Dean A. Bundschu | Crain's Raleigh Durham

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Dean A. Bundschu

Background:  

Bunker Labs RDU is a nonprofit organization built by military veteran entrepreneurs to empower other military veterans as leaders in innovation. Bunker Labs RDU provides educational programs, access to resources and a local network to help military veterans and their spouses launch and grow businesses.

The Mistake:

Not being fully prepared to hire and properly manage our first employee.

One of the biggest challenges of being an entrepreneur is that you are everything in the beginning – you’re doing pretty much every single role in the company, including being the janitor.

I was the only person when I first launched my startup, so I did everything, from building the website, to all the social media, to putting together events, to putting together the education for our first cohort – literally everything. I was, of course, trying to fundraise, too. It was just not sustainable to continue that way.

If you want to really grow and do what you’re doing, you have to be able to offset some of that. When you get to that point where you have some resources and you want to hire someone, that’s where it’s easy to make the biggest mistake.

The very first thing I wanted to offload was the marketing. For example, you reach out to your network and find a person or two who sounds good, or you know someone in the field, so you move quickly to bring them on board without really thinking through the role – the responsibilities, coming up with quantifiable goals and milestones so you don’t set them up for failure and to determine if they are really qualified for the role.

One bad hire can really hurt a startup.

The Lesson:

It’s wise to hire slow and fire fast.

If you’re looking to bring someone on board, look out a couple months first. Think through what you want that role to be, when you want to hire them. Make sure that you get multiple people in front of you. It should involve cost-benefit analysis rather than just impulse.

I got a referral for a candidate and it was someone I knew and I liked, so the decision was made because I needed someone as quickly as possible. I liked them and I wanted to bring them on board. At the time, I didn’t think through what I was doing. Sometimes, as a startup, you’re not all that organized. I needed someone who was really entrepreneurial – who could take the initiative and make it happen.

One, it’s not fair to the individual you bring on board if you’re not setting clear goals and expectations. And second, you have to weigh that person against other candidates. Get out in the community, identify multiple candidates. That takes a lot of time, especially when you’re trying to build a business.

I’m not saying to take a long time hiring once the process has begun, but to really think through the role ahead of time. Start to think through what those roles mean, what types of skill sets the candidates should possess and set goals and metrics for those roles before bringing someone on.

That’s the tricky thing with a startup – one bad hire can really hurt a startup, especially if you’re at the point where you’re just starting to earn some cash flow.

It’s a huge drain and it kills you twice as badly – you’re paying an individual who’s not productive, and then you have to dedicate your time to the role again. A really bad hire compounds.

If you do make that mistake, it’s not necessarily too late to fix. You need to really think through the role, get back with the individual and craft some expectations. Don’t be afraid to put in place a 30-, 60-, 90-day review plan and cut them loose if they don’t make it.

I’ve seen it and I’m guilty of it, too. You want to keep giving people the benefit of the doubt. But the only thing that matters in startups is results, and you’re allocating precious financial resources, so the worst thing you can do is to keep them around. You can’t be afraid as the leader to cut ties. It’s the bottom line: It’s not personal, it’s business.

Dean Bundschu is on Twitter at @DBundschu and Bunker Labs RDU is at @BunkerLabsRDU.

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