In my previous positions, before Herodesk, I've more than once fallen into the trap of hiring in anticipation of future growth. Or at least wanting to.
I was looking into the Palantir, trying to predict what would happen.How many customers we would get. How busy we'd be. And how many people we'd need to handle that. So, I pushed hard on getting those people hired so we'd be ready for what was about to come.
Well... That was a mistake.
(I can think of a few of my old colleagues who'll probably laugh a bit when reading this, but yeah, you were right - shoutout to you!)
Anyway, it's not only a bad way of running your business. Doing that can be extremely dangerous for startups and small businesses.Especially if you're bootstrapped!
Hiring is a big, fixed cost that you'll carry every month, and often it can take several months to get rid of that cost if needed.
So you must be 100% confident in what you're doing before you hire, and be comfortable with your cash-flow budgets.
All that combined is why I've decided to hire a new senior full-stack developer now. Next time, I'll deep-dive into the process of going from >400 applications to one final candidate.
I've taken a lot of inspiration from 37Signals' original principles on running a business, among those "Hire when it hurts" - not in anticipation of what is about to come (read it, it's worth it).
For me, there are two different aspects to this.
First and foremost, it has become a goal in itself for me to run Herodesk with as few people as possible. To run a lean, flexible and fast-moving team.I've tried to run a big team and be part of a huge organisation. It was fun, it has its perks, and I learned a lot from it.But honestly, I enjoy smaller teams and organisations more.
And since it's my company, that's what I'm aiming to build.
Second, I no longer take any pride in how big my company is in # of employees.I don't know if it's only a Danish thing (but it is definitely a Danish thing), that the first thing someone asks you, when you meet at a reception or whatever and get to know each other, and you say you have your own company, is: "Well, that's great, how many employees do you have?".
That's like asking what your brand is worth based on Facebook likes.
Unless your production capacity is directly tied to # of people you have (like a consultancy agency or something), it's a vanity metric.
Instead, you should ask: "How much money are you making?" or "How much money are you making per employee?".Now, THOSE are interesting questions. Very "un-Danish", but way more interesting and insightful to what really matters: Is the business good?
Bo Møller and I talk about this on the most recent episode of our new podcast: SaaSKøbmænd.dk.It is in Danish, but check it out and LIKE and SUBSCRIBE if you enjoy it.
We also deep-dive a bit on where each of our companies are at, get concrete on growth- and customer numbers, and what we'll be focusing on next.
(If you also want regular updates from Bo and his businesses, subscribe to his newsletter on https://bandeja.org/)