Founder Resources
How VC funds evaluate and identify strong startup leaders and teams
This article is the second in a series of three articles about building a team that will help you raise $10M+ in Latin America.
Early-stage companies have three priorities:
You have an endless list of things that need to get done and can’t afford to have a team of single-lane specialists. You need high-slope people: people willing to get their hands dirty, wear different hats, adapt, and grow fast with you and your startup.
Before diving into this article, you’ll probably want to check out frameworks we use to think about startup teams, such as the A, B, and C players framework, Danny Meyer’s 4 Types of Employees, and Keith Rabois’ Barrels and Ammunition framework.
On this episode of The Knowledge Project from 2022, Kunal Shah says that startups should stop hiring in terms of "years of experience," and focus instead on "experiences per year." High-slope people are people who have a lot of experiences per year.
In this chart, Person A has more accumulated experiences to start, but Person B has a higher slope of experiences per year, and surpasses Person A quickly in total experience. Person B is the high-slope person that will add more to your early-stage startup in the long run.
Sam Altman also suggests hiring high-slope people:
Hiring for high-slope people shifts the hiring question:
There are four main qualities that high-slope people share:
High-slope people ask questions where most people accept assumptions. Curious people do things because they want to, not because you force them to. As A16Z’s Marc Andreessen says,
“Anyone who loves what they do is inherently intensely curious about their field, their profession, their craft… And you should be hiring people who love what they do.”
According to top solo VC Elad Gil, you want to hire people that get shit done. High-slope people don’t wait for you to give them step-by-step directions. They take the initiative and aren’t afraid to try new things. They generate momentum and shorten feedback loops, allowing them and the people they work with to learn fast.
High-slope people don’t need external motivation. What they may lack in experiences, they make up for in drive. If you constantly need to motivate your team for things to get finished, you’re likely doomed. High-slope people are hungry for new experiences, ready to dive headfirst into your startup, and independently motivated to do great work.
Many people are curious and have interesting ideas. But, as they say, ideas are everywhere, but until you do something with them, they’re nothing. Most people have a long list of things that are between 20% and 80% done. It’s easy to start a new project but it’s a lot harder to finish it. High-slope people finish things. They recognize that finishing 1 thing is more valuable than 10 things 70% done that don’t get finished.
For most high-slope people, the process is the same: curiosity is the spark, a bias for action gets things moving, self-motivation keeps them going, and they follow through and finish what they start. The act of finishing things, regardless of whether the result is good or not, drives more feedback loops, helping high slope people improve. As YCombinator’s Paul Graham says,
“People who do great things don't get a lot done every day. They get something done, rather than nothing.”
After a high-slope person finishes one thing, they dive into the next thing they are curious about, creating a flywheel effect between these 4 qualities.
This flywheel is what increases the slope for high-slope people. The faster the flywheel turns, the higher the slope of the person, and the more of an asset they become.
Outcome multipliers are people who truly move the needle and help your business be much more likely to succeed. Hiring top talent is an outcome multiplier, as the best people create a ripple of positive effects on your startup. Outcome multipliers are usually:
Hiring these two types of outcome multipliers helps you execute, recruit, uplevel the rest of your team, and fundraise.
Culture is not a set of platitudes, it’s a set of actions that are repeated. As Ben Horowitz says in his book What You Do Is Who You Are, culture is how a company makes decisions. A company with a performance culture is a meritocracy where individual goals align with company objectives, and team members are rewarded based on what they provide.
During the early stages of your startup, you won’t have many processes and culture will be set by what the first team members do, and how they do it. As Rands in Repose author Michael Lopp says,
“The people who are responsible for defining the culture are not deliberately doing so. They do not wake up in the morning and decide, “Today is the day I will steer the culture of the company…” They just do it.”
Your startup’s only real advantage is speed. Iterating fast gives you a chance against bigger companies that have many more resources than you do.
To build a fast, iterative startup, you need a team that learns and grows just as fast. You need a team of high-slope people. High-slope people jump at the opportunity to take on more responsibilities, and raise the bar for the rest of the team.
If your team members can't grow beyond their current roles, they'll fall behind when company and role expectations change in a few months. Or worse, they might slow down the company, making it grow only as fast as they do.
There are two types of early-stage startup teams:
As more high-slope people join a team, overall productivity increases, and the slope of total output for the team gets steeper. Over time, high-slope teams significantly outperform mediocre teams. Most startups, though they might not want to admit it, are mediocre teams.
You have limited resources and most likely won’t be able to convince people to join your startup with a high salary that your startup can’t afford. You hire high-slope people by looking past what the person has done, and thinking more about what the person will be able to do with you.
High-slope people typically don’t get bogged down on titles, they are more interested in solving interesting problems and working on projects they are passionate about. You get more out of them, and they get more out of working in a startup because they can take on various roles that they wouldn't be able to at a big company.
Once you identify high-slope people, you need to retain them. Your high-slope people are A players, and you should retain them the same way as you retain A players: by not tolerating low performers on your team, giving high performers more responsibilities, increasing their compensation, and offering them regular equity refreshes.
Building a great early-stage team isn’t about hiring more people, it’s about hiring more high impact people. Regardless of market conditions or industry, the best startups always have high output/person multiples. Some founders think that they can throw more people at the problem they’re trying to solve. In practice, that can work for a little while, but it’s better to hire fewer people who can learn, grow, and get things done.
If you are able to grow and scale, eventually you may have to turn your team, or hire new people to complement your original team. This is normal! Having high-slope people on your team means that this process can be less painful and more efficient.
There is no silver bullet to team building, but hiring and retaining high-slope people is a lead domino that makes everything else easier in your early-stage startup.
Founder Resources
Paying off HR and people debt is not about adding bureaucracy, it’s about allowing you to move faster. Think about your minimum viable process: the minimum amount of HR you need to help your company move quicker and more efficiently.
