| Time To Staff Up Your First Directors and Managers? Hire Half. And Promote Half. Posted: 31 Jul 2021 07:56 AM PDT The time comes for every growing SaaS company when you need to hire your first managers. Not VPs, but Directors and managers under them. Some rough rules: - You need one Sales Director for each 8 sales reps. Your VP can’t directly manage more than 8.
- You need one SDR Director for each 10 SDRs. Each 10 SDRs, even 8 ideally, need a manager.
- You need one Director of Eng or team leader for each 8 engineers. The rule of 8’s, again.
As you scale past $5m-$10m, you as a founder and/or VP need to make sure you are putting this layer of management in place. If you don’t, you won’t scale. It may take a quarter or two to show up, but no one should be managing more than 8 reports. More on that here. OK now the time comes to hire those managers. Let me suggest one simple rule: find half outside the company. And half right inside the company. You might not be sure, for example, that your top AE is ready to be a Director. Or that the engineer everyone already looks up to is ready to be a Director, either. They might not quite be ready. But I’ve found 8 times out of 10, if they want the management role, hiring the best internal candidate as a stretch hire works out. Then, force yourself to hire 50% of them from outside the company. They won’t know the product and culture, but they probably will have more on-point experience, and a bit more seniority in many cases. This has several big advantages: - The 50/50 rule makes the number of slots clear to everyone. As you scale, a lot of folks may want promotions. It helps take some of the drama and issues out of things when everyone knows it’s 1 from outside, 1 from inside, etc. It won’t seem subjective that way, and folks won’t feel like they were passed over (as much).
- The 50/50 rule forces you to nurture your top ICs even better. You’ll focus more on mentoring your top break-out individual contributors when you know you’re always hunting for that next manager 3-12 months down the road.
- The 50/50 rule helps you scale faster. It’s easier to promote someone already on the team. Once you have a framework for it, you’ll scale faster knowing where to source half your managers. And it will also help you backfill where existing folks on the team may need help.
Look, it’s pretty basic. But think about the 50/50 rule in hiring your first managers. Half from the team you already have, half from outside the company. Keep that a rough rule for each department, and you’ll have a strong org, that scales faster. A related post here: Who Ya Gonna Promote? Don’t Wait Too Long.
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| 7 “Little” Things That Almost Caused My Startups to Fail Posted: 31 Jul 2021 05:20 AM PDT I haven't failed yet, but boy every time, I've come close. Let me make a list of the "little things" I let go, but that I shouldn't have, that almost killed me/us: - Setting a little too insane of a goal. Crazy goals are good, but I wonder about insane. At Adobe Sign / EchoSign, I said we'd do $2m ARR by the end of Year 1. We ended up at $200k in ARR. Not terrible 1 year from launch, looking back, especially by the standards of the time. But the team was dejected and broken. One cofounder quit. Another fired another one. I thought we could do it, though. But I should have stress tested that assumption a little more. This cost me one of my cofounders, and some of the engagement of another.
- Not paying myself a salary — for a little too long. Once we were in trouble, I stopped taking a salary, and reinvested a bunch of the proceeds from my first start-up to keep us going. That was OK. But I took it a little too far. I did it a little too long. This gave me an excuse. To do OK, but not to kill it. After all, I wasn't taking a salary! Pay yourself once you can afford to. This cost me some of the urgency I needed — once things finally got good! A little more here: In The Early Days, Don’t Forget To Pay Yourself, Too | SaaStr
- Communicating with challenging teammates a little too little. I still struggle with how to maintain a constant flow of communication with folks I lack alignment with. I do dailies every day with the folks I'm aligned with, but I tend to shrink away from constant communication with folks I have disalignment with. This doesn't work. You have to flip it around. You can save team members, or at least extend their lifetimes, just by communicating better, more often. This cost me several key team members leaving 6–9 months earlier. I would have loved to have had them longer.
- Shipping a little bit too way early. This is a tough one. If you wait to ship until you have a perfect product, the market passes you by. But in each of my start-ups, I shipped 90 days too early looking back. And boy it cost me. In my first start-up, it cost me the second largest customer in the industry. We just had too many bugs at launch, which cost us a lot of the halo from our press at launch, and made the early user feedback too confusing. Just 90 more days in the oven would have been so much better. Yes, this is tough. Better to ship too early than too late in the early days. But a little too early can be rough in a B2B product, in a product you are trying to get paying customers for.
- Not hiring a head of partnerships / biz dev early enough. This sounds small, but it wasn't. Just because you as CEO can kick off relationships, it doesn't mean you have 50 hours a week to maintain them. We were way ahead of the market in partnerships and integrations early, but by not staffing up biz dev, we let competitors build better long-term relationships with key partners. I lost key partners due to not doing this.
- Not really, truly listening to our early customers. I made them as happy as I humanly could … but I didn't truly listen to why. Not strategically and proactively. A bunch of our early customers were in seemingly weird industries, like debt consolidation. I thought we were a niche product for debt consolidation. But I didn't listen — properly. The real use case was sales. The debt consolidators bought us for their sales team because we were fast. I should have gotten on a jet and visited them in person. And listened more. And not assumed the reason they bought us on the surface was the real reason.
- Not getting better mentors. I had help, but I needed just one great CEO who had done it to give me just a little bit more hands-on advice. Just a little more. I should have taken the extra lunch, the extra hustle, to get that mentor on board. There were so many obvious things the Me Today could have told the Me Then. I should have found someone like that to help set me straight, just on a few things. A bit more here: I Don’t Know about CEO Coaches. But We All Could Use CEO Trainers. | SaaStr. A great mentor can help you avoid just 2 or 3 of the 10-20 top obvious, key mistakes we all make. That's plenty to be impactful. A great mentor can also see when it's about to take off and get great, even when you are still stuck in the weeds. Getting that insight is also insanely helpful. [Help get mentors for your team too. Use products like PlatoHQ.com to source mentors for engineering and product]
Maybe just avoid a few of these! (note: an updated SaaStr Classic post) The post 7 “Little” Things That Almost Caused My Startups to Fail appeared first on SaaStr.  |
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