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Anthony Rose: Hello, everyone. All right. We’ll give a few moments more.
Anthony Rose: Oh, and if we can mute everyone.
Anthony Rose: okay. So we have an exciting session coming up on growing your team, please. Firstly mute, and so post your questions as you go. We’re going to talk a little bit at first, st and then we’re going to turn for questions, and then at the end we may bring you on. If you’ve got any questions yourself and team, can you please feature me and my co-host so that we are full screen? Please.
Isaiah Baril-Dore: Looks like it looks like we are on on my screen. Looks like we’re pinned.
Anthony Rose: Okay, great.
Anthony Rose: Okay.
Anthony Rose: Now let me just do this.
Anthony Rose: and then we are good to go. All right.
Anthony Rose: Hello, everyone. Today we have a fantastic session with index ventures. Who’s built this amazing thing called team plan. Now, one of the big problems with a startup is growing your team. Who should you hire when. And one of the big problems is you raise some funding. And now you’ve got lots of money to spend. And you think I need to build a team, and I hire all these senior people, and it turns out to be a huge mistake. So in founder chat groups, in many places, you see founders asking.
Anthony Rose: should I hire a head of marketing? Should I? Should I outsource? Do I hire a salesperson? Do I hire a head of sales right at the beginning. Your 1st quandary is usually.
Anthony Rose: should I hire a CTO, or should I hire a sort of tech lead who could become a CTO so to dive in and solve all of these problems. We can meet someone who spent a lot of time on this and analyze some of the fastest growing companies
Anthony Rose: so that you get the data dump on when to hire who, when. So you don’t spend all of your money hiring the wrong people who are basically sitting around looking to grow a team rather than to build stuff. And that’s really the challenge you have when growing your business at sea beagles, we’re 160 people. I’ve been through this a few times back in my iplayer days team of 200 people.
Anthony Rose: and what you learn is the stages of a company
Anthony Rose: stage one. It’s a couple of founders, you doing everything yourself, from your invoicing to, you know, setting up servers, whatever yourself. And then, of course, you can’t do everything yourself.
Anthony Rose: So you start hiring people who know more about what they do than you. But eventually you can’t have all these people reporting to you. So you need to have you know, people who head up sections, and if you hire those too early, their only goal is to spend more of your money to grow a team because they want to lead a team. Anyway. Enough from me. Let me dive in, sire, over to you.
Isaiah Baril-Dore: Thanks, Anthony. Hey, everybody! Thanks so much for coming. I’m Isaiah. I’m a strategist index ventures on the talent team, and just a bit of background on me. I’ve spent my entire career as an operator. Working in startups through Ipo always on the Hr team, really with a focus on compensation and equity. My background. I started as a comp analyst
Isaiah Baril-Dore: way back in the day, and I I led to the total rewards and talent management. At scaling orgs. And my role at at index is just that it is advising our founders on compensation, equity, talent, management questions and helping them really see around corners
Isaiah Baril-Dore: and concerns that maybe they don’t know yet. And that’s sort of what we’re we’re here to talk about today. And really, in the future it is to build and share these amazing tools that that will showcase today. So the theme of this webinar, as as Anthony laid out is sort of like surfing that edge of chaos. A little bit of chaos is good
Isaiah Baril-Dore: and index of the last, I mean almost 10 years now. They’ve been building. We’ve been building sort of deeply researched tools that are meant to help founders at every step of that that journey. So
Isaiah Baril-Dore: that focuses on compensation right? Which is sort of my background, which we may talk about later. Around international expansion of both to Europe and to the Us.
Isaiah Baril-Dore: And our most recent, which is probably our most ambitious, yet which is scaling through chaos, which is our our book. And maybe, if I can just spend a minute on scaling through chaos, which is the
Isaiah Baril-Dore: the partner of of team plan. But index. One of our our core beliefs is that people is what create outlier businesses. And we turn that really into a guide. So this is the founders guide this, the scaling team from 0 to 1,000,
Isaiah Baril-Dore: and so to build this as Anthony sort of sort of hinted at, we analyzed 200,000 career profiles
Isaiah Baril-Dore: from 200 of the most successful companies at the last
Isaiah Baril-Dore: 1015 years. These these are companies that have done that journey. They’ve scaled 0 to a thousand. And then, beyond
Isaiah Baril-Dore: think, Figma Airbnb stripe, both in our portfolio and outside.
Isaiah Baril-Dore: And we took that data. We enriched it with insights.
Isaiah Baril-Dore: case studies. We interviewed 60 founders in our in our portfolio and beyond, to really build this guide that that helps you stage by stage answer questions that founders have around building the best businesses in the world.
Isaiah Baril-Dore: So Anthony also mentioned like.
Isaiah Baril-Dore: how do you delegate product? Leadership? Right? Those are like the top questions we get. When should you hire a Cfo
Isaiah Baril-Dore: and even more like tactical questions around, when is the right time to introduce leveling or performance management? These are the topics that we get asked.
Isaiah Baril-Dore: I found it all the time. So
Isaiah Baril-Dore: this amazing guide, this is the the hard copy. But the the guide itself.
Isaiah Baril-Dore: and everything that index does is actually available for free on our website. It’s open source. So I highly recommend you go to index ventures. You can actually see the the book for free
Isaiah Baril-Dore: and we launched that alongside team plan, which is what we’re here to talk about today.
Isaiah Baril-Dore: That is our our web based web based application which is essentially an organizational benchmarking tool
Isaiah Baril-Dore: and I think for me, having worked in Hr. For most of my career, it it helps answer a lot of the questions that I remember being asked by founders around.
Isaiah Baril-Dore: like, how many engineers should I hire in the next year? Or what’s my ratio of product to marketing in certain business units
Isaiah Baril-Dore: And that’s what team plan aims to aims to answer today. So
Isaiah Baril-Dore: I’m gonna share my screen to walk through a brief demo
Isaiah Baril-Dore: and and the goal of this is really not to go incredibly deep into data, because there’s a lot of it. But to just show how it can help answer some of the common questions that that we get from founders.
Anthony Rose: Important. It’s an interactive system. So you can dial in the size of your company and perhaps the amount of money you’ve got and a few other things, and then it will help you see what leading companies have done at that stage.
Isaiah Baril-Dore: That’s exactly right. So if everyone can see my screen here, this is this is team plan available for free on our website, and we’ll sort of we’ll sort of walk through it. The 1st tab here is teams.
Isaiah Baril-Dore: and, as you can see from the color coding here is, it shows at every stage of company growth of headcount from 10 to 500. What is the what is the breakup of functions in these teams at this time right?
Isaiah Baril-Dore: And we knew that we wanted this to be a dynamic sort of benchmarking tool.
Isaiah Baril-Dore: So not only can you select different business models because we know that teams are structured differently. If you’re b 2 b to C or Sas.
Isaiah Baril-Dore: you can also select location. But you can really, which we think is is incredible is you can actually
Isaiah Baril-Dore: select or unselect the actual companies that you’d like to benchmark again. So if you are growing your business, and you really look up to. You know, these 15 sas businesses. You can sort of see how they structure their businesses from 10 up to 500,
Isaiah Baril-Dore: and there are very like practical uses for this for founders as you’re you’re building a team, so I’ll walk through a few here. So at 10 people, right, this is your your core group. Almost half of your team will be engineering. That makes sense. Right? You are building your Mvp, you’re trying to find your product market fit. Most of your team should be technical and background, and at least half are like core
Isaiah Baril-Dore: or engineering.
Isaiah Baril-Dore: That is different.
Anthony Rose: Okay, if I if I hop in occasionally.
Isaiah Baril-Dore: Please.
Anthony Rose: Observations. Okay. Great.
Isaiah Baril-Dore: Having lived in.
Anthony Rose: Okay, excellent. So one of the things where this manifests itself, firstly, is where I see pitch decks where there’s a use of funds slide, and you know red flags are where the use of funds is at the early stage, primarily on marketing and sales as opposed to tech. So it’s possible that you built the perfect product with only 2 people, and you never need to build any more. And you just hear to market.
Anthony Rose: But that’s unusual, right. The the largest and most profitable and and fastest growing companies have got hundreds of engineers. And that’s because as soon as you’ve built something, if it’s working. You want to build more and expand your market. So seeing at an early stage a, you know good fraction of the team being tech
Anthony Rose: unless there’s some reason you’re different. If if your skew is very different to that.
Anthony Rose: probably something to watch out for, both in your own company and also an investor is going to be spotting that and see it as a red flag.
Isaiah Baril-Dore: Yeah, it’s exactly right. And I think it’s it’s a supernatural segue into let at 500. Your engineering team has gone down to a quarter right? Cause at 500 people. You are often investing in expansion your sales and marketing team and go to market in yellow here has exploded right. You are potentially entering New Geos. You are working on marketing to ensure you’re building out your brand. It makes total sense, right?
Isaiah Baril-Dore: and and maybe even showing how the the filtering here works as well. So in a Saas business, you, we would find that your marketing department often would be based on the data. 3 people at the head count at 50, right? But if you were building a B to C app, your marketing department would be 6 right. It’s doubled twice as much, and that is like it makes sense because you need to have inbound for B to C build brand awareness
Isaiah Baril-Dore: to ensure that you’re driving people towards your business. And this feels intuitive right for any founders on the call who are building. But it is so incredibly helpful to have data and actual benchmarking to back this up, because what I found is often and ends up being quite anecdotal right. And this is what we believe, is the 1st time that that this data has been analyzed in this way.
Anthony Rose: The anecdotal bit is where people tweet, and we’ve done all this with 0 marketing cut to complete bullshit. You spend a fortune on marketing. And you’ve got 8 people in your SEO team. So yeah.
Isaiah Baril-Dore: Exactly right. And and then, as I meant like, you can truly mix and match this in any way. Right? I encourage you, you know, as you as you go online to type in different variations of businesses, see how they differ, because the data from the book suggests that, like each business model structures, their teams entirely different. And it makes sense.
Isaiah Baril-Dore: So let’s talk hiring quickly. This is our next tab on here. And what this is really is about how you navigate between these stages. So from
Isaiah Baril-Dore: 10 to 50, 50 beyond 250 to 500 right? And this is really around thinking about the types of roles you need to hire to get to each stage. Not just that, but also where you would expect attrition. So while from 126 to 250 you would hire
Isaiah Baril-Dore: 38 engineers.
Isaiah Baril-Dore: You would also expect
Isaiah Baril-Dore: 8 to leave right.
Isaiah Baril-Dore: And one of the things I really like to call out about this page, where, like the data sort of meets real life, is this light pink which is
Isaiah Baril-Dore: employees that left the function, but stayed in the business. And I love this because for founders that are asking and always looking external, it’s a real signal about where you find talent pools internally right, we find that in support and sales and biz dev and customer success, there’s a huge amount of moving within these functions. And so I’ve experienced
Isaiah Baril-Dore: 1st hand, that sometimes your support people are the best suited to to go into customer success or sales, because they know the product right? And so I would encourage founders that as you’re as you’re looking for your next Talent Pool, sometimes looking internally, is a great place, and the data suggests that.
Anthony Rose: I’ll I’ll hop in with a few things. So, firstly, you know, when you are fortunate enough to have a company now 6 or 7 or whatever years in one of the things you’ll have noticed is that many of your starting team are no longer with you, and the question is, the 1st time, you know you, you notice that you know not. Everyone’s still there. It’s a panic attack. And then you realize actually, it’s pretty standard, you know. In London. Probably people spend, you know, 2 years.
Anthony Rose: 3 years at a company is probably quite good. 2 years is probably not a non-standard. So if you’re 6 years in, you’d
Anthony Rose: be lucky to have a good fraction of your original team still with you. So, looking at the slide of Who’s no longer there will help. You see if your company is performing better or worse than others on retaining talents. And obviously, if you can retain talent, it’s better than hiring new people, but giving them the career pathway within the company is super important as well.
Anthony Rose: So now I’ve got a couple of questions from the chat which is
Anthony Rose: about hiring. And maybe you’re going to get to this in a moment, and if the slides or the team plan covers it, which is permanent, team, 1st contractors versus fractional. Do you have anything to talk about on that? And otherwise we’ll just segue on that for a moment. Now.
Isaiah Baril-Dore: Yeah, I mean, it’s not. It’s not baked into this this application here. But I think there’s
Isaiah Baril-Dore: there is a time and a place, right? It depends around what’s the type of skill. It’s the product that you’re building. Sometimes it’s often cheaper to find outsource talent, but you often don’t have that permanent sort of talent internal. I don’t think there’s 1 sort of rule of thumb, but I think it depends on a bit of the product, and where you’re building it as well.
Anthony Rose: Alright. Well, maybe I’ll have a go. Then at answering that question. So I’m not a fan of contractors. I believe you hire people who are there for the mission your team internally, and the reason for this is that I think outsourcing makes sense. If you’ve got a product, spec, and you know exactly what you want, and you find some people who build exactly what you want, that, particularly in the early days of a company, and in general in a startup. You don’t know what you want. You’re gonna build it. You can have an Mvp. You’re gonna try it. You’re gonna ship it.
Anthony Rose: and what you want is a team invested in the success, even if it isn’t what you expect it to be. And yeah, imagine that you build your landing page, and it doesn’t converse.
Anthony Rose: If you and your team are building it together, you’re going to go. It doesn’t convert. All right. Let’s try this tag line. Let’s change this and all the changes you make you love making those changes because the outcome is what you’re looking for. But if you’ve outsourced it every time you drop another email to them. Can you please change this? It’s going to be like another cost sent, or a negative thing. Dude, could you have not got it right on the product spec.
Anthony Rose: So I’m a big fan of doing it with a building it with a permanent team. But your challenge and here’s your catch. 22 is you can only hire people once you’ve raised a couple of 100,000 pounds in funding, otherwise you don’t have the money to pay them. So the initial section is, you may have to do some outsourcing or contractors until you’ve raised enough to build your team.
Anthony Rose: and then, in terms of the fractional part. I think some roles like Cfo and others, can be fractional, but I think it would be wrong to have a fractional CTO or fractional product manager. That would be a bit strange that somebody breezes in with, you know, core competencies and then disappears again for a while, leaving you to figure it out. That doesn’t seem right to me, anyway, and.
Isaiah Baril-Dore: For me.
Anthony Rose: Back to you.
Isaiah Baril-Dore: Completely agree. Yeah, we’ve actually seen a huge trend of fractional exacs over the last sort of 5 years. Particularly in the departments that you mentioned. I think you’ll see.
Isaiah Baril-Dore: It may be too early to hire a full Chief people, officer, but you need someone senior to come in and sort of align some of your people objectives. It’s really helpful to have a fractional fractional role in those cases.
Isaiah Baril-Dore: So on to the last tab here, which is leaders, which, for me, I think, is some of the most fascinating data in team plan.
Isaiah Baril-Dore: and there’s a few sections on it. But one of one of them here is at each stage that you select.
Isaiah Baril-Dore: It will show you in the founders. Tab here for each of your core founder roles. How likely is it that your CEO is a founder versus not versus your CTO
Isaiah Baril-Dore: versus coo versus chief people, officer or chief product officer? And I think one of the things that I find very interesting in this data is, and we we hear this quite frequently, is that
Isaiah Baril-Dore: It is very uncommon to have a coo, much less have one as a founder at 50 people, and we’ll see that change over time.
Isaiah Baril-Dore: But this is really helpful when you start to look about like your founding group. What are the roles you’re assigning at your 1st sort of like building a company
Isaiah Baril-Dore: very common. Obviously our CEO and CTO, which makes sense for for our tech businesses that we’re we’re backing
Isaiah Baril-Dore: and.
Anthony Rose: Just pause. Sorry! Can I pause on that quickly? And can you jump through the phases of a company to see how that changes? Because
Anthony Rose: you know, as you say initially, the CEO and CTO are likely to be the founders. But if you’re a 500 or 1,000 person company, and if you’ve raised your series B or C. Often the founders may be brilliant at going from 0 to one, but not the right people to go from 10 to 100 or so, and so they may drop out. They may sell some of their shares. Maybe they fired by the board. Who knows
Anthony Rose: and so one of the key takeaways is, if you see
Anthony Rose: that in later stage companies the CEO or CTO is not the founder, then that means for you who are a founder today. How do you either reinvent yourself, or know that you should play this game of chess in terms of fundraising rounds and your own career, that you may not be that person later, and that may be just fine as opposed to being a major traumatic incident.
Isaiah Baril-Dore: Yeah, it’s exactly right. I mean the data that we, the data suggests that Ctos are actually the most likely of the founding to transition away. So you can see here at 500 people, only 40% of CTO are still founders. And you have 31% are non founders would suggest that data, that that is the role that is most likely to to be hired externally. After a founder leaves.
Anthony Rose: By the way, I would, I would say. The reason for that is Ctos probably cover 3 roles. One of them is they can code themselves. Number 2. They’re great technical architects and number 3. They are team leaders to grow a team. And if you look at your CTO, maybe they cover all of those, and maybe they kind of like one or 2 of those. So they call themselves CTO initially, because that would look great on the founder business card.
Anthony Rose: but they love coding, and they hate hiring, and they’re lousy at managing. So you know, they either have to reinvent themselves, or they get parked in a role of being the chief architect. So it’s like a soft landing, and someone else is managing the people side. But you know it’s all about the characteristics of the person.
Isaiah Baril-Dore: Yeah, it’s exactly right. And and I’ll give you another real world example here, as we go into the technical roles. And so the this section here actually shows what’s the most senior role that exists in each of these functions at these different stages, and a a 1 that that comes up quite frequently is like, we’ll have early stage founders at, you know, 30, 50 people.
Isaiah Baril-Dore: They want to hire a chief revenue officer. Cro, right super senior person that’s going to manage the whole go to market.
Isaiah Baril-Dore: But the data suggests that in sales and business, 50 people, only 20% of companies have a Cro right? It’s much more common to have a Vp sales or a much more junior sales leader right? Because it it makes sense at 50 people. You do not have the need for a role that oversees this entire function.
Isaiah Baril-Dore: whereas to your point, as you transition between
Isaiah Baril-Dore: these head counts at 500,
Isaiah Baril-Dore: almost 70% have a chief revenue officer. It makes sense as you scale to have these roles or to roll up functions. And you’ll see that across all of these, each of these these functional breakouts.
Isaiah Baril-Dore: And I think another one that we we discuss a lot in scaling through chaos is around
Isaiah Baril-Dore: and we even mentioned in the openers around your product leadership, right? And so in product, at 50 people
Isaiah Baril-Dore: over a quarter of your most senior product leader is a senior IC
Isaiah Baril-Dore: right, and that aligns with the experience that we have around keeping product incredibly close to the founder in early stages.
Isaiah Baril-Dore: And you would be. It’s surprising, actually, that even as you scale.
Isaiah Baril-Dore: you know, you still only have a quarter of companies that bring in chief product officers at at 2 50,
Isaiah Baril-Dore: and it means that founders really hold on to that product role which we think is critical for the most successful companies as they grow.
Anthony Rose: Feeling too guilty. Now that’s great. Okay? So so let’s talk about one of the dive in to the Cfo role because it’s 1 of the ones that perhaps works better as fractional. I think many people don’t quite understand what the Cfo role really is, you know. Initially, you need a bookkeeper, and then there’s on the one side, you know, accounting and bookkeeping, and over here there is, I need help with my multi-year business plan.
Anthony Rose: I need someone to help with the financials for a pitch deck. I need to have the financials from my board reporting. Where do you see the sort of accounting transition into Cfo. And do you think that can be fractional or not?
Isaiah Baril-Dore: I would say, beyond 250 is where I think it makes sense to bring in, and you can even look at it. Sort of here in the in the gna is that almost a quarter at 250 are starting to bring in a Cfo I think at this point, this is when you’re starting to centralize in your financial functions, I think data is critical. You need someone who is sort of able to present and have accurate data for the board. And
Isaiah Baril-Dore: I I think in scaling through chaos we talk about our leaders in 3 distinct buckets. We have builders, optimizers and builders, scalers and optimizers. And I think, knowing the right role that fills that category, your 1st finance hire is going to be a scalar going 0 to one, you know, just thinking around how to put in the right metrics
Isaiah Baril-Dore: later on, you need someone that is going to be able to present, you know, as you’re heading to an Ipo journey building your your road show ultimately able to do. You know, quarterly earnings calls. So my view is that 250 is when you’re starting to sort of really see that trend of bringing in the professional Cfos.
Anthony Rose: Okay. Now, one of the things I very much like about the team plans that you built is being able to dive into different types of companies, because, of course, you might be thinking, well, you know, Airbnb is super different to, you know, a cap table, or legal business, or something like that. But then, being able to look at that segment helps you understand better what’s right for you, because some businesses are super tech intensive.
Anthony Rose: and some of them. You’ll build the tech much sooner. And then it’s a lot about brand differentiation marketing sales, identifying, you know, partnership opportunities and so on.
Isaiah Baril-Dore: Yeah. And I think I I’ll add, I mean, I I completely agree. And I think this is version one of this data. I mean we launched this in March.
Isaiah Baril-Dore: and our vision for this is that we continue to add in additional companies.
Isaiah Baril-Dore: so you can actually break down exactly to your, to your point. These business models in in sub subgroups, right? Like vertical Sas
Isaiah Baril-Dore: and actually see how those functions build. And I think
Isaiah Baril-Dore: enhancing on that will be locations right right now, obviously focus mainly on us where a lot of these successful companies have Hq’d. But bringing in new additional data will be fascinating to see what, how European companies actually structure their teams different than than a Us. Hq’d.
Isaiah Baril-Dore: And I think finally, will be this sort of like time tracking. I think one of the things that comes up in any of the the questions we have around scaling through chaos and team plan is around the impact of AI. Right? I think it’ll be very interesting to see as we have time horizons of this data. If in 3 years
Isaiah Baril-Dore: this, you know, Klarna has said famously that they plan to cut their workforce in half
Isaiah Baril-Dore: with AI tooling is like, will we see that the percentage of customer support roles or Bdr roles
Isaiah Baril-Dore: has decreased because of AI, and it’ll be really fascinating to that play out in the data real time.
Anthony Rose: That’ll be super interesting. One thing I have seen already with AI is that founders always saw it as a badge of honor. The team size. Yeah, we’ve got 500 people. We’ve got 250 people more were seen to be better. But I think now less is better. Having a bigger team. Size just means
Anthony Rose: a certain inefficiency at embracing technology to do more with the same number of people. It’s not to get rid of people. It’s just that you can grow without needing to hire. So I think that’ll be interesting to see and see who it affects. So can we segue unless you go cover it shortly into
Anthony Rose: the team and culture, and maybe that’s done through scaling, through chaos and other things. But one of the key things is how you build and maintain the team culture as the founders start becoming, you know, a couple of levels detached from everyone else is that something you can talk about, and then I’ll share some thoughts on that as well.
Isaiah Baril-Dore: Yeah. And so, team plan is really based on the data of sort of organizational design where scaling through could ask, the book actually goes into much deeper around how you think about creating leverage as a CEO creating culture. And I think the views in in here that in from index is that you have to establish your culture super early. And there’s there’s something around the the company. Culture aligns a bit to the founder culture, right? It has to be authentic.
Isaiah Baril-Dore: I think you have to write it down early, and you have to build values and principles that you actually measure against and hold people accountable as you scale. I think just assuming that you, as a founder, that you’re you know the way that you work will
Isaiah Baril-Dore: will transcend multiple layers down doesn’t happen right. It has to be built into hiring practices, into performance management. And ultimately, how you think about review, you know, reviewing your talent every year, and I’m curious your experience on that, Anthony.
Anthony Rose: So very interesting, because, you know, it’s said that as a company it reinvents itself when you go from 0 to 10, and then 10 to 30 and 30 to 100 100 to, you know, 300 or whatever. So we’re like partway through that chart, not at 500 yet but past 30.
Isaiah Baril-Dore: Getting it.
Anthony Rose: And and back at the when we were about 30 people at sea legals, I noticed particularly. One of our team was sort of struggling. They hadn’t really reinvented themselves from doing themselves to managing and building a team, and they clearly want to do and be hands on themselves. But we clearly needed a team to get built, and ultimately they ended up leaving. And about that time I was sort of struggling. Why this person is so good
Anthony Rose: at doing this, but we now need this to be done, and they’re not reinventing themselves. And then, you know, we’re very fortunate to have indexes and invest in our company
Anthony Rose: and index had sponsored an event with about 20 founders put on by Mckinsey, and it was about growing pains, and one of the things that was said that at about 30 a minute is sort of about 100 plus people. You’ve got these transitions where your early team no longer have direct access to the founders.
Anthony Rose: because they used to all sit in office together. But now there’s management in between, or the founders super busy, or you’re getting 1 30th of their time, not 1 3rd of their time, and at that point also, the other thing is, the company is now switching
Anthony Rose: from you know mission to performance. It’s about the the idea of building something to now selling something, and many people see the selling as a sort of venal sin. No, our passion. Our mission is just to build this amazing thing. You can’t build it. If you don’t sell it, you won’t have a company. So as soon as you talk about pricing and sales and refunds and credits.
Anthony Rose: this becomes, you know, something that needs a brain switch to do. And so one of the things I learned from this session, and I think that pretty much every founder is going to experience, that is, as you switch gears from building to selling and switch gears from. You know it’s just. There’s no middle management. Everyone’s together to. We have to go to the next step, and you will then see both for yourself and for your team members
Anthony Rose: who can reinvent themselves, and you know a typical one would be the CTO. Which is
Anthony Rose: initially they coding and setting up the Aws instances. And now they’ve got a couple of people they’re working with, but soon they may be somewhat hands off and maybe doing architecture, workshops, or just hiring, and so on. So it’s that reinvention to me which is super important. And then, seeing when it’s your internal team that will grow into these new roles, or whether you, when you’re hiring externally.
Isaiah Baril-Dore: Yeah, it it is so there’s so there’s so much there that I think it’s a great topic. I think one of the things we found from our data is that
Isaiah Baril-Dore: of your 1st 10 hires. By the time you reach a thousand, only 2 of them are left right, and so maintaining that culture and recognizing when people have sort of reached their limit.
Isaiah Baril-Dore: is incredibly important. You know, one of the things we call out in scaling through chaos is like you have to avoid being overly loyal to your early staff. I mean, it’s incredibly important to to highlight your your culture carriers who have been there. But you have to avoid like overly loyal, because if you are growing, you sometimes have to bring in, like the true experts who can sort of bring that company to the next stage, which is, which is a really hard thing for founders, for sure.
Anthony Rose: Okay, if anyone’s got any questions, please pop them in the chat. Which other things did you want to talk about? Maybe on some of the other books and some of the topics we’ve discussed.
Isaiah Baril-Dore: Yeah, I I love this. Actually, it’s a it’s a very great segue from the the topic, the question here, which is for hiring leaders and team members. Is there a good database for salary? Comp data
Isaiah Baril-Dore: startups is benchmark. So yes, I think there are. I mean the last, probably 5 to 10 years, been a huge amount of comp data. Providers come to the market between pave figures, Ravio, which is amazing. I I highly encourage. But index. We actually have a tool that’s open source online, called Option plan, which is part of our index press also available for free online. And I’ll actually show you quickly what that looks like. It’s an amazing app
Isaiah Baril-Dore: and option plan really is for founders to build their 1st option pool and to think about what are the benchmarks that they need for hiring their their 1st staff, both in salary and in equity. So you can really input your benchmarks around, funding around valuation.
Isaiah Baril-Dore: around where you plan to hire, in which type of markets and actually determine what the size of your option pool may be. And what are the benchmarks for hiring hiring talent across all these different locations? This is an incredible tool. We we hear it referenced all the time. From founders. That sort of like their initial option pool design is based on the option plan, rewarding talent book
Isaiah Baril-Dore: so high rank, who is linked.
Anthony Rose: And and importantly, you can select Uk on that and get, you know, not, not contaminated by insane Us. Option, full sizes, and comp, which is very different. I mean the patent broadly in the Us. Is, you know, people expect a major sale of the company, and therefore value comp equity, share options very highly. Where in the Uk, it’s very much. The
Anthony Rose: Founders think that the employees are gonna love. The share options and the employees go. Yeah, share. Options are great. Can you just pay me a market salary, please? And if you give me some options that’d be awesome. So it’s just not as highly valued, and also.
Anthony Rose: and if options vest over 3 or typically 4 years, and people often not in the company that long, you’ll often be able to recycle your options, you’ll because not everyone will be taking up and exercising their options. In fact, only half of all options issued will probably ever be exercised. So don’t get distracted by investors going. You need a 20% option pool.
Anthony Rose: you know, ironically, we’ve got a great set of this data both on employee salary and options on SeedLegals. I just need to get more time to turn that into data.
Anthony Rose: So
Anthony Rose: alright. Now, let’s talk about the challenges of hiring. It’s a great question and bringing into the team senior roles. So hiring a junior role is easy, right? I mean, firstly, you have a lot of data on it. You know, you after a while, you’ve hired 20, you know, developers or 20 support team.
Anthony Rose: So you know very quickly which ones are gonna match and be a fit, and so on. And also, if it goes wrong, it’s easy to undo the damage. But if you hire a CTO or Cfo or product person and goes wrong. It’s gonna go wrong badly. You’ve taken a long time to hide them. It’s gonna take a long time to get rid of them. It’s, gonna you know, screwed up your product.
Anthony Rose: any tips for that. And and presumably that also reflects why, particularly the product role sits with one of the founders for years, until they are
Anthony Rose: forced to reluctantly, perhaps, divest themselves of it.
Isaiah Baril-Dore: Yeah, I mean, I think the 1st tip is that that we actually heard one of the case studies in in the book, and that we’ve seen real time. Is that
Isaiah Baril-Dore: it is incredibly difficult to onboard more than one executive in a year. I think if you are planning out your roadmap
Isaiah Baril-Dore: like bringing in a new CTO and a new Cfo in the same year is incredibly difficult. We have some. There’s some examples in the book of people who tried to hire like 3 executives in a year, and it’s incredibly difficult to onboard effectively maintain culture. Have the right hiring bar, particularly as you’re scaling. So I think 1st is like focus on the right role at that right time and invest time in ensuring that you are holding your hiring bar incredibly high.
Isaiah Baril-Dore: and you’re bringing in the right person. And then that, too, is around onboarding right? Someone new into the into the business is going to have their own experience. But it’s incredibly important for founders to like focus on ensuring that they are embedded. They understand the culture, the teams, and they can be successful in that. Beyond that. First, st you know, sort of 2, 3, 6, 12 months
Isaiah Baril-Dore: and I I think I think finally, it’s identifying the right profile of those roles. Right? Ctos. Come in many different shapes and sizes, understanding the type of CTO that you need is critical. Right? You’ll have Ctos that work that are called the the later stage. But the optimizers that they really are focused on incremental, you know, adjustments to a much larger organization where you may need a true scaler who is putting in
Isaiah Baril-Dore: new systems new processes, upsetting, and if you bring the wrong one at the right time, it can actually sort of slow down. The business growth. So
Isaiah Baril-Dore: identifying the right roles and and profiles is super critical.
Anthony Rose: Okay. Now, from the work you’ve done on these books and the interactive systems, what tips and observations have you got for everyone watching and listening on top performing companies. Give us a bunch of things that you think they did, and people should do, or the things that they
Anthony Rose: didn’t do.
Isaiah Baril-Dore: Yeah, so it’s it’s a great question. So last week we held an event at at our office. With some of the founders of notion, revolute chief growth, officer and whiz, and I think they each told some of their stories around for scaling hyper growth. Successful businesses, and I think 2 things were were clear. Number one is that there is no one right way to scale a business. Each of them had unique stories, unique org charts.
Isaiah Baril-Dore: While the data is incredibly important. It it is so dependent on sort of the founder where they spike their skill sets. And so, even as you’re reading a book like this. I think it’s incredibly important to know yourself
Isaiah Baril-Dore: and where you spike 2. I think one of the the facts from the the data is that founders at every stage from 0 to 1,000 should be spending half their time
Isaiah Baril-Dore: on people related topics.
Isaiah Baril-Dore: and I know that that seems like hard to believe and the type of people work shifts right in early stages around hiring and onboarding in later stages. A 1,000 people. It’s around, you know, culture and management team alignment. But from this we’ve actually had some of our founders sort of self reflect and think like, well, I’m actually only spending 20%. Or I’m spending 80%.
Isaiah Baril-Dore: And they’ve actually adjusted sort of like that like, we’ll identify where maybe you’re missing a role. You need to bring in a full time talent person at 50 people, or 25 people to to readjust
Anthony Rose: When you, when you talk about people you mean internal as opposed to talking to customers.
Isaiah Baril-Dore: Yeah, like, people like, Hr, yeah, both hiring onboarding culture, internal comms and leadership like managing teams.
Isaiah Baril-Dore: And I think finally, is, keep the talent bar incredibly high.
Isaiah Baril-Dore: We had one of our founders come in and do a pitch recently. One of the things they mentioned was
Isaiah Baril-Dore: like prioritization is only real if it hurts. I thought that was such like a a like a great quote, because
Isaiah Baril-Dore: there is a huge tendency and risk that as you’re hiring quickly to just say, like we need a body and seat right?
Isaiah Baril-Dore: and you’ll sometimes sacrifice on the quality of hire. And I think one of the things we found from our best founders who have scaled. This is to like, be incredibly diligent around those those hires like keep that bar high.
Isaiah Baril-Dore: suffer some pain of not having the right person until you find the right person. Sort of grow your team.
Isaiah Baril-Dore: and that would sort of sort of be like 3 key takeaways, I would say, based on just conversations. We had in the last last 7 days, with a few founders.
Anthony Rose: Okay. And on that last one about that pain of not hiring, I have to say. And this is slightly unrelated. But to me there’s been a mind shift over my career, and you always have this giant Trello board filled with all these tickets or github with all these tickets that you haven’t built, and I would each of see each of these as a failure for us to ship something that we had an idea on.
Anthony Rose: And then one day I realized that actually, I transformed it. And by picking only
Anthony Rose: the most important things, each sprint to ship, you can focus that. Actually, something is on this list for ages it’s actually a triumph. It was never the most important thing. So it doesn’t matter how big the list is. Those are just not the most important things, and the thing that other thing I I heard was that
Anthony Rose: at Amazon a business statement was that he would keep teams intentionally starved of resources to force them to focus on, you know, intelligent, smart solutions to problems and picking the most important things. And so when you know, one of my team called me going. I wish we had more people in X team instead of going. Yes, we’re going to raise more money and just throw it at us. I quite like to go. No.
Anthony Rose: in fact, we intentionally not going to grow that. So we intentionally pick just the most important things to focus on, because otherwise, what happens is, if you do manage to raise a lot and you do spend a lot, you end up spending highly and efficiently and building all sorts of things when, in fact, the limiting factor is often the brain capacity of you know, the the decision making team to intelligently pick the things to build and be able to monetize afterwards.
Anthony Rose: So my message to anyone watching this is to invert things so that all the things you’re not doing. Don’t wake up and see them every day as a source of frustration. See it as a source of delight that the fact you haven’t done it is because you’ve done something more important. This, of course, assumes you shipping efficiently and actually shipping something important rather than shipping something nothing at all. So
Anthony Rose: I I think, unless anyone’s got any questions, I think we it’s it’s a wrap, for now this has been amazing growing. A company is super hard. I don’t claim to be.
Anthony Rose: hey? You know, brilliant at it. We all have our way of thinking. For me. I love product, and I love design. I’m not much of a people person, but if you’re a founder you may be the opposite. And how do you complement yourself with a suitable co-founder? And, by the way, do you have any material on finding co-founders.
Isaiah Baril-Dore: Not on indexpress, but I think as a resource, I mean our our index ventures as a whole is like, has an incredible network and talent team that is all around connecting incredible people. So one of the things that we offer to our our founders is like the opportunity to get connected within our networks. So no actual tool on that right now. But it’s a good idea for future tools.
Anthony Rose: Okay? And I’ve done a video on finding a co-founder, because finding co-founders is one of the hardest problems. Right? You can’t advertise wanted co-founder salary, 0 high high degree of risk must put up with my cranky late night emails and personality and poor jokes.
Anthony Rose: Apply here so very quickly. The, you know, right at the beginning, the founding co-founder problem. I’m going to spend a moment on that which is, I think, there are 3 roles at the beginning of a company which is
Anthony Rose: the the domain hustler, the person whose idea it was. They know the market. They’re on this mission to solve something, but they often can’t build something themselves. So the second role is the person who’s going to deliver it, which is often the CTO.
Anthony Rose: And the 3rd role is someone to make it a proper business which maps to the Coo or Cfo role, and then what you should do is look within and see which of one or more. All 3 of these am I? And then look to surround yourself
Anthony Rose: with co-founders who will complement those skills. So you know, at SeedLegals. I really, I’m the tech slash product, Guy. So I fill sort of that that role. I can do some of the finance stuff. But it’s not really me. My co-founder does that, and my co-founder. It was his idea. So he’s the domain hustler. But these days he’s more sort of background and strategic, and I’m front of house.
Anthony Rose: So the 2 complement each other. So look within. It’s very rare that as a founder you can do all 3
Anthony Rose: sometimes you can do 2, and most commonly at SeedLegals. We see companies got 2 founders, and that’s like your, you know.
Anthony Rose: hit 0 starting point. And then you’re going to go through and hit up team, plan and see the next steps as you grow. And of course, perhaps you have less direct influence in the company on a day to day basis. But you’ve got a much wider sphere of influence on a much wider growing company.
Anthony Rose: So with that, thank you everyone for watching head over to the index ventures team plan scaling through chaos and option plan. They’re fantastic resources, all free. We usually do. The Colbert show. You do excellent.
Isaiah Baril-Dore: Book there.
Anthony Rose: All right, and Isaiah, thank you so much for for joining and helping. Spread the word.
Isaiah Baril-Dore: Having me. I appreciate it. Take care, everybody.
Anthony Rose: Thank you. And yes, we’ll share the video and an article page afterwards to help you on the journey as well. Thank you. Everyone.
