Hiring Big Company Execs vs. Hiring Startup Joiners

with Appster Co-Founder & Co-CEO Mark McDonald

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Catch Mark speaking at Kick.Start.Smart. Brisbane & Melbourne

Many of us have been there before. You need to hire some sort of leader for your company. Maybe it’s a project manager, a sales director or marketing guru. You write up a quirky job ad and post it on LinkedIn or Seek, then wait.

Before you know it, you’ve got a bunch of people and a few big company applicants.

Wow. Boy, do they have impressive numbers on their resumes.

Managed a $100 million revenue line? Check.

Managed 100 people? Check.

Acted as an entrepreneur in a huge company. Check.

However, before you hire your next VP from KPMG, HP or whatever large company they may come from, you need to make sure that you don’t just mistakenly hire somebody that will fail in a nimble startup environment.

At Appster, we’ve hired executives that worked out great for the company and a few that didn’t. These are the things we learned first-hand:


1. Hire people who have worked in big and small firms

Our leadership team and advisory board is comprised of people from all kinds of companies. Some have managed billions in revenue, while others have come from small firms. There are pros and cons to each:

Pros of hiring someone from a big company:

  • Your executive will understand what systems and processes larger companies use to manage scale. Some of these will be useful as you grow, while others will not.
  • They understand how to deal with issues that aren’t as obvious in a startup made up of just a few people – such as how to position communication to different stakeholders in the business, organisational design and how to manage increased complexity. These are the things you start to manage once you cross 50 people!
  • They often have networks and knowledge of how larger companies operate which can be priceless if your target market is sitting inside one of those companies.

Pros of hiring someone from a startup or SME:

  • They’ll understand how to be ‘hands on’ in launching a startup or running a business. They know how to get their hands dirty.
  • They can work in ‘chaos’ and understands what it takes to work in an environment where there isn’t defined processes or even established ways to generate revenue yet.
  • They’re often battle-tested and know what it takes to build something from nothing.

Each background has advantages and weaknesses. In my experience, I’ve found that it’s best to find somebody who has worked in both environments. A hybrid!

If you hire someone who has only worked in large companies, it may take too long to adapt them into how your startup works.

Alternatively, if you hire someone who has worked in a smaller or similar size company then they may not be able to adapt to fast growth when the complexity of your company outgrows what they’ve managed before.

You don’t want to be swapping out talent every six to 12 months because you’re outgrowing their skill set and competency.


2. The leading indicator of fit

For someone working in a large company, it can often look like a ‘setback’ in their career to go work in a startup.

The game before used to be about profit and loss responsibility, headcount and budget allocation.

In a startup, they suddenly have to work on a dime, report to somebody who is half their age and make things happen themselves without a big team.

Some people adapt really well to this and become thriving members of teams. They bring enormous amounts of value from their experience and play well with others.

Then you have others. Their ego means because they’ve ‘done this already at X company’, their method and thinking should be the way you do it at your startup. Anything else is heresy to them.

They may even become passive aggressive and bring corporate politics into your tight-knit team.

These folks have to go; they’re toxic. However, you can avoid hiring them in the first place by looking for the trait of humility throughout their career.

How do you find that out? Well, that ties into my final point.


3. Reference check like a pro

Don’t make the mistake I’ve made many times being a lazy reference checker. According to Brad Smart, it costs 15 times more than the executive salary if you make a mistake – that can be millions of dollars. So it’s worthwhile to make sure you do your due diligence.

Reference checks are the elixir of truth for some of the exaggeration that occurs during interviews.

For me there are three rules of reference checking:

1. Do not let the recruiter do the references for you. Do you seriously think they’re going to try to find the flaws or culture clashes?

2. Make sure you speak to their managers, the last five of them. Minimum.

3. If they don’t want to give you references or only want to show you the ones they want (i.e. not direct managers), run away.

Some of the things you’ll want to really focus on making sure you clarify:

  • How political is this person? Was there ever any issues between them and other colleagues? Did you ever feel like they used backroom chatter to get things done?
  • How humble are they? Can you show some examples of them being a level 5 leader? Do they put the company before their own success?
  • Did they do what they claimed themselves? Make sure they aren’t taking credit for something they didn’t really accomplish or contribute to.
  • Are they proactive? Do they manage through waiting for people to bring decisions and information to their desk (like many execs do), or are they comfortable proactively going out and making things happen themselves?


Remember, people will often only say nice things in reference checks. If you aren’t getting any negatives you need to dig deeper. Don’t be afraid to ask things like even an olympic gold medalist has things they’d want to improve in, what are they?” Trust me you’ll find out some interesting things.


This article was originally published on Appsterhq.com.

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