At MT❯Ventures, we are grateful for the incredible community of founders that we get to work with every day. While it is our goal to always be a resource for our founders and to underpin their success, we also recognize that there is more to a vibrant startup than good legal advice. We are therefore delighted to share the wisdom and insights of our founders, with the hope that it may help you in building your success story. This week, we’re featuring the insights of Andrew Pelekis, Co-founder of Claynosaurz Inc.

Andrew:

In a nascent startup, what you need are partners, not employees. This relationship is similar to a marriage; you’ll face numerous challenges and spend an inordinate amount of time together. There are three things to be wary of in finding the ideal partners:

1. Degree of complementary skills. Each partner should fill in different roles – like a band where each member plays a different instrument, complementary skills harmonize to create successful outcomes.
2. Problem solving capability. A problem solver is capable of learning rapidly and making optimal decisions, often without full information and very quickly. It’s a tacit skill, but one that is imperative.
3. Gut feeling. Trust your instincts — your partnership should feel naturally right. Consider the Airport Test: would you enjoy being stranded at the airport for hours with this person? If the answer is no, that’s probably a deal killer.

Beyond the founding partners, you’ll need to build a team. Early-stage ventures operate with limited resources. Whether you're compensating with capital or equity, each hiring decision is significant and risky. Therefore, expanding the team beyond the founders requires planning.

While a fully fleshed out business plan points to the “what?”, the objective of the plan for hiring is the “who?”. This is a critical part of building. Building without knowing when you’ll need to fill in a gap with a new hire will lead to either a hiring mistake, as you hire someone quickly to try and solve the problem, or bottlenecks, as you take your time to hire the right person, but there is a back-up in throughput. Ensure you have a clear plan outlining the required steps and who will perform them and find and fill the gaps proactively.

Pixar, renowned for hits like Toy Story and Finding Nemo, dedicates years to storyboarding and planning before starting actual production. In startups, as in filmmaking, costs and complexities escalate quickly once production starts. Planning minimizes surprises, although they're inevitable.

So now you have a plan in-hand, and yes, it will evolve over time, but how do you make hiring decisions? First, identify the skill set gaps in your development plan to arrive at a high-level job description. Then, understand what types of expertise are required. There are at least two types of expertise to consider in this sense: (1) acute and (2) tacit knowledge. For instance, in a 3D production pipeline like at Claynosaurz, acute knowledge is crucial for specific tasks like modeling and animation. On the other hand, our project managers and brand strategists have immense tacit knowledge, built through experience.

The need for tacit knowledge in a particular role depends on three factors:

1. The difference between the new role and your team’s existing skill set. The greater the difference, the more valuable tacit knowledge becomes. Conversely, for roles within your expertise, hiring for acute knowledge is likely to be more efficient and cost-effective.
2. The degree of breadth within the role. If the job at hand is multi-faceted, more tacit knowledge is required.
3. The stage of the company itself. The younger the company is, the more likely it is that there will be unforeseen events and that tacit knowledge will therefore become more valuable. Startups face a high volume of 'unknown unknowns.' Challenges will frequently arise that require team members capable of independent action and problem-solving and of demonstrating agency in doing so. The smaller the team and the younger the company, the more you should prioritize agency, which comes through tacit knowledge.

Lastly, hiring around a plan that may change should not make you wary. If you’ve built the team well, the individuals with agency, problem solving skills, and tacit knowledge will adapt. If the plan has shifted so much that team members with acute expertise are no longer needed, then the unfortunate truth is that you must let them go. On this matter, do not hesitate or try to make things work that otherwise do not make sense.

Crafting a successful startup team hinges on combining complementary skills, problem-solving abilities, and intuitive compatibility. The right mix of people, adaptable and aligned with your vision, transforms challenges into opportunities, steering your startup from concept to reality through strategic planning and flexibility.

And, of course, there are the legal realities where the rubber meets the road. When it comes to hiring or firing workers, structuring their compensation, and everything in between, make sure you get support from your legal team. Your ability to effectively respond to challenges and opportunities alike depends on your ability to be responsive – don’t let poor legal housekeeping be the reason you miss your rocketship moment.