The biggest challenge faced by most startups is a lack of funding. There are all kinds of routes that you can go through, such as crowdfunding, getting an angel investor, or securing a bank loan but if this is your first entrepreneurial project or have little on-paper experience in the field, encouraging investment is going to be difficult.
Startups also face a similar challenge when looking to encourage talent. With no funding and just an idea, potential new hires are going to be wary of leaving their cushy 9 to 5 jobs and hopping aboard the SS Let’s Get Rich from My Genius Idea.
It seems like a chicken and egg scenario. However, building a startup team when you have no money and just a vision doesn’t have to be an insurmountable task.
Is Your Startup Vision More Than a Vision?
The question that you need to ask yourself – and the question that all potential hires will be asking of a startup in its infancy – is whether you have just a vision or whether you have a plan.
We’ve all met people with a “vision.” They are the same people with notebooks full of doodles and diagrams, written upon pages that have gone yellow with age. These are the men and women who give you updates on their grand ideas at dinner parties – the same grand ideas you’ve been hearing about for decades. You need to have a plan to convince people that you are going somewhere and really want to make this work.
How to Make a Startup Plan
A good startup plan needs the following components:
- A comprehensive summary of how your business will solve the problem experienced by your target market.
Saying “we will help businesses become more productive” isn’t going to cut it. Tell your potential employees that you “aim to reduce friction and improve workflow by offering task automation and work scheduling” and you may just get a bite.
- A thorough understanding of your industry and your competitors.
As the person in charge, prospective employees expect you to have done your research. They will want to know who you’re up against, how your business will be different (and better) to these rival firms, and how your small-fry startup plans to compete against these multinational sharks.
- What needs to be done to build and grow your startup.
Knowing what you want to do and what you’re up against is a start but you’re going to need a plan of action. No one wants to be part of a directionless startup, they want to be part of something exciting that’s going places (with a founder that knows how to get there). This may involve building an MVP, acquiring some customers, or setting up customer acquisition channels (such as an email list and a content marketing strategy) to prepare for launch.
- You need to know your numbers.
Just because your startup doesn’t have any funds (yet), that doesn’t mean that you can do everything on a bootstrap budget. You know it and anyone you hires knows it too (if they don’t know it then you should question their naivete). You should have a good idea of what money you’ll need to develop your MVP into a full product, or what a major marketing plan would require. You should also know when you’ll need this money, as this will give your employees an idea of how much money needs to be generated and how.
The way that you present your startup plan is the subject for another blog post, another day. However, this should be written down, presented in an easy-to-read way and not just scribbled on some Post-It notes taped to the company fridge.
Have You Taken Any Steps With Your Vision?
Have you ever tried to sell someone on a product that doesn’t exist? It goes a bit like this
Company: Hi, we would like to sell you the best car in the world!
Customer: Awesome! Can I see it?
Company: Well, it hasn’t been built yet and there are no designs.
As a startup founder with no capital, no one is expecting you to have built your MVP and to already be getting customers. However, they will expect you to have something to show, just to prove that you’re serious about what you’re doing.
This could be the registration of your company’s website, the filing of a trademark, or a patent if you plan to sell a physical product. It’s also a good idea that you have reached out to some potential customers such as putting together an email list or by writing articles about your industry to establish yourself as a thought leader.
Understand What Roles Your Startup Needs
You could hire anyone with any skills to your startup but it won’t help you progress through your business plan discussed two sections ago. In order to hire effectively and appeal to the right people, you need to understand what roles your startup needs.
The roles you need when your startup has just been founded will differ to those you need once your startup is two years in. Now, you may need talented developers who can build your MVP whereas later you may need growth hackers who can improve your churn rates. While the duties of a growth hacker may sound exciting, improving a churn rate of zero (because your startup doesn’t have many customers to churn) isn’t going to be very effective.
To figure out which roles you need to hire, look at the first steps your startup will need to build its project or attract investors and think of what skills this requires. You can also look at the skills that you have and see where you’re lacking (or better yet, get your brutally honest best friend to point out your flaws for you) and hire people who can balance you out. It’s why non-technical founders look for technical co-founders.
Then, see what sort of roles these skills and duties would fit under them. Some roles, such as content marketer, can have lots of different titles (like digital marketer, and content strategist) but the skills will be the same. Try typing the skills and duties into LinkedIn to see what sort of titles and profiles show up.
Look for Thought Leaders in Your Space
Thought leader – noun – A thought leader is an individual or firm that prospects, clients, referral sources, intermediaries and even competitors recognize as one of the foremost authorities in selected areas of specialization, resulting in its being the go-to individual or organization for said expertise. (via)
If someone is a thought leader in your space then they know a lot about your niche or industry and who is successful within it. They may have had some experience (potentially more experience than you) in working in that industry and could be a great first hire.
If they aren’t working in the field now and never have, but do have a real interest for the subject, then even better. They may have been waiting for the right opportunity to get involved in the industry and your startup, with its grand vision, could be just the opportunity that they are looking for.
To find a thought leader, you need to go where they are. Social media is a brilliant tool for this as just by typing in related hashtags you can find profiles who post about your niche a lot. You can also look on platforms like Medium, an oft-used place for thought leaders who don’t have a company or platform in the industry to share their thoughts but still have a lot of good ideas.
The only problem with attracting thought leaders is that they may be skeptical of your prospects and may prefer to see some results before working with you.
In this case, look for people who believe in you, although they may not have a huge knowledge in your industry. These people, whether they are former coworkers or family members, may be more likely to support your vision and work alongside you although you have a lack of funding.
Offer New Hires Equity
Getting a potential new hire into the interview in the room is the difficult part and if you’ve successfully done that, then you’re super close to hiring them. However, the challenge isn’t done yet.
There’s still the big question of salary. You may be offering a tiny fraction of what they could get by taking their skills to Google, Apple, or any other major firms. In the absence of a big salary, you could offer them equity, giving them shares so that they’ll be able to cash in on success if the company goes public or if it’s purchased by a bigger company.
Just because you don’t have the funding secured for your startup, this doesn’t mean that you have to sit on your hands. You can make real progress and make some great hires with just your great idea.