Over the next two months, I am going to discuss what I believe are the four basic components needed to turn a start-up into a successful, long-term company. They are people, passion, perseverance and profitability. I will highlight each of these four components in separate posts in the coming months.
It may sound cliché, but the most important component is having great people. It took me many years to figure this out, but people truly are the cornerstone of any company. You might have a great idea but without the right people, the idea might never reach its full potential. Not only do you require smart people, but people who share the long-term vision of the start-up. With the early employees, you want to build the right culture which is needed to attract top talent as the company grows. For many years, Google was the place to be in Silicon Valley if you were a coding genius. The culture was built by early employees who were from computer science backgrounds and insisted on the corporate motto "Don't be evil." Nowadays, it seems all the top computer science talent wants to work at Facebook, partially because of the stock options they would receive but also because they would want to work with other smart and talented people. Top talent likes to work with top talent.
In addition to having smart people who know the market, you also want people who can challenge business decisions in a constructive manner. Initially, you will spend a large part of your time with the core team building out the business and having people who are easy to get along with in a work and personal environment is highly recommended. Start-ups are inherently stressful and the last thing you need is to surround yourself with negative people. People who are always negative can be very destructive and should be removed immediately there's no need for additional drama from within the company.
Here's an excellent example of two companies which have gone in opposite directions even though they are in the same space Google and Yahoo! As stated before, Google has a history of treating its employees like kings, such as providing free gourmet cooked meals, haircuts and so much more. They even provide their engineering staff with something called 20%, where programmers can work on anything that interests them. Google's real asset is its search algorithm but without the right people to tune it and tweak it, the whole thing might have ended up like so many other Internet search giants. At the other end of the spectrum is Yahoo! In the early 90s, it was the Silicon Valley start-up to work for, but over the years, many top-ranking employees left. This led to a vicious cycle where other people left and then they couldn't attract new talent which was sorely needed in such a competitive industry.
One of the most difficult tasks for any company is hiring people. That difficulty is even more amplified at a start-up, as many people don't want to take the risk of joining an unknown entity. And if you are lucky enough to experience hyper-growth, you have all sorts of people applying and the hiring standards usually get relaxed in order to fill a job role. By maintaining a strict adherence to hiring great people can only benefit the company in the long run.