Top Four Reasons Entrepreneurs Fail at Hiring for their Startup

Sweta Patel

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Have you ever wondered why most startups never succeed even after getting funded millions? The truth is that most entrepreneurs are not the best when it comes to allocating their dollars to revenue-generating activities. It is difficult to know who is the most suitable person for the job – when you have so many tasks at hand. Throughout my life, I have noticed that the number one reason most of my businesses didn’t perform, as sufficiently as they could have, was because of the due diligence required in the hiring process. In my first startup, I hired many of my college friends in hopes that they would perform well and I had already known them for a while. This is the wrong way to go, I will never hire my friends in any endeavor I pursue.

After failing several times when it comes to hiring the right people, I can confidently say I have realized many lessons I will not repeat. I wanted to share these lessons with potential entrepreneurs in hopes they don’t learn it the hard way and can make more successful decisions when it comes to reaching their company goals.

Here are my top four lessons:

Extensive background checks are a must

If you want to protect your company and empire, then do a background check on each and every individual you hire, regardless of how sincere they come off. There are several skip trace methods you can use to efficiently acquire public record information to guide you in the proper direction. More often than not, I have had many interviews where people came off genuine and usually I would hire them right away. When I would do a thorough background check, I found they were just another charlatan. This was devastating. I couldn’t believe the information I found and how effectively people cover up their mess these days. This is a non-negotiable for me because it’s not about trust, it’s about protecting your empire and your power. You don’t want to relinquish this. Here are a few websites that may help you on your search – WhitePages.com, Truthfinder.com, and USphonebook.com. I also check Pacer which is a government website to investigate legal records. Before I was that nice person, I would hire anyone that wanted to work for me and was passionate about the company.

Passion is measurable

If they pass the background check, then you move on to the next step, measuring the level of passion they have for what you do. If they are just there for a paycheck, then you may not be going after the right people. The first question I ask is why do you want to work here? What inspired you to fill out an application in the first place? I get a feel for the level of passion they have for the company and then I measure it by assigning them a task and asking them how they feel about it. Usually, within the first few minutes, I can tell if they are interested in the company’s mission or they are feigning. People who can stand by the company’s mission have a story that connects with the mission. The passion comes from the pain and the suffering they experienced that helps them connect with your company’s mission. If they can’t use the solution, then they may not be the right fit.

Go beyond the tasks and resumes

Most current companies rely too much on the resume and initial interviews. If you read job descriptions meticulously, they’re not exactly cut and dry. They really concentrate on the tasks. The truth is if a person is capable of learning and being resourceful then the tasks are the last thing you have to worry about. There were so many times where I “faked it” to get a position and I would learn on the job. This is why most entrepreneurs are not able to find the right people because they put too much focus on the resume and tasks they want the person to perform over just understanding who they are as a person and how they work. There were many companies I worked for that would reject candidates because they switched too many positions or they didn’t have the right “skill” needed – but the chemistry wasn’t even measured. Can you really measure someone’s capabilities through a resume? If so, I would have failed that task miserably. I don’t look for fancy resumes and job descriptions any more. I search for people who are lifelong learners and are able to think on their feet.

Every hire should be able to sell

This is the truth when it comes to going beyond the startup to an actual company. There were many entrepreneurs I worked for that would hire people who were skilled at their trade but had no idea how to think from a revenue perspective. You can design all day but if it is not keeping the doors open of the company, it doesn’t matter what you design. It requires the right mindset to be able to design with the objective of marketability. The design usually gets very personal and the mindset shift takes the person out of the perspective that they have to design something based on their opinion of how it will sell. If every single person is not performing from a selling perspective, then the company will have many silos and it will be hard to collaboration between departments. The one thing I noticed was that entrepreneurs tend to separate departments early on and I have always felt that this is where they go wrong.

After working with over 200-startups I can easily say these were the main reasons why many startups didn’t perform or meet their goals. I hope these top four lessons help you pick the right people for your company. Feel free to reach out to me at startupgrowthmode.com for additional assistance.

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Millions of women who silently struggle with autoimmune-related health issues have a new resource to turn to for help. Sweta Patel, founder of Healveda is no stranger to success. She has advised and served as an executive for more than 200 high-growth startups in Silicon Valley. She’s the founder of Startup Growth Mode, Best-Selling Author, and an Oracles Member, an elite brain trust of entrepreneurs that include Sir Richard Branson, Tim Draper, and more. Sweta switched from tech to health after successfully dealing with three different autoimmune episodes. Today, she is on a mission to help women all over the world find natural ways to defeat the crippling effects of autoimmune diseases while going after their dreams.

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