How to Hire When Your Startup Needs
to Grow Up
Many
‘lateral hires’ are complicated and expensive—whether they work out or not.
EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V
AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1
Sep 8,
2025
In the life of most
startup entrepreneurs whose businesses survive to the ripe-old age of three
years, or who have hired more than 100 employees (or both), the inevitable
discussions begin around that anniversary or significant benchmark about hiring
“grownups” to supplement the founding management team. Occasionally these
conversations are initiated by the CEO who understands that he or she needs
help, but in the far more typical instances, it’s the investors, board members
and sometimes worried key customers who want to be sure that the team is
functionally complete and up to the task of managing the obstacles ahead.
To say that these
“lateral hires” are complicated, expensive, and very risky is an
understatement. In dollar terms, they’re expensive whether they work out or
not. But the real cost is in management time and also in the various impacts on
the rest of the team that are always part of the process. Balancing egos,
adding titles, juggling job descriptions, and finessing actual operating
authority are all massive tasks. Just keeping the peace is a challenge. A huge
percentage of these sincere attempts and fraught experiments fail miserably
and, sadly, rarely soon enough to avoid damaging some critical relationships inside and outside the
company.
Causes for the failure
can vary widely, but typically focus on blaming the newbie—for obvious, but not
necessarily accurate, reasons. Other reasons include (1) a quickly-emergent and
readily apparent lack of energy (stamina) and/or little enthusiasm for the
day-to-day aspects of the business; (2) a weak connection to and empathy for
the rest of the employees; (3) an early tendency to criticize the way the
current team has run the business in the past; and (4) a focus and excessive
interest in and emphasis on financial and compensation issues.
Sometimes, it’s the
CEO’s own lack of interest, support and endorsement that brings about the new
hire’s demise. And, of course, there are plenty of cases where the best laid
hiring plans get blown up because the critical fit simply isn’t there—neither side
of the deal looked deeply and clearly enough into the prospective arrangement
to see the most obvious pitfalls. Leaping before looking leads to plenty of
subsequent angst and severe remorse.
This is especially true
right now when the market is flooded with men and women in their 40s and 50s
with tons of documented and valuable experience who’ve been abruptly cut loose by Trump and his rotten DOGE flunkies. Far
too many corporate executives and government managers have read the glossy
books and seen the heroic movies, but they haven’t got the slightest clue as
to how brutal life can be in a rapidly growing startup and
how radically different it is from everything they’ve experienced before.
It’s ultimately on the
CEO to do his or her best to make these personnel matters work out as swiftly
and smoothly as possible, especially because hiring and retaining the right
additional talent is absolutely critical to the company’s future. There are two
primary concerns about the actions and reactions of the rest of the team that
always require attention and some active involvement by the boss.
Youthful passion versus
patience and planning
All successful startups
are customer-centric and everyone in the place is told by the CEO from day one
that being empathetic, attentive, reactive and responsive to the customer’s
needs and demands is the most
important operating rule for the business. Everything for the customer needs to
be done “yesterday” and every problem or hiccup is an absolute emergency where
everyone’s running around freaking out. This mindset might work when there are
12 of you sitting in a house somewhere, but not when there are hundreds of
employees spread all over the country.
The older and more
experienced “newbies” know this—that patience and process are essential even in
a crisis—and that, even when your hair’s on fire, you don’t use a hammer to put
it out. But the younger team members confuse this considered response with ignorance
or indifference. You hear that the new guy “doesn’t get it”—he or she doesn’t
understand “our” culture—they don’t fit. And this perception quickly spreads
across the company.
The CEO needs to step in
and make it clear that this is not a matter of a bad attitude or any lack of
passion or interest in the business. It’s a response governed by a more
important longer-term consideration. There’s a plan and a purpose, there’s a
process in place, there’s a new measured approach to emergencies, and there’s
an underlying idea and acknowledgment that if everything’s an emergency, then
ultimately nothing gets done.
Let bygones be bygones
New, experienced team
members are usually brought in—at least in part—because the systems and
programs which had been in place from the beginning need to be strengthened and
hardened in order to support the company’s growth. Documentation, for example,
is almost always deficient. This requires change, and change is always
uncomfortable, but it’s rarely personal. This is another area where the younger
old-timers take great offense and umbrage. Every suggestion, each comment and
especially observations about the old ways that things were done is taken
personally and regarded as an affront and attack.
The team feels that it’s
necessary to stick up for the past, that it’s somehow disloyal to suggest that
the CEO didn’t get everything right from the get-go, and that saying that
things need to be different going forward is blasphemy. They’re offended on behalf
of the founders and management team. But the sad truth and the joke is that the
CEO doesn’t really care.
As we all get older,
it’s so much easier to get over slights, to avoid getting angry or offended by
insignificant actions, to forgive and forget about little mistakes, and to not
hold grudges. Attention to detail is a critical earlier tenet of startup discipline
and nobody likes to see errors or mistakes, but as the business gets bigger and
far more players are involved, some problems are going to be inevitable and
unavoidable. The focus needs to be on fixing them and not being frustrated
about them.
Here again, the CEO
needs to speak up and let the team know that, while their pain on his behalf is
appreciated, it’s not necessary or useful. Everyone needs to learn from the
past but not live there, and they need to get on with building a better and stronger
business. The past is a resource, not a residence. If the boss doesn’t give a
damn about something, it’s not on you to carry the cross of grievance for him
or her. Life’s too short and there are far more important things to address.
Let bygones be bygones.
