How to Avoid the Broken Dreams of Entrepreneurs



Most startup missions fail. Often, the deathblow is failure to build the right team. The wrong hire at a high-growth business costs significantly more than at a slower growth company. It can literally put your survival at stake when an executive leadership role is involved. When hiring an executive leader, does it really make sense to be penny-wise and pound-foolish?

Anything that slows down your ability to execute translates into lost market opportunity or advantage. Growth is crunch time: either leadership will have the capacity to grow organizational effectiveness, execution competence and performance agility, or the things that made your business a hot prospect in the beginning will wither and die. When it comes to hiring an executive leader, being thrifty or hasty is a sure recipe for loss of horsepower and momentum.

Moreover, the Society for Human Resources Management puts the cost of replacing a bad hire at up to five times their annual salary. And the costs rise steeply as you ascend the organizational ladder. Then there are the intangible costs. High turnover impacts morale, creates organizational drag and produces a loss in opportunity costs. Success in anything requires a full-time effort. When in high-growth mode, the costs of turbulence in your leadership team are especially disruptive and even devastating.

If you want to avoid being part of the vast majority of startups that fail, understand the high costs of making a bad executive hire. Then develop and invest in a smart plan, a process to evaluate the wide reach of the market for top leaders and recruit the top-caliber executive leader that is right for you. Fear, greed and scarcity are all part of the same mindset and can break your entrepreneurial dreams. To grow a thriving business, the opposite is needed. Exercise your abundance mindset and the bold confidence you need to achieve your mission.

The best utilization of venture capital is to acquire the right human capital.




Reprinted by permission.

Image credit: CC by Bernard Goldbach

About the author: Dave Carvajal

Dave Carvajal built HotJobs (650 employees, IPO & $1.2B market cap then sold to Yahoo!) as Co-founder & TheLadders (400 employees, $80M revs) where he focused on attracting, retaining and developing all employees. These days he’s asked by top VCs and CEOs of high-growth startups to build their Boards and leadership teams with the top 1% of A+ executive talent. He is an Ironman and lives in NJ with his wife where he is co-founder of twin boys and a pup named Clover.

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