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In every company, employees are an invaluable resource. Not only are they the ones who help startups hit the ground running, working fast and furious to meet outrageous goals, but they also bring an incredible background of education, experience, abilities, creativity and more.
These are the intangible factors that make human capital such a critical piece of the startup puzzle.
As a former entrepreneur and now an investor who helps startups realize their dreams, I know how a talented and motivated workforce can mean the difference between a successful business venture and one that fails.
Let’s discuss how human capital can be the secret weapon for a thriving startup.
Related: Beyond the Basics: 5 Surprising Qualities Investors Seek in a Winning Team
Invest in people and their skills
While entrepreneurs have great ideas, they need a team with the right abilities to take their vision from a concept to a viable product or service. That means finding the right people with particular skills and experiences to drive innovation and solve problems others can’t.
Personality, attitude and work ethic are crucial. That’s one element of human capital that can’t be ignored. You can hire someone who is the best in their field, but if they create division and strife in your team, it won’t work.
Conversely, your startup’s success depends on people who know what they’re doing and do it well. It’s hard to build a strong company with good people who aren’t contributing to the day-in-day-out technical needs of the organization.
It’s a balancing act you must evaluate correctly the first time, as hiring the wrong person can set your company back. And in the fast-paced startup environment, that doesn’t bode well for future investments.
Attracting and keeping top talent
Anyone familiar with startup culture knows that it can get pretty vicious when you’re trying to hire the best talent. It’s highly competitive, with many fledgling companies vying for precious capital.
That’s why creating a culture that attracts the right candidates is essential. With so much transition over the past decade, there are not many ways startups can differentiate themselves in a tangible sense, such as working virtually, ping pong tables, free food, etc. With most companies already offering those things, it becomes more about selling your vision and what the future could hold with the right people on board. Appealing to a candidate’s sense of self-worth and intrinsic value can go a long way to bring them on.
However, once you have them in the fold, the game’s not over yet. According to Founders Circle, the average employee tenure in high-growth startups is two years. If getting them in the door wasn’t hard enough, keeping them there is even more challenging.
This attrition rate makes sense. Startup life is a grind, and it can quickly take a toll on everyone within the organization. That’s why employee engagement initiatives are so important. As an entrepreneur, you have to remember that you have real people working for you, and even the most devoted among them have needs.
Talk with your team members individually and have honest conversations about how they’re doing, how the company is doing and how your team can help each other through challenging periods. Ask them what they need or if there’s any further education or learning that might help them in their roles. You have no idea how the simple act of taking time to attend to your employees, treating them as people and not resources, can motivate them to keep their eyes on the prize.
Related: Here’s What’s Brewing in the Minds of Startup Investors
A culture of continuous learning
While the scheduling and budget constraints of running a startup can be brutal sometimes, it’s still important to carve out opportunities for your people to focus on enhanced learning and skill development. Giving employees the chance to pursue their passions and improve their craft is an integral part of the human capital process.
If you think about the technology and software industries, change and evolution are constant. It only makes sense that you want your team to stay updated on the latest trends and developments, bringing these new insights into your organization. You want your team to evolve with the technology they’re working with, so allow them time to focus on the latest updates and integrate those ideas into their daily work.
Not only is this an essential investment in your company, but you’re also sending your people the message that you value them and their careers. You want them to be the best versions of themselves and give them opportunities to build on their knowledge and experiences.
That can be scary, as it’s always a possibility they may take all this new knowledge to another organization. But that’s a risk you should be willing to take if it means improving your product and service while bolstering your company culture.
Building a winning team
As mentioned, I’ve been on both sides of startup life as an entrepreneur and an investor. In my experience, I have found and firmly believe that no single individual can get all the work done, nor do they have the talent to do so.
As a leader within an organization, it’s your responsibility to recognize that you can’t do it all, and you shouldn’t have to. Finding the right people makes an incredible difference in the work you do. That includes building a diverse and inclusive team. A robust and diverse team is a good signal to investors of a healthy organization, and it also pushes your team to think in new, innovative ways crucial to development.
Every person in your organization should be seen as a strategic ally and resource for your company’s continued growth, development and success.