Your First Hires: Building a Startup Team That Actually Gets Things Done

The notification popped up on Jessica’s phone at 11 PM on a Tuesday. Another customer support ticket, the third one that day about a bug she’d already fixed twice. As the sole founder of a growing SaaS platform, she was juggling customer support, product development, marketing, and sales. The revenue was there—$15,000 monthly recurring revenue and climbing—but she was drowning.

Jessica knew she needed help, but the thought of hiring her first employee felt overwhelming. Who should she hire first? How much should she pay them? What about equity? And perhaps most importantly, how could she be sure they wouldn’t slow her down more than they’d speed her up?

Jessica’s dilemma is one of the most critical inflection points in any startup’s journey. Getting your first hires right can accelerate your growth and free you to focus on what matters most. Getting them wrong can drain your resources, distract from your vision, and sometimes kill your company entirely.

The Timing Paradox

The biggest mistake founders make isn’t hiring the wrong people—it’s hiring at the wrong time. There’s a sweet spot between doing everything yourself and bringing on help, and finding it requires honest self-assessment.

You’re probably ready for your first hire when you find yourself repeatedly doing work that someone else could do better, faster, or cheaper than you. This might be customer support if you’re spending hours each day answering the same questions. It could be content creation if you’re a technical founder struggling with marketing. Or it might be development work if you’re a business-focused founder who’s reached the limits of no-code tools.

The key indicator isn’t how busy you are—it’s whether your time is being spent on activities that only you can do. If you’re the only person who can close deals with enterprise customers, you shouldn’t be writing blog posts. If you’re the only one who understands your technical architecture, you shouldn’t be managing social media accounts.

Your First Hire: The Multiplier Test

Your first employee should pass what I call the “multiplier test.” They shouldn’t just take work off your plate—they should make you more effective at your core responsibilities. The best first hires are force multipliers who amplify your strengths rather than simply filling gaps.

For technical founders, this often means hiring someone who can handle customer-facing activities: sales, marketing, or customer success. For business-focused founders, it’s usually a technical hire who can build, maintain, or improve the product. But these aren’t hard rules—the right first hire depends entirely on where your biggest bottlenecks are.

Consider the story of David, who founded a project management tool for construction companies. As a former contractor himself, he was excellent at understanding customer needs and closing sales, but he was spending 60% of his time on basic customer support. His first hire wasn’t a developer or a salesperson—it was a customer success manager who could handle support tickets and onboard new customers. This freed David to focus on sales, and his revenue doubled in the following six months.

The Equity Conversation

One of the most anxiety-inducing aspects of early hiring is determining equity compensation. Early employees are taking significant risks by joining an unproven company, and equity is often the only way to attract quality talent when you can’t compete on salary.

The general rule is that your first few employees should receive between 0.5% and 2% equity, depending on their role, experience, and when they join. A senior developer joining as employee number one might warrant 1.5-2%, while a junior marketing coordinator joining as employee number five might receive 0.5-0.75%.

But equity isn’t just about percentages—it’s about vesting schedules, cliff periods, and what happens if someone leaves. Standard practice is a four-year vesting schedule with a one-year cliff, meaning employees earn their equity over four years but don’t receive anything if they leave before completing one year.

More important than the exact numbers is having transparent conversations about equity from the beginning. Explain how you arrived at the numbers, what the equity could be worth in different scenarios, and what happens in various situations. These conversations are uncomfortable, but they prevent much more uncomfortable situations later.

Beyond Technical Skills: The Culture Question

Your first employees don’t just join your company—they help define it. The people you hire in the first five positions will establish the culture, work ethic, and standards that persist as you scale. This makes cultural fit even more important than it would be at a larger company.

But “cultural fit” doesn’t mean hiring people who are exactly like you. In fact, the opposite is often true. Your first hires should complement your skills and temperament, bringing perspectives and abilities that you lack. If you’re a visionary who struggles with execution, hire someone who loves turning ideas into reality. If you’re detail-oriented but struggle with big-picture thinking, find someone who can help you see the forest for the trees.

The key is ensuring that your early employees share your core values and vision for the company, even if they approach problems differently than you do. They should be excited about your mission, comfortable with ambiguity, and willing to wear multiple hats as the company evolves.

The Remote vs. In-Person Decision

The rise of remote work has fundamentally changed early-stage hiring. You’re no longer limited to talent in your immediate geographic area, which dramatically expands your options. At the same time, building culture and maintaining alignment can be more challenging when your team is distributed.

For your first few hires, there’s something to be said for having people you can work with closely, whether that’s in the same office or the same time zone. The rapid iteration and constant communication required in early-stage companies can be easier when you’re not dealing with significant time zone differences or communication delays.

That said, some of the most successful startups have been remote from day one. The key is being intentional about communication, establishing clear processes, and over-investing in relationship building during the early stages.

Avoiding the Hiring Traps

Early-stage hiring is full of potential pitfalls that can derail your progress. One of the most common is hiring too quickly out of desperation. When you’re overwhelmed, it’s tempting to hire the first qualified candidate who shows interest. This almost always leads to problems down the road.

Another trap is hiring people who are overqualified for your current stage. A VP of Engineering from Google might seem like an amazing hire, but they might struggle with the ambiguity and resource constraints of a five-person startup. Sometimes the person who’s perfect for your company at 50 employees is completely wrong for your company at 5 employees.

Perhaps the biggest trap is failing to establish clear expectations and accountability from the beginning. Early employees need more guidance and feedback than employees at established companies, not less. They’re helping to build processes and standards from scratch, which requires constant communication and course correction.

The Legal and Administrative Reality

Hiring your first employee involves a surprising amount of administrative work that many founders underestimate. You’ll need to set up payroll, understand employment laws in your jurisdiction, establish benefits policies, and create employment contracts.

This administrative burden is one reason why many startups initially work with contractors rather than employees. Contractors can be easier to manage from a legal and administrative perspective, though you sacrifice some control and long-term alignment. The decision between employees and contractors depends on your specific situation, but don’t let administrative complexity prevent you from getting the help you need.

Making the Decision

Ultimately, the decision to hire your first employee is as much about personal readiness as business readiness. You’re transitioning from being a solo founder to being a manager and leader. This requires new skills and a different mindset.

You’ll need to learn how to delegate effectively, provide clear feedback, and create systems that work for more than just you. You’ll need to balance giving people autonomy with maintaining quality standards. Most importantly, you’ll need to trust other people with aspects of your business that you’ve been controlling entirely yourself.

This transition isn’t always smooth, and it’s normal to feel anxious about it. But for most founders, it’s also liberating. Having the right person handle tasks that drain your energy allows you to focus on the activities that energize you and drive the most value for your business.

The Long View

Your first hire is rarely your last, and the decisions you make now will influence your hiring for years to come. The standards you set, the processes you establish, and the culture you create with your first few employees will persist as you scale.

This means thinking beyond just filling immediate needs. Consider how each hire fits into your longer-term vision for the company. What kind of organization are you trying to build? What values do you want to embed from the beginning? How do you want people to work together?

Getting your first hires right is one of the highest-leverage decisions you’ll make as a founder. Take the time to do it thoughtfully, and you’ll build a foundation that supports sustainable growth for years to come.