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An entrepreneur once told me the first 25 people he would hire for a startup would be friends and family. At the time, it seemed like a sound strategy because friends and family are known commodities; you can (hopefully!) trust them, and chances are you will enjoy working together.

But having worked in the startup space over the past three years, I now realize that too many startups made bad hiring decisions based on this 'comfortable' approach. And while friends and family can certainly make good employees, there are better and more effective approaches to hiring.

Startup entrepreneurs often hire people they know or have worked with in the past. This is the easy way out because it involves little or no research or interviewing. But hiring the wrong employee can make executing strategy very difficult. In fact, in a small startup, every hire is critical because he or she can make or break a startup's prospects.

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Early-stage startups thrive when they have people who have the right skills and the ability to work as a team. They should understand the dynamics of working for a startup and, as a result, appreciate the demands and pressures involved. And when push comes to shove, with the right skills, they will perform well as the company evolves.

To avoid hiring failure, startups need to be pragmatic and realistic about attracting the right person. It means creating a methodology that helps them discover, identify and assess candidates for each position. This may see them hire people don't know but the upside is they have a defined approach to hiring.

Before you hire people you know, be sure to ask yourself the following questions :

  • Do they have the right skills and experience?
  • Are they well suited to work for a startup?
  • Can they perform well as part of a small, fast-moving team?
  • What are their career goals?
  • Are they willing to do a variety of jobs?
  • What is more important to them – money, experience or the adventure?
  • How would they react if the startup struggled or started to run out of money? Flee the roost or stick it out?

And remember: As much as startups want to move quickly, speed doesn't matter if you don't have the right horses.

Mark Evans is the principal with ME Consulting, a communications and marketing strategic consultancy that works with startups and fast-growing companies. Mark has worked with four startups – Blanketware, b5Media, PlanetEye and Sysomos. He was a technology reporter for more than a decade with The Globe and Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshmarketing and meshwest conferences.

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