May 5th, 2021

Reflex CapitalBlogHR

Any successful startup sooner or later gets to a situation, where capacity, knowledge and experience of the founders and their initial teams stop being enough and it’s time to tap the talent market. And then comes the surprise.

At first, the founder realizes, that from any given pool of candidates, by definition 49.999% is below average. The difference between crisis and conjuncture is in the number of losers looking for a job. Employers try to keep above average people at all costs. Sometimes it so happens, that an exceptional individual has a dispute with their boss, they feel they are not adequately compensated or they lose their faith in company leadership. But all it usually takes is few phone calls to their friends and they do not need to post their resume to job hunting sites and worry that nobody is replying.

The second surprise comes from the realization, that–contrary to startup enthusiasts–many people go to work simply because they did not find any other legal way how to make their living and need to be motivated constantly to do their job. It’s unfortunate that it became sort of a norm that people get paid to show up at work and if they manage to actually produce something useful while there, they are eligible for a bonus.

Specific area of concern are managerial positions. Experienced manager willing to work for startup salary is about the same type of oxymoron as is the latest technology with at least fifty reference installations. There are basically two breeds of experienced manager: those, who built their company and sold it and those from corporations. The first kind either stay entrepreneurs or don’t want to work too much to become employees. For the other kind, leaving the corporate nest is risky, because “out of sight, out of mind”. The stock options do not solve the problem, because though the idea of becoming a dollar millionaire is tempting, there are very few unicorns roaming the Czech woodland and this idea clashes with the unfortunate reality of many experienced managers, where the bank account is under constant monthly attack of mortgage, car leasing, wife’s fashion habit and private kindergarten tuition (to say nothing of the golf club membership). There are very few, who can afford to live several years out of their own pocket, to recover with profit few years down the line by selling their stock options with enough left over for retirement. And none of that is even remotely guaranteed.

So what can be done? We hire an HR manager! You see the problem there, right? HR managers are no exception to the damned 49.999% rule I mentioned earlier and so is the reality of startup salaries. Really good HR managers, able to attract above average workforce, are few and far between and their current employers pay them in gold. The startup founder is usually able to find someone capable of organizing a teambuilding drinking party in the local pub and finding a receptionist who would not lose mail on regular basis, but that’s about it. Junior HR manager won’t fill senior positions. Founder is usually not senior either, but without good team cannot reach their goals. So the only thing left is to search, search and search. And listen to advice given to me by someone much wiser than I was:

We at Reflex are well aware of these HR woes in our portfolio companies. That’s why we have Marek. Marek used to be an entrepreneur, top manager and HR director and is definitely on the A-team. Marek is probably our busiest partner. He is available to our portfolio companies for free consultations, help with recruiting, conflict resolution, personal development and all the HR-related stuff.

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