Startup Growing Pains – The Problem with ‘Water Walkers’

It’s an exciting time for every successful startup: when and who to hire as the baby company grows to meet expanding opportunities! At the same time, this moment is fraught with peril. The right hire can propel the firm to the next stage of development, while the wrong hire can seriously set back or even doom the company’s prospects.

So how should leaders of a startup think about navigating these rocky shoals and growing their team?

Common advice says you should hire the best, not the cheapest. And this, indeed, is sound advice. But does this mean you should go after the most expensive person you can afford? Should you pursue a “Water Walker,” e.g., a person who has risen to a senior position in a large company in the space you’re looking to enter? (We use the term ‘Water Walker’ because startups so frequently see such a person and their resume as being able to perform miracles, e.g., walking on water.)

Before we answer the question directly, let’s take an actual, real-world example to illustrate that “over hiring” or going after a Water Walker can be a major mistake.

NewCo (changed the name to protect the guilty) needed a back-office system. They had just raised their A round and had plenty of money. They knew of a top guy in charge of managing the back-office system at an S&P 500 company. They hired a recruiter to lure this person away from their current BigCo role, complete with a big salary and valuable stock options.

Unfortunately, NewCo succeeded in its pursuit. This was unfortunate because this person had no idea how to develop systems within the context of a startup – a much smaller budget, things changing every five minutes, and the lack of formal structure. He struggled for more than two years before NewCo finally looked for an alternative.

Having helped hundreds of startups for over 20 years now, the Finish Line PDS team has heard this story too many times. Sometimes the hire is in engineering, sometimes it is in sales, other times its operations. But the story is always the same, with the startup’s founders thinking, “This Water Walker will save us because they worked for the famous BigCo!”

The reality is that the challenges startups faces are vastly different from what big companies encounter.

In the example above, NewCo’s mistake was they incorrectly defined their problem. They hired someone who was an expert in RUNNING a back-office system. But what NewCo needed was a team member expert at INSTALLING and CUSTOMIZING a solution based on NewCo’s own particular needs.

If the founders had peeled the onion, they would have realized that their Water Walker’s skill set was rising through the ranks at a large company and running a system that someone else had selected, installed, & customized in years past. NewCo did not realize that simply copy-pasting BigCo’s solution would not work in their startup context.

So, what was the right solution in NewCo’s case? Well, to pour salt in the wound, the alternative that allowed NewCo finally to move forward was a SaaS (Software as a Service) solution available for a modest monthly fee! Pursuing and hiring a BigCo Water Walker was an expensive mistake that significantly set NewCo back.

A new parent would never hire a hospital’s chief of surgery because what really is needed is a pediatrician, e.g., an expert at helping babies growing into healthy kids. Similarly, it would be best if you avoided Water Walkers for your startup and, instead, look to hire experts that know how to help a young company manage the growing pains and reach the next stage of development. After all, you want the best for your baby.

For more information on how Finish Line PDS can help you avoid the startup mistakes we have seen – and a few we’ve made ourselves – please visit our STARTUP Hub.

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