1 Simple Rule: Consider the People You Can Attract to Your Startup

Consider employing those who have worked for new ventures before.

The startup environment is dynamic, uncertain, and often stressful, requiring specific skills from your employees. When hiring someone new, look for those who know the startup environment. These employees are likely to cope with the demands of a quickly changing environment and stay on board even if times are tough (as they sometimes are for every startup).

Look for Jacks- and Jills-of-all-trades.

Just as the startup environment changes quickly, so will the tasks your employees have to do. In such a situation, it can be advantageous if your employees have a more general skillset rather than a highly specialized skill set. That way, you can allocate them to new tasks during venture development that you could not foresee when hiring.

Giving up some of the control over your venture can be challenging.

Many entrepreneurs describe their ventures as their babies. They highlight their close bonds to their ventures and their level of dedication. Still, you may not be able to work on all the tasks required to run your venture on your own, and—sooner or later—you will likely need to hire employees to support you. Metaphorically, they may become babysitters of your venture. Ensure you communicate your expectations concerning your overall idea of your venture and highlight the values important to you. However, consider the autonomy of your employees so they will feel sufficiently responsible for the venture (or at least their venture tasks). They may become crucial to further developing your venture when they can make suggestions and incorporate their ideas.

2 Simple Rule: You Will Shape Your Employees, but They Will also Shape You

It is great if you are passionate, but be aware of what you signal to employees.

When you display your entrepreneurial passion, employees can catch fire from you and invest more effort into your venture. However, be aware that different signals can impact employee motivation differently. Suppose you display that you are passionate about developing your venture’s product and making the venture successful. That is great because it signals to employees that you are putting great effort into the current venture. However, this can backfire if you signal that you are passionate about founding ventures more generally. Employees may fear that you are already looking for the next venture to found and that you are thus less committed to the growth and scaling of the current one.

Empower employees to craft their tasks and roles.

Employees will likely come up with suggestions on how they will perform their tasks and perhaps even which tasks they should perform. Because your employees will become experts in their assigned roles, they will likely have relevant insights into these roles and make meaningful suggestions to improve them. If these suggestions fit your ideas of how your venture should work, they can be invaluable to make the venture more efficient. Employees willing to assume more responsibility may even take over some of your tasks and reduce your workload; you can then reallocate your attention to other critical issues.

Guide employees in building your venture’s culture.

Beyond their regular tasks, employees may also develop some informal roles in your venture. For example, employees may come up with some rituals for your venture or organize events for venture members. If these activities are consistent with your values and ideas for your venture, supporting and encouraging them makes sense. In this way, your employees can become the ideal spreaders of your venture’s values and help you build its culture as it grows.

When your employees’ projects fail, help them get over it early.

Projects in new ventures often fail, creating negative emotions in employees that impact their learning and motivation. However, you can help your employees get over these emotions. In particular, provide them with emotional support and tell them that failure can happen to anyone; indeed, failure may be positive if they learn from it. Such support efforts are particularly effective soon after a failure event occurs.

3 Simple Rule: Build a Culture in Which Your Employees Thrive

Establish cooperation within your venture rather than competition.

Although competition can bring out the best in individuals (or groups versus other groups), it can limit information sharing across competing units. Information sharing and learning are critical for venture progress when dealing with an uncertain environment. Rather than stimulate a competitive spirit, it is better to stimulate cooperation and collaboration. Create a culture where venture members help each other perform their essential tasks to enhance innovation and member satisfaction.

When helping someone learn, engage actively in listening to understand the underlying issue.

Active listening helps you better understand to offer more effective help. Active listening does not mean that you remain quiet. It can involve asking probing questions to understand the situation better. The person asking for help is making themselves vulnerable to you (admitting they do not have the answers), so show respect to them in how you deal with their vulnerability. Remember, everyone needs some help sometimes. Over and above demonstrating your trustworthiness, let people know you are accessible. If you signal you are too busy, people will not approach you for help. These signals of unapproachability can diminish the helping culture and adversely impact your venture’s innovativeness.

Promote a helping culture by providing slack and discretion.

Help requires venture members to have some slack time to help others on a task not formally allocated to them. They need to believe they have sufficient time to perform their tasks and some spare time to help others with their tasks. To be effective, help needs to be a voluntary endeavor. You need to give venture members the discretion of when, who, and how they help.

4 Simple Rule: If You Want to Be Entrepreneurial, You Need to Be a Failure-Tolerant Leader

Eliminate or minimize an anti-failure bias in your venture.

You need to realize that people try to hide their mistakes and failures. When they do so, your venture loses an excellent opportunity to learn. It would be best to create an organizational culture where people feel comfortable revealing the activities that led to a failure and enabling your venture to learn. Ironically, if your venture has an anti-failure bias, failures will be more costly.

Display empathy.

Empathy means that you can understand and share a person’s emotional and cognitive experiences. As a failure-tolerant leader, you can build empathy with other venture members by explaining how you have experienced failures, how you felt when a failure occurred, and what you did to learn from those experiences that eventually led to success. Such empathy signals communicate to venture members that failures are accepted as part of the entrepreneurial process. It may be tough to tell stories of your failures, but it builds credibility, displays courage, and promotes a creative and innovative climate within your venture.

Show interest in members’ processes.

Interest in members’ processes signals to venture members that processes are essential and that outcomes do not always reflect a good process. Be curious about how venture members start projects, how they are progressing, what issues they are facing, how they are addressing those issues, and so on. The added advantage of showing interest in members’ processes is that it can help facilitate their intrinsic motivation, which is critical to creativity.

Emphasize collaboration rather than competition.

While competition can generate energy for improving performance on specific tasks, collaboration is more critical in creative endeavors. Collaboration encourages venture members to share information throughout the organization, enhancing creativity and innovativeness.

Tolerate failures that enhance learning; don’t tolerate other failures.

Not all failures are tolerable. Tolerable failures are well thought-out, provide an opportunity to learn, and are diligently performed. Intolerable failures are ill-conceived, provide little learning, or are based on negligence. To state the obvious, you must tolerate tolerable failures but not intolerable ones.