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Hiring the right people is easily among the three most important things a startup founder needs to get right if he is serious about his business. The other two are having a scalable product or service, and having the right investors.

Matrix Partners David Skok says a hiring crisis can cripple a startups abilities to get products built on time. It can also starve them of the talent they need to market and sell those products.

Then of course, the wrong hire can leave a bad taste in the mouth an experience that gets especially bitter in a small company trying to make it big in the bad world.

This week, at the Matrix Partner office in a tree-lined Bangalore street, managing director Avnish Bajaj and Practo founder Shashank ND chatted about startup challenges and hiring.

Heres a list of practicable solutions to everyday problems startups face with employees.

The friend problem

One problem a lot of startup founders face while growing is suddenly realising that the friend the one who was the by-default co-founder when the business consisted of two laptops and two guys is not really the right person to build a big company with.

The solution is cutting the cord at the right time.

It is also important to not build a company as a friends and family project. Dont surround yourself with friends. Most founders do that because it is easy, and it makes decision making easy. But that could be dangerous, Shashank warned.

I have people in my team who worked very closely with me, but now they are doing something totally different. Shashank said this ensures fresh ideas keep coming in, the company is free of needless hierarchy, and that the founder does not live in a self-created bubble.

The bad hire problem

Another common challenge for growth-stage startups is falling for the lure of the rockstar employee. The one who comes with great work experience, has a flashy attitude, and exhibits a nonchalant cool that shows immense promise.

That works, but it is important to make sure that beneath that rockstar persona, the candidate shares certain values that are in-sync with the company.

The best of our founders have a clear vision of what the company stands for, what its values are, said Avnish. And that reflects in their hiring process.

Shashank said the challenge was to make sure the candidates have a vision of their own.

If the vision fits, it works and the position [designation] becomes secondary. You can also move your people around depending on what their ultimate goal is. For us, we want to make sure that when outsiders meet two people, they would automatically know who among them is a Practeon, he said.

Addressing your employees a certain way Practeons for Practo, in this case is also a great way of building community, Avnish said.

The growing-too-fast problem

Growth stage startups often find themselves in situations where they have to go from 50-odd employees to hundreds almost overnight. That automatically makes it harder to vet candidates, and it is at this stage that companies can also lose their culture.

The trick is in sticking to the companys original vision adamantly, but being patient with new employees.

Missionary organizations hire for intrinsics. Others hire for skill sets, Avnish said, talking about startups that work for a core value. Those bring out the best in people and they always give a longer rope, he added.

The sum of the whole becomes much greater than the parts.

Shashank agreed. At Practo we see if we can polish a potential candidate. We never hire someone who thinks of himself as bigger than the company.

It is also crucial to not let go of your original values and cave in to the pressure of hiring fast. Practo still rejects more than 99 percent of candidates if they are not a culture fit, he said.

The how-to-keep-them-happy problem

Happy employees make for happy companies. Everyone knows that. But how does a founder, firefighting every day, ensure all employees are doing well?

There is no quick fix to this one. The solution lies in making sure you spend as much time as you can with your first hires. Faceless employee surveys wont cut it.

Your employees are going to be your brand ambassadors, and your first hundred odd employees are your key to success there.

In the first few years, even though revenues were very important, I spent most of my time with our people, Shashank told a roomful of investors and startups.

60 percent of my time was spent talking to employees drilling our vision in, solving their problems, being their father, brother, whatever they wanted me to be.

A 2015 survey of Indias CEOs by the Economic Times said Shashank scored a 100 percent in approval ratings.

The first 500 people in the company are super important. It is so, so important that those people exhibit our culture and values, even in the exit interviews he said.

Because, they will go out and talk about your company. They are your ambassadors.

This article originally published at Tech in Asia here

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