Hiring Your First 10 Employees: A Startup's Guide
Hiring Your First 10 Employees: A Startup's Guide
Reading Time: 25 minutes | Last Updated: December 2025
Startups don't fail because of bad ideas. They fail because of bad hires. The wrong first employee can destroy your culture, burn your cash, and slow you to a halt. The right tenth employee can 10x your growth.
This guide gives you the tactical playbook for hiring employees 1-10. These aren't enterprise recruiting processes bloated with bureaucracy. These are lean, fast, effective methods that work when you're moving at startup speed.
The Stakes: Why Early Hires Matter More
Employee #1-3: Set your culture DNA. They'll train everyone who follows. Wrong hire = culture poison.
Employee #4-6: Determine if you can scale. They build your processes. Wrong hire = operational chaos.
Employee #7-10: Define your trajectory. They multiply your output. Wrong hire = plateaued growth.
The Math:
- Bad hire costs: $50K-200K in salary, lost productivity, replacement
- Timeline impact: Sets you back 3-6 months minimum
- Culture damage: Can take years to recover
Getting hiring right isn't optional. It's existential.
Phase 1: Hiring Strategy (Before You Post a Job)
The Hiring Sequence
Hire in this order to avoid chaos:
Hire #1-2: Product Builders
- Software: Senior engineer or CTO
- Physical product: Lead designer + manufacturer
- Services: Delivery expert
- Why first: Nothing happens without product
Hire #3: Generalist Operator
- Title: Operations, Chief of Staff, or "Doer of Things"
- Skills: Process, finance, legal, HR basics
- Why third: Founder needs to focus on product and sales, not admin
Hire #4-5: Revenue Generators
- Software: Sales or growth lead
- Product: Marketing or distribution lead
- Services: Business development
- Why now: Product needs customers
Hire #6-7: Specialists
- Deep expertise in specific functions
- Examples: Frontend engineer, paid acquisition manager, customer success
- Why here: You know exactly what you need
Hire #8-10: Scale Enablers
- Roles that let you 10x
- Examples: Second product engineer, second sales rep, content lead
- Why last: You have product-market fit and can invest in growth
Compensation Strategy for Startups
You can't compete with Google on salary. Compete on total value proposition.
The Startup Offer Package:
| Component | Market Rate | Startup Alternative | |-----------|-------------|-------------------| | Base Salary | $120,000 | $90,000-100,000 | | Equity | 0% | 0.5-2.0% | | Title | Standard | Elevated (Director vs. Manager) | | Autonomy | Low | High (own function) | | Growth | Slow | Fast (learn by doing) | | Impact | Marginal | Massive (shape company) |
Equity Guidelines (Employees 1-10):
| Hire # | Role Type | Equity Range | Vesting | |--------|-----------|--------------|---------| | 1-2 | Cofounder-level | 1-3% | 4-year, 1-year cliff | | 3-4 | Senior leaders | 0.5-1.5% | 4-year, 1-year cliff | | 5-7 | Key early team | 0.25-0.75% | 4-year, 1-year cliff | | 8-10 | Strong individual | 0.1-0.25% | 4-year, 1-year cliff |
Explaining Equity to Candidates:
"This equity could be worth $0 or $500K+ depending on our success. We can't guarantee the outcome, but we can guarantee you'll have massive impact on getting there. If you want certainty, join a big company. If you want transformational upside, join us."
The Ideal Candidate Profile
For each role, define:
Must-Haves (Non-negotiable):
- Skills that can't be trained in time you have
- Values alignment (non-negotiable in early team)
- Stage-appropriate experience (startup vs. enterprise)
Nice-to-Haves (Bonus points):
- Industry experience
- Specific tools
- Pedigree (schools, companies)
Anti-Qualities (Automatic no):
- Needs structure and clear processes (you have neither)
- Risk-averse (startup = risk)
- Title-focused (your titles mean nothing yet)
Example: First Engineer Profile
Must-Haves:
- Built and shipped production code independently
- Comfortable with ambiguity and changing requirements
- Aligns with your mission (not just looking for any job)
- Can work with minimal supervision
Nice-to-Haves:
- Your specific tech stack experience
- Previous startup experience
- Open source contributions
Anti-Qualities:
- Needs detailed specs to work (you don't have a PM yet)
- Only wants to write code (startups need generalists)
- Uncomfortable with legacy code (you'll accumulate technical debt)
Phase 2: Sourcing Candidates
The Sourcing Mix
Don't rely on one channel. Use all five:
Channel 1: Your Network (40% of hires)
- Ask every advisor, investor, friend: "Who's the best [role] you know?"
- Warm intros convert 10x better than cold applications
- Incentivize: Offer $2K referral bonus for first 10 hires
Channel 2: LinkedIn Outreach (25% of hires)
- Use Sales Navigator ($80/month)
- Filter by: Title, company size, location, recent activity
- Send 20 personalized inMails daily
- Expect 10-20% response rate, 2-5% become candidates
Channel 3: Job Boards (20% of hires)
- AngelList/Wellfound (best for startup talent)
- Stack Overflow (engineers)
- Dribbble (designers)
- LinkedIn Jobs (general)
- We Work Remotely (remote roles)
Channel 4: Communities (10% of hires)
- Slack communities in your industry
- GitHub (for engineers—look at their code)
- Twitter (follow thought leaders in role)
- Meetups and conferences
Channel 5: Recruiters (5% of hires, but expensive)
- Only for critical senior roles (hire #1-3)
- Cost: 15-25% of first-year salary
- Best for: Executive search, specialized technical roles
The Outreach Message
Your first touch determines everything. Make it personal and compelling.
Bad Cold Email: "Hi, I saw your profile and think you'd be great for our open role. Check out the job description here: [link]. Best, [Name]"
Good Cold Email: "Hi [Name],
Noticed you shipped [specific project] at [Company]. The [specific technical choice] you made was clever—saved them months of work.
We're building [company] to [mission]. We just raised [funding] from [investors] and are looking for our first [role]. Your experience with [specific skill] would be perfect.
Worth a 15-min call to explore if this could be your next big challenge?
[Your name] [Company]"
Why it works:
- Shows you did research (not spam)
- Compliments specific work (not generic)
- Explains why they specifically fit
- Low-commitment ask (15 min)
Building a Talent Pipeline
Hiring is always urgent when you start looking. Build relationships before you need them.
The Talent CRM:
- Use a simple Airtable or spreadsheet
- Track: Name, role, source, interest level, last contact
- Nurture: Monthly check-in with "not now but maybe later" candidates
- When role opens: You have warm leads ready
Ongoing Sourcing:
- Spend 2 hours weekly on sourcing even when not hiring
- When you meet great people, ask: "Who else should I know?"
- Maintain relationships with "almost hires"—they refer others
Phase 3: Interview Process
The Interview Sequence
Move fast. Great candidates have options. Speed is a competitive advantage.
Day 1-2: Phone Screen (30 minutes)
- Goal: Basic fit and interest alignment
- Who: Founder or hiring manager
- Questions:
- "Tell me about your current role and why you're looking."
- "What do you know about us? Why us specifically?"
- "What are you looking for in your next role?"
- "What's your timeline?"
- Outcome: Pass to next round or reject
Day 3-5: Skills Assessment (2-4 hours)
- Goal: Can they do the work?
- Format:
- Engineers: Take-home project (4-hour max, paid if over 2 hours)
- Designers: Portfolio review + design challenge
- Sales: Mock sales call
- Marketing: Write a campaign brief
- Ops: Analyze a dataset and present findings
- Why paid: Shows respect for their time. Attracts serious candidates.
- Outcome: Score 1-5 on skills, pass to final or reject
Day 6-8: Deep Dive Interview (60-90 minutes)
- Goal: Values alignment, motivation, long-term fit
- Who: Founder + team member they'll work with
- Areas to cover:
- Past challenges and how they handled them
- What they need to be successful
- Career goals and how this role fits
- Cultural fit questions (see below)
- Outcome: Reference checks or reject
Day 9-11: Reference Checks (2-3 calls)
- Ask for 3 references: Manager, peer, someone they managed (if applicable)
- Questions:
- "What was their superpower?"
- "What were their growth areas?"
- "Would you hire them again?"
- "How did they handle [specific situation relevant to your needs]?"
- Red flags: References who are lukewarm, only provide peer references, or can't recall specifics
Day 12-14: Offer and Negotiation
- Call with offer (don't email)
- Express genuine excitement
- Present full package (salary, equity, benefits)
- Give 48-72 hours to decide (creates urgency without pressure)
- Be flexible on details, firm on values
Total Time: Under 2 weeks.
Every day you add, you lose 10% of candidates to other offers.
Behavioral Interview Questions
Past behavior predicts future performance. Ask for specific examples.
For Problem-Solving: "Tell me about a time you faced an ambiguous problem with no clear solution. What did you do?"
Listen for:
- How they defined the problem
- What information they gathered
- How they made decisions
- What they learned from the outcome
For Resilience: "Describe a project that failed. What happened and what did you learn?"
Listen for:
- Ownership vs. blame
- Honesty about their role
- Specific lessons applied later
- Growth mindset
For Collaboration: "Tell me about a conflict with a teammate. How did you resolve it?"
Listen for:
- Emotional intelligence
- Focus on outcomes over ego
- Ability to disagree respectfully
- Willingness to compromise
For Startup Fit: "When have you worked with limited resources or unclear requirements?"
Listen for:
- Comfort with ambiguity
- Creativity in constraint
- Bias for action
- No need for perfect conditions
The Follow-Up:
Always ask: "Who else was involved? Can I talk to them?"
This catches embellishment. If they won't provide contact, dig deeper.
The Cultural Fit Test
Skills can be trained. Values can't. Test for alignment with your core values.
Define Your Values First:
Example values for early startup:
- Customer Obsession: We start with customer needs and work backwards
- Bias for Action: We prefer to try and learn rather than analyze forever
- Radical Honesty: We give direct feedback and receive it gracefully
- Ownership: We act like owners, not employees
- Continuous Learning: We constantly improve ourselves and our product
Values-Based Questions:
Customer Obsession: "When have you gone above and beyond for a customer or user?"
Bias for Action: "Tell me about a time you made a decision with incomplete information."
Radical Honesty: "When have you received difficult feedback? How did you respond?"
Ownership: "Describe a time you took on something outside your job description."
Continuous Learning: "What's something you learned in the past 6 months? How did you learn it?"
The Test:
After the interview, ask yourself: "Would I want 100 clones of this person?"
If yes, they fit your culture. If no, pass—regardless of skills.
Phase 4: Making the Offer
Offer Structure
Present a complete package, not just salary.
The Offer Components:
- Base Salary (annual, paid monthly/biweekly)
- Equity (percentage, strike price, vesting schedule)
- Benefits (health, dental, 401k matching if applicable)
- Perks (remote work, flexible hours, learning budget)
- Role Details (title, start date, reporting structure)
- Growth Path (what success looks like in 6, 12, 24 months)
Sample Offer Letter:
"Dear [Name],
We're thrilled to offer you the position of [Title] at [Company].
Compensation:
- Base Salary: $95,000/year ($7,917/month)
- Equity: 0.75% of company, 4-year vesting with 1-year cliff
- Full health and dental coverage
- $1,000 annual learning budget
Role: You'll be our first [function], reporting to [founder]. You'll own [specific outcomes].
Start Date: [Date]
Next Steps: Let's schedule a call to discuss any questions. Please sign and return the attached offer letter by [date].
We can't wait to build with you.
[Founder name]"
Negotiation Handling
Expect negotiation. It's a sign they're serious.
Common Requests and Responses:
"The salary is lower than I expected." Response: "I understand. Here's how we think about compensation: We keep base salaries at 75th percentile of market, but the real value is the equity. If we hit our targets, your equity could be worth [range]. We also offer [perks]. Is there flexibility on which component matters most to you?"
"Can I work remotely?" Response: "Yes, we're a remote-first team. The only requirement is overlap with [timezone] for 4 hours daily for collaboration."
"I need more equity." Response: "Let's discuss. What number are you thinking? [Listen]. The challenge is equity is our most precious resource—it affects future hires and fundraising. If we increase equity, could we adjust base salary? We want to find a win-win."
"I have another offer with higher comp." Response: "Congratulations—that validates your market value. Here's my honest take: If compensation is your only factor, the other role might be better. If you want to build something meaningful, have massive impact, and potentially earn significantly more through equity, we're the right choice. What's most important to you?"
When to Walk Away:
- They negotiate aggressively on every point (sign of future conflict)
- They focus only on salary, ignore equity (short-term thinking)
- They need 2+ weeks to decide (not excited enough)
- They make demands that break your comp bands for other hires
The Pre-Boarding Period
The time between offer acceptance and start date is critical. Don't let them go cold.
Week 1 Post-Offer:
- Send welcome email with company overview
- Introduce to team via group message
- Ship swag package (laptop sticker, t-shirt, handwritten note)
- Share reading materials (not required, but helpful)
Week 2-3:
- Assign a buddy (existing team member)
- Schedule casual coffee chat with buddy
- Send agenda for first week
- Set up accounts and tools before Day 1
Day Before Start:
- Check in: "Excited for tomorrow? Here's where to park/meet."
- Ensure laptop and tools are ready
- Prepare desk/workspace (even if remote—ship monitor, etc.)
Phase 5: Onboarding for Success
The First Day
First impressions matter. Make Day 1 memorable.
Morning (9 AM - 12 PM):
- Personal welcome from founder (15 min)
- Office tour or virtual team intros (30 min)
- Team lunch (in person) or virtual coffee chat (60 min)
- IT setup and tool access (60 min)
Afternoon (1 PM - 5 PM):
- Role overview with manager (30 min)
- First small task (something they can ship today)
- 1:1 with buddy (30 min)
- End-of-day check-in: "How was your first day?"
Key Principle: They should ship something on Day 1. Even tiny. Creates momentum and belonging.
The First Week
Daily:
- 15-min check-in with manager
- Complete onboarding checklist tasks
- Meet one new team member daily
By Friday:
- [ ] Met all team members
- [ ] Understands company mission, values, and strategy
- [ ] Has access to all necessary tools and accounts
- [ ] Completed first project/task
- [ ] Has scheduled 30-60-90 day plan meeting
The 30-60-90 Day Plan
Set clear expectations for first 3 months.
Days 1-30: Learn
- Goal: Understand company, product, and team deeply
- Key Activities:
- Complete product training
- Shadow 5+ customer calls/interactions
- Understand current processes and tools
- Build relationships across team
- Complete 2-3 small projects
- Success Metrics: Can explain company to outsider, has identified one improvement opportunity
Days 31-60: Contribute
- Goal: Deliver meaningful value
- Key Activities:
- Take ownership of a significant project
- Propose and implement one process improvement
- Start mentoring newer team members (if applicable)
- Build cross-functional relationships
- Participate in team processes (planning, retros)
- Success Metrics: Project delivered, positive feedback from peers, self-sufficient in role
Days 61-90: Lead
- Goal: Act as owner of your domain
- Key Activities:
- Lead a project or initiative
- Contribute to hiring (interview candidates)
- Present to team or company
- Develop 6-month personal growth plan
- Identify and act on strategic opportunities
- Success Metrics: Taking initiative without prompting, others seeking your input, ready for increased scope
The 90-Day Review:
Formal check-in at Day 90:
- What went well?
- What was confusing or hard?
- What do you need more/less of?
- What are your goals for next 6 months?
- Compensation review (if warranted by performance)
Common Early-Stage Hiring Mistakes
Mistake 1: Hiring for Today's Needs Only
You need someone to write code today. But in 6 months, you'll need them to manage other engineers. If they can't grow, you'll be hiring their replacement soon.
Fix: Hire for 18-month trajectory, not just immediate skills.
Mistake 2: Ignoring Culture Fit
"They're brilliant, but a bit difficult." That "bit difficult" becomes toxic when you're 10 people working in close quarters.
Fix: Reject brilliant jerks. Culture is your only sustainable advantage early on.
Mistake 3: Moving Too Slowly
You meet a great candidate. You want to "see who else applies." Two weeks later, they have another offer. You lose.
Fix: When you find someone great, move fast. Good candidates have options.
Mistake 4: No Onboarding
"Here's your laptop, here's Jira, go figure it out." They feel abandoned. They underperform. They quit.
Fix: Invest heavily in first 90 days. It pays dividends for years.
Mistake 5: No Performance Management
You avoid hard conversations. Underperformance festers. Team morale drops. Star performers leave because "management doesn't address problems."
Fix: Set clear expectations. Give frequent feedback. Address issues immediately.
Your Hiring Action Plan
Before You Hire:
- [ ] Define your values (if not already done)
- [ ] Write ideal candidate profiles for first 3 roles
- [ ] Set compensation bands (salary + equity)
- [ ] Create interview scorecard template
- [ ] Set up basic HR tools (Gusto, Carta for equity)
During Hiring:
- [ ] Post to 3-5 job boards
- [ ] Activate your network (ask everyone for referrals)
- [ ] Start LinkedIn outreach (20 messages/day)
- [ ] Move candidates through process in
<14 days - [ ] Check references before offer
After Hiring:
- [ ] Send welcome package immediately
- [ ] Set up tools and accounts before Day 1
- [ ] Assign a buddy
- [ ] Create 30-60-90 day plan
- [ ] Schedule weekly check-ins for first month
Tools for Startup Hiring
| Tool | Purpose | Cost | |------|---------|------| | Ashby | ATS and scheduling | Free tier | | LinkedIn Recruiter | Sourcing | $170/month | | Homerun | Job board and applications | $83/month | | Codility | Technical assessments | Pay per test | | Gusto | Payroll and benefits | $40/month | | Carta | Equity management | Free for early stage | | Slack | Team communication | Free tier | | Notion | Onboarding docs | Free tier |
Conclusion: Hiring Is Product Development
Your team is your most important product. You iterate on your software daily. You should iterate on your hiring process just as rigorously.
Every hire either raises or lowers your average. Early on, one bad hire can destroy your culture. One great hire can 10x your potential.
Move fast. Be selective. Invest in onboarding. Give constant feedback. And never compromise on values.
Your first 10 hires determine your company's trajectory. Choose wisely.
Next Steps:
- Download the "Startup Hiring Playbook" with templates and checklists
- Join our founder community to share hiring best practices
- Subscribe for weekly hiring tactics and candidate sourcing strategies