Why It’s Better to Hire Too Soon Than Too Late

So I’m here in Austin, Texas, talking to my buddy Josh Rusin’s mastermind to a bunch of entrepreneurs and investors who are, you know, building their fantastic, awesome businesses. And the thing about business is that businesses only exist to deliver value to another human. And the effectiveness of our business, of our company, which is a group of people, is its ability to work with and through other people. So your success as an entrepreneur, as a founder, is predicated on how well you can recruit talent. You can point them towards your vision and then how you can motivate them to take actions in the directions of your dreams. Now, we all struggle with this at different points in our journey. Depending on where you are initially, when you first start your business, chances are you’re wearing all the hats, you’re doing all the work yourself. That’s just the nature of the beast.

But as you start to grow, you start to have a little bit more supplemental income that you can start allocating towards hiring amazing people to help you. Now, hiring is one of the scariest things you can ever do because there is no guarantee that’s going to work out. And chances are, if you’ve never hired before, you’ve never trained or onboarded, you’ve never retained a talent, you don’t know what you’re doing. And so it’s going to feel really uncomfortable, and you’re going to potentially blow a lot of money. For a lot of entrepreneurs, what they end up doing is they just keep delaying the hiring process until it becomes an absolute necessity because of the demand that they have in their business, and it’s in excess of what they can currently fulfill. And they’re starting to get burned out now. They start hiring out of pure necessity. And when you hire from this place of we have a problem in the business that we need to fix immediately.

You start to take whoever comes in the door first. You’re not necessarily finding the absolute best talent because you have a fire that needs to be put out right now. And so you’ll take any warm body to help you with that. Right? As a result, you tend to not get the absolute best talent. They might put out the fire, but they might create a bunch of other issues in the process. And for a lot of entrepreneurs, this then kind of sours you on the idea of hiring. You’re like, this was not worth it. This person put out this fire, but they started this even bigger one over here.

And that’s because you waited to hire until you had a problem to solve. The better time to hire is when you have opportunity. Hire for the opportunity. So the way I think about this is I don’t wait to hire somebody when I have the demand already. So it’s like, I don’t want to hire this person until I have the customers for them to fulfill. Right? That’s too late. You want to hire before that moment. You want to hire the person that’s going to come in and they’re going to bring in more company or more business.

They’re going to bring in better operations. You’re hiring before the problem for the opportunity. And the way that I’ve always thought about this is that there’s only two times to hire. You can either hire too soon or you can hire too late. The cost of hiring too soon is capital. It’s going to cost you money out of pocket that you might not necessarily have yet, or it’s not going to be comfortable to pull that out of your pocket. The other cost, the other expense is the cost of missed opportunity. You could put these both on a spreadsheet, but one’s much easier to quantify the cost of capital.

You can easily see on that spreadsheet and say, oh, this is going to cost me $50,000 a year to hire this person. In exchange, I’m going to be able to only make this much. And so you can do the math on that. Whereas the cost of opportunity, or cost of missed opportunity, it’s very, very hard to quantify on a spreadsheet. You could put it there, but in a lot of cases, you’re just throwing a dart at the board. You’re just guessing because you can never really know what the cost of missed opportunity is. You don’t know what you don’t know. It could have, you know, the thing that didn’t happen.

Who knows what the likelihood of that was to happen, or what could have yielded as a result, the price of serendipity. But in my experience, having just been around the business block for a few years at this point, talked to enough successful people, what I’ve come to notice is that the cost of missed opportunity is almost always greater than the cost of capital. And so it’s always better, in my opinion, to hire too soon to help explore opportunities, rather than waiting too late to try and fix problems. And so if you’re on the fence right now about where should I hire? Should I, is now the right time? Probably is. If you’re already asking yourself that question, it’s probably too late, in fact. And then here’s another little sub tip, another thing that I had to learn the hard way is that within your business, you will have your a players or b players or c players. That’s just natural that you’re going to have that kind of a bell curve. It’s very natural to put our a players on the biggest problems, to put out the biggest fires within our business.

It’s like, oh, this thing is falling apart over here. Let me put this person on here to fix it. Now, when we do that, when we constantly put our a players on putting out fires, they can get burnt out because that’s not fun to clean up other people’s messes all the time because the fire in the business is usually a result of somebody else not doing the thing. And so the a player has to swoop in and fix it better. From what I’ve experienced is to take your a players and put them on the opportunities, let them run free in the wild fields of all the opportunity that they could explore to help grow the business, rather than always putting them on fire duty. Like, instead of always having them cleaning up the messes within your business, ask yourself, what is the opportunities that I could point this person towards that would pay exponential upside? And what you’ll end up having then is people who are very highly motivated, really excited to come to work and do the thing. And because they’re taking full ownership of this opportunity, rather than having to clean up somebody else’s problem, they do it so much better. And that opportunity yields fewer fires in the future.

So that’s just something I had to learn the hard way over the years. And it’s an easy, it’s an easy trap to fall into putting your best people on the problems rather than on the opportunity. So hope this brings you guys a little bit of value as you’re out there thinking about should I hire, who should I hire? What should I do when I hire them? And that’s it. That’s all I got. So I’ll catch you guys in the next episode, but until then, stay hyper, folks, my friends.