#product #startups - 5 mins read

The ultimate guide to making your startup’s first product hire

“Is now the time to make my first product hire?”

It’s a question guaranteed to cross every startup founder’s mind.

The vision has long been there. You’ve developed a minimum viable product (MVP), hired a few more engineers, and, crucially, started onboarding your first customers.

But right now, it’s not all smooth sailing. You’re stretched thin across investor meetings, prospect demos, partner meets, roadmap maintenance, and engineering management - not to mention being knees deep in the sales funnel.

It’s official: it’s time for your first product hire.

But that doesn’t stop the doubts or put to rest the burning questions. This isn’t a small decision, and it’s hard to get right.

Don’t worry - we’re here to tell you everything you need to know about when and how to make your first product hire.

Table of contents

When to make your first product hire

If your situation sounds anything like we just mentioned, there’s a good chance you’re ready to bring a product manager on board.

That said, every startup’s journey is different. Just because Terry from the local said he made a product hire in his first month doesn’t mean you should follow in his footsteps.

But in our time as designers, engineers, and product developers, these are some of the key signs we see time and time again that you’re ready to make your first product hire.

👫 You have a growing team of engineers

Again, the exact number may vary depending on the scope and ambition of your product, but anywhere from five engineers is grounds to justify a product manager.

🗺️ Your roadmap is looking increasingly complex

That doesn’t have to mean more products, but at this stage, it’s likely that you’re getting constant feedback from customers and prospects ranging from nice-to-haves to deal breakers.

🤝 You need to focus more on business development

Being the founder of a startup comes with a boatload of responsibilities - not least being in mountains of meetings. Eventually, you’ll reach the ceiling of your product knowledge and your time will be better spent on business development.

⚠️ Your product development is having teething issues

Encountering product constraints is inevitable. Maybe your team is struggling to pay back its tech debt, or you have little understanding of whether the features you’re shipping are meeting your customers’ needs (you can find 9 more common product constraints here). Whatever the situation, the extra time and expertise your first product hire will bring can get you out of your product rut.

📉 Development is slowing down because of your other commitments

“The right time to do it is when the product founder/CEO feels like teams are now blocking on them for high quality, fast decisions of direction” notes Noah Desai Weiss, Chief Product Officer at Slack. “When the development teams are slowing down because the CEO becomes the bottleneck, you probably need someone who can serve as a de facto Head of Product.”

🚨 Your user base is growing and you have concerns about your product’s scalability

The fact you’ve recognised the situation is great - but that doesn’t mean you’re equipped to deal with it. An experienced product manager will likely have worked on larger-scale, high-volume products, coming equipped with the tools and techniques to grow your product sustainably.

Quote from Noah Desai Weiss

Founders often struggle to let go. They’re used to having near-total control over both business and product.

But making your first product hire is far from admitting defeat. Rather, it’s a sign of your growth. Proof that your business is ready for its next stage.

It’s still your baby. Just now it’s, erm, other people’s baby, too.

To free, or not to free(lance)

Now that you’ve decided your first product hire is on the cards, there’s another hurdle coming your way.

Do you hire in-house, or a contractor/agency/freelancer?

It’s an age-old debate with - you guessed it - no right or wrong answer, so let’s have a quick look at some of the arguments for each.

Hiring in-house

The most common argument for making your first product hire in-house?

👑 Culture is king

For startups and scaleups, one bad hire can throw off the (sorry) vibe. Your business is likely to be a close-knit bunch, all hard graft and craft beer nights, so adding someone compatible into the mix is, for many, crucial.

It means you can dedicate more attention to finding not only the skill set you need, but the person you like.

Not to mention, there’s the promise of long-term commitment - at least a year, you’d hope - and easier communication. Sure, you can chuck a contractor in your Slack channel, but the predictability afforded by the 9-5 can lead to some faster turnarounds.

(Bonus tip: remember to consider what your first product hire’s job title will be. This will vary in importance from company to company and hire to hire. You might consider Head of Product, Product Manager, or Chief Product Officer - although the latter may depend on whether you aim to flesh out a C-suite at this point in your business’s journey.)

Hiring a contractor

For a lot of startups, this is the sensible way forward.

A contractor may cost £450-£1000 a day, but remember: that’s an all-in cost. Full-time employees typically cost 1.25-1.4x their base salary once you factor in benefits and holidays.

And if things don’t go exactly to plan with the business, like having to scale back down, it’s simpler to let a contractor go.

Overall, working with a consultancy like Hyperact is often a faster, more flexible setup. It was the right choice for Dstny Automate, who hired us to improve their flagship product and bring two more to the market.

Important principles for your first product hire

Regardless of whether you choose to make your first product hire in-house or bring aboard a contractor, there are some crucial principles for the hire.

⛔️ Don’t: hire your mate.

Hiring a friend might help the culture fit angle, but that doesn’t mean their experience, skill set, or attitude is right for your startup right now.

✅ Do: hire an experienced product professional.

Taking responsibility for a small business’s product takes a lot of experience. It’ll be a unique challenge - different from the ‘maintenance mode’ many are used to in larger firms.

(Whatever title you end up hiring for, it’s worth brushing up on how best to interview for a product role. We recommend checking out these great questions for interviewing a chief product officer, product manager, or general product leadership.)

⛔️ Don’t: hire cheap.

We get it - you’re thrifty. In a startup, every expense is felt. But this isn’t something you can risk doing on a shoestring.

✅ Do: be willing to pay industry standard (or higher).

If you’re hiring someone with the right industry experience, there’s a good chance they’re on a high salary. According to Glassdoor, the average UK salary for a product manager is £63,708, and £157,252 for a chief product officer. By joining you, they’re rolling the dice and choosing to buy into your vision - the least you can do is compensate them well.

⛔️ Don’t: hold out for a unicorn.

The perfect hire? Probably doesn’t exist. The longer you wait and wait and wait for the dream candidate to come along, the more your product - and wider business - will start to suffer for it.

✅ Do: hire someone whose values align with yours.

You have a candidate who’s experienced, but maybe not quite as experienced as you’d hoped - should you turn them down? Not necessarily. Remember, it’s just as important that they gel with you as vice versa. Studies show 73% of people have left a job due to a poor culture fit.

What skill set should your first product hire have?

Your first product hire will spend crucial time roadmapping, understanding and accounting for user needs, and monitoring the market.

They’ll also be developing a long-term product development strategy - organisations with one grow 37% faster than those without.

But what skill set should you be looking out for? Apart from having a number of years under their belt in a product-related role (ideally 5+ years as a Product Manager), what qualities should you be hiring for?

Here’s what we suggest you look out for.

Soft SkillsHard Skills
CommunicationMarket research
LeadershipData analysis
EmpathyUser-centered design
Problem solvingAgile ways of working
AdaptabilityProduct discovery
Decision makingProduct development
Stakeholder managementTechnical understanding
Time managementPrioritisation

Setting your team up for success

Because so much of your work as a founder happens in your head, you need to take a few measures to ensure your first product hire’s experience is smooth sailing.

1️⃣ Introduce your first product hire to the engineering team. This is the time to decide on clear standards, expectations, and responsibilities. But remember - this is a mutual decision. Your new team member will be working closely with the engineers, so both the overall vision for the company and the ways the team will interact need to be well-communicated.

2️⃣ Show them the technical infrastructure. It’ll probably be of a different scope to what they’re used to working with. You’ll need their guidance, and they might need yours. Once they’re familiar with the tech stack they’re playing with, you can start to get into the meat of their work and get your first product hire contributing to the development process.

3️⃣ Communicate your vision for the product (and even give them autonomy to define it). You’ll have covered some of this in their interview, but it’s important to hammer it home. Why were they hired? What pains are they solving for you? In which areas is their expertise needed? Which parts of the roadmap are concrete, and which are subject to change? Bold employers should consider handing this vision over to their new product hire - simply trickling it down is likely a waste of their talent, and won’t free you up to the same degree.

It’s time to hire

We get it - that sounds like a lot to consider.

But the key, as ever, is this: don’t overcomplicate it.

Although the product is key in a startup or SME, treat your first product hire as you would any other. Bring aboard someone experienced, flexible, and great with communication, and you’re off to a winner.

Oh, and remember…

don’t hire your mate.

To help your new product team out, grab your tips on how to get them firing on all cylinders here. Or, if you’re interested in outsourcing product work, check out Hyperact’s services to start working with us.