Building a high-performance team from zero

Descriptive transcript

David: Just while Sabina is getting her slide deck ready to share with you all, I'll just mention really briefly that I think she is one of the most outstanding founders in the UTS Startups program. She's also an alumna of the MBAe, which is one of my favourite degrees because I did it. She's awesome. She works with Uber Australia in talent acquisition, but also has her own startup, which I hope she'll share a little bit about, called Postcode-F. If you have your hands free and can type that in a URL, Google Postcode-F. It's an incredible initiative. I think Sabina has so much richness to share, hopefully in the next 20 minutes or so. So, will you all join me in giving a little virtual clap so she feels appreciated as she shares how to build an awesome team from zero.

Sabina: Cool, awesome. Thank you. These introductions are always so strange. I'm like, oh my God, someone is talking about me. But hey, thanks for joining this virtual presentation. That's my face to your left. A little introduction about myself: I've been in recruitment for the last 10 years, worked with a range of companies in every industry. Ten years—I call it dog years—it feels like much, much more. But I've been lucky enough to work with some phenomenal people from a career perspective as well as businesses. As Dave mentioned, I'm also the founder of Postcode-F. Postcode-F aims to empower and educate skilled migrants and refugee talent and connect them with enterprises looking for talent. The business is built on a mission to create a world where every individual's true potential is realised, regardless of their circumstances.

I'm just putting up one of my favourite quotes while I talk about this. We're going to discuss what a high-performance team is, the importance of it, and hone in on three strategies to implement when you're building from zero. I think we can all agree the value of a high-performance team has always been recognised in any business context, in every culture. Obviously, it means something different to different people, but fundamentally it's always at the forefront of every business owner's and founder's mind. Apart from that, a huge number of savvy startup investors value the quality of the team and the interaction of the founding members more than the idea itself. It's why 90% of investors think the quality of the management team is the single most important non-financial factor when evaluating an IPO.

So, what are we going to cover today? Three things: first, a co-founder checklist—how do you find your perfect mate? Second, a people strategy—looking at talent acquisition as a product. Third, the business case for diversity—very much my favourite topic.

Let's talk about how best to go about finding the right co-founder. Finding the right person when you're building a business is one of the most critical decisions, and unfortunately, there is not a one-size-fits-all. Like most things in life, it's part art, part science.

However, I like to apply two frameworks, and I recommend you use these as well when you start your startup journey. First, a quantitative framework—these are the measurable and tangible aspects. Just like you would pilot your product, pilot your relationship with your co-founder. If you've found someone you think is excellent, build a six-week pilot program where you actually work on a real-life business problem with them.

Ensure this person complements your skills. If you're not a technical co-founder, find someone who is technical and learn the other side. You don't need to learn how to code, but understand and make sure you have enough data points to know what good looks like so you can make the right decision.

Align on working styles and communication cadence—super important. If you're someone who doesn't like WhatsApp messages in the middle of the night, make sure that's communicated to the other person and align on what you actually prefer.

Ensure this person is self-sufficient if it's just the two of you. When you're not there, this person is proactively doing their work. Formalise everything, including how you're going to agree and manage disagreements when they occur—this will save you a lot of heartache.

The qualitative framework—some of the softer stuff—is just as important. There's a huge rhetoric around opposites attracting in business; I think this is important, but you need to ensure there are measurable characteristics that are different between you and your co-founder. Fundamentally, you do need to align on a lot of things. As I found out when I worked with a co-founder previously, that relationship completely fell through because we were way too different. Choose character—ensure your values actually align. This is the stuff that's going to keep you resilient and get you through the difficult times when you're starting up a business.

Ensure you understand the other person's financial and emotional stability. Do they have family? Do they have a specific time where they have a runway and need to make revenue? One of the most important things is to be honest about what you're actually building. You can inflate what you're trying to do to this other person, but fundamentally, if it's not true to what you've described, they're going to end up leaving, which is much more damaging.

People strategy—looking at talent acquisition as a product. Just like you would with your product or service through its entire growth process, you need to understand there are different customer groups, and you can offer different benefits and features to your customers. Cast the same lens on how you build your startup.

It's important to understand that the people who start with you aren't always going to be the people who stick with you as you grow and scale, just as your customers change as your product develops.

When it's just you and another person—generally zero to ten—it's better to look at people who are hustlers and tinkerers. They're able to create a lot from very little. These people aren't always going to be the ones who stick with you when you get to that 10 to 50 mark. At that point, you need to start thinking about leadership skills, people and processes, effective systems and tools, so you can scale your business at a regional or global level.

With 50-plus employees, this is when you hire for the future. You hire for potential, for people who are big-picture thinkers, people who are invested in getting your business to the next level.

People strategy—how to attract and retain talent. You've got your co-founder, you understand the growth stage you're in and the type of people you need. Now, how do you build a story around your startup?

Obviously, being one or two people, resources are tight, time is limited, and you don't have much money to spend. So really think about investing in things that don't cost money.

First, employee value proposition (EVP). Second, values and mission. Third, diversity and inclusion (D&I) and social impact.

EVP is essentially: why would someone want to work with you or your business compared to another company? This is important because you're constantly competing for talent from big banks and large consulting firms. Unless you have a story to tell, it's going to be hard to attract talent.

You don't need to be big or have the sexiest product; you just need to be authentic in what you're doing, and that leads to values and mission. If you talk to any smart and motivated person, you'll find they want to be part of something great and solve interesting problems. If you can create values and a mission that help someone realise that, you'll attract some of the best people in the market.

Diversity and inclusion, social impact—super important. In the current social and economic climate, this is even more important. Think about what social impact projects your business is involved in. What do you stand for? Is your process inclusive? Are you creating an environment where women with children or parents looking for flexibility are able to come to work? This is extremely important to start thinking about.

Offering challenging projects—smart people want interesting problems to work on. Think about how you can engage people and why they want to stick with you. Talk to them and create job descriptions and work that suits that.

Psychological safety and flexibility—if you're going to have a diverse workforce and attract people with different wants and needs, you need to provide an environment where they can be their authentic selves and share any feedback or challenges they're facing.

Finally, salary and equity. I put that at the end because if you get the first few characteristics right, then salary and equity matter less. At the end of the day, people will go work for a big bank if they're looking for a big salary. They're coming to a startup because they want to feel like they're contributing towards something great.

Finally, my mantra: always be recruiting. This isn't about pitching your business to everyone you meet, but having genuine conversations about why you're doing what you're doing. People buy into your story and who you are as a person, so always share that with anyone you meet.

David: Do we have any questions? I just typed that into the chat because I was thinking we might have a little bit of time. I'm just going to watch it, but there's a good one.

David: Diversity and inclusion.

Sabina: Yeah, we can go back.

David: The question is just what's D&I? It's a term.

Sabina: That's it, really—it's diversity and inclusion.

David: While we're waiting for a question, one from me: being someone who's worked in a big and fast-moving organisation like Uber, and also on Postcode-F, you spoke a little bit—probably my favourite slide—about the zero to ten hires and then ten to fifty. I've been on that journey and seen that, but is there anything you can give us in terms of your experience and how we can make ourselves more hireable for startups?

Sabina: That's a really good question. There are definitely lots of things you could do. First, just get yourself out there. At the moment, New South Wales has seen a huge boom in startups. It's a great time to be a founder. Everyone is out there experimenting and hustling. If you're interested in joining a startup, get out there—go to networking events. Obviously, you can't physically be there right now, but there are lots of things you can do: co-working spaces, networking events, talks like these, and proactively reach out to people on LinkedIn.

A lot of the time, only large startups post adverts and jobs on LinkedIn. Sometimes it's best to go out on LinkedIn, say, "Hey, what you're doing is really interesting," and introduce yourself. Those are two things you could proactively do to get yourself out there and know what's happening in the startup space.

David: So, kind of proving that you are a hustler in the way that you market yourself.

Sabina: 100 percent.

David: I remember the first time I saw you speak was at the MBAe Venture Day where you pitched Postcode-F. My jaw was hitting the floor; it's such an incredible idea. I didn't realise that didn't exist yet. There's a great question around team versus co-founder. What you're doing through Postcode-F is literally placing great, talented people in companies.

Why would you go for a co-founder, or is it better to hire team members and see how it goes? What's your take on that?

Sabina: Good question. It really comes down to the individual. There's no one-size-fits-all. It depends on the problem you're looking to solve and what brings out the best in you. Some individuals thrive in a partnership—if that's you, absolutely get a co-founder so you can bounce ideas and build something great together. But if you're more of a lone wolf, go forth and conquer until you get to a point where you need to delegate responsibility. Then start hiring people to take on roles like social media, engineering, whatever it is. Assess who you are and your strengths, and talk to your mentors and advisors about what will make you successful, then make an informed decision.

David: Great. Your point about leveraging mentors and advisory is really good as well. Moving on to another question from Peter.

Peter: Hi Sabina, how are you? The question of how you determine an equity stake—I haven't had much experience. Are there formulas out there? You have to value so many intangibles. Time is obviously the main stake, but it's just one thing to weigh up. It's also about how much value they provide.

Sabina: I was talking to a friend running his own business in Singapore. You can do maths around how equity could work and prepare for that, but actually assessing how much equity to give someone is difficult. The way he described it, and I agree, is: higher the risk, higher the equity. If someone is all-in and making decisions that risk their stake and livelihood, they get more ownership. That's one way of looking at it.

Peter: For example, I have a co-founder who started off but hasn't really taken much interest. It's not a problem now because there's no money being made, but if at some stage he doesn't put more time in, is he still going to expect 50% down the track? If I was devoting a lot of time and he wasn't, I'd want to reduce that equity, and that could be tricky. Do you have a written agreement all the time?

Sabina: There are two things here. It sounds like you don't trust he's going to put the work in. If you continue the relationship and the business does well, other problems will manifest. The root cause is probably a fundamental breakdown in your relationship with your co-founder. Address that first, and then the equity conversation will come up.

David: Awesome questions. Thank you so much, Peter. There's another quick question here. If your co-founder is too scared to sign up with UTS Startups, we probably need to talk more about what UTS Startups is, but in terms of moving forward in a startup together...

Sabina: When you're in a company together, a startup, and you want to make big decisions together, have you got any tips or advice on that, in terms of the direction of the company?

Sabina: Good question. The easy answer is communication cadence—having open, honest communication on a daily or weekly basis is extremely important. Recently, I worked with a consulting firm that wanted to grow and sell the business, and they brought in a CEO too quickly, which drove a wedge between the co-founders. They did it too early. When we talked about why, the answer was both got busy and didn't keep checking in to make sure the business was going in the right direction and both were on the same page. It sounds basic, but in a startup, just having a check-in meeting is fundamentally a priority because so many things can change in a day. That communication is extremely important.

David: There's maybe one minute until we're meant to wrap up and have a break. Really quickly, can I ask about diversity and inclusion: what's the future looking like at the moment? What do startups need to be thinking about?

Sabina: Actually, I haven't finished my presentation, but that's fine. I'll go through it quickly. I wanted to talk about diversity and inclusion because it's a very important topic. There are about four key reasons to think about diversity: moral obligation; more innovative teams equal more innovative ideas and products, which equals profitability; and having a more diverse team makes you more attractive to investors. It's not just important to want to be diverse and build a diverse environment—you also need to put processes in place and mitigate unconscious biases when making hiring decisions. Five types of unconscious bias pop up, but affinity bias and confirmation bias are ones we always see, especially when hiring for a startup because you're under pressure and want to work with people similar to yourself. These biases impact areas like engagement, communication, performance management, succession planning, and more. To mitigate unconscious bias when hiring, be aware of your emotional state, don't make critical decisions under time or external pressure, and make sure you have structured competencies to measure candidates against before hiring.

A company that does this quite well—though not perfectly—is Uber. We have a set of competencies we assess every talent against. It's not a perfect system because humans are humans and hiring managers can make emotional decisions, but it helps people think more critically about how they assess and make decisions.

Second, values and norms—create these no matter how big or small you are, and ensure they're tied to individual performance in the business. Uber does this well; my performance is tied to how I live and breathe our values, and there are financial metrics attached. If I'm truly a values-driven employee, it impacts my bonus. That's just a quick example of a company implementing what I've spoken about.

That's me—now we're done.

David: Firstly, how do you get that much information out of your mouth in that quick time?

Sabina: I had to learn to pitch, that's why.

David: I hope everyone knows how incredibly rich that half hour was. The amount of information and value you've given us is priceless.

Sabina: You're too kind, thank you. These are my details if you want to have a further chat. I'll try my best to help you. One thing I want everyone to take away is: make sure you apply the same entrepreneurial lens you apply to your business to how you build and structure your business internally. If you do that, you can't go wrong.

David: Fantastic. Make sure you screenshot that or something. There are a lot of companies watching or that we're all connected to that could really use some of the services and that recruitment-as-a-product approach you were just talking about. Really fantastic stuff, we appreciate you so much. Appreciate your time. Everyone, clap react or clap in real life or both.

Sabina: Thank you, Peter. If you want to have another conversation about what's happening, reach out to me. I felt like we weren't really done talking.

David: Definitely. Thanks, everyone.