You’re neck deep in trying to find investors, and your new IT expert has just taken your entire system down while trying to install a video game on your central server. According to Statistic Brain, 46 percent of startup companies will fail through general incompetence.

Another 30 percent will fail due to inexperience or a lack of managerial experience. Many startup business owners are simply not skilled in identifying good employees and managing them effectively — a cause of disaster down the line.

1. Friends Don’t Make Good Employees

Never hire friends as employees. Many startup companies begin as groups of friends because it just seems easier. Friends may be trustworthy, but it can also be very difficult to manage someone you know and trust.

It will be even more difficult to correct them when they’re wrong. Instead, do yourself a favor and use a site that has a job application online.You can identify qualified applicants in different niches from airline to sporting goods jobs that can help your business thrive.

The national unemployment rate is still at 7.4 percent, according to the Bureau of Labor Statistics, which means that there are many qualified workers looking for a job.

As a startup owner, you may not have experienced hiring previously. If so, it might be a good idea to get some advice from an expert before starting.

2. Cut Out the Dead Weight

A startup usually doesn’t have a lot of funding, and one of the major reasons a startup will go under is through expanding too fast. A B-level employee may not just be costing you money through incompetence but rather because the position shouldn’t exist. Analyze your company’s current positions and cut the extraneous titles.

3. Bring in People Who Believe in the Dream

It’s crucial for a startup to create a brand for themselves. Many startup companies practically work their employees to death out of necessity: a startup is hard work, and there’s a lot that needs to be done.

Startups also often don’t have the funds to spend a lot of money on salary. The only way an employee can really be driven to succeed in this type of atmosphere is by truly believing in the company and enjoying the company atmosphere.

When hiring employees, you should focus on bringing in people who are a good fit. Otherwise, they could potentially destroy your business from within.

4. Churn is Distracting and Defeating

Forty-six percent of new hires will either be fired or will leave the company within a year and a half. A year and a half is a critical amount of time for a startup company. Even established companies will often have difficulties training new hires.

If you hire a subpar employee, and they quit within the first year, this could severely damage your startup’s operations. Instead, you need to focus on hiring quality employees who will remain at least as long as it takes to get the business started.

Otherwise, you may find yourself having to spend a lot of time chasing new employees and training them.


  1. hmm… doesn’t really sound like b-level employees…. sounds more like what I would call C- and D-players. But, otherwise 100% agreement. Bad hires suck time and co-worker oxygen out of any enterprise…. and start-ups can’t afford to lose either.

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