#12: What's More Important: Doing or Leading?

Why you should be a generalist early on. What type of person do you hire: 'a barrel' or 'ammunition'? Mistakes to avoid in your early hires.

Starting 2024 strong with the most important topic - people.

In the next few newsletters, I’ll delve into this topic from different angles, connecting the dots of my experience and approach in people management and leadership development.

I can say confidently that in 2024, Belkins is self-operational. We have built a team capable of closing the entire cycle without the involvement of my partner Vlad or myself, from acquiring clients to servicing them, and even handling sales or payroll. The company can grow at a stable 20%-30% rate every year with good margins. I'm not boasting, just highlighting the fact that we've reached a point where the business is operationally self-sufficient. It took us less than 7 years.

All these 7 years, Vladislav and I were generalists (wearing many hats, figuring out step by step all the nuances of this business). But when someone asks what my job was, I’d always say it was leadership development, HR and people. Because, really, in professional services, people are the success factor and the root of problems. If a company is successful, it means the right people are doing the right things, creating value. This is true for all industries, but especially in professional services. When something isn't working in your agency, it's probably also because of the people.

That's probably why, out of all the LinkedIn badges, I went for “Top Leadership Development Voice.” Empowering great and talented people has always been a passion of mine, and I've connected it to my work.

So, my job from day one was building the right team, bringing on great people, working side by side with them so that one day, these people could work on the system without me. Unfortunately, this meant we had to let some people go, but we also welcomed some greatly talented individuals in.

Out of the 11 people who originally joined Belkins as the first team, only 5 are still with us, and only 4, including me and Vlad, are in leadership positions.

Chris Orlob gave one of the greatest hiring pieces of advice ever. Chris said there are two types of people: “a barrel” or “ammunition” and you should be careful who do you bring on board early on.

Looking back at Belkins’ early days, Vlad and I were barrels, and our original teammates were the ammunition. Thinking about this now, I think we made the right decision, albeit unconsciously. Basically, it allowed us to:

• Delegate some tasks to people while still being deeply involved in client work.

• Bring on people with less experience, allowing us to move faster with regard to hiring or put less pressure on the payroll.

• Learn all aspects of our business while we were small and become good at them.

Having said that, those who had the potential to become a barrel stayed with us and have now grown into great managers. Those who wanted to stay in their lane left us.

Here are my top 3 mistakes less experienced agency owners make when building their first core team:

• Bringing on people to run big chunks of the work, instead of hiring niche expertise. For example, looking for a head of business development or head of sales to build the sales force from the ground up, instead of bringing in a single SDR who can work under your leadership as ammunition.

• Not hiring and taking on more work yourself, instead of delegating, thus slowing down your growth.

• Not having a well-thought-out recruitment process with a detailed candidate description, test assignments, a 2-3 interview process, and a test period. This leads to a poor match for new hires and wasted time and opportunities.

The whole rule of thumb ‘hire slow, fire fast’ is all about having a well-structured recruitment process that you've basically built yourself (learn!), then, with very clear goal setting and expectation management processes, you can let go of those people who are clearly not a fit during the probation period (1 week, 2 weeks, 1 month, 2 months, 3 months - let go), thus fire fast.

• Goal Setting - What do we want to achieve?

Use S.M.A.R.T. criteria (specific, measurable, achievable, relevant, time-bound). Example: We need to generate 20 new appointments to close 2 clients. We need to do this in 3 months. Realistically, you need a ramp-up; month-1: 5 appointments, month-2: 7 appointments, month-3: 8 appointments.

• Expectation Management - How will we achieve it, or how do I want you to work?

I expect you to run tests on multiple channels, research and write great sales copies, reply to client messages within 1 hour, be available in the afternoons, provide daily updates, etc. Basically, be open about what it is like to work with you and what kind of behavior you expect.

Delegating Too Early

To make your agency work, you need to be a generalist. Sam Altman articulated this perfectly:

“I think that the best founders are generalists all the way through. Maybe you’re a specialist in a particular technology that you develop, but when you transition from building a product to building a company, you have to specialize in generalization starting that day and never look back.”

Here are a few areas where you need to be very good:

• Sales: You close the first clients, then you hire an SE to close along with you. (The mistake is hiring an SE to close the first clients instead of closing them yourself.)

• Marketing: You build your GTM, then you hire a marketing specialist to execute. (The mistake is hiring a digital marketing specialist to develop GTM or completely taking hands off the wheel too early.)

• Delivery: You deliver the service to your client, then you hire an SDR, Graphic Designer, Content Creator, or whoever makes up your delivery team. (This is what most agency owners usually do.)

• Client Management: You manage clients initially, then only when the delivery team is built out do you bring on account management. (A common mistake is delegating client management early on.)

• Finance: You understand your P&L, budget, and spending, then you bring on a finance specialist to do this for you. (The mistake is relying on external financial support early on, not having a business model, financial planning, costs, and budgets nailed down.)

• Recruitment: You are the best interviewer, talent source, and screener. You build hard skill tests, then you bring on a recruitment specialist to polish your recruitment process. (The mistake is relying only on internal or external recruitment.)

Priority of bringing people onboard if you are the only agency owner (If you have a co-founder, it’s different):

1. Delivery: Delegate a small part of the client delivery process (full-time → ammunition).

2. Sales: Bring on someone to help you sell (full-time → ammunition).

3. Marketing: Bring on someone full-time to run your GTM (full-time → ammunition).

4. Client Management: Bring on someone to manage clients (full-time → ammunition).

5. Recruitment+HR: Bring on a people person (full-time → barrel).

6. Finance + Accounting + Analyst: Bring on someone to run your finance (part-time → barrel).

Why this priority?

• Up to 20 clients, you’ll know everyone by name, build strategies for them, oversee deliverables, and work on some deliverables yourself. However, delegating routine work or niche specialist work in delivery is essential. So, the first logical hire is someone to help with client delivery. (full-time → ammunition)

• Then you need someone to assist with sales. You will still be selling, just alongside someone, to bring in more clients. (full-time → ammunition)

• After that, you get help with marketing while still involved in it (thought-leadership, referral, partner, social, outbound, etc.) (full-time → ammunition)

• As client numbers grow and your delivery is strong, you can delegate client management. (full-time → ammunition)

• Finally, you've been working with people, sourcing talent, asking your network, building a recruitment process, but now, having freed time with other aspects, you can bring on a people person & recruitment to work with you. (full-time → barrel)

This allows you to focus more on scaling delivery, then marketing, then sales.

At this point, you’ll probably have 5-10 people in delivery, 1-2 in biz dev/sales, and 1-2 in marketing. Logically, delivery will be the first department to shift from an ammunition to a barrel approach. Now you can bring someone from the market to manage your biggest delivery team. (full-time → barrel)

Important Note:

1. Early on (10-20 people), you don’t promote your first hires to a delivery manager or operation head, if you don’t see that person to be a clear barrel.

2. If you promote someone from the existing team, they would likely follow your existing process and not implement innovative approach, so an external hire is preferable to blend new knowledge with existing best practices.

3. At the same time, if you bring an external hire into an unbuilt process or on something that clearly doesn’t work yet, it's doubtful that this person can solve that problem for you early on. Likely, it will be a failed experiment.

I have heard this hundreds of times: “My sales doesn’t work, I’ll bring someone to build it” - and it failed. “My marketing doesn’t work, I’ll bring someone to build it” - again, it failed. This is the professional service game; you need to learn how to be in the driver's seat, driving any car: a truck, a Honda, or a race car.

Today's summary:

• Embrace the role of a generalist. Focus on service delivery, sales, marketing, client management, recruitment+HR, and finance.

• Initially, avoid hiring 'barrels'. Concentrate on bringing in 'ammunition'.

• Ensure key business functions are developed to a decent level before delegating.

• Avoid early internal promotions for manager positions; seek external talent for innovation.

Most importantly:

• Build your agency and team in a manner that enables self-operation, while still ensuring stable growth and good margins.