F2F #58: When to hire the first operations profile

Being a founder means being extra frugal, especially in the early years. We live constantly feeling like "I can do this myself" and then we get stuck in the "I should still do this myself" to avoid overspending.

I had a few conversations lately around this topic and I think we did it great at MarsBased back in the day, so here's my answer: when your team hits ten people, in your first company, in day one in successive companies.

This post is about when to hire a person who will help you to scale your company. It can be someone who deals with admin and accounting, but also HR or operations in general. Basically, a generalist, a workhorse, someone with a can-do attitude that'll help you to focus on what you do best, not on what needs to be done.

I will be henceforth referring to this person as "ops", for the sake of simplicity.

First-time founders: hold it 'til it hurts

When you're building your first company, you don't know what'll hurt you and when it will come your way. You also don't know how and when will you start making money, and this ops person is a non-billable profile, in a services company. He/she doesn't bring money directly, so it's a hard sell to investors or the board, as they will see him/her as another expense.

Luckily, being an independent company, we had to report to no one, only to ourselves. So in 2017, we decided to hire our first Office Manager.

We didn't know better and we thought that we needed an Office Manager because that's the closest to the job description we posted back in the day. Quite paradoxically, we've never had an office, so Bego wrote "I'm an office manager in an officeless company, so... what am I supposed to do?". Read it to understand what she was tasked with and what was expected of her, in case you want more details.

Back around that time, HR was still HR and the "People & Operations" (or, the short versions of "POPS") was still not so common, and "operations" only seemed too corporate for us. We also didn't know whether we were going to grow, so we decided to call the job "Office Manager" so she could take care of our little Martian Spaceship.

It took us months to decide that we should hire that profile. For a services company, to add a non-billable profile it means having to concede part of your margin (and thus, profits, and thus, dividends). But we did it for the future of the company.

Up until that point, I was running errands like printing business cards, printing documents, shipping laptops for our employees and booking coworking spaces and meeting rooms to meet clients, for instance, while my partners were also doing stuff like recruiting, sending invoices, buying flights for our employees and paying salaries.

When that amounted to something like 20-25% of our time, we decided that it was enough. If you do the math, billing an extra 20-25% of the time of the three co-founders would've greatly compensated for her salary, but to be frank, we never did that math. We didn't want to burden her with feeling like a net loss to the company, and she basically allowed us to focus on higher-level tasks and to bring more value to the company.

We started with a part-time contract, but a few weeks into it, we upgraded her to full-time, as it provided immediate returns in focus and mental bandwidth, greatly reducing our human error caused by being overworked and context switching.

That was a pivotal moment for MarsBased.

Second-time founders

My advice for second-time founders is to hire this profile right away - even if only part-time.

Why?

• You already know the roadmap: You won't have to discover what kind of tasks you can delegate to the ops person and you will already know that he/she will never run out of tasks, if you do this correctly.
• You have already done his/her job: You know how long does every task take, whom to contact, what the expected outcome is and whatnot. No need to learn the job before delegating it - you did it in the first company.
• You have already delegated this job: Irrespective of whether you hire the same person or not, you have already seen what things can you delegate and which you can't. For instance, in our case, this role pays salaries and sends invoices to the clients, but I've heard from other founders that they couldn't delegate this part to someone else (and they put this face when I told them that we do -> 😱).

Every project I've started after MarsBased has always been with an ops person as either co-founder or contractor and they've had plenty of work from the get-go.

Bonus: When do I hire my second ops person?

The thing is, if you've done it right, you'll see the benefits of having this kind of profile. The more you weave them into the company core, the more instrumental they will become, and thus more empowered, making you feel more empowered in turn. It does come back.

In 2019, we changed our Office Manager for a more senior profile in that space and she became Head of People Operations, enabling us to grow further. This profile manages HR, accounting and operations even today.

We hired our second operations person in the shape of a Project Manager when we hit 20 people. While not strictly what you'd think of an operations person, she helped my co-founder Jordi to step away almost completely from project management to operate as COO/CFO 95% of his time. In turn, this enabled us to grow even further.

Now, we're 30 people and we've recently hired another People Ops person so we can internalise hiring, so she'll be working mostly doing HR. This move adds up to our internal cost, adding up to 3 non-billable profiles, but we know it'll be worth it.