The first ten most important employees decide more than the first thousand.
People often talk about the importance of a startup’s first ten employees, and the basic idea is useful. Early employees help establish the company’s habits, standards and understanding of what good work looks like. However, I prefer to think about the first ten most important employees, because chronological order is not the same as organisational consequence.
Someone may join the company very early and perform necessary work without making decisions that shape its future. Another person may join several years later and determine the architecture of the product, the quality of its leaders, the economics of its operations or the standard by which an entire function will be built.
These are the people I mean.
They are not necessarily the ten most senior people on the organisational chart, and they may not all join during the same stage. They are the individuals whose judgment becomes embedded in the company. Their decisions create systems, products, teams and precedents that hundreds or thousands of future employees may inherit.
If those decisions are excellent, the company can compound them for years. If they are poor, future employees may spend years correcting problems they did not create.
Important employees create organisational inheritance
Every company inherits the thinking of the people who built its earliest important systems. The engineering leader chooses an architecture that may determine how reliably the product scales. The first serious product leader establishes how the company understands customer problems and prioritises what to build. A finance leader creates controls that may protect the business from waste, fraud and poor capital allocation.
In a manufacturing company, a small number of people may establish the standards for quality, safety, supply and production. In a regulated business, the early compliance leaders can influence whether growth is built on a sound foundation or on obligations that will later become expensive liabilities.
These decisions are not isolated tasks. They become infrastructure for subsequent decisions.
When the company hires another hundred people, most of them will enter systems designed by a much smaller group. They will write code within an existing architecture, sell a product whose positioning has already been established and follow processes whose logic was determined before they arrived.
This is why the first important people can decide more than the first thousand. The thousand may produce more total work, but the earlier key decision-makers often determine the environment in which that work will occur.
Their standard becomes the organisation’s starting point.
Identify the consequential roles before filling them
Founders should think deliberately about which roles will have the greatest effect on the company’s future. The answer depends on the business.
A software company may need exceptional judgment in engineering, product, security, distribution and finance. A manufacturing company may place greater weight on production, supply chain, quality control, technical design and capital management. A company entering the security sector to build solutions involving drones, artificial intelligence or other advanced technologies would need to think seriously about technical capability, manufacturing partners, safety, regulation and the sensitivity of the systems being created.
The founder should not begin by copying another company’s executive structure. The better question is: which decisions, if made poorly, could permanently limit this business, and who will be responsible for making them?
Those are likely to be among the company’s most important hires.
This exercise also prevents founders from treating every vacancy as equally urgent. A company can spend significant money hiring many people while leaving one consequential role weak. Headcount increases, activity increases and the central decisions remain poorly made.
The important role deserves a standard defined before candidates appear. What must this person be capable of doing? What decisions will they own? What evidence would show that they have solved comparable problems? What character will the role require when the company is under pressure?
Without that clarity, the founder may become impressed by the strongest available candidate rather than waiting or negotiating for the person the business truly needs.
Founders must learn to negotiate for talent
Exceptional people do not usually join a company merely because a vacancy exists. They may already have good jobs, strong reputations, attractive compensation and several options. If the company is young, the founder is asking them to exchange certainty for a possibility that has not yet been fully proved.
The ability to negotiate for talent is therefore one of the founder’s most important skills.
Negotiation does not mean manipulating someone into accepting less than they deserve. It means understanding what the person values, explaining the opportunity honestly and constructing an arrangement in which joining the company makes sense for both sides.
The candidate may care about ownership, autonomy, mission, the difficulty of the problem, the opportunity to build a function from the beginning or the possibility that their work will have unusually large consequences. Cash compensation matters, but it is not the only resource a founder can use.
The founder must learn to tell a credible story. Why does this problem matter? Why is the company capable of solving it? Why is this person important to the attempt? What could their work become if the organisation succeeds?
Great candidates can recognise empty excitement. The story must be supported by the founder’s seriousness, existing progress and willingness to give the person meaningful authority. You cannot recruit an exceptional leader by promising ownership and then treat the person as a senior assistant whose decisions require constant approval.
Sometimes the company cannot afford the candidate’s normal market compensation. That does not automatically end the conversation. The founder can consider equity, milestone-based increases, a part-time or advisory beginning, a defined project or another structure through which both parties can test the relationship. The arrangement must be fair and clearly documented, but a resource-constrained company should not assume that lack of cash eliminates every path to strong talent.
Founders negotiate capital, customers and partnerships. They must become equally capable of negotiating the people without whom the vision cannot be executed.
Assume that exceptional people may not remain forever
When I think about bringing some of the best people into a company, I do not assume that they will work with me forever. I think in terms of three to five serious years. If they remain longer and continue creating value, the company is fortunate, but permanence should not be the condition under which the hire becomes worthwhile.
Exceptional people are often ambitious. Some will eventually start their own companies, join another important mission or move into a different stage of their lives. Treating that possibility as betrayal can cause founders to avoid capable people in favour of those who appear less likely to leave.
The better objective is to make the period of alignment unusually productive. During those years, the person should solve meaningful problems, develop other leaders, document important knowledge and build systems that outlast their direct involvement.
This changes how the company thinks about retention. Retention is still important, and good people should be treated well enough to remain while the relationship continues to make sense. But the company should not build a critical function in such a way that the departure of one person destroys it.
A truly important employee should leave the organisation stronger, not merely more dependent on their presence.
Succession and knowledge transfer should therefore begin long before anyone announces an exit. Leaders should build teams, share context and make their reasoning visible. The founder should know which relationships, credentials, systems and decisions are concentrated in one person and gradually reduce that concentration.
The company should benefit deeply from exceptional individuals without becoming hostage to any individual, including the founder.
Reward performance, not proximity
If the company expects important employees to create extraordinary value, the reward system should recognise that value. Compensation should not be based only on title, loyalty or proximity to the founder. It should reflect responsibility, performance and the long-term value a person helps to create.
Employee stock options can be powerful because they allow important contributors to participate in the upside they are building. Equity communicates that the relationship is not merely an exchange of salary for labour; the employee has an opportunity to share in the value created over time.
However, equity should not become a substitute for performance or a vague promise used to compensate for poor working conditions. The expectations, vesting terms and conditions should be clear. People should understand what ownership means, what risks remain and how their contribution will be assessed.
A strong performance culture connects responsibility to outcomes. Important employees should not be judged only by how busy their teams are, how many meetings they attend or how persuasive their presentations sound. Their functions should become visibly stronger because they lead them.
An engineering leader should improve reliability, speed, security and the organisation’s technical capacity. A product leader should improve the company’s ability to identify valuable problems and deliver solutions customers use. A commercial leader should create healthy, repeatable revenue rather than growth that disappears once discounts or excessive spending are removed.
The precise measures will differ, but the principle is constant: important people should be rewarded for important results.
Do not confuse high potential with permanent exemption
The importance of a hire can make founders slow to confront misalignment. After investing time in recruitment, negotiating a strong package and publicly presenting the person as an important leader, admitting that the appointment is not working can feel costly.
That delay is dangerous because consequential employees do not underperform in isolation. Their decisions affect hiring, morale, execution and the quality of the systems others depend upon. The more important the role, the greater the organisational cost of leaving poor performance unresolved.
Founders should be decisive when they recognise persistent low performance or fundamental misalignment. Decisive does not mean impulsive. The expectations should have been clear, the person should receive honest feedback and, where the problem is correctable, a reasonable opportunity to improve. The company should distinguish between a difficult beginning, an unsupported employee and a pattern that demonstrates the fit is wrong.
But once the pattern becomes clear, importance should not create immunity.
The wrong senior person can lower the standards of everyone hired beneath them. They can create factions, delay decisions and turn the founder’s reluctance into a cultural lesson: performance standards become negotiable for sufficiently powerful people.
Letting an important employee go may be painful, but keeping a misaligned one can become fatal to the company’s next stage.
Hire people who can improve the original standard
The first ten most important employees should not merely preserve what the founder has already imagined. Their value is that they can expand the company’s capacity beyond the founder’s personal skills.
The founder should seek people who can establish a standard, not merely comply with one. They should be able to define how excellent work is done in their area, recruit others who can meet that standard and improve the system as the company grows.
This requires humility from the founder. Recruiting the best person means accepting that the person may understand the function more deeply and may propose an approach different from the founder’s original view. If the founder wants only obedience, the company will struggle to attract or retain people capable of building at the highest level.
It also requires clarity. Autonomy is useful only when the person understands the outcome, constraints and values within which decisions must be made. The founder must provide context, remove obstacles and ensure that the important leaders move as one organisation rather than building competing kingdoms.
The aim is not to assemble ten impressive individuals. It is to create a group whose combined judgment gives the company capabilities it could not otherwise possess.
The thousand will inherit what the ten normalised
When a business reaches one thousand employees, very few people can interact regularly with the founder. Most employees experience the company through managers, systems, products and expectations built by others.
The quality of those inherited systems depends heavily on the people who first made the consequential decisions. They determine whether the company values outcomes or activity, whether excellence is teachable, whether disagreement is constructive and whether responsibility remains clear as the organisation becomes complex.
This is why founders should take their most important hires seriously. Identify the roles that can shape or threaten the future. Establish the standard before recruitment begins. Learn how to negotiate outstanding people into the mission, reward the value they create and assume that their time with the company must be used intentionally.
Then remain willing to act when alignment or performance disappears.
The first ten people on the payroll may become important, but chronology alone is not the point. The decisive people are those whose judgment becomes part of the organisation’s inheritance.
Choose them carefully. The first thousand may spend their careers living inside what those ten built.
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