Guest author Scott Gerber is the founder of the Young Entrepreneur Council.
Some people may think it’s ludicrous to try to break into an industry where you have no specific expertise. But lack of experience doesn’t necessarily mean failure, as long as you work smart and align with the right resources—and people.
Curious about how other founders think, I asked 12 entrepreneurs from the YEC to weigh in on the debate: How important is it that your co-founder or first few hires have a lot of experience in an industry where you don’t? Their best advice is below.
Hire Up
You need to hire someone in the space that you’re entering in the beginning. They should be able to tell you what’s going on in the industry, what events you should be going to and have a lot of contacts to be able to push your business to the next level. Pay attention to the leaders in the space on LinkedIn, see if they have recently left their job or reach out to them to see if they are interested in leaving their current job.
Learn From Scratch
Neither of us knew anything about the hair business when we got into it, and unlike many other industries, our company is probably better for it. We learned all we could by talking to those who ran successful multi-unit enterprises and even dove deep into what a franchisee would need to know and do to open a chain outlet.
But coming from different backgrounds (marketing and finance), we wanted to put our own spin on the business, and we did it mostly by questioning the assumptions many associate with hair salons. Why close Mondays? Why all the mystery pricing? Why does drama have to come with the territory?
Since we empower our employees to manage the quality part of the haircut experience, we use our time to put butts in chairs. We work much more on our business than we do in it.
—Michael Portman, Birds Barbershop
Look For Domain Expertise
Domain expertise is a must for any co-founder or startup. Starting a company is easy, it is the middle and end parts that are hard.
As a startup, time is one of your most valuable assets. Every company faces unforeseen challenges and events—how you and your company respond to these events will make the difference between success or failure. If you don’t have mastery over your industry, you will find yourself spending undue time and energy (which you don’t have) getting up to speed trying to learn the industry.
If you want to learn about an industry, don’t waste your investors’ money and time trying to start a company in an industry you know nothing about, just go back to school. It will be cheaper and much less painful.
Experience Isn’t Always Necessary, But It’s A Plus
If you happen to have a co-founder who has experience in that industry, great—if you don’t, nothing to fret over. Make sure you make connections with people from that industry that you can gain guidance from, try to establish mentor-like relationships (without forcing it) and get as much advice as you can. You don’t want to waste years on the wrong path because you were misguided or spitballing for whatever worked.
Also, in hiring people outside of your niche, it’s best to find a connector between yourself and that new hire—someone who can vouch for that person. Find someone you know in that industry and ask, “Do you know anyone who’s looking for a new position? Anyone good?,” and try to go from there.
—Rob Fulton, Exponential Black
Look for Employees With Complementary Skills
Depending on the industry, there’s a minimum amount of subject matter competence one might need (tech, for example). But in general, I’d put my money on the entrepreneur who has the passion and smarts over the experience any day. That said, a smart entrepreneur in this situation should look to recruit others who bring a diverse array of skills to help the company sustain and succeed.
—Chris Cancialosi, Gotham Culture
Having Industry Expertise Is Critical
I’m a co-founder or board member in nine different companies. I don’t invest in companies, I invest in co-founders. My background is online advertising. I was intrigued by the idea of a personal media brand and knew I needed to consistently build mine. I met Clint Evans, whose writing experience and background with media made him a great co-founder to help me reach my goals.
You must be a true connector to recruit outside your space. You can’t fake it here. Join local or even virtual groups of lateral thinkers. Mastermind groups are also a fantastic resource. You’re exposed to divergent thinking and ideas you’d never have thought of. Synergies occur and even if none of the group members have the expertise you seek, many times somebody in the group can refer you to the expert you need.
—Joshua Lee, StandOut Authority
Intellectual Curiosity Is Key
At some point in your career, you were a novice in your respective industry. Over time, you came to learn all there is to know and you can certainly do that again. While it is advantageous to recruit a co-founder who has domain expertise, it isn’t necessary.
The most important thing is having enough intellectual curiosity to quickly understand most of the ins-and-outs of the industry, so you can at least navigate your way through and develop initial traction. Otherwise, you may be paralyzed and unable to get anything done. Moving forward, as you grow your business and begin recruiting talent, your best bet is to search online communities dedicated to this niche and submit postings to job boards catering to applicant pools filled with candidates that have the skills you are looking for.
Hire Someone Eager To Learn
It could certainly be an advantage, because knowledge is key when entering new products or markets, but I think it’s even more important to hire or partner with people who are open to learning. The knowledge you need is out there, but if you surround yourself with efficient people committed and willing to learn, you can do wonders. If they don’t have the knowledge, they’ll find a way to get it.
You Need Someone With Domain Expertise
It’s very important because success is often about diving deep into that industry—this can often be an advisor as well, but make sure there is someone. For hiring, have an outside consultant (hired or friend) who is an expert in the space help you with the interview process. We had a wonderful acquaintance who helped us interview developers to make sure they had the right experience, for example.
Experts Really Help For Raising Capital
If you’re starting a business outside of your domain expertise, you absolutely have to surround yourself with people who have experience in that area. Investors typically want to see domain expertise, so that’s important for raising capital.
Even more important, as you build a business, you need to have a story behind the company that every partner, employee, investor, media contact, etc. will want to know. Why this? Why you? It’s incredibly important that the story and answers to those questions are compelling. Otherwise, you’re starting at a disadvantage.
Be A Facilitator
If you don’t know much about the space, the only thing you can be is the facilitator: the person that knows how to build the right team. At a minimum, you have to have a vision for what the product has to be and know who you need to bring on board in order to make that happen. Otherwise, you’re just a poser.
It’s very important that you find some co-founders that know the space, but you have to at least understand the space and the product you’re trying to complete at a high level. It takes a lot of intuition. However, if you’d like to bring in people from outside your realm of expertise, you should invest a lot of time in understanding their world, going to their events, figuring out what makes them tick. You have to understand anybody’s position and beliefs before you can earn their respect.
Build A Team Smarter Than You
It is essential to hire employees that are extremely experienced in your business’ industry. My theory has always been that you should build a team that is smarter than you and can be independent of you. It is equally as important, as entrepreneurs, to recognize our own weaknesses and fill those lacking areas with staff who can compensate.
—Sean Marszalek, SDC Nutrition
Image courtesy of Shutterstock
