Nicholas Holland is founder of Populr. The following post is a rebuttal to Jon Soberg’s guest post “Why hiring B employees will kill your startup.”

Regardless of their level of experience or expertise, most entrepreneurs can agree that unicorns are majestic, magical creatures that absolutely do not exist — never have and never will.

So, it seems a little ridiculous when I hear people talk about stacking their startup’s roster with only unicorns — aka A Players — while completely dismissing anyone for employment that’s considered a ‘B player.’ Those people need a reality check when it comes to hiring.

I’m a three-time entrepreneur and I’ve hired over a hundred people — often under duress because my small company was light on work one day and overloaded the next. Moreover, I usually find myself looking for tech talent that is hotly pursued by companies much larger than mine. I don’t think this an uncommon practice for startup founders.

It’s also common to hear advice like “only hire the BEST!” and “seek only A Players” when looking for new employees — something that always makes me laugh. I wonder which entrepreneurs these sage advice-givers think they’re saving from failure. Is there someone out there who purposely chooses a sub-par team-mate? (The short answer is no.)

Worst, the cliché of ‘hiring A Players’ creates an atmosphere that lets the business always blame the employee if they don’t work out. “Ah snap! Jody didn’t work out… Guess she wasn’t an A Player”. This lets the entrepreneur off the hook and often keeps them from self-reflection.

Truth be told, it’s incredibly simplistic to define someone as “The BEST!” or as an “A Player.” I’ve had employees that are absolutely brilliant in one area, and terrible in another. What does that make them … a C? Or what about employees that do exactly what you say, but don’t take any initiative. Are they A Players for the leader that leads them, but F players for the entrepreneur who depends on ‘self starting’ as a crutch for their lack of management skills? What about A Players that are loaded up with B Player work and never get a chance to shine? Do they get downgraded?

Before you start looking for your sparkly horned beauties, consider some of these points:

The downsides to searching for the Unicorn employee:

• It greatly extends the search process, and in the meantime, the work is piling up. Consider finding someone who meets the minimum expectations and then get back to work. You’d be surprise how much more productive your startup will be if you aren’t waiting around for someone who matches your dedication and work ethic.

• Even the most skilled hiring techniques can’t guarantee you’ll hire a Unicorn, so be careful about analysis paralysis that leads to even more delays in your growth.

• If you have problems with someone after you’ve hired, writing them off as B-Players means you get all the joys of firing, losing money with turnover, and decreased team morale (which is terrible for your business). Instead, own the responsibility of helping that employee be successful. Forge them into “only the BEST!” or A Players.

• Last, avoid the trap of assuming that A Players are always leaders. Some of your best people will crave your leadership and will follow you to the ends of the earth. But, they won’t be leaders. And that’s OK.

Always seek the best employees you can get, but be mindful that you have limitations to balance. It makes people uncomfortable to accept a “good enough” version of anything, but that is often what you’ll get when you’re faced with other business factors. Plus, there are a million factors that go into making an employee successful — more than I can share in this post.

So take some personal responsibility and check yourself before you whip out the trusty “B Player” card when things don’t work out with one of your employees.

Top unicorn image via Sari ONeal/Shutterstock; Batmanicorn art via Unicorns Rock

Nicholas Holland is the founder of CentreSource interactive agency, mentor for Nashville, Tenn.-based startup incubator JumpStart Foundry and a seasoned entrepreneur. His latest startup Populr, a service that enables customers to easily create and publish POPs (published one pagers), recently made its public launch. Follow him on twitter @nicholasholland.

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This is a guest post by investor Jon Soberg.

B players and C players are far worse than D’s and F’s. In fact, in my experience, B players are the worst hires you can make.

Before getting into the details, it may be useful to level-set and explain what I mean by these employee stereotypes (although there have been some differences of opinion over the years.)

A player: Fully self-sufficient and takes initiative that positively impacts the company.
B player: Does some things well, but not fully self-sufficient, and not consistently strong.
C player: Just average, and does not excel in any area.
D player: Poor performer, and shouldn’t last long if you are a half-capable manager.
F player: Should be out…like yesterday.

Good Enough is the Enemy of Great

When you have someone on your team that you think is doing well enough, you will likely trust them with mission-critical tasks like hiring or pushing code. This will impact the entire evolution of your company. If you entrust important decisions to someone who is just “good enough,” you will watch the opportunities pass.

This is why hiring B players will kill your company. The work will be good, but not great. They will deliver on time most of the time, and hustle sometimes, but not always.

Let’s say you are in a startup, and you have a B player as your vice president of sales. The person will close a good account, but won’t consistently beat targets. If they go head-to-head against a competitor with better salespeople, this person (and potentially the whole startup) will lose. If you’re an early-stage startup, you are walking dead. Raising the next round will be like selling against a stronger competitor — you won’t ultimately win.

I have built multiple engineering teams from the ground up, and I always started with an anchor rock star.  The engineer that everyone wanted to work with, and whose work was so solid that he or she made everyone else more efficient and effective.  I’ve been asked before how many engineers it would take to replace someone like that, and the correct answer is that there is no way to replace a person like this.  Even if I could hire 10 B player engineers for the same price, I would never do it.  The product quality would suffer and the time-to-market would slow; you simply can’t replace skill with numbers.

Lessons learned

My opinions on hiring and people haven’t come by accident. I’ve got scars from my career (and I’ve seen it from many angles — founder, executive, consultant, investor). I’ve made some pretty bad hires along the way. The really bad hires are the easy ones — it is obvious when someone fails or is clearly the wrong fit. You wonder what you were thinking, but at the end of the day, you can reverse these mistakes quickly and efficiently.

I have needed to fire a fair number of people as well, and I will say this is one learning from my experience — I have never felt that I fired someone too soon.

At one of my startups, I fired my entire QA department and made the engineers do all their own QA. The result: better quality product, released faster. The QA department had become a bottleneck, and they weren’t doing quality work. The engineers weren’t happy, the product management team wasn’t happy, and the product suffered. I saw the release cycles slowing down, and saw some of the tension between the QA and Engineering departments. As I dug in, my conclusion was one I had not originally wanted to see — I had a B player at the top of the QA department, and the rest of the department was B and below. It was killing us. My biggest mistake was not recognizing it sooner.

When I was a little boy, my uncle used to tell me “he who hesitates is lost.” Those are words to live by.

I have plenty of individual examples as well, and the toughest ones are always the ones who are doing fine. Managers often blame themselves. Is the job not well-defined? Does the person have enough support? Maybe they just need more time, and they will improve. It isn’t easy to find great people, so why let the decent person go hoping to find someone better?

There is an opportunity cost to keeping someone when you could do better. At a startup, that opportunity cost may be the difference between success and failure. Do you give less than full effort to make your enterprise a success? As an entrepreneur, you sweat blood to succeed. Shouldn’t you have a team that performs like you do?

Every person you hire who is not a top player is like having a leak in the hull. Eventually you will sink.

Jon Soberg is a Managing Director at Blumberg Capital, where he invests in early stage companies, specializing in FinTech, SaaS, and eCommerce. Prior to joining Blumberg Capital, Jon has been a serial entrepreneur and senior executive in multiple companies including Ditech, Broadband Digital Group and Adforce, which had a highly successful IPO.  

A CFA Charterholder and adjunct faculty in the Wharton Marketing Department, Jon earned a B.S in Engineering from Harvey Mudd College, an M.S. in Engineering from Northwestern University, and an MBA in Entrepreneurial Management and Marketing from the Wharton School, where he is a Palmer Scholar.

Top image via wavebreakmedia // Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Dropbox has had no trouble convincing consumers to use its tools, but it will need a dedicated sales team to reach large enterprises. To bolster its sales and support team, it has brought on Kevin Egan, a vice president at Salesforce.com, and Kim Malone Scott, who ascended the proverbial ladder at tech giants like Google and Apple.

Kim Malone Scott

The San Francisco-based company develops software to help businesses and consumers store files, photos, and more. The market is full of competition from the likes of Box and Google Drive, but Dropbox is the undisputed king of cloud collaboration, and it hit the 100 million user milestone in November. The company has two offices — in San Francisco and Dublin, Calif. — and a burgeoning staff of about 250 employees.

[Related: Read more about how business-focused startups are putting off hiring a traditional sales team, and favor the "freemium" distribution model.] 

As Dropbox continues to grow its team and rumors fly that its readying for a 2013 IPO, it may struggle to keep its startup culture in tact. New hire Scott may be able to help with that; she recently taught professional development and management skills at Apple, where she wrote the curriculum on company culture. Prior to Apple, she spent six years at Google as a director, and has sales and operations experience with AdSense, YouTube and DoubleClick.

[Related: Read more here about how Salesforce and Intuit are working to maintain a startup-like culture.]

Dropbox has also poached Egan from Salesforce, where he spent a decade working in its sales and operations teams. In his current role, he works as a senior vice president of global recruiting.

This year, Dropbox has primarily focused on building out its engineering team. It lured the designer of the Facebook “Like” button and the creator of the programming language Python. It also boosted its engineering firepower through talent acquisitions; it recently acquired Audiogalaxy and Snapjoy.

I’m curious to see whether Dropbox is successful in selling its products to large companies, given the spate of high-profile security breaches. Competitors Box and Egynte are already making headway in the enterprise with a traditional sales push — it’s a massive market opportunity for any cloud software company.

Paper chain image via Dirk Ercken, Shutterstock 

Atlanta-based WebMD, the largest source of medical information on the Web according to Comscore, will cut 250 jobs in the coming month as part of an ongoing effort to save $45 million per year.

The company will lay off 14 percent of its total workforce across all offices, a direct result of a disappointing third-quarter. As the Atlanta Business Journal originally reported, about half the employees at the company’s headquarters may be affected. It is unclear which departments will experience the worst layoffs, but early reports suggest it will be sales, video production, information technology, and editorial. The cuts come at a short-term cost increase: They’ll cost the company approximately $8 million in its first fiscal quarter of 2013.

In an official statement to the press, the company revealed that it will also put into effect other “cost-saving actions” during the first months of 2013. We have reached out to a spokesperson from WebMD for comment.

The company is seeing a decline in advertising from large pharmaceuticals, its bread and butter. In recent years, the Food and Drug Administration has tightened regulations on how big pharma can advertise. In addition, WebMD is facing competition for these ad dollars from a host of startups that offer consumer-friendly health information. Competitors include HealthTap, which provides patients with an online link to thousands of physicians, and Everyday Health, which provides medical news and information.

In November, the company announced that revenue had declined from $135 million during the year-ago period to $117 million. Despite the fact that traffic continues to grow (reaching an average of 107.2 million unique users per month and 2.56 billion page views in Q3), advertising and sponsorship income took a downward turn. CEO Cavan M. Redmond admitted that the company would need to adapt in an increasingly “challenging and changing” marketplace.

“Becoming leaner and more nimble will enable the company to extend our leadership in this highly dynamic and increasingly demanding marketplace,” said Redmond, in a statement. “In addition, anticipated changes in U.S. healthcare will provide meaningful new opportunities to link the needs of patients, consumers, and healthcare professionals to enable them to navigate their care. We are moving swiftly to implement these operational changes and new market initiatives.”