Back in the twenty-teens the growth hacking/lean startup approach took over. Some of the overly aggressive tactics from those times were dropped relatively quickly but many of them were adopted as standard best practices but never really talked about in the same context again. Earlier this week I had someone ask me about when to hire for what roles and ultimately how to know when to make that investment.
I think each business and business model has some different signals to look at when making these decisions but I will try to generalize as much as possible to make it more applicable to everyone.
When considering a hire I tend to think through a few specific things:
- What kind of need do I have?
- What level of investment can I make in terms of both time and money?
- What kind of return can I expect to make from that hire, and how long till I see it?
What kind of need do I have?
It’s not always (and shouldn’t) be as straight forward as “There is work that needs to be done.” I know that business owners, managers, etc. get tons of unsolicited advice from all types of people — who honestly tend to just speak to what they know — and all of that advice is hard to parse through. Things like:
- Oh you need to be on TicToc, it’s the fastest growing social network right now.
- You really should invest in your content strategy.
- Facebook ads have been a really good tool for our business.
- Your SEO could definitely be better.
- You absolutely need to be tracking as much data as you can.
- You should really have some automated campaigns set up to drive your lead funnels.
While none of those things are probably false statements, they’re not helpful in evaluating your actual needs based on your current business model and challenges. An actual need looks something more like:
We’re developing high-quality content that is valuable to the community but we’re not getting enough traffic or traction to make it worth the time we’re putting into it.
Once you can “vocalize” your problem, it’s easier to find the need. In this case we need to increase traffic and/or revenue on a per content basis. We’ll assume the website is monetizing their traffic at a reasonable level so we’ll look at options for increasing traffic first.
What level of investment can I make in terms of time and money?
If you’re trying to be as lean as possible you need to maintain a pulse on your entire team’s bandwidth. Maybe you have a content creator who could step back from some flashier things to free up some time or a project you can pause to free up some resources.
If you are able to identify ways to free up time from your existing team, you need to evaluate the potential opportions for where to redirect that time and the learning curve/time investment it will take to get to a point of generating results.
Note: you also need to validate whether the time you can free up is coming from people who are willing/eager to learn and do more or if you’re risking turnover by asking someone who wants to stay focused on their main job to do something outside of their expertise or comfort zone.
Ultimately you need to evaluate the people and skills sets you are able to free up against the opportunities you identified to help solve the problem. In this case we’re looking at traffic so let’s say we narrowed it down to:
- Investing more time into social media management, focusing on engaging the audience and driving more of them back to the content we’re creating.
- Finally doing something with our newsletter and setting up email to be a consistent traffic driver.
- Learning how to optimize the site for SEO to drive more organic traffic.
All three of these options are valid strategies and approaches that could likely yield similar results so let’s look at some scenarios.
- Most of the time you were able to free up came from your website manager – this person is more technical in nature and not incredibly strong at writing. This person is probably best suited to dig into SEO as they will be able to understand information from Seach Console and also be able to implement improvements independently.
- Most of the time you were able to free up came from more junior writers who don’t have a lot of experience working with websites or email platforms but are well versed in social media. This person could be easily shifted towards promoting content on social media. While there’s a learning curve to go from personal social media use to business social media management, there are a lot of resources out there to provide guidance, examples, templates, and ideas.
- You were able to free up some time on someone who is well-rounded and learns quickly. This person might be well suited for digging into your email platform and strategy to see if there are basic best practices that could be implemented easily.
By taking an approach that uses available time you were able to free up without increasing expenses you can essentially start making progress towards your goal and get to a point where you’ve increased incoming revenue enough to justify a dedicated hire.Please see this for reference on when generalists vs specialists make the most sense.
- Didn’t add to ongoing expenses by adding a new hire.
- You are leveling up your team in a way that helps them understand more about the business.
- Instead of hiring specialists, you’re developing them which allows you to hire lower cost replacements as the people you train shift more focus towards these results-yielding initiatives.
- You’re distracting team members from their core responsibilities.
- The internal people training to take on new responsibilities won’t likely be as effective as a dedicated or specialized hire you might make.
- It might take longer to see results from the time investment.
If you’re at a point where you can’t or don’t want to try and leverage your existing team to take on the new opportunities you need to look at what kind of investment you can make and for how long. Maybe you can cover the cost of a hire but only for three months. I would use the next section to calculate the expectations/goals for the hire and be very clear with them that they will need to hit these goals in that three month period — ultimately securing their own job.
What kind of return can I expect, and when?
If you’re going to be a lean business, you need to transform this question into a requirement for your potential hire: “I need to see $XXXX more revenue in the next X months.” You don’t need to be that blunt about it, but you get the idea.
I’m not going to dive into advanced analytics or hardcore math-ing in this post for the sake of keeping it simple. Instead, we can use a general metric like revenue per pageview to try and calculate the results you would need to justify a hire at the price point the market is asking for.
All you need to do is look at each opportunity/strategy and use the insights available to forecast a rough increase in pageviews (this can be done with basic Google Analytics analysis).
For channels like social media and email where you have a specific sized audience, I would look into what it would mean to increase not just frequency but also click through rates. You can then calculate how the increase in sessions/click throughs translates to pageviews by using average pageviews per session and then multiply by your revenue per pageview.
- I have an email list of 10,000 subscribers.
- I’ve seen maybe 5% of those users open my monthly email to click through to the site.
- On average, those users see 1.5 pages per session.
My plan in hiring someone would be to update our email templates to improve clickthrough rate (from 5% to 7%) and start sending weekly newsletters. I can forecast the impact of achieving those goals by taking 7% of 10000 and multipling that times 4 (four newsletters) and then multiplying that by 1.5 (pages per session). Once I have that number I can multiple it by my revenue per pageview number and compare it to my current performance to see what kind of potential revenue impact I would see.
It may be a case where you need to hire someone to take on all three opportunities – and in that case it’s really just validating how long it will take to achieve the results that will justify and ideally surpass the cost of the hire. Again, the idea is scaling that revenue up until one of those responsibilities is generating enough revenue to justify a dedicated hire/owner.