Product Startup Podcast Episode 219: Hiring Your First Startup Team

00:00:00 Kevin Mako: Hello, product innovators. Today we learned tips on what to look for in your first hires at a hardware startup from a two-time founder with hundreds of millions of dollars in sales.

00:00:08 Kevin Mako: This is the Product Startup Podcast, a show to learn from top leaders in hardware product development, prototyping, manufacturing, product selling, and everything in between.

00:00:18 Kevin Mako: Hosted by Kevin Mako, the leading expert on product development for hardware startups.

00:00:23 Kevin Mako: Welcome back, everyone. I'm very excited to introduce Kevin Lavelle to the show.

00:00:27 Kevin Mako: Kevin is the founder of Mizzen + Main, a consumer product company,

00:00:30 Kevin Mako: is sold via hundreds of outlets and even has 10 of their own retail stores, doing hundreds of millions of dollars in sales since inception.

00:00:36 Kevin Mako: He has now founded Harbor, a pediatric device startup that just raised $3.7 million in seed funding as well.

00:00:42 Kevin Mako: Today, Kevin will share valuable knowledge for inventors, startups and small manufacturers on the type of personality that you need to look for in your first hires at a new hardware startup, the types of characteristics that matter and that don't, and why quality is so important in hiring.

00:00:56 Kevin Mako: Now, on to the episode.

00:00:57 Kevin Mako: This show is produced by Mako Design.

00:01:00 Kevin Mako: The original firm providing end-to-end consumer product development services tailored specifically to hardware startups, small manufacturers, and inventors.

00:01:09 Kevin Mako: Take your product from idea to store shelves at MakoDesign.com.

00:01:13 Kevin Mako: Now on to the episode.

00:01:17 Kevin Mako: Hey, Kevin, welcome to the show.

00:01:18 Kevin Lavelle: Thanks so much. I'm glad to be able to talk with you. Thank you.

00:01:21 Kevin Mako: We're excited today to have you on to talk about early hiring.

00:01:24 Kevin Mako: It's something that every hardware startup, hopefully, is thinking about at some point in their journey.

00:01:29 Kevin Mako: even if you're just in the ideation phase or you're in the development phase or you're just launching to market.

00:01:34 Kevin Mako: At some point, you're going to grow from being a one or two-person team to hopefully a full-stack team.

00:01:39 Kevin Mako: And one of the most important things in that journey is the hiring.

00:01:43 Kevin Mako: How are you actually bringing on the right team members that will help grow your brand to the next level?

00:01:49 Kevin Mako: Turning it from a product startup into an actual product business with real employees.

00:01:54 Kevin Mako: So what better person today to talk about?

00:01:56 Kevin Mako: You're now on your second venture, your first venture, Mizzen + Main.

00:01:59 Kevin Mako: was a huge success, hundreds of millions of dollars in sales all over the world. You've got

00:02:04 Kevin Mako: 10 retail locations. So before we get into the meat and potatoes of today's conversation,

00:02:09 Kevin Mako: just give us a quick backstory of how you got to the success story that you are today.

00:02:13 Kevin Lavelle: I don't know that I'm at the success story yet, but we've been very fortunate. It's been a great ride.

00:02:18 Kevin Lavelle: The short version there is, I grew up playing golf. I'm wearing one of our golf polos now.

00:02:23 Kevin Lavelle: I watch performance polos take over on the golf course. And when I was a college intern in D.C.,

00:02:28 Kevin Lavelle: which taught me I never wanted.

00:02:29 Kevin Lavelle: to work in politics, but I was there. I watched a congressional staffer run into a building

00:02:33 Kevin Lavelle: soaked in sweat. I wondered why had no one ever made a dress shirt out of performance fabrics before.

00:02:38 Kevin Lavelle: Thought about the idea for years, finally decided, I've got to give this thing a shot. We launched the

00:02:42 Kevin Lavelle: world's first performance fabric dress shirt in 2012. We'll talk about some of those early days later in

00:02:48 Kevin Lavelle: this discussion. But out of the gate, it was doing everything I could to get every sale, one sale at

00:02:53 Kevin Lavelle: a time, and then tens and then hundreds and then thousands. And that's a long early grind. But

00:02:59 Kevin Lavelle: learned a lot through that process. Ultimately, we've had a great run. We had L Catterton invest in

00:03:04 Kevin Lavelle: us. They're the world's largest consumer retail private equity firm. We've gotten some really

00:03:07 Kevin Lavelle: incredible partnerships, guys like Phil Mickelson, JJ Watt, and others. The business is still going,

00:03:12 Kevin Lavelle: still going strong, but I've decided to launch a new startup, a pediatric telehealth startup,

00:03:16 Kevin Lavelle: building a better baby monitor. It's called Harbor. And it's based on my own experience,

00:03:19 Kevin Lavelle: that similar aha moment where something happened. I said, why isn't this better? And I decided to go out

00:03:25 Kevin Lavelle: and build that better thing. I woke up one morning.

00:03:29 Kevin Lavelle: And my son's Nanit app on my iPhone, it's a Wi-Fi baby camera that runs an app on

00:03:34 Kevin Lavelle: your phone. The Nanit app had just crashed. There was no audio coming through. So I ran up to his

00:03:38 Kevin Lavelle: room. Thankfully, he was just fine. But then I learned you can't rely on these app-based systems on your

00:03:44 Kevin Lavelle: phone to be a baby monitor. So we'll talk more about it. But ultimately, that's the problem that I

00:03:48 Kevin Lavelle: wanted to solve. And now we're building, I think, something even bigger than that, which is a wrap-around

00:03:52 Kevin Lavelle: kind of pediatric and early childhood wellness overall telehealth company.

00:03:57 Kevin Mako: Amazing. Both these stories started.

00:03:59 Kevin Mako: from that aha moment of just a pain point that you saw in your own life, which is so akin to so many

00:04:03 Kevin Mako: inventors out there. I know many, many people listening to the show have that same thing that was

00:04:08 Kevin Mako: the spark for their product idea. But it's also important if you're listening to the show and you haven't

00:04:12 Kevin Mako: had that idea yet, just keep your eyes open. Keep looking at the pain points that you're having

00:04:16 Kevin Mako: in your personal life because I have interviewed on the show. And obviously macro design has worked with

00:04:21 Kevin Mako: hundreds and hundreds and hundreds of people who the spark to their product invention, the big

00:04:26 Kevin Mako: success story that ended up coming out was just that.

00:04:29 Kevin Mako: personal pain point either at work or in somebody that they're close to or at home.

00:04:34 Kevin Mako: And that's the beginning of so many ideas. So I want to learn from you today, Kevin,

00:04:38 Kevin Mako: really what some of those growth initiatives were that helped you scale. Today is an important

00:04:43 Kevin Mako: episode for those who are considering to not only launch a product, but launch and grow an empire.

00:04:49 Kevin Mako: While that transition, there's a lot to go through. And today's topic is about hiring. So Kevin,

00:04:53 Kevin Mako: just talk big picture. Walk us through what's important when thinking about hiring. You're

00:04:58 Kevin Mako: very first staff members to help grow and scale your new hardware product business.

00:05:04 Kevin Lavelle: I think I'm going to just say like table stakes is they have integrity. They have relevant overall experience,

00:05:11 Kevin Lavelle: especially if it's a first hire, they're going to be doing something very specific. So moving aside

00:05:16 Kevin Lavelle: some just the very basic table stakes that anyone should consider when hiring. I'll talk about maybe

00:05:21 Kevin Lavelle: some of the principles that I think are most relevant in no particular order in a startup. I think I would

00:05:27 Kevin Lavelle: always, I say no particular order, but I would always start with, could this person succeed

00:05:31 Kevin Lavelle: in the unbelievably dynamic, uncertain, and fast-paced world of a startup? And in so many startups,

00:05:39 Kevin Lavelle: you want to get somebody that's been there before because you want their experience to come help

00:05:43 Kevin Lavelle: you in those earliest of days. My experience has generally been people from large, very large

00:05:50 Kevin Lavelle: organizations always, but generally from large organizations are not the right fit for the

00:05:56 Kevin Lavelle: earliest, earliest stages. Because in a startup, a day is like a week in a big company.

00:06:02 Kevin Lavelle: A week is like maybe even a quarter in a big company. And a month is basically a year. And it sounds

00:06:08 Kevin Lavelle: funny and cliche to say it, but the speed at which you have to make decisions is unlike anything most

00:06:13 Kevin Lavelle: people have ever experienced. And that cuts both ways. The need to move quickly to survive, but also

00:06:22 Kevin Lavelle: the consequences of decisions tend to be so much smaller that people.

00:06:26 Kevin Lavelle: People from large organizations just aren't used to saying, okay, let's just go with it.

00:06:30 Kevin Lavelle: And then we'll iterate or pivot if we have to. Because if you go through all the processes that you

00:06:35 Kevin Lavelle: normally do in a large organization to make every decision in the small organization,

00:06:39 Kevin Lavelle: you'll never even get off the ground. It's just fundamentally not possible. And so it's not to say

00:06:45 Kevin Lavelle: no one could ever transition from large to the earliest startup employee. So if that is the case

00:06:50 Kevin Lavelle: that you feel like they could, I would really dig into what in their personality gives you the confidence

00:06:56 Kevin Lavelle: to bring them on board for the most critical hire you'll make in the company's, you know,

00:07:01 Kevin Lavelle: tenure. Are there things that demonstrate their ability to handle change? Are there things in their

00:07:06 Kevin Lavelle: history or resume that show that they can operate without a team, that they can operate without a

00:07:11 Kevin Lavelle: decision maker approving or helping guide those decisions? There's a lot of different ways you can look for

00:07:17 Kevin Lavelle: that. That would be the first thing that I would start with. The second thing would be some measure

00:07:21 Kevin Lavelle: of get to know them in some capacity for more.

00:07:26 Kevin Lavelle: more than an interview. And so a lot of the earliest hires at my second startup harbor,

00:07:32 Kevin Lavelle: we have worked with on a contract basis for either a couple weeks or in many cases, a couple of

00:07:37 Kevin Lavelle: months where they were doing some freelance for us on the side. And so we really got to know each other.

00:07:43 Kevin Lavelle: And if you can do that, that is just the best way to hire because somebody could be the perfect fit

00:07:48 Kevin Lavelle: for the role that you want to hire for, but you guys just don't mesh. And the way that you want

00:07:53 Kevin Lavelle: to operate the business just doesn't align with how they make decisions.

00:07:56 Kevin Mako: So,

00:07:56 Kevin Lavelle: Those would be the first two things. And then the third thing would be, do they understand fundamentally

00:08:01 Kevin Lavelle: what they're getting into? And so I've seen some people say, I really want to go work for a startup.

00:08:06 Kevin Lavelle: And then they say, you know, I want my all in cash comp in year one to be $400,000. Great. You are

00:08:12 Kevin Lavelle: 100% not a fit for this startup because you have no idea what sort of tradeoffs and types of things

00:08:17 Kevin Lavelle: are going to be required for this role. And you really can never negotiate someone down successfully from

00:08:23 Kevin Lavelle: a $400,000 kind of opening compensation ask.

00:08:26 Kevin Lavelle: because that's just so far removed from the reality of that first type of higher role.

00:08:32 Kevin Lavelle: And they need to understand that what they're buying into is the upside rather than, well,

00:08:37 Kevin Lavelle: you have to pay me what I'm worth right now. And that, to me, is the biggest flag for they're not going to

00:08:42 Kevin Lavelle: have the right frame of reference for what these decisions require. And as a corollary, I'm talking to

00:08:48 Kevin Lavelle: a bunch of prospective kind of ambassadors and celebrity investors and others. And some of them say,

00:08:52 Kevin Lavelle: well, if you want to work with me or their agent, if you want to work with this person,

00:08:56 Kevin Lavelle: And, you know, they're going to need at least seven figures a year in cash compensation.

00:09:00 Kevin Lavelle: Like, okay, well, then you're not a good ambassador for a startup at this stage because that tradeoff

00:09:05 Kevin Lavelle: doesn't work. So that's actually a really easy and great thing to know up front. But hopefully those

00:09:09 Kevin Lavelle: are our three first good kickoffs for framing for that first hire.

00:09:13 Kevin Mako: That's so powerful. Finding the right fit for the job, especially in the entrepreneurial venture.

00:09:18 Kevin Mako: I love how you keep coming back to that startup attitude because the reality is you don't have

00:09:22 Kevin Mako: the budgets to the big corporations. So you're not trying to compete with them toe to toe on.

00:09:26 Kevin Mako: the precise figures, especially when we're talking about cash compensation. It's all about the

00:09:30 Kevin Mako: upside. A big part of that upside is that it's kind of your job as well as the entrepreneur to sell them

00:09:36 Kevin Mako: in a way. They've got to believe in what you're doing because the reality of almost any startup is that

00:09:41 Kevin Mako: you are getting paid less now in order to be part of a ride in which you will do significantly better

00:09:46 Kevin Lavelle: than your peers by just going and getting a fluffy corporate job. The other thing I just want to add to that

00:09:52 Kevin Lavelle: in terms of the, you know, being a part of a ride. I've seen a lot of

00:09:56 Kevin Lavelle: I'll call it takedowns on Twitter where early employees took a bunch of equity and they got totally

00:10:00 Kevin Lavelle: hosed because it didn't work. And there are some prognosticators on Twitter that say basically working for

00:10:05 Kevin Lavelle: a startup is a bad trade and anyone should just go take more money at a more secure job. If the only reason

00:10:11 Kevin Lavelle: you're going to work for a startup is because you think your equity is going to be worth $10 million and

00:10:15 Kevin Lavelle: you're willing to make that trade, it's probably not the right voice also. If you are going to work for a

00:10:20 Kevin Lavelle: startup, sure, take a bet on yourself and say I want to be a part of an upside. I'm ready for it. But also

00:10:25 Kevin Lavelle: So the ability to learn and grow and extend your skill set, no, you should be compensated

00:10:31 Kevin Lavelle: for it. I'm not saying go do work for free or take a 90% haircut on your compensation,

00:10:35 Kevin Lavelle: but the intangible benefit of the speed and breadth of responsibility that you can get,

00:10:42 Kevin Lavelle: there is no greater example of this than myself. Before I started Mizzen + Main,

00:10:46 Kevin Lavelle: I'd never even interviewed someone, let alone hired them, managed to P&L, and then I never

00:10:51 Kevin Lavelle: done any of that. But I called myself a CEO and I was off to the races.

00:10:54 Kevin Lavelle: Every single thing I did was brand new. And I was able to go from no P&L experience, no

00:11:01 Kevin Lavelle: managerial experience, nothing, to running ultimately a multimillion dollar company because of what a

00:11:07 Kevin Lavelle: startup affords you the chance to do. And so I saw folks, some of the best hires I ever had, had no

00:11:13 Kevin Lavelle: college degree. They had no real, you know, robust resume, but they came in and they proved they could

00:11:18 Kevin Lavelle: outwork and outsmart and out hustle, every one around them. And they rose to a point where they got

00:11:24 Kevin Lavelle: hired away to a role that they never would have gotten before because those other companies

00:11:29 Kevin Lavelle: needed to see those proof points. And when you can say, I took the business, I was a part of the

00:11:34 Kevin Lavelle: business from here to here, and here are the 10 things that I personally did, that's really hard

00:11:38 Kevin Lavelle: to do at a larger organization. You can claim credit. But if you're one of 10,000 employees,

00:11:43 Kevin Lavelle: it's really hard to say that, like, you materially move the needle for the top line or the bottom

00:11:48 Kevin Lavelle: line of the organization.

00:11:49 Kevin Mako: Well, that comes back to what you're talking about. Even when you're first

00:11:52 Kevin Mako: hire, does this person have the ability to do a lot of work? Are they a get stuff done type of

00:11:58 Kevin Mako: person or is a kind of a massive delegator, thinker, this sort of stuff, which is very akin to big

00:12:04 Kevin Mako: corporate, lots of meetings, very little action. As you said, you know, weeks turn into months that turn into

00:12:09 Kevin Mako: years. So at a startup, you don't have that luxury. Things need to be getting done every single

00:12:13 Kevin Mako: day. So if you can prove that you're that type of person that has the grit, the integrity, as well as

00:12:18 Kevin Mako: the intelligence to hustle and move on these things quickly, make action.

00:12:22 Kevin Mako: actual actions happen, you're going to be much further ahead. And the learning, what better

00:12:26 Kevin Mako: place to learn, especially as somebody who's maybe looking to change career or early in their

00:12:31 Kevin Mako: career, whatever else. Startup was an incredible place. Now, I see it with countless startups,

00:12:36 Kevin Mako: clients of ours or just other groups that I'm a part of. And there's really no machine that moves

00:12:41 Kevin Mako: nearly as fast as somebody who is, especially with leadership like you had, Kevin, where you were in

00:12:46 Kevin Mako: it 110%. You're looking to make moves very quickly. You're looking to conquer a market.

00:12:51 Kevin Mako: you're moving at the speed of light. So everybody who then joins around you is going to be doing

00:12:56 Kevin Mako: a very similar thing, moving quick and getting things done.

00:13:00 Kevin Lavelle: 100%. And I will follow that great kind of encapsulation with somewhat of a contradiction

00:13:06 Kevin Lavelle: immediately in my advice, which is the biggest change that I've made from my experience at Mizzen + Main

00:13:12 Kevin Lavelle: to harbor. And part of it is the nature of what we're building is hiring experienced people.

00:13:19 Kevin Lavelle: And I don't mean big, big, big comfort.

00:13:21 Kevin Lavelle: people who say, oh, I've seen everything and I've done it before. But people with the relevant

00:13:25 Kevin Lavelle: experience required to be successful. And so very specifically with Mizzen + Main, I sort of tinkered

00:13:32 Kevin Lavelle: around. I found a seamstress. I called fabric companies. I found people to make me a pattern. And I sort

00:13:37 Kevin Lavelle: of hacked together the prototype and the first thousand shirts myself and paid for it myself. And my job

00:13:43 Kevin Lavelle: was to then go out there and sell the shirts. And I learned how to sell and how to get our product in

00:13:46 Kevin Lavelle: and blah, blah, blah, blah, blah. I didn't hire anybody from the end of the end of the

00:13:51 Kevin Lavelle: for I think at least four years, maybe five. And part of it was I couldn't afford to hire

00:13:59 Kevin Lavelle: anybody for a long time, but then also everyone from the industry either told me my idea was stupid or were

00:14:05 Kevin Lavelle: so dismissive of our existence that I wasn't having a conversation trying to get them to come in

00:14:10 Kevin Lavelle: and help us. Now, I certainly didn't talk to everybody in the industry, but my conversations were

00:14:14 Kevin Lavelle: largely, not only do you not have a chance, like, you're an idiot for trying. With Harbor, we're

00:14:20 Kevin Lavelle: building very advanced electronics and very robust systems. We have to be at the leading

00:14:27 Kevin Lavelle: edge of cybersecurity. This is an incredibly sophisticated electrical engineering, industrial design,

00:14:32 Kevin Lavelle: mechanical engineering, software, firmware, cybersecurity. And so with Harbor, we have nine people

00:14:38 Kevin Lavelle: on our team and we just launched the wait list for our product. I have been working on this idea

00:14:44 Kevin Lavelle: directly for over two years. And my co-founder and I, who's the technical side of the business,

00:14:49 Kevin Lavelle: have been building this company for 18 months. We have probably 1T people on contract from

00:14:55 Kevin Lavelle: one hour a month to 40 hours a week because the number of people with expertise is so high. And so I do want

00:15:01 Kevin Lavelle: to just be careful to say, like, don't askew anyone that has experience or big company resume because

00:15:07 Kevin Lavelle: there's no way they could survive in a startup. There is a balance. And depending on the needs of the product you're

00:15:11 Kevin Lavelle: building, the technical requirements in some cases, you just fundamentally cannot skimp on.

00:15:17 Kevin Mako: Yeah, especially in hardware. I mean, we talk a lot about it on.

00:15:19 Kevin Mako: the show, you can condense your feature sets, but never sacrifice quality of your feature sets.

00:15:25 Kevin Mako: Hardware is expected to be a five-star Amazon reviewed product. Even if you're a new brand,

00:15:29 Kevin Mako: the market is looking for top-tier quality. Therefore, you really have to at least make sure

00:15:35 Kevin Mako: that you're hitting certain key minimum milestones with top-level expertise. Otherwise, don't even

00:15:42 Kevin Mako: start. So it's kind of all or nothing in terms of quality. But, of course, as a startup,

00:15:46 Kevin Mako: what you can sacrifice is your feature creep. You can always.

00:15:49 Kevin Mako: always save certain things for a version 2.0. And that's been addressed quite a bit, especially

00:15:53 Kevin Mako: when you're coming into a complex consumer electronics products. You've got to be very sophisticated

00:15:57 Kevin Mako: about what your first offering is, be very targeted, be very niche, be very specialized, very good

00:16:02 Kevin Mako: at what you do and that limited skill set. And I love how you said, like you've really packed a lot

00:16:05 Kevin Mako: of design engineering, et cetera, into it in the early phases before you even launched to make sure

00:16:10 Kevin Mako: that you're launching with that world-class quality right out of the gate from day one.

00:16:15 Kevin Lavelle: Yeah, absolutely.

00:16:16 Kevin Lavelle: Because anything less is you're sacrificing the entire company.

00:16:19 Kevin Lavelle: And, you know, I think an important lesson, and though it's not hardware, I think a very

00:16:23 Kevin Lavelle: important example of this is I don't know what version of Uber I tried, but I remember the very

00:16:29 Kevin Lavelle: first version of Uber that I tried is like ancient technology compared to what Uber is today.

00:16:36 Kevin Lavelle: But if they didn't do that, they had no chance to do anything else. Hardware you can't iterate

00:16:41 Kevin Lavelle: obviously nearly as quickly. But I think it's important, the lesson that you said is feature

00:16:46 Kevin Lavelle: creep, what do you have to have to create value for the customer? And if you do that

00:16:51 Kevin Lavelle: materially better than anyone else, then you have a chance to continue to grow and add things. And

00:16:56 Kevin Lavelle: for us, there is the minimum hardware feature requirements. And then we have made some system design

00:17:02 Kevin Lavelle: choices and some product selection choices on the guts of the product to allow us to expand in a huge

00:17:08 Kevin Lavelle: huge way from a software perspective over time. So we nail the hardware with that foresight in mind

00:17:14 Kevin Lavelle: for what do we need to future proof against for the years ahead. So we don't have to keep

00:17:18 Kevin Lavelle: iterating new pieces of hardware. But all of the growth in features will come on the software side.

00:17:24 Kevin Lavelle: Our launch version will be everything you need in a baby monitor. But then we have a roadmap of two

00:17:30 Kevin Lavelle: years of features that we will release later. Because if we tried to do all of that at once,

00:17:34 Kevin Lavelle: we would never launch. And when it comes to something as expensive and complex as hardware,

00:17:38 Kevin Lavelle: you do have to get that first product out in the world to have license to be able to do everything

00:17:42 Kevin Lavelle: else.

00:17:43 Kevin Mako: Kevin, thanks so much for your words of wisdom. Just before I let you go,

00:17:46 Kevin Lavelle: what is the website to Harbor? Harbor.com. And all of our socials are at Harbor Sleep. And then

00:17:55 Kevin Lavelle: I'm on X at Kevin S. Lavelle. Thanks, Kevin. Appreciate it. And I'll put the links in the show notes below

00:18:00 Kevin Mako: for anyone that wants to click through. Thanks again for your words of wisdom today on hiring and getting

00:18:05 Kevin Mako: your first product to market. Some of the concepts around feature creep, really important.

00:18:09 Kevin Mako: And you know, it all ties in. Hiring feature creep, product development. It's all

00:18:13 Kevin Mako: kind of nestled together very tightly. So I appreciate you bring those things to light and how that

00:18:16 Kevin Mako: even affects your hiring decisions as you hire your first employee for a hardware startup. Thanks,

00:18:21 Kevin Lavelle: Kevin. Thank you. Appreciate the opportunity. Thanks. Thanks. And take care.

00:18:26 Kevin Mako: Thanks for tuning into this episode of the Product Startup Podcast. If you found some value in the

00:18:31 Kevin Mako: show, please do us a huge favor and hit the like button and subscribe. If you have any questions,

00:18:36 Kevin Mako: guest suggestions, or anything else, feel free to reach out to us anytime at our email, podcast@makodesign.com.

00:18:43 Kevin Mako: This show is hosted by Kevin Mako, North America's leading expert on product development for hardware startups, and the podcast is produced by Mako Design, the original firm providing end-to-end consumer product development services tailored specifically to hardware startups, small manufacturers, and inventors. Take your product from idea to store shelves at MakoDesign.com. That's M-A-K-O-Design.com. Thanks for joining and see you again soon.