The First Stranger: Transitioning From Contractors to Your First Real Hire

There is a distinct shift in the atmosphere of a startup when you hire your first stranger.

Up until that point, the business is likely a collection of informal agreements. You might have co-founders who are working for equity and a dream. You might have contractors who you pay by the hour to complete specific tasks. You might have friends who are helping out on the weekends.

These relationships are transactional or relational.

Then, you hire someone you do not know.

You bring on a professional who is trading their career capital for a salary and a belief in your vision. This changes the physics of the company. It forces the organization to mature instantly. You can no longer operate on shorthand and assumptions.

Many founders delay this moment. They stay with contractors too long because it feels safer. A contractor is easy to fire. A contractor does not require payroll taxes. A contractor does not need a career development plan.

This is diminished as your team grows. A new member is the n+1 member. New person is therefore 1/n+1 when n is small in the beginning, they are a staggeringly large part of the “next day” organization. When n is large and you have say 50 people, the new person is hardly any impact. This is obvious. Until you hire first employee when it is shocking.

However, you cannot build a lasting institution solely on rented time. Eventually, you need people who are culturally obsessed with the mission. You need employees.

How do you navigate this crossing? How do you ensure that bringing a stranger into your chaotic world does not break the business or the person?

The first barrier is not legal or financial. It is psychological.

When you hire a contractor, you are paying for an output. You want a logo designed. You want five blog posts written. You want the code refactored. The relationship ends when the task is done.

When you hire an employee, you are paying for an outcome and a domain.

You are no longer saying, “Please design this page.” You are saying, “Please take ownership of our user interface and make sure it converts.”

This requires a relinquishing of control that is terrifying for most founders. You are used to doing everything yourself or micromanaging a freelancer. To get the value out of a full-time hire, you have to let them make decisions.

You have to accept that they will do things differently than you. They might even do them better.

We must ask ourselves if we are actually ready to manage a person, rather than just managing a task list. Are you ready to have one-on-one meetings? Are you ready to provide feedback that isn’t just about the work, but about their behavior and growth?

If the answer is no, you are not ready for an employee. You are looking for a high-end assistant.

The biggest mistake founders make with employee number one is writing a job description based on tasks they want to offload.

It usually looks like a laundry list of things the founder hates doing. Answering support tickets, scheduling meetings, posting to social media.

If you hire someone to do tasks, you will have to manage them forever. You will become the bottleneck because you have to constantly feed them new tasks.

Instead, you need to define the problem.

Do not hire a “Social Media Manager.” Hire someone to “Solve the problem of our low brand awareness.”

When you frame the role around a problem, you empower the employee to find the solution. This is the difference between a subordinate and a colleague.

Write down the three biggest problems in your business that are stalling growth. Is it that you cannot close sales fast enough? Is it that the product breaks when more than fifty people use it?

The job description should be a description of these problems.

When you interview candidates, you are not asking them if they can do the tasks. You are asking them how they would solve the problem. This filters out the task-doers from the problem-solvers.

How do you know if a stranger is good?

Resumes are marketing documents. They are often exaggerated. References are usually friends who will say nice things.

The only way to know if someone can do the job is to watch them do the job.

If you have never conducted an interview before, practice with friends. Almost everyone has been interviewed, so they have good real world experience. Do not try to be someone you are not in an interview. That is just a recipe for attrition in a few weeks when they realize you were “fake”. As Fred Rogers said, we like you just the way you are. And usually, founders are super passionate about their startup. Which is infectious.

You should never hire your first employee without a practical work sample or a paid trial project.

If you are hiring a salesperson, have them sell you your own product (tell them this in advance of the interview or as a second interview). If you are hiring a developer, have them review a piece of your code. If you are hiring a marketer, have them critique your landing page.

We are looking for the “how.”

We want to see how they think. Do they ask clarifying questions? Do they make assumptions? Do they push back on your bad ideas?

The first employee sets the bar for everyone who follows. If they are mediocre, your next ten hires will be mediocre. A-players hire A-players. B-players hire C-players to protect their egos.

You cannot afford a B-player in this seat.

Here is a hard reality.

You cannot hire an employee into a vacuum.

When it was just you, the processes lived in your head. You knew how to handle a refund because you just knew. You knew the brand voice because it was your voice.

A stranger cannot read your mind.

Before you bring someone on, you have to pay down your documentation debt. You need to create the “Standard Operating Procedures” (SOPs) for the core functions of the role.

This does not mean you need a three-hundred-page manual. It means you need a rough framework.

Record a video of yourself doing the job. Write down the access codes. List the software tools.

However, there is a nuance here. You do not want to document everything perfectly.

Why? Because you want the new hire to build the systems.

A great way to onboard the first employee is to hand them the rough notes and say, “Part of your job in the first thirty days is to turn these messy notes into a professional playbook.”

This helps them learn the business and gives them immediate ownership of the process.

We talk a lot about “culture fit.”

This is often code for “someone I would like to have a beer with.”

When you are hiring your first real employee, you do not need someone who reinforces your existing habits. You likely need someone who challenges them.

If you are a visionary who is terrible at details, do not hire another visionary. You need an integrator. You need someone who loves spreadsheets and hates chaos.

This will cause friction. That friction is good. It is the friction of traction.

We should look for a “culture add.” What is missing from the DNA of the company? Do you lack discipline? Do you lack aggression? Do you lack empathy?

Hire the person who brings the missing ingredient, even if they feel slightly alien to you.

Do not hire jerks. No matter how talented, how excited, how great of pedigree, or how great of a referral… if you cannot stand this person just skip them. Your future self thanks you. And your team. And your future team. And everyone. No jerks.

Finally, we have to look at the math.

A full-time employee is a fixed cost. Contractors are variable costs.

However, the variable cost per unit time is higher with contractor than employee. That “uncertainty” of a contractor has a cost. So the longer you keep the “option” the most expensive it gets. Be flexible, not foolish.

When revenue dips, you can pause a contractor. You cannot pause an employee’s mortgage payment.

You need to be sure that you have the cash reserves to support this salary for at least six months with zero revenue growth.

If hiring this person puts you in a position where one bad month bankrupts the company, do not do it. The stress will make you a terrible leader. You will resent the employee for costing money, and they will sense your anxiety.

“But as soon as…‘big thing’ happens we can easily afford it” is a great way to justify your bankruptcy. Do not build a plan on wishful thinking. Protect your cash.

The goal is to hire someone who generates more value than they cost. But there is a ramp-up period. For the first three months, they will likely cost you time and money.

You must be financially prepared to make that investment without panic.

Hiring the first stranger is the moment you stop playing business and start building a company.

It is scary. It introduces legal complexity, interpersonal drama, and financial risk.

But it is also the only leverage point that matters.

You have taken the business as far as you can alone. To go further, you must trust someone else to carry the load.

Do the math. Define the problem. Trust the process.

Keep building.