Startup Founders Are Building Without Employees Longer Than Ever

Startup founders are building with no employees for longer than at any point in the last 5 years.

Data below looks at the number of days between company incorporation and the hiring of the 1st, 2nd, and 3rd employee.

(Just equity-holding, full-time employees to be clear, so maybe folks are using consultant-ish people).

And I realize incorporation date is not usually the point where a founder starts thinking about or working on an idea, but hey we gotta have a starting date here.

𝗗𝗮𝘁𝗮

• In 2019, the median time from incorporation to 1st hire was 214 days.

• In 2024, that median time was 284 days (32% higher).

• This same pattern repeats itself for the 2nd and 3rd hires as well - they are being added to the team after much longer periods than in 2019.

You can see the clear "dips" in the timelines in 2021 and 2022, when even tiny startups were hiring fast and furious.

So what's driving this change?

1. 𝗗𝗲𝗳𝗶𝗻𝗶𝘁𝗲𝗹𝘆 founders being more capital efficient and careful about their team construction. If funding is tight, hiring slows.

2. 𝗣𝗿𝗼𝗯𝗮𝗯𝗹𝘆 founders looking around at their peers in nascent companies and seeing how far they're starting to get with just the founding team.

3. 𝗟𝗶𝗸𝗲𝗹𝘆/𝗠𝗮𝘆𝗯𝗲 founders are enhancing their own capabilities with AI tooling and don't feel pressure to hire anyone at the jump.

4. 𝗣𝗼𝘀𝘀𝗶𝗯𝗹𝘆 founders are finding it difficult to select that perfect 1st hire (not sure why exactly this would be the case - maybe the best first hires are all starting their own companies?)

Smaller companies moving faster is the current meta across startups.

#startups #startuphiring #founders #foundingteam

Lots more data on startup hiring, firing, salary, equity — give me a shout for a link to our upcoming State of Startup Compensation virtual event where we dig into all this data!