Startups Are Waiting Longer to Make Their First Hire

Startups today: just founders, no employees.

Well, no employees for longer than ever, at least.

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

This is just equity-holding, full-time employees to be clear, so maybe folks are using consultant-ish people...but I doubt it's a large percentage.

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.

𝗧𝗵𝗲 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.

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 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?)

This is cool...but I do worry about where the startup jobs will go. I think we sort of hand-wave at this kind of change and say things like "well more ppl will be founders" but that doesn't apply to everyone.

May we live in interesting times 😬

#startups #startupjobs #founders #startupfounders

More data on pre-seed startups out this week — subscribe at the link in graphic!