Silicon Valley investor Marc Andreessen says the threshold is when a company surpasses 50 employees.
According to Silicon Valley investor Marc Andreessen, companies with more than 50 employees must start thinking about adding a human resource function before things start to go horribly wrong. In this Business Insider article, Marc says that many companies in Silicon Valley put off HR as a critical functional until it’s too late and that many of them were facing some level of catastrophe as a result.
In an interview with entrepreneur and investor Elad Gil for his new book, "High Growth Handbook," the investor shares his secrets for how start-up leaders can turn early success into lasting relevance and one of his best tips was on the topic of when to hire a human resources leader.
"If you don't start layering in HR once you've passed 50 people on your way to 150, something is going to go badly wrong," Andreessen told Gil in the interview. Andreessen argues that poor HR practices can be the downfall of startups as “team disharmony is repeatedly cited as one of the biggest reasons why startups fail”. This is because most companies will initially focus on building a great product and distribution channel before making sure that their finance, HR, legal, marketing, PR, investor relations, and recruiting abilities are up to scratch. However, delaying those activities only increases the risk of failure caused by what he terms ‘self-inflicted wounds.’
