How To Build A High-Performing CXO Team And Supportive Leadership For Startup Growth

AirBnB spent five months interviewing their first employee before hiring someone; in their first year, they only hired two people.

Hiring leadership talent has always been a challenging task, but it has become even more difficult in recent times. Recruiting exceptional leadership talent in the dynamic and fast-paced world of startups requires more than filling a role—it demands identifying individuals capable of driving innovation, fostering resilience, and shaping the organisation’s trajectory. This shift underscores the need to adapt and reposition strategies accordingly.

Think of Covid-19. No business, large or small, was immune to its initial shockwaves or long-term socio-economic impact. But what happened next was far from expected. After the FOMO-driven investment tsunami and the Great Resignation of 2021 came a harsh funding winter.

But there is a silver lining. Indian startups are increasingly embracing tech enablement, leveraging advanced software to enhance business experiences, streamline hiring, and optimise customer interactions. This deeper integration of technology reflects a shift toward sustainable growth, a necessity after grappling with funding and scaling challenges. Today, startups are focusing on meaningful progress throughout their business life cycles, from early-stage growth to large-scale operations. They are seeking C-suite-ready leaders equipped to navigate the unique complexities of each phase, driving innovation and resilience while steering the organisation toward long-term success. 

Undoubtedly, innovation and disruption cannot take the backseat in the startup sector. But this time, entrepreneurs are keen to focus on what matters in the real world instead of exploring the glittery opportunities, prioritising sustainability over growth at all costs. 

In essence, startups are becoming more cautious about over-hiring or overspending. They are also less likely to underdeliver or experiment excessively unless founders are confident that their strategies will lead to profitable business outcomes. This shift in approach pressures startups to hire the right talent while balancing short-term scaling and risk-taking with long-term value creation, emphasising the need for a strategic equilibrium between growth and calculated risk.

Recently,  leadership hiring for Indian startups has seen a ‘notable increase’. As per an Accord India report, C-suite recruitment grew by 15% Y-o-Y in the first half of 2024. The report also highlights that sales and marketing has become the largest hiring function, with startup heads focusing on expanding their customer base and enhancing branding as competition intensifies. 

Again, the rise of startup IPOs in 2024 makes them attractive workplaces. It signals that startups are not scrappy newcomers but serious public market players seeking experienced leaders to guide them through complex business challenges, particularly from an IPO readiness standpoint. Being part of an IPO is a significant milestone for any leader, as it allows them to say, “I helped take this company public.” Having IPO and listing experience is a valuable achievement that enhances a leader’s career portfolio.  

According to Anshuman Das, cofounder and CEO of executive search and talent advisory firms Careernet,  Longhouse Consulting, and HirePro, the demand for C-suite executives has increased in recent years due to the evolving needs of startups and their expansion strategies.

“In tech-enabled or tech-first businesses, where the technology stack is the backbone of operations, the role of Chief Technology Officer (CTO) becomes pivotal in steering the company’s growth and innovation,” he said. 

“Even during frugal times, startups prioritise filling this position, as they need a solid technology foundation to run the business. In all tech-driven companies, a CTO acts as the backbone, ensuring that the infrastructure and the technologies required to scale the operations are in place and working in sync with business goals,” he added. 

Launched in 2009, Longhouse Consulting is a specialised executive search and leadership advisory firm, with a deep understanding of the talent landscape in the high-growth digital sector, emerging technologies, and the consumer internet space, operating under Careernet, a talent solutions provider since 1999. The Indian startup ecosystem was still in its infancy at the time. However, given their unique requirements and specific challenges, Das, an IITian, and his senior partner, Rohit Srivastava, understood the criticality of leadership hiring across startup stages.

Longhouse Consulting has been working with late-stage ventures since their early stages and has helped them hire talent across roles. The company hires key talent for organisations to enable them to be future-ready by providing talent advisory and assisting them at different stages of their evolution, both India and globally. Longhouse Consulting offers a blend of expertise, innovation, and an understanding of the talent landscape. 

The company’s legacy extends to curating complete leadership teams for key players in sectors like ecommerce, fintech and edtech, retail, food delivery, mobility, healthtech, logistics, SaaS, brick-to-click, VCs/PEs, professional services, emerging industries, and IT and offshoring. 

Longhouse Consulting has executed over 500 CXO mandates and established 100+ enduring client relationships. With a strategic focus on lending ventures, the firm has orchestrated external leadership hires, constituting 20% of its portfolio. 

Key Challenges Of Leadership Hiring

Startups face several hurdles regarding leadership hiring, but a high turnover can be particularly painful. As top leaders anchor businesses and take them ahead, rapid and unplanned exits will hurt startups’ growth. The C-Suite often exits amid unforeseen critical situations (think of merger and acquisition, demerger, reshuffle, financial crunch, or regulatory turmoil), recently observed in sectors like edtech, financial services, healthtech, and more. 

Stable and profitable startups also face this issue. As per a 2023 annual roundup by Inc42, more than 30 cofounders and CEOs transitioned to other companies and started new ventures during the year. Even at an IPO-bound startup like Shiprocket, nearly 89% of the entire leadership team has been working for three years, underlining how brief their tenure could be.      

Given that the leadership exodus will continue for internal and external reasons, how does Longhouse Consulting help startups cope with this challenge? 

“We start by looking at a startup’s stage and go deep into its growth trajectory and likely challenges. Instead of solely focussing on finding the right profiles, we do a strategic analysis of the startup’s requirements in the first place,” said Das. 

“Our approach goes beyond simply starting the search process based on a job description provided by the customer. We prioritise a thorough company analysis first, enabling us to propose a tailored strategy that aligns with their unique needs and goals. Our strength lies in offering advice that aligns new hires with broader business goals. We use our industry connections to find qualified candidates who are a good cultural fit.”

For example, the firm may recommend hiring a VP of Engineering for an early-stage startup, leaving the role of a CTO open for a later stage when the business will require more out-of-the-box solutions and better tech integration for seamless growth. Such hiring helps foresight prevent premature recruitment and ensures budget flexibility.

Longhouse Consulting has also crafted a hiring playbook for each stage. Here is a quick look at the essential criteria.

• Filling skill gaps for early-stage startups: This is the ideal time for founders to take stock of their strengths and weaknesses and onboard leaders to complement their expertise. For example, a technical founder could be looking for a cofounder with experience in marketing and sales to drive customer acquisition and revenue growth.
• Scaling-up specialists for growth-stage startups: As startups scale up, their hiring strategy must evolve to align with new growth criteria. Business leaders coming in at this stage should be able to manage large teams, work in sync with new markets, and achieve milestones like new product offerings, go-to-market strategy, geographic expansion, and product diversification.
• Specialised hiring for late-stage startups: At this stage, more specialised hiring happens for long-term, strategic roles. Startups now look for people with proven expertise in global expansion, public listing, compliance, corporate governance, merger and acquisition, or other critical objectives to guide the business closer to its core goals by fine-tuning operations.

From Domain Expertise To T-Shaped Excellence: How CXO Roles Are Changing

Startups essentially bank on the power of agility, enabling them to navigate changes and unforeseen business situations while leveraging the specialisation of their people to stay ahead of the curve. But extreme specialisation brings risks and creates silos, at times resulting in centralised bottlenecks, with founders holding sway. Hence, the current focus is on hiring leaders who nurture expertise, insights, and bold ideas so that they can successfully navigate through myriad challenges. In brief, they should be dynamic leaders who can build a business from the ground up.

This well-rounded expertise and adaptability across domains mark the new-age T-shaped leadership (Harvard Business Review is all praise for this model) and call for a new genre of executives. In simple terms, a T-shaped leader will share their broad yet ‘implicit’ knowledge with all functions (the horizontal part of the ‘T’) but will continue to focus intensely on their specific area of expertise (the vertical part of the letter). For instance, a CTO should understand other business functions and collaborate across other business units while staying laser-focussed on technology.

Das summarised this trend well. “Leadership in startups requires a unique blend of soft skills and adaptability. Understandably, collaboration is the key here. Leaders today must work closely with cross-functional teams and manage multiple stakeholders to move the business forward. The ability to create an impact quickly and efficiently is paramount, and leaders are expected to be hands-on. In a growth environment, a high-impact, hustle-driven role is essential, as relying on a hierarchy-led mindset will lead to failure in such fast-paced settings.” 

Much like the CTO, the role of the chief product officer (CPO) has also evolved as startups increasingly explore new product offerings to stay relevant in tech-driven markets. Many product leaders are now driving innovation across Indian startups after leaving their global roles.

“Then again, as companies grow and prepare for IPOs, seasoned CFOs become critical stakeholders for managing complex financial strategies and investor relations. The chief growth officer (CGO), a key role in high growth, digital-first sectors, is also gaining importance, especially in sectors like fintech and ecommerce, where business development, marketing, and revenue generation are key success drivers,” said Das. 

What The Future of Startup Hiring Holds

The new world order post the Covid-19 pandemic has ushered in several new trends. We have seen wary, cash-crunched founders waiting months for the perfect candidate or indefinitely putting the role on hold. We have also witnessed new businesses entering the market during the pandemic, thriving or shutting shop. However, the most significant change is work flexibility, the opportunity to work from anywhere (WFA), and companies worldwide trying to come to terms with this shift.

Not all of them, though. While a few startups have gone fully remote or operate in a hybrid mode, thousands of employees have been recalled to the office, and remote work is only readily available if one is in the C-Suite.

Companies like Starbucks and Victoria’s Secret have made rare exceptions. The world’s largest chain of coffeehouses and roasteries has a new CEO, Brian Niccol, who works from California instead of relocating to Seattle. Likewise, Hillary Super of VS stays in New York and occasionally flies to Ohio. Despite several debates, this broad trend highlights one critical tenet: Remote and hybrid work will be the future for many businesses, even at the C-level.

This can benefit Indian startups in more ways than one. As homegrown companies prepare to enter global markets, they are bound to require talented leaders with a deep understanding of those markets. Undoubtedly, remote work will help them recruit the right people without additional disruptions.

A good use case is Peppermint Robotics, a Pune-based startup that has expanded its operations to the US. It has also onboarded the US-based Donny Mitchell as its business president there to manage things efficiently. Mitchell comes with two decades of experience in healthcare and robotics.

“Indian startups are also adopting innovative practices to attract top talent. Stock options and restricted stock units (RSUs) are becoming more common, aligning leadership incentives with a company’s long-term success. This reduces the perceived risk of joining a startup and makes leadership roles more attractive than traditional corporate positions”, explained Das.

With flexibility shaping the future of work, new leadership models like the rise of fractional executives may emerge soon. This means professionals with C-Suite experience can guide businesses now and then. Such practices will be cost-effective and will help companies keep their heads above water during sudden exodus.

To build a strong leadership team, startup founders must clearly define their missions, visions and values. This is crucial as a new hire must align with the startup’s culture and long-term goals as soon as possible to give her best. Over-hiring or under-hiring can also lead to significant issues. Therefore, hiring leaders who fit the startup’s current development stage and can grow with the company is essential.

“Founders should recognise the importance of hiring for the future, not just the present. As the company grows, the leadership team must be able to scale with it, addressing both current challenges and future opportunities”, said Das.

With Indian startups maturing fast, the importance of leadership hiring cannot be overstated. As the startup landscape evolves, so must the hiring strategies to attract, retain and empower their leadership teams.