by Colin Dittus, VP Consulting, Gibson Consultants

December 2022 – At a time when the macroeconomic environment has made funding for healthcare startups increasingly challenging, employing the best talent strategies has become more critical than ever.  The companies that stand out and win the battles both for investment dollars and market share will be those who can strike a balance between aligning the best expertise with mission-critical functions while not burning through early capital.

Funding milestones follow a fairly predictable path, but aren’t typically in lockstep with talent needs.  For example, a company early in the funding cycle may not be in a position to prioritize hiring a full-time CFO, but certainly will want to have its financial house in order.  While running lean is a necessity in a company’s early formative days, knowing when to seek specialized expertise is just as critical to the company’s next phase of development.

Reluctance to engage external talent can significantly delay a company’s ramp-up, or even derail it altogether.  Two common scenarios illustrate this temptation to run too lean:

• An organization hiring its first VP of Sales & Marketing is often hiring for business development expertise, adding very little in the way of actual marketing expertise – a function critical to the company’s success.
• The CEO who also serves as de facto Chief Product Officer will eventually miss market opportunities or misalign product strategy.

Even with identified needs and a small budget, why are there often missteps or avoidance in resourcing for these critical skills?  The primary reasons relate to lack of access to talent, administrative headaches, and an imbalance in value and cost.  A brief look at the common models may help shed some light.

• Leveraging a consultant through a boutique consulting company.  This can be a great option for bringing in deep subject matter expertise. Startups are often reluctant to pursue this option, however, because costs can be significant and options fairly limited.
• Hire an interim leader.  An interim leader is someone who devotes nearly all his or her time to the startup for a defined period of time or until the ultimate successor can be hired.  This model allows the company to tap into a deeper level of experience without a long-term commitment to the increased cost.  This is most often someone known to the organization or from the founding team’s personal network.  This is a double-edge sword, however, as the startup’s network may not allow them to cast a net wide enough to find a professional with the right skills, experience, and availability – and costs can be significant.
• Hire a fractional expert.  A fractional hire (someone who devotes a portion of his or her bandwidth, typically 10 to 20 hours per week) can be an excellent option as the company can tap into expertise without having to commit to a full-time hire.  Ideally, the organization can leverage increasingly more of the expert’s time as the needs of the business grow.  However, as this is also often someone in the startup’s network, options can be limited – especially when trying to identify someone with the flexibility to align bandwidth to the needs and timing of the business.
• Hire a full-time resource at the lowest-possible budget impact and hope they grow into the role.  This can be a good cost-saving option but generally yields a hire who lacks sufficient experience in the trenches and vision to anticipate future challenges.

There’s a time and a place for each of these options, and none of them is necessarily wrong.  But each has its own set of drawbacks that can lead to improper fit, excessive cost, or startups avoiding them altogether.

Talent-savvy companies take a highly focused and methodical approach when hiring for key full-time roles. They’ll seek out an established, well-respected recruiter with domain expertise and a deep network, and invest significant time and resources to ensure they make the “right” hire.

Engaging contingent talent (consultant, interim, or fractional hire), however, shares little similarity.  These decisions are typically made based on personal networks, convenience, and with limited due diligence.

But what if there was another option: one that virtually eliminated risk, gave the startup the power of selection, and came at a price point that allowed the startup to maximize its crucial early funding?

This option exists today in the form of specialist search firms with the capability to deliver talent in the method that best meets the needs of the startup: whether that be a fractional hire, an interim leader, or a consultant with subject matter expertise for a key initiative.  This “delivery-agnostic” approach is a more recent development in the talent ecosphere, and therefore not yet widely embraced by seasoned healthcare entrepreneurs.  The benefits to those who do take advantage of this offering, though, are significant.

The right firm not only leverages a deep database of talent to provide the skills, experience, and intangibles needed – giving the power of selection and variable price points from which to choose – they also manage all administrative, financial, and compliance issues involving the resource.  They’ve already sourced available experts and can quickly vet and qualify based on the specific need – managing the entire process along the way.  They’re often able to identify a career professional just making the transition out of full-time employment who does not require premium consulting rates and is looking for a soft landing to enable the transition – which can help the startup stretch its budget considerably.

Having access to the right talent resources to scale while protecting cash can be tricky.  However, there are options to enable this and they’re making an impact in the healthcare marketplace.