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Profit 101 Video #13: Pursuit of Profit Margins - De-risking

Remove risk with fractional hiring decisions

October 26, 2023

What other benefits do we have with fractional hiring? We've discussed costs and the ability to de-risk. How do you actually de-risk employment with a fractional model?

For the employee, the benefit is clear: don't quit your job. This is significant. If I'm an employee looking for a new position or maybe wanting to try something different, perhaps joining a startup, the idea that I don't have to quit my current job reduces the risk of trying a new opportunity. This is a massive advantage from the employee's perspective.

But what about from the employer's side? That's likely your perspective, right? The risk of hiring the wrong person is monumental. Why not try them out fractionally? It's logical. Instead of solely relying on interviews, which are short and where candidates might tell you what you want to hear, why not work with someone on the side to truly gauge their abilities? This goes beyond a typical interview. The reality is, you need to see the person's actual work. This approach allows you to do just that.

This importance of seeing potential employees' work firsthand was fundamental for us when we started hiring and building our team. Starting someone on a fractional basis for a few months before transitioning them to full-time became a strategy to make this possible. From a startup's perspective, if you're wondering how you'll convince someone to transition from fractional to full-time, especially if they're reluctant to leave their current job, equity is your answer. Offering equity in the company is an attractive incentive, especially when compared to a traditional big company job.

There's a third point to consider in this de-risking strategy: not only do you get to see their work, but you also get to observe their work ethic. Anyone who can successfully juggle a fractional role in addition to their other commitments demonstrates a commendable work ethic. This is another compelling reason for the attractiveness of fractional hiring.

Next up- sizing talent pools.

More Posts from the Profit 101 Series

Business Principles

  • Profit 101 Intro
  • How to Start
  • Year 1 - Quit or go All In
  • Minimum Viable Revenue
  • Fail Fast
  • Total Addressable Market (TAM)
  • Pricing & Unit Economics
  • Not all Cofounders Are Created Equal
  • Not all Revenue is Created Equal
  • Tech Debt

Startup Costs Video Series

  • Software
  • Marketing
  • Hosting

Pursuit of Profits

  • How to get 50% Profit Margins, Part 1 Video
  • How to get 50% Profit Margins, Part 2 Video
  • Pursuit of Profit Margins Video - Fractional Hiring
  • Pursuit of Profit Margins Video - Cost Savings
  • Pursuit of Profit Margins Video - De-risking
  • Pursuit of Profit Margins Video - Talent Pool
Back to Profit 101

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