In a lot of cases you can partner with great people instead of hiring them.
To enhance ourdoings.com with online photo editing I just had to read Snipshot's API docs. To enable a super fancy comment system I just integrated with Disqus. I stopped hating slideshows when I tried piclens, and they're integrated too.
So follow his advice that the first employees must be perfect. If you can't hire perfect, find an alternative to hiring.
The point about how some startups go from launching on 200k to raising 5mm and then spending 200k a month was right on. After closing a big round of vc funding it's so tempting give yourself a huge raise etc....and so deadly.
If your entire company is going to fail from just one bad hire, you need to re-examine your processes.
It's the nature of the game. Some people are more capable than others. Of course try to get the most capable people you can, but in between superstar and loser, there are a lot of people who can create more value than the total cost of hiring them. (counted in terms of compensation but also training time from other employees, botched tasks while they are learning the ropes, etc etc)
When your company has hundreds of workers, you're right it isn't going to fail because of one bad hire, although one bad hire can lead to slow bozofication of your workforce, I know companies where you can quite accurately predict how many years ago a person was hired based on his competence (there are obviously exceptions but as a rule the better an employee is the earlier he was hired).
But when your team is 2-5 people you just can't afford to hire people who have a relatively small positive net value you need the superstars or at least rock solid developers, anything else will hurt your startup. Productivity is diminished in large teams, so don't add a body to your count if isn't going to make a difference. Building a startup is hard enough don't hurt your chances by settling on anything less.
I strongly agree with 99% of this post. But I don't agree with the:
"Three weeks vacation? Not going to happen."
It doesn't cost you anything to offer a decent amount of vacation. That's probably the best way to avoid burning out your highly motivated hackers. Give them some time off when they need it and they'll come back with even more energy and drive.
