The Controversial Hiring Model That's Saving Early-Stage Startups Thousands - 5/28/2026

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📰 Today's Edition:

Recently, Elizabeth Yin, GP of Hustle Fund posted what turned out to be a rather controversial tweet suggesting startups should focus more on projects and less on permanent roles. The response was fascinating – some founders embraced the concept wholeheartedly, while others pushed back strongly.

So today we are going to dive in and clarify the thinking behind her tweet and why this approach could save many early-stage companies thousands of dollars while actually improving their execution.

The core of the argument: early-stage startups rarely know exactly what they'll need long-term. The reality is, many functions simply don't require full-time bandwidth when you're just getting started. Yet we consistently see founders rushing to make full-time hires for roles they "think" they'll need, often before the work actually exists.

After investing in and advising hundreds of startups, Elizabeth has witnessed this pattern repeatedly: companies burn through precious runway on premature hires, only to realize months later they don't actually have enough work to keep those people fully utilized. Or worse – they realize they hired for the wrong skills entirely as their business evolves.

Let me walk you through three specific scenarios where thinking in projects rather than roles can be transformative for your startup.

Challenging What's Truly "Core" to Your Business

One piece of startup advice that's reached sacred status is "never outsource your core business." It's repeated so often that few people question it. But here's the problem – many founders aren't actually clear on what their "core" truly is.

Let me give you an example that might surprise you: Uber, in its early days, had their initial app built by a consulting firm in Mexico. Yes, a company now worth billions initially outsourced their technology development.

"But wait," you might be thinking, "isn't technology the core of Uber's business?"

Not exactly. Uber's true competitive advantage wasn't the app itself – many competitors have since built nearly identical technology. Uber's core was their ability to accumulate drivers and riders, creating powerful network effects. That's the moat competitors couldn't easily replicate, even with the same technology.

This distinction is crucial. To identify what's truly core to your business, ask yourself: "What aspect of my business would be nearly impossible for competitors to replicate even if they had identical technology?" That's where your full-time focus and hiring should be concentrated.

Now, we’re not suggesting you can just outsource everything and put your feet up. Founders still need to maintain management oversight and wear multiple hats. But this management challenge exists whether you're working with contractors or full-time employees – it's not unique to outsourcing.

The key is realizing that many functions can be effectively handled through project-based relationships, freeing up your capital for what truly differentiates your business.

Project-Based Work That Rarely Justifies Full-Time Hires

Let's talk about the second scenario: the multitude of one-off projects that simply don't justify full-time roles.

Every startup needs legal incorporation, tax filings, logo design, website development, and dozens of other specific tasks. Yet we regularly see founders hiring full-time specialists for these intermittent needs based on anticipated future demand: "I'll need a designer full-time in six months, so I should hire one now."

This approach burns cash unnecessarily. This philosophy on hiring is straightforward: you should have enough work ready immediately to maximize utilization of that person from day one. Cash-strapped startups simply can't afford to "make work" for employees when priorities might shift dramatically from month to month.

Think about it this way: Would you rent an office three times larger than you need today because you might grow into it next year? Of course not – that would be financial malpractice. Yet founders make the equivalent hiring mistake constantly.

Here's a practical approach to determining what should be project-based versus full-time:

Frequency of need: How often will this function be required? Daily, weekly, monthly, quarterly?

Criticality: Is this work directly tied to your core value proposition?

Specialized knowledge: Does the work require deep, ongoing domain expertise specific to your company?

For most early-stage startups, functions like graphic design, content writing, bookkeeping, and even some development work fail these tests. They're better handled as discrete projects until the volume justifies full-time attention.

Platforms like Upwork, Fiverr, and industry-specific talent marketplaces make finding quality contractors easier than ever. The key to success lies in creating detailed project briefs with clear deliverables, timelines, and quality standards – the same management principles that apply to full-time hires.

Leveraging Global Talent Through Smart Hiring

The third scenario where this approach shines is tapping into the global talent pool. Modern technology has eliminated geographical barriers, expanding your potential talent pool exponentially.

This unlocks two massive benefits: access to specialized expertise and often more affordable rates for cash-conscious startups. We frequently hear the objection, "You get what you pay for," suggesting lower-cost talent must be lower quality. This simply isn't universally true.

The reality is that quality contractors exist at various price points globally. Economic differences between regions mean you can often find exceptional talent at rates that work for your budget. Additionally, many highly sought-after experts take on consulting projects, especially for short-term, interesting work that doesn't conflict with their primary employment.

Here's a framework for matching your needs to the appropriate talent level:

For truly complex, mission-critical work in areas with significant regulatory or business risk – like specialized legal matters in emerging technologies – it makes sense to splurge on the "top 1%" specialist.

But for standard quality needs – like building an informational website or setting up basic accounting systems – you likely don't need the most expensive talent in the market. A competent professional can deliver what you need at a fraction of the cost.

When working with global talent, clear communication becomes even more important. Invest time in creating detailed specifications, establish regular check-in cadences, and use collaborative tools to bridge time zone differences. Being respectful of cultural differences while maintaining high standards will help you build a reliable network of project-based contributors.

The Project-First Mindset as Your Startup Superpower

To summarize, there are three scenarios where thinking in projects rather than roles delivers tremendous advantages:

1. Challenging assumptions about your core business, focusing full-time resources only on what truly differentiates you

2. Treating one-off and intermittent needs as projects rather than creating full-time positions

3. Leveraging global talent to access specialized expertise at various price points

This approach preserves cash – the absolute lifeblood of any startup – while still getting critical work done. It provides the flexibility to pivot and adapt without carrying unnecessary overhead. And contrary to what some believe, it often leads to higher quality outcomes since you can match specific projects with the exact expertise needed.

I want to be clear: as companies grow and stabilize, the balance will naturally shift toward more full-time roles. Mature operations with predictable workflows benefit from the continuity and cultural alignment that comes with a permanent team. But even then, maintaining a project mindset for certain functions can be valuable.

I'd encourage every founder reading this to take a hard look at your current team structure and hiring plans. Are there opportunities to shift from roles to projects? Could you redirect precious capital from fixed overhead to growth initiatives? The most successful startups Elizabeth has invested in have mastered this balance between core full-time team members and project-based contributors.

In the early stages of building a company, cash efficiency isn't just a nice-to-have – it's often the difference between success and failure. Think in projects, not roles, and you might find yourself with months or even years of additional runway to figure out what truly drives your business forward.

Until next time,

Dunky, the “debater” hippocorn

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