The Hidden Cost Of A Bad Hire In Early Stage Startups

[00:00:04] Building a startup is exciting, and let's be honest, it can also be lonely, chaotic, and full of hiring decisions that keep you awake at night. So in today's episode of Startup Builders and Backers, I'm joined by Darren Tompkins. He's the founder and CEO of Vader Ray.

[00:00:25] And Darren has spent years helping companies move beyond transactional recruitment and thinks differently about how they build teams. For him, hiring is not about filling roles, it's more about shaping culture, momentum, and long-term growth right from the ground up. So in our conversation today, we will get into the hidden costs of the wrong hire, the tension between speed and alignment,

[00:00:53] and why many startup founders need to rethink what a growth partner really means. So if you're building a company and wondering how to get your first few hires right, this episode will hopefully give you both clarity and confidence to move forward. And on that note, let's get into it. Let me introduce you to Darren right now. So thank you for joining me on the podcast today.

[00:01:21] Can we tell everyone listening a little about who you are and what you do? Yeah, so my name is Darren Tompkins. I am originally from a small town called Salem, Virginia, which is in the Appalachian Mountains, probably something our host has never looked at on a map as far as like the little pinpoint. Went into the military, was an officer, and got my degree in geographic information systems from the University of South Carolina. Like him, I was in IT for a long time. Never really liked it too much.

[00:01:50] You know, different callings come at you fast in life. Now I am in recruiting. I'm CEO and founder of Vader Ray Recruiting and Consulting out of Houston, Texas. Yes, that is a Star Wars reference. We can get into that. And yeah, we do traditional recruiting. We also have Vader Ray Engineering, which is a 1099 engineering support for oil and gas and data center development. And then we have the virtual professional side of the house, which includes our AI.

[00:02:19] And yeah, we've been cranking it out, still in startup for a few years now, but I just wouldn't rather be doing anything else. W2 World was never really for me. And yeah, here we are in 2026 and we're pushing pretty hard this year. Wow, that is a lot to unpack there. IT, military, Star Wars references. And one of the things that I always love doing with my guests is taking them back to their early days and their origin story.

[00:02:48] What happened here? So tell me about those early days of Vader Ray. What problem were you seeing in recruitment firsthand or team building that frustrated you enough to not just complain about it, but get out there and start your own company? I still complain about it every day. I made no mistake. But yeah, you know, there's two ways to get into recruiting. One is you come out of college or high school or whatever, and you get on with a giant firm that kind of pushes you at the bottom and keeps you there, which is just not the way to go.

[00:03:17] And then I had gotten through a nonprofit event where I was an executive, met somebody who had like a boutique, like small time kind of thing where we'll, you know, we're looking for somebody to come in as like a second in command. Learn about recruiting as we go, get some good commissions, and then kind of build a team from there. And that was really the way to do it, even though this is like right at COVID where there was no work happening anywhere.

[00:03:41] But I learned fast at this biz and probably like you being in IT back in the day, we have had so many shitty recruiters call us, man, for jobs that just not even remotely qualified. And they still come in this week. I haven't done GIS work in 14 years every week. Oh, I have a perfect GIS project manager for you. And it's just like, what resume are you looking at?

[00:04:04] At any rate, I just knew from that learning experience and dealing with all these other people that I could probably do it faster, leaner, and scale quicker for our clients. And, you know, I've been a member of some business networking groups where it's like I was talking to them about getting out of my W-2 and starting this recruiting agency. And, you know, they all gave me the same advice. If you're going to do that, set the date, don't deviate. You've got to make it happen because if you're like, well, what about this? What about this?

[00:04:31] Or I'm kind of making a good commission structure this year. Maybe I'll do it next year. No, I don't do that. So what I was able to do is got in pretty good with a couple of clients that was with me at the time. I did not have a non-compete or non-solicitation. And I was like, look, I'm thinking about doing this. Will you guys come with me as clients? And they said yes. So it was kind of a, all right, let's do this. And then, yeah, I just kind of developed from there.

[00:04:58] I came up with the idea to use, I didn't come up with the idea, but I wanted to use virtual professionals. Because I could literally do this. I could do this podcast from the moon as long as we have cell and internet. And that's exactly what the way recruiting does, unless you have to actually physically get in front of somebody. So we run lean. Again, everybody's all over the place. We don't have a main office anywhere. I just feel like that gives the impression of a lot of overhead when you're meeting new clients.

[00:05:28] I mean, not be ready to make a jump to something big. And it's just a way for me to keep my client base small, which is on purpose because I love building the relationships with people. You know, instead of just doing one-off from across the sea, I'd rather have dedicated clients that keep coming back and, you know, helping them save money and a long-term development for us.

[00:05:51] And when I was doing a little research for you, one of the things that really stood out to me was that you talk about being more than a recruiter and actually becoming a true growth partner. And I think this is something that startup founders often obviously miss sometimes. So what does that actually look like in practice? And how is it different from that transactional hiring model that most founders might be listening and used to? Yeah. So I'll give you a very good case study.

[00:06:21] Well, we have an only guest client. I won't name who they are. But, you know, when I was in the W-2, they were an early client of mine. And it was literally just, you know, they would call us up. We need whatever, you know, and then everything's based off commission of finishing the job, getting that job closed. We were doing everything from people that just turned wrenches up to, you know, executive level stuff. Five years later, six years later now, you know, they're my full-time client with a two-year commitment. So we're not going anywhere.

[00:06:49] They've kind of pushed everybody else out because I got in good with the president of the company. It's gone from just doing recruiting for them where, you know, we were just as it comes along, like ad hoc stuff. Well, we fired this guy. We need another person to, you know, we are now the fully outsourced model for them where they realize we do it faster and more effective. And you don't have all the corporate fluff.

[00:07:15] When you hire an internal recruiter, you'll get them for whatever dollar amount. But then you have to pay their benefits and stuff like that. And they have to attend regular HR meetings or department stuff where really it takes away time that takes away from doing the job, which is get us a qualified person to do this. Right. It's gone from that to them trusting us for the next two years to do all that. But also when we really talk about partnership, one of the projects we're doing right now is executive succession planning.

[00:07:46] It's not a secret. They have a vice president of operations, again, for a huge company that is retiring. He's been there for a while. They trust him and they want to make sure that the next person is not only more than qualified to do that job, but this person's expected to jump into the president role later when the next president retires.

[00:08:09] So that type of dedication where they could have gone out and gotten a big company that does retainers and it's going to cost you $100,000 to run this project to us doing coming to me first, us, Vader A, and trusting us to find the next hire. And these are not, you know, some of these jobs in typical recruiting, they can last a few days if you know the right people. This is something that's been going on for six months. You know, we're still in the middle of it right now.

[00:08:37] But when you can get the top down kind of rally around the flag of what you're doing from the executives to, again, warehouse workers or whatever you're replacing, that is what it really means to become a trusted partner. Well, they call you first, they value your input, and you get a deeper dive into their culture versus just we need whatever job candidate kind of thing.

[00:09:02] And one of the things I think we just don't talk about enough is the fact that when a startup will make a bad hire, the cost goes far beyond just the salary there. In your experience, what are the hidden costs of hiring that wrong person too early on in the startup founder's journey? And how can founders avoid this trap? Because it can be quite devastating, can't it? It is. And I've seen it too many times to count.

[00:09:28] You know, when people leave their jobs for really two reasons. They leave it for money or they leave it for a better culture. You know, there's certain little pieces, 2% or whatever, for different reasons that they do that. But it's the same way that, you know, companies need to hire. You know, they need to hire somebody that's a better fit for the culture. They need somebody that can fit their pay band.

[00:09:54] And what we see is, and I don't remember the figure, something like it costs you like six times more to fire somebody than it does to maintain them, right? In the job. And the pitfalls, I've seen people like just this past week, perfect candidate, we're hiring them, offer letter goes out, they signed it, and then they fail the drug test. You know, little stuff like that that you really can't plan for because it's such a deep knowledge for the candidate, right? Yeah.

[00:10:23] When somebody leaves your company or when they're just not the right fit, it's generally not just them that gets affected. You know, there's coworkers and things. There's vendors. There's processes that get, you know, there's emails they just simply get forgotten about if they don't have the right, you know, IT support. There's a lot of information that can get stalled depending on what sector of the company that they're in. And we never want to be siloed in different areas of your company.

[00:10:50] You kind of want synergy in all of them, but it happens. And so when that person is fired, you hire the wrong person. It's just a drag and it really sucks down the culture. The pay will just be there, right? But the company culture and the people's attitudes around you can really get affected. Whether you're the candidate that just sucked or the manager that hired them, and now people are kind of doubting your ability to lead. You know, it's all about the leadership.

[00:11:18] And I suspect there'll be many early stage founders listening that have been guilty of hiring for speed because they feel that overwhelming pressure to scale when that time feels right. But how should they balance that urgency with the cultural alignment and long-term fit? Because we have to talk about technology and AI and everything, but it's that cultural alignment, that long-term fit. That's the key to everything, isn't it? Yeah. You know, I did some consulting last fall with a guy.

[00:11:46] Now, he's a friend of mine, not really, but he has a small company up in Dakotas where he just couldn't find the right person. You know, it's like, so sit me down and tell me about how you're hiring. And what he was actually doing was trying to hire for culture first. Can I get along with this guy? And it's like, bro, you're wasting your time. Like, they have to be able to do the bullet point things that you need them to do on that job description. If they can't do that, then why are you going to get to know them and build a relationship base?

[00:12:15] I was guilty of that. I had a sales development person, really liked her, man. She was sweet and nice and had a great presentation, but I kept dragging it on and on and on because she never closed anything. You know? But it's like, finally, in the end, I'm like, oh, God, this took too long. Let's move on to the next person. And I felt bad, but if I would have maintained my own advice, you know, from the very beginning, it wouldn't have drug out so long.

[00:12:41] And it wouldn't have, like, affected other people in the company because if a bad hire is there for 30 days, probably not too much damage is going to be done. But if they're there six months and they develop their relationship with everybody else and, like I said, other people external, it's a little tougher because those people are going to be like, okay, why happened? And then why did this happen? You've got to do it in a sequential order that's going to make sense for your business.

[00:13:09] You have to keep it at business first in the key focus of the job, and then, you know, then you can develop from there. And you're someone that's worked with many different companies building right from the ground up. And I'm curious, if you put all those experience and insights into a big melting pot, what kind of patterns do you see in the teams that do scale successfully versus the ones that stall and run into problems? Is there any patterns there? Yeah.

[00:13:38] So, you know, there's two ways to develop a company. One is to go get a bunch of investors and get in very early on where you can kind of reinvest the money and have better techniques and better quality of people that can come in and just know what to do, right? If we started this company with $10 million, we'd get $10 million for the work and the quality of pulling people from bigger companies, you know, to come work for us.

[00:14:03] Or you can bootstrap, which is me having the idea, hey, the website's available, so let's start there and develop from the relationships that I already have. Scaling in this particular business can be tough because a lot of it is relationships. You know, somebody works for an oil and gas company for however many years. I have an idea to start a recruiting company because I know where they are and I still have the relationship within the staff there.

[00:14:32] Yeah, they can do that, but it's a numbers game with this, right? It's the same way with do you have one candidate for this job or do you have 50 that you can go through? Because that one may seem like they're perfect, you know, during the interview and then you get to the finish line and everything goes to crap. Whether it's failing the drug test or not showing up the first day or they try to, you know, once they got the offer letter in front of you,

[00:14:58] they're trying to pump you for more money or they get in there and they're just not the right person. They're not the person you thought they were, like dating scene or something. You know, it's just like, wow, you're different from the online profile that you do have. It's the same thing. It's a numbers game. It's a culture game. It's a money game. And the scaling piece of what makes it successful is what do you want out of?

[00:15:25] Like I said at the very beginning, I value my family. I have four-year-old and seven-year-old daughters. I'm very involved in what they do. I cook a lot, you know. I'm involved with their school. I do volunteering for less fortunate. I like having fewer clients that are more consistent versus a big company that just fishes after hundreds of jobs and clients that may or may not pay out. So do I make as much?

[00:15:54] Does Vader Ray, is it worth as much as like a Korn Ferry or something like that? Absolutely not. But I have a lot of free time, which is something I value at this point in my life, which I'm sure you can appreciate, to do these other creative outlets versus just concentrating on process all the time. Yeah, 100% with you. And another thing that stands out about you, I mean, your background, you've got the IT background, military, and you're a father. And as a founder yourself, how has your own natural leadership style had to evolve while growing Vaderay?

[00:16:23] And were there anything you had to unlearn along the way? Maybe a few bad habits from your IT days or something like that? You know, when I got my first career job offer with Sunoka Logistics Oil Pipeline, when I was fresh out of the Army, you know, fresh out of school, I had a really hard time because, and I've told this, I told the engineering manager back in the day, I'm like, listen, when your subordinates in the Army screw up really bad, you tell them how bad they suck, and you make them do physical things to make up for it, whether it's push-ups or whatever.

[00:16:54] In civilian land, you can't do that, you know? So it's a quick trip to the HR office if you tell them exactly what you think, right? So I did have to change up my attitude a little bit, right? And then, you know, you go through your, when you're working in a W-2 where there's like the different levels, hey, you're hired as a manager, you're hired as a director or whatever, you know, the company's been around a while.

[00:17:21] It's going to kind of place you into things that you should be doing on a day-to-day versus what you should be leading on a day-to-day. As an entrepreneur here at Vader Ray, I've had to really, every day is a little bit different, and you kind of make it as you go, you know, new business ideas. The leadership piece for me, I've always been a delegator, but I give people just enough rope to hang themselves with because I'm going to be there to clean up, you know? Which is why I'm always the point person for new clients and existing clients

[00:17:50] because I still need to be the face in case somebody leaves, you know? Otherwise, the communication's not happening. You're going to get a phone call one day like, hey, what happened to you guys? I haven't heard from you in two months, you know? And it's like, oh, crap. Yeah. The leadership style, and again, for me last year, just letting this person, the sales development person, just drag on and on. I just, you know, I'm very empathetic for people and I'm very, I want them to have big, happy, healthy lives and careers and all that,

[00:18:19] whether it's here or somewhere else. But I'll try to always help you along the way. Sometimes that's a detriment to me, you know, if I make the wrong decisions, but everything's a guess and opinion in life. And we're both men of a similar age and we've seen a lot of changes in our careers. And I think looking forward now, we've got distributed teams and virtual professionals. They're becoming the norm now in ways that we would have never been able to,

[00:18:47] we would have never been able to predict back in the day. So what are the new skills you think that startup founders need now to better build trust and accountability across multiple borders and time zones? Because again, we don't talk about this stuff enough. It can be quite challenging, can't it? Yeah. And I've consulted about this. It's like doing some talks and whatnot. The way that I ensure that my, the traditional term is VAs, virtual assistants.

[00:19:16] And that covers a broad variety of tasks, right? We are trying to change the narrative to virtual professionals, which is why you see in our, my, it's on this side, virtual professionals instead of virtual assistants, because they are doing so much, you know? All of our teams have come from the Philippines. That's just the way I was introduced into it. I know guys in real estate and whatnot, but they have virtual, like executive assistants. They put no effort into getting to know them, right?

[00:19:44] They're like, here's your hours per week. And here's what I need you to do. And that's it. If you treat your virtual professionals, like employees, like whether they're full-time or part-time, you know, they will go above and beyond. So like we have a, we just got it done right before you and I met where we have a weekly kickoff, you know, Zoom, which is something traditional companies do. And then we have a Friday roundup of what did, you know, here's what's supposed to happen this week on Friday.

[00:20:14] What did happen? Tell me, and I always in every minute, what can I do to help you? You know, cause they're typically more busier than I am when it comes to the daily grind. When you put that much vested interest in them, they're going to give it right back. And we, we do check in through WhatsApp throughout the week, you know, when we have projects and stuff. And, um, you, as an owner, as a entrepreneur, whatever you want to call it, treat them like, treat them better than anyone else. It's like anything else in life.

[00:20:42] You treat them better than any other boss that they've ever had. And they're going to jump over hoops, jump through hoops to, uh, to help you out. And cause that's what they're really there for, to help you and the business out succeed. Um, you know, here in the States, I could hire, um, you Americans, but we're, we're so much in startup. And again, we didn't come here with a bucket of money. You know, it's just more cost-effective and it's faster, um, to, to do it this way.

[00:21:12] And to give a startup founder that could be listening anywhere in the world to give those people a, a valuable takeaway from listening to this conversation. If you were to advise that first time founder about to make their first three hires, what, what mindset would you want them to adopt before they even post that job description out there on LinkedIn or in the, or online? Know what exactly you're hiring for.

[00:21:38] Um, if you're in a startup, you don't want to have this, well, I need a big idea person to come up with these things. No, that's you as the owner of the company. No, like, no, no, no, no, no. You've got to take on a lot of that responsibility. You know, everybody in life will tell you, you need a good sales guy and, you know, good account. Right. So I would start there with that mindset. I happen to be very lucky that my wife is an awesome accountant. So she's listed as her CFO.

[00:22:04] Now she has a full-time job where she gets mad at me sometimes because I come up with the ideas and these, these opportunities that she has to play clean up at the backend, you know, and she's not happy about that sometimes. But yeah. And then use, use AI and you're going to, yeah, I know you'll appreciate this. I mean, there's, I, you know, I haven't had to spend a legal document past an attorney in quite some time because, or a contract, you know, I can get all that information from AI.

[00:22:34] Use it to be creative. Use it to get your process down. But yeah. Accounting and sales are two that you really need to make sure you have good sales, meaning business development, depending on what you're doing. Um, and make sure you're all working together. Well, I mean, you've got to be oiled machine. Otherwise, you know, you're going to fail pretty quickly. The motivation is key. Um, and I've had some other business ventures where, um, you know, everybody comes in talking

[00:23:02] to big game and then, you know, you're left holding the bag, which sucks. And, um, but make sure that their motivations wind up with yours. And I think it's a powerful moment to end on, but before I let you go, I sometimes give my guests an opportunity to not only share their insights and experience, but maybe even ask me a question. So do you have a question for the, the host? I do.

[00:23:30] We're obviously a very pop culture driven family here. So Vader Ray is from star Wars, a big thing in mind as a kid. So, but the name is from my daughters. They're named Josie Vader Tompkins and Izzy Ray Tompkins. Um, that is always been just something we've been involved in. Uh, I don't know what else to, but I, you know, there's a lot of more to me. Like I own a pro wrestling ring. I've been a manager and all this other stuff, um, where we, we keep a big variety, you know, uh, between.

[00:24:00] So with that, and this is something I ask a lot of people that I, that I interview with, or I'm doing interviews, which is what movies are inspiring you in your day to day or your future. And it can be something from your distant past or something now where this is what makes me, but this is what's also going to make me 10 years from now, as far as ideals go. Oh man, this is probably going to date me, but I was raised on those Rocky movies, man.

[00:24:26] And then, you know, the, the, the world ain't sunshine and rainbows. It's not about how many times you get knocks, but how many times you get back up, keep moving forward. And the underdog can do anything. We, we can all do anything we want. If we put our mind to it, put in the hard hours. And I would say they've, those movies probably had the biggest effect on me. And I think it's quite sad now because many movies now are quite doom and gloom and you can't achieve what you want to.

[00:24:51] But in the eighties, everything kind of was, it led us to believe whether it was true or not is debatable, but it made us believe, or we were encouraged to believe that we could achieve anything and go after your dreams and do anything. But I don't see that as much in today's movies. Would you agree? Everything's about the montage, man, especially with the Rocky movies. You know, you can't beat a good montage. You'd use your AI to create one for you and you can use the Rocky montage music for your next podcast.

[00:25:20] Yeah, that's right. You've got me thinking now. Maybe I need to create my own podcast montage. Yeah. We'll see what we can make happen there. And for everyone listening, if they want to find out more information about yourself, Vader Ray, and expand on anything we discussed today, where would you like to point them? Yeah, man, you just head to our website, vaderray.com. You can find me on LinkedIn. I'm pretty prevalent there. There's not a lot of secrets with me out there. If the government's still watching and they see everything that's going on in my life,

[00:25:50] because I put so much out on media and online. You are in good company there, my friend. I'm exactly the same. Fairly open book. I think we both are, but I'll have links to absolutely everything. I'd love to stay in touch with you and continue to follow your journey. And we'll get you back on later in the year, see how things are evolving for you. But more than anything, just thank you for sharing your journey and your insights. Thank you. Thank you, good sir. Have a good night.

[00:26:15] I think there is a moment in every founder's journey when you realize that your company will only grow as far as your team can take it. And this is where today's conversation really landed for me. Darren reminded us that hiring is not just another admin task. It's a leadership decision. It shapes your culture, your pace and your future.

[00:26:39] Whether it be avoiding costly early mistakes and bad hires to building trust across distributed teams. That mindset that you bring to those first few hires, that could define everything that follows. So hopefully today's episode gave you a fresh perspective on how you are building your team. But if you're a founder, I'd love to hear your biggest takeaway. If you enjoyed it, share the episode with another founder who is maybe about to make a key hire.

[00:27:08] Maybe you can stop them from making a bad mistake. But most importantly, let's keep this conversation going. Go to techtalksnetwork.com. You'll find so many different ways you can contact me there. Let me know your thoughts on this. But more than anything, thank you for tuning in and listening to Startup Builders and Backers. And I look forward to speaking with you all again very soon on the next episode. Bye for now.