Hard To Do, And Easy To Screw Up – A Primer On Hiring For Startups

One of the most popular conversations I have with entrepreneurs I work with is how to improve their recruiting and hiring strategy. I love when they dive into this topic early on because it’s one of the hardest parts of running any company, no matter how small or big, and super easy to screw up. It’s also extra hard these days for tech companies when talent is sparse and you’re trying to create a culture of diversity. The blog post below is definitely not comprehensive and also not a replacement for a company-specific conversation tailored to your business, products and team, but in most cases these tips should be useful.

Herewith, a primer on hiring for startups.

business-people-sitting

Your Hiring Strategy

How much time have you put into thinking about what roles you will hire and when? It’s easy to say “we just raised x-million dollars, let’s hire!”. Then, oops, twelve months in you realize you have a bunch of people you don’t really need or worse, you’re running out of cash. Take some time to think about your hiring strategy. Don’t just plot out how much money you’ll spend per quarter on “heads”, but consider what roles they’ll play and how senior or junior each one will be. Also think about what roles could be filled by contractors vs. full time hires.

One exercise I often ask entrepreneurs to do is to draw an org chart of what their company might look like 12 months from now. Then, plot out the growth stages in hiring along the way. While their company will almost certainly change a lot between when they start and what it will look like along the way, having some idea of which and when roles may be added, and what they will cost, is a good way to think about how to prioritize your hires.

org_phase1

Org. Phase 1 (first 6-12 months)

org_phase2

Org Phase 2 (Months 12-18)

Beyond budgeting for growth (and compensation – including equity – each role may require), you should also consider time invested in getting those hires and lead time to fill the positions. Assume you and/or your team will spend a lot of time finding the right people, interviewing, selling candidates on the opportunity and getting them on board. Ask any first-time founder and they’ll tell you hiring consumed way more of their time early on than they ever expected. Further, just because you’ve got a position open, doesn’t mean you’ll fill it right away; especially if you keep the bar high and don’t settle for just anyone for the role. Resist the temptation to hire too fast for key positions. The opportunity cost associated with letting the wrong hire go and starting over is extremely high.

The Job Description

Once you know what roles you want to fill and when, you should write a basic job description (JD). This not only gives you a tangible to market the position, but it also serves as a communication tool with your team to be clear on what the role is and what you’ll be looking for in the candidates they may be helping you interview.

No matter where you post or share the JD, if it doesn’t attract the right people to apply for the job, you’ve failed right out of the gate. You want as many candidates to apply for the job as possible. Some tips on writing a good JD:

  • Avoid overt and subtle gender bias
    • Don’t use specific pronouns. Just don’t.
    • Test your job description for gender themed words and other potential biases. Try to keep it neutral.
  • Highlight a need for aptitude and attitude over must-have tech skills
    • Fast learner, dedication, multi-faceted skills – all good ways to suggest you care about potential.
    • Research shows that women, specifically, generally won’t apply for jobs where they don’t meet all the required skills. Don’t create an exhaustive list. Only highlight critical skills. You can always prod for more specifics once they’re in for an interview.
  • Highlight training opportunities – this suggests you can get them there vs. absolute required skills.
  • Avoid superlatives – “Ninja” “Expert” “top in their field” can all be deterrents to someone applying for the role. While we all want to hire people with high self esteem, some people are very humble and may not think they are an expert. Even if they are!

Sourcing

Sourcing candidates is a complex process that goes well beyond just posting the JD on your website or AngelList.

  • Make your “jobs” or “careers” page GREAT. Candidates who go there should feel like “I want to work with those people!” Two of my favorite career sites right now are DigitalOcean and Wistia. Both convey a strong sense of culture as well as make it very clear what positions are open.
  • Think about posting on other sites that are related to your industry. Perhaps affinity or user group sites. For example, She Geeks Out has a Slack site that has a jobs channel. Only women geeks are on that site and many are looking for jobs! Or maybe a hardware meet-up site or industry association site.
  • Your best hires will come from people you know. Consider using a networking tool like Drafted to tap into your network and your friends’ networks to find the right people. Even a small bounty can be a big incentive to get the right referrals.
  • Think about having a BIZZpage or post on the Jobs Board on VentureFizz (Boston) or similar sites to get more local visibility.
  • Most VCs have job postings on their website for their portfolio companies. If you’re venture backed, leverage this!
  • Don’t just promote the job on your social media channels but ask your network (including advisors, mentors and your board) to do so as well. Make it easy for them by creating the tweet, FB post, etc, with the appropriate text and links.
  • Campus recruiting is an awesome way to get young talent – especially here in Boston! Try to get resumes of students who will be at job fairs in advance. If you see some you like, reach out ahead of time and make contact. Maybe ask them their t-shirt size (if you have wearable swag) and tell them you’re exited to see them at the job fair. It’s a great way to get candidates to actually stop by your booth. Have swag at your booth and, most importantly, have people who know your company and understand the roles you’re trying to fill.
  • On whether to use outsourced vs. in-house recruiters, it depends on what your hiring strategy is.
    • If you think you’re going to have a regular cadence of hires over the next 1-2 years or more, hire a permanent recruiter who can manage the entire lifecycle – from helping with job descriptions, to sourcing, managing the interview process and on boarding your new hire. Someone who’s in-house will understand your product, your culture and the kinds of people you hire. They will save you gobs of time and energy when it comes to finding and hiring the best candidates.
    • Outsourced recruiters are great for targeted, high ranking, positions like a head of sales or a VP of Engineering. Don’t waste your time combing your network for these people unless you find someone right away. That’s what these guys are good at. Have them work on a fee for placement contract vs. a retainer up front. This is a good way to motivate the recruiter and the best ones will be happy to work this way.
  • Finally, leverage your team. Remind everyone at your company that they are on the hook to always be looking for talent and selling your company as a great place to work. The best hires often come from internal referrals. Consider offering a referral bonus for referrals who are hired and stay on board >90 days. Remember, though, some cash or cash equivalents (e.g., gift cards) are considered taxable income!

Resume Review

Fewer candidates are relying on paper resumes these days in favor of LinkedIn, but you will still see the standard resume for awhile. Here’s what I look for when I read resumes, as well as LinkedIn and Github profiles and Google searches:

  • A summary paragraph should help me understand a candidate’s brand. Are they a builder and leader of teams? A technology architect that knows how to build something from the ground up and to scale? Can they close a deal or build a relationship with strategic partners?
  • Track record is important. These days, it’s not unusual to see someone 1-2 years one place and then another. I look for “jumpers” though – people who have been <1 year in a few places tells me they either can’t fit in or they have made a lot of bad judgment calls on the companies they’ve joined. One or two jumps among longer stints are OK though. Especially if it’s someone who had a long track record somewhere else, and is now trying to find their next home.
  • resume_reviewI want to see more about what someone has accomplished than their responsibilities – ideally with metrics. For example, they wrote a coding standards guide or implemented a scrum process that improved code release velocity by X% or created a sales strategy that improved MRR by Y. What someone was/is responsible for is not as powerful as what they actually got done!
    • Unless they just graduated or I’m hiring for a research position, I don’t want to see education on the top. I care more about what they’ve actually done than where they’ve been educated or their GPA. Anyone with no work experience, even if a recent grad, is suspect for a startup. It questions how hungry this person is and how hard they’re willing to work.
  • If it is a research type of role, then I do look for publications with others, patent filings (even if provisional) and conference experience. This tells me they’re serious about their work, can collaborate, can bring something to a conclusion and present their ideas. Without all of this, I’d worry they are more into experimenting and not getting anything of significance done and/or able to work with others.
  • On LinkedIn, I often get the general resume/CV info I need, but more importantly, I look for how the candidate has chosen to present themselves; like a good summary and a full story of their job history, education and groups they’re a part of. If they are an active candidate looking for a job (vs. a passive candidate I’m trying to lure away from a comfortable job), then I expect their profile to be up-to-date and clean. They should be savvy enough to know that hiring managers and recruiters will be searching for them on LinkedIn. I expect to see alignment with the resume/CV they provided. I also expect to see a few, current, recommendations for active candidates. Finally, I look for mutual connections who could be good back door references (more on this below).
  • Regarding Github, it’s a nice way to see how an engineer contributes to open source projects or their coding style or community followers. However, keep in mind it is a not always an indicator of someone’s professional work. For a very technical role, I still have engineers provide real coding samples and/or do a small coding exercise with one of my engineers to see how they code in the real world.
  • Finally, Googling a candidate for anything “suspect” never hurts. Bigger companies do background checks. As a startup, a good check can be just looking to see if you can find arrest records or other behaviors that may not gel with your company culture. However, not every bad find on a web search is a flag not to hire. Some people drank too much in college and have gone on to have wonderfully successful professional lives 😉

The Interview and Candidate Experience

So many companies underestimate how important candidate experience is to landing the best hires. From the first blush with the candidate in an email or phone screen, to their onsite and offer process. This is as much about you finding the right person as it is them falling in love with your company and the opportunity.

  • Phone Screens: Whether you have a recruiter do it or you’re doing them yourself, you should have phone screen standards to ensure there’s consistency across candidates. Your goal with a phone screen is to not waste anyone’s time – yours, your company’s or the candidate – and to decide whether someone should come in or not for a full on interview. There are some good tips here on phone screens.
  • The Onsite Interview:  Be organized!job_interview_woman-smiling
    • Line up the right people to interview the candidate. No more than 2-3 people who will work with them.
    • Be clear to each of the interviewers on what their role is for the interview – for example, Joe will test their coding skills, Mary will talk with them about their teamwork and collaboration, and Bob will dig more into accomplishments at last job(s) and what they want out of this role. All interviewers should see the JD and candidate resumes at least a day before the interview.
    • Everyone is responsible for A) assessing culture fit and B) selling the job, company and opportunity. Make sure less experienced interviewers know the basics around what they can and can’t share about your product roadmap, financials, etc. Drill into their heads that if they don’t know the answer, tell the candidate they or someone else will get back to them. Don’t make stuff up!
    • Make sure everyone who interviews candidates knows what’s illegal to ask!
    • Optional: Have them sign a NDA before they come in or before interviews start so you can share more with the candidate about the role and what you’re building.
    • Have an agenda for the candidate when they come in. The recruiter or hiring manager should walk them through it and explain who they’re meeting with and why (e.g., “Joe is a developer you’d work with” or “Mary is the team leader from our product team).
    • Make sure the last person they meet with knows what to do in terms of walking them out, handing them back off to the recruiter, etc.
    • Whomever wraps up should NEVER make any promises. Just tell them it was great to meet them and whomever is the hiring manager or the recruiter will be in touch soon.
    • Only the recruiter and/or hiring manager should inquire about compensation requirements, start dates, etc.
    • Nice touch: Give them materials/swag they can take with them after the interview. Perhaps a white paper on the space you’re going after or a fun t-shirt to remind them how cool your company is.
    • NOTE ON REMOTE HIRES: If at all possible, have them come in for face-to-face interviews and pay the expenses associated with this visit. If not, all the same rules apply for a video interview as in face-to-face.
  • After the Interviews:
    • Have everyone send feedback to the hiring manager/recruiter without biasing others. Don’t walk by the next interviewer and say “she’s awesome!” or roll your eyes.
    • Keep feedback consistent: Strengths, weaknesses, opportunities and a Hire or Not Hire statement. No neutrals! Each interviewer either wants to work with this person or not.
    • If there is a big divide on a candidate (50-50 hire/not hire), then have a roundtable discussion so everyone can understand each other’s point of view. The hiring manager should read back everyone’s feedback and then ask people to share more details on concern or passions about the candidate. Ultimately though, it’s the manager’s call.
    • Fast turnaround is important! Do not leave a candidate hanging more than a day or so. Immediate follow up and next actions can make or break landing someone good and it leaves an impression on your company that can travel with the candidate. Follow up with a thank you for their time. If you’re passing, just say they are not a fit for the role and move on. If an offer is coming, ask for references and be specific on when you plan to make a decision. Let them know when they should expect to see an offer as well.

Regular and Backdoor Reference Checks

Although it did happen to me once where this was not the case, most references are going to be with people the candidate can trust to say great things. So, use those references as an opportunity to learn more about the candidate. A few key, but not all, questions I usually ask:

  • Confirm the role they were in with the reference and how they worked with the candidate (manager-employee, peer, etc.)
  • Ask them to highlight a particular accomplishment or contribution the candidate made and why it stuck out.
  • As their potential manager, what areas you should focus on to help grow the candidate in this role. (this is a great way to uncover weaknesses without asking directly!)
  • Would you hire him/her again if you had the chance?

Note that some companies have strict rules about references and won’t let someone do more than confirm title and dates of employment. The only time I read into someone not wanting to give details as a negative is if they explicitly say they prefer not to give a reference or have nothing they can share. I will usually ask if it’s company policy and if not, read between the lines!

Finally, on backdoor references, I highly recommend them. Be respectful of the candidate though – especially if they are still employed – and don’t blow their cover. Only ask someone to introduce you to someone who knows the candidate if they can trust that the person will respect the candidate as well and give you honest feedback. I rarely make a hire without at least one backdoor reference.

Your First Experienced (Senior) Hire – Don’t Be Ageist

A lot of startups come from young, inexperienced, founders with little to no prior work experience. It can be a little daunting when you decide (or your Board tells you) that you have to start hiring people 10+ years older and more experienced than the founding team. The idea of someone older or with more experience than you can cause all sorts of worry about culture fit, being patronized or steamrolled into doing things you don’t want to do. The best advice I can offer is experience and culture fit trump age. Many older candidates have worked at companies with much younger people before and if they’re hired to be the expert in a particular field, let them be the expert, but you are still the boss. It may mean they’re not keen on beer pong on Friday nights or can’t relate to the cat GIFs your team shares on Slack, but if they get along with everyone and meet the needs of your company, get past it. Those senior hires are going to take your company from good to great.

Making the Offer & Closing the Deal

Making the right offer for a startup hire is HARD. An experienced candidate has to make tradeoffs between salary and equity and no two candidates are the same. I could do a whole blog post just on this topic! Instead, I will give you a few things to think about and point you to a few resources:

  • Decide what kind of company you will be in terms of compensation. Is equity something you want your employees to value more than salary? Is parity among team members important? (because they will talk, trust me!).
  • Are you willing/able to pay market rates for a couple of key hires? If you can’t, can you set expectations that you will adjust salaries upon future fundraising/revenue growth? Will you be able to explain to earlier hires who have more equity than comp that an experienced key hire is getting market rates when they’re not? job_offer
  • How much equity will you put aside to refresh grants/hire future team members?
  • How willing are you to negotiate? Will it be a take it or leave it offer, or will you build in some room to adjust comp/equity up/down depending on the candidate’s needs?
  • What other compensation will you offer like healthcare, 401K or maybe Uber and food reimbursement for late night work? Not all startups can afford perks, but if you have some to offer it can make a huge difference for some candidates.
  • Resources: Understanding Equity, AngelList Salary Data, more tips on startup salaries and equity from my buddy @payne92.

A Quick Note on “Try Before You Buy”

A more common practice is to ask someone to work on a small project as a consultant so you can try each other out before either party commits. This can be very helpful – especially if they get some work done for you in the process! Be super clear on expectations here. Hire them as a contractor and pay them. Make sure they sign a simple contract that makes it clear they assign all of the work to your company and it’s under NDA. Set a timeline and agreed upon outputs (code check in, documentation, white paper, whatever…). Make sure they understand what you expect to see and that if it passes, they will get an offer. Do not be the company that keeps hiring “temps” to get work done with no intention to hire.

On-Boarding

Your candidate has accepted the offer! Hurray! You are so close to being done, but not quite over the finish line yet. Make sure your company is everything you promised and more:

  • Send a welcome “package” with general info, maybe some pre-reads about the company, the technology or market. Also include any benefit information (if applicable) in advance so they can think about what they’ll sign up for.
  • Get some info up-front to make the first day easier – like what email address they want (if they get to choose) and maybe a heads up on tools your company uses like Slack, Trello, Github, Intercom, etc, so they have a chance to familiarize themselves if they are new to these tools.
  • Order them a desktop, laptop, or whatever other tools they’ll need (if you cover that expense for your employees) so, ideally, these items are onsite when they start. It’s also nice if you can set them up on various tools, email, etc. before they arrive so they can jump in right away.
  • Figure out where they will sit and who they’ll have lunch with on their first day! So basic, but so welcoming and so often forgotten! Also, tell them what are normal work hours for your team and when should they arrive on their first day.
  • Make their first day and first week feel warm and fuzzy. Take them to lunch, introduce them to the team (locally and on Slack or the like if you have remote peeps). Give them opportunities to get familiar with tools, content and processes. Check in with them at the end of the first week and ask how it went.
  • Most important, ask them how their candidate experience was throughout the process so you can improve things for the next set of hires.

It’s crazy to think this is not what I consider to be an exhaustive list when it comes to the whole hiring process, but I hope it will get you and your company on a good path towards hiring top talent! Have some tips of your own on this topic? Please share in the comments below.

[Updated Nov 2017]

8 thoughts on “Hard To Do, And Easy To Screw Up – A Primer On Hiring For Startups

  1. Pingback: Hard To Do, And Easy To Screw Up – A Primer On Hiring For Startups | Kingston United Group – Uniting Businesses to the World

  2. I have seen many startups make the mistakes you describe and waste valuable time and resources trying to fix them – great advice! I agree with nearly suggestion you have, especially regarding avoiding gender bias in tech recruiting! I may quibble slightly that the best recruiters will be happy to work on a contingency model – it might make sense for engineers but probably not when it comes to senior level positions. You need to engage with a firm you trust, show that you are willing to partner and let them take your opportunity to market. FWIW, we do a hybrid executive search here with a retainer up front but a pay-for-delivery model which has been very attractive to start ups as they are not “all in” if the search gets canceled or if someone from their own network surfaces.

    • Thanks for the insight, Tracy! I think a full service firm vs. independent recruiter could be a different approach – especially for startups. There are all sorts of models. Each company needs to find the one that works best for them!

  3. Pingback: The War On (Diverse) Talent | Being FA and Other Ponderings

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