Startups live or die based on their ability to attract talent. All other factors that can affect startup success are secondary. This is even more pronounced when you are an early stage startup (read ‘resource constrained to the extreme’) as you have little or no room for bad hiring decisions. Having said that, everyone makes hiring mistakes and it is a process that you hope to get better at with experience. If you are like me and most other entrepreneurs, you would dump conventional wisdom and techniques, and build your own set of hiring rules that are driven by your unique style and situation. Over the years, I have been involved in several startups and here are some of the things I have learned in hiring during early days of the startup (i.e., first 2-5 employees).
Avoid hiring complete strangers: In my view, when you are just starting out, it is next to impossible to successfully hire strangers. I have tried this twice and regretted the decision both times down the road. There are simply too many unknowns and points of failure for the arrangement to work. I am of the view that you have to know your early hires well enough to at least get a hold on the basics such as – Are they a good fit? What are their professional goals and limitations? Any personality issues? What about personal situations or habits? In early days of your startup, you easily spend 10 to 18 hours with your team every day. You come to know practically everything about each other and things start falling apart as soon as conflicts surface. Imagine working day and night with someone who has an attitude problem, or someone who is a habitual excuse maker, or has too many personal commitments – you get the point. Whether you know the person thru a past job, college, personal network, or a friend, try to spend as much time as possible with the candidate and, if possible, build some sort of work-based relationship. It is almost like dating before marriage.
Slow and steady wins the race: In startup leadership material, there is a lot of emphasis on quick decision making. But, it is rarely a good thing when you are trying to hire for your early stage startup. There are so many factors that can influence your decision in the moment that it is almost always better to go slow so you have time to reconsider your judgement. You might think that you need to fill a position right away otherwise your progress would stall. For most part, this is a short sighted view. In the longer run, you’ll be in a much worse position if you end up hiring a wrong person.
Do not hire for specific ideas or job requirements: As an early stage startup, your idea and product will change. It is imperative that you have a broader view of who would be a good fit regardless of changes and pivots. Same goes for specific requirements and skills, it is much better off to seek talented people who can pick up required skills quickly rather than getting stuck with an individual who is only good at a particular skill set.
You don’t need a manager: The last thing you want in an early stage startup are employees who act like middle managers. You want contributors not delegators. Whatever position you are trying to fill, you need hands-on employees who can hit the ground running from day one. That is the only way they can have an impact in early days of your startup.
Don’t look for similarities: A lot of times founders make the mistake of seeking people who are similar to them. And, I don’t mean similar just in terms of skills and knowledge (which most founders are smart enough to avoid). I mean similar in terms of passion, risk appetite, goals, work habits, personal commitments, etc. You need to understand that everyone is different and their uniqueness brings a completely new set of advantages and limitations. You just want to make sure that the person you are hiring meets your must-have requirements because there is no such thing as a ‘perfect match’.
Look for startup DNA: Everyone on the street finds startups cool and talks excitedly about an opportunity to start or join one. But, almost none have any clue about what it takes to work (or I should rather say ‘struggle’) in a startup environment. You have to vet your initial hires for their ability to cope in a startup environment. You don’t want someone who is risk averse, is known to procrastinate, needs an admin on day one, sticks to office hours, or negotiates on vacation time.
Make it about their success: Hiring managers spend most of their time assessing the type of talent they need and then pursue and interview candidates with those needs in mind. There is nothing wrong with that approach, but it is also important to convey your thoughts on the impact your startup brings to potential employee’s career. You should genuinely put in effort to find an answer to this question as it not only helps the employee, but also makes it easier for you to decide. The logic is simple – if employees you hire do not achieve individual success, they would soon tire out and look for an opportunity to exit. This can be extremely expensive for your startup.
It is not about pay: If you find yourself negotiating too much around salary, you should simply skip the candidate. The underlying assumption here is that you know the candidate well enough to have approximate idea of their financial needs, and the offer is appropriately made so the person can at least pay the bills. You should always be flexible, though. Just because you drive a 15 year old Honda Accord doesn’t mean the other person should have the same lifestyle. For the right employees, you may have to go beyond your initial offer to meet their needs. But, at any point, if you feel the person is stretching beyond reality, you should simply skip. All early employees should join you for reasons other than their paycheck (anyways, it is much less than what they could get elsewhere) – reasons that convince them about a considerable upside in the long run such that short term compensation loss is irrelevant.
Culture is important, but leave it for later: In hiring employees, there is a lot of stress given these days to ‘culture fit’. I totally agree that ensuring cultural fit is probably one of the most important things. But, don’t fret too much in early stages of your startup. In early days, culture is limited to the ability of the early team to work well as a group. If anything, your early employees will help establish the company culture. So, it is more important that you are okay with their core values and can trust them as you build company culture together.
Build your personal brand: Building a startup is all about surrounding yourself with people who are smarter than you. But, why would someone smarter than you join you for lesser upside and probably half the market rate? The single most important factor is YOU. If there is one place personal brand works wonders, it is the startup world. When it comes to hiring, your personal brand generates inbound leads of high caliber employees that are impossible with conventional hiring tools. It is also the primary reason your employees will stick with you through thick and thin. But, brand building is extremely hard and time consuming. Whether it is online or offline, it takes considerable time to figure out who your audience is, where to find them, and how to engage with them. What has worked for me is participation in relevant online conversations, networking via local events, and helping build relevant online and offline communities. More on this in next 2 tips.
Leverage networks and tools: In today’s connected world, there are so many ways to find potential candidates. The most valuable of them is your network and their connections. Reach out to all relevant people and ask for recommendations. This could include your co-founders, employees, past colleagues, and other friends and acquaintances. There are also many tools available that allow you to search for talent, request an introduction through a common connection, or start a conversation – networks and communities like LinkedIn, Angellist, GitHub, Behance, HackerNews and StackOverflow are just some of them.
Get active locally: If you are building a startup, attending conferences and networking events is a given. It is also an important channel for building your hiring pipeline. You can then select who you would like to pursue and start building a relationship with them before you reach out for a position. Another thing that has worked for me is getting active in local university and college programs. Try to get involved in any type of engagement that can put you in front of a large student base, which can easily turn into inbound hiring leads. You can also try to organize relevant events in your local area that gives you visibility among the right audience. Meetup is a great tools for organizing such events.
I hope these tips are helpful to you. It is an immense drain of time, energy and money if you end up with a wrong hire. So, hire with caution and follow the process that works for you. I would love to hear what has/hasn’t worked for you in the comments section.