Once a Zen master was teaching his class. He told his pupils the story of a hare being chased by a pack of wolves in a Jungle. The teacher asked the pupils on who they thought would persevere. The Pupils unanimously shouted, “Oh Master, the wolves will. They’re a pack, they’re fast and they’re predators”.
The Zen master took a sigh and in a soft tone replied – “Incorrect, it would be the hare. The wolves are just chasing a meal, the hare is fighting for his life”
We founders are the hare. Most employees are the wolves. You may hire the best and the brightest in the industry but unless they are truly in unison with your vision, they’re just wolves looking out for their meal.
As a startup founder you need to get your A team right. That’s the first ten employees. They are the ones who will give shape to your dream and vision and shape the company culture. They will be the deal that defines the direction of your path – Growth or decline!
So how can one go about finding the right employees?
I’ve been in the entrepreneurial space for a decade now and worn many hats – VC, angel investor and entrepreneur. I have always seen hiring to be a major concern for businesses globally.
Well drawing from my experience of hiring where I have grown my team to up to 35 people and then brought it down to 6-8 right now, I’ve learnt stuff the not-so-easy way and here’s what I have to advise fellow founders venturing into entrepreneurial life.
Step I: Which roles to look for?
Before the hiring process begins do an internal assessment of yourself and the company. On a piece of paper, create a roadmap of your product and the stage you are at. It will give you a clear insight into what you’re doing, and where you need help. The points you need help with are the ones which you need to hire for e.g. development, marketing or sales.
If you’re a tech business, then the tech team would be your first hire else it would be the sales guy who will validate the need for your product or service and see if people even want to buy it.
I went with hiring the tech team first, then a sales development representative SDR and then marketing manager.
Recently while I was talking with Scott Sambucci, CEO SalesQualia, he mentioned hiring your sales guy after you have made the first ten sales as a founder because then you know how the system works and you’d know what to expect out of your sales hire.
Have one of the co-founders dedicated to product and one senior person handling accounts, operations and administration.
Step II: Define your ideal candidate profile (ICP)
The second and perhaps the most crucial point is to create a profile of your ideal candidate for the key roles you have identified that you want to hire for. What traits would you like them to have, what values and vision would you prefer they have, what competencies would you really want them to have etc.
It’s not a wishful practice but something very strategic that is sure to save you plenty of headache in the long run.
1) Defining behavioral traits that the candidate must have will help them execute the role they’re hired for with ease and settle and gel into the company culture e.g. salesperson 25-35 years old, extrovert, likes challenges, is persistent, independent worker, process oriented, reads a lot etc.
2) Having clarity on what competencies you’d like a future employee to have will shorten the learning cycle and get the candidate to become productive in half the time e.g. a sales executive must have idea of CRM tools, the sales funnel, lead generation etc.
Step III: Where to look for them?
I think the best way to find startup talent is to enter their space. e.g. if looking for a sales person, go to LinkedIn, if you’re looking for a developer, go to Hacker News or Angel, if looking for marketing, go to Facebook groups.
If you trust your team right, then even remote work is proving to be a brilliant option. Remember, talent trumps location. If your trust your process and the candidate’s ability and performance record, then it shouldn’t really matter where the employee works from. If they are punctual with deliverable and know their stuff, then the sky is the limit for you. eg. the marketing team at Alore is completely remote spread across cities and countries and that’s fine by us because they’re high performing happy bunch of people delivering value.
As a startup hiring a talent agency or professional HR services may get expensive and finding the right person on Freelancer or Upwork may get tedious so here are a few websites I recommend on scouting for candidates that worked for us.
Facebook Groups – Choose depending upon the niche you want to hire for
LinkedIn – If you can afford their startup related package then great, else just get creative by writing hiring in your status and posting about openings often.
Referrals: Always keep your employees in loop about being on the hiring mode and to recommend candidates they feel would gel well in the company culture. Incentivize the right hiring as well.
Step IV: Pre-Screening CVs- Which ones to shortlist?
Once you’ve posted your job openings, you’re sooner or later going to get applications with each candidate professing their undying love for startups and passion for their respective work profiles and how they fit perfectly for the role applied for. – Cut through the weed to save time. I suggest the following tips on scanning the right applications:
- Look for keywords – desirable skills and qualities that you feel are a must have
- Don’t look for the years of experience but the actual stuff of what they’ve done.
- Look for the transferable skills
- Look for achievements that talk numbers – if you can quantify your achievements and are data drive, that’s a good thing for a startup
- Is there a cover letter – Candidates who write a cover note make additional effort to tell about themselves beyond a CV would. See value in it.
- Visual appeal – Is this person’s CV neat, grammar and error free in their CV – You’d be surprised at the number of candidates that don’t take care of this basic thing
Have someone else screen the CVs as a cross check. Thereafter call up the shortlisted candidates for ten-minute calls to understand more on their CV.
Give weightage to the motivation and driving energy of the person and evaluate with just one goal in mind. “Would you like working with this person day in, day out?” As a startup when team sizes are small, this matters way more than you think it will.
Two tips I find useful for interviewing startup employees:
1) Call them up 30 minutes before or after. It’s not that you don’t value their time but at a startup you have to be an expert at getting unexpected stuff come up. How well you handle this depends on how mentally resilient you are. Calling 30 minutes before would likely throw off a more rigid mind.
2) Ask them to talk about their failures more than their successes – Let them speak whatever story they want to – you be listening to them for these 3 things:
A) Do they quote data and numbers in between,
B) Does their story end positive or negative e.g. even in failure if they talk about learning its positive and if they talk about never wanting to let that happen again its fear and negative.
C) Do they tend to discuss blame on themselves or others or share it etc. (shows the team spirit and responsibility quotient)
Depending on the role you’re interviewing for give the candidate one obvious incorrect piece of information and check if they’re attentive to that and notice it. An observant and confident employee saves many bad situations from happening every day.
Step V: Let Data guide the way
Once you’ve pre-screened candidates send them a behavioral test. These are scientific data-based tests to check employee aptitude and help in optimal hiring. They basically measure your candidate against what the ideal profile for the position should be. They match this data across millions of data points and give an assessment on how good a match the person is, what drives and motivates them and how the manager can extract the best performance from the candidate as an employee. If the gap is too wide, then its better to part ways at this point. If the gap is narrow, then go ahead to the next stage.
Behavioral tests that I recommend:
If the behavioral test shows good results, then send a case study to solve or invite over for an assessment round/in person interview. If a candidate has crossed all this then you can move to discussing salary!
Pro Tip: For high customer facing roles, it’s a good practice to let the candidates shadow you for a day. I do that with my sales candidates and so far, its helped most candidates realize from the start whether they are capable of running the show or not.
Step VI: Incentivizing
Understand that a startup has many vantage points to balance. E.g. If you’re bootstrapped, then affording hefty salaries is an issue, you can’t just offer equity to every incoming employee without having clarity on when they might just leave.
Unless they are co-founders you cannot expect in-coming executives to be going salary free and you can get in someone with a very high package and not really needing that. This might prove to be you personal white elephant.
Simultaneously you need to be paying them enough that their financial needs are being met and they don’t have the stress of meeting up to financial commitments in their lives beyond work. Each person has their financial cross to carry – EMIs, Student Loans or supporting family etc. Financial security is important in the lives of happy employees.
and also, like some wise guy once said “If you think hiring professionals is expensive, try hiring amateurs”.
I completely understand that this is a tough trick to manage. I’d suggest loosely the following guidelines:
a) For junior roles you need to pay a standard salary and have a performance-based allowance in between.
b) For mid-management offer ESOP depending upon the seniority, experience and package. The really talented staff would be in demand anywhere they wish and therefore giving them the right reason to stay is important.
c) For senior hires offer Equity options of 0.5% to 3% (pre-funding stage) conditional to them completing 2-3 years of service at the startup. This will not just motivate the person to stay but also to work much harder because now they will truly feel ownership and what’s yours you sweat blood for it when you need to.
Step VII: On-boarding well
Founders need to create a robust on-boarding process. Much like you’d love to have customers on-boarded well and talk high of you, extend the effort t your team as well. A proper on-boarding helps teams settle into being productive much faster.
Have a proper list of tools, timings, documentation, communication plan etc. clear for the new employees so they have less moments of figuring out “what to do”
It’s important to create and update your onboarding plan to keep pace with the company growth and stage. e.g. what you’d want a salesperson to do in the startup stage would be much different at the scaling stage.
The employee needs to be clear of what will be expected of them in next 15, 30, 60, 90 days and how the management plans to measure that.
Company Culture is super-duper important, and companies must take care in having a plan or framework for onboarding people into a culture. This is of course an intangible and non-quantifiable aspect but very core to team success. e.g. for me having a team that reads, is very interactive, communicative, loves networking, is data oriented and has fun together is important.
During this initial period of on-boarding, ensure you talk to the new colleagues and employees about the vision you hold for your company and where the company plans to be in the next 3, 6, 12, 18, 24 months.
Step VIII: Checking compatibility over 30, 60 and 90 days as probation period
Once you’ve hired someone into your startup, evaluate their progress in milestones of 30 days, 60 days and 90 days.
First 30 days: Provide the initial hand holding and guidance to understand their role. Ensue they are immersed into your company culture. Give them some achievable and realistic goals for their function.
Day 3- Day 60 – This is when you begin noticing them get independent and take call on minor stuff. set milestones for this duration and have the new employees fend for themselves in the role
Day 6- – Day 90 – this is when visible results must begin showing up. At the end of the 90 days if the candidate shows no recognizable professional progress part ways with them else onboard them as permanent employee while broadening their role and responsibilities.
Tip for Founders: Up to the time you are 30 employees strong you as the founder need to get to know each of the employees really well and spend time interacting with the team and get to know them a little more beyond their work to understand what motivates them
Does hiring ever stop?
As a rule, the most widely acknowledged advise is to be on an Always Be Hiring (ABH) mode. This is pretty much useful when your churn is high in the initial years. The employees who are coming in may or may not gel into the culture at the startup. Always have open positions advertised for and spend 30% of your time every week just keeping in touch with the prospective employees, candidates etc. You might think it’s a lot but experience has taught me that unless you make the effort to spot the diamonds from the dust you will have to settle in for whatever comes your way in case you haven’t created a candidate pipeline for yourself.
However, that said I think hiring can stop as well. Hiring stops in the best or the worst situations. Eg if you’re not able to earn any revenues and are heading to a drop in profits, you tend to freeze hiring to just work with the team you have and focus on getting back to profitability.
Alternately you also stop hiring when your team is performing the best it can and you don’t see a need to hire anymore as scaling has gone onto an almost auto-mode. Its something David Hansson From Basecamp spoke about. They froze hiring because “At just around 50 people and no full-time managers, it feels like we’re just at this crucial break in the waves at Basecamp now (excluding customer support) “
I’d like to conclude by saying that for startups hiring must be given the importance it deserves. Most startup founders fall into the category of being obsessed about the product or service and keeping hiring as a last moment thing. You save countless man hours and triple productivity when you have the right talent for the right job and dont have to spend time training and on-boarding every few months. In short always know what roles you want to hire for, what traits you’re looking for by creating an ideal candidate profile (ICP), having a proper on-boarding plan for them, incentivizing them well and then as a best practice always be on a forever hiring mode. Always hire a candidate who is aligned to the mission and vision of your company. Go for people who are motivated by factors other than salaries and money. They’re the ones who will make a difference and bring in change.
I’d be happy to hear your thoughts on how you go about hiring at startups and what best practices you follow.
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