What is the biggest challenge startups face? Some say that delivering products at the intersection of compelling, intuitive, and quality is the biggest challenge. First time founders say it is raising venture capital. Experienced entrepreneurs, however, often point to hiring, saying there is a hierarchy to these challenges. Great talent creates great products which in turn attracts smart capital.
Hiring the best people is difficult on a normal day and even more challenging in today’s bullish technology market. There are more ideas chasing bright talent than ever before. Market segments that exhibited slower growth in previous business cycles (e.g. hardware, education, government) now have significant market, entrepreneur, and venture capital interest. When you combine this growth with the documented shortfall in new and experienced engineers and the US’s more restrictive visa policies, hiring has never been harder.
If the current quantity deficit making hiring difficult, then filtering for quality makes the task seem herculean. A golden rule entangling hiring is that “A” talent hires more “A” talent, while “B” talent tends to hire “C” talent. This rule is never more important than when you first starting hiring. Your first 10 hires will in turn hire the first ~70 people in your startup. Your startup’s success depends on permeating the tradition of only hiring “A” talent into the early roots of your startup. But there are only so many “A” level individuals and most are already gainfully employed!
Customers, venture capitalists, and partners also place tremendous pressure on you as a founder to quickly build product. Seed or Series A funding only intensifies that pressure to build and hire. The venture community doesn’t give you capital so it can earn simple interest at the bank. We all use the words “lean” and “agile” to describe engineering process, but what folks really want is speed. You know you need to hire “A” talent but are simultaneously pressured to hire “quickly” and “good enough” to get rapid iterations of products into customers’ hands.
A unique challenge for hardware startups is the diversity required in their first hires. The word hardware, viewed in the context of hiring, is too limiting to describe the scope of this challenge. A successful hardware startup has to nearly simultaneously recruit for hardware (Mechanical Engineering, Electrical Engineering, Industrial Design, etc.), software (client, embedded, back-end), and production (manufacturing, logistics, etc.) teams.
With all of these hiring headwinds, it is critical that you employ best hiring practices. But how do you learn these best practices? It’s your first time building a hardware team, you are manically focused on only hiring “A” level talent, and you are surrounded by other startups recruiting in the same small pool. What do you do?!
There is no magic formula, no silver bullet to make hiring easy. But there are practices that experienced founders and recruiting professionals use to make the task a little easier. Nothing replaces having an experienced recruiter on your team, but until you can afford one, here are a few tips.
Tip #1: Make hiring your company’s focus
While your startup’s main focus is the product, it’s your team that delivers that product. Growing your organization is a full time job and it starts the first day of business. You are always looking for great candidates, even if you are not ready to hire for a particular role just yet.
Do you have job descriptions for all of your current and near term hires? It is really easy to keep a rough description in your head, but turning that into a compelling description that stands out in a long list of competing jobs is almost an art form. Your social network can’t recruit for you without a concise sentence or two of what you are looking for and a full description at an easily accessible URL. Can you articulate your description in a single, impactful tweet?
As you write job descriptions for your first team members, think about the growth path for these roles. You might initially be looking for an individual contributor but your startup’s rapid growth could easily change that. If a position could scale into a managerial role, it’s important to document that in the job description and screen candidates with those criteria, as opposed to dealing with painful discussions and changes later on. People joining your startup may also have the expectation that as your startup grows their responsibilities and role will too automatically grow. Being explicit about when that is true and when it will not be is really helpful.
As you post a role, you need a compelling and holistic compensation plan that is written in a form people without an MBA can understand. Compensation is more than salary; it includes stock, startup specific benefits, titles, and the intangibles associated with working for your company. It is very important to know what competitors are paying in your market segment, in adjacent spaces, and in the geographic region you are based. While you are not a large company yet, knowing what both large corporations and startups pay gives you insight into what prospective employees will be weighing when reviewing competing offers. You should play to your strengths, taking elements you can offer more of (stock, unique benefits, time off, etc.) and selling them aggressively. In a final preparation step, test your compensation package with a neutral but knowledgeable third party who can objectively comment on whether they think your offer is really competitive.
Tip #2: Recruiting is an offensive maneuver
Recruiting is not a passive or defensive activity. While you want to believe your startup is so exciting and so well known that candidates will come streaming to your door, remember there are potentially hundreds of other companies that are as exciting and well known. Posting job descriptions on a few job sites and waiting for results is a sure-fire way NOT to get the candidates you want.
You need go on the offensive with recruiting. The best source of qualified candidates is from people you already know and trust. Your goal is activate your direct contacts and their connections when hiring. You want 50 people helping you look for a candidate as opposed to just yourself. When you are with friends, colleagues, and partners, let them know about your open positions. When attending industry events, consider that somewhere in the crowd could be your next engineer. Your personal, business, venture, partner, and mentor networks all need to be activated to help as you recruit.
One thing many founders shy away from is cold-calling potential candidates at other (e.g. competing) companies. When you wrote your job description, you probably discussed where similar people work. It’s time to use LinkedIn and your networks to reach out to folks at those companies. Be graceful in your requests to people you don’t know as well, but remember, you don’t get what you don’t ask for. While the engineer you pinged at a large Silicon Valley company might be quite happy where they are, it didn’t hurt to ask them if they were interested in a new role, and they might just end up telling another colleague about your opportunity over lunch.
And don’t forget to recruit for diversity. Race, gender, experience, and mindset. A diverse set of “A” players gives you the varied perspectives you need to win!
Tip #3: If you can’t hire a recruiter, learn from a recruiter
When you are just starting out, dedicated recruiters can be quite expensive. That doesn’t mean, however, that you have an excuse not to start building relationships with great recruiting resources. Recruiters are just like every other employee; they want to work someplace fun amongst great people. Reach into your connections and find recruiters you can grab a coffee with. Talk to them about your startup and ask for some of the tricks of the trade. Ask them how they use LinkedIn to mine for candidates? What events do they go to (and which ones do they avoid) to interact with high quality candidates? How do they reach out to second level connections? Ask them to review your job descriptions to check if they are compelling. Do they have any good suggestions on how to cold-call companies laden with the talent you need? In their opinion, is your compensation package competitive? The more you ask, the more you learn!
Recruiting is a two-way street, so offer to help the recruiter with some of their open positions. Often recruiters are looking for roles you are not hiring for but might have great connections to. Establishing great connections with recruiting resources can help you well before you hire one full time. And remember, the recruiter you’ve built a meaningful relationship with already knows how amazing your startup is when you go to recruit them!
Tip #4: Get sexy
You are not alone in recruiting talent. You’ve got to make sure your job descriptions and startup stand out in the sea of companies looking for employees. When writing a job description, have fun with it. In a long list of dry descriptions, one that has a sense of humor, is inspirational, or challenges the reader stands out quickly. Consider these two job descriptions:
Option 1: Barnyard Industries, a funded startup in San Francisco, is looking for an experienced Mechanical Engineer for its upcoming projects. The ideal candidate balances theoretical and practical experience, having a Bachelor’s degree with a Masters in Mechanical Engineering preferred, and 2-4 years of work experience with a Fortune 1000 company. The position is focused on the design and engineering of complex mechanisms, assemblies and systems, using advanced technical knowledge. The candidate will direct and coordinate projects and other engineering personnel. Experience with industry standard tools from Autodesk and Solidworks is required.
Option 2: Barnyard Industries, makers of the amazing new robot pet Milo, is looking for a Mechanical Engineer who wants to delight kids and families. We’re an early stage company funded by SuperTopDog Ventures to change the way robots interact with kids, and you’ll be the person in charge of helping make Milo move and interact like a pet. This means you’ll be working on complex robotics systems with a team of insanely talented roboticists from around the world. You’ll have a bachelors or masters degree in Mechanical Engineering from a great school and some time under your belt making products elsewhere, but your adventure really starts at Barnyard. We hope you like working with the latest tools including the Autodesk suite and Solidworks, because we’ve got a top of the line PC environment with three monitors waiting for you. And did we mention our amazing beer bust Fridays and crazy fun corporate culture? Come work hard and play hard at Barnyard!
They both have the same basic asks of potential employees, but they come across very differently. At the end of the day, your job description needs to reflect the ethos and culture of your company, but a dry, concise job description has trouble standing out in a crowd.
To bring in more candidates and to highlight your strengths, consider open house recruiting events at your startup with a compelling draw. If you want folks to give up a night or weekend to visit your startup, make sure the event drawing them in is worthwhile. An industry luminary, a cocktail tasting, video games, it can be almost anything, but make it your own and make it fun. The event should reflect your startup’s atmosphere and personality. You want visitors to remember what a great place your startup is so they’ll tell that story to others as well as consider it for themselves.
Recruiting is a full time job that starts the day you start your company. In this strong tech economy, it is hard to get the “A” level talent you want without proactively reaching out on every channel possible. You work incredibly hard to build the best product possible, so remember to work as hard to get the people who are going to build your amazing product!