10 principles for startup recruiting

I’ve read a lot of interesting and well-written articles recently that cover best practices for hiring people into startups.  The first thing I’ll say is that, having done it, unsurprisingly recruiting into a startup is really really hard and equally as important.  It requires more attention than you could ever could have planned for, and if not done correctly is one of the easiest ways to kill your startup.

The below 10 principles on startup recruiting aren’t necessarily exactly how we pulled it off at Invite Media, although it would be how I’d do it again having learned a few things the hard way:

1. Make sure you hire “startup folks”.  For most roles at a startup, especially early on, you’ll often hear the term “startup person” thrown around.  A startup by definition is risky and undefined, and hopefully that risk is reduced as time goes on and progress is made.  People you hire into a startup early-on need to be the kind who will enjoy being in the trenches with you, can stomach the overall risk being taken, and doesn’t think too much about his/her salary not being guaranteed a year from now.  A guy at a big company down the street who has the skills you want on his resume but likes his 9-5 hours and cushy job lifestyle probably isn’t a great example of a startup person.  Getting a startup to the next life chapter is really hard, and it’s all about the people, so make sure you hire startup people.  After having done Invite, I’m even more convinced that “startup people” truly are different, whereby they couldn’t imagine working at a big company and live for the risks of startups.
2. Make sure the incentives and interests are aligned.  This has a few meanings.  First, it’s remarkable how much incentives matter, primarily monetary, so make sure the person is properly incentivized to go after the same things you are.  That is code for make sure they get an industry-standard (or better) equity package or compensation plan for their role.  There’s a reason great sales teams are built around very well thought-out and structured commission and compensation plans, so as to align goals (more on that later).  Second, be wary of the person who cares about the wrong things.  For example, all too often do people come knocking on startup doors looking for a fancy title and/or high base salary.  There are certainly times that someone may need a higher salary to make things work financially, but develop a good sniff test for someone’s true intentions/goals and if they’ll be in the same boat as you.  At Invite, not surprisingly many of our best employees were the ones who cared less about their title and current salary and negotiated hard for more equity and upside.  There are a lot of tactics and point-scoring you can do here to gauge probability of success of a hire.  For example, it’s probably worth something and a good thing if a potential recruit responds to one of your emails at 1AM (you’ll certainly be up at that time).
3. Spend a lot of time doing it.  One of my board advisors once told me that if I wasn’t spending half of my time on recruiting, I was doing something wrong.  Looking back, I couldn’t agree more.  I know of successful companies where the founder still interviews or at least approves every single new hire.  Don’t outsource recruiting, stay involved.  It’s fine to leverage resources to grow a pipeline of potential new hires, but you’re the keeper of the vision and culture and the one who should know best about who to hire (not to mention you will have to work with the person).
4. Don’t make big senior hire mistakes.  There’s a time and a place for big hitters and big name hires.  You see it all the time with startups “becoming official” by bringing on some big name guy from a big company who allegedly has “been there done that” and has a huge rolodex.  Those hires often work out great.  They also often go horribly wrong.  One of my favorite posts on this topic is by Ben Horowitz, and he also alludes to some things in #1 above with needing to be able to fit into a startup.  It no doubt depends on your industry and company, but at Invite we put this off as far as we could and never really made a big senior hire mistake, which I’m very proud of.  We made a ton of recruiting mistakes, but watch out for the big ones.  These kind of things get press if short-lived, are hard to unwind, and open up all kinds of risks.  For example, the person who by definition knows everyone (probably a reason you brought hired him) will all-of-a-sudden be telling everyone their side of the story.  This common recruiting pitfall also relates to the next thought.
5. Worry about glass ceilings.  We were taught this one by an employee we hired and learned it was the main reason he was leaving.  Turns out, this was the main reason a lot of our best folks left their previous jobs.  It’s also code for keeping things flat in terms of organization structure.  Now that I’m aware of this concept, I see it all the time in startups.  This problem need not be created by huge name hires, although that certainly can do it, but can be created by a simple “manager” hire or unneeded layer.  Essentially, your best and brightest startup employees run their day like their own CEO and handle the details themselves.  In return for this, they expect to gain responsibility (and of course upside from exits) over time.  The last thing they want is some manager or layer put above them that creates a glass ceiling for their career growth.  There’s a time and a place for management layers, and startups typically aren’t either.
6. Fix mistakes quickly.  If there’s a lesson we learned the hard way, it’s to fix hiring mistakes quickly.  It’s 100% true that a bad hire can actually detract value from a company by slowing down or distracting others, or also by just doing work the wrong way (for instance, implementing a feature in a way that obviously isn’t scalable).  The moral of your best and most important folks will also increase when you fire the bad person.  Like many things, it’s better for both to cut strings before it goes too far.
7. Fix mistakes yourself.  In other words, if you make a bad hire, it’s your responsibility to fire that person and to do so before the problem gets worse.  In terms of who does it, there are qualifications depending on the size of the company and all that, but fixing mistakes yourself will earn the respect of the company and help you grow as a manager.  You’ll also be more careful in hiring if you have to face the unfortunate consequence of letting go the person you shouldn’t have hired.
8. Focus on culture.  Don’t hire assholes, plain and simple.  Also, don’t hire folks who can’t handle the intellectual conversations of the company and can’t keep up, or people will lose respect on a number of levels.  Bring in people who instill the culture you want.  For us that was hard-working, detail-oriented, confident (you don’t want a bunch of scaredy-cats running around not bringing things up), smart, and hungry (both physically and figuratively).  Learn how to ask the right questions or look for the right things in interviews to gauge culture-fit.  Unsupplied reference calls are my favorite technique.
9. Be transparent.  I recently saw this in a post by Chris Dixon as well.  Put simply, transparency almost always wins and applies to recruiting as well.  When bringing in someone new, go out of your way to help them understand the value of the equity or compensation you’re giving.  This means being transparent (to the extent you can) about things like current valuation, realistic valuation expectations, outcomes, and what % of the company their share represents.
10. Get creative with the process.  I forget who told me this one, but I love it.  Instead of the standard interview and onboarding process, mix things up.  For instance, tell the person who’s coming in that for the first 60 days, their job isn’t guaranteed and that options (and maybe other stuff) don’t start vesting until after the 60 days.  Plan on a performance review after 60 days where it’s decided if both sides want to move forward (who says a performance review after A WHOLE YEAR later makes the most sense?).  There are risks to this process, but pro’s as well.  You’ll certainly lose some people who “feel like they’re above this”, but who knows, maybe those weren’t the people you wanted in the first place.

Hope this helps.  As always, feel free to share any links to other related posts you find useful.