As a hiring manager or member of a growing team, I've interviewed hundreds of candidates for all sorts of positions over the last 10 years. In my current role as "Talent Guy" at JumpStart, I interview several candidates a week. One thing I've learned is that good interviewing is a skill. And like any other skill, it requires practice and repetition to become proficient.
To become expert, it requires a strong process. I've also learned that most people suck at interviewing. They hate it. It terrifies them. Trying to assess complete strangers in one or two hours is the worst part of their jobs and they'd gladly hand it off to someone else if it wasn't so damned important. And that's the thing: it's probably the most important part of any entrepreneur's job.
A larger, more stable company can afford a dud hire every now and then. Sure it will be painful carrying dead weight, compensating for poor performance, intervening (read: "putting them on a plan"), firing and then hiring and training a replacement. But the company will survive and, unfortunately, grow to accept bad hiring as part of life in a big company.
In a startup, one bad hire can be devastating, causing damage to the company from which it cannot easily recover. A bad sales hire can kill the most conservative sales forecast, sapping credibility with investors, and requiring more precious time and capital to gain traction.
Anywhere in the business, a poor performer or cultural mismatch can negatively affect others on the team, dragging down morale and performance. At best, it's a setback that allows the competition to get to market before you do. At worst, you never get to market.
As difficult as it is to assess human behaviors and determine if a candidate has what it takes for your startup (even if you're not quite sure what it takes), you can improve your odds of hiring success with a few best practices and a solid process. Since this is a topic that can't easily be covered in a single blog post (as much as I like to fill the page), I'll break things down into three separate posts:
- Getting Ready
- Structuring Effective Interviews
- What NOT to Ask & Getting the Most From References
Getting Ready: Know What You Are Looking For.
The first part of any process is to know your objectives. In the case of hiring, you need to know what you are looking for in an ideal candidate. Shocking revelation, I know. Like most situations in life, a good Yogi Berra quote sums things up best: "If you don't know where you are going, you will wind up somewhere else."
So the first step is to think deeply about what objectives this position will need to accomplish for the business to be successful, and in what timeframe. This is easier than you might think at a startup. That is because the milestones, objectives, and goals of the business can be tied directly to the priorities, performance and contribution of the individual.
If the company needs to design and build a prototype in the next 6 months, you might need a project manager to oversee development with the required technical skills, industry experience and attitude for the job. If the business needs to introduce your product to pilot customers, develop a scalable and repeatable sales process, and build out a sales team, you need a sales leader who has done something like this before.
Therefore, the first step in creating a new position is to list the 3-5 critical milestones or objectives that the new hire will be responsible for delivering. Be specific and don't shy away from numbers and measurable outcomes. Your business will be held accountable to achieving specific objectives within an acceptable timeframe. You should think about each individual's contribution in similar terms. When you start to consider candidates for the position, you will want people that have delivered similar outcomes in previous roles.
Determine the Essential Functions for the Job.
Next, determine what the 5-7 day-to-day tasks that achieving these milestones will involve. Unlike the objectives of the position, you can afford to be a bit more general in setting functions of the role. In many cases, you won't know exactly how the job will get done.
One of the fun parts about innovation is that you are often times doing something that no one else has done before. That said, you might find similar positions posted on various job websites that list out the essential functions of the role that you can "borrow." A simple keyword search on Ventureloop.com or Startuphire.com should provide you with what you need.
Look for Adaptive Excellence.
As I've discussed in previous posts, entrepreneurs often start and end the process with the technical skills and industry experience necessary for success in the position. However, in early-stage startups, market dynamics change, assumptions prove to be flawed, strategies shift, and unexpected challenges are guaranteed to emerge.
Likewise, the required technical skills, and the nature of the position itself, are likely to change quickly and often. Therefore, it is critically important that you look for candidates that have a demonstrated track record of success in multiple, varied pursuits where they have had to adapt quickly to achieve excellent results on a meaningful level. This is what I refer to as Adaptive Excellence and discuss in greater detail here. Having the right mix of technical skills is great, but the right candidate must have Adaptive Excellence as well.
Understand Your Culture.
Another mistake that entrepreneurs make is to overlook the importance of cultural fit in their startup business. A great hire, with the perfect background, still may struggle to perform and fit within your young company if they do not share the same core values as you and your founding team. Articulating what those values are, and seeking them in all of your new hires is a critical part of the hiring process.
For a quick guide to establishing what those values are for your business, visit my post on The Importance of Cultural Fit in Startups. I've also provided examples of successful entrepreneurial cultures here. Once you've determined the 3-7 core values that are important to you and shared across your founding team, write these down and include them in your job description.
How Much Can You Afford?
This is where the proverbial rubber meets the road in recruiting. If you've followed through on the above process, you should know what you are looking for in a candidate. Now, can you afford that person? The short answer is probably not, at least in terms of cash compensation. You are, after all, an early-stage startup. And A+ entrepreneurial talent does not come cheap.
All-star candidates have lots of options, most likely including the job they currently have. However, you offer something special: a chance to play a critical, high-impact role in delivering an innovative new product to market and (potentially) creating significant wealth in the process. That said, dreams alone don't put food on the table. So know what the market is willing to pay candidates like the ones you seek and try to offer salary, performance incentives, and stock option participation that are competitive.
There are several resources that can help you determine what that looks like. Probably the best report on executive level compensation at equity-backed technology companies is the CompStudy collected each year by Noam Wasserman, J. Robert Scott and Ernst & Young. I can also provide you with compensation data for most types of positions within technology startups through various databases to which I subscribe.
Inevitably, you will need to identify where you are willing to compromise in order to attract an A+ player. My advice is to give on specific industry experience or seniority and hold strong to Adaptive Excellence and Core Values. As Jim Collins puts it, "people can learn skills and acquire knowledge, but they cannot learn the essential character traits that make them right for your organization." You cannot easily teach adaptability, urgency, and entrepreneurial intelligence.
If you are sincerely cash-strapped, consider seeking candidates that match your talent profile, but are lacking the years of experience you would prefer. Mark Suster describes these as candidates who "punch above their weight." Look for those candidates that are achieving results beyond their peer group and catch them before they are out of your price range. Think creatively so you can spot experiences that might not be a perfect match, but where excellent results required the same abilities and attitude you are seeking.
Tie It All Together in a Job Description.
Finally, now that you have assembled the 3-5 key milestones/objectives of the role, the 5-7 essential functions of the job, and the 3-7 desired personal values in a successful candidate, you need to pull it all together into a functioning job description. A job description is not merely the document you post to job boards or share with your professional contacts. It communicates to internal stakeholders exactly what you are looking for in a candidate in a way in which you can all agree on and refer to when evaluating candidates. It is your roadmap, your guide, during the interview process. It too will need to adapt as you meet with candidates and gauge what the market will provide.
A good job description is also a marketing tool for your company, so be sure to include a compelling description of your business, vision, and sales pitch. Remember, your ideal candidate is not looking for a job. They are looking for an opportunity to grow, meaningfully contribute, and enjoy the benefits of their hard work. Be sure that your job description does not sell your company short.
A Few Words About Using Recruiters.
The services of recruiters or search consultants are typically viewed as an unnecessary expense to a process that we should be able to do ourselves. However, as I said before, good interviewing is a skill that most of us do not have.
The more I learn about what it takes to be a good interviewer, the more I'm convinced that there will always be work for good recruiters. A good recruiter saves time by helping you work through the above steps in creating a compelling job description; screens candidates; helps to identify those "passive" candidates that are not trolling the job boards looking for a new opportunity, and; sells your opportunity as the opportunity for that great candidate.
And saving time is saving money, especially when a search starts to drag out and you are tempted to "settle" on a mediocre candidate because you needed someone on the job yesterday. But choosing the right recruiter, and managing them in a way that increases the likelihood for success, is a topic that deserves its own blog post. So I'll save that for another time.
Robert Hatta is the Vice President of Entrepreneurial Talent for JumpStart Ventures. He has worked at several startup companies in Northeast Ohio and Silicon Valley, as well as other high growth, technology companies across the U.S. and Europe. Through these experiences, Robert has gained an extensive understanding of the culture and needs of high growth companies with a particular focus on talent.