A unique aspect of being in a startup is how quickly you will grow, and the incredible impact each hire will make on your company culture. Tutum started with two co-founders and in the past five months we’ve become a team of 6. The key is to ABC: Always Be Collecting (candidates).
Albert Wenger of Union Square Ventures came in to Techstars and gave a great talk about startup hiring. With over 20 years of operating as an investor, he’s seen that recruiting is one of the biggest success factors for USV’s portfolio companies.
He gave us his insight on how to go from 3-10, from 10-20, and from 20-50 people. Detailing how each of these stages have varying demands on the startup.
I’m happy to say that I love working at Tutum, and everyone on the team is extremely close knit. We’re looking to close our fundraising soon, and we’ll be looking to hire additional members to the team. When you have so few people, each new addition can dramatically change your company culture. This makes personality and demeanor a top priority that even trumps skill.
It doesn’t matter if you’re the best developer out there; if you can’t work with the rest of the team and if you actively cause disruptions with everyone you work with, we can’t hire you.
We want new hires to share our sense of excitement in creating an amazing product that could potentially change the landscape of cloud computing for the better.
So how did we go from our co-founders to our founding team of six? We’re all good friends of our CEO Borja through different stages of his life. Fernando and Bernardo are his good friends from elementary school. Graham from high school. Myself from undergrad. And Honglin from a Masters program.
That’s the importance of Always Be Collecting.
To go from 3-10 people
Your first 3-10 people are most likely going to be friends and friends of friends. You want to make sure the people you hire are known quantities. You probably know what your best friends are like at their worst, which is really important when you’re going to be working in a high-stress environment. No matter how amazing a person is during their interview, you just don’t really know that person and how they’ll act when shit hits the fan.
It’s also extremely important to get utility infielders. These are people you can hire who can do lots of jobs. Everyone needs to wear multiple hats. There’s just too much that needs to be done to have specific titles like at a Fortune 500 company.
You must beware of having a mono culture (e.g. all ex Google). If your first ten hires are guys, it’s going to be harder to bring girls on board. We’ve also blogged about being an International Start-Up Team, and really value how diverse our team is.
The proper attitude is also essential. The critical aspect is:
Keep calm and get shit done.
It can be deadly if people can’t stay calm, and you have to end up holding their hand.
Albert defines the perfect startup attitude as:
- No drama
- Results oriented
- Past is a predictor (people can change, but it’s rare)
- Show me your work (not talk)
- Team player
He used to use quizzes during interviews, but no longer believes in them. They end up leading to a monoculture almost necessarily.
Instead he prefers using a specific set of interview questions. It’s important to have a set of questions you’re comfortable with. You will use these in every interview to compare/contrast candidates. If you ask everyone different questions, it won’t be helpful in judging different candidates. Here are Albert’s three favorite questions:
- What book do you think everyone on the team should read? (this can reveal not just information but also the character of the person)
- What is the last awesome thing you have learned? (you want someone with a passion for learning)
- What did you not like about your previous job? (if people go off about how everyone at their previous job was horrible and the environment was bad, this is a big red flag)
To go from 10-20 people
- As we enter this territory we’ll be focusing on building diversity. The further you go down one path, the harder it is to go back.
- Hone culture. This should focus on what you do, not what you say you’re going to do.
- Add structure to the team. We’ll have team leads where it makes sense.
- Have real job descriptions. This is when you start moving away from utility infielders and towards owning roles. You want to start developing the idea of what you need done, and who is going to do it.
- Hone your recruiting process. This takes a ton of time. If you have a poor hiring process, the entire team will feel the effects. You want candidates to say they loved the environment, not get the impression that you are disorganized.
- Build out onboarding. This will set the tone of what the new hires can expect from your company and how you operate. You will be doing this more and more often. It’s best to set some time aside and develop what you want this to look like.
To go from 20-50 people
This feels like an eternity away right now. I can only share the advice of Albert Wenger on what it takes for this kind of expansion. If we’re lucky we’ll be referring back to these notes in a couple of years 🙂
- funnel, funnel, funnel. If you try to go from 20-50 people, you need to see 100s of people. You need a massive funnel to accomplish this well.
- Need a tight process. If you’re interviewing 5-10 people per position and you want to be present as the CEO, then this will mean between 250-500 interviews.
- Start incorporating tools to help get through such a high volume of interviews.
- Need a real organization.
- Specialization and management. You need to place the utility infielders.
- Last chance on culture. It can only go down hill if it’s not set at this point.
Some quick channels to build your funnel:
- Social media (engineering blog)
- Conferences (engineering talks)
- University outreach
Important notes about process:
- Always get back to everyone you interviewed. It’s a form of marketing and a way to NOT screw up your reputation.
- Don’t drag out the process with candidates.
- Don’t use quizzes! (although asking them to perform a job related task can be very insightful)
- Diversity takes effort. Diverse teams are better at everything.
When you’re looking to fill positions at this stage, recruiters and head hunters are going to be valuable. There are two different types of recruiters: contingency and retained.
Contingency can be described as No Win, No Fee. A service is performed by a recruitment company for free until the client chooses a candidate for a position. This can lead to a higher volume of candidates, but with less of a focus on quality.
Retained means the recruiter will charge an upfront fee to the client. They also operate on an exclusive basis, meaning the job will only be filled by this recruitment company. This process is much more rigorous and in a perfect world will come up with five candidates with the exact skills, location, salary that you’re looking for and you can just choose one.
Alberts suggests using retained search for senior positions. It’s been around for a long time because it actually works. You also need to meet a lot of candidates. A lot of people say that they meet a lot of people for lower positions and only a few for higher ones. This makes no sense. You want to make sure you see just as many candidates if not more for your senior roles, since they will be having a significant impact on the company.
Don’t get star struck by hearing big name companies. You need to understand what the person actually did. Also spend a lot of time with these candidates. Understand them and how they work.
When it comes to senior hires, cultural fit is a double edged sword. Don’t necessarily take someone with the same exact approach, it may be worth it to get someone on the friges of your cultural fit.
Always remember that hiring is one of 3 top CEO/founder jobs. The first rule is don’t run out of money. The second rule is have a great strategy.
Plan, measure, and improve. If you have some recruiting needs, make sure it stays a top priority.
ABC, Always Be Collecting. Have a list, ask people for people, every time you meet someone that could be valuable for your company make a note of it. Who knows, maybe 6 years down the line you’ll be called on by your college buddy.