Tuesday 20 February 2018

When a startup needs to recruit staff, it becomes the candidate

Startup Diary: Hiring is one of the toughest and most critical elements - but in this situation your startup is the candidate

An established business has value to those seeking employment. Stock image
An established business has value to those seeking employment. Stock image

Richard Rodger

As your startup grows, you'll need to start hiring. How do you conduct interviews for your startup to help you recruit the best candidates?

If you're been following this startup diary, you might recognise that as a trick question. Traditional interviews are a low information ritual at best, and a serious waste of everybody's time at worst. Time, more than money, is your most precious resource when you are building a company.

Let me start with the word candidate. An established business has value to those seeking employment. It's secure and stable, and they can have a reasonable expectation that the job will continue to exist over the long-term. You have to sell yourself to an established business to get a job - you are one candidate among many.

A startup is on the other side of this equation. There are great people out there, but they can choose to work at other startups. Your startup company is the candidate. There's nothing more off-putting than a startup founder who thinks they are doing someone a favour by hiring them. So if you can't hire, start with your own mentality. You're not hiring, you're selling, and people are doing you a favour by working for you. This change of perspective is the key to hiring good people.

Let's think through the implications of making the company the candidate. What can a startup offer? Money? No. This is in short supply. At best you can offer market rates, if that.

What else can a startup offer? Options? No, that only works out once you are successful. It's just part of the deal, and not something that makes you different from any other startup.

I will make one very important point here. Early employees do expect to get a pay-off down the road when you achieve success. They took a risk on you after all. That is something you must make sure happens. There are ways of doing this properly, but that is a subject for another diary entry.

What else? A great business model? No, that's your founder perspective again. People won't join you just because you think you have a great business model, industry connections, or a valuable patent. All of that remains to be seen.

To implement the idea of 'the startup is the candidate', you have to take the perspective of the person who is thinking about working with you. First, offer a respectful hiring process. Interviews are demeaning. Their premise is that the candidate may not meet the standard. Start by assuming that the person talking to you is actually a competent professional.

The question is not 'can they do the job?'. The question is: 'is your work environment, and your personality as a founder, a good fit for them?'.

You can only find that out by working together - and by working together, I mean that you pay them for any time they put in, regardless of output. This is not as impractical as it sounds - it's not like you'll have a queue of people beating down your door. You'll be lucky to get any help you can.

Set very clear parameters in terms of task, time and money. Something small and self-contained is the way to go. If it doesn't work out, pay them and part on good terms.

This approach works best when the person is freelance, or does not have a full-time job.

If they do work full-time, you have to be more inventive. For developers, collaboration on open source projects is the easiest alternative. Sometimes the existing job is in an unrelated industry, and there are no ethical issues. But if there are restrictions, then I suggest meeting the person for coffee, and taking them out to lunch. Do this a few times. Discuss the business openly. See what they say. Do you click? This is not as good as doing a mini-project together, but it's not bad either and you get to have interesting conversations over lunch. Don't forget your perspective - they are doing you a favour applying their brain to your plans. That's why you buy lunch. Always.

The second thing you can do is to help the person find a better job. Yes, better than your job! You have to accept that all you are as a company is a stepping-stone in somebody's career. Most companies demand fake loyalty, and everyone pretends that they'll be staying forever.

What if you were explicit that the job might just be about building skills for a higher-paid position? This makes the whole conversation more honest, and plays to your strengths as a startup.

You can offer experience with new technologies. You can offer senior roles with lots of responsibility. You can allow people to build a public profile for themselves. You can move careers forward. You just have to be prepared to support people when the time comes, and they walk into your office and tell you they're leaving. Knowing that you will do this is hugely valuable to ambitious people.

Third, you can provide a non-toxic culture. A startup always gets to determine its own culture. You can be very deliberate about how you construct your work environment. For example, I've chosen a remote model with a lot of openness, and an acceptance of part-time work. That's a stark contrast to most jobs, even those at large companies that are known as great places to work. As companies grow, there are more hiding places for abusive managers. That's a hard problem to solve at scale, but in a small startup you can protect people far more effectively.

What have been the consequences of the decision to hire in this way? I've been able to build out a full team in about four months. That's 11 staff. Seven in marketing, events, and sales, and four on product development. Eight are part-time. Nine work remotely. Three are based internationally. Five are contractors. The company has fitted itself to the staff, not the other way round.

I'm building a software-as-a-service product for conference speakers, organisers and exhibitors. I have no idea just yet how the business model is going to play out. There are lots of strategic decisions ahead, and you'll hear all about them, and their consequences, in future editions of this diary.

But I can say with confidence that the decision to hire as if the company was the candidate has worked out well. The evidence is manifest. In my other life as a startup adviser, I encourage companies to follow this path all the time, because it does work. It's a difficult step for founders to take. We have big egos (and I don't claim to be free of that defect-I pontificate in this column every week), and we believe our companies are perfect. As with so many startup skills, you need to switch gears to do different things. Decide to lose the ego when hiring, and you'll actually hire!

  • Newsletter update: 667 subscribers, 22pc open rate. That's one less subscriber than last week. Has growth stopped? We've been busy building our new promotion strategies, rather than executing the old one.

Time to hold our nerve.

Since the start we've had 753 subscribers, of which 51 have unsubscribed.

Richard Rodger is the founder of Metsitaba. He is a former co-founder of Nearform, a technology consultancy firm based in Waterford

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