The competition for talent in the startup ecosystem is intense, and as an early-stage startup, you’re already at a disadvantage.
You likely can't compete with the benefits at more mature companies, offer the clout that comes with a well-established brand or even guarantee a stable future for the company.
You do, however, have one big advantage: Good early-stage hires want to join an early-stage startup. All you have to do is know how to find them.
This guide will crystalize key steps in early-stage hiring, from why someone would want to join an early-stage startup to what you should look for, and how to recruit the top talent you find. Let's start with the obvious.
A mature, stable company can offer a lot — a long financial history, established product-market fit, positive growth metrics, and plan for growth.
An early-stage startup will almost always be missing at least one of those things, and when you consider how risky startups already are—the University of Chicago's Booth Business School found that roughly half of startups failed to make it five years—the decision to join an early-stage company becomes extremely high risk.
So why would anyone join a company where resources are scarce, compensation is modest, and the office almost definitely will not look like this:
(The New York office of Ceros, a platform helping creators design interactive content. They also have a private pub for employees.)
The decision to choose an early-stage startup comes down to motivation. Early-stage employees, overall, are driven by high-risk, high-reward opportunities—a very different motivator than you might find in a later-stage hire. Taner Halicioglu, Facebook's first engineering hire, is now rich enough to donate $75,000,000+ to UC San Diego. Early-stage hires aspire to that kind of success—even if it means risking a stable future.
But it's not just financial upside that gets top talent on board. Your first hires are going to be motivated by the opportunity to work on problems that are part of your company's core. Sure, engineers at 200-person companies are still running projects, innovating and impacting the business in a real way, but at an early-stage company, new employees are involved in problems fundamental to the business. That's the kind of involvement other organizations would typically keep in the C-suite.
“Startups are one of the few places where you have the opportunity to step up and do jobs that are way, way, way, way outside your comfort zone,” says Tim Delisle, CEO of AI-powered data operations company Datalogue. “The type of (work) that people would expect from a VP of Marketing, a Head of Engineering, a Head of Data, those titles open up to you at a much younger age.”
For example, an early-stage engineer can define the technology stack the rest of the company will be built on. An early marketing hire can build the brand from the ground up. For people without executive experience, early-stage startups may be their only chance to be exposed to these sorts of challenges.
While there isn't a one-size-fits-all funnel for early-stage hiring, there is a general philosophy. Before you begin looking for early-stage candidates, know your needs as a company and what value you can offer to candidates. Without those guiding principles, you won't be able to effectively hire.
Understanding your needs is tricky. At a later-stage company, you'll have concrete growth goals and initiatives that require new hires. At an early-stage startup, it's much less likely that you'll be able to neatly define each role, and needs will vary based on your funding, industry and unique team dynamic. “In hiring, you shouldn't start with a function, but you should start with a set of tasks and attributes,” explains Jenny Fielding, managing director at Techstars. Look for someone with the skills to function like a cofounder—the ability to take on a whole category of responsibilities and build from the ground up—but don't get bogged down with business titles.
“Instead of saying, 'We need to look for people that have CFO experience', look for what you actually need to get done. The truth is, you probably don't need a CFO,” Fielding says. “There are probably business development people that have a great grasp of numbers that can help you with your finances. When you take those labels off, at the early stage, you have much more access to talent.”
And no matter how much pressure you feel to “just get someone in,” do not rush it. There will always be bugs to fix and fires to put out, so don't lose your cool. “Hiring, especially at an early-stage company, can become reactive,” says Mariele Marki, talent and brand manager at employee-controlled payment app DailyPay. “Someone is absolutely swamped, and they need another body in the room. That puts a lot of pressure on that hiring manager to just get that help, as opposed to understanding who that best fit would be.”
If you're feeling pressure, focus on crafting a compelling value proposition for future hires. It should be succinct and speak to the employee motivations laid out in the last section:
If you can answer these three questions in a single sentence, you have a pretty compelling case for why someone would want to join your team.
To find good early-stage hires, you'll need to lean on personal referrals and hiring platforms. In your later stages, you'll (ideally) have a strong company brand that drives huge numbers of inbound candidates, making recruiting a breeze. But right now, you almost certainly do not.
We've seen from internal data that early-stage startups have the weakest conversion rates in recruiting. Even when people introduce you to prospective candidates, it's pretty uncommon for a young company to close a high percentage of the candidates it pursues. But that's okay. At this stage, a single hire can completely change your company.
Sourcing will play a big part. Your personal network and those of your advisors will be a rich source for early referrals. After that, platforms like A-List and AngelList will be direct paths to leading candidates.
Evaluating is just as critical. The number-one thing you need to asses in candidates is their eagerness to build something. If working on hard problems and discovering new solutions isn't a primary motivator, they are not going to thrive at an early-stage startup. Dhawal Mujumdar, founder of revenue intelligence platform Polymorph, tells candidates:
“Hey, this is what we're working towards. Do you really want to be part of that journey? We may not succeed. We may fail at the end of the day. Can you be proud of that enough to put that on your resume?”
Plenty of talented people aren't going to fit that mold. They might make great hires down the road, but right now, they are not the people you need. Another strong evaluation tactic is staying tuned to questions candidates ask and looking out for signs that they need more structure than you can currently offer.
“A red flag is a candidate asking questions, expecting that there's going to be quarterly reviews or these types of experiences that you might have at a larger company,” says Su Sanni, founder of microtransit nonprofit Dollaride and fundraising WeDidIt. “You don't have those things at a startup. You're looking for folks who are going to be self-starters...and can execute on a job without having their hands held.”
Think of these first hires almost as cofounders. They should be strong at solving really fundamental problems—often with no oversight or resources—and making decisions about how your culture works.
The secret to closing the deal with your candidates is to present your company as a community. Be transparent about your vision, your passion, and your excitement for them to join. If they ultimately go in another direction, that's okay, too. Keep the relationship open, and offer whatever help you can.
In 2015, Parabol cofounder Jordan Husney was looking for employee number four. Based on company pain points, he knew their next, right hire had to be a triple threat: a gifted engineer, a community builder, and a project leader.
The team started its search and found an engineer who was building an open-source collaboration application. More importantly, he was documenting and promoting it as he worked, building a community around the project.
“We tried to reach him via his email address and we didn't get anything back,” Husney remembers. “He has a neglected Twitter account we tried to DM, and he didn't get back. We tried leaving comments on some media pieces that he had written. He didn't get back to us. We opened an issue on his GitHub profile, and he didn't get back to us. So I wrote him an open love letter on social media, and just said, 'We like you for the following reasons.' It was so creepy that he couldn't ignore it. He wrote back very kindly, 'Okay, what's your deal?'”
It turned out, the candidate was just finishing a tour with the Peace Corps and wasn't looking to join an early-stage startup. Fair enough. But instead of ending the relationship there, Husney offered references to some later-stage companies.
Further down the line, and because of that relationship, the same engineer came back to Husney. He said, “Hey, I'm close to an offer, but you were really unique, and I feel like I might be making a mistake if I don't hear more from you. Can we talk more?”
Three years later, he still works at Parabol.
The lesson? Even if you don't need a new hire right now, you should always be engaging with top talent. Recruiting is about community building, and you can't build a community on an as-needed basis — you have to nurture it before you need it, and they'll be the ones who carry you into the future.
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