Hiring Secrets from Startup CEOs

As we enter 2016, the talent war is more intense now than ever before. Without a defined talent acquisition strategy, companies will be washed away by competitors — a threat that applies to both startups and large public technology companies — players need to be more aggressive now than ever when recruiting high-performers…just look at Snapchat’s clever strategy to poach Uber and Airbnb engineers. Evan Spiegal hasn’t responded to our texts, but we had a chance to sit down with four, all-star entrepreneurs and hear their insights on winning the talent war. Here are our experts:

To enable our founders to give their most honest, raw, and real stories, we’ve anonymized their lessons below.

1) Hire not just for today’s work but also for tomorrow’s goals

“We ask 4 questions to ourselves to figure out if someone is a world class hire: can they excel at their job today; can they excel at their job in two years; can they add to our company in a 10x way (e.g. do they have future dreams of being an entrepreneur); are they winners (do they have a passionate drive in ONE singular pursuit? A world champion juggler is someone we want to hire).”

“You hire for one thing, but at the end of the day, you have to wear 1,000 hats at a startup. And that’s what we look for: someone who can do what we hired them to do and be the best at it but also be able to grow and manage other missions.”

2) Even one strong “no” is enough to pass on a candidate

“We have a ranking system of 1–4 for candidates we interview. 4 is ‘I would fight to have this person on our team.’ 1 is ‘I would fight to not have this person on our team.’ We’ve found that even if there is just one ‘1’ in our 5+ interviews, it’s best that we say no. This creates a good amount of false negatives, but it’s better than bringing on a false positive in my opinion.”

“For one of our candidates, there were 2 people who were overtly lukewarm about the candidate, but we had been searching for months to fill the role, so we hired them… Ultimately, our teammates’ reservations and reasons for being lukewarm were accurate. It was an accurate read on the candidate; we shouldn’t have hired them even if it meant waiting even longer to find that mission-critical hire.”

3) But, do NOT make hiring decisions by consensus

“We’re not a company that makes decisions by consensus. Every hiring decision is made by a single person who is accountable for the candidate’s success and will be managing them. Anyone on the team is free to disagree or give their opinion, but in the end, the hiring leader makes the decision.”

4) Networks are most obvious channel for recruiting, but don’t underestimate recruiters and other tools

“We allocate our hiring time to give 5% to postings (e.g. AngelList, StackOverflow, etc.), and 95% of the time just talking to people because they’re going to know who’s out there, who’s looking, and who’s sniffing around with that skillset.”

“I’ve made the best hires when I’ve worked with a recruiter, which is different from what you’re probably hearing from other people. It pushes me outside my own network and outside who I initially thought might be the best person for the job.”

5) Referral bonuses work

“We’ve found that $5–10K is the optimal referral bonus; it’s a meaningful amount of money. Above $10K, we found that it doesn’t really change things; you start incentivizing people to just send you huge volumes of people to see what sticks instead of being thoughtful about the referral.”

6) Remote hiring taps into previously classically-unattainable talent pools, but beware of the extra management burden

“We prefer to hire remote people over those that are based near our headquarters, so that we can keep our culture ‘remote first.’ Keeping people motivated and on the same page is a separate topic, though.”

“Seeing as remote work is very flexible, the person has to be great at managing his or her priorities and working autonomously for large blocks of time with little to no management. There’s no substitute for experience when it comes to mastering these skills.”

“I think remote hires can be fantastic, specifically when you think about technical hires, because you’re not constrained by location so you can really tap into the best talent around the world for that position. However, it means taking on additional management burden to make sure that remote hires doesn’t cause communication challenges. I think it takes a lot of communication to keep everyone together, and to interact in the same place enough that communication is never misunderstood.”

7) The best traits in a new hire? Urgency and tenacious improvement

“The best people feel the startup time pressure. They work harder to get something done without anyone asking them to because they feel urgency, and they’re passionate about what they’re doing. They are raising their hand to figure out how things can be done better even if it’s not in their scope of responsibility. That urgency is tied to thinking like the owners and having passion for the vision. Hey, if we can get something solved tonight, it’s much better than getting solved tomorrow.”

“Passion for their craft is most important. It means the person has spent a significant amount of time improving their skills on their own and have an insatiable desire to keep improving them regardless of the situation.”

8) Bad characteristics: Watch out for job hoppers

“The biggest red flag when hiring is when someone jumps jobs too regularly.”

“If a candidate changes jobs too regularly (every 7 months to 1.5 years), this means that they aren’t very ‘gritty.’ They were willing to bail when things aren’t perfect; as a startup, there will always be ups-and-downs, and you want to have someone you can rely on to be there when things get tough.”

Bonus: Interview Tricks

Interviewing is one of the least predicting processes in hiring; “work sample tests” are better

  • “A lot of times, companies are asking the wrong questions anyway. That being said, the more you can get an independent work sample tests, the more predictive the signal.”

  • “Even if they are non-technical, still make them do sample tests. Make them do work that they will have to do on the job; test how they react to situations that they will face when they join your company.”

  • “I ask them to demo the product we’re currently selling. I also give them case studies of emails and ask them how they would respond to them.”

  • “Use hypotheticals to understand your candidate’s perspective and goals.”

How to circumvent bias while hiring

“In our hiring process, every position must complete a project. In most cases, reviewers of the project do so blindly, meaning they know nothing about the candidate. They only see the work. This is a great way to circumvent any implicit biases when it comes to what matters.”

Bonus Bonus: When things aren’t as pretty

(When to fire)

“There is no need to keep low-performing team members on the team. If they are not great here, most of the time, it’s because they aren’t excited about the work; it doesn’t mean that they aren’t talented. I spend a disproportionate amount of time to find them a new home. I’ll sit down with them and map out what they want to do and help them get there. Be direct and time sensitive, but treat them with care. You never know when you may work with them again.”

“Sometimes the experience they need is just out of scope, so you have to identify friction fast, especially being a super early stage company. You’ll know if something isn’t working, and that you and your employee are talking past each other. At [my previous companies], you could get your boss involved if you didn’t know how to do something and bring someone else onto the team — and the final output is going to be good because you could have 200 eyes on the project; in a startup, you might only have one layer before the product goes to the customer.”

“I’ve had to let go of many people, unfortunately, but none that I had a personal relationship with prior to [company]. Firing is always hard, but not pulling the trigger when you need to is deeply hurtful to the business. It’s my job to protect the team. For that reason, I don’t find it very hard to let people go.”

“You look at the team, and say if I don’t fire this person, is it going to hold back the rest of the team and the company?”

About the Companies:

Help Scout builds help-desk software for companies all over the world, and happens to be a Converge VP portfolio company. CEO Nick Francis is well-known for his “remote culture”, which you can read more about via Keeping your remote team connected and What we’ve learned building a remote culture.

Vivoomfounded in 2014 by Katherine Hays, is a mobile participatory ad platform (also a Converge portfolio company), working with brands like Lily Pulitzer, Universal Pictures and others.

Before joining his current pre-launch startupKenny Mendes was Director of Recruiting at Box, one of the largest cloud storage providers. Prior, he was a recruiter at Riviera Partners and analyzed baseball stats for the San Jose Giants.

Jackie de la Rosa founded BeautyTouch in 2015 in the hope to make women’s beauty products more accessible to the masses. Before BeautyTouch, Jackie ran Mark Cuban’s early-stage, Northeast based investments.

Thanks for reading and see you next time,

Ash & Brian