The 6 BIG Reasons why start-up hiring is hard

1. It’s High Stakes

The people you hire can make or break even the most high-potential startup. You might have an amazing product, smart strategy and ‘just right’ market conditions, but all this will be worthless without great execution. And great execution depends largely on people – your current team and your future team.

In a startup environment, the stakes are high, you have increasing investor pressure and your resource pool is limited. All of this makes for a pressure cooker scenario in which you’re required to make smart, thoughtful but quick decisions.

Having worked with a few hundred startups over the years, I see a few key dynamics that make startup hiring incredibly unique – and challenging.

2. Different folks suit different growths

One of the biggest mistakes I see from startups is hiring the wrong profile for the growth stage of the business. This is tricky because a large proportion of talent in the market describe themselves as startup ready without really understanding the realities of startup life. Startup is used to describe wide and varying contexts – and someone might describe themselves as a startup guru because they supported a new product launch for google in 2019… sure they may have some relevant skills, but until they’ve tested those skills in the ambiguous and under-resourced context of a startup, they don’t know what they don’t know.

There are subtle but significant nuances when it comes to the type of person who will be successful in your team in early stage, scale up and all the stages in between. For example the type of product managers you need to lead your product team when you’re pre- product market fit will be laser focused on trying to crack the code on what your potential customers want (and will love). Post- product market fit, they might be more focused on scalability and enterprise readiness.

Similarly, the type of sales rep who will help you get from 10 to 100 customers (highly creative and entrepreneurial) will be very different from the reps you’ll hire to get you from 100 to 1,000 (will help you scale sales playbooks and evolve vertical propositions etc).

On the customer success side, as your customer base becomes larger and more sophisticated, your customer success team will evolve from ‘jack of all trades in keeping every precious customer’ to enterprise advisory and value realisation.

Ensure you take the time to consider your growth context and peel back the layers of what will genuinely create success for where you’re at right now. Accept that some of the people you hire now to solve some immediate problems, may not be right for the next stage of your journey – and that’s ok. A small proportion, however, will adapt beautifully and be a rich source of IP for you through multiple stages of growth.

3. Your hiring needs are changing constantly (your recruiter will love you! )

Startup priorities shift and change at a mind-blowing rate. This agility and embracing of change is critical – from helping you evolve an MVP to a brand customers love, to testing the right distribution and sales channels to get you to an acceptable CAC.

Hiring, however, is an incredibly time-consuming and expensive task to test and learn on. And that’s before you even consider the cost of a failed new hire. Take some additional time planning before you press go on hiring to minimise this risk. Gather your business partners/key stakeholders to workshop the short, medium and long-term business goals this hire will impact. Get as much clarity as possible about what you need from a hire across the next three, six and 12 months. This might not be possible for every single hire, however ensure that you at least do this on key hires.

4. Founders can be weird

Founders are often brilliant, visionary, a little obsessive and highly emotionally invested in achieving success for their startup. They will pursue goals with a level of pitbull relentlessness that can only be admired (unless you’re too close to the teeth). But be wary of the double-edged sword this presents from a leadership perspective. These are the traits that will convince a tired and overworked team to walk barefoot across hot coals in pursuit of the mission – and the same ones that might burn and ultimately lose you great people along the way.

Startups a bit further along in growth may have already buffered themselves with a number of good leaders under the founder, in which case, this isn’t such a big deal. If you’re not at this stage however, the key is finding talent who will work well with the founder without needing too much adjustment on either side.

Great founders take the time to consider their strengths, leadership style and idiosyncrasies, and make a deliberate effort to surround themselves with people who complement their approach. If it proves tricky to do this, a minimum baseline is to ensure you’re finding candidates who have deep alignment and belief in the startup’s mission. This belief and sense of purpose in their role will help supersede other niggles they may feel about how they want to be managed and led.

5. You have no brand – let alone an employer brand

The war for talent is tough for any start-up company. When your bigger opposition is armed with crazy perks like in house chefs, unlimited leave, hefty salaries and generous RSU’s, you might feel like you’ve already lost the battle. But you can win by playing smart. You just need to change the playing field.

When you strip away the shiny perks, your value proposition can actually be far more meaningful than what’s on offer at a goliath SaaS company. You have the opportunity to help talent architect a career they previously wouldn’t have thought possible. You can give them the opportunity to have purpose, make an impact and build something meaningful. And in the process, they’ll develop skills that will accelerate their career far beyond the trajectory offered in a more mature company.

So, you need to tailor your value prop to talent persona you’re targeting, and get your unique story out there. Whether that be through your recruiter, content assets or network. You don’t need a big marketing budget to make this happen – some of the best startup content assets I’ve seen are founder interviews shot on an iPhone. Authenticity, passion and raw insight are what will get cut through with your target audience.

6. You have limited resources

Hiring mistakes are amongst the most costly and time-consuming mistakes you can make, and unfortunately, the ones you are most likely to make. However when your budget is tight, it’s impossible not to cut corners. The key is to make sure you cut the right corners. For example, you may find that for 60% of roles, you can likely afford to hire through your network or (to a lesser extent) advertising channels. These are the roles where there is a larger addressable talent market, more commoditised skill sets or the role focuses on simpler execution. So do these roles as cheaply as possible and avoid using recruiters where possible. Identify your existing employee advocates, set up an internal referral program and leverage employee networks for the powerful source they can be.

The other portion will be highly critical to your key goals and may require exceptional skill sets. This might be your head of product or one of your first three enterprise sales reps. The more critical the role is to your key goals, the more you should be investing to get it right. This might mean hiring a head-hunting firm or even an internal recruiter – but whichever it is, make sure they have deep specialisation and established networks in the area you’re recruiting. Investing time in building a genuine partnership with them and staying involved throughout the process will help them weather the ups and downs of your hiring journey.