Recruiting Advice From Venture Capitalists
What do you do if your company can’t find the talent it needs? To some degree, the answer depends on where you are. Venture capitalists in places like Cleveland, Chicago or Minneapolis sometimes advise local startups to relocate to the coasts, though that’s not necessarily the answer, according to Scott Mosley, director of global capital strategies for the Wisconsin Economic Development Corp. in Madison.
While companies such as General Motors have set up engineering hubs around the country to attract talent in various locales, branch offices or remote workers may not be the answer for startups.
One alternative is to locate near a major research university. In fact, a host of companies are doing just that. That means places such as Dane County, Wisc. — home to the University of Wisconsin at Madison – can rank among lists like the Progressive Policy Institute’s top 10 counties for tech job growth. However, while universities are turning out highly skilled graduates that startups are snapping up, companies still have to hire carefully, Mosley says.
“I think the old maxim of hire slow and fire fast still exists today. As the founder of a company, you have to be laser-focused on customer acquisition and revenue,” he explains. “Because you don’t have the right team in place is not an excuse. A venture firm will not take that as an excuse. They’ll just pull the plug on you. If you don’t have a team in place, do you have four or five A-list candidates that you can get on board as soon as you’re funded?”
But even if you do have those candidates available, startups’ funding limitations won’t give you the luxury of time to train an almost-right person. New hires, Mosley points out, have to be able to walk in the door, sit down at their desks and contribute on the first day.
The Company as a Recruiting Tool
The founder’s vision and personal charisma are central to a company’s ability to lure founding engineers away from half-million-dollar salaries at the likes of Google. That ability is a key piece of what venture capitalists look for, according to Indranil Guha, principal at Bain Capital Ventures’ Palo Alto office.
“Once you have some product validation and you think the hypothesis for this company is real, hiring suddenly becomes the biggest gating factor to executing on that vision, so you’ve got to use all available channels to find great talent,” he says.
But the dearth of tech professionals on the job market makes it tough for startups to hire, which in turn impacts their product timelines, observes Ben Hicks, a partner in the Software Technology Search division at Boston recruitment firm Winter Wyman.
“It’s not across the board, but many are struggling,” Hicks says. “Sometimes they have to lower their expectations, but they don’t want to lower the bar completely. They have to find creative ways to find people, even if they’re not totally a perfect fit.” Some companies are active in meetups and other events in their local tech community, making a lot of noise and doing anything they can to get free publicity, hoping they’ll gain more traction with job candidates.
However, serial entrepreneur Matt Ehrlichman, whose latest venture is home-project website Porch.com, warns that it’s essential to get those early hires right. “When you’re deciding on your team, it’s so critical to get people with the right set of skills, that balance you,” he says. “So often that co-founder or early employee decision is made without a great deal of thought. People are what will make or break your company.”
Ehrlichman believes that the best way to attract good people is basic: Build a great company. “The best people gravitate to other smart people. I think the saying that ‘A players hire A players and B players hire C players’ is so true. As long as you’re really diligent about making sure the early players are really good, and you’re staying focused on building the company, it makes it exceptionally easier to hire great people.”