Thumb1

Hiring effectively is both a science and an art. This article will cover five practical principles to make the life of a startup CEO easier.

1) The Hiring Landscape

In emerging ecosystems oftentimes there is a dearth of talent. In mature ecosystems availability is usually not the problem, it’s cost. Ever heard of Google or Facebook paying hundreds of thousands of dollars for an entry-level ML engineer? And attracting talent is half the battle, retaining is the other. All the cliches about money and fulfillment are very much true here — a startup probably needs both. At Tau Ventures we advise our entrepreneurs to use the same principles of rapid iteration they apply to the startup for hiring. In other words, to test various channels for hiring — their own networks, their investors’ networks, public job posting, university career centers, recruiters — and double down on what works.

2) Active Versus Passive Recruiting

Active recruiting is about looking specifically for a particular profile, usually within a specific time period, and is what most of us associate with hiring. Just like only 10% of an iceberg is visible above the water, that is how most active recruiting works. The underlying structure is actually passive recruiting, which means posting in newsletters, or in public forums like LinkedIn or Twitter, or building an overall brand through a media strategy. The goal here is to generate inbound interest from candidates and/or to capitalize on their interest when you switch to active recruiting. Our advice to all our entrepreneurs — always be passively recruiting. Period.

3) The Interview

Many startups stumble on this one, as do corporates. Some companies operate on unanimity, some on consensus, some on having interviewers and decision-makers be independent groups of people. Regardless of the cultural choice, the interview process has multiple levels of Don’ts. Don’t wait more than a few days in communicating with a candidate. Don’t ask them to do homework beforehand, say a coding exercise, without giving enough time. Don’t do back channels on them without telling them, especially if they are still in their job and needing discretion. Don’t delay by more than a few days in giving them a clear answer after they have finished all their conversations. Don’t look at the process as a transaction, look at candidates who don’t join as ambassadors for you and the company. We strongly advise all our startups to maintain stats on the entire funnel — #resumes, #interviewed, #offers, #acceptances — and to periodically review the hiring process itself to make sure it is scaling adequately with the company.

4) The Offer

An offer is not only about salary, in fact each offer has its own personality with multiple variables to consider:

  • Cash — This can also have some variables of its own, for instance in sales it’s often about a fixed base and variable comp based on milestones
  • Equity — The stock you are getting which typically has variables of its own (options vs grants, vesting schedule etc).
  • Bonus — This could include signing bonus and relocation bonus
  • Benefits — From healthcare to food
  • Policies — From vacation to maternity / paternity leave

You as the employer are unlikely to know upfront what the prospective employee values. So one strategy we advise our own entrepreneurs at Tau Ventures is to make multiple offers, say offer #1 is high on cash and low on equity, #2 is high on equity and low on cash, #3 is medium on both. Then let candidates pick, the very fact of having a choice in itself will likely give them more conviction on taking an offer.

5) The Close

Almost there with a candidate but they have some final hesitations? Ask them what they need. Sometimes it could be a conversation with your investors so they can share why they invested. Sometimes it could be with an advisor who can vouch for the technology. Sometimes it could be with an ex-employee who can tell what it was like working with you. Sometimes it could be a view on this market from an independent analyst. The point is your openness to connecting an employee to the kind of person or data they need will in of itself go a long way for them to gain enough conviction.


Originally published on “Data Driven Investor,” am happy to syndicate on other platforms. I am the Managing Partner and Cofounder of Tau Ventures with 20 years in Silicon Valley across corporates, own startup, and VC funds. These are purposely short articles focused on practical insights (I call it gl;dr — good length; did read). Many of my writings are at https://www.linkedin.com/in/amgarg/detail/recent-activity/posts and I would be stoked if they get people interested enough in a topic to explore in further depth. If this article had useful insights for you comment away and/or give a like on the article and on the Tau Ventures’ LinkedIn page, with due thanks for supporting our work. All opinions expressed here are my own.

LEAVE A REPLY

Please enter your comment!
Please enter your name here