You've had your brilliant idea, built a company from the ground up and now need to hire some staff to help propel the dream even further. Every startup hits this stage sooner or later and while recruiting can always be a challenge, startups face some unique barrier when it comes to hiring. There are many benefits to working at a startup, more autonomy, exciting work, fast-paced environments, etc, but they can sometimes be hard to communicate to candidates used to sending out dozens of resumes a week. And with a candidate-driven talent market, sometimes it seems like a startup should grab any decent worker they can. But who you bring into a small team makes a significant impact on what gets done and how. So instead of jumping to hire quickly, let's take a step back and explore some common hiring mistakes that startups make and how to avoid them in the future.
Why is hiring at a startup challenging?
The “big three” of hiring challenges for startups are usually:
- They might be very inexperienced in the process of hiring, especially if the company was founded by two engineers.
- They don’t have enough market awareness to have any type of employer brand.
- It’s very hard for them to be competitive in terms of salaries, especially if they’re competing for tech talent with the Googles, Oracles, and Amazons/Apples of the world.
Those are the big bucket challenges, and admittedly, none of them is very easy to fix. They all take time and it doesn’t happen overnight. If you think your business is moving fast but hiring isn’t keeping up, don’t worry. That’s a common source of stress for startups.
The problem becomes when startups try to solve for these challenges and end up making hiring mistakes, such as the ones we'll dive into next.
Five common startup hiring mistakes
If it's time to hire at your startup, try to avoid making one of these mistakes:
1) Hiring for jack-of-all-trades generalists: David Epstein’s book Range is bringing back the idea of generalists, but it’s actually a bad play in early-stage startup hiring. While generalists are broadly great, there are millions of tiny things to do as a business is starting to be built. If you mostly hire generalists, it can be seen as “Well, we have all these skilled people who can pitch in on all these tasks!” The problem is: it means a certain percentage of tasks are being done by people with limited to no expertise in that area. Start by focusing on specialists around product, code, finance, marketing, etc. As you scale, generalists can become more relevant.
2) Hiring too fast: Startups are often founded by people with 10th gear, go-go-go mentalities. They want to scale a business and they see its potential. Well, hiring is not necessarily in the same boat. Hiring needs to be a slower process because it requires degrees of context and analysis about who a person is, what they’ve done, and what they can bring to this team. “Move fast and break things” is a good mantra for a startup (it was for Facebook initially) but not for a hiring process. This can be a culture clash but when it comes to staffing, slower is likely better for the initial hires.
3) Hiring only for culture: This can happen if you have some idea of being an open, breezy, Nerf Gun-style office and you only hire for people you see fitting that mold. That will both reduce diversity of people and diversity of ideas, and you may not last long. Instead, hire initially for skills in mission-critical roles to get the business to the next level, be that a round of funding, profitability, a launch, etc. Hire for skills in those roles first, and then see how the culture is evolving as you shape the first 5-10 hires. Then you can consider hiring more for “culture fit” or “culture add" as you grow.
4) Hiring experienced sales teams off the bat: This can feel like the right move, but experienced sales teams come at a cost -- and actually, sometimes more junior professionals can outperform salespeople with 10-15 years experience, especially in areas like SaaS. A lot of startups don’t even have a sales function initially, and when they first try it out, they often outsource it. The first full-time sales hire means you’re serious about selling product, and usually you spend years developing and refining product first. Don’t go all-in on experienced sales in the early stages.
5) Hiring too many of your friends: While some businesses have been built on the backs of great friendships, this trend is a dangerous one to test. While it feels comfortable, it’s nearly impossible to work together with a fully clean slate. More often than not, you can harm both the friendship and the business. Both are no good. Use your friends for advice and counsel, but hire other skilled people.
Effective startup recruiting is possible
It might be tempting to fall into some of the bad habits listed above but try to temper the instinct. The recruiting process won't necessarily be easy but it will hopefully help you land some new hires who share your vision and believe in your budding brand. The best talent will bring new skills and competencies to your team that hiring friends or hiring for culture fit might not enable you to do. That's not to say startup culture isn't important, because it absolutely is, but company culture needs to be balanced with the immediate needs of production, marketing, and sales. Potential candidates should be vetted and screened carefully, tested both with assessments and work tasks to see where their strengths and weaknesses lie, and interviewed using a structured approach. And after the hire, don't forget about onboarding, even if the team is small. Hiring great talent as a small company is possible when you avoid common pitfalls and focus on giving your recruiting process the time and energy is deserves. And when you do, you might find your new team members are better able to hit the ground running.