A Systematic Strategy for Sourcing Startup Talent

Companies with the best record and most success at hiring top people don’t sit around and wait for those people to show up. They go out and grab them by the throats. OK, it’s fair to say that grabbing someone by the throat and dragging them to your office for a job isn’t going to work, but sourcing talent is extremely important.

Sourcing talent means actively recruiting. It means going out there, finding prospects, reeling them in, and getting them on board. Sure you can wait around for the top candidates to find your crappy job descriptions on crappy job boards and somehow be miraculously incentivized at that very moment to eagerly apply … but that’s like sitting around in a ghost town watching tumbleweeds roll by. Yawn…

And FAIL.

Without great people a startup cannot succeed.

Startups generally do a very bad job of sourcing talent. There are two simple (but inexcusable) reasons:

  • They don’t know how
  • They’re too busy

Those are both poor excuses, but I hear them quite regularly. The worst is, “I don’t have time to spend on recruiting, but I need people!” I’d argue that startup CEOs need to spend anywhere from 25-35% of their time recruiting (if not more!) It depends on the stage of the startup, but even as it scales and additional people get more actively involved in the process, startup CEOs and founders can’t delegate the responsibility. It might make sense to bring in a recruiting firm, but the ultimate responsibility and investment of time and energy must be made by the startup CEO and founders.

So how should a startup source talent?

Here’s how I’d go about it:

Build a Target Company List

  1. Make a list of competitors. This probably already exists, which is great. If not, put a list together. Make it broad. Things you need to know per competitor include: size (# of employees), location (relative to yours), how well it’s doing (track stock prices for publicly traded companies, or record anecdotal evidence), who you know there.
  2. Make a list of similar, local startups. Using the same criteria as above, make a list of similar startups in your area. “Local” might mean just within your city, but you could increase the geographic range as well. “Similar” means startups working with the same technologies, in the same area/space/industry, or those that have many of the same types of roles.
  3. Make a list of bigger, similar, local companies. See #2 above, but instead of the companies being startups, make a list of all the bigger companies that have similarities of interest.

In rank order from most valuable to least valuable, you now have a pool of potential companies to poach from. That’s right, you’re about to go out and steal people from other companies! But think of yourself like Robin Hood, robbing others for the greater good! At least your greater good…

Leverage Friends

  1. Assign someone to manage the lists. This could be a great job for an intern, or someone else within the organization. Tracking companies isn’t the key component of this process, it’s just for laying the groundwork. If there’s no one you can delegate this to, then you have to do it yourself. The lists need to be constantly updated and refreshed.
  2. Leverage friends outside the target companies. With a target list of companies, you need to find friends that don’t work at those companies that can provide you with intel and introductions. You’re now starting to build a list of potential prospects.
  3. Leverage friends inside the companies. Go right to the source. Find people you know within the target companies and see what you can find out. You’re looking for intel and introductions. Friends within the target list of companies may have loyalties to their existing employers, and that’s fine, you can respect that. But remember: You’re not doing anything wrong. Poaching talent is the name of the game.

One of the best questions you can ask friends is, “Anyone entrepreneurial there?” You’re looking for people that might have an entrepreneurial spark; the types of people that won’t ignore startup jobs, but may actually jump at the opportunity. Your friends can at least tell you if there’s ever been any watercooler or after-hours chatter about startups and entrepreneurship amongst the people they recommend.

Create a Target List of Prospects

  1. Do your own research. Don’t rely exclusively on friends; do your own homework. LinkedIn is a great resource for this. It’s becoming easier and easier to find people, how they’re tied to specific companies, similar people to the people you’ve found, etc. Use Google too. And Twitter. Facebook has some interesting data as well.
  2. Create a list of prospects. First off, it’s important to think of these people as prospects. Just like you would selling your wares to someone. That means it’s most likely going to take a few “pings” before the prospect is receptive, and you have to make sure the value proposition to the prospect is clear. Sell benefits, not features. In the case of recruitment that means you have to sell the benefits of the job, not the job requirements.

    Next, you need to decide what information about someone you want to collect. Name, email address, phone number — that’s fairly obvious. Social network participation could be worthwhile (so you can follow prospects on Twitter, Facebook, etc.) Their resume may be online, or at least they have a LinkedIn profile. Save that URL. I also like to take note of their career path and how long they’ve stayed at various jobs, especially the last one. Startup people tend to hop around, so after 2-3 years they may be getting antsy. That’s potentially the perfect time to pitch someone on switching.

    The health of their current company is also a potential indicator that a prospect might be ready to jump ship. There are lots of ways to track that information.

  3. Rank the prospects. Using the criteria above (and maybe some of your own), you want to rank the prospects. This doesn’t have to be a superbly scientific exercise, but it’s going to be helpful from a time management perspective for yourself (and your existing employees.)

Work the List

  1. Follow the prospects. Follow your prospects on Twitter, Facebook, etc. If they have blogs, add them to your RSS Reader. You want to get a feel for people over time, which will impact how you rank them.
  2. Deploy your staff. You shouldn’t be the only one sourcing for your startup. Get others involved as well. They can follow some of the key prospects, especially if it’s in a shared domain space. Get your system administrator to follow and track the system administrator prospects.
  3. Find multiple routes to the prospects. One introduction might be all it takes, especially if it’s a very strong one. But if you can only get a light introduction, look for other ways to connect. In some cases you can do this through social networking alone – a prospect might reciprocate a Twitter follow action, for example. But you also want to look for more people and stronger connections through your social graph. Who do you know that the prospect knows? What are the relationships? How can they be strengthened and leveraged?

Go for the Sale

  1. Make your intentions clear. You can’t wait forever or be sneaky with a prospect about the recruitment process. Make it clear, pretty quickly, that you’re interested in speaking to a prospect about a job opportunity. You’re not offering a job at this stage; just trying to get to know the person better. You may have broader intentions too: Interested in sharing startup war stories, building your network, talking “shop”, etc. And those are great reasons for constantly building and nurturing your network. But I wouldn’t hide the fact that you’ve got job positions you’re looking to fill.
  2. Get them hooked. As you build relationships with prospects you do want to move them into the recruitment funnel as quickly as possible. Sure, dating is fun, but you need to get married. Remember: Sell the benefits. By this point in time you should know what makes a prospect tick and you can tailor your pitch appropriately.

This is neither a quick or easy process — nor should it be. Plus it’s ongoing and essentially never stops. Recruiting great people is very hard. Doing it on a consistent basis is almost impossible. It takes more work than most people realize, and definitely more work than most people are willing to put in. But if you’re running a startup and not actively tapped into the talent market you’re going to lose out on the best people. Someone else is putting in more work, being smarter and more aggressive about recruiting people, and that leaves you in a dangerous spot. Without great people a startup can’t win.

For more information, check out these posts:

8 Questions to Ask When Interviewing at a Startup

Job interviews are meant to be conversations. The interviewer asks some questions and the interviewee does the same. It’s never a good sign when an interviewee doesn’t have any questions. It shows a lack of interest. This is particularly true when interviewing for a startup job because there tend to be so many more unknowns at startups compared to more established, bigger organizations.

Recently someone asked me, “I’m thinking of taking a job offer from a startup. I’ll have to relocate. I have some concerns. What questions should I ask?”

That’s a great question. I immediately thought of Tony Wright’s post: Guide to Evaluating Startup Ideas. It’s definitely worth reading, but it’s also quite high level and doesn’t deal with some of the more nitty gritty issues of startup work life. So here are 8 questions I’d suggest you ask when interviewing at a startup:

  1. What past success and experience do the founders have? Startups are driven by their founders. More experienced founders with past success have a better chance of succeeding again. That’s a good thing. The type of experience is important too. If they previously ran a completely unrelated startup in a completely unrelated industry, that’s less relevant than if they just exited a company in a similar area for $50M. A lot of my own decision as to whether I would join a startup or not would be based on the quality of the founders. Probe aggressively around this area.

    Incidentally, past failures are interesting too. Founders that are willing to discuss their past failures, what they’ve learned, etc. are probably more open, communicative and honest. That’s a good thing.

  2. How much money is left in the bank? Let’s cut right to the chase. Find out how much runway the startup has left. Find out if they’re making money or losing money. Get a sense of their financial health, because this ultimately drives most of the risk in taking a job. I would be concerned if a startup is unwilling to share this information.
  3. What’s the corporate hierarchy? Startups are generally very flat organizations. But it’s worth asking just the same. Who is the direct report? Do you have access to the founders and/or CEO? How does information flow through the organization? How are decisions made and at what levels? The startup’s corporate hierarchy – even if it’s only 2 or 3 levels deep – can have a significant impact on the day-to-day work environment.
  4. How will performance be assessed? Startups often do a very poor job of reviewing employees. They may try and do employee reviews, and then skip them because they’re too busy. Employee reviews are sketchy at best in startups because things change so quickly. It’s not reasonable to do 3 or 6-month reviews and expect to get really meaningful results (both for the employer and employee.) You want to ask this question to get a feel for how the company operates and communicates internally.
  5. What are the startup’s plans for the next 6-12 months? This is a very big, open-ended question. And that’s intentional. As Mark Suster’s points out, open-ended questions tend to draw the responder out more, get them talking, revealing things. This is important in job interviews. If the interviewer is speaking more than the interviewee that’s a very good sign. Granted, it might mean the interviewer is just a talkative person and wasting your time, but often it means they’re comfortable, warming up to you and eager to connect.

    There’s a good chance when an interviewee asks this question that they’re going to learn a lot about the startup. It might be difficult to judge the response received, but look for key points around financial strategies, user acquisition, spending of money, marketing & sales strategies, etc. Specifically, look for details tied to the job you’re interviewing for. If you’re applying to a web / graphic design job, look for information related to the work you’d be doing. How important is it? How often does the interviewer talk about it? In what context?

  6. What’s the competition like? Again, this is a fairly open-ended question. It’s there to get the interviewer talking. It’s also interesting to see what the response is like to this question. If they pooh pooh the competition and don’t take them seriously that’s a red flag. If they’re panicked, that’s also bad. If they can speak intelligently about the competition and how their startup is different and unique, that’s good. This question can also draw some ire from interviewers; it’s interesting to see how people respond if they feel their back is up. That means there’s a risk asking a question like this, but it’s worth it.
  7. How many more people is the startup hiring in the next 6-12 months? It’s always interesting (and potentially very, very important) to understand how quickly a startup expects to grow. If a startup is planning to hire too aggressively that’s a warning sign. They may be overly optimistic. They may run out of cash too quickly. If a startup is planning to hire too slowly that’s also dangerous, because it might mean the workload is overwhelming for each individual. It’s difficult to judge the right number of new hires a startup should bring on in any given period of time (especially as an interviewee looking from the outside-in) but getting a feel for a startup’s recruitment strategy is helpful nonetheless.
  8. What are the key metrics for success in the next 6-12 months? Startups need very well-defined goals. The interviewer might speak about the startup’s future plans, but now it’s time to dig a bit deeper and get more specific. This question is intended to narrow down on specific metrics or targets that the startup is aiming to achieve in the relatively near future. The intent here is to understand whether those metrics exist, how they’ll be measured and whether they’re reasonable. Ultimately those are the metrics that all employees should be judged against.

A lot of this information can be collected through research. Do your homework! Don’t go into an interview cold, especially with a startup. It should be fairly easy to find information about the startup (amount of money raised, competitors, etc.) and find out about employees (or at least see who they are via their social media profiles.) But even if you know the answers to some of the questions above, ask them anyway. So you might find out that one of the co-founders recently exited their last startup. You don’t have to ask them, “Have you ever sold a startup before?” Instead, ask them specifically about that experience. You’ll get bonus points in the interviewee’s mind for having done your homework.

What else would you ask and want to know when being interviewed at a startup?

Hiring a Ruby on Rails Developer for a New Startup

So here’s the scoop — I’m starting a new company. I can’t tell you the name (don’t have one), and can’t tell you what it’s about (not ready). I also can’t tell you who is involved (except for me, of course). I can tell you that it will have a strong mobile component.

I realize that’s not a lot of information. I don’t plan on doing this in stealth, but there are some reasons that I can’t announce much right now.

But I can tell you that I’m looking to hire a senior Ruby on Rails Developer.

Here are the details:

  • I say “senior” because I need someone that has the potential of being a co-founder with me. I’m not really looking for “employee #1″ — that’s boring and just doesn’t fit into my plans (although we’ll see what happens.) You might not be ready to be a co-founder right off the bat, but I need you thinking that way.
  • If you have experience with mobile development, especially on the iPhone, that will be helpful. If you don’t, that’s OK. But you’ll have to learn. And want to learn.
  • You have to be in Montreal. You can relocate (I can’t pay for it), but you have to be working from here.
  • You know who Eric Ries and Steve Blank are, although you don’t have to be a zealot of either. (I’m not interested in religious nuts. A smart, strong understanding of what those two are about will be helfpul.) Add Sean Ellis to that list.
  • You’re not exclusively interested in coding in a dark room with lots of caffeine. If you want to live in a tech bubble or tech silo, you’re a code monkey and that’s no good for me. (And yes, I’m being obnoxious on purpose.)
  • Ideally you’ve done A/B testing before, and used analytics properly. And you enjoyed both a great deal. You think. You test. You think. You act. In that order.
  • You do recognize that a 9×5 job and workload just aren’t realistic for a startup. And even if they were, you wouldn’t want them because work = fun.
  • Last, but certainly not least, you want to have a lot of fun in the SUPER-EARLY stages of a crazy startup. And this is as early as it gets.

Please don’t hesitate to ask me any questions you might have. In fact, I encourage them.

To apply, please email me: byosko@gmail.com. Send me whatever you think will catch my attention (No naked pictures, please!)

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Ben Yoskovitz
I'm VP Product at GoInstant.

I'm also a Founding Partner at Year One Labs, an early stage accelerator in Montreal. Previously I founded Standout Jobs (and sold it). MY BIO >>

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