Hiring for Lean Startups: The First Few Hires

Editor’s note: This is a cross post from Flow Ventures written by Raymond Luk (LinkedIn, @rayluk). Follow him on Twitter @rayluk. This post was originally published in January 12, 2012 on Flow Ventures.

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I was having coffee with a founder the other day and we started talking about his hiring plans. Since he’s a non-technical founder (which Ben Yoskovitz claims is a dead-end to begin with) he had several top coders in mind, all of whom were earning big bucks with larger companies.

“I’m paying them a little bit of money but they’ll join full time once I can raise money,” said the founder. It’s something I hear a lot, especially from non-techie founders.

I went back to review some blog posts on Lean hiring, and I came across Eric’s post “Lean Hiring Tips” and Mark MacLeod’s “Fat Hiring for Lean Startups“. Both are worth your time. But I think they’re also written for startups that are already up and running and need to expand. I’m interested in very early stage hiring, e.g. when you’re one person looking for a co-founder or you’re two people looking for your core team.

Companies always take on the characteristics of their founders and in the rush to scale, I find many startups don’t stop to consider how they’re establishing the DNA of their company. The first few hires are the most important ones you’ll make.

  • Hire for an experimental mindset – Look for people who enjoy encountering problems, designing ways to solve them, and finding proof of success or failure. Skill at building, whether it’s software or a marketing plan or a sales funnel, is irrelevant at this point. You need people who will volunteer to scrap their plans, not fight you when you want to change course.

How? Join a hackathon, Lean Machine or just create your own (laptop + Starbucks = hackathon). Give your (potential) team a crazy challenge and see who exhibits the right behaviours.

  • Hire generalists – A lot of people will disagree with this advice. If you can find the best Python developer in the country go for it. But only if she’s also willing to cold call customers, crank out some Web site copy and help you whiteboard the business model. Your #1 focus is to find a business model that works. The latent technical talent on your bench won’t help you unless you graduate from this first phase

How? Again, hackathons are great practical tests. No matter what their skillset, look for passion about your business model and solving customer problems.

  • Prioritize UX over development – This is easier said than done since there’s a shortage of UX talent. But it’s better to have a kick-ass UX person and a mediocre developer than the other way around. UX will help you find your business model and most (good) UX people already have an experimental mindset and generalist attitude

How? Actively seek out UX people, not just developers. You may need to work at a distance if you can’t find local talent. Consider working with less experienced people if they can prove themselves through testing.

  • Get skin in the game – Leaving a six figure job to join your startup for a paycut is not skin in the game, or not enough in my books. Hire those people later when you’ve found your business model, have money in the bank, and need to scale. Skin in the game means working full time, just like you are. It means putting their reputation on the line, raising Ramen funding from friends/family/spouses and saying “I’m going to see this through until we fail.”

How? Stop feeling like you’re a poor startup that can’t afford to pay top salaries. Those aren’t the droids you’re looking for. Think of finding your co-founders like raising your first round. You need to get them excited to invest in your business.

I know this advice seems to apply better to “Web” startups than general technology startups, which is a common criticism of Lean startups in general. But I think it applies more broadly. If you hire for the right attitude, you not only solve the critical product-market fit problem, but you set the DNA of your business right from the start. I guess I haven’t seen too many examples of startups failing because they lacked a specific technical skill. They probably think they failed because of it though.

In the end, I guess “hiring” is the wrong word to begin with. You’re looking for people to co-found a business with you. You aren’t buying their skills, you’re asking them to invest in helping you shape the course of your business from the very beginning. Maybe not all of them (including yourself) will be able to scale up with the business. That’s a problem for another day.

Editor’s note: This is a cross post from Flow Ventures written by Raymond Luk (LinkedIn, @rayluk). Follow him on Twitter @rayluk. This post was originally published in January 12, 2012 on Flow Ventures.

It’s people, people!

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How do I know that emerging technology is still booming? It is incredibly difficult and competitive to recruit, hire and retain people with startup experience across Canada. Just look at the number of jobs posted on the StartupNorth Job postings:

The number one budget item for startups is headcount. For most companies, the people costs far exceed the costs associated with hosting, etc. I don’t know about you but we’re not designing our own servers or opening data centers near the Arctic to reduce the cost of computing and power consumption. It means that the people are the biggest cost for a startup as they grow.

This is different during the initial creation of many of the startups in the bootstrapping phase. We’ve seen a lot of startups get to Minimum Viable Product and start the process of finding a scaleable business model keeping their headcount costs low or close to zero. You might infer that the experience at YCombinator or TechStars or 500Startups is designed to give entrepreneurs the bare minimum of capital and put them in a focused, competitive environment with a deadline (Demo Day) to do the customer development and build the connections necessary for the next stage. Upon exit, many of these companies raise a significant amount of capital. Have you asked yourself why?

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It’s to hire the best people. And it turns out that hiring the best people is not something that can be easily solved with a job posting, or a tweet, or free iPad. Recruiting is Hard! And at startups, it can be difficult to step away from fund raising, product development and customer engagement to focus on the thing that can make or break your business. Ben Yoskovitz wrote a great summary post of his efforts to Recruit and Hire Top People for a Startup that every founder should read:

The war for talent across Canada is just beginning. During my time at VeloCity at UWaterloo, I was impressed at the number of US companies and startups that were actively recruiting on campus. And the established companies aren’t alone, we have seen an increase in the amount of US investments (looking at you GoInstant, Vidyard, TribeHR, Kik, Playerize, Enflick, Shopify, Hootsuite, A Thinking Ape, and others). This will undoubtedly lead to increasing salaries (see @byosko’s # 4 prediction for 2012 in Montreal). It doesn’t even take into consider the continuing recruiting efforts that companies like Rypple, Radian6, Dayforce. For startups, we are going to need to improve our culture and game to keep talent. And getting your startup to a point to raise enough money to pay competitive salaries is going to be the baseline to play in 2012.

If you are designer, marketer or developer and you are curious at who is hiring or if you want an introduction, drop me a note with a resume (david at davidcrow dot ca) and I’ll do my best to match you with companies I know are looking.

 

Web Startup Society Career Fair

Entering StartupThe Web Startup Society at the University of Toronto is hosting a startup career faire on April 7, 2011.

This is a great opportunity for local startups looking to hire developers, interns, engineers, designers, and other smart problem solving kids from UofT.

Startups can apply to recruit, it’s $50 and the deadline is March 25.

Web Startup Society in partnership with Career Centre invites startups to apply for Startup Job Fair to be held on April 7th, 2011 from 1-4pm at Career Centre, Koffler Student Services Centre, 214 College Street, Toronto, ON

This application form will help us select which Startups would be eligible. A team of review panel consisting of someone from the career centre, a CS faculty member, and a KMDI member will decide which Startups would qualify based on two simple criteria.

We’re looking for companies that already have funding and have demonstrated the potential to provide a good level of job experience for student applicants. If you’re one of the companies that get selected, we request a $50 fee to cover the expenses of holding the event. If you have any further inquiries, kindly send an email to biljana.carter@utoronto.ca. For more details, check out

 

Appy for UofT Startup Job Faire