The Four Tools to Win Talent for Your Startup
Originally posted on 11/7/19
Collin Gutman is a Co-Founder and Partner at SaaS Ventures, with over a decade of cumulative experience as both an investor and a startup founder. Prior to founding SaaS Ventures, Collin co-founded Acceleprise, the world’s first pure enterprise tech accelerator. Collin also has been an entrepreneur, having founded WorkAmerica, a social impact workforce development startup. Collin holds a BA cum laude from Yale University, and is an avid DC sports fan.
Hiring at a startup is hard. You generally don’t pay as well as the competition, you’re more of a risk than competition, etc. You need people to take a chance on you the same way you’re taking a chance on them. But you can still land great talent that can drive your business forward.
Big companies have several recruiting advantages over startups — more job security, often better pay, easier work hours, and a better “brand” for the resume. So you’ve got some built in hurdles. As a startup, however, you’ve got four levers that you can pull to fight back, four tools in your toolbag that bigger companies don’t. Using the right one(s) of these with the right key hires are the keys to winning the war for talent.
1) Equity — This is the biggest differentiator that startups have to offer that bigger companies don’t. The equity in your startup can be worth more than bonuses other companies offer by a factor of 100, and can make up for any difference in salary — as long as your prospective hire believes your company is going to succeed. A friend of mine was a first-100 employee at a startup that went public for $1B+. Her equity, for 3 years of work, was worth $150,000, for a relatively early career job, nearly doubling her income for those years. That’s not something General Electric can offer.
2) Leadership — But the equity can also be worth nothing. So getting prospective hires to believe in the company is key to having them believe their equity will become worthwhile, but that belief in the company and desire to be part of a success is a recruiting tool in and of itself. You, as a startup leader are a charismatic individual that others gravitate toward — that’s why you’ve been able to recruit, maybe raise money, and attract a few other customers. You are an asset middle management at large companies lacks. So sell that — yourself. You’re going to lead, develop talent, and make the company successful, hence why your prospective hire should want to be a part of the team, instead of a cog in someone else’s wheel.
3) Freedom — Startups are dynamic environments where things change on the fly, you never know what tomorrow brings, and all the other platitudes. This may scare some potential hires away, but more often than not it attracts millennials. Millennials don’t want to go sit in an office, do their job to make their boss happy, put in face time, and go home. They want to make an impact — not necessarily a “social impact,” but an impact on the company, and be challenged to use their skills and talents. Your startup will be full of these dynamic employees, and allowing them to be themselves and use their creative talents (rather than asking them to roll down a checklist every day) will keep them motivated and make your startup a more attractive place to work than someone with bigger paychecks but offering a “worker bee” job.
4) Culture — You’re a dynamic company. You don’t need expensive snacks or kegerators or an office with exposed brick to have a fun culture. You should have a team of dedicated individuals supporting a great leader to achieve a common goal. You should have an environment with high expectations, but no BS. Work hard when you’re working, but don’t work on vacation. Devalue face time over results. Be a place that you’d want to work — where the company values its employees while still keeping everyone working hard toward the end goal. By creating a workplace full of motivated people committed to a shared ethos of working hard and respecting each others’ lives, you’ll accomplish all of the “great culture” and “work life balance” points that others strive for — without the ping pong table. Though the ping pong table does serve a purpose — it’s a great symbol. It shows that you’re the type of place that doesn’t want to conform to “big company” norms and wants to be perceived as a “cool startup.” That alone will help you screen out applicants for whom this pace and environment just won’t work.