How Your Recruiting Strategy Should Evolve With Your Startup
As you move through the well-defined phases of startup evolution, your recruiting tactics should evolve in parallel. At all times, you must optimize your talent search and processes for where you are currently, not where you’ve been or where you’re going. Otherwise, you risk spending too much precious capital early or scaling too fast with B-level hires.
Many times, young businesses jump the gun and build robust HR capabilities before they need them. Founders will also outsource recruiting before fully exploring their professional networks for the ideal candidates.
In this article, we discuss how your recruiting efforts should mature with your startup over time.
Forming the Business: Starting With Who You Know
When startups are first beginning, the most important priority is building a founding team of individuals who all share the same dream. Every person should buy-in entirely to the overarching mission and vision of the business.
Although the exact product, service, or target market might change, it’s crucial to have people who are passionate about growing a company and persevering through unforeseen challenges. The founding team is the cornerstone of the startup, the bedrock upon which all else is built.
After establishing the founding team (or “minimum viable team”), it’s time to assess what you need to create an initial prototype or to find your first customers. You should only seek out new talent this early if your founding team is missing crucial skills or knowledge to test the originating business idea.
If you absolutely can’t move forward without filling a gap, recruiting should start with a “who you know” exercise. The founding team should sit down and create lists of moonshot hires - the best possible candidates for the roles that need filling, given the unique business model, market, and employment opportunity.
During this phase, you are looking for complementary skill sets and personalities, in addition to people who quickly grab on to the founding dream. You want to tap only those who you would be inspired to work with over the long term. Any new hires should be incredibly impressive and talented. They should be the best out there for what you are trying to accomplish.
At a time when 90% of startups fail, you can’t afford a wrong step this early in your startup’s life cycle. One bad hire could chart an unintended trajectory for your young business.
You know what you need better than anyone else. You know the personalities of those on the founding team, and you know what it will take to be successful. Start with your network. Go out and find the few people on your own who can help you build your minimum viable product.
Validating the Business: Recruiting A-level Players
It’s time to test your product or service in the real world with real people.
During the validation phase, you must be prepared to iterate quickly and adapt according to customer feedback. At the same time, you’ll likely develop Key Performance Indicators (KPIs) so that you can measure success. On the back end of the validation phase, your startup may begin to attract some interest from angel investors or incubators.
However, capital is still light, and the pressure to only hire top performers remains. The next employees must fit your company culture, as well as understand the vision of the founding team. They should possess a passion for startups and your business, in particular.
What many fail to realize here is the ripple effect that the next wave of hires will create in your startup. As John Collison of Stripe puts it, hiring decisions compound over time. If the founding five members bring in five B-level players, and those people hire five B-level players each, your organization is now 85% B-level players, which is not good.
Those seeking to scale in the validation phase need cost-effective, yet meticulous recruiting help. With a partner like funded.club, you can continue to focus on growing your business while our team takes care of finding high-quality candidates on your behalf. Overall, our services reduce cost-per-hire by 70-80% and take days rather than weeks.
Scaling the Business: Automating Talent Pipelines
After successfully forming and validating your startup’s existence, it’s time to scale. The market is ripe for your product, and you must act fast to capitalize on the opportunity.
It may still make sense to outsource your recruiting to a partner, like funded.club, who has grown to understand your business and unique hiring needs. The advantage of working with outsourced recruiters early (but not too early) is that they can kick it into high gear as soon as you’re ready.
You may also be in a position to build your own recruiting operation. Seed capital and outside investment can help significantly in creating the capacity for your team to take this step carefully.
We strongly recommend that you proceed with caution here. An inefficient and bulky in-house recruiting process will hurt more than help. Bring in someone who specializes in scaling fast-growing businesses and chasing down top talent in the marketplace.
But, don’t rush this step. Hold out for the right HR lead before jumping fully into managing your own recruiting. The right recruiting partner can grow with you without holding you back until the time is right.
For those ready to bring on an outsourced recruiting solution, contact our team today. We’d love to talk.
Ray Gibson is founder and CEO of Funded.club. He brings 20 years of experience in recruiting across Europe, North America and Asia and 5 years running his own startups.