Hooked on Risky Business - Issue 35
Startups have been on a talent hot streak as of late, but this is a reminder to all founders that the pendulum swings.
What's going on?
If you are a founder working diligently to hire critical leadership roles, we're entering a predictable cycle. And if you've been in tech long enough, you know this cycle well — the back-and-forth talent migration between big tech and startups. Perhaps you've been one of these people in the past — trading your entrepreneurial soul for shelter at big tech. Staying just long enough to build a financial safety net, then plan your next escape to build and thrive with an early-stage team or bring your own idea to market. The last twelve months brought greater access to talent who were more receptive to the "what if" of a startup when nowhere really seemed "safe." But here we go again, headlines of billion-dollar companies closing shop and recent IPOs falling somewhat flat — causing startup curious talent to get cold feet about taking the leap. If you found it easier to attract leaders who would have been otherwise untouchable in recent years, you may soon find yourself reliving the norm of competing for and losing talent due to greater risk aversion. Now is the time to get game-ready as you head into 2024 to ensure you aren't running down recruiting paths that end in disappointment.
Why does it matter?
At early stage, setbacks in your hiring process are debilitating to your business. You don't have time for multi-meeting interview processes that fail to identify risk aversion until the eleventh hour, nor can you compete in a bidding war. You are wasting your time and the time of the leader you are recruiting if you are not maniacally focused on understanding true startup fit early in the process. Right now, candidates are tossing their line in the water and talking to as many companies as possible, so it's critical to identify early on if they are grasping for a straw (random) or specifically interested in solving your problem (strategic). Nothing is more painful than spinning through interview cycles only to later hear from a candidate, "I accepted an offer with MSFT." It has never been more crucial to align your mission and the problems you aim to solve with the motivation of your candidates. This alignment will significantly aid in differentiating missionaries from mere mercenaries. Missionaries have a deep passion for the problem space and your mission. They are excited to follow you into battle and motivated to make greater magnitudes of impact on your business. But remember, missionaries still require focused and ongoing pre-closing throughout the interview cycle, even when they deeply connect with you and the opportunity. Be relentless in filling the gaps and doing the careful work to get these leaders across the finish line because they will have options. And because they have options, your leadership talent experience matters. Be communicative and show up with a dialed-in process that further spotlights why you and your team are the best act to follow.
What do others think?
"For an early-stage startup, it's absolutely critical to hire people who are aligned with and believe in the mission. To that end, my first conversation with the candidate is one of extreme candor. I describe the very real outcomes of the startup — it's highly probable that this startup will fail, and your stock will be worth nothing. And there's a small chance that this will have life-changing outcomes. The candidate should choose us if and only if the alignment with the mission clearly outweighs the highly probable negative outcome." — Vijaye Raji, Founder and CEO of Statsig
What do we think?
While many flock to startups with the fantasy of striking it rich and retiring at the ripe old age of thirty, this is not the reality of a startup. And while company failure will drive many people back into the arms of big tech, there will always be those who choose to run right toward their next startup adventure. Occasionally, those who seem like mercenaries are actually missionaries temporarily sidelined for personal reasons. Exercise empathy during "life happens" moments and stay connected, as these builders will be back. Startups are undoubtedly a platform for developing innovative products and disruptive ideas, but they also incubate and shape the next generation of startup leaders. There's no better place to build a career rocket ship than at a startup. As a founder, how you recruit is directly tied to your ability to validate who is willfully staying on the rocket ship and who is not.
What do YOU think?
Take Action
Be transparent. Transparency plays a critical role in optimizing your talent funnel. Honest conversations and messaging about the opportunity, compensation, your team, and the state of the business are a must. It starts with a role spec and your employee value prop. This information is essential to ensuring talent opts in for the challenges they will face as they step into the role — more on this in Issue 8.
Always be qualifying and pre-closing. Top questions every founder should ask: Can you live on the cash offered for this role? What other opportunities are you interviewing for? [Function, Scope, problem, company stage] How does this opportunity stack rank with others? What are your top three criteria for deciding between these opportunities? [Money, mission, team, impact] If their answers align with what you have to offer, you are more than likely to be on the right track with someone. Find more great strategies and perspectives on this topic in Issue 15.
Prioritize experience. There is more and more talk about leaders having terrible candidate experiences. Ghosting, stalled updates, and lack of transparency will wreck your talent brand. As the pendulum shifts, experience will matter more and more. Experience is your team's audition with a candidate and a preview of what it's like to work with you. Run efficient and transparent processes where you and anyone on the hiring team are moving in lockstep. We talked about the consequences of poor experience in Issue 29.
Resources, Events, Announcements
Aspiring for Intelligence —> Open (Source) Sesame
Employee Value Prop Template —> Make a Copy