How to Hire for Success When You’re an Unknown Startup
As your start-up begins to grow, you’ll likely need to hire more people outside of your founding team. However, that early on, each new hire has the potential to change your business’s DNA.
So it’s better to sculpt a strategic hiring process now rather than later if you want to hire for success when you’re an unknown start-up. Because after funding, the biggest hurdle you’ll face is hiring.
For start-ups, having the right people in the right roles especially matters. You can’t afford to lose the time when seed funding and other nascent phases of your business are ongoing.
What are the challenges of hiring for a start-up?
Every stage of growth has unique challenges when hiring for a start-up. But let’s explore the challenges that founders might face during a start-up’s earliest stages.
Every hire matters
As your start-up begins to gain steam, you’ll notice that every hire has an impact on your growth and culture.
When your team is still small, new hires influence the quantity and quality of the work you put out. They also affect the team’s culture, capabilities and general morale.
Start-ups are high risk
Joining a start-up isn’t the right career choice for everyone. Some people prefer more stability, larger teams and greater predictability when it comes to clients and assignments. Others enjoy the fast pace and don’t care so much about the business they work for not having a long, successful track record.
This makes finding the right people both easy and difficult. There aren't as many people on the market who enjoy the instability, but at least you know those who come in for interviews or are already hired are there because they truly want to be.
Attracting talent — let alone finding talent — is difficult when you’re unknown. Unless your founding members have a reputation and are generally noteworthy, your start-up’s name isn’t going to ring a bell for anyone.
You’ll have to really sell your vision and impress not only your investors but also potential candidates who are considering joining your team.
How to hire employees for your unknown start-up
So, how do you hire for success when you’re an unknown start-up? The first step is attracting talent.
You want to ensure your business attracts top-quality candidates because at the end of the day, your start-up is only as successful as the people you bring on.
Build an appealing business
Your earliest team members will likely be people who were all more or less in the same professional network. Hiring remains flexible at this point.
But later, you’ll need to build a business that people outside of your immediate network will want to work for. And this doesn’t mean a fancy office or free lunches — it means making your cultural work values clear.
Your start-up’s values are synonymous with your identity as both an employer and a business overall. It’s best to define those values early so that you start on the right footing and there’s no confusion concerning what you expect from hires.
Because you’re likely unknown, at least for the most part, creating an online presence will help you gain an identity in the public eye. Being strategic with what you put on your website and what you post on your social media platforms is essential. And you should keep content consistent among all your outlets.
While any talented person will find competitive pay one of the more attractive components of a role, not all hires will put it at the top of their list. But that doesn’t mean it shouldn’t be at the top of yours.
In your early stages, most employees will likely be underpaid. Start-ups aren’t rolling in profit yet! But you should plan to bring employees up to market rate as soon as you’re able.
Additionally, offering equity will appeal to more applicants. A higher salary is a plus, but it’s common for early employees at a start-up to have equity included in their compensation package. Ownership through equity helps buffer the initially lower pay because it’ll pay off eventually when the business does well and grows its stock.
Networking and sourcing are equally important when reaching candidates. You should constantly recruit, even if you only have the resources to grow your team bit by bit.
You can network by attending conferences, meetups, webinars and talks. This helps you create a real-world foundation for your next potential hire.
Sourcing involves directly reaching out to candidates within your immediate and extended network. For example, the people on your current team are there for a reason. And they probably know other people with similar skill sets who may be interested in joining your start-up.
Sharing next-hire requirements with your team will allow them to reach out to their contacts and essentially take the recruiting work off your hands.
What to look for in employees
Here are some key areas to consider when identifying potential hires.
Skill vs attitude
It’s tempting to think that the most qualified candidate is the one who has everything you’re looking for on paper: an impressive resume, cover letter, experience and credentials.
But sometimes attitude and personality matter more for early teams because a start-up’s nature is usually risky and unpredictable. But it’s also exciting, and it takes a particularly motivated personality to thrive in that environment.
Experience vs potential
It’s always better to hire someone who has a lot of experience rather than someone with little to no experience. But a candidate who misses the mark by just a hair in terms of years of experience could very well have great potential.
A candidate with great potential will be highly motivated and excited to learn. Sometimes, a potential hire with the most years of experience won’t have the drive to go beyond the credentials they have.
In this case, use your best judgement. Finding someone with the right mix of potential and experience will work best in your favour in the long term.
Similar to personality or attitude, cultural fit isn’t something you can decipher when skimming someone’s resume, cover letter, licences and certificates. But it’s crucial nonetheless.
Your earliest employees are integral members of your team. They set the tone for how your start-up will operate.
What types of people do you want to work with? What types of people will set the foundation for a healthy cultural standard in the workplace?
Once your cultural tone is set, you’ll have a healthier overall workplace — onethat future hires will likely feel comfortable being part of.
On that note, it’s advantageous and ethical to hire people who don’t ‘look like you.’ A lack of diversity in the workplace sets your business back. Employees who come from various walks of life, ethnicities and backgrounds will bring their own unique, personal ideas to the forefront.
And in turn, that will help you sell products and provide services to all different types of people.
When and whom should you hire?
Your start-up’s needs will certainly change over time. And what you look for in a candidate will change as well. The hire who works well for your business right now may not work well later.
Additionally, your start-up’s type and workload demands will fluctuate. It’s beneficial to.use these factors as references for hires.
Whom to hire
Once your start-up begins to grow, your priorities will change. This could mean changes in your product and service offerings or even developmental changes.
As a result, the roles you need to fill will change. You might need more people in your software engineering department if you want to focus more of your money and effort on developing a certain product or platform.
Or maybe your product is up to par. In that case, you might want to start bringing people into your human resources department because you’re behind in administrative work.
When to hire
An important aspect of hiring for your start-up is being selective with timing. If you hire too many people very early, you might be stretched for cash. Or maybe you hire more people than you need, and employees have too much free time.
Ultimately, this wastes time and money.
Here are a few questions to consider before hiring:
Do you have the funds to support a new hire (e.g. training, salary)?
Is there enough work to occupy a new hire?
Do you have the time to scout and recruit talented prospects?
You’ll typically instinctively know when it’s time to hire because work will pile up. Or maybe your finances are doing well, and you’re no longer struggling with the means to pay your team.
If your existing team begins to feel strained, then it’s probably time for you to expand the team.
Creating a hiring process for your start-up
Here’s a rough outline of how to write a job description for your start-up:
A section about your business
A job description summary
Perk and compensation details
Once you’ve written your job description and candidates start reaching out, you need to do a few things from the point of application to hire.
Screen applications: Compare applications to determine who has the required skills based on the job description. Additionally, you can spot any red flags.
Give a practical skills test: The skills you test will vary depending on the role. You can distribute a test before, during or after an interview.
Interview candidates: Many businesses now have hybrid work environments, so you can conduct interviews either in person or virtually. Interviews are less about quizzing a candidate and more about determining whether they have values and personality traits that mesh with your business’s workplace culture.
Pick a candidate: Many businesses will put candidates in a spreadsheet and score them based on cultural fit, skills fit and practical fit (e.g. salary, commute). And as you’d expect, whoever ranks highest is likely the best pick for the job. However, it’s wise to pick a candidate who ranks equally among all aspects — not super high on one and low on others.
Contact Airwallex to support your startup’s financial endeavors
We’ll help you streamline your finances and improve your profit margins so that your success doesn’t stall. Better money management will help your business stay organised and will help you tackle future opportunities to increase your ROI.
Related article: How to calculate ROI
From seed to Series E: Understanding funding rounds
Venture capital vs crowdfunding: What’s the right call for your b...
Net revenue retention and the 3 things every venture capitalist l...