Hiring talent from large companies: An opportunity or a bad idea?
Founders may want to explore the largely untapped talent pool of senior professionals in larger organizations for scaling up.
Once a startup has acquired Series A funding, the next order of business is to enhance the user and product base by scaling across offerings and markets. This often requires a founder to expand the team and make some critical hires.
These new hires would need to help with reaching new markets, have the requisite experience of scaling up a business, and the passion to endure constant change — an integral part of growth.
For B2B startups, this sort of talent would largely fall in the buckets of Sales & GTM, Product, Engineering, Operations, Finance, and HR. There would also be a need to recruit at leadership levels to steer the startup in the right direction.
Founders look to solve for this in two different ways:
1. The founders themselves scale to take on these roles. However, if the founders do not have these skills or believe they can’t scale to play these roles, they need to look outside for hiring for leadership roles like CTO, CSO/CMO, and COO.
2. If they have to hire, founders usually look at it this way — hire from other startups that are more established, bringing in individuals laterally to play the same function in their company with the promise of matching or higher compensation and larger equity. For example, a product manager from a Series C-funded startup comes in as Chief Product officer in a Series A-funded company.
However, an avenue that remains largely unexplored in India is looking at talent from large enterprises or non-startup companies. This involves hiring resources who are looking to leave the trodden path and play a more meaningful role in a younger company’s growth. This we have seen happens post Series B or C, but not earlier than that.
The reason for this in my view is that there are several founder biases/fears that exist although they may not be admitted openly:
Bias I: People coming in from larger companies are used to too much structure, follow too many rules, and aren’t agile enough.
Bias II: They are often older, and hence lack the energy and drive to take on new challenges.
Bias III: They may not blend in the startup culture, and worse, may even impact the culture.
All the above biases/fears do have some truth in them. However, like everything else in life, there are always the exceptions, and these exceptions are worth the effort to go down this path.
There are a large number of high energy folks who have built businesses within large companies, are less restricted by the structures and rules, know how to navigate with limited resources and are seasoned in managing stakeholders & getting their way.
There is also strong interest in this community for roles in emerging start-ups, as has been substantiated by a recent survey I came across. It came to me as a surprise that among the senior-level professionals surveyed, nearly 74% would prefer working with startups over larger enterprises. The primary reasons for this were the diverse experience they could get and the potential impact they could make. Flexibility, culture, and a flatter hierarchy were quoted as some reasons for their preference. I suspect the potential wealth creation is an unstated, but important driver too!
Here’s why I think founders need to be open to hiring such folks:
1. Their experience in navigating growth could prove immensely useful for the startup’s journey.
2. Often, post Series A, as the company readies for scale and builds processes, some of the boring stuff needs to be done. Suddenly, execution becomes a major focus area, demanding discipline and rigor. At this stage, an experienced professional may be the right fit for the company.
3. Moreover, doing 12–14 hour days is not the only way to scaling a business. You need people who work smart and who have been there & done that.
One area which is possibly a good example of how larger IT service & product companies can be unexplored hunting grounds for talent is the product manager role!
Yes, you heard that right…the elusive, much glamorised product manager role! I’m sure some of you reading this are already thinking of this as a blasphemous suggestion given how sacred this role seems to be.
Jokes apart, here is why I think it makes good business sense to look outside the conventional product manager hunting grounds:
1. There is a talent war out there for good PMs. It seems like bringing in the right PM on board is the toughest thing to do these days. Firstly, the role stands at the crossroads of engineering, management, and user experience.
2. Second, even if you do find someone with this sort of skillset, either they are super expensive hires or very hard to retain.
In the B2B world, the Product Manager should be able to understand the needs and problems of a business owner and accordingly build solutions.
There is this vast community of solution consultants in the larger IT service companies and some product companies who have this experience and understand the confluence of technology, user needs, and the business/domain specifics.
This old world role of a ‘solution consultant’ in a services firm is, in some form, an equivalent of a PM in a product startup.
My belief also stems from my own journey where after a long stint at Infosys building the BPO business, I led the product role at a fintech startup. I played that role for over 2 years and also ended up selling the product that we built into the market. Of course, the frenzy for product managers did not exist as it does today.
While the contexts may be different, I am willing to go out on a limb and say that smart solution consultants can morph to being excellent product managers, at least in the B2B context. This does not imply that there will be no barriers at all, but if a startup creates the right model and methodology to help such profiles transition, this mega bottleneck and scarcity of product management talent can be mitigated in some small measure.
(I came across this great write-up on finding product talent that you may like to read.)
Back to the wider topic of sourcing talent from large and conventional companies. In summary, I think hiring professionals from larger / conventional companies is a trick not exploited as well by Series-A funded companies.
This is also an art that Series-A funded founders may have to slowly warm up to. This will involve a shift in mindset. It will involve building some cultural flexibility and more openness in the way founders think about roles and role design. Hiring such talent is also about hiring for unknown situations and such a bet can work in your favour, given their rich experience of dealing with unknowns and making the journey a tad easier.
Would love to hear views from founders in this, thoughts on some of the biases I have outlined, and also whether you think this is an opportunity or just a bad idea!
Arali Ventures is a pre-seed, seed-stage VC from India, investing in entrepreneurs building enterprise-tech solutions for the world. We help shape their journeys through product-market-fit and beyond and scale the offerings to greater heights.
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