Building a world class talent team for early stage startups
Building out a talent function has become one of the latest obsessions for almost every startup founder out there. More than 2,317 companies (based on data taken from AngelList) are looking to hire someone in a talent or recruitment related role to help scale their businesses. That said, talent in an early stage startup environment is less related to a specific role or a set of tactics and more about building a strategy that optimises for a culture of high performing teams.
At Founders Factory, we are in a unique position of incubating our own startups from scratch. Our internal team of engineers, data scientists, designers, growth marketers, product strategists and creative developers uncover new business opportunities by rapidly experimenting with new product ideas that eventually turn into stand alone businesses which are able to attract external founding teams. Ultimately, the talent team are responsible for taking on the challenge of hiring the first three employees of each startup we launch. As you can imagine, it’s not exactly straightforward to recruit the CEO or CTO of a startup that hasn’t even been born yet.
Over the years, we have learned a lot about what it takes to build a strong talent team that supports a hyper growth environment facing inevitable uncertainty, one that steps away from any traditional recruitment structures. With this in mind, I’ve highlighted some key themes that every early stage startup founder should consider when growing their business.
🥇Start thinking about talent from day one:
Every startup should be thinking about talent as a sustainable competitive advantage from the very early days. A clear example around this would be to define your employee value proposition (EVP) to leverage organic acquisition channels and reduce the cost per hire in the long run. You’ll need to be able to trigger your perfect candidates’ motivations by differentiating your startup from its competitors. While most later stage startups have the funding to highlight their competitive salaries and endless list of benefits, the majority of people who join a startup in the very early days are looking to make a dent in the universe. This is where your company mission and values should be clear. At the same time, your EVP can’t be static. It will depend on how you balance the considerations of your startups’ purpose and goals, funding and investor returns, as well as your culture.
While it’s important to be thinking about talent from day one, it’s equally important to remember what stage you’re in as a business:
- Startup: you are doing a lot of scrappy things and are constantly calibrating external candidates in the market until you find gold. You are hiring fast but in some instances firing faster.
- Growth (also famously known as 2.0): You’ve now found gold, and are starting to put processes in place with the people necessary to mine that gold. You are hiring slowly, and firing fast because you’ve now learnt from your previous mistakes.
Ultimately, talent cannot be a side project. It’s something you can’t turn on and off as you please but must be ingrained in the foundation of your culture. If you are a founder, you need to be the first person on the talent team. Start with the resources you have, take the time necessary to plan and structure how you want to approach it, and plant the seeds necessary as soon as possible so you can set the rest of your team up for success.
🎯Creating a scalable and repeatable talent acquisition process:
If you really want to supercharge your recruitment efforts, it’s important to place a lot of bets on different tools and technology to amplify your efforts. For example, Chosen (a startup we launched from our incubator) has not only helped us discover high quality talent from diverse backgrounds, but also enabled our team to focus on growing talent pools for current and future candidates. Recruiters are expensive and have misaligned incentives; and sourcing on Linkedin is time consuming. Don’t be afraid to source new talent in the most unexpected places. Try tapping into Slack communities that can help you build meaningful connections with prospective candidates. Experiment with as many tools as possible to build the top of your talent pipeline as quickly as possible.
Referrals: Double down on referrals where you can. There is no other sane way to build your team from the ground up other than to start with your existing networks. Referred candidates are consistently rated the highest quality hires, the most productive employees, the strongest culture fit and the lowest cost to recruit. They’re also the most likely to accept offers and the least likely to quit once hired. Great people tend to know one another and great talent tends to congregate in tight-knit networks. Hire the right people and you’ll open up a whole new network of exceptional talent. To do this you’ll have to master recruiting through your employees’ networks. The key is to treat your referral strategy like a sales campaign. Take this traditional sales approach and give it steroids.
Candidate journey: Any startup that is seeking to dazzle and close the best talent will need to create a magical candidate experience. Treat your candidate journey like a customer journey and constantly refine it. Our team is relentless about eliminating friction. We always go out of our way for candidates by acknowledging all their needs.
The first and last job of your talent team is to create a authentic human connection. Keep it real✌️
- Human connection — precision should begin the moment you reach out to a candidate. At the Factory, the talent team has made a commitment to respond to all candidates (inbound, referral or otherwise) within 72 hours, throughout every part of the process. Always keep your candidates moving through a frictionless cycle, whether it’s scheduling a phone interview or getting in touch with a referral.
- Trust — you need to deliberately establish a common ground with candidates to try and find as many touch points as you can to connect on a personal level. Investing in this relationship early makes closing conversations drastically easier because you are acknowledging someone as a person. Paying attention to the details is incredibly valuable and applies to the logistical side of the candidate journey. You’ll need to build trust with candidates and it’s important to share context before it is even requested. For example, after interviewing our prospective CEO candidates in the first instance, we always share our sample letter of intent which outlines the founding team equity splits. Where possible, try to front load any uncomfortable conversations, especially compensation.
- Authenticity — is a core value on the talent team and encourages us to be our true self when interacting with potential hires. It’s not about creating an alter-ego for your startup. Our team is coached to answer the hard questions and be completely honest. Once you are able to successfully recruit someone, they don’t want to be sold. People see through that straight away.
🤹What important skills are required for your talent team?
As much as possible, you want to construct a team with diverse talents and personalities. Startups sometimes confuse hard skills with the intangible qualities. We define hard skills that are quantifiable such as designing in Sketch or building mobile apps or even speaking a second language. Soft skills on the other hand are a bit more difficult to measure and can include things like empathy, communication skills, as well as creative problem solving capabilities.
Simply put, the key difference is:
- Hard skills: define how well you work
- Soft skills: define how well you work with others
The reality is your talent team is solely focused on people. While it is harder to measure the impact, the irony about soft skills is that they are some of the hardest skills to learn and deploy. They need to be worked on relentlessly and are called upon in almost every interaction with a prospective candidate. Yet we call them soft skills — we imply they are fluffy, fluid, or intangible.
For example, we prioritise storytelling versus selling as a mandatory skill for our team. This ultimately comes down to the ability to communicate effectively. You need a talent team that focuses on understanding how a specific role fits into your company objectives and then builds a unique narrative around it for each candidate. This means asking questions that identify high performers who seek to learn and be challenged. The best talent teams relay an aspirational vision and illustrate tangible growth opportunities for candidates within it. Every interview should be an opportunity to tell the story of how your company was born because at the end of the day, you’re communicating a world defining opportunity, not a rigid, bulleted job description.
👉 Moving forward:
As with any startup, the people part is one of the most difficult components of growth. How will you activate talent hacks and iterate fast enough to help you attract exceptional talent? The small wins happen around the edges and it’s up to you to produce a frictionless, scalable process. Try something new. Take risks. You might just be surprised at what you’ll achieve. Your future depends on it.
To learn more about the Factory, check out: https://foundersfactory.com/
