9 Tricks to build your Talent Acquisition function

Some practical pieces of advice for scaling your team after raising a Seed round.

Introduction

In my previous role as Talent Director at Notion Capital, I spent a lot of time thinking about key success factors in recruiting after Series A. As part of this research, I published ‘The Unicorn Trajectory: Who Unicorns hire and when they hire them’. If you’re interested (and/or at that stage already), have a read. One of the key learnings of this research is that companies on the ‘Unicorn Trajectory’ tend to be amazing at hiring execs post Series A (one exec per quarter is the rule of thumb to keep in mind).

One of the topics I never fully covered in writing though was what it would take to get to Series A (and start hiring execs), talent-wise. Over the past few weeks, I’ve spent some time with the Point Nine team and have helped a few of their portfolio companies (just for fun ;)). As you might know, Point Nine focuses primarily on supporting companies from Seed to Series A. Here are 9 key learnings for you, Seed stage founders, fresh from the P9 factory!

1. Plan to hire, don’t hire to plan.

Founders that have just raised a Seed round often start by thinking ‘We have just raised $m so we should start hiring people’. The thought process that will likely be more productive is the following:

1. To raise a successful Series A, we need to hit specific milestones by 12/18/24 months from now, and in particular we need to generate a certain amount of revenue by that time. In case you’re not sure about these milestones, speak to your board members or have a look at Point Nine’s napkin.
2. Who do we need to have in the organisation to hit these milestones (and that revenue target)?
3. Who do we already have that can do those things exceptionally well?
4. What gaps do we have in the organisation?

Once you’ve been through these 4 steps, you should be able to build a good hiring plan.

In the words of Keith Rabois… ‘So, every company has two or three or four, hopefully no more than five really core things that [they] have to conquer and solve to be successful. And so you wanna decompose each of them and put a name against each of those five things, and … [each] person, you’d better have conviction is about as good in the world as you can get to solve that specific problem. And if you don’t have a name or you don’t have conviction around that person, you better go find one.’- quoted by SaaStr

2. Hire some help

If you have 4+ open roles, it’s probably time to hire a Talent Acquisition Manager that will help you.

There are a few reasons for this:

• Opportunity cost: For every moment that someone on your team is looking for candidates or screening CVs, they are not building/designing/selling.

The average full time Talent Acquisition Manager in a tech company will be working on 5–10 open roles at any given time.

1. This means that they will be spending half a day to one day per week, on each open role.
2. If you don’t have a Talent Acquisition Manager, someone else on your team will be spending approximately one day per week on each open role, because they’ll be less efficient than a Talent Acquisition Manager will likely be.
3. So if your Engineering Manager is hiring 3 people, then they’ll only be doing Engineering Management work for 2 days per week.

• Efficiency: Talent Acquisition Managers know where to find great candidates
• Cost: You’ll spend less on recruiter fees if you have a Talent Acquisition Manager, so on balance you’re likely to spend a bit less
• Process: Talent Acquisition Managers can set up your ATS and recruitment process for you

Many Talent Acquisition Managers will work on an interim basis and many are happy to work part time. For example, if you’re only planning on opening 4 roles in the next few months, try to find a Talent Acquisition Manager who’s happy with a 2-day-per-week contract for the next 2 months. If you’re looking for contacts, ping me on LinkedIn and I can probably help with a few recommendations.

Finding a Talent Acquisition Manager is one among many hiring processes you’ll have to go through — the rest of this post will give you some actionable hiring tips.

3. Write job descriptions

If you don’t have a job description, don’t start hiring.

You don’t necessarily need a perfectly crafted, shiny job description for every role when you’re starting out, but having a document that defines what you expect candidates to deliver if they get the role and what candidates should expect of you is an absolute must. In my experience, writing a job description is also a good exercise to go through to make sure you actually need to fill the role.

Some examples of bullet points for Seed stage people are below — if you use them, please change the wording slightly so that your job advert isn’t penalised from an SEO point of view.

Product Manager

• Develop the product vision and strategy, and create the objectives and roadmaps required to accomplish the intended outcomes
• Oversee the use of techniques such as interviews, personas, user behaviours and feature adoption analytics to fully understand product gaps and opportunities
• Manage stakeholders across the business to ensure that feedback loops between product, marketing, engineering and any other relevant parties are seamless
• If you want more details, Louis wrote a long post with a template for a job description here.

Full Stack Engineer

• Architect and design complex new systems and products, not only with a focus on performance, but also with scalability and a flawless user experience in mind.
• Work cross-functionally with product managers, designers and marketers to engineer new product features and bring roadmaps to life.
• Ensure a high quality of code, including testing and documentation, to ensure our products are scalable and bug free.
• Manage projects from end-to-end, from the initial concept to customer rollout.

Talent Acquisition Manager

• Oversee end-to-end recruitment, from job advertisements to on-boarding, ensuring a world class candidate experience throughout
• Pro-actively source candidates, reducing the need for external recruiters
• Measure performance of sourcing channels including email and LinkedIn, optimising for cost and quality of candidate applications
• Implement and manage the technical requirements for all talent acquisition activities, including an Applicant Tracking System, Jobs Board, and any other software required
• Work closely with leadership team members and hiring managers to plan new roles, including overseeing budgets and lead times, and creating job descriptions that fit company requirements

Account Manager

• Develop and implement a strategic account plan for each of your dedicated accounts, to drive revenue opportunities and provide exceptional customer value and service
• Work cross-functionally with product, marketing and leadership teams to win deals and to ensure alignment with customer expectations and delivery timelines
• Oversee customer feedback loops to ensure the relevant teams can easily understand and prioritise requests
• Build and maintain exceptional relationships with your dedicated accounts, to ensure you are the ‘go to’ advisor for all requests and comments related to our product

Sales Development Representative

• Become an expert in our market segment and product offering, to clearly articulate the value proposition to potential customers
• Identify, research and approach potential customers that meet eligibility criteria as possible buyers of our product
• Manage cross-channel outreach by contacting potential customers over email, phone and social media
• Build relationships with decision makers at potential customers to engage an active dialogue
• Manage and communicate your progress against targets, to ensure sales management can support where required
• Share best practices with colleagues and team members, to ensure that targets are achieved across the sales team

4. Set a high bar

At Seed stage, the majority of the hires that are made will be the first in the function.

The first Product Manager, the first Salesperson etc etc. In brief, it might be hard for you to get a benchmark of ‘what a really great Product Manager’ or ‘what a really great Salesperson’ is like, if you aren’t one yourself and/or if you haven’t hired one before.

To get around this it’s a good idea to ask your network and your investors to introduce you to two or three really great Product Managers, Salespeople, or whichever role you’re hiring for.

When you speak to them, here are a few tips:

• Run the job description past each of them and ask for feedback
• Ask them what kind of experience level someone will need to be able to do the things listed on the job description
• Ask them how they would approach each of the things listed on the job description, so you know what answers to look for from candidates. This will help you write a scorecard (or an assessment doc) once you start running your interview process. More about this in point 6.

5. Get an Applicant Tracking System (a.k.a ATS)

An ATS is like a CRM for your hiring operations. In short, get one. They aren’t crazily expensive, they will do a better job than Google Sheets, and — most importantly — they will make your life easier and save you time.

Every minute you spend inputting a candidate name to a recruiting Google Sheet or uploading a job advert to a career site is a minute not spent on a higher value task that will likely have a bigger impact on your business. If you’ve hired a Talent Acquisition Manager, they should be able to do this for you.

Things that ATS’s typically offer:

• Branded careers pages
• Multi-site job posting (i.e. one click to post your job to 10+ careers pages)
• Interview scheduling
• Kanban-board style candidate pipelines
• Automated CV uploads, and candidate profile downloads from LinkedIn

Pricing starts from ‘free’, and if you need full functionality for hiring 5+ people then prices start at around $100/month. It’s very unlikely that when you look back on the early stages of your business as you raise $100m and hit Unicorn status that you’ll think ‘you know, we really could’ve saved $100/month on that ATS when we started out’, so I’d suggest that you bite the bullet and pay for it.

Some suggestions of ATS providers to get started with:

https://join.com/

https://gohire.io/

https://www.workable.com/

https://breezy.hr/

https://www.freshworks.com/

I will have a hard time telling you exactly which one you should take. They’re all pretty equivalent, just pick one!

6. Put in an interview process

In the early stages of growing your business, you don’t need a highly intricate interview process. But you will ideally have a framework for the questions that you ask and how candidate answers are assessed.

One simple way that I’ve found works well at this stage is to make sure that you can answer each of the three following questions before extending any job offer to a candidate:

• Can they do the job?
• Do they want to do the job?
• Do we want them to do the job?

Can they do the job?

This part of the interview process should test how the skills and experiences of the candidates match up with the requirements for the job. This should be done first, because you don’t want to spend time with candidates that don’t have the right skills for the job, regardless of how well they fit culturally.

Ideally, there should be two components to the ‘Can they do the job’ part: i) a conversation and ii) a technical test.

The conversation part of this should ideally be 30–60 minutes long and you should aim to cover each bullet point in the job description by turning each of them into a question. You should ideally have a brief marking guide to help you score the candidate, so that you can compare all candidates equally.

The testing part of this should take the candidate no longer than an hour; you want to understand the capabilities of the candidate without imposing significant time restraints on them.

Let’s take a ‘Product Manager’ job as an example.

The conversational part….

The ‘test’ part….

This is largely dependent on how your product will be built, and what the main focus of the Product Manager should be, but a few examples of technical tests:

• Ask candidates to write a Product Requirements Document (PRD) for the addition of a specific product feature
• Send candidates documents from customer interviews and ask them to create a short list of priorities based on customer comments
• Send candidates a data file that outlines product usage, and ask them to make comments and recommendations
• Create a product roadmap with some information missing. Ask candidates to highlight the missing information and make suggestions for improvements.

Will they do the job?

This part of the interview process should be conversational, ideally run by the hiring manager (i.e. often, the operational person that will work closely with the hire, not the talent acquisition person). Questions should allow candidates time to express their career aspirations, so that the hiring manager can understand if they would be a good fit for the direction of the company.

Example questions:

• Why are you looking to leave your current job?
• What is it about our company that you’re interested in?
• Whilst we are doing very well as a company, we are still at a very early stage so things can change rapidly: how do you feel about working in an environment like that? If you were to score your comfort level level with uncertainty from 0 to 10 (where ‘0’ is not comfortable at all), what number would you give yourself and why?
• We’re currently based in Berlin and we sell into Europe; in the future we’ll be building products for a global audience and selling as such. Where do you think the challenges are with that, and how do you feel about tackling them?

Do we want them to do the job?

This part of the interview process tackles the question of whether you think you’d like to work with each candidate. In other words, it’s an interview that assesses the culture and values fit of each candidate.

It’s tricky to interview for ‘values/culture fit’ if you don’t know what your values or culture are.

You and your Co-Founders might not yet have a formalised set of ‘company values’; if you have, that’s great (jump to the next paragraph) and if you haven’t, spend some time thinking about four or five words that describe how you behave and how you want your co-workers to behave. They don’t have to be set in stone forever, and they don’t have to be published to the wider company just yet, but ideally they will be agreed between Founders so that you have something to work from.

Let’s say that you land on the following values: integrity, ingenuity, practicality. Your interview questions for the ‘Do we want them to do the job?’ section would most likely be…

1. We strive to have integrity, even when it’s tricky to do so. Can you give us an example of when you’ve had integrity at work, even when your colleagues or clients didn’t?
2. To create successful products, we need to create ingenious solutions to client problems. What does ‘ingenuity’ mean to you, and why?
3. Ultimately, everything we build has to be usable, and we don’t have endless resources to create products. In other words, we need to be practical about how we grow this business. Would you describe yourself as a practical person? Can you give us some examples, either from work or from your personal life?

Depending on how candidates answer these questions, you should get a pretty clear view of whether they will work in a similar way to how you work.

Side note: there is a school of thought that follows the management consulting interview tactic of ‘would I like to spend 4 hours at an airport with this person?’, or ‘would I be happy to go for a drink with this person?’. I personally don’t think that really matters; successful teams get on well with each other based on their working styles, not their chatting styles, and I have some wonderful friends that I’d happily spend hours and hours talking to but I’m not convinced we would work together all that well.

7. Take references

Once you’ve interviewed a number of candidates for an open role, you should be starting to get closer to making someone an offer. At this point, you ideally want to start referencing your final one or two candidates.

This part of the process can be really painful, but it’s infinitely more painful to have people on the team that aren’t right for the job, so it’s worth investing some time in doing it properly. If you’re interested, Christoph and Jenny wrote about this some time ago here.

Ideally you should ask the candidates to provide the names/emails of their former managers, and then follow up with these people to ask:

1. What was this person like to work with?
2. What were they great at?
3. What were they not so great at?
4. Would you hire them again?

If you know anyone that’s worked with the candidate in the past, also ask them for their opinions.

No business has ever failed because they spent too much time referencing candidates properly, but many businesses have struggled because they hired people who weren’t excellent at the job.

Another framework that P9 Advisor Zack Urlocker uses in such situations is the following: when answering question 4 “Would you hire them again?”, you want the person giving the reference to answer “absolutely” or something equivalent. If not, you might want to dig deeper and/or understand why.

8. Be closing, always

The movie ‘Glengarry Glen Ross’ isn’t the pinnacle of the film industry, but the timeless quote from it — ‘Always be closing’ — applies when it comes to building teams at Seed stage.

The very best candidates will usually be the hardest to close because they’ll likely have offers from other places, so here are a few tips to ‘Always be closing’…

1. Financial certainty: Make sure that candidates know how much money you’ve raised. If your Crunchbase page says you’ve raised $100k from undisclosed investors, but you’ve actually raised $2m from Point Nine, for example, be really clear about this with candidates.
2. Stay in touch with candidates: ping them a quick email between interviews to make sure they have everything they need, and to give them a direct line to you to ask questions if they have them.
3. Excitement levels: Make sure they know that you’re really happy to be in conversation with them. Putting ‘we’re really excited at the prospect of working with you’ on the end of emails to candidates will likely make the experience much more enjoyable for them. And if you don’t feel like you can email them that without being slightly untruthful about your excitement levels… then maybe they are not the right candidate for you.
4. Making the offer: When you make an offer to a candidate, get a few people on a call to make the offer together. It might be the Founder, the hiring manager, and someone from the team who all get on a brief call just to say ‘We’re really glad to be extending this offer to you’ as well as some of the specific reasons that each person is really excited to work with the candidate, and then the hiring manager can follow up with the details of the offer via email.

9. Plan compensation

Compensation is — in many ways — a false economy. I’m absolutely not saying you should pay people way more than market rate, but attempting to pay significantly less than market rate will almost certainly cost you more in the mid to long term: people will ask for increases, people will leave, people will feel limited sense of duty to your company, if they are significantly underpaid.

With that in mind, it’s essential to know what market rates are so that you can make an informed decision about how to pay people.

Hired.com have some great data on this, a few examples of which are shown below for London:

Remote vs Office based

Now more than ever, the question of how to address paying remote workers versus those that are based in an office in Berlin/London/Stockholm is one that often needs to be addressed.

To prevent us from reinventing the wheel on this, please take a look at Gitlab’s view on it which is incredibly detailed and well explained.

Sales commission

For the majority of sales roles, a basic salary alone won’t cut it. Setting up OTE structures can be quite a daunting task but the basic principles are really well defined by Winning By Design, who list them as:

• Keep it simple. Your compensation plan should fit on a single page of paper.
• Show causality. Make compensation directly related to the desired effect you wish for the team member to achieve.
• Think short-term. Keep the time between the activity and the compensation less than 60 days.
• Make it fair for everyone. All compensation must be fair and equal for everyone.
• Make it easy. Compensation should be easy to measure and easy to administer.

A more detailed description of how to do this in a SaaS business, from Winning By Design, can be found here. P9 Advisor Seth DeHart can also help you on that (and wrote about it in this post).

Compensation levels

We often talk about ‘technical debt’ which is essentially the process of building a tech stack that doesn’t scale as much as it needs to, and then having to rebuild things.

We rarely talk about ‘human capital debt’ which is the same thing, but with an HR twist to it. There are many elements of ‘human capital debt’ that need to be addressed (which will require a whole different blog post) but one of the most common to crop up is that of compensation levels.

At the Seed stage, it’s quite possible that you’ll only have one person per function so you won’t need to set compensation levels for each team. But you’ll likely be surprised at how quickly that changes, and how quickly you’ll have a team of people with a variety of different compensation plans that don’t match their experience levels.

The earlier you can tackle this, the better, because unwinding it further down the road can be time consuming and very expensive…and the good news is that it doesn’t need to be super difficult to start putting it in place.

In brief, you’ll need to define a handful of job levels per function, and then allocate a compensation bracket to each one. Charlie HR wrote an exceptional piece on how to do this — you can find it here, and one excerpt is below.

In summary…

Building a fantastic team to propel you from Seed to Series A isn’t rocket science but it does require some rigour, some patience, and some planning. Cutting corners might work in the short term, but overall it’ll slow you down rather than speed you up.

Seeking advice from your network and bringing in Talent Acquisition Managers sooner than later will not only make the process quicker and more scalable, but it’ll leave you with more time to do what you do best: leading your business from strength to strength, and having fun along the way!

Thanks to Louis Coppey and the P9 Family for their input and guidance with writing this — it’s always a pleasure!