The End-To-End Guide to Startup Hires, From Yelp’s Former COO

At a startup, hiring executives can feel like a willy-nilly process. You’re moving fast, you needed more people yesterday and you don’t have time to give it a ton of thought. It can be tempting to go at a breakneck speed and make it up as you go along.

Don’t, says Geoff Donaker, an early stage startup investor at Burst Capital and former COO of Yelp. Donaker helped build the management team during his ten-year stint at Yelp, where he was an early employee, and helped scale the organization and take the company public. He’s currently on Yelp’s board and also previously held director roles at eBay. He’s hired dozens of people, and fired his fair share too. What he’s learned from years and years of team-building is this: Having a method and structure go a long way when you’re hiring.

So in this presentation, Donaker taps his wealth of experience in hiring and shares his process as applied to the startup world. You’ll find his best tips in this end-to-end guide, from writing the job listing to checking references. Check out his TK-step process below.

Step 1: Determine Your Desired Level Of Competence

The most critical key to hiring is this: Front load your work. Before you start recruiting and interviewing, you need to be incredibly definitive about what you’re looking for. Start by considering what level of experience you’re hiring for. Donaker breaks it down this way:

• Directors should provide functional expertise. “This is somebody really, really good at sales or engineering or marketing,” Donaker says.
• Vice presidents should be leadership experts. They have the same skills as directors but have several years of experience building and running a team. “This person is not only great at sales, but you built a sales team that’s great,” Donaker says.
• C-suite executives should have successful startup executive experience, “Preferably a cofounder or C-level executive of another startup that’s done well. At this level, you should be getting your true business partner who’s bringing something to the table you can’t otherwise get,” Donaker says.

“I’ll see candidates who are really at the director level and they’re asking for C-level titles. ‘I’ve got four years experience as a really strong finance person, I want to be your CFO.’ That’s silly talk, and we should all try to figure that out before we get very far in the process,” Donaker says.

Interviews are limited. They can only tell you so much. Focus on other parts of the hiring process instead.

Step 2: Write Concise Job Descriptions

Now that you’ve defined what level person you’re hiring, write a job description. “Make it super simple and objective. Skip the generic requirements like ‘team player’ and ‘good communications skills. Don’t write down things that anybody could say ‘yes’ to. No one will ever say they don’t meet those types of requirements. Make your list more objective. Say something like, ‘seven years of finance experience at increasingly senior levels.’ That’s something I can look at a LinkedIn profile and say yes or no, this person meets this objective,” Donaker says.

Step 3: Sell The Role

Job listings aren’t set it and forget its. “Unless you’re Google or Facebook and you’re paying top dollar, people are not just going to come flocking to you and find you. Market the role by listing the job on sites like AngelList, but also sell: talk to 30 people that might know the person that you’re trying to reach. Call them, or text them, or email them individually and say “Hey, I know you know people in finance. I’m looking for a head of finance. Can you give me at least one good candidate?” Donaker says.

• Key tip: Approach folks who might refer you candidates one-to-one. Don’t just drop their email in a bcc to 100 people you know. “Think about how you respond when you’re approached personally versus bcced on a mass email. Personal reach-outs increase your chances of getting a helpful response, and these referred candidates are also more likely to be receptive because they’ve been referred by someone they trust,” Donaker says.

Step 4: Screen Out Candidates

The screening phase is where your commitment to structure and methodology — as Donaker advises above — will help tremendously. Donaker has a few maxims he sticks to for this process candidates, which can feel overwhelming. Here’s how he structures early screens:

• Stick to your guns. When reviewing resumes, go back to the requirements you wrote down at the start. “Look at the profiles you’ve got and see if they actually match,’” Donaker says. In the earlier example, there was a CEO who said he wanted someone with seven years of increasing finance responsibility. “We got a resume from someone who’s four years out of business school. He did two years of finance and two years as an associate in venture capital. Does that sound like seven years of operating finance experience to anybody? But guess what the CEO who receives this profile says? ‘This person looks awesome! He must be really smart,’ and he sets up an interview,” Donaker says. “I’m sure this person is awesome and really smart, but that person does not actually meet the job description we said we wanted to hire for. So let’s not waste our time on that.”
• Vet first, interview last. Don’t waste your time — and the interviewee’s — by failing to vet them. Have a 10-minute call to start to make sure this would even be a match. Your goals on the call:
• Check the match. “Try to check anything that wasn’t obvious in terms of your requirements. Maybe they say on their resume they have HR experience but it’s not obvious from their LinkedIn. You can confirm that with a quick call,” Donaker says.
• Sanity check compensation. “If this person needs to make $300,000 and we’ve got a $100,000 budget, then hauling them in for a one-hour interview is a waste of time,” Donaker says. “Figure that out early. What are their needs? Does it match your budget? Check geography too. They live in south San Jose. Your company’s in Marin. Are they going to move?” Donaker says.
• Scan for red flags. “Sometimes somebody will say something that’s massively offensive in the first three minutes of meeting them. You probably don’t need to waste your time with an hour with that person,” Donaker says.

Strict structure is your friend. Only talk to people who meet the job requirements you laid out at the start, and sanity check their expectations. Don’t get sidetracked.

Step 5: Interview Smart.

Donaker’s macro advice for interviewing is pretty simple — don’t spend too much time on it. He recommends focusing on Step 6 — reference checking — instead. But of course, you do have to do a little interviewing. Keeping in mind that interviews are a limited tool, here are Donaker’s tips to make what interviewing you do as helpful as possible:

• Avoid the likeability trap. “Ninety percent of what’s happening in interview is: ‘Do I like you? Do you like me?’ What are we judging on? We’re judging for likeability, which has nothing to do with that job description you wrote up,” Donaker says.
• Ask the same questions of every candidates. Just as you brought structure to the job description and screening, do the same for interviewing. “Write up the same list of questions you’ll ask every candidate. If they’re open-ended questions, you could have as few as five for an hour-long interview,” Donaker says. “Take notes and you’ll have answers you can compare.”
• Unlock candidates’ real motivations. “The number one question I always ask every candidates is to do a resume walk. I ask, ‘So you did X. What are are the nuggets of what you did at that role and then why’d you leave and take the next gig? Did you leave for a bigger title? You left for more money? Why? The resume walk, when done right, can tell you a lot,” Donaker says.

Hit references hard. Hit them early and often, and hit them before you’ve already decided you really like a candidate.

Step 6: Throw Your Effort Into Reference Checks

This is a critical step of the process, and it’s important to remember that references are for information not confirmation. Donaker shares his approach for eliciting honest feedback on your candidate from both front- and backchannel references.

• Run checks continuously. “If I’m lucky to have two or three strong candidates, I’ll actually do reference checking on all of them at the same time. Then I can actually really use the references a signal to make a decision. So often reference checks happen at the eleventh hour. You’ve already decided. You’ve basically made an offer to somebody and now you do reference checks? Guilty. I’ve done this before, but are you really listening at that point? You’re not,” Donaker says.
• Conduct the three-line email test. For any reference, send a short email that says:

“I’ve been talking with Candidate X about a senior position at [your company]. We’re really lucky we have several great candidates for the role. If Candidate X is one of your favorite people you’ve worked with, I’d love to hear back from you and chat with you about it for a couple minutes.”

“It’s not a question, right? It’s a statement that says, if this person is amazing, I’d like to hear back from you,” Donaker says. “Nine times out of ten, if you send three of those front channel references with the way I just worded that, people will respond within a half-an-hour. ‘She’s amazing. I would hire her again in a heartbeat.’ Fast responses like that are the types of signals you’re looking for.”

• Phrase the “name their weaknesses” question differently. “No one will give the candidate’s weaknesses to you if they really like them. Instead, say:

‘Hey, if I’m lucky enough to get to work with this person, what suggestions as her former manager do you have to make the most of her skills and personality when she’s coming into a new situation?’”

“That can open people up. It sort of says, “Hey, I’m intending to hire this person anyway so tell me how to make this work.’ And, that’s where sometimes people will tell you things like, ‘Oh, this person does work really hard, but she sometimes subject to burnout. She sometimes gets really upset if you give her projects on a Friday, because she’s really protective of leaving at 4 p.m. every Friday and so you have to be careful about that,” Donaker says. “That’s useful and honest feedback.”

• Go for the backchannel references. “These are people that the person worked with that aren’t the three people they gave you as references. You should always check with the candidate if it’s okay to hit their backchannel — don’t do it without their knowledge. But once you get far enough in, I think every executive you’re hiring should say, ‘Yup, go for it. Talk to my back channel.’ At which point, you should find everybody they’ve worked with, contact them on LinkedIn and start hitting those people. Those people have no reason to be especially nice or anything else. You’ll get a more on-the-mark picture,” Donaker says.

Note the behavior of a candidate’s references. When people leave things unsaid or choose not to respond, there’s usually a story there.

In Conclusion

So remember, frontload your work when hiring for an management position at your startup. Build structure and repeatability into the process by writing a specific job description and screening out anyone who doesn’t meet those requirements. Do the same for interviewing, which should be a light, smartly conducted process using the same list of questions to be asked of every candidate. Finally, reserve most of your energy for reference checking. Tap a candidate’s backchannel, ask good questions and call references before you’ve made up your mind — they’re not there to confirm a decision you already made. They’re there to help make a decision for you.

On a final note, Donaker has some bad news for you: One in three of your hires won’t even work out. That’s his rule of thumb. And it’s one of the hardest ones to internalize. “The first thing to do is simply acknowledge that this is just not gonna work out the decent percentage of a time. If you can kind of get over that emotionally, it will make it a lot easier to actually make those hiring decisions up front. You’ll realize that you’re not looking for perfection, you’re looking at the best you can get now. It makes it a lot easier to cut big when you need to,” Donaker says. Embrace the fluid nature of startup employment. “The team will keep changing. Founders assume everybody you hire is going to be there forever. They’re not. Everybody’s only there for awhile. Hiring is an art more than a science — the science part is the structure, but the art is also you and your own best judgment. It’s different for everyone, but finding that balance of structure and flexibility will lead to hires that take your startup team to the next level.”