Hard-won Lessons for Startup Recruiting

May 7, 2021

Jeremy Hermann,

I have spent most of my career building engineering teams—hiring hundreds and interviewed thousands. After building the data infrastructure and machine learning platform teams as Uber, I co-founded Tecton. I spent two years building out the core engineering team — the strongest I have had the privilege of working with.

Some of the lessons learned in previous roles transferred, but I found that recruiting today for an early-stage company has a unique set of challenges — ones I wish I knew years ago. I’m sharing them here

This post is targeted at hiring the first 25 engineers in a company, but most ideas also apply in larger companies, like Uber.

Commit lots of time (and hire recruiters)

Recruiting is the most important thing in building a company, and it takes an extraordinary amount of time and energy. This is doubly true during boom times when there is more capital and talent-hungry companies. Even at larger companies like Uber, with established brands and large recruiting organizations, good engineering managers still spend half their time recruiting. You generally have to talk to hundreds of candidates for each one that you hire. Recruiting ends up being at least a half-time job for much of the founding and leadership team.

Given this, a few things are important:

Make recruiting part of the culture. Talk regularly about recruiting at team meetings so that everyone understands the importance and expectations. It also helps the team understand why they need to do so many phone screens and interviews.
Hire recruiters early. Startups often hire full-time, in-house recruiters as part of their first 10 employees. Unfortunately, it can be harder to hire a good tech recruiter than hire a good engineer, which is all the more reason to start early. A recruiter can do a lot of the leg work and make sure the process keeps running well, but the founders and functional leads still need to be heavily involved and devote considerable time. You can’t outsource recruiting to the recruiters.
Never stop recruiting.It takes months to build up a pipeline of candidates for a given profile. It pays to plan and start recruiting well before the hire is urgent. It also means that once you get a pipeline running, it is often better to keep it running, even if you are uncertain about hiring needs. If you are at risk of overhiring, it can be better to keep the pipeline running and raise the bar even more.

Be systematic

Given the amount of time that it takes to recruit and the high cost of mistakes (losing a great candidate or hiring a bad candidate), it pays to be systematic. Repeatable processes, good tools, and accurate analytics allow you to more efficiently and reliably handle the volume of candidates and meetings. They also serve as a foundation for experimentation to continuously test new approaches and isolate what works and what doesn’t. And they help ensure a fair process for candidates. There isn’t one process that will work for all companies in all markets at all stages. You need to continuously measure, debug, and improve your process to get it to work and keep it working as the company evolves.

A great hiring process includes:

The right people in the right roles to own and run the process—the hiring manager, recruiter, coordinator, and interview team
A well-defined candidate workflow that has a repeatable set of steps for finding, engaging, evaluating, and closing candidates
Good tools to support and automate the workflow and allow you to collect data that shows where things are working well and where they are not

Roles

Hiring Manager: The hiring manager needs to be responsible for the hiring and generally can’t fully delegate to the recruiters. In the very early stages, the hiring manager typically does everything until they hire recruiters and sourcers.
Recruiter: The recruiter should be great at finding, engaging, and building relationships with top-notch candidates. In addition, good recruiters are organized, process-oriented, and can help develop and run the recruiting process. The recruiter ends up owning the candidate’s experience end to end and then helps the hiring manager engage more towards the offer stage. The recruiter also makes sure the candidate has a great experience end-to-end so that they love the company will be easier to close. Even if they are rejected, they will still leave feeling good and will be more likely to refer their friends.
Sourcer: It often makes sense to have a separate person handle the sourcing piece—finding prospects on LinkedIn, GitHub, etc. Early on, the person doing the recruiting role will often handle sourcing as well. The hiring manager should engage the sourcer when reviewing the lists of prospects before there is any outreach to avoid wasting time on the wrong people. This is a great way to train the sourcer.
Coordinator: Given the large number of meetings and interviews that need to be scheduled (and often rescheduled), it is often good to have a separate person act as a coordinator. In smaller companies, this can be an office manager or an exec admin. As the company grows, you often need a dedicated person to manage the large volume of interviews and help ensure a smooth experience for candidates.
Interviewers: Finally, a panel of trained and well-calibrated interviewersneeds to be pulled from the team for each candidate. They should first handle the technical screen and then the onsite interviews.

Candidate Workflow

It pays to have a well-defined workflow (complete with runbooks and checklists for each stage) to manage candidates from initial contact thought to offer and close. The workflow is typically organized as a funnel, similar to what sales and marketing organizations track and develop customers. It is important to accurately track which candidates are at what stage, how long it takes for candidates to move from one stage to the next, and the percentage of candidates that move to the next stage versus the ones that opt-out or are rejected. This helps you measure and monitor the overall process to make sure candidates are not getting stuck.

The goal is to move candidates through the stages as quickly as possible. Reject candidates that are not a good fit early in the process, and minimize the number of good candidates who drop out, lose interest, or go elsewhere. Reporting on the conversion rates between stages allows you to understand and adjust the flow, make forecasts, and debug problems.

Reports showing flow and conversion rates through this funnel are useful for driving the regular (e.g., weekly) recruiting meetings between recruiters and hiring managers.

Tools

While many companies start with spreadsheets to track candidates, there are good SaaS tools that make sense to implement sooner rather than later. These help define and reliably run the candidate workflow.

For outreach, Gem is excellent and allows you to create templatized, multi-step email campaigns for candidates. It helps find email addresses. And it tracks and reports on open and responses to the emails.

For tracking candidates, Greenhouse and Lever are the more established tools, but analytics and reporting are sorely lacking. Ashby is a newer tool that started with excellent analytics (using Greenhouse candidate data) and now supports complete candidate lifecycle tracking.

Bake in diversity early

Without sustained effort and commitment from the top, new hires will tend to look like the team (especially the leaders) that you already have. If you have a diverse founding team or a diverse early executive team, it will be much easier to hire diverse employees under them. If you don’t have this, it gets increasingly hard over time to hire a diverse team. Bake in diversity early and be ready to hold key leadership roles open for diverse candidates.

We interviewed an exceptional woman engineer very early at Tecton, and she declined. I met up with her a few months later and asked for feedback. She said that while we seemed like a great company, she wasn’t ready to jump in as the first woman on the team.

I have spoken to companies who have had to pause hiring non-diverse candidates entirely to catch up and establish a viable foundation for the future. This is very painful for a company that needs to grow.

If having a diverse team is important for your company, then you have to make hard choices. Diversity doesn’t happen by accident.

Hire for strength, not lack of weakness

It’s well established that you should aim to raise the bar with each new hire. Steve Jobs has a famous saying that A players hire A players and B players hire C players. Similarly, Peter Norvig at Google showed that if you set the bar as the current minimum of the team, you get weaker and weaker over time, whereas if the bar is the average person on the team, you get stronger over time.

While I believe this is true, it is also worth highlighting that good teams have diverse strengths. In addition, great people are not without flaws, and outsized strength in one area often comes with relative weaknesses or shortcomings in other areas. The goal should always be to hire for strength and not lack of weakness (unless, of course, there are ways of managing around the weakness).

Also, keep in mind that greatness is always in the context of a role. You may find that there are engineers who don’t have the specific technical strengths for being an infrastructure engineer, but they do have the right mix of technical, communication, and sales abilities that make them an amazing implementation or forward deployed engineer. Be smart about how you organize your teams, make sure the strengths needed for each are super clear, and then raise the bar with each new hire.

Hiring is hard, and you will be tempted to lower the bar when you are falling behind your hiring targets, which always seems to happen. However, I’ve found that if you hold the bar and focus on candidates’ exceptional strengths, that it starts to get easier as a strong team starts to become a magnet for other strong people.

Scale referrals and warm introductions

My biggest regret at Tecton was spending too much effort on cold outreach and early conversations with people we met this way. We only got 5% of our hires from cold outreach. Everyone else came from the founders’ networks, referrals from employees, from investors, and we even hired one who was referred from someone that we interviewed and rejected.

Sequoia has a good set of tools and practices for driving employee referrals. But in addition to referrals from employees, friends, and investors, you should also look for warm introductions (through this same set of people) to candidates that you might require cold outreach.

As the company matures and has a better and better external brand, cold outreach, college recruiting, conferences start to work better. But referrals are always an important and significant source of hires for the lifetime of the company. One of the keys to successful recruiting is scaling your ability to get referrals and warm introductions from many sources.

Offer learning, purpose, and a shot at life-changing money

Startups quickly find that they can’t compete with larger tech companies on compensation. Larger companies can afford lavish salaries, stock grants, and benefits that don’t make sense for startups. But you can still pull talent from the big companies.

You shouldn’t try to compete on compensation. But you can offer things that larger companies can’t offer that end up being more important over the course of a career—faster learning and growth, purpose and impact, and a shot at life-changing money. Many of the best engineers at large companies are bored, not getting rich, and are ready for a change (even if they don’t realize it yet).

Bigger companies have to pay more to compensate for the fact that you learn less and have less chance at life-changing upside. Startups can pay less because they offer more reliable learning and growth and because they offer a shot at life-changing money.

Figure out what the candidate wants from their career and how your company can be a stepping stone towards that (assuming that it actually can do that—and, if not, it’s probably not a good fit and won’t last even if you do hire them). This should be the main part of the conversation when you deliver the offer. You are going to pay a fair, market-rate salary, give learning opportunities that will fast forward their career and help them become the best professional version of themself. If you all can make the company work as a team, then they can be rich.

Conclusion

Hiring and engaging a great team is the most critical piece of building a tech startup. If you have the right people, you can fix almost any other problem. With the wrong people, it is tough to get anything else right. Great startups need to be great at recruiting great people.