Start-ups offer employers and job candidates a unique opportunity to create win-win working relationships
I have long been a vocal advocate for the importance of Human Resources—ahem, People Operations these days. In a start-up of any sort of scale I’d go so far as to say it’s the single most important function in the company; if you get the right people on the bus you can achieve just about anything.
While that’s the case, it’s always bothered me that there’s often so much apprehension around the hiring process—both from the perspective of the hiring company and the job seeker. For employers, hiring full-time employees means shelling out some serious cash for salary and benefits—people are almost always the single biggest expense for SaaS companies. A mis-hire is not only an expensive mistake, but can also represent a major setback in terms of building your product, hitting your sales number, or properly supporting your customers.
The hiring process is even worse from the perspective of the job applicant. Candidates spend countless hours trying to proactively anticipate interview questions and craft the “right” response. The entire process is often nerve wracking and a vast majority of people feel at least some semblance of imposter syndrome, often disqualifying themselves from positions they’re perfectly capable of fulfilling.
Having sat on both sides of the table, I’ve developed a stupid simple approach to start-up hiring that’s helped me cut through the bullshit on both sides, removing any semblance of smoke and mirrors from the hiring process. This approach has helped me both hire better people and land better job opportunities myself.
How I developed this approach to start-up hiring
I want to start by sharing a few stories that have shaped my perspective on hiring. The first dates back to May 2009, shortly after I graduated with a freshly minted MBA degree. I went to grad school immediately following my undergrad, so I’d never had a “real job” when I graduated. Regardless, I was eager to flex my new degree… except in May of 2009 the economy was in a tailspin. The starting salary of the average graduate from my MBA program the year prior was about $90,000—for my graduating class that dipped down to about $50,000.
Refusing to accept defeat and move home to live with my parents, I drove to Boston one day and took a job waiting tables at Legal Seafoods. The restaurant manager, Myles, looked me square in the eye during the interview and said, “You just graduated with a MBA. Why exactly are you applying to Legal Seafoods?”
I hoped my time waiting tables would be short lived, but I ended up delivering bowls of clam chowder for a solid nine months as I interviewed at companies throughout Boston. One day interviewed at a fitness club where I was asked how much I could bench press, and the next I interviewed at one of the most prestigious consulting firms in Boston where they asked me how many ping-pong balls would fit in the room I was sitting in—before telling me I had only 30 seconds to answer.
“A ping pong ball is about 1 square inch…. This room is about 8x10….”
In retrospect all of those interviews were one of the best things that’s ever happened to my career—I got a ton of practice with interviewing and I learned the important lesson that job interviews are really interviews going both ways.
Eventually I found myself sitting across the table from a start-up CEO, Michael, in an interview where I thought I was doing pretty well. That is until he asked me a final question…
“So what do you know about SEO?”
The truth was I’d just graduated with a MBA focused in marketing, yet I knew absolutely nothing about SEO other than it was an acronym for Search Engine Optimization. I hesitated as my mind waivered on how to respond—”what’s the right answer to this question?” I wondered to myself. When the silence in the room had become deafening I finally blurted something out.
“I don’t know anything about SEO, but if you give me another interview I’ll learn everything I can and will talk you through what my SEO strategy would be for your company when we meet next.”
To my surprise I got the job and learned another important lesson in the process—when it comes to interviewing for jobs, the truth will set you free.
Fast forward five years, and things at that start-up had gone really well. I was leading a team of 15, the company was growing like a weed, and I loved the people that I was working with. But around that time I was approached by a recruiter and presented with a job opportunity that was hard to ignore. It was my first VP position. It was at a Sequoia company. I was offered a $70,000+ raise. And next thing I knew Mark Roberge, Hubspot’s CRO and a board member at the company, was calling me telling me it was a great opportunity for my career and he’d be excited to work with me.
While I was very happy at my current job, I had some serious student debt—the extra cash would go a long way in paying that off. And after 5 years at my current company I felt like I had been working on the same problem for some time and would benefit from diversifying my professional experience a bit.
At the time it was easily the most difficult professional decision I’d had to make. I wanted to take the new job, but I also knew I had a great job already and was sitting on something of a winning lottery ticket. My existing company was doing very well, had raised funding with very favorable terms, and was a known commodity. The new role was with a company that had a higher risk profile—it was definitely less of a sure thing.
As I hemmed and hawed over the decision, I called Beth Harrison, an executive coach that had been hired to work with our leadership team. She heard me out, then said something profound.
“Geoff, it sounds like you want to take the new job but are worried about the new company being a bit more risky. Why don’t you ask for a parachute?”
Beth proposed that I negotiate by asking for a severance package in order to make the new job a bit less risky—if it didn’t work out I’d at least get paid for a few months while I looked for a new role. I almost choked I was laughing so hard at her suggestion.
A severance package? Come on. I’m 28… no one’s giving me a severance package.
“You’ll never know unless you ask,” Beth insisted.
I got the severance package and I accepted the new position, learning another key lesson in the process—you’re never going to get what you want unless you’re willing to ask for it.
Start-ups Offer A Unique Opportunity For Us To Be Better To Each Other—Both As Employees and Employers
Since these formative experiences early in my career I’ve gone on to spend a good portion of my time consulting, which means I’ve had a bunch of additional opportunities to apply, pitch, and negotiate employment opportunities at start-up companies. I’ve read countless articles on both hiring and interviewing tips, the vast majority of which I’ve rejected under the same pretense—they make it seem like the hiring process is a game of playing cat and mouse.
I remember reading one article authored by an executive at a well known SaaS company, where he said he would go into a room to interview a candidate and specifically leave some trash on the table. He’d then return later to see if the candidate had thrown the trash out—the idea being this was some sort of barometer for how well candidates take initiative. While I saw the logic, I couldn’t help but think, “This is the type of hiring bullshit I want no part of. This is jumping through hoops.”
There also seems to be this notion that if you get offered a job, you need to negotiate to absolutely maximize your salary. But you’re then pitted against a hiring manager who is tasked with making stellar hires and bringing them in at 20% under the market rate. So who wins in this scenario?
What I’ve come to understand and appreciate about both hiring and interviewing within start-ups is that you have an enormous amount of freedom to create a win-win situation for both parties involved. Free from the shackles of big company bureaucracy, tiered salaries, and rigid employee handbooks here’s my can’t miss approach to start-up hiring.
Start-up hiring guidelines for job seekers
Here’s my advice to anyone looking to land a job in a start-up.
Apply to a small number of jobs that you actually want
This is job searching 101, but I have to start with it—the biggest mistake I see people make when they apply for jobs is sending out a large volume of resumes to any job that seems remotely interesting to them. This almost never works; instead, I encourage people to find just three jobs that they’re really excited about and are reasonably qualified for. Go all-in on those applications—make it your singular goal to be the absolute best, most prepared candidate for each of those three roles. If you truly do this, more often than not you’ll get one of the three positions.
Do the sample project when asked
If you’re asked during the interview process to provide a work sample—whether that’s writing some code, delivering a design concept, or sharing a 90-day growth plan—you should do it. I know this is controversial to many people, mostly because you’re being asked to provide value for free but also because it’s time consuming.
Well, if you’re only applying to a small number of positions the time commitment issue flies out the window. And if you’re worried about providing value for free, check your ego at the door. You wouldn’t buy a car without test driving it—why would a company shell out tens or hundreds of thousands of dollars to hire you without getting some insight into how you would be to work with? It’s your job to win the gig, so if you really want the job do the work and over-deliver.
The correct answer is always the exact truth
Each month I mentor a student or two that’s going through Springboard’s Digital Marketing Career Track, and I hear the same sentiment over and over.
“Geoff, I’m applying for this job at a digital marketing agency. I don’t have much experience with Facebook Ads so what do I say in the interview when they ask me about that?”
My answer is always the same and always surprising to the student—”tell them that!” The point here is not to talk yourself out of a job, but if you say you have experience that you don’t that will very quickly be discovered on the job.
Instead, admit the experiences and skills that you don’t have and mention other experiences that are related and relevant. This could be as simple as, “I haven’t managed Facebook Ads, but I’ve ran some campaigns in Google Ads so I understand paid advertising metrics like cost-per-click. I’d love to learn more about Facebook Ads and think I could pick it up pretty quickly.”
Hiring managers at great companies don’t expect you to have every single desirable skill or experience—your honesty will often be seen as refreshing and totally appropriate.
Ask for what you want
If you’re lucky enough to get a job offer, ask for what you want. It’s really that stupidly simple and you will never know unless you ask. This does not mean that you should be asking for $250,000 salary if you’re applying to an entry level position—you need to have an understanding of your market value and what’s reasonable to ask for, but that aside you should be forthcoming with what it would take to make you really excited to accept the position.
Maybe it’s a $20,000 raise, or a bigger equity stake, or the ability to work from home two days per week. Whatever it is, figure out what’s most important to you and give the hiring company the opportunity to make you a happy camper. It’s always better to negotiate up front than to accept an offer you’re less than excited about only to find yourself asking for a change shortly thereafter.
Share your decision criteria and information on other job offers transparently
If you’re lucky enough to have a couple of job offers on the table, I’d advocate strongly that you share with both companies the fact that you have multiple offers— as well as the criteria that you’ll be using to base your decision on. If that’s money, fine. If it’s title, so be it. If it’s remote flexibility, that’s perfectly OK too. The reason to do this is that you’re going to end up turning somebody down that wanted to hire you. If they at least understand what criteria you used to make your decision—and they see that you took the job most in-line with those criteria—they will understand why you chose to turn them down. Being transparent like this will keep you from burning bridges.
Perhaps even more controversial, I’d advocate for sharing the details of your other offers transparently. I wouldn’t advocate for doing this proactively, but if you’re asked about your other offers I think it’s totally appropriate to share that information. This shouldn’t be done with the intent of creating a bidding war, but you can do this to show how the offers on the table differ from one another—again you’ve already shared the criteria you’ll be using to make your decision so this is useful context for both hiring parties. The only way you’ll get yourself in trouble here is if you make a decision that goes against the criteria you shared with each company.
Do your diligence on the company
Again this one sounds like a no-brainer, but I mean this at a much deeper level than “read the company’s website and have some questions lined up.” Particularly for more senior roles, part of understanding what’s reasonable to ask for is understanding the stage that the company you’re applying to is at and what the company’s financial situation looks like.
Has the company raised funding? What’s the company’s current burn rate? You’re probably not going to ask for that $200,000 salary in a company that’s doing $500,000 in annual revenue. Most companies will readily provide this type of information if you sign a non-disclosure agreement—it’s your job to ask so you have full context on the business and can make reasonable asks in-line with the stage of the business.
Understand equity structures and cap tables
Most start-up jobs come with at least some sort of equity grant in the company—it’s your job to understand the equity structures and capitalization table for the business so that you understand the potential value of the equity that you’re being offered. Start-ups today may have a traditional stock option plan with a 4-year vesting period and a 1-year cliff, or they may offer incentive membership units. You may be offered restricted stock or unrestricted stock. Ask questions and learn the nuances of your equity grant. Investopedia is a great resource for understanding any concepts that may be unfamiliar to you.
Mid-level hires are notorious for not taking this step—most equity grants are very intentionally a large number of “shares,” so don’t fall into the easy trap of excitement at being offered 10,000 shares! Senior level hires always take the time to understand these nuances in painstaking detail.
There is almost always some wiggle room here too—aside from the overall number of shares included in your grant, you can always ask for provisions like a shorter vesting period or accelerated vesting if a liquidity event occurs. Changes like these often require some paperwork, but they can typically be offered if the employer is motivated to hire you.
Start-up hiring guidelines for employers
If you’re hiring people into your start-up, chances are you’re growing—congrats! Here’s how to get the right people on your team.
If you want to hire someone, it’s your job to give them what they want
If you’ve run an interview process and identified someone that you’re really excited to hire, it’s your job to get that person on the bus. If they’ve shared with you want they want, it’s your job to provide it to them or to come as close as you possibly can. It’s really that simple.
It’s much better to bring someone onboard that’s genuinely excited about the offer that you’ve made them than to pinch pennies over a small amount of money (or other benefits) that leaves them feeling less excited about their new role.
Seek to understand each candidate’s decision criteria
As a hiring manager take the time to ask each candidate about what’s most important to them in a new role. Everybody has a different financial situation, a different family situation, and different needs—proactively ask so that you can cater your offer to each candidate as much as possible.
Interview to make sure you know what skills candidates have and don’t have
When interviewing candidates to work at your start-up, you really want to understand two things.
What relevant skills the person has and doesn’t have
If the person is going to be a cultural fit at your company
Forget about the jumping through hoops, the strange hiring practices, and the questions designed to catch people by surprise. If they’re a cultural fit and you feel good that their skills and experience will set them up to be successful in the role, you have yourself a good hire.
Stop looking for the magical hire
One of the biggest mistakes I see hiring managers make is looking for the elusive “magical hire.” It might be the full stack developer that’s built a handful of great digital products that you try to bring onboard for $20,000 under market salary, or the elusive marketer that’s skilled in every facet of digital marketing and has never not delivered a hockey stick growth curve.
If you continue to look for these people, you’ll inevitably come up short and will burn bridges with some really good candidates that you could have had on your team. Great job candidates can very quickly sniff out companies that are looking to find a magical hire—and in almost every instance it’s a sign that they’d be a pretty shitty employer. You can and should try to hire a great team, but remember that you’re out to find “people” not “resources.”
Run a recruiting process that makes the candidate feel wanted
Everybody wants to feel wanted—taking the time to make a candidate truly feel wanted can tip the scales in your company’s favor. It’s why we all look for love, why we all join clubs and other communities, and why we see entire cities work to recruit sporting stars to their local teams.
I was talking to a company that knew that I was weighing a tough job decision and was going to be making a decision the next day. They made me an offer over what I asked for, I woke up to a personal email from both Co-founders, and they had other team members that I’d be working with call me the next day to tell me how excited they were about the potential of working together. Needless to say, I was super impressed. This stuff matters, shows that you care, and is easy to execute on.
Don’t oversell your company’s prospects
Another tell-tale sign of a lousy company is one where the hiring managers oversell their start-up’s potential. Sure, you want to build excitement about the opportunity to get people onboard, but do it by building credibility rather than selling a pipe dream. Be overly objective and transparent in sharing information on the market opportunity, your company’s growth rate, and potential obstacles that could impact your success. In my experience the best founders are very straightforward and almost cautious in selling the potential of their business too aggressively.
Many of the points I’ve made in this article may come off as controversial, but I’ve followed this recipe first hand and seen it produce great results. All I’m really advocating for here is radical transparency and allowing ourselves to be human throughout the hiring process. While that may not be how you’re used to thinking about hiring, interviewing is a two way street and being completely forthcoming about what matters most to you is the seed that grows the most successful working relationships. Your start-up’s success hinges on it.