The first hires are the hardest

Welcome to this edition of The Operators, a recurring Extra Crunch column, podcast and YouTube show that brings you insights and information from inside of tech companies. Our guests are execs with operational experience at both fast-rising startups like Brex, Calm, DocSend and Zeus Living, along with more established companies like AirBnB, Facebook, Google and Uber. Here, they share strategies and tactics for building your first company and charting your career in tech.

In this episode, we’re talking about hiring and recruiting:

1. Why people take the risk of working at early-stage startups
2. When and how to work with recruiters
3. How to make your first hires

A company’s first hires are often the hardest; money is usually too tight to pay competitive salaries, there’s no recognizable brand or reputation yet and most people would prefer to work at a company their friends and family have heard of before. There’s also fair presumption of risk and unviability — who wants to take a job that might not be around in a year?

Startup founders overcome these odds on a regular basis. To figure out how, we spoke with two experts:

Farah Sharghi-Dolatabadi began her career as a software developer and financial advisor before moving into recruiting. She’s been a recruiter at startups in addition to companies like Google and Lyft. She’s currently a senior technical recruiter at Uber and an active career coach at HireClub.

Kelly Kinnard is Vice President of Talent at Battery Ventures, where she’s worked with startups like Wag, Coupa, Fastly, and Gainsight. She also has experience at top recruiting firms and in executive search at Oracle.

Below is a synthesized summary of our conversation; check out The Operators for the full episode.

Why people take the risk of working at early-stage startups

Most early-stage startups fail. That shouldn’t be news to anyone. Still, however unlikely big outcomes are, the possibility of being a part of the next Facebook or Uber is tempting, and taking a job at a brand new company may even rational on an expected value basis.

Sometimes it’s not just the chance at a big financial outcome. We’ve heard early-stage employees say they made their choice based for more intangible reasons, like having more autonomy in their work, seeking a less structured environment, working with a certain type or set of colleagues, wanting a sense of adventure or purpose and the opportunity for more rapid career progression.

It may not be possible for an early-stage startup to offer market-rate compensation, but they can personalize the opportunity for early employees.

“Be creative and do things like cater to that individual and think about it on a case by case basis,” said Kinnard. “If that candidate really wants to work from home two days a week because they have a dog and you can’t allow dogs in the office, and they want to be able to walk their dog or go pick up their child from school after school, then try to customize things according to each individual.” But don’t forget that compensation still matters, as do market rates. According to Kinnard, “cash is still king, and I think sometimes I see founders and I see CEOs be unrealistic about what they expect to be able to pay people. A part of what I do is provide them with competitive comp data so they can look at the data and [see] here’s what 3000 companies that we’ve surveyed have suggested the compensation ranges.”

Creative problem-solving pays dividends in recruiting, just like in does with most other problems startups need to solve. Experienced recruiters can help companies figure out how to get creative, but how do you know if working a recruiter is right for you?

When and how to work with recruiters