a16z: Why Web3 startups should hire recruiters early

Original title: Why startups should hire recruiters much sooner than they think

Original author: Aurora Petracca, a16z Crypto

Original translation: Luffy, Foresight News

When startup founders find product-market fit and get funding, investors and advisors often offer advice: hiring the right people will lay the foundation for the company's growth. On the contrary, if the wrong talent selection is made, the company's efforts may be wasted.

This advice is absolutely correct, but lacks a specific implementation path because there is no practical guidance at all. Learning how to recruit is a full-time job. Therefore, company founders should find the right recruiters as early as possible. In this article, I will share how to do it.

In fact, recruiters should be among your first 10 employees. It seems counterintuitive: if founders are desperate for the right technical talent, why should they prioritize hiring others? Having helped scale Airbnb (50 employees when I joined) and Coinbase (7 when I joined), and having advised countless other startups, I can attest to the importance of hiring people in the early stages. When I joined Airbnb, I was the company’s third recruiter; when I joined Coinbase, I was the second.

Recruiters can save a lot of time

The process of going through multiple rounds of interviews and finding the right hire among multiple candidates takes a lot of time. Saving time is important, especially in the crypto space. There are only a limited number of candidates with expertise, and candidates may be considering job opportunities at multiple companies at the same time. It may not be difficult for founders to keep up with 100 candidates at once, but you have other priorities to deal with, so something will go wrong one day. The practical impact of this can be: poor candidate experience, missed hires, and damaged reputation. A poor candidate experience can easily make you lose out, not just to one candidate, but to all candidates.

Hiring takes a lot of time. If it doesn’t, then your startup’s hiring process may be too easy, or your company may be growing too fast, which can lead to staffing issues and turnover. Remember, as a founder, time is your most valuable resource. Hiring a professional recruiting leader means you can focus on other more important tasks and allocate your time wisely. You’ll still be involved in the hiring process, but only at key points throughout the process, which is more strategic and efficient.

I often see this scenario with new startups: they are looking to hire their first batch of technical people, they have great connections, but often those connections are at the wrong time. Maybe they have hired a few people this way, and they need to proactively reach out to candidates. But this raises a new set of questions: How many people should you contact? Should your company use a precision recruitment strategy or a mass recruitment strategy? Startups may need a combination of both. They both have their place, depending on the role, but they both are undoubtedly a lot of work.

Hiring the right technical people can take a lot of time. Statistics show that you need to contact 50 to 100 people to hire 1. Every message you send to a candidate needs to be carefully thought out, and the response rate of candidates to recruiters is at most 30% (if the founder or technical leader contacts, the response rate may be higher).

Let's say your company is only hiring 2 engineers. You might put 30 candidates through the recruitment process, and each candidate will receive 2 to 5 interviews. This means you need to manage and schedule 60 to 150 interviews in a short period of time. As a founder, you may also need to lead some product, engineering, marketing, fundraising, customer support, and daily operations, and liaise with external advisors every day, etc. Therefore, even if you have good intentions for the candidate, the candidate experience will be degraded. Negative experiences will quickly appear in Glassdoor reviews, which future candidates will read.

Recruiters can mitigate these problems by working closely with hiring managers to develop the right strategies. In the early days of Coinbase, I worked with engineers and managers such as Brian Armstrong, Rob Witoff, and Varun Srinivasan to help them build their teams. I would make a list of candidates I thought were the best, and if they liked them, I would communicate with the candidate first; then they would do a phone screen and I would manage the entire process. This partnership worked well and Coinbase hired a lot of talent.

Founders are Talent Magnets

Founders play a critical role in early recruiting, including articulating the company’s vision and mission, defining the values the team can live up to through the recruiting process, and of course, evaluating top talent. Once on board, great recruiters can help create and run a rigorous recruiting process, with founders only being present at key points in the process. Founders should be involved in every interview until the leadership team has developed a great hiring criteria.

Founders have another critical role to play. Great engineers want to build cool products with other great engineers. Technical founders need time to write about the novel technical projects they’re working on and why they’re important to other engineers. These will make for beautifully packaged recruiting content. They can tweet (and have friends retweet); share on Farcaster, Discord, Signal, and Telegram channels; share on LinkedIn and company newsletters; send to their entire network. In this way, founders can better attract talent.

The entire company can use this content in any outreach messages. Don’t forget to regularly update with new content created by the team. This approach is good for individual founders, too: imagine how much energy you’d save if you spent your time building a great product and writing about it, instead of emailing and following up with candidates for every open position on your careers page. Of course, founders still need to secure some candidates from the beginning. But the idea is to let them spend their time more strategically and choose a few high-impact positions.

Upfront Spending Saves Money in the Long Run

All this sounds great, but isn’t it too expensive to hire a recruiter early on? After all, every startup has a limited amount of money.

Investing precious funds in people who can accelerate your team’s growth is a wise decision. Delaying your product by several months due to an inability to hire engineers quickly could allow competitors to take your market share. This will cost your company more money in the long run.

When Airbnb had 18 employees, they prioritized culture assessment and candidate experience. So they started by hiring an external recruiter to ensure someone was on top of the process from start to finish and that no candidate was overlooked. Similarly, when I joined Coinbase as the first internal recruiter, the company was only 7 employees and they were already investing a lot of time and resources in recruiting. When the company was only 4 employees, the founders established a partnership with an early technical recruiter because they knew how much of a recruiting workload it was. Once there was a sustained need to hire, this person joined full-time, and when the hiring needs surged for the next phase of expansion, I joined.

Both Airbnb and Coinbase prioritized bringing in recruiters (whether they were internal or external) to help the company grow in the long term.

How to Identify a Great Recruiter

How do you tell the difference between a great recruiter and a bad one? Here are some guidelines:

· They proactively meet with hiring managers to brainstorm and develop creative candidate sourcing strategies.

· They implement these strategies immediately.

· In an emergency, they will reach out to the founder/hiring manager to discuss and resolve compensation issues rather than risk losing the candidate by delaying.

· They will meet with candidates “after hours.” If necessary, they will meet with candidates in person at 9pm or on a Sunday afternoon.

They are not only charismatic, but also agile:

· They have a well-organized system in place to ensure that calls are not missed.

· They know who needs to be contacted.

· They keep the recruiting team focused on the task of submitting feedback and drive the process through reviews.

If recruiters are not systematically organized, recruiting will fail.

Qualities of a Great Recruiter

Great recruiters often start their careers at competitive sales or recruiting agencies. Or, they may work as a customer support representative at a company known for its high bar for talent.

When I look for talent from agency recruiters, I like to see that the candidate has been working in-house for at least a year, as this shows that they can adapt to the culture and workflow within the company.

When I look for talent from agency recruiters, I like to see that the candidate has been working in-house for at least a year, as this shows that they can adapt to the in-house culture and workflow. But if the candidate is adaptable, humble, willing to learn, resourceful, and able to find ways to succeed, these are excellent qualities in my years of recruiting experience.

In addition to these core traits, you also need to look for recruiters with experience in:

· Fixing broken processes

· Solving data problems

· Navigating complex relationships with hiring managers

· Developing creative talent strategies.

They can use startup equity incentives (a mix of cash, options, tokens, RSUs) to attract candidates, and they know how to use valuation as part of the pitch.

Finally, find a recruiter who is passionate about the company's mission. Many recruiters have experience selling different products and visions, but to them, it's just a job. Look for people who truly believe in what you are building, as their energy and genuine passion will come through in conversations with candidates and be infectious. In most startups, early employees are often attracted to the mission, and without that sense of mission, it takes a lot of effort to get through those tough early days. In crypto, a sense of mission is a must to get through the uncertainty of the industry.

The ideal recruiter is someone who believes deeply in your mission, feels ownership over the company, and is protective of what you are building. I have literally heard people say that Airbnb is like a "cult." If so, then I was part of it. As a recruiter, my energy needs to be infectious to candidates, otherwise I won't be able to convince them to join. When I joined in 2011, there were a lot of skeptics who thought Airbnb was a sketchy idea that would never work. In that environment, it almost takes a cult-like obsession to succeed.

I share a similar obsession with Coinbase and the power of crypto to change the world, which kept me focused during the crypto winter. Additionally, recruiters are critical to the long-term success of a company as early leaders of company culture as it scales.

How to recruit candidates in a turbulent environment

The regulatory environment for Web3 can be daunting for some candidates, especially when negative news spreads. However, it’s fair to say that we experienced similar sentiments when Airbnb experienced public unrest. It’s conceivable that any company that is trying to change the way we live, such as Uber and OpenAI, would face the same situation.

Both Airbnb and Coinbase have used a proven approach of telling the mission we are on through stories (mission and the power of narrative). We also highlighted the regulatory preparedness the team had done to implement change. Similar approaches can help other Web3 companies.

One of the unique aspects of Web3 is market volatility and bull and bear cycles. Showing a chart of Bitcoin and Ethereum market trends over a 5-10 year period can help candidates understand the current challenges. I also often use articles written by industry experts to help tell the story.

Do recruiters (and hirees) need to have experience in cryptocurrencies?

Do your recruiters need to be experts in Web3? I would choose recruiters who are passionate about the field over those who have experience, as long as they have the characteristics I mentioned above and have worked at a company with strict hiring standards.

What about the talent pool? When I started at Coinbase in 2014, there were no candidates with "Web3 native experience." Many candidates who were considered "crypto native" were only interested in short-term projects and did not have the staying power we require.

Therefore, I look for engineers who have expertise in payments, infrastructure, scaling, and security, as well as an interest in the concept of Bitcoin or decentralization and its value. Their experience helps build a solid engineering foundation for the company. We have the most success finding great Web2 engineers with key domain expertise who are working on side projects in the cryptocurrency space.

If you can’t find Web3 talent willing to work long term, hire people with the following traits:

· Analytical skills

· Intelligence

· Creativity

· Open-mindedness

How to Hire a Great Recruiter

It’s no surprise that recruiters are generally good at interviewing. So how do you tell the difference between a great recruiter and a mediocre one?

I like to get to know recruiters through behavioral questions. These questions can provide insight into a recruiter’s experience with hiring challenges, how they work with hiring managers, and how they engage candidates. These three areas are core qualities of a great recruiter, and if you can get a recruiter to talk about their specific experience solving real problems in these areas, you can learn more about their thought process, their creativity, and how they deal with adversity.

You can also test a recruiter’s skills in conversations with candidates through live role-play interviews. Great recruiters should be able to pull off this type of interview. Additionally, watching how candidates react under pressure through non-traditional interviews is a great litmus test to see how they handle unexpected situations.

How to Judge a Recruiter’s Job

Once you’ve found a recruiter you like, what should you expect from them? How do you evaluate if they’re doing a good job? They should:

· Own the hiring process for all candidates and complete the hire.

· Establish a hiring process to ensure consistency and organization for all candidates.

· Work with other hiring managers at least weekly to understand what’s going well, what’s not going well, and develop recruiting strategies.

· Provide an excellent candidate experience as well as a hiring manager experience.

· Keep detailed records of compensation packages and work closely with leaders in charge of finance to let them know about trends they’re seeing (e.g., pay declines due to compensation) and pull data to ensure the compensation packages they’re offering are competitive.

· Take control of your recruiting operations and maintain clean data by implementing an ATS. They should be able to use this data to provide leadership with brief reports on recruiting progress. They should also use the data to identify where problems are in the process and then develop a plan to fix them.

· Help embed the company's cultural values into the recruiting process so that the employee base reflects the company's values.

· Help you understand how your company can achieve diversity in recruiting. Lack of diversity hurts the product. The road to a diverse workforce will only become more difficult if you don't invest the time from the beginning. But in the early days of a startup, you may have to hire people with the right skills to build the company. A recruiter can help you think through how to approach this kind of problem and execute the strategy you think makes the most sense.

Depending on the recruitment workload, these tasks may be shared by multiple people.

What else can a recruiter do besides recruiting

But what does a recruiter need to do after they’ve made their first batch of hires?

First, remember that people who don’t proactively look for ways to make themselves valuable shouldn’t be in your company, especially at a startup, where many early employees have to wear multiple hats. Beyond that, recruiters can also play an important role at early-stage companies in the areas of talent and HR. But be aware that if you plan to hire someone to handle both recruiting and HR, you must interview someone with the right skills and who also wants to work in HR.

A typical recruiter can help with general onboarding, or manage an HRIS system. But if you need someone to help with performance management, career development conversations, terminations, employee relations issues, and off-site events, you’ll want to choose someone with experience in this area. In startups, HR work is often done by people without HR experience, and this should be avoided when hiring a recruiter.

Second, if a company is growing rapidly, this "double duty" may only be a stopgap measure until a full-time HR person is hired. However, if a company is growing more slowly, a recruiter who also doubles as an HR person may be a long-term solution. As a company scales, each of the following areas will eventually require someone with specific expertise.

These are also the tasks that recruiters are best suited to do when they are not recruiting. When recruiting activities restart, they return to their areas of expertise.

· Talent brand building work: Attend conferences and meetups to build a public talent brand; work with engineering leaders to brainstorm interesting technical blog content that can be used for recruitment brand creation; work with developer relations leaders to properly showcase the work to potential candidates

· Onboarding, offboarding, and termination

· Manage HR systems to track employees and their internal activities

· Performance review process

· Employee career development

· Regular team building activities. If the company is fully remote, it is especially important to conduct team building activities every quarter, because without face-to-face interaction, it is difficult to build connection and trust between employees.

· Cultural ambassadors: In addition to incorporating values into the recruitment process in a structured way, these values should also be communicated to the company on a regular basis.

Summary

Most people are often surprised by how much work there is to recruiting. If you ask an experienced founder, they will probably tell you that attracting, managing, and retaining top talent is the most challenging part of the job. When considering what will make your company successful and what will lay the strongest foundation for your company to scale, consider hiring a professional recruiter as early as possible.

Original link