July 21, 2022
April 20, 2022
If you’re a first-time founder, the thought of hiring your first 10 employees can seem daunting. Compared to an established company, you don’t have brand recognition, endless budgets, or teams of recruiters available to help. It might, in fact, be just you at this stage.
When it comes to hiring, you don’t know what you don’t know. Fortunately, though, others have been there before — so we chatted with them. Below, find three founders and recruiting experts’ tips on hiring your first, all-important 10 employees.
Nolan Church: Hired as DoorDash’s very first recruiter in 2015, Nolan eventually became DoorDash’s Head of Talent, a role he held until 2018. From there, he became Chief People Officer at Carta. Today, he is co-founder and CEO at Continuum, a marketplace for executive talent.
Jaclyn Chen: Jaclyn is the co-founder and CEO of Benepass, a Y Combinator startup that helps companies distribute meaningful benefits to their teams. Since 2020, Jaclyn has grown Benepass from a team of eight to a company of 35.
David Connors: David previously founded and ran Automately, a startup that was bought by Sequoia Capital in 2019. From there, David became Director of Recruiting Operations for Sequoia. He now works as the co-founder and CEO of The Swarm.
Before you begin to hire, build yourself a lightweight hiring process, recommends Jaclyn.
“It’ll start to feel like recruiting is at least half your full-time job as a founder,” says Jaclyn. “Having some lightweight processes in place can speed it up for you and you can make some decisions faster.”
Your processes don’t need to be complex. In fact, as a rule of thumb, Jaclyn says that the level of detail in your hiring processes should be equivalent to that of your current sales process, whatever stage you’re in.
For Benepass, their processes clarified:
Need help benchmarking your compensation, equity, and benefits? David and Jaclyn recommend using Option Impact (which is free and lets you view compensation data sourced from over 3,000 companies) or Pave (which is free to use for compensation benchmarking).
When job boards are flooded with postings from later-stage startups, it can be hard to stand out to potential employees — which is why you should likely focus on outbound, rather than inbound, recruiting early on.
“Around 60% of your first 10 to 15 hires will come from your own network, from referrals,” says David. “You really want to be tapping your warm connections, the people you worked with before, the friends of friends… work from that core and then work your way out.”
Not sure how to get started with referrals?
Learn 8 tips on launching an employee referral program from Ozzie Osman, co-founder of Monarch Money.
Referrals are not only easier to get started with, but they also tend to lead to better results for companies, with referrals taking less time to onboard, having longer tenures, and saving companies $7,500 per hired referral.
One advantage that early-stage startups have over larger, later-stage companies is that founders are still involved in the hiring process. As those who own the vision and mission for the company, founders are in a unique position to really sell the company’s mission and vision to candidates.
“You have to lean into founder magic early on in the process with every candidate,” says Nolan. “That is a super power that early-stage companies have that, frankly, later-stage companies cannot scale.”
At Continuum, either Nolan or his co-founder Greg take every first call with a candidate. “I would say that 90% of that call is all of us selling,” says Nolan. “We’re not asking questions because we haven’t earned the right to. It’s all about selling and getting the candidates super excited.”
After that initial call, Nolan or Greg will get on a second call with a candidate, answer any of their questions, and then move into asking the candidate questions. But leveraging that “founder magic” at the start allows them to sell candidates their vision and mission for the company — long before it’s a household name.
Another advantage early-stage startups have over larger companies is that they can share information far more informally — and Nolan, David, and Jaclyn do just that at their respective startups.
“We share asymmetric information with candidates,” says Nolan. “I’ll share my most recent investor update, board decks, our pitch decks. This is something you’ll never get at a later stage, so you have to lean into what the strengths are for the earlier stage. If you can do it, I think you should.”
Jaclyn tells candidates what their valuation was in their latest round, and walks candidates through exactly what their equity might represent in different scenarios.
Giving candidates a behind-the-scenes look at that type of data can help show your company’s growth and potential, as well as the concrete progress you’re making towards your goals.
Every startup is operating under different conditions, but if you’re backed by investors, don’t go small when it comes to compensation.
“I see a lot of companies who have compensation policies that are just below market and just unrealistic,” says David. “The number of companies that I’ve seen be successful for being really stingy and holding the purse strings really tight is very, very low versus the ones that have been really generous with investing in their people.”
David’s compensation policy extends to contractors on the team, who receive equal equity in The Swarm as employees do. “I think that really helps to increase buy-in,” says David. “You can then start getting all the benefits as well as having more people that have a vested interest in the success of your company.”
Don’t think of your reference checks as simply dotting your Is and crossing your Ts. Instead, treat them as a rare opportunity to discover more about your candidate.
“We really value reference checks, almost more than we value the actual interview,” says Jaclyn. “The level of excitement that we hear on reference checks is very, very correlated to how we end up feeling about that person.”
The key to a successful reference check, though, is to ask detailed questions. Most references will only say positive things when asked generally about a candidate, so Jaclyn recommends getting specific in your questions:
David also recommends embracing back channel referencing, where you use network connections to get others’ opinions on the candidate (of course, while ensuring that you don’t contact anyone at their current workplace).
“Anyone can sell themselves and be really great at showing up to interviews,” says David. “But talking to someone who’s worked with them before, and especially gathering a few of those data points from multiple different people, is hugely important.”
Giving candidates feedback throughout the interview process works for two reasons.
First of all, it helps differentiate you from the hoards of companies who simply send templated emails. Being transparent in your feedback to clients provides a level of honesty and transparency that many candidates look for. It’s another benefit that comes from being an early-stage company, and it’s one that you should use — especially since it gives candidates a concrete sense of what it might be like to work with you.
Second, it allows you to see how that candidate responds to feedback.
“Before we extend an offer, we always share interview feedback with the candidate,” says Nolan. “‘Here’s what we loved. And then here’s constructive feedback for you on your interviews.’ And I love the constructive feedback piece because we care deeply about giving feedback and I want to see how they respond to it. Delivering constructive feedback to somebody and then listening to how they respond gives us further signal on if we want to extend an offer.”
If you’re working to land an important hire, don’t forget to give them your ownreferences. As a startup, that might mean connecting them to an investor or an advisor, who can help a top candidate understand why you’re worth backing.
“One of our investors is the Co-Founder of Superhuman,” says David. “When we were trying to close our CTO, I made sure to introduce Vivek to our CTO candidate, and he spent like an hour with him. He was awesome at breaking down why he believed in the company and really sold the candidate.”
Obviously, says David, you can’t do this with every candidate or you’ll quickly burn your investors out. However, for those really critical hires, don’t hesitate to pull in the people who are invested in the success of your company.
Another advantage early-stage startups have over later-stage companies is the ability to move quickly. Larger companies can take weeks or months to move candidates through a hiring process, while startups can be more nimble.
Jaclyn recommends keeping your hiring process under four or five steps total and being transparent with candidates about why each step is required.
Keep potential candidates in the loop.
David recommends using Guide, a platform that guides candidates through the hiring process and keeps them informed and engaged every step of the way.
If you haven’t trained as a recruiter, you need to proactively work to improve your skills. To do so, Nolan recommends debriefing with the hiring team after every candidate.
“One of the things I care deeply about is that our hiring process scales in a way where if I’m sick, or if we’re hundreds of people and I’m not involved in the process anymore, that my team is living the same hiring philosophy that we had in the early days,” he says.“The best way to coach this into everybody is to do a debrief at the end of every process, because then you can understand: ‘Why were you a four? Why were you a two?’ And when you start double-clicking and they start listening to what others are saying, they get better at recruiting.”
Getting candidate feedback is also an excellent way to discover where your hiring practices are strong and where there are gaps. When a new employee joins The Swarm, David does a retrospective takedown of the interview process with them, asking them about their experience and where things could be improved.
“If you do that a few times and get that feedback loop spinning, you’ll identify areas where you can tie things up,” David says.
This isn’t meant to add pressure to an already stressful experience — but Jaclyn, David, and Nolan all warn founders to be judicious about who they hire.
“At Sequoia we had this principle, which was that the founding team is critical to the success of every company,” says David. “Getting those first five to 20 hires right is super critical to setting the quality, diversity, and experience that will take the company from zero to 100, 1,000, and 10,000 employees.”
Jaclyn also points out the very real costs of hiring the wrong fit due to time pressures. “If you get someone in who’s not amazing, it’ll take them probably a month or two to ramp up. It’ll take five or six months before you’re certain that it’s not a good fit, and then it’ll take you three months to hire a new person,” she says. “So it’s absolutely better to spend an additional month or two to hold your bar and be honest with yourself. Like, is this person going to level up the whole team by having them join us?”
If you're just getting started on your hiring journey, discover the key roles you should be hiring for depending on your growth stage.
And stay tuned for the next Swarm events here!