I’ve spent time with hundreds of founders and startup executives over the past six years, and the constant headache is hiring. Finding the right talent tops the charts of bottlenecks, barriers, and blockers, especially for early-stage founders.
In this post, I’ll outline a framework that helped founding teams conquer their hiring woes and unblock growth.
Impact / Effort
Once you’ve decided to expand outside of your co-founders, you’ll face a host of time-consuming tasks that don’t have guaranteed outcomes. Your ultimate guiding principle while building your team should be impact vs. /effort.
Why?
As an entrepreneur, you’re leveraging years of specific experience innovating in an industry you know like the back of your hand. The knowledge and skills you are utilizing are valuable, and in fact, expensive! For example, the average consulting hourly rate in the US is $244, for a total daily rate of $2,440!
What’s my point? You should be using this time where it’s most valuable.
Where?
Many founding teams are spending ¼ or more of their weeks looking for candidates. Interestingly, first-time founders are investing 4x their time into sourcing and interviewing compared to repeat founders.
Leverage the heck out of your network. Candidates with personal connections to the core people in the company tend to stay in the business 2x to 3x longer, and if done effectively, you can spend up to 10x less effort building candidate pipelines early on.
Most people have limited experience sourcing, and you’re not just the interview loop, you’re also the PM or engineer, with recruiting as an additional priority. Before you know it, you can run up a tab that ends up being much higher than those agency fees you wanted to avoid.
At this point, a vicious cycle of “need to hire to hit goals but need to get shit done before hiring” can quickly spin out of control. Shipping features will always be P1 even at your expense. With hiring on the back burner, you’ve now either hit the low effort/low impact or high effort/low impact.
Break the cycle
The relief many founders turn to is hiring recruiters, which doesn’t typically work. Your business is likely not at a point to be permanently hiring yet, so bringing on a recruiter can quickly become costly. This may make a lot more sense later on.
Partner up
The solution? This is the unavoidable moment where I suggest something that sounds salesy and completely aligns with my agenda, but here it goes: Find an agency you can work with! it’s hard, I know - they’re expensive, challenging to find, and can be frustrating to work with. But a solid agency partner can be a game changer allowing your people to build vs hunt.
The best advice I give execs is to get referrals. Your VCs will typically have a couple of recommendations that you can vet. Ideally, you’ve already built a partnership from the early days but this is a good time too.
Instead of bringing this in-house, you’re much better served signing a few agencies and letting them battle it out, cutting the low performers quickly. This keeps the effort low and the impact high as you bring in a top-tier recruiting agency that you can trust.
The growth phase
Time to scale
With many different initiatives, teams, and fires consuming every last second of the day, how do you balance recruiting with all these demands? The short answer is, you don’t.
Because no one has an infinite budget for outsourcing recruiting, this is the time to delegate internally by hiring a recruiter. While you’re in a scaling phase, 90+% of roles can be filled by the internal team, but even the best recruiters aren’t magicians, so there will inevitably be some roles that they don’t fill.
I’m going to make one more suggestion that admits I’m biased but does work: spend money on recruiting.
Leaders consistently cite budget as one of the biggest blockers to hiring efficiently. In most startups, recruiting sees only a fifth of the budget of sales and marketing because most of us think of it in terms of salary. It’s important to think of your payroll budget as separate from your recruiting budget.
You should have a recruiting stack that includes an ATS as well as sourcing and outreach tools. There are so many options to fill these roles from solutions like Greenhouse to more tech-forward tools that actually utilize AI like Hireflow.
At the end of the day. it’s the people you bring in that get you to the place you want to go. Hiring will always be the starting point for building amazing products so I hope this is helpful as you roadmap finding talent the same way you would on the product to ensure delivery on every important initiative - starting and ending with bringing in the best people.
Why Rocket?
Our pitch
Rocket is the #1 talent partner for startups and top tier VC firms like a16z, Mayfield, and NEA. We have placed hundreds of incredible product, engineering, and finance candidates for them. Connect with us as you’re looking to bring in next-level talent. We will be that trusted partner that’s perfect for any and all of your startup hiring.
