Throughout my career I have spent countless hours on recruiting. It is the lifeblood of all growing businesses, and has always ranked near the top of my priority list. In my former life on Wall Street, I sought to attract and retain top talent in derivatives structuring and marketing as well as proprietary trading. These people had many options and were aggressively sought-after by my competition. They were potential game-changers for my teams, and the stakes were extremely high. The challenge was: how do I distinguish my opportunity from that of other firms? I was sitting at Deutsche Bank, a trading powerhouse but lacking the cache of a Goldman Sachs or a Morgan Stanley. Sure, I could potentially offer more money in the short-run, but for me to win the source of differentiation had to be greater than that.
Reflecting upon my experience, the challenge I was facing is pretty similar to start-up CEOs and CTOs today who are looking to hire top engineers in direct competition with Facebook, Google and top start-ups with distinct brands and buzz. But in speaking with a handful of my portfolio companies, I’ve noticed a massive difference in the approach to recruiting: some are recruiting to fill a role; others are seeking partners to jump on board and to execute against a holy mission. Some view recruiting as a pain; others view it as a passion. You can guess which firms have been more successful in their hiring efforts. In fact, we at IA Ventures have really begun to recognize the networks of portfolio company CTOs as a distinct competitive advantage. Are they thought leaders? Do they speak at leading-edge conferences? Do they have a hacker drinking group? Do others seek out their advice and counsel as a node in the developer ecosystem? It’s not enough to just be a great engineer if you are on the front lines of recruiting: you have to be a force of nature with infectious passion, energy and vision. This is what I did on Wall Street and it worked pretty well. This is what I see top CTOs and CEOs doing today to stand out from the crowd and to win against resource-laden incumbents and other rising stars.
I was having this exact conversation with one of my portfolio companies last night. They have a strong nucleus but desperately need more engineers. They are building a very interesting and potentially transformative business. They are still early so can dole out healthy amounts of stock options, yet they have paying clients. In short, they have a good story. Problem is, they’re not telling it right. Here is some of the advice I laid on them over beers:
- You’re not hiring to fill a role; you’re selling a dream. This doesn’t mean being fluffy (which engineers hate); it means clearly articulating the company’s big vision and how the right person will help the company disrupt and transform the market.
- If you don’t exude infectious passion for the mission, forget about hiring the best. Your competitors surely will, so you better get it together – and fast.
- Recruiting is not a necessary evil; it is the vehicle by which your company will achieve its mission, and those whom you bring on board will be your partners on this mission. Notwithstanding the effort required, you should bring an intensity and resolve to the process that keeps you in a positive frame of mind.
- Selling the intangibles is key, especially if you can’t offer the same cash comp as your competition. Yes, stock options can help close the gap, but even this often isn’t enough. Understanding the person’s background and articulating why they might be uniquely well-suited to joining the team. Giving them some budget to go to relevant industry conferences, host a developer drinking group, etc. These small gestures can go a long way.
- Cement the fact that they are your partner and the importance of their role in transforming an industry. Yes, it might feel unnatural to go after someone so hard and to psychologically boost their value to such an extent, but let’s face it, you need them. If they are a good person, a great engineer and buy into the vision, they are gold. Go get them.
Recruiting also has a lot in common with fund-raising. At its core, you’re selling. The vision. The mission. The economics. The dream. At the top end of the market they’re not selling you: YOU ARE SELLING THEM. If you keep this in mind, you will invariably have more success in building the team of your dreams.