Written by: Aurora Petracca, External Venture Advisor at a16z Crypto
Compiled by: Luffy, Foresight News
When startup founders find product-market fit and secure funding, investors and advisors often offer advice: Hiring the right people will lay the foundation for the companyâs growth. On the contrary, making the wrong choice of talent can undermine the companyâs efforts.
This advice is absolutely correct, but lacks a concrete 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. This seems counterintuitive: if the founder is desperate for the right technical talent, why 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 recruiting in the early stages. When I joined Airbnb, I was the companyâs third recruiter; when I joined Coinbase, I was the second.
Recruiters can save a lot of time
The process of going through multiple interview rounds and finding the right hire among multiple candidates takes a lot of time. Saving time is very important, especially in the crypto space. There are 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 a founder to keep in touch with 100 candidates at the same time, 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 hiring opportunities, and damaged reputation. A poor candidate experience can easily make you uncompetitive, not just with one candidate, but with all candidates.
Hiring takes a lot of time. If it doesnât, then your startupâs hiring process may be too simple or your company may be growing too fast, which may lead to staffing issues and turnover. Remember, as a founder, time is your most valuable resource. Hiring a professional recruiter means you can focus on other more important tasks and allocate your time wisely. You will still be involved in the hiring process, but only in key parts of the process, which is more strategic and efficient.
I see this scenario a lot with new startups: They're looking to hire their first batch of technical people, and they have great connections, but often those connections are at the wrong time. Maybe they've hired a few people this way, and they need to proactively reach out to candidates. But this opens up a whole new set of questions: How many people should you reach out to? Should your company use a precision or volume strategy? Startups may need a combination of both. They both have their place, depending on the role, but both are undoubtedly a lot of work.
Recruiting the right technical people can take a lot of time. Statistics show that you need to contact 50 to 100 people to hire 1 person. Every message you send to candidates needs to be carefully considered, and the response rate of candidates to recruiters is at most 30% (if the founder or technical leader contacts you, the response rate may be higher).
Letâs say your company is hiring for only 2 engineers. You might run 30 candidates through the hiring process, and each candidate will be interviewed 2-5 times. That means you need to manage and schedule 60-150 interviews in a short period of time. As a founder, you might also be leading some product, engineering, marketing, fundraising, customer support, and day-to-day operations, and liaise with external advisors every day, etc. So even if you have good intentions for your candidates, the candidate experience will be degraded. Negative experiences will quickly show up in Glassdoor reviews that future candidates will read.
Recruiters can mitigate these issues by working closely with hiring managers to develop the right strategy. In the early days of Coinbase, I worked with engineers and managers like 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 me, I would have an initial conversation with the candidate; 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 magnets for talent
Founders play an important role in early recruitment, including clarifying the company's vision and mission, defining the values ââthat the team can achieve through the recruitment process, and of course evaluating top talent. Once on board, a good recruiter can help create and run a rigorous recruitment process, and the founder only needs to appear at key points in the process. Founders should participate in every interview until the leadership team has formed excellent recruitment standards.
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 theyâre working on and why theyâre important to other engineers. These become beautifully packaged recruiting content. They can tweet it (and have friends retweet it); share it on Farcaster, Discord, Signal, and Telegram channels; share it on LinkedIn and company newsletters; send it to your entire network. This way, founders can better attract talent.
The entire company can use this content in any outreach messaging. Donât forget to regularly update new content created by the team. This approach has benefits for individual founders, too: imagine the amount of energy youâd 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, choosing a few impactful positions.
Upfront spending saves money in the long run
This all sounds great, but isnât it too expensive to hire a recruiter early on? After all, every startup has a limited amount of money.
Itâs a wise decision to invest precious funds in people who can accelerate your teamâs growth. If your product is delayed by several months because you canât hire engineers quickly, your competitors may take market share from you. This will cost your company more money in the long run.
At Airbnb, when they had 18 employees, they prioritized culture assessment and candidate experience. As a result, they first hired an external recruiter to ensure someone was on top of the entire hiring process from start to finish, ensuring no candidate fell through the cracks. Similarly, when I joined Coinbase as the first internal recruiter, the company was only 7 employees and they were already investing a significant amount 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 hiring workload it was. Once there was a consistent need to hire, this person joined full time, and when hiring demand surged for the next phase of expansion, I joined.
Both Airbnb and Coinbase prioritize bringing in recruits (whether theyâre internal or external) to help grow the company in the long term.
How to Identify a Great Recruiter
What separates a good recruiter from a bad one? Here are some guidelines:
They proactively meet with hiring managers to brainstorm and develop creative candidate sourcing strategies.
They will implement these strategies immediately.
In an emergency, theyâll approach the founder/hiring manager to discuss and resolve compensation issues rather than risk losing the candidate by delaying action.
They will meet with candidates âafter hours.â If necessary, they will meet with candidates in person at 9 p.m. or on Sunday afternoons.
Not only are they charming, they are also agile:
They have a thorough organization system to ensure that calls are never missed.
They know who they need to contact.
They keep the hiring team focused on the task of submitting feedback and drive the process forward with reviews.
If recruiters are not systematically organized, recruiting will fail.
Qualities of a Good Recruiter
Great recruiters often begin their careers at a competitive sales or recruiting agency. 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 an agency recruiter, 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. But if the candidate is adaptable, humble, willing to learn, resourceful, and able to find a way to succeed, these are excellent qualities in my years of recruiting experience.
In addition to these core traits, youâll also want to look for recruiters who have experience in:
Fix imperfect processes;
Solve data problems;
Navigate complex relationships with hiring managers;
Develop a creative talent strategy.
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 their pitch.
Finally, find a recruiter who is passionate about the companyâs mission. Many recruiters have experience selling different products and visions, but to them, itâs 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 contagious. 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 the cryptocurrency space, a sense of mission is a must to survive 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 youâre building. Iâve actually heard people say that Airbnb is like a âcult.â If thatâs the case, then Iâm part of it. As a recruiter, my energy needs to rub off on candidates, or I canât 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 cryptocurrency 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 may be worrisome for some candidates, especially when negative press spreads. To be fair, though, we encountered similar sentiment when Airbnb experienced public unrest. Itâs conceivable that any company that seeks to change the way we live, like Uber and OpenAI, will face the same.
Airbnb and Coinbase both used a proven approach of telling the story of our mission through storytelling (the power of mission and narrative). We also highlighted the regulatory preparedness the team was doing to implement change. A similar approach can help other Web3 companies.
One of the unique aspects of Web3 is market volatility and bull-bear cycles. Showing a chart of trends in the Bitcoin and Ethereum markets over the past 5-10 years can help candidates understand the current challenges. I also often use articles written by industry experts to help tell the story.
Do recruiters (and hires) need to have cryptocurrency experience?
Do your recruiters need to be experts in Web3? I would choose recruiters who are passionate about the space over those with experience, as long as they have the traits 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 âWeb3 native experience.â Many candidates who were considered âcrypto nativeâ were only interested in short-term projects and did not have the staying power we required.
Therefore, I look for engineers who have expertise in payments, infrastructure, scaling, and security, but who are also interested 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 who have expertise in key areas and are working on side projects in the cryptocurrency space.
If you canât find Web3 talent willing to work long-term, hire people with the following traits:
Analytical skills
intelligence
creativity
Open Mind
How to Hire a Great Recruiter
Itâs no surprise that recruiters are generally good at interviewing. So what separates the great recruiters from the mediocre ones?
I like to get to know recruiters through behavioral questions. These questions can provide insight into recruitersâ experiences with hiring challenges, how they work with hiring managers, and how they engage candidates. These three areas are core qualities of great recruiters, and if you can get recruiters to talk about their specific experiences 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 your recruiterâs skills in talking to candidates through live role-play interviews. A good recruiter should be able to perform this type of interview competently. Additionally, observing how candidates react under pressure through non-traditional interviews is a good litmus test to see how they cope with unexpected situations.
How to judge the performance of recruiters
Once you find a recruiter you like, what should you expect from them? How do you evaluate whether they are doing a good job? They should:
Take control of the recruitment process for all candidates and complete the recruitment.
Establish a recruiting process to ensure consistency and organization for all candidates.
Work with other hiring managers at least weekly to understand whatâs going well, whatâs not going well, and to 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 responsible for finance to keep them informed of trends they are seeing (e.g., pay declines due to compensation) and to extract data to ensure the compensation packages they are 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 a snapshot of their 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 integrate the companyâs cultural values ââinto the hiring process so that the employee base reflects the companyâs values.
Help you understand how your company can approach diversity in hiring. Lack of diversity hurts your product. If you donât invest the time from the beginning, the road to diversity will only be harder. But in the early days of a startup, you may have to hire people with the right skills to build your company. A recruiter can help you think through how to approach this and execute the strategy you think makes the most sense.
Depending on the recruitment workload, these tasks may be completed by multiple people.
What else can recruiters do besides recruiting?
But what does a recruiter need to do once theyâve completed their first batch of hires?
First, remember that people who donât proactively look for ways to make themselves valuable should not be allowed into your company, especially at a startup, where many early employees have to wear multiple hats. Beyond that, recruiters can also play an important role in 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 managing an HRIS system. But if you need someone to help with performance management, career development conversations, terminations, employee relations issues, and off-site events, youâll 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, recruiting people who also serve as HR personnel may be a long-term solution. As a company scales, each of the following areas will eventually require people with specific expertise.
These are also the tasks that recruiters are best suited to do when they are not recruiting. When recruiting starts again, they return to what they excel at.
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 recruiting brand creation; work with developer relations leaders to properly showcase the work to potential candidates
Hiring, leaving and firing
Manage HR systems to track employees and their internal activities
Performance Appraisal Process
Employee Career Development
Conduct team-building activities regularly, especially once a quarter if the company is fully remote, because it is difficult to build connection and trust between employees without face-to-face interaction.
Cultural Ambassadors: In addition to integrating values ââinto the hiring process in a structured way, these values ââshould also be communicated to the company on a regular basis.
Summarize
Most people are often surprised by how much work recruiting can do. If you ask an experienced founder, theyâll probably tell you that attracting, managing, and retaining top talent is the most challenging aspect of the job. When considering what will make your company successful and what will provide the strongest foundation for your company to scale, consider hiring a professional recruiter early on.
