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How to Hire When Everyone Wants to Found Their Own Startup

62 points by coloneltcb 12y ago

apalmer 12y ago
Seems to me that only those who are in the start up culture echo chamber could hold this view. Its just not realistic that the vast majority of talents people are not joining your start up because they have their own start up. The numbers do not make sense. Also the graphic that shows the paypal talent diaspora also is off, early employees who make a couple million in a start up are not going to want to WORK for a salary cause they have a couple million. They may want to join as founders if you can sell them the dream I guess.
- harryh 12y ago
  early employees who make a couple million in a start up are not going to want to WORK for a salary cause they have a couple million This is empirically false.
deleted 12y ago
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Animats 12y ago
Note that the suggested approaches do not include "offer them equity" or "pay lots of money". Most startups fail.
- notduncansmith 12y ago
  Even equity isn't especially compelling. Unless I'm a founding team member, I will always take higher pay in lieu of equity. After being with a company for a year or two and having a solid idea of where it's going, I'd probably consider it, but until that point equity is worthless to me.
  - ConfuciusSay 12y ago
    Also, even with the best equity agreement, you can still get royally screwed when it comes down to the wire.
    - fleitz 12y ago
      Exactly, what's the liquidity preference for the salary you're leaving on the table? Oh that's right about -10X
    - ryanobjc 12y ago
      Alas, employee equity holders are last on the list of winners.
- ConfuciusSay 12y ago
  Personally, as a prodigy boy-genius languishing in a shit industry, I can't wait to fill my belly with mentorship and live under a roof of self-actualization.
  - wuliwong 12y ago
    hahahaha, very good. It's amazing that this article doesn't mention money at all. As if people who want to make startups are so idealistic that money isn't a factor in choosing employment paths.
    - onewaystreet 12y ago
      The article doesn't mention it because it would be useless advice. Most startups don't have the money to match Facebook, Google, etc. and the ones that do don't need the advice.
      - wuliwong 12y ago
        First, I think this whole article was filled with useless advice. The only useful thing would be to talk about giving people better compensation. Maybe it wasn't obvious that I was thinking about equity+salary when I said "money". Startups have equity. Equity is a financial instrument. Equity would definitely be considered in any compensation package. My experience is that startups are extremely stingy with equity. I honestly was shocked back when I first learned how little equity was given to engineers in general. So I disagree with your statement that it would be useless advice, if you also extend it to giving more meaningful equity to employees. Also, I've had salary offers from startups that matched offers from the big software giants. Startups have money they just have to decide how to allocate it. If they need engineers and they are having trouble hiring, they probably will have to offer a higher salary or lower their talent expectations. Or just keep the same plan and hope to get lucky.
      - nandemo 12y ago
        It's arguably the most important advice. Nobody said that you need to match Facebook and Google. First, it's not like the BigCorps will hire every single person that your startup is interested in (e.g. Facebook rejected Brian Acton who went on to cofound Whatsapp). Also, there are plenty of people who would rather work for (say).9x at your startup than work for x at BigCorp.
vinceguidry 12y ago
There's a way through this mess. First, focus on people that want to be hired. There's lots of people out there who tried to roll their own and realized it's a lot harder than it looks. Plenty just want to focus on the fun tech stuff and leave client communications, marketing, and all the other small-business drudge work for others. Second, be willing to build people up. Promote from within and let people grow into the role they want to have. Fuck a foosball table, I want room to grow. Convey this clearly in the interview. Leave off the X number of years in technology Y nonsense, and, if you're feeling particularly froggy, the demand for a four-year degree. Nothing about having one makes you any better at technology work, it's function is purely signaling. You can get a much better feel for who someone is just by listening to them talk about their pet projects or what inspires them or what they want to do. Third, drop the pretentious bullshit. It's a seller's market for talent, you're courting them, do what you have to to minimize HR's influence on the process. Be responsive, don't ask stupid questions, do whiteboard exercises, all that tech interview bullshit that just skews the signal-to-noise ratio rather than increases it. You can get away with that shit if you're Facebook, but even there it's a dick move and it doesn't really help.
- cgh 12y ago
  Agreed. And don't be afraid to hire people in their 40s who might not fit in visually but nevertheless have vast experience building stuff that actually ships. And don't be afraid to hire remotely. You don't even have to go overseas - there is a vast untapped pool of underpaid talent in North America.
  - jdhawk 12y ago
    Playing devils advocate here: > And don't be afraid to hire people in their 40s Experienced, and expensive. Usually have families to support, and a greater desire for work/life balance. This does not mean they're less productive (per capita) but it doesn't fit the image of "start-up culture." Work long hours for peanuts, do what you boss says. > And don't be afraid to hire remotely. This takes damn good management/culture to work well. Someone who has faith in their employees. Someone that's not looking to blame everyone around them for failings. Someone who can see past the cognitive bias of the person down the hall, etc... There are lots of managers and lots of cultures. Not a lot of good managers in good cultures. EDIT: I do agree with you - just pointing out what I hear on repeat about the subject.
zedpm 12y ago
>Recruit Outside Of Central Casting Good idea, start by being open to remote developers. I'm not going to relocate to SF, regardless of salary, equity, or how exciting the project is. I've worked remotely successfully for the better part of a decade, so I know it works. Slack, HipChat, Skype, etc. make the lack of physical presence nearly irrelevant.
- amirmc 12y ago
  Companies that can figure out how to create and manage a distributed team will have disproportionate advantages if the product is successful and they suddenly need to scale. Open-source projects are a good example of this.
michaelochurch 12y ago
"Everyone good wants to be a founder" is ludicrous. 1. Most people don't have the connections to become founders without an incredible amount of work (that could be better spent in, say, finance where the long hours bring 20-40% annual pay increases). For every one person who has the connections to deliver Sequoia on an idea, there are 9,999 equally talented people who don't. If you can't find one of those other 9,999, then you're without hope. 2. The problem is that non-founder equity is generally quite pathetic. If the founders each get 20% and the first engineer gets 1%, then you're never going to see a "founder-quality" first engineer. It simply won't happen. To a large extent, hiring in the Valley is about exploiting the Winner's Curse regarding the unknown value of the equity. As it were, the more talented and seasoned people tend to assign it a low value (perhaps 0.25x price-at-valuation, meaning it'd take $160k of equity on a 4-year-schedule to offset a $10k salary drop) while the clueless and young ones who haven't made their (business and technical) mistakes yet tend to overvalue it (sometimes 1+... which makes no sense because why would one pay a higher price than the VCs are paying?) Talented people would gladly take non-founder positions if the terms (equity, autonomy, introduction into the investor class) weren't so terrible. It's not like being a founder in the VC-funded world is great; it's that everything else is worse.
- wuliwong 12y ago
  I'm one of those non-connected people working non-stop nights and weekends on "startups". Switching to an industry that actually pays out according to the amount of work I would put in is interesting. I either haven't considered it or never really thought that type of industry existed (outside of something like sales). Also, I 100% agree. Employee equity is so small it's kind of insulting. The only time I took equity was b/c I was able to work with some semi-"famous" founders and hoped to at least to grow my network. I did grow it a little, and I might be able to tap into it at some point but the equity returned me exactly zilch.
hiou 12y ago
The problem is that everyone is trying to hire the best, partly because they know how good that looks when fundraising, partly because that's how you win in winner take all tournament type economies. This ends up similar to NFL Quarterbacks. Even the worst quarterback in the NFL is exceptional, but everyone wants the best one because it's hard to win a Super Bowl with the worst quarterback in the NFL. So it's not that talent is hard to find. There are 1,000s of of people that are very good quarterbacks. It's that the best talent is hard to find. And this is because there can only be a couple of bests at anything.
- derefr 12y ago
  People also try to hire the best because the value of a team in an acquihire scenario is basically the sum of their "ranking scores"—if you're the #1 most-wanted developer in the whole talent pool, the acquirer will pay exponentially more than they will for the #2 most-wanted, and so forth. If you want to succeed as a startup, recruit by setting a bar and hiring anyone who passes it, not by comparing people to other people. "Good in an absolute sense" is much more useful knowledge than "better than X."
  - wuliwong 12y ago
    Where are these rankings kept? I honestly never had a clue that there were rankings for developers. I've never once seen that or heard it talked about.
    - derefr 12y ago
      I didn't mean that there are literal rankings; to be the "#1 most-wanted" developer is just to be more well-known and sought-after (and thus to have higher social status and clout in the industry) than the "#2 most-wanted." Google collects highly-ranked developers (e.g. Rob Pike)—for no other reason than their high rank—and calls them Fellows. Heroku hired Ruby's creator Matz, and let him continue working on Ruby itself in an open-source fashion, just to say they had him. It's like collecting baseball cards, basically.
- bootload 12y ago
eloisant 12y ago
How about: give them a little bit more equity than just scraps? Everyone want to found their company because they know it's the only way for them to be rewarded if the company is successful. Right now it's more like: "the company got bought, the founder is a millionnaire, you get some pocket money and the awesome opportunity to be a cog in Google Adwords!"
- _random_ 12y ago
  What, you mean treat developers as managers? What a ridiculous suggestion! How about a nice Google-style office instead?
- johnward 12y ago
  "the company got bought, the founder is a millionnaire, you get some pocket money" That happened to me. I wasn't the earliest employee but I would have liked to have more than enough to buy a used 2000 Honda Civic when company sold for hundreds of millions. Winning the startup lottery is hard enough. I end up doing it and get basically nothing. I honestly never thought my equity would be worth anything so I guess I can't complain.
- applecore 12y ago
  Anyone who's founded a startup knows just how much risk is involved, and how significantly it's de-risked by the time they're hiring employee #1, #10, or #100. Basically, 50% of an idea is worth less than 0.05% of a startup with traction.
  - angersock 12y ago
    Sure, but consider the case of B2B enterprise sales in some sectors: you might not be able to finish building a product until you've hired a few engineers. Those engineers? They're more vital to your company than your precious idea, because without them you have nothing. I don't think it's unreasonable at all to give them some real skin in the game.
  - dasil003 12y ago
    There's something weird about the structure of your comment. How much traction do you assume a startup has when they hire #1? Personally I think startups are too stingy with equity, 2% is considered generous, but this is not enough to compensate for the risk for employees 1-10, which is part of the reason the savvy ones want to be a founder rather than employee. I think the stinginess persists partly because of ignorance of the average prospective employee on stock option plans, so they're not getting the level of pushback they will about salaries. But more importantly from the granting side, it's very hard for founders to tell if a prospective employee has the all-out intelligence, hustle and tenacity to be a part of the critical core group that literally builds a money-making machine from scratch. It's true that hiring is a huge risk, but this is what the vesting schedule is for. Companies need to bet bigger on individuals, because the risk profile does not decline as precipitously as the equity grants, there's a discontinuity there that is keeping savvy employees out. If you are selecting only for people who can afford to work for free then you're leaving talent on the table.
georgemcbay 12y ago
How about "realize there is a whole big world outside of the Bay Area"? I have no interest in founding my own company. I'm a software developer and a pretty good one. I want to continue to develop software (it is what I truly love to do), not manage a business. I also have zero interest is moving to the Bay Area. Been there, done that (prior to the first dot com implosion), nice place to visit but won't ever live there again. I get pings fairly regularly from friends and/or ex-coworkers asking me if I'd like to work in the Bay Area (remote not an option). The answer is and always will be "no, not unless you open up an office in San Diego (or allow remote work, without expecting me to constantly be travelling to the Bay Area)". Surely there are more than enough people like me in places that aren't the Bay Area to hire to start successful businesses -- San Diego, Austin, Portland, Boston, etc, these places exist and have tech talent!
- beachstartup 12y ago
  we're based in santa monica and have or have had full time remote employees in all the areas you mentioned. portland is my favorite. in fact, when interviewing, we kind of look at bay area residency as a contra-indication. it's at least 25% more expensive to hire someone there. so, if you flip that assertion on its head - for the same price, we can hire someone 25% better, that lives in austin, or portland, or whatever. and, in fact - our salary then becomes significantly above market for the area, and we get exceptional talent. if you extend this philosophy to hiring more experienced (i.e. 'older') people, you get a triple-threat: above market salary, smart/good people, maturity/experience.
squozzer 12y ago
If you are a founder, you are a genius. If you are a genius, you can spot talent instantly or can otherwise overcome obstacles. Either way you don't need tips from TC, do you? If you need TC to tell you how to hire, then you're not really a genius and should just walk into the nearest bonfire or otherwise stop breathing my air.
fencepost 12y ago
Some other folks have hinted around this, but I think the best way to look at this is by rephrasing the title: "How to Hire When Everyone Who Wants to Work for a Startup Wants Their Own" By that I don't really mean "work for a startup" so much as "work in the stereotype of startup culture." If you're starting with a very small team and trying to build with no profitability while you try to attract a major buyer, then yeah you're going to have to work within that culture of young people willing to take on the attendant risks. If you're trying to build a viable business that happens to be a startup, perhaps you need to look beyond that initial group - because if you're only looking at 20-somethings with Macbook Airs working in coffeeshops, you're going to get a disproportionate number of people who want not just a startup but their own startup.
frostmatthew 12y ago
The everyone in the title is clear hyperbole, but obviously one meant to convey most or maybe even very nearly all. That's probably a belief held by TechCrunch writers and Startup School attendees but most likely far from realistic. My previous job was at a small nonprofit and we worked in a large co-working space that had hundreds of startups[1]. Many of the people I had conversations with (or overheard) in the kitchen/common-areas were heavy into the startup-scene (serial-founders or engineers who would only work at startups). I'm now at a large tech company and not one of my co-workers has ever expressed interest in founding a startup (or even working for one). This is probably because startups tend to attract people who want to work for a startup and larger companies tend to attract those that would rather not. If startups feel they are having a harder problem filling vacancies than large companies maybe that's a sign that talent pool is larger and they should ask what they can do to appeal more to that crowd, instead of what they could do to get potential founders to work for them instead of founding their own. [1] http://en.wikipedia.org/wiki/Cambridge_Innovation_Center http://en.wikipedia.org/wiki/Cambridge_Innovation_Center
bsder 12y ago
Um, everybody wanting to start a startup is a simple signal that salaries are too low. Better to be employee single digit at a startup and get bought out by Google 3-5 years from now than to work for Google for those 3-5 years.
- nrmitchi 12y ago
  You start by mentioning everyone wanting to start a startup, then switch to saying how it's better to be an early employee at a start up. Being the founder of a start up acquired by Google in 3-5 years may be better than working there for those years, however that is not necessarily the case for being an employee at one. Other comments in this thread point to equity in startups often being too low, so I wont repeat the same stuff.
  - bsder 12y ago
    The parent article is "How To Hire When Everyone Wants To Found Their Own Startup". Not be an employee of a startup, FOUND their own startup. And, while equity distribution still stinks, it's still better to be part of a startup doing something interesting than being a drone at Google. Generally, your salary is probably comparable (being more than 80% from the going rate will be an issue), you're doing something important if not interesting, and there is upside.
deleted 12y ago
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pnathan 12y ago
As I get more senior, I get less tolerant of exploitive cultures. You hire me by giving great benefits[1], an office next to transit in a city I want to live in, good salary, a nice office for me alone, and hands-off management who will support me, along with a commitment to free software. Generally those axes are how I rank companies, the scaling parameters vary depending on my life situation at the time. I also want to note that lots of Bay Area companies seem to have a thing for recruiting from top 10 schools. Get over themselves, go out to the Mid-/Mountain West and scour those students. There are good students outside of the top 10. [1] A compelling benefit would be fully funding a PhD in the US for a fully furloughed duration. No one ever has that as a benefit afaik. I'd like to see it offered. Note, Foosball is not a benefit. Nor is having a video game station. Nor is gourmet food, happy hours, or senior devs with 3 years of experience (that's an anti benefit).
jasonkostempski 12y ago
I could imagine the biggest fear of a "founder type" might be a company they work for attempting to claim ownership of his or her work at some point. I don't know if there's a good common solution to concerns like that. If there is, it might be good to advertise that those concerns would be addressed right up front.
choppaface 12y ago
You can't put lipstick on a pig. What's largely missing in the article is a notion that you want to find candidates who are mutually good matches for your company. Your position should have enough opportunity and value to the specific candidate to not require much sales effort. Selling harder up front just sets your management up for a big commitment on top of everything else. Good engineers with multiple offers will bounce inside of a month when they join and see all the sophistry you fed them. Put that salesman energy into 1. differentiating your opportunity or better 2. developing your current team and hierarchy to actually support the competitive talent you seek. Be /less/ greedy for hires. A mindset focused on talent is poisonous in the long term: http://www.newyorker.com/magazine/2002/07/22/the-talent-myth http://www.newyorker.com/magazine/2002/07/22/the-talent-myth The suggestions in this article are somewhat reasonable, but the article does much more to whitewash and promote the Paypal mafia (and especially Keith as a new VC) as competent. The recommendations for creating 'mentorship' and 'founder culture' have value, but that often translates into just fixing obvious management problems. To start, don't let your management burn too much money on recruiting.
- c23gooey 12y ago
  Sorry to nitpick, but I think you're getting your metaphors mixed: You can put lipstick on a pig, but its still a pig http://en.wikipedia.org/wiki/Lipstick_on_a_pig http://en.wikipedia.org/wiki/Lipstick_on_a_pig You cant polish a turd http://en.wiktionary.org/wiki/you_can%27t_polish_a_turd http://en.wiktionary.org/wiki/you_can%27t_polish_a_turd
  - choppaface 12y ago
    lol
JSeymourATL 12y ago
> Recruit Outside Of Central Casting-- This is a big idea, worthy of more discussion. Where/How do you find a hidden talent? For example, there's a founder I know, who has been unusually successful finding & training up former Theater/Drama majors. He says they're creative, quick learners, and appreciative the chance to start a new career.

62 points by coloneltcb 12y ago

Seems to me that only those who are in the start up culture echo chamber could hold this view. Its just not realistic that the vast majority of talents people are not joining your start up because they have their own start up. The numbers do not make sense. Also the graphic that shows the paypal talent diaspora also is off, early employees who make a couple million in a start up are not going to want to WORK for a salary cause they have a couple million. They may want to join as founders if you can sell them the dream I guess.

harryh 12y ago
early employees who make a couple million in a start up are not going to want to WORK for a salary cause they have a couple million This is empirically false.

deleted 12y ago

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Animats 12y ago

Note that the suggested approaches do not include "offer them equity" or "pay lots of money". Most startups fail.

notduncansmith 12y ago
Even equity isn't especially compelling. Unless I'm a founding team member, I will always take higher pay in lieu of equity. After being with a company for a year or two and having a solid idea of where it's going, I'd probably consider it, but until that point equity is worthless to me.
- ConfuciusSay 12y ago
  Also, even with the best equity agreement, you can still get royally screwed when it comes down to the wire.
  - fleitz 12y ago
    Exactly, what's the liquidity preference for the salary you're leaving on the table? Oh that's right about -10X
  - ryanobjc 12y ago
    Alas, employee equity holders are last on the list of winners.
ConfuciusSay 12y ago
Personally, as a prodigy boy-genius languishing in a shit industry, I can't wait to fill my belly with mentorship and live under a roof of self-actualization.
- wuliwong 12y ago
  hahahaha, very good. It's amazing that this article doesn't mention money at all. As if people who want to make startups are so idealistic that money isn't a factor in choosing employment paths.
  - onewaystreet 12y ago
    The article doesn't mention it because it would be useless advice. Most startups don't have the money to match Facebook, Google, etc. and the ones that do don't need the advice.
    - wuliwong 12y ago
      First, I think this whole article was filled with useless advice. The only useful thing would be to talk about giving people better compensation. Maybe it wasn't obvious that I was thinking about equity+salary when I said "money". Startups have equity. Equity is a financial instrument. Equity would definitely be considered in any compensation package. My experience is that startups are extremely stingy with equity. I honestly was shocked back when I first learned how little equity was given to engineers in general. So I disagree with your statement that it would be useless advice, if you also extend it to giving more meaningful equity to employees. Also, I've had salary offers from startups that matched offers from the big software giants. Startups have money they just have to decide how to allocate it. If they need engineers and they are having trouble hiring, they probably will have to offer a higher salary or lower their talent expectations. Or just keep the same plan and hope to get lucky.
    - nandemo 12y ago
      It's arguably the most important advice. Nobody said that you need to match Facebook and Google. First, it's not like the BigCorps will hire every single person that your startup is interested in (e.g. Facebook rejected Brian Acton who went on to cofound Whatsapp). Also, there are plenty of people who would rather work for (say).9x at your startup than work for x at BigCorp.

vinceguidry 12y ago

There's a way through this mess. First, focus on people that want to be hired. There's lots of people out there who tried to roll their own and realized it's a lot harder than it looks. Plenty just want to focus on the fun tech stuff and leave client communications, marketing, and all the other small-business drudge work for others. Second, be willing to build people up. Promote from within and let people grow into the role they want to have. Fuck a foosball table, I want room to grow. Convey this clearly in the interview. Leave off the X number of years in technology Y nonsense, and, if you're feeling particularly froggy, the demand for a four-year degree. Nothing about having one makes you any better at technology work, it's function is purely signaling. You can get a much better feel for who someone is just by listening to them talk about their pet projects or what inspires them or what they want to do. Third, drop the pretentious bullshit. It's a seller's market for talent, you're courting them, do what you have to to minimize HR's influence on the process. Be responsive, don't ask stupid questions, do whiteboard exercises, all that tech interview bullshit that just skews the signal-to-noise ratio rather than increases it. You can get away with that shit if you're Facebook, but even there it's a dick move and it doesn't really help.

cgh 12y ago
Agreed. And don't be afraid to hire people in their 40s who might not fit in visually but nevertheless have vast experience building stuff that actually ships. And don't be afraid to hire remotely. You don't even have to go overseas - there is a vast untapped pool of underpaid talent in North America.
- jdhawk 12y ago
  Playing devils advocate here: > And don't be afraid to hire people in their 40s Experienced, and expensive. Usually have families to support, and a greater desire for work/life balance. This does not mean they're less productive (per capita) but it doesn't fit the image of "start-up culture." Work long hours for peanuts, do what you boss says. > And don't be afraid to hire remotely. This takes damn good management/culture to work well. Someone who has faith in their employees. Someone that's not looking to blame everyone around them for failings. Someone who can see past the cognitive bias of the person down the hall, etc... There are lots of managers and lots of cultures. Not a lot of good managers in good cultures. EDIT: I do agree with you - just pointing out what I hear on repeat about the subject.

zedpm 12y ago

>Recruit Outside Of Central Casting Good idea, start by being open to remote developers. I'm not going to relocate to SF, regardless of salary, equity, or how exciting the project is. I've worked remotely successfully for the better part of a decade, so I know it works. Slack, HipChat, Skype, etc. make the lack of physical presence nearly irrelevant.

amirmc 12y ago
Companies that can figure out how to create and manage a distributed team will have disproportionate advantages if the product is successful and they suddenly need to scale. Open-source projects are a good example of this.

michaelochurch 12y ago

"Everyone good wants to be a founder" is ludicrous. 1. Most people don't have the connections to become founders without an incredible amount of work (that could be better spent in, say, finance where the long hours bring 20-40% annual pay increases). For every one person who has the connections to deliver Sequoia on an idea, there are 9,999 equally talented people who don't. If you can't find one of those other 9,999, then you're without hope. 2. The problem is that non-founder equity is generally quite pathetic. If the founders each get 20% and the first engineer gets 1%, then you're never going to see a "founder-quality" first engineer. It simply won't happen. To a large extent, hiring in the Valley is about exploiting the Winner's Curse regarding the unknown value of the equity. As it were, the more talented and seasoned people tend to assign it a low value (perhaps 0.25x price-at-valuation, meaning it'd take $160k of equity on a 4-year-schedule to offset a $10k salary drop) while the clueless and young ones who haven't made their (business and technical) mistakes yet tend to overvalue it (sometimes 1+... which makes no sense because why would one pay a higher price than the VCs are paying?) Talented people would gladly take non-founder positions if the terms (equity, autonomy, introduction into the investor class) weren't so terrible. It's not like being a founder in the VC-funded world is great; it's that everything else is worse.

wuliwong 12y ago
I'm one of those non-connected people working non-stop nights and weekends on "startups". Switching to an industry that actually pays out according to the amount of work I would put in is interesting. I either haven't considered it or never really thought that type of industry existed (outside of something like sales). Also, I 100% agree. Employee equity is so small it's kind of insulting. The only time I took equity was b/c I was able to work with some semi-"famous" founders and hoped to at least to grow my network. I did grow it a little, and I might be able to tap into it at some point but the equity returned me exactly zilch.

hiou 12y ago

The problem is that everyone is trying to hire the best, partly because they know how good that looks when fundraising, partly because that's how you win in winner take all tournament type economies. This ends up similar to NFL Quarterbacks. Even the worst quarterback in the NFL is exceptional, but everyone wants the best one because it's hard to win a Super Bowl with the worst quarterback in the NFL. So it's not that talent is hard to find. There are 1,000s of of people that are very good quarterbacks. It's that the best talent is hard to find. And this is because there can only be a couple of bests at anything.

derefr 12y ago
People also try to hire the best because the value of a team in an acquihire scenario is basically the sum of their "ranking scores"—if you're the #1 most-wanted developer in the whole talent pool, the acquirer will pay exponentially more than they will for the #2 most-wanted, and so forth. If you want to succeed as a startup, recruit by setting a bar and hiring anyone who passes it, not by comparing people to other people. "Good in an absolute sense" is much more useful knowledge than "better than X."
- wuliwong 12y ago
  Where are these rankings kept? I honestly never had a clue that there were rankings for developers. I've never once seen that or heard it talked about.
  - derefr 12y ago
    I didn't mean that there are literal rankings; to be the "#1 most-wanted" developer is just to be more well-known and sought-after (and thus to have higher social status and clout in the industry) than the "#2 most-wanted." Google collects highly-ranked developers (e.g. Rob Pike)—for no other reason than their high rank—and calls them Fellows. Heroku hired Ruby's creator Matz, and let him continue working on Ruby itself in an open-source fashion, just to say they had him. It's like collecting baseball cards, basically.
bootload 12y ago

eloisant 12y ago

How about: give them a little bit more equity than just scraps? Everyone want to found their company because they know it's the only way for them to be rewarded if the company is successful. Right now it's more like: "the company got bought, the founder is a millionnaire, you get some pocket money and the awesome opportunity to be a cog in Google Adwords!"

_random_ 12y ago
What, you mean treat developers as managers? What a ridiculous suggestion! How about a nice Google-style office instead?
johnward 12y ago
"the company got bought, the founder is a millionnaire, you get some pocket money" That happened to me. I wasn't the earliest employee but I would have liked to have more than enough to buy a used 2000 Honda Civic when company sold for hundreds of millions. Winning the startup lottery is hard enough. I end up doing it and get basically nothing. I honestly never thought my equity would be worth anything so I guess I can't complain.
applecore 12y ago
Anyone who's founded a startup knows just how much risk is involved, and how significantly it's de-risked by the time they're hiring employee #1, #10, or #100. Basically, 50% of an idea is worth less than 0.05% of a startup with traction.
- angersock 12y ago
  Sure, but consider the case of B2B enterprise sales in some sectors: you might not be able to finish building a product until you've hired a few engineers. Those engineers? They're more vital to your company than your precious idea, because without them you have nothing. I don't think it's unreasonable at all to give them some real skin in the game.
- dasil003 12y ago
  There's something weird about the structure of your comment. How much traction do you assume a startup has when they hire #1? Personally I think startups are too stingy with equity, 2% is considered generous, but this is not enough to compensate for the risk for employees 1-10, which is part of the reason the savvy ones want to be a founder rather than employee. I think the stinginess persists partly because of ignorance of the average prospective employee on stock option plans, so they're not getting the level of pushback they will about salaries. But more importantly from the granting side, it's very hard for founders to tell if a prospective employee has the all-out intelligence, hustle and tenacity to be a part of the critical core group that literally builds a money-making machine from scratch. It's true that hiring is a huge risk, but this is what the vesting schedule is for. Companies need to bet bigger on individuals, because the risk profile does not decline as precipitously as the equity grants, there's a discontinuity there that is keeping savvy employees out. If you are selecting only for people who can afford to work for free then you're leaving talent on the table.

georgemcbay 12y ago

How about "realize there is a whole big world outside of the Bay Area"? I have no interest in founding my own company. I'm a software developer and a pretty good one. I want to continue to develop software (it is what I truly love to do), not manage a business. I also have zero interest is moving to the Bay Area. Been there, done that (prior to the first dot com implosion), nice place to visit but won't ever live there again. I get pings fairly regularly from friends and/or ex-coworkers asking me if I'd like to work in the Bay Area (remote not an option). The answer is and always will be "no, not unless you open up an office in San Diego (or allow remote work, without expecting me to constantly be travelling to the Bay Area)". Surely there are more than enough people like me in places that aren't the Bay Area to hire to start successful businesses -- San Diego, Austin, Portland, Boston, etc, these places exist and have tech talent!

beachstartup 12y ago
we're based in santa monica and have or have had full time remote employees in all the areas you mentioned. portland is my favorite. in fact, when interviewing, we kind of look at bay area residency as a contra-indication. it's at least 25% more expensive to hire someone there. so, if you flip that assertion on its head - for the same price, we can hire someone 25% better, that lives in austin, or portland, or whatever. and, in fact - our salary then becomes significantly above market for the area, and we get exceptional talent. if you extend this philosophy to hiring more experienced (i.e. 'older') people, you get a triple-threat: above market salary, smart/good people, maturity/experience.

squozzer 12y ago

If you are a founder, you are a genius. If you are a genius, you can spot talent instantly or can otherwise overcome obstacles. Either way you don't need tips from TC, do you? If you need TC to tell you how to hire, then you're not really a genius and should just walk into the nearest bonfire or otherwise stop breathing my air.

fencepost 12y ago

Some other folks have hinted around this, but I think the best way to look at this is by rephrasing the title: "How to Hire When Everyone Who Wants to Work for a Startup Wants Their Own" By that I don't really mean "work for a startup" so much as "work in the stereotype of startup culture." If you're starting with a very small team and trying to build with no profitability while you try to attract a major buyer, then yeah you're going to have to work within that culture of young people willing to take on the attendant risks. If you're trying to build a viable business that happens to be a startup, perhaps you need to look beyond that initial group - because if you're only looking at 20-somethings with Macbook Airs working in coffeeshops, you're going to get a disproportionate number of people who want not just a startup but their own startup.

frostmatthew 12y ago

The everyone in the title is clear hyperbole, but obviously one meant to convey most or maybe even very nearly all. That's probably a belief held by TechCrunch writers and Startup School attendees but most likely far from realistic. My previous job was at a small nonprofit and we worked in a large co-working space that had hundreds of startups[1]. Many of the people I had conversations with (or overheard) in the kitchen/common-areas were heavy into the startup-scene (serial-founders or engineers who would only work at startups). I'm now at a large tech company and not one of my co-workers has ever expressed interest in founding a startup (or even working for one). This is probably because startups tend to attract people who want to work for a startup and larger companies tend to attract those that would rather not. If startups feel they are having a harder problem filling vacancies than large companies maybe that's a sign that talent pool is larger and they should ask what they can do to appeal more to that crowd, instead of what they could do to get potential founders to work for them instead of founding their own. [1] http://en.wikipedia.org/wiki/Cambridge_Innovation_Center http://en.wikipedia.org/wiki/Cambridge_Innovation_Center

bsder 12y ago

Um, everybody wanting to start a startup is a simple signal that salaries are too low. Better to be employee single digit at a startup and get bought out by Google 3-5 years from now than to work for Google for those 3-5 years.

nrmitchi 12y ago
You start by mentioning everyone wanting to start a startup, then switch to saying how it's better to be an early employee at a start up. Being the founder of a start up acquired by Google in 3-5 years may be better than working there for those years, however that is not necessarily the case for being an employee at one. Other comments in this thread point to equity in startups often being too low, so I wont repeat the same stuff.
- bsder 12y ago
  The parent article is "How To Hire When Everyone Wants To Found Their Own Startup". Not be an employee of a startup, FOUND their own startup. And, while equity distribution still stinks, it's still better to be part of a startup doing something interesting than being a drone at Google. Generally, your salary is probably comparable (being more than 80% from the going rate will be an issue), you're doing something important if not interesting, and there is upside.

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pnathan 12y ago

As I get more senior, I get less tolerant of exploitive cultures. You hire me by giving great benefits[1], an office next to transit in a city I want to live in, good salary, a nice office for me alone, and hands-off management who will support me, along with a commitment to free software. Generally those axes are how I rank companies, the scaling parameters vary depending on my life situation at the time. I also want to note that lots of Bay Area companies seem to have a thing for recruiting from top 10 schools. Get over themselves, go out to the Mid-/Mountain West and scour those students. There are good students outside of the top 10. [1] A compelling benefit would be fully funding a PhD in the US for a fully furloughed duration. No one ever has that as a benefit afaik. I'd like to see it offered. Note, Foosball is not a benefit. Nor is having a video game station. Nor is gourmet food, happy hours, or senior devs with 3 years of experience (that's an anti benefit).

jasonkostempski 12y ago

I could imagine the biggest fear of a "founder type" might be a company they work for attempting to claim ownership of his or her work at some point. I don't know if there's a good common solution to concerns like that. If there is, it might be good to advertise that those concerns would be addressed right up front.

choppaface 12y ago

You can't put lipstick on a pig. What's largely missing in the article is a notion that you want to find candidates who are mutually good matches for your company. Your position should have enough opportunity and value to the specific candidate to not require much sales effort. Selling harder up front just sets your management up for a big commitment on top of everything else. Good engineers with multiple offers will bounce inside of a month when they join and see all the sophistry you fed them. Put that salesman energy into 1. differentiating your opportunity or better 2. developing your current team and hierarchy to actually support the competitive talent you seek. Be /less/ greedy for hires. A mindset focused on talent is poisonous in the long term: http://www.newyorker.com/magazine/2002/07/22/the-talent-myth http://www.newyorker.com/magazine/2002/07/22/the-talent-myth The suggestions in this article are somewhat reasonable, but the article does much more to whitewash and promote the Paypal mafia (and especially Keith as a new VC) as competent. The recommendations for creating 'mentorship' and 'founder culture' have value, but that often translates into just fixing obvious management problems. To start, don't let your management burn too much money on recruiting.

c23gooey 12y ago
Sorry to nitpick, but I think you're getting your metaphors mixed: You can put lipstick on a pig, but its still a pig http://en.wikipedia.org/wiki/Lipstick_on_a_pig http://en.wikipedia.org/wiki/Lipstick_on_a_pig You cant polish a turd http://en.wiktionary.org/wiki/you_can%27t_polish_a_turd http://en.wiktionary.org/wiki/you_can%27t_polish_a_turd
- choppaface 12y ago
  lol

JSeymourATL 12y ago

> Recruit Outside Of Central Casting-- This is a big idea, worthy of more discussion. Where/How do you find a hidden talent? For example, there's a founder I know, who has been unusually successful finding & training up former Theater/Drama majors. He says they're creative, quick learners, and appreciative the chance to start a new career.