How to Make Your Startup’s First Hires

You know you need help. You know you’re overwhelmed. You’ve finally got the funding or the customers and can afford to hire! Now what?

Hiring is a commitment. And the smaller the team, the bigger the impact of any one hire.

Roughly this with definite exceptions for high level roles:

Image: gross oversimplification of the stakes of hiring.

1. What needs to be done?

• Make a list of everything that needs to be done, both day to day and at a strategic longer term level. I like to think about team planning centered around a 12–18 month window. That’s usually long enough to make meaningful progress but not so long that you lack the right visibility. You’ll want to think about what’s coming now and next to shape the right plan. For example, right now the role might be very tactical but later transition to strategic leadership.
• Cross out anything on the list that doesn’t need to happen at all. Circle what only you can/should do — for example, fundraising or long term strategy. Don’t just pick what you *enjoy* doing most. Think about your own strengths (or weaknesses) but be realistic about what you might need to build within yourself or buy in an employee.
• We tend to think of our teams as a reflection on who we are and as such sometimes we: build a team larger than we need, hire for a scale that’s so far in the future that the new hire struggles to get tactical, rely solely on “gut instinct” also known as bias, hold everyone to unrealistic standards and withhold delegation… Planning ahead can ensure that we mitigate the risk of our own emotions in this process.

• Group the remaining duties by skill and/or competency and duration. You’re not going to find a bookkeeping creative director. That’s not a thing. Will there only be more of this? Is this a one time need to get set up and then you can maintain? Look at what duties are typical of a single job. At this stage, generalists are key and critical. But even a phenomenal generalist has their limits. If you’re looking to supplement an entire department that’s key to your strategy, consider whether a cofounder might be the best decision.
• When you budget for a new hire, think beyond salary! You’ll need to consider taxes (federal and state), benefits (these will cost more than you think and are at least 5 figures/person), retirement plans, bonus or commission and equity. These can vary significantly by state and position. Some tools I like include this toolbox and compensation data from Payscale or Salary.com. I’ve never seen Glassdoor have accurate salary info.

2. Do you need a contractor, employee or vendor?

Image: Pros & Cons of Employee vs. 1099 vs. Vendor. To receive in a Google doc, please email amanda@newance.co

If you decide to employ people, a SaaS partner like a Gusto (you login to a portal as will your employees) or PEO like EmpowerHR (you’re technically a “shared employer” with them and they sometimes work more directly with your team) can be a great place to start. These will walk you through getting established at a federal and state level to employ people and handle payroll etc. Some will even include benefits options.

There are two pieces to “HR” in this context — the admin/compliance/payroll stuff and the talent attraction/retention/management. A PEO or SaaS option are best suited to help with that first set of HR needs — paperwork, templates, compliance etc.

3. Promote & Ask

Want additional help for creating a great job description? Check out our guide!

3a. Build the job.

• What needs to happen. What does success mean? What core characteristics are critical for success in working with you? What’s the culture that you want to build long term? These hires are your foundation. What experience would someone need to be successful in this role? What are some things you’d be willing to teach? (< — this will save you $$$)
• What does your next key hire care about? For example, an exceptional engineer tends to care about solving interesting problems. A highly skilled operations person typically wants to influence processes and gets great satisfaction from building systems.
• Why should this person want this opportunity? Yes, you know and believe in your vision. But they don’t yet. Just like you bring an investor on this journey, you need to do the same for your team.
• Watch out for biased language and leave out “he” or “she”. If you need to use pronouns use they/them. Avoid rockstar, superhero, ninja or anything cheesy. Don’t call your team a “family”. It implies unconditional love that is just not true in the workplace and will hinder you from making tough decisions later on.

Image: Chart showing you not to be too casual or formal/internally focused with your job description.

3b. Post it where the right people are. If you’re looking for a senior chemist, are they really on ZipRecruiter? Probably not. But a communications manager may be.

• Share wide and far but pay special attention to the places, spaces & people who will be connected to this person. For example, sharing a React role with React Meetup & Slack groups is going to get you further than LinkedIn. That doesn’t mean LinkedIn will never work out. It’s just not enough to rely on it.
• Consider job boards to help you expand your network and diversify your candidate pool. We have a list of options here.
• Think about who you know who will know this person. Maybe you know all insurance people. But you recall that a former coworker’s spouse is a tech recruiter. Look to see who they know and ask for introductions. This is different than saying “who do you know?” Make it so, so easy for people to give you referrals. Write something that they can easily forward to the person you’re hoping to meet: I’m hoping to connect with NAME about a new role on our team. They’d be able to (1 selling point on the job that’s about the candidate and what they might want). Totally fine if they’re not looking for a change. Always happy to connect with great people.

Image: Visualization of your Network

Who else cares about this hire being the right one? Equip your investors, partners and even key clients with the idea that you’re hiring and for whom. Give people not just links but suggested language to make it easy to share your info.

3c. Find the right people and ask them.

• Yes, we hope the right applicant comes along. But exceptional people have options and pursuing job boards may be only part of their search strategy. Or they may never apply to jobs at all.
• A good cold message is about getting a conversation started not closing the deal right away.

Image: Sample Cold Message. “Hi (Candidate), I noticed (why them) and thought you might be interested in (problem I’m solving) and the team we’re building. (Add why this could be good *for them*) Not assuming you’re looking for a new job but would love to connect either way. How is (make it easy by suggesting a few options) for a quick intro call?”

4. Screen (Know vs. Worked With)

• “I know them” and “I’ve worked with them in a startup” ARE NOT THE SAME THING. Design your process ahead of time and put every candidate through it.
• A good process is: consistent, fair and focuses on skills/job responsibilities rather than irrelevant and protected class info like gender, age, race etc.
• Build a scorecard of what you’re looking for and establish ahead of time which pieces you’ll dig in on throughout the process.
• Keep it long enough to be thorough but short enough that it doesn’t hinder your ultimate goals. After four interviews, you’ll see significantly diminishing returns on accuracy or useful information. And you’ll have bored candidates. One conversation is not enough.
• If you’re hiring for a skillset you don’t personally have, consider paying a trusted resource to join part of the process. We bring in outside senior interviewers often if we’re helping someone make a first engineering hire.
• Start talking lightly about compensation early and often. In some states you can ask about compensation history and in many you cannot. Instead, start talking about the range you’re thinking (including any thoughts on whether you could flex) and save everyone time early on. Find out if they’re interviewing elsewhere and if you’ll be competing.

5. Offer

• Incentives drive behavior. You’ll want to be very thoughtful about any incentives that you build into a plan. For example, commission is an incentive to sell more. But commission paired with a less than livable base salary is most likely to incentivize shortcuts and bad deals.
• You should have your market insights from your initial research. Use those and the ongoing conversations you’ve had during the selection process to form an offer.
• There are some decent offer letter templates available everywhere. Pick one that suits your tone. Have an attorney help you with equity grants and any other confidentiality/non-compete considerations. It’s critical that those be written perfectly and within legal scope.

6. Onboard. Do not throw them in the deep end.

• You’re so relieved to have help. And you do. But short term… This is going to be more work. What context do they need? Which people do they need to know? What systems and equipment do they need access to? What do you expect them to do within 30/60/90/6 months? Make that list clear and shared.

Making your first few hires is a big responsibility that can ultimately impact your company’s long-term success. But, with an understanding of the hiring process and a clear plan in place, you can have confidence that you’re making the right hiring decisions so that you can keep delivering for your customers.

How can we help? I have free HR Office Hours open here or am open to questions at amanda .at. newance.co.