A Guide to Hiring for your Startup

1. A guide to HIRING FOR YOUR STARTUP Yevgeniy Brikman
2. What is the most important part of a startup?
3. a) The idea b) The technology c) The sales and marketing
4. a) The idea b) The technology c) The sales and marketing
5. People are the most important part of a startup
6. Differences between people are massive
7. Therefore, hiring is the most important thing you do
8. Best piece of startup hiring advice:
9. Don’t do it
10. Don’t do it (yet)
11. Stay small as long as you can
12. Build a culture of leverage and efficiency
13. Eventually, you’ll need help
14. Founders spend >25% of their time on hiring
15. You must spend this time wisely
16. I’m Yevgeniy Brikman ybrikman.com
17. I wrote a book about startups hello-startup.net
18. based on my experiences at LinkedIn & TripAdvisor hello-startup.net
19. as well as interviews with developers from many startups: hello-startup.net
20. Google, Twitter, Facebook, Stripe, Pinterest, Quora, Coursera, GitHub, and many others. hello-startup.net
21. Here’s what I learned about hiring
22. 1. Who to hire 2. Where to look 3. How to interview
23. 1. Who to hire a. Co-founders b. Early hires c. Later hires d. What to look for 2. Where to look
25. You need a co-founder
26. to fill in your weaknesses
27. to talk you out of bad ideas
28. to share the work load
29. Two or three founders works best
30. Building a successful startup takes 10 years
31. So be careful when picking a co-founder
32. Look for someone you’ve worked with before
33. College classmates & former co-workers are ideal
34. Split the equity evenly
35. Make sure everyone is on a vesting schedule
36. Remember, a successful startup takes 10 years
37. You need everyone to be bought in for the long term
39. Early hires are like bringing new DNA into your company
40. Choose the first 10 employees very carefully...
41. ...as they determine the next 100
42. Airbnb CEO Brian Chesky would ask early candidates:
43. “If you had a year left to live, would you take this job?”
44. Early on, prefer generalists
45. In the early days, everyone has to do everything
46. “You don't want someone saying that's not my job” - Julia Grace
48. Later stage startups can hire more specialists
49. Prefer “T-shaped People”
50. Experts at one discipline (vertical leg of T)
51. Broadly skilled at others (horizontal leg of T)
53. Smart and gets things done
54. Smart because you constantly have to learn
55. Gets things done because you must ship
56. Good communication skills
57. Can you converse with them?
58. Can you understand their writing?
59. Can they explain complicated concepts?
60. A good culture fit
61. Similar tastes & appearance is NOT culture fit
62. It’s discrimination
63. Real culture fit is about shared values
64. E.g. at Zappos, providing amazing customer service is a core value
65. Everyone who is hired answers customer calls
66. That’s culture fit.
67. 1. Who to hire 2. Where to look a. Use your network b. Employer branding c. Job boards d. Premature optimization
69. The majority of startup hiring is via referrals
70. Referrals fill jobs faster
71. Referrals have the highest retention rate
72. Referrals are the highest quality hires
74. Employer branding is attracting candidates to your company
75. You do this by sharing valuable content and teaching
76. Blogs, meetups, hackathons, conferences, open source, etc
78. No one likes job postings
79. “Results oriented”
80. “Has at least 12 years of iOS experience”
81. Only active job seekers look at job postings
82. If you just “post and pray”, you only reach 1 out of 5 candidates
83. If you’re going to post jobs, get creative
84. And post them in the right places
85. Better yet, reach out to candidates directly
87. Old joke: the boss takes half the resumes, throws them in the trash and says...
88. “I don’t hire unlucky people.”
89. You’re throwing away resumes if you:
90. reject someone for typos in their resume
91. reject someone for not having a particular degree or GPA
92. reject someone for not being a “bro” or a “ninja”
93. Instead of looking for reasons to reject a resume...
94. “Look for something that shines” - Gayle Laakmann McDowell
95. 1. Who to hire 2. Where to look 3. How to interview a. Interviewing is hard b. Basic interview process c. Interview questions d. Making an offer
97. You get an hour to make a decision that lasts for years
98. 1970’s orchestras: 5% of members are female
99. 1990’s orchestras: 35% of members are female
100. The difference? Blind auditions.
101. Interviewers will be wrong. Err on the side of no.
103. Step 1: connect
104. Email, phone, in-person. Get them interested.
105. Step 2: phone screen
106. On-site interviews are expensive
107. Use a phone screen as a filter
108. Step 3: on-site interview
109. Aim for 4-8 interviewers, each with a different focus:
110. communication, culture fit, job-specific skills, closer.
111. Don’t confuse interviews with interrogations
112. Your goal is learning, not a confession.
113. Make sure the interviewers are good representatives of your company
115. Puzzles and brain teasers are terrible interview questions
116. Whiteboard coding is a terrible interview practice
117. There are much better alternatives
118. Work on real- world problems (GitHub, Jawbone)
119. Give a talk (Peopleware)
120. Take home problems (Pinterest)
121. BYOL: Bring Your Own Laptop (Coursera)
122. Go through a real workday (Typesafe)
124. First, check references
125. What has this person accomplished?
126. What was it like working with this person?
127. If the reference checks are good, make the offer personally
128. Then follow up in writing
129. An offer has four parts
130. Part 1: the opportunity
131. There's work and there's your life's work. The kind of work that has your fingerprints all over it. The kind of work that you'd never compromise on. That you'd sacrifice a weekend for. You can do that kind of work at Apple. People don't come here to play it safe. They come here to swim in the deep end. They want their work to add up to something. Something big. Something that couldn't happen anywhere else. Welcome to Apple.
132. Part 2: the salary
133. Be fair and transparent
134. Use a formula hello-startup.net/resources/salary/ Salary = (job type x seniority x experience) + (location + salary choice)
135. Seniority Salary Executive $150,000 Senior $125,000 Junior $100,000 Use a table hello-startup.net/resources/salary/
136. Part 3: the equity
137. Be fair and transparent
138. Equity = (i - 1) / i Use a formula hello-startup.net/resources/equity/
139. Employee Equity Hire #1 2-3% Hire #2 - 5 1-2% Hire #6 - 15 0.5-1% Use a table hello-startup.net/resources/equity/
140. Part 4: the benefits
141. Listen to the candidate
142. $1 in benefits can be worth a lot more than $1 in salary
143. Time off, classes, outings, commute, hackathons, remote work, etc.
144. Recap
145. People are the most important part of a startup
146. Founders spend >25% of their time on hiring
147. Use your network
148. Build a strong brand
149. Be thoughtful about how you interview
150. Make an offer they can’t refuse
151. Check out Hello, Startup for more info hello-startup.net
152. Questions?
153. Slide 1, Road: Bec Brown Slide 2, Business plan: Heisenberg Media Slide 5, People: Heisenberg Media Slide 8, Four buildings: Davide Ragus Slide 11, Ant: US Dept of Argriculture Slide 13, Helping Hand: Tomas Sobek Slide 21, Handshake: Flazingo Photos Slide 22, Road: Joshua Tree National Park Slide 25, Jobs & Wozniak: Revol Web Slide 29, Schmidt, Brin, Page: Joi Ito Slide 32, Classmates, Travis Rigel Lukas Hornung Slide 34, Scale: Bob Miller Slide 39, DNA: EnzymLogic Slide 42, Brian Chesky: Official Le Web Photos Slide 44, Swiss Army Knife: Wikimedia Slide 48, Tools: Lachland Donald Slide 49, T-shaped person: Valve Slide 53, Brain: Allan Ajifo Slide 56, Tin Cans: Sebastien Wierz Slide 60, Scrabble value: Got Credit Slide 69, InMap: Ali Imam Slide 74, Honey: Thien Gretchen Slide 78, Flyers: Joel Kramer Slide 82, Passive candidates: LinkedIn Slide 83, Billboard: Google Blog Slide 87, Trash can: Sebastien Wiertz Slide 97, Office interview: Weltbild Verlag GmbH Slide 103, Keyboard typing: iloque Slide 105, Phone call: NEC Corporation of America Slide 108, Office: Robert Couse-Baker Slide 111, Chair: Paul Kehrer Slide 115, Puzzle question mark: Horia Varlan Slide 116, Whiteboard: Doc Searls Slide 117, Light bulb: R. Nial Bradshaw Slide 124, Reference call: Martin Cathrae Slide 129, Letter: Bearstache Slide 132, Money: Ervins Strauhmanis Slide 136, Stock certificate: Wystan Slide 140, Ear: Travis Isaacs Slide 152, Questions: Derek Bridges Photo credits

Editor's Notes

You can take away the idea, the technology, and the sales, and you’d still have a startup; take away the people, and you’d have nothing.

In many tasks, difference between people is 20% or 30%. In creative tasks like programming, lots of research shows difference are an order of magnitude.

Moreover, while 1 bad hire in a 5,000 person company is usually tolerable, 1 bad hire in a 5 person company is a disaster.

Your company will not be successful until your hiring strategy is successful

You will never be as efficient as you are when your company is just 3-5 people hacking away all day. Communication overhead increases with the square of the number of people.

Be proud of accomplishing a lot with a little.

The key question to ask is not “what can we do if we hire another person” but “what can we NOT do unless we hire another person, no matter how much we try?”

Imagine you're a team of 2 co-founders and you want to hire 12 people by the end of the year. How much of your time do you think that will take? The answer: nearly 1,000 hours, or almost 20 hours per week.

Paul Graham has a great blog post called The 18 Mistakes that Kill Startups. Number one on that list is “having a single founder”.

Startups can be very overwhelming and stressful, but with multiple founders, each one thinks "I can't let my friends down." This is one of the most powerful forces in human nature, and it's missing when there's just one founder. Investors know this, and when they see a solo founder, they not only assume that the founder is unlikely to succeed alone, but also that the founder couldn't convince any friends to join, which is a bad sign and makes fundraising more difficult.

Easy to split the work and avoid politics. Any more than three leads to more in-fighting and instability.

Average time from founding a company to a successful “exit” (e.g. IPO or acquisition) is 8 years. Of course, it’s only an “exit” for the investors, and the founders will stick around at least a couple years more after an IPO or acquisition.

You want a proven relationship and someone you can depend on. You also want someone who is relentlessly resourceful, has a complementary skill set, is in a similar in age/financial situation/motivation, and most importantly, someone you can trust. “Fights between founders” is also on the list of “18 Mistakes that Kill Startups”.

Friends and especially family are more risky, as you may not have worked with them before and it’s hard to be objective when a personal relationship is on the line. However, someone you know and trust is still better than a total stranger or someone you meet through “founder dating”. Founder dating is about as likely to work out as a drunken shotgun wedding in Vegas.

Of the top Y Combinator companies, zero of them have a significantly uneven equity split.

4 years with a 1 year cliff is typical

So don’t bicker over who-did-what or who-contributed-more in the first few months.

The co-founders should be involved in all early hiring decisions

Or even the next 1,000

Airbnb took 6 months to hire their first employee

Don’t copy this practice exactly (even Chesky has amended it to “10 years”), but take the underlying lesson to heart: early employees matter.

AKA “Jack of all Trades” or “Full Stack Developer”.

Tuning DB queries one day, working on an investor pitch deck the next day, fixing JavaScript code the third day, and ordering office furniture the day after that.

Julia Grace is the CTO of Tindie.

Look for a broad range of experience, and even more importantly, the right attitude. You want somebody who is willing to take on anything.

This term and image comes from the Valve Handbook for New Employees.

To become a true expert at one discipline, you typically have to have broad experience in many others. It's similar to how almost all athletes
practice not only their sport, but also train strength and conditioning at the gym, as that develops a broad physical fitness that is useful in any sport.

This phrase comes from Joel Spolsky’s blog post The Guerrilla Guide to Interviewing

Everything in a startup, and technology in general, is constantly changing, so you need smarts more than knowledge. The kind of smart you want is not about IQ, but about clear thinking and problem solving. Ask the candidate questions about a topic you know deeply. Get them to the point where they don’t know the answer and see if they ask the right questions to go from unknown to known.

Smart isn’t enough. You’ve probably worked with someone who has never shipped. A startup isn’t about brilliant debates, UML diagrams, or perfect architecture. It’s about building something people want. Ask the candidate to do a deep dive on a project they did and know deeply and have them explain it. When they are done, you should know exactly what they contributed. If they can’t explain that clearly, either they didn’t contribute much, or they are a poor communicator.

Most of what you do in a startup is communication. Even coding is primarily communicating your intent to other programmers. Good communication skills are often a sign of clear thinking. Therefore, all else being equal, always hire the better communicator.

Look at their emails, blogs, and code.

Sergey Brin would ask candidates to teach him something new during the interview. If the candidate owned an important subsystem in your company, could they explain how it works to a new hire? In other words, would this candidate be a good representative of your company in the office, at interviews, and at conferences?

You’re going to spend at least half of your waking hours at this startup. Are you sure you want to spend it with this person? Some companies call this the “no assholes rule”.

A San Francisco company proudly blogged how a candidate failed their “go out for a beer test” because he was wearing a suit. That is not culture fit.

Liking beer or disliking suits is not a “value”. Company core values are not fickle preferences or strategies. They are something that endure no matter what the company is building and even if the market would punish the company for holding those values.

See Deliver WOW Through Service.

Almost 100% of hires at successful early stage startups come through referrals: someone the founders know, or someone the investors know, or someone the early employees know.

An average of 29 days for referrals versus 45 days for career sites.

Referrals have a 45% retention after two years, compared to 20% from job boards

You can find them by talking to your friends, colleagues, and family; by crawling your LinkedIn, Twitter, GitHub, and Facebook networks; by attending or hosting conferences, meetups, and hackathons. And you need to incentivize everyone at the company to do the same by offering cash, prizes, and/or recognition for each referral.

As the company gets bigger, the percentage of hires from referrals drops, but it should never drop below 40-50%. If it does, it may mean you’re not incentivizing referrals enough, or, even worse, that employees don’t like the company enough to recommend it to their friends.

In the marketing world, “outbound marketing” is where you send your message out to customers (e.g. through advertising), whereas “inbound marketing” is where you bring customers in to you by offering them something valuable (like honey).

This content should not be trying to overtly hire people. It’s content that’s valuable and high quality in its own regard. A blog post that teaches programmers how to do something is good; a recruiting video is not. Teach your audience and they will see you as an expert in the field and be more likely to buy your products or join your company.

You should setup a corporate blog and social media accounts, but be sure to also encourage each employee to create their own individual brand with personal blogs, talks, and social media accounts.

“Results oriented? Oh well, I guess I can’t apply.” said no one ever.

The “me monster”: the company lists all its requirements and its wants, but completely forgets to tell the candidate why they should apply to the job in the first place.

Most programmers I know applied to just one job in their entire life, and that was coming out of college. After that, they’ve never seen a single job post, and just get offers when someone reaches out to them (e.g. referrals).

Make your job posting standout. Think of it like an ad and focus on why the candidate should apply. See Your Job Posting Sucks for inspiration.

See http://www.hello-startup.net/resources/jobs/

The best way to use job boards (like LinkedIn, StackOverflow, and GitHub) is not to passively post a job and hope someone finds it, but to actively find the candidates, and reach out to them to see if they are interested.

Unless you’re hiring copy editors.

Google crunched the data on their hiring and found that GPAs and test scores are worthless at predicting job performance. This logic applies for most “job requirements” people list, such as “12 years of iOS experience”. You’re just throwing resumes away.

Actual job ad: "Want to bro down and crush some code? <Redacted> is hiring." Looking for “ninjas”, “rock stars”, and “bros”, is a great way to throw away a huge number of resumes.

People are remarkably bad at writing resumes. Many people you’ve rejected for not having “XXX” on their resume may have actually done “XXX”, but not known that it was a good idea to include on the resume. Engineers are particularly bad at this. Resume writing skills probably do not correlate with job performance.

Gayle is the founder of CareerCup and the author of “Cracking the Coding Interview”, “Cracking the PM Interview”, and many other books on hiring.

It’s very hard to get a sufficient signal from such a short time and from an artificial, high-stress setting. This is one of the reasons referrals are so useful, as real-world experience with someone is a much stronger signal than an artificial interview.

Another disturbing example was a study of parole judges that found that a prisoner's odds of being granted parole were significantly affected by the time of day of their parole hearing. The odds start at around 65% in the morning, gradually drop to nearly 0% just before noon, and then jump back to 65% after lunch. The judges' stomachs were more important in parole decisions than any of the evidence presented.

Maintain a very high bar. It’s very costly to fix a hiring mistake, so it’s better to occasionally reject a good candidate than to occasionally hire a bad one. Look for a strong “yes” from every interviewer--look for something that shines brightly.

Talk about your company’s mission and values. Tell about what you’re building and the opportunity that’s available. The interview is a two way process: while you’re interviewing the candidate, they are interviewing you. Make a good impression as often as you can so that when you finally find someone worth hiring, they want to join you.

1-3 phone screens is typical

Especially in terms of time

Make sure the candidate has a chance of passing the on-site interview before you spend the time and money to bring them in. Ideally, most people you end up bringing on-site get offers because you have an effective phone screen process.

Having more interviewers reduces the odds of making a bad decision because one interviewer had a bad day or was biased.

The closer should tell the candidate about the job (you may want to prepare a demo, slide deck, video, etc), show them around the office, take them to lunch, and get them excited about the company’s mission. Remember, while you are interviewing them, they are interviewing you.

Consider carving out time for interviews, making them an inherent part of the job, and rewarding interviewers so that employees are excited about doing it rather than seeing it as a chore. To build a great product, you polish every part of the design; to build a great company, you need to polish every part of the hiring process.

Google did the research and found brain teasers have no value other than making the interviewer feel smart.

The industry standard for a technical interview is to ask the candidate to work on a CS 101 data structures and algorithms problem, come up with the whole solution up front (instead of iteratively) while thinking out loud, and then to write it by hand on a whiteboard with no syntax highlighting, no auto-complete, no google, no StackOverflow, no compiler, no open source libraries, no documentation, no tests, and no easy way to refactor. Premature
optimization is the root of all evil, but not in interviews, where we force the candidate to optimize the hell out of individual code paths with no profiling and usually at the cost of clarity and simplicity. If someone wrote code like this in the real world, you’d fire them. So why do we interview this way?

GitHub has the candidate work on one of the company’s open source projects. At Jawbone, they give data science candidates a data set and 3 hours to explore it and come up with interesting findings.

Have the candidate do a 10-15 minute presentation in front of the team and then answer questions. It gives the candidate an opportunity to discuss a project they worked on in-depth, to demonstrate their communication skills, and to communicate with many members of the company in a short time.

This can be used as a filter before the phone screen, and then you can discuss the code the candidate writes during the phone screen.

The candidate gets to code in their natural environment.

Typesafe brings in candidates for 1-2 days and gives them a laptop, has them check out the real code, go to meetings, work with a mentor, go to lunch, and so on. You get to see the candidate in a real-world setting and they get to see what the job is really like.

Is the candidate smart and do they know how to get things done? Are they a good communicator? Would you want to work with them again? Were they in the top 1% of people you’ve worked with? Top 10%? 50%?

Handing them an offer in-person is the best, but if that’s not practical, then make the offer over the phone. This is another opportunity to get the candidate excited about the company and its mission.

And follow up periodically after that while you wait for a response. For example, while I was thinking about TripAdvisor’s job offer, they sent me a nice care package with a TripAdvisor hoodie and a nice note. It probably didn’t cost them much, but it made a big impression on me, and I still remember it to this day.

Yup, yet one more time you need to remind the candidate why they should be joining your company. The opportunity--a chance to take on the company’s mission and work with amazing people--is the most important part of the offer.

Would you rather see something like this or a boring-looking legal document?

Your goal is to take salary off the table as a concern by making a fair offer. The best way to make it seem fair is to be transparent at how you got the number.

This is the formula from a startup called Buffer that is so transparent that they revealed all of their salary information to the public. You can use online salary calculators to find a reasonable baseline for each job type.

Most startups can’t compete with big companies on salary, so you have to make up for it with equity.

Once again, you want to build trust, and to make employees feel like they are being treated equally. The best way to do that is through transparency.

In this formula, i is a percentage that represents how much the company’s value will increase if you hire this person. You should be willing to give someone 5% of the company if you believe the 95% you have left will be worth more than the original 100% after this person joins. Of course, you also need to factor in their salary, and to make sure you that you more than break even, but this is a good starting point. See The Equity Equation for more info.

A job is a huge life decision that affects the candidate’s family, career, lifestyle, what they do for half their waking hours, and much more. Listen carefully to the candidate to find out what it would take to make them comfortable with this decision.

The differences between people are huge, each person matters more in a tiny startup, and therefore, hiring is the most important thing you do.

Hiring is incredibly time consuming. Make sure you learn to do it efficiently.

Referrals should be your first go-to for efficient hiring

After referrals, your second priority should be to build a strong brand. Anything else, such as job postings, are a distant third.

Make sure your interviews give you enough signal to make good decisions; make sure your interviews give the candidate a great experience too.

Focus on the opportunity. Listen to the candidate. Be fair and transparent.

A Guide to Hiring for your Startup

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