Stay up to date on our entrepreneurs, events, research and more. Check out our October newsletter here.
Reprinted from This is Going to be Big. Original post here.
By Charlie O’Donnell.
There will always be an excess of bad ideas and dumb money in the market–so we’ll always be complaining about a lack of talent, no matter how many developers there are.
Still, I contend that most companies have no idea how to hire, and in the last week, my theory got proved to me several times over.
In February, I got contacted by a former management consultant who was now working in an operations role for a high profile startup. He was ready for his next big thing and offered to help me out with the fund. I wasn’t hiring, but I agreed to meet him due to his generous offer. We met up and I was super impressed. In March, I introduced him to two startups that needed some operations help.
The first company responded right away, but offered to meet the candidate ten days later. Four weeks went by and the other company still hadn’t responded at all–not until I nudged them.
Luckily, he wasn’t in that much of a rush, so the timing still worked out for meetings. Both companies were impressed and one wanted to make an offer. The other one didn’t really follow up at all, and I got a note from the candidate:
“btw, any idea what could have happened on the [Company #2] front? I thought the entire process went as well as it possibly could and I even walked out of there (after meeting [the founder] and the entire team in two sessions) w/ what I thought was a soft offer. and then radio silence. I’ve followed up as non-annoyingly as possible via email but I don’t want to be pushy. any thoughts?”
And the company that wanted to make an offer to him? He sent me this note about the founder:
“have you heard anything from him? I thought the conversation last monday went well but I’d love to hear more about what he specifically needs/is looking for. he seems to be a hard guy to pin down.”
So I ping the founder and they have another meeting. The candidate was psyched:
Hey there, I had a great convo w/ [the founder] this morning. I may have finally met someone who has the same (possibly more, though I find it hard to believe now that I’m writing it down) amount of energy that I do.
Still no offer, though. Another two weeks go by. By then, the market catches on that he’s looking, and another startup, one that was bigger and more mature, starts the recruiting machine. The candidate meets the team first thing in the morning one day, has four interviews with the right folks, and gets an offer literally at the end of the day. He was overwhelmed by their interest after getting the runaround from the other companies over weeks, if not months, and chose to accept.
What’s unfortunate is that the company that wanted to hire him is a great company with a really inspiring founder–but it left a bad taste in the candidate’s mouth. In fact, both companies came off poorly. Whether or not the second wanted to pull the trigger, the last thing you want to get is a reputation for not having your stuff together on a first impression.
Yet, I see this time and time again. Companies have conversation after conversation without setting timelines or pulling triggers. It’s not even a matter of considering your potential employees carefully. If you need 4 meetings to select a candidate, you should be able to pack them into a day or two. Get all the relevent people needed to make a decision lined up, and have an agreed upon criteria, with standard offers ready to go when good people are found.
If you can’t pull the process together to make a quick decision, you’re not only going to lose people, but you’re going to signal that you can’t move quickly on other decisions as well, whether or not this is really the case.
It’s not even just about slow decisions. There are other companies that aren’t even getting a shot at candidates because they’re simply not in the game. I know two top developers that left a mature startup in the last two or three weeks. I met up with one of them over the weekend and asked him:
“Did you have a real offer on the table from any of the other companies you were talking to?”
“Nope… they talked about possibilities and asked what I was looking for, but no one actually put anything down on paper that was real.”
This isn’t even a question of quality. I can’t speak for this person’s ability to code, but is the market so dead that there aren’t even any other offers to someone with at least two years at a mature, well known startup, who then gets an offer at a high flying reputable team? I know the team who hired this person–he wouldn’t have gotten an offer if he wasn’t terrific.
Contrast that with a company like Stack Exchange, where my friend just started working. He’s a smart product manager that I introduced to Joel. He met with the company on a Friday and early Monday, they had an offer on the table. That was actually slow. Usually, they said, you get one the same day.
Moreover, on his second day on the job, he was interviewing other candidates to join the company. It’s a quick process. There’s a set amount of people allocated to interview each type of candidate. If they give the thumbs up, they meet with Joel, and if he likes them, an offer is made by the end of the day–no effing around and waiting for some other company to scoop them up.
The best companies know what they’re looking for, empower everyone in the organization to spot it. They have a standard process for getting the final call and a prepared offer ready to go in due time. In just a couple of months, Stack’s employee base has grown almost 30% since my friend joined. Companies like that are lapping the competition who complain about the talent market and can’t get their act together in the hiring process.
It’s a shame, too… because there are some absolutely terrific companies with some great founders who aren’t competiting in the market for talent–and the companies that are winning might not always be the most interesting ones. The company who hired the candidate I quoted before? It’s a mature ad tech company probably less than a year from a strategic acquisition. So, in a year, this person is going to be working for a huge company post acquisition, tied up by equity vesting. That doesn’t sound so interesting to me–and I can think of a hundred other companies with more exciting stories that should have stepped up.
But they didn’t…so the company skilled at the hiring process won.
So how can you compete and win the war for talent? Here are some steps to get you in the game:
1) Block out some regular time multiple times per week for a founder or a trusted scout to take even a short, preliminary meeting with a candidate. If someone comes in on a recommendation, an empowered decision maker should be able to meet with them within 48 hours of the intro. At that point, you should be able to schedule a “Go/no go” day within another day or so.
2) Basically, that means you have no more than a week to get from an e-mail to a written offer. A “go/no go” day should allow the candidate to meet all the key people necessary to make a decision, who can then come together at the end of the day to make an offer.
3) This means that you need to push down hiring authority (or at least influence) to people underneath the founder. You need to create enough of a company culture and clear enough mission that lots of people should be able to tell whether or not the candidate is skilled and if they’re a fit for the company. If the only people capable of doing that are founders or a single HR person, you’re going to create a scheduling bottleneck and you’ll never move fast enough. Just about anyone should be able to raise their hand and say “This person is awesome, the founder needs to meet them right away.”
4) Have standard offers ready to go. Know your org chart and what you’re looking for.
5) Make sure everyone in your company understands the org chart and what the needs are, so they can understand a match.
6) Know the market. Don’t start the conversation with “We can’t pay what you’re making.” If the candidate seems like they could be a fit, they’re going to be worth it. Companies win because they hire the best people, not the cheapest–and if you’re making less than market offers, you’re not going to get the right people.
© 2016 Endeavor Global, Inc.
All Rights Reserved
Endeavor Global, Inc.
900 Broadway, Suite 301
New York, NY 10003
1 (212) 352-3200
Site by #BRITEWEB