Hiring for Entrepreneurs: How to Eliminate Uncertainty from Your Process
Hiring is one of the hardest and most essential things you’ll do as a startup founder.
It feeds into everything that your business does. Hiring can be the difference between a startup that struggles to scale and one that does it naturally. As with every new founder, I struggled with it, and 10 years later, I still make mistakes. However, I’ve found that instituting a robust hiring process can make a huge difference.
In this piece, I’ll share more about the process we used at Draft.dev to hire over 150 people in the past two years, and share some takeaways from conversations with other founders on the topic. By the end of this piece, I hope you’ll feel more confident making hires that can help you take your business to the next level.
Why Is Hiring so Hard?
The reason a lot of entrepreneurs get stuck here is because they’re hiring for roles they don’t know much about or for skill sets they don’t have. When I first began hiring, some of the worst hires I made were people who I simply didn’t know what their day-to-day was going to look like.
In trying to bridge this gap, I also made the mistake of hiring people too similar to me. The problem with having too many people who think alike is a) you have too many people who think alike and b) ironically, they’re probably not a good fit for that role that you’re unfamiliar with because they have the same skill sets as you.
There’s a very real cost to your business for every bad hire you make. According to the Society of Human Resource Management, it can take up to 42 days and cost an average of $4,129 to hire a new employee. And that’s just for bringing them on board.
Add to that the cost of training them — the materials used and time spent (likely your own as the founder) — and it can easily come to several thousands of dollars per employee on top of your recruiting costs.
A startup can’t afford to gamble with that kind of time and money.
Figuring Out Who Your First Hires Should Be
The moment you start scaling your business, you’ll have to decide which positions to recruit for.
Do you need a salesperson or a sales-oriented Account Manager?
Should you avoid the cost of a full-time CTO or is the investment worth it?
Is a Performance Marketer or a Content Marketer likely to get you more leads?
Here are a few tips I’ve used for deciding which hires to make first in my business:
1. Track Your Own Time
Founders of newly minted startups are always juggling many tasks, but you need to know how you’re spending your time if you want to free it up by hiring someone.
When I began scaling Draft.dev, I took the time to define each step in my sales and production process. I ended up with five categories for my time — sales, account management, writing, editing, and administrative.
Then, I tracked the amount of time I spent on each task. I realized that while I liked writing, it was taking up way too much of my time. This told me that I was ready to start recruiting writers to fulfill more client requests.
2. Identify the Role You Need
At some point, take off the founder’s hat. Think of yourself as just another employee and consider how you’re uniquely qualified to help grow the business.
According to Sam Shepler, Founder at Testimonial Hero, “For a productized service or agency, I think a good order to remove yourself from is 1) fulfillment 2) client communications 3) sales 4) marketing. Although, this can depend on the service itself. With a productized service that is easier to sell, you can remove yourself from sales easier than with a customized service.”
3. Quantify the Value of Your Time
Maybe you’re really good at handling more than one function within the company. There’s still the possibility, though, that someone else could do it cheaper than you.
Jake Lumetta, Founder at ButterCMS, says, “Value your time as a founder. Put a real $/hour figure into your head and use it to calculate the true cost of you doing X or Y. Then ask yourself, ‘Can I find someone who would do it more cost-effectively?’ 95% of the time, the answer is yes.”
I went through this same process as I started hiring for Draft.dev. I realized I got a much higher ROI from time spent on sales calls than I did from anything else and decided to delegate other tasks.
4. Find Versatile Contributors
Your first few hires need to be dynamic people who can execute, lead, and adapt to everything the role throws at them.
The first editor I hired was part Project Manager and part Editor. She could do full-stack editing, which is a very underappreciated talent. This means she could cover all the bases from developmental editing to copy editing and structural editing, in addition to being able to manage the workflow. She could also serve as my backup, if necessary, in handling some of the more operational and administrative tasks, such as matching writers to articles, paying them, and so on.
Now that we’re bigger, our roles are more specialized, but it wasn’t a luxury we could afford early on.
5. Be Open to a Flexible Structure
Say there’s more than one function you need to hire for, but you can only afford one full-time employee. Instead of trying to prioritize one of these positions, map out the scope of each role and consider freelancers or part-time hires.
We do a lot of contract-based hiring at Draft — especially with our international hires. I like the flexibility this gives us, but more than that, I like that we can tap into a global talent pool and use it as a competitive advantage versus companies that just focus on local talent.
As a quick rule of thumb, you want people who are strategically important to your company or have a relationship with customers to be full-time, in-house hires. For people who are simply coming in to do a very specific job, aren’t talking to customers, and don’t lead teams, it’s often better to hire them as contractors.
Finding Your First Few Hires
Once you’ve identified the roles and the kind of people you want to hire, your mind naturally turns to the question of where you’ll find them. Often, the issue founders face isn’t that they can’t find applicants — it’s that they can’t find qualified applicants.
While I don’t have a silver bullet, I do have some tips that might help:
Personal Network vs. Job Boards
Your personal network is an excellent starting point, especially when you want to make low-risk hires for business-critical positions.
The first writer I hired at Draft was also a friend. I knew from experience that he was a solid engineer with a background in writing and was a perfect fit for what we needed.
This, in a nutshell, is what your personal network gets you. Smart, proven people who you’ve either worked with or come highly recommended by people you trust.
The problem with relying solely on your network is that you can miss a lot of high-quality applicants. Using a job board, you have access to a much larger talent pool. When you source from both these channels, you can compare the quality of candidates between them and generate good feedback for the future.
At Draft, we typically spend between $1,000-$2,000 promoting each job post, and that nets us anywhere from 30 to 300 applicants depending on the role. We prioritize niche job boards like Dynamite Jobs, Remotive, WeWorkRemotely, and AngelList for access to remote-ready, startup-compatible candidates. LinkedIn and Indeed are options as well if you need to broaden your search.
Tapping Your Secondary Network
When you’re recruiting, it’s easy to get fixated on certain websites or referral sources. It can make you overlook a number of places that are connected to your business and can give you exactly the kind of candidates you want.
- Social Media — Let your team know you’re recruiting and leverage their combined social reach. If you’ve been intentional about hiring culturally-compatible people from the outset, this method will likely get you more of the same.
- Investors — Investors typically have a large network of people and companies they’re associated with. They’re also likely to know people who’ve worked in your industry before and can be excellent matchmakers.
- Competitors — Recruiting from competitors might feel sneaky and underhanded, but no one said you’re only ‘competing’ for business. Employees are fair game too. And realistically, this is probably your best bet for finding proven candidates who are intimately familiar with the job and the industry.
Making Your First Few Hires (Using a Process)
A basic 45-minute call doesn’t tell you much about a candidate other than how good or bad they are at interviewing. A process lets you test the skill sets they claim to have and help you eliminate biases.
Over the years, I’ve tinkered with and refined my hiring method to find a system that works well. Here are a few handy extracts from our hiring process at Draft:
1. Publicize Compensation
We make it a point to use fixed, transparent pay rates for each role, so that candidates can opt in or out accordingly.
2. Build a Pipeline
We try to gather at least 20–30 applications before we begin evaluating them. This gives us a good sense of the quality of candidates we’re working with.
3. Use Realistic Trial Assignments
We usually have our applicants complete two assignments. The first is a short 15–30 minute mini-assignment for the top 10%-25% of applicants. Then, after a screening call, we offer a longer paid trial for the top 2–5 candidates.
4. Check References
I’ve only ever neglected feedback from a candidate’s references once and I regretted it. Make sure you get some third-party validation before making an offer.
5. Check for Value Alignment
Finally, make sure you’re hiring people who match your company’s intended values, whatever they are. And figure out these values before you make your first hire.
As Sam Shepler points out, “Once you have a handful of people, it’s a little late to start thinking about company culture and values. There will already be one and it might not be exactly the one you intended.”
For instance, at Draft, it was always important for us to be flexible, asynchronous, and global. We wanted independent thinkers who didn’t need to be in an office every day with a boss telling them what to do.
This also resonates with Tony Chan, Co-Founder at CloudForecast, “We try to find candidates that have an ‘I can figure it out attitude’ and are curious by nature. As a self-funded startup, we don’t have a lot of time to hold someone’s hand every step of the way. We need someone to come in and take ownership of the areas they were hired for.”
Co-founder and C-suite roles are among the hardest to fill at a startup. To get the right people on board for these positions means getting them to buy into your business at a conceptual level.
It goes without saying that you’re not likely to find them on job boards. You need people who are completely aligned with your vision and values. Limit your search to prospects who:
- You know personally
- Work in the industry you’re interested in
- Have worked at an early-stage startup before
For technical roles like that of a CTO, you’re also going to have to give them a reasonable incentive. Cash + equity will likely need to be on the table depending on your funding situation and the executive’s prior experience.
Growing a startup is challenging, and hiring is a big reason new founders struggle.
Institute a recruitment process, even if it’s a basic one. This will help you proceed systematically and give you more information to make better decisions with. It’ll also help you build your company culture earlier and ensure it perpetuates as your business grows.
If you’ve found these insights helpful or have some of your own you’d like to share, I’d love to hear from you. Leave a comment below or find me on Twitter to continue the conversation.