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Startup Recruiting: 3 Lessons Over 4 Years

 

 

by Projjol Banerjea

 

These are startup recruiting lessons learned (sometimes the hard way) over the past four years while helping grow SponsorPay into one of the top 100 private digital media companies globally. As such, they’re my/our catalog of experiences rather than a rigorous analysis of a large dataset.

 

1. Hire Slow (a.k.a. Carefully)

Much has been said about the adage “hire slow, fire fast,” and I doubt the debate will be laid to rest here. The approach has its champions and has certainly delivered excellent results for many. Zappos’ Tony Hsieh is among its most vocal proponents and, in fact, regards hiring mistakes as his biggest failure. Others, like entrepreneur-turned-VC Mark Suster (his blog is a must-read, whether or not you subscribe to all his views), recommend the “hire fast, fire fast” approach.

 

Personally, I’d pitch my tent in the first camp with the disclaimer that “slow” should be interpreted as “careful.”

 

While it is entirely true that startups need a certain recruiting velocity/cadence in order to increase the likelihood of success, it is equally true that poor hires have a markedly detrimental impact in a variety of ways:

  • they make bad – and costly – business decisions (or don’t make them at all … which is probably better, but not by much)
  • they have an adverse effect on other employees’ disposition and productivity
  • the hires they in turn make often tend to be of their ilk
  • you spend more time correcting their mistakes than you can afford

 

My advice:

 

Understand your hiring needs

In spite of playing in one of the fastest growing sectors of digital media, we frequently come across companies in our industry that embark on a spate of new hires only to announce layoffs a few months later.

 

Exercise restraint. For some, the approach that works is to not hire someone until you need two of them. While this isn’t the magic formula (there is none – every company and industry is different), it reflects a certain attitude that is crucial for any recruiting strategy. It also tends to obviate the trouble of managing difficult conversations, legal battles, negative press, lack of morale and unease among other employees, etc., as well as “death by premature scaling.”

 

In our case, while we’ve grown reasonably fast to a current headcount of more than 150 across the US, Europe and Asia, we’ve been more circumspect than many others in the industry. This –though painful at times– has served us well, allowing us to deftly navigate a fast-changing landscape.

 

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Pick the best (for the role)

It cannot be said enough – only hire A+ players. While, based on experience, this is certainly easier said than done, it’s also the one cardinal rule that should never be broken.

 

The quest for such people is very much like searching for grains of wheat in barrels of chaff. However, they’re worth the effort – and you realize this from the very moment they assume the role. Not only do they perform the expected duties in a laudable manner, they often grow quickly to add dimensions to the position that you had not even anticipated. In doing so, they can alleviate both current and future hiring needs.

 

As a startup, you don’t have the luxury of being able to absorb – or even temporarily ignore – mediocrity. And more often than not, you’ll only get one shot – get it right.

 

A word of caution, though: hire to the role. We made the mistake, especially early on, of overselling positions to those who impressed us during interviews. The result? They came, started strong, were quickly bored and/or disappointed… and they left.

 

Only embellish the responsibilities associated with a role if you’re confident of being able to deliver on these promises, either immediately or in the near future. If not, save yourself the trouble. Also, keep in mind that regardless of the new or additional pastures you indicate to a candidate, you’ll probably still need the original function(s) fulfilled.

 

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Look inward before you look outward

 

A-players attract A-players. As simple as that.

As soon as you have a quorum of top quality assets, they should become the engine that drives further recruiting efforts. Across their professional, educational and personal networks, is access to a wealth of talent. In fact, attracting talent should be the responsibility of every member of the team. While this will be innate to an extent, introduce incentives to ensure it remains a priority (though not to the extent that it cannibalizes daily work… you may laugh but it’s been known to happen).

 

Also, some of the best hiring decisions we’ve taken were those that involved the transfer or promotion of an existing employee. Before opening a role to the external market, look within the company – you may be surprised by what you find.

 

During the first couple of years, the majority of SponsorPay recruits were young, smart and hungry but didn’t really know exactly what they wanted to do or where their strengths lay (we continue to make such hires but not quite in droves as earlier). Unsurprisingly, while they impressed with overall enthusiasm and general aptitude, their first (and, occasionally, even second) role within the company wasn’t the perfect fit.

 

Attempting to fill roles internally allows you to amend sub-optimal person-to-position pairings, which is in the best interest of both the individual as well as the organization. It also conveys the message of potential (upward) mobility that is motivational for the team.

 

2. Fire Fast (a.k.a. Immediately)

One of my greatest regrets in the last few years is having waited too long to remove laggards from my team. No matter how careful you are in the selection process, it’s inevitable that there will be those that don’t work (out) as hoped or expected.

 

Get rid of them. Quickly.

 

Don’t get me wrong – I’m an ardent advocate of providing oodles of feedback as well as accommodating a variety of working styles. I’m also slow to judge cultural fit since ours – like many other startups I know – is quite a motley bunch of crazies. Finally, I’ve learnt to recognize the “right person, wrong position” dilemma and resolve it.

 

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However, ever so often –in spite of increasingly stringent screening methodologies– we hire someone who is simply a poor performer.

 

Rarely, these are those who lack both aspiration and capacity, and comprise a category that can be eliminated altogether with a reasonably robust interview process. There are also those who work hard but don’t produce results. Some of these might just be a matter of a poor match between ability and function – relatively easy to amend. Other instances are just unfortunate and need to be dealt with in a candid manner.

 

However, the majority of cases –from experience– are those who’re just not willing to commit to the levels of effort demanded by the role and invested by the rest of the team. I should clarify that those who fall into this latter bucket are not necessarily lazy – they’re just too “comfortable”. They exhibit average levels of engagement, and while that would be fine in many other scenarios, for us – as with most startups – it’s just not good enough.

 

Of course, not everyone will live and breathe the company (as founders and early employees usually do).  And you shouldn’t expect that either. At the same time, one of the fundamental qualities of the culture of a successful startup is the passion shared amongst its people to continually strive to improve the status quo, and to do it – almost literally – today instead of tomorrow. This energy is both palpable and infectious in those who become pivotal to the business, and starkly absent in others who should be weeded out.

 

3. Accept Attrition

Recognize early on that, if you bring the right people on board, you might eventually have to bid adieu to them as well. The sooner you come to terms with this the better.

 

 

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For one, enterprising, entrepreneurial individuals (the kind most young startups look to attract) might put blinders on for a couple of years, but they’ll soon yearn for the next big thing – possibly their own. Don’t begrudge them their ambitions. And, while not every group of “graduates” will go on to form a PayPal Mafia, successful alumni can often bring positive PR – and sometimes valuable business – to their alma maters. For example, three of those who were pivotal to SponsorPay’s success have since moved on and given birth to promising companies itembase, Iconpeak and moboqo.

 

It’s also important to acknowledge that “people who’re suited to building a ship aren’t always the best at (or have interest in) sailing the ship, and vice versa”. Those who’re scrappy, independent and thrive as micro-managers can be overtaken by the organization burgeoning and maturing around them. Their departures are bittersweet – while they create what might seem like gaping holes, these can be opportunities to re-evaluate a function or advance a department. Indeed, a fast-growing company can not only prosper with the egress of some early employees, it might even be necessary.

 

 

bio-projjolProjjol Banerjea is VP Marketing & Business Development at SponsorPay. Previously, he was VP Marketing at mobile payments company Surfpin. He has degrees in business, informatics and computer science from Oxford, Indiana and DePauw universities.

 

 

Photo Credits

smarnad | SOMMAI | Boaz Yiftach | bplanet | freedigitalphoto.net

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