In this podcast aTalent’s Outi Mäkinen and Jukka Kujala, the Head of Talent for Icebreaker.vc, talk about hiring and team building for early stage startups.
In this episode of #rekrycast podcast Outi Mäkinen and the Head of Talent for Icebreaker.vc Jukka Kujala talk about hiring and team building for early stage startups. The discussion covers among other: What to look for in co-founders? Who to hire as the first employee? What kind of compensation to offer? How to deal with stock options? And what the market situation really is for startups trying to find team members.
Skills and motivation to look for in co-founders
When building a founding team to start your venture, you should consider the MVC or Minimum Viable Company. This means that your founding team should include the essential building blocks that are required to get the venture going. In a Minimum Viable Company, your founders should collectively have at least the following skills:
- Domain expertise
- Technical expertise (if you are working with a software product)
- Experience in sales and marketing
- Leadership skills and someone who will make sure the company goes forward
- Basic understanding of recruiting new team members
While there are no fixed rules for the size of the founding team, the team at Icebreaker.vc has noticed that the larger the founding team, the more difficult it will ultimately become to the co-founders. Jukka suggests that a founding team of 2-3 people is a good starting point.
When building a team, the skills and expertise in the subject matter are highly important. However, when building a founding team, you should also take a hard look at the motivation of each potential founder. Do they have the motivation and drive to be there and to fight for the same goal for the next 5-7 years? Do they have the drive to keep going even when things get rough?
As an additional reading, Jukka recommends The Co-Founder Dating Questionnaire, as it is a good tool to assess if you and your co-founders are a match – or not.
What should the first hires outside the founding team be?
“Many startups and founders are very surprised on how much effort recruiting and hiring actually takes. They might think it will be easy, you just put a job post online and start getting the perfect applications from where you hire someone. But it really does not work like that. Especially not in a super early stage startup. So in hiring the first step for many is to get past that surprise.”
The first hires outside the founding team obviously would depend on the founding team and their skills. If the founding team is tech-driven and they have already built a minimum viable product (and perhaps have the first paying customers), it might be most ideal to hire more people to sales or marketing to drive more sales. On the other hand, if the founding team is more sales-oriented, hiring a robust tech team should be the first thing to do.
How to hire and find talent as a startup?
Finding and hiring skilled employees with the right mindset is one of the most crucial jobs in a fast-growth startup. If your founding team does not have prior experience in recruiting, you should simply start with your networks. Book lunches with people that you know and trust and who you think a) might be interested in the venture themselves or b) might be able to introduce you to the next potential person. Doing this will allow you to snowball a single meeting into a dozen meetings with potential hires.
It is also highly important to talk about your company to everyone you know, both online and offline. Tell them about your company and your vision, what you have already done and what you are doing next.
“I’ve noticed that many founders are shy to tell anyone what they are working on, because their product or service is ‘not ready’ yet. Well, you know, it will actually never ‘be ready’, so overcoming that shyness and talking openly about yourself, your company and what you are building is important. That is something people don’t do a lot but should.”
In addition to actually finding potential hires, your networks can also be a golden opportunity to expand on your own understanding of the field you are trying to hire too. Say you are trying to hire a developer (yes, just a generic developer) and you talk about this position with a developer friend. By telling him about the requirements, he might be able to specify that you are actually looking for a front-end developer with experience in Swift. Having these discussions will help you iterate the sought profile until you know exactly who to look for.
When booking meetings, do take into account that while online meetings make it convenient to scale the number of people you can meet, offline meetings (face-to-face) are much more engaging and give much more information about the person in question. Being able to interact with the other side, seeing their reactions when you pitch the venture can tell you a lot about the person. So we suggest that if you have the option to meet face-to-face, always prefer it over online meetings.
How does the recruitment market look like for startups?
The current market situation, especially when talking about hiring developers, is difficult. Finland has an immediate need for thousands of new developers. This means that talented developers can pretty much choose who they work for and for how much. This makes hiring experienced developers for startups (that are inherently risky and usually lack resources, both time and money) hard to say the least.
In addition to developers, the general competition to hire the best talent is tough. The Hub, a free talent attraction platform for startups listed over 700 startups (when writing this article) searching for new talent just in Helsinki. This should give you an idea of how many other startups are looking for talent at the same time.
“While the market situation might be tough, do remember that your goal shouldn’t be to attract everyone. Instead, you should aim to find that one person who would really like to work in your company.”
As an additional reading, check out this DIY Employee Stock Option Plan (ESOP) for more details on compensation and incentive models for startups and, to get an idea of what it is like to find talent to your startup, get inspired by this article: What It Takes to Hire 10 Employees in San Francisco.
Listen to the episode for more details
Below are listed convenient timestamps for the different topics covered during the podcast. You can use these to take you directly to the exact point in the podcast on YouTube.
1:36 The most important things when building a founding team
4:53 What should the first hires outside the founding team be
6:12 How to hire and find talent as a startup
10:08 How to balance the lack of money and time when hiring for a startup
13:27 Online vs offline meetings with potential hires
19:12 Compensation models and equity stakes
24:30 How does the recruiting market look like in Finland (for startups)
27:27 How to use events for hiring
34:40 What role does Slush play in startup recruitment
What is Icebreaker.vc
Icebreaker.vc is a venture capital company that invests €50 -350K in Nordic and Baltic software-driven companies at the idea, angel and seed stages. Icebreaker.vc manages a €20 million venture capital fund to help “pre-founders” build success stories that would not happen otherwise.
If you are a founder or thinking about founding a software-driven startup, check out Icebreaker and their community!
What is aTalent Recruiting
aTalent is a recruiting and employer branding agency specialized in helping companies find and attract talent in the fields of IT, Business and Engineering.
Visit this page for more information about our service or contact us below.