10 Seed-Stage Avoidable Hiring Mistakes

In 2020, we worked with 75 seed-stage founders who raised an average of $3M from Silicon Valley’s most high-profile venture capital firms. These founders graduated from top incubators and elite academic institutions, yet the overwhelming majority of them were struggling to hire out-of-network talent for their startups. In fact, 41% of startups missed their hiring goals, often from avoidable hiring mistakes. (Source: LightSpeed)

The following is a curated list of hiring trends we observed while working with early-stage founders. This is not a “you did this wrong” report card; it’s meant to be a self-assessment tool that brings awareness to some of the most common startup recruiting mistakes, so they don’t have to be repeated.

One of our favorite attributes about seed and first-time founders is their willingness to admit they don’t know what they don’t know. It’s that willingness to learn that gave us the confidence and conviction to share our frontline observations.

1) Founders have mastered their customer-facing brand, but they haven’t addressed their candidate-facing brand.

51% of our early-stage founders don’t have a page on their website dedicated to culture and careers. (Source: Will Reed)

Founders forget to view a candidate as a prospect, ignoring their journey from awareness to hire. A strong digital reputation means a company and founder have a uniformed and compelling narrative across all their online platforms, making it easy for an out-of-network candidate to learn more about their funding, team culture, growth trajectory, etc.

2) Founders want to “play it by ear,” forgoing a standardized interview process.

The ad hoc approach to creating a hyper-customized candidate experience sounds like a way to accommodate your dream candidate, but from our observations, it’s leads to:

(1) Mismanaged candidate expectations around timeline and process
(2) Risk of bias due to incomparable candidate evaluations
(3) Team confusion around roles and responsibilities in the interview process
(4) Inability to interpret pipeline metrics

3) Founders are unintentionally competing, not collaborating with their talent partners.

Founders should always be recruiting, but their timing and tactics need to be revisited once they’re working with an internal or external talent partner. No longer the frontline SDR, the founder is now the “welcome mat” and strategic closer. Plus, the partnership should free up time to do the things only founders can do at this stage.

4) Founders are overly optimistic about passive candidates.

Less than 10% of hires started as truly passive candidates. (Source: Will Reed)

The networking call is a no-pressure way for founders to engage top talent and activate passive candidates, but optimistic founders routinely keep passive talent in-process past a second interview, hoping the next call will convert him/her. This behavior inflates pipeline metrics and makes the search look healthier and more promising than it actually is.

5) Founders forget there are multiple stakeholders in a career change.

When it comes to changing careers, founders often perceive the candidate as the sole or primary decision maker, overlooking the powerful stake of friends and family. Founders often forget they’re recruiting a whole person who is making this decision based on a multitude of influences: mortgage, children, extracurricular involvements, etc. The best recruiting founders equip their top candidates to sell the company vision back to their friends and family.

6) Founders lean on the backchannel too much, letting “off the record” feedback rule the interview process.

Founders seem to be less interested in candidate references, deeming them engineered and an impediment to speedy hiring. Instead of collecting a holistic (360°) set of references, they tend to revert to the backchannel: calling or texting a mutual connection for his/her “off the record” opinion of a candidate. Relying on the backchannel alone does four things:

(1) It invalidates the founder’s interview process.
(2) It allows one person’s opinion to outweigh all other interactions with the candidate.
(3) It leaves no room for the candidate to share additional context or demonstrate growth.
(4) It puts the founder at risk because it’s a breach of candidate confidentiality.

7) Founders skip over the ideal candidate profile, thinking they’ll know the right person when they find him/her.

30% of the time we’re brought in to backfill a previous mishire. (Source: Will Reed)

With aggressive hiring targets and demanding investors, founders often don’t take the time on the front-end to build a clear ideal candidate profile (ICP). As a result, it’s easy to get bamboozled by the best interviewer versus the best candidate, or the search turns into a never-ending unicorn hunt. The ICP is a one-page source of truth, validated by multiple advisors, that keeps all interview participants aligned on the goals, skills, experience, location, compensation, etc. of the ideal candidate.

#8) Founders romanticize their company’s market appeal.

We tend to see founders think their startup is the best gig in the marketplace - and rightfully so! However, the ones who know where their startup realistically ranks against other employers are more prepared to compete for top talent. It’s important to realize which titles, compensation packages and benefits are truly competitive advantages, versus which ones are merely table stakes.

P.S. For early-stage employees, uncapped commission and equity are table stakes.

#9) Founders over-index on location, which costs them talent.

Founders often have great reasons for wanting to prioritize a specific geography: team collaboration, nearness to customers, culture, etc. However, founders can experience delayed search outcomes or settle for B-team talent if they let geography dictate a search. When search criteria and talent pool don’t overlap, adapt quickly. For seed-stage companies, remote A-team talent always trumps local B-team talent.

#10) Founders value team participation, which can lead to an excessively long interview process.

Early-stage founders graciously want their co-founders, Board Members, Advisors and team members to be involved, which leads to a 10-step, 10-week interview process. Knowing the best talent is on the market for 10 days (Source: officevibe) and 57% of candidates will leave an interview process if it takes too long (Source: Robert Half), it’s important to determine who is vital to the vetting process and how to get him/her in front of the candidate within a four-week timespan.


February 20, 2021

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