Intriguing facets of hiring for a startup

Published: Mar 23, 2015

Author: Amit Banka

I often wonder how the perspective of companies/ entrepreneurs change while hiring at various stages of their life cycle – Startup, Early Stage, SME and Mature companies. Talent acquisition and hiring has been the toughest part in any life cycle, irrespective of the stage the company is in. These are important aspects, especially at the top management or executive committee level, and play a key role in stability, sustainability, scalability of companies.

Therefore is it a sector-specific issue? Could be...

Most recruitment these days is happening in the tech space – ecommerce or mobile related technology companies, basically companies driving the next wave of development and therefore attracting most investments. A typical recruitment in these spaces would be for a candidate who understands new-age technology thought process, is able to grasp changing consumption patterns, adapt to ever changing consumer behaviour, think digital – whether its sales, marketing, visibility, PR, brand building, etc.

So then, what is the big fuss about? Isn’t it simple – engage a consultant, scan resumes, meet the ‘right’ candidate at a budget and close the deal. But I wish it was so simple!!

This post talks about the hiring challenges faced by entrepreneurs at the Start-up and Early Stage of their life cycle.

STARTUPS – 0-2 years old (still bootstrapped) - Much has been written about the nightmare of hiring at the startup stage – theirs is the toughest sales pitch to make. Only dreams to sell, only promises to make, and mostly just some non-attractive equity to offer. It is widely known that salaries and incentives are not the best in a startup. No fixed hours of work either – so be ready for long work hours, unstructured thought process – fire fighting all the time, and completing your task with minimal resources.

Plus, in the beginning there is no quantitative compensation for the long hours you put in. However, it is the thrill of working on unique problems, passion to work through hardships for that one single milestone, sense of pride and achievement at every milestone, and the opportunity of donning a variety of roles that makes a startup job attractive.

So if all this is so clear, why is recruiting for startups still a challenge?

When it comes to “not-so-well funded bootstrapped companies”, those in its initial 1-2 years of operations, where founder/ co-founder is managing multiple fronts himself, its challenging to figure out the following –
1. To hire or not to hire?
2. Where to hire from? Networks, portals, etc?
3. What should be the cost of hiring?
4. Is this the right candidate?
5. What if the business loses momentum because of a wrong hire?

There are many examples how wrong hires can set back your business – but I guess that’s a topic for another day. Here are few things that an entrepreneur can consider while hiring:
a. Ability to juggle things at the same - has the candidate worn different hats?
b. Cultural fit – whether he will fit into the startup culture?
c. Did he complete the task he undertook?
d. Is he a team player?
e. How much pressure can he take?
f. What is his personal motivation behind joining a startup?

Most important is for the founder to step into the recruiter’s shoe, because, at the startup most key functions are driven by the entrepreneur himself, and he needs to be sure that the person being hired can shoulder the responsibility he wants to pass on. Even the most experienced consultant can never offer any guarantees, so expecting a 100% hit rate in terms of the candidate is unfair. There could be mismatch of expectations and in some cases the wager may completely go wrong.

Early Stage companies(Primarily in the Tech space) - Here I would refer to companies who have raised a Series A or B round. This is a tricky space, as the entrepreneur is still moving out of the angel stage and probably some amount of investor dominance has kicked in. Board has tasted business POC and now plans to take the big leap – the stage where Board becomes more dominant. At this point if the entrepreneur can figure out some key hires, pay little generously to onboard the right talent, then it would be the right direction to move in. Hiring at this stage is much easier compared to startups.

In most of the ‘well-funded companies’ hiring challenges are shared between the founding team and investors. The existing investor, with good connections in a similar sector plays an important role to bring in a candidate – right from identification to negotiations, etc. By the way, this is irrespective of the affirmative rights that covers key hires :) But in most cases, it is the founders who know what kind of people they want to be part of their team. Because only they know the entire picture, what promises they can make, what perks they can provide, etc.

In companies such as a Flipkart, the early hires were people with good experience across the board, and those willing to work in a startup. A majority of early hires at Flipkart came from IIT. Chances that these early hires came through founder contacts cannot be discounted, as the Bansals themselves are IIT Delhi alumni. Sample this:




Acqui-hire is another interesting way to induct and introduce senior talent into the company. One such acqui-hire that I remember in case of Flipkart is Mekin Maheshwari. He came in 2010, has grown over the years and the roles he performed over time at the Company has also undergone much transformation. Mekin was part of weRead that got acquired by Flipkart in 2010. Post acquisition, Mekin joined Flipkart as Head of Engineering and subsequently today is heading HR at the ecommerce firm. Acquisition is a worthwhile route to take, because a product that you find attractive enough to acquire has been built by a team that can help you grow your own organisation.

As the company grew, Flipkart regularly hired people into key roles based on company demand. Today they have a second level team of six people who hold key positions and work as the interface between the founders and its employees. Sanjay Baweja from Tata Communications, Suraju Dutta from Fedex and Rajnish Baweja from Airtel are some of the key people who recently joined the company in 2014. However, needless to say, such hires are possible only with significant money infusion into the company that allows an incumbent to forsee a secure future and assure better retention.

Opportunities in the HR space are immense. It’s not just about ringing your own network… but agencies who specialise in hiring for a particular stage of company’s life cycle, that will become the need of the hour. Some existing online and offline HR companies have started with this approach but still have a long way to go.

Recruitment agencies will need to come with variable and attractive pricing model and even handhold beyond recruitment. However getting the right solution to this puzzle definitely seems to be an uphill task.




Posted In: Business Transformation



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