Hiring makes and breaks startups. One mistake in the first 10 hires at a new company can spell disaster.
I’ve been there and so have most investors.
So when it comes time to raise seed phase capital and investors gain comfort with how the venture can capture a massive opportunity, they turn to the hiring plan. This is because, for all the knowns and unknowns that add risk to a venture, the right team can go a long way to de-risking the business.
The hiring plan for most founders starts and ends at the ‘team’ slide of their pitch deck. For early ventures, this slide includes roles that are ‘soon to be filled’.
Founders in this scenario are (desperately) hoping they can find rockstars to take up these roles. And they might be quietly confident they can make this happen. Or they hope their future investors will dip into their networks and magically pull candidates from nowhere.
If this is you, that team slide isn’t a hiring plan. It’s an ambition or in the words of a friend of mine, ‘they’re selling talent religion and I’ve never seen religion de-risk a business’.
And hence the title of this post.
Hiring superb people is hard
There are very few of us who can pluck battle-tested operators from our networks who are known quantities and ready to join the business at short notice.
You know it and investors know it.
They will assume, as you should, that hiring key roles will be difficult. Really difficult. And the longer your team operates without outstanding talent operating in key roles, the higher the drag on momentum.
I feel a sense of relief when I go through the process of writing and iterating hiring plans. They give me a basis from which to be confident that my business knows the type of people we need to solve the problem we’re pursuing. From there I can start sounding people out for their interest in roles.
And the sooner a hiring plan exists, the sooner I can put my network, and my advisers and investors, to task to identify candidates. Most importantly, hiring plans provide the basis for thoughtful disagreement about why these roles matter to our future.
After all, what I think about which key roles may matter to our success is a sample size of one. I want to know if I’m wrong from well experienced and believable people.
Hiring plan ingredients
Writing a hiring plan (or summarising it into a slide) is the simple part. It’s the four ingredients that take time to create and understand. And each one is worth their weight in gold.
Ingredient 1 – Clear Job Description
If you need a Chief Technology Officer, a Vice President of Regulatory Affairs or any other senior role, don’t sum up their job in three bullet points on the fly. If only I had a dollar for every time I’d seen that happen…!
Create a crystal clear job description that defines their functional and cultural contribution. Also, ensure it includes the financial incentives on offer and how they should expect to be known inside and outside the organisation if they are successful in the first two years and then after five years at your company. This is important because it will help candidates understand that you are in search of an ally, not just employees.
Not having this will mean you can’t adequately talk to potential candidates about them joining your business. And if you do start talking to candidates about roles without having clarified what you want the role to achieve, there is an excellent chance the candidate will form their own perspective about the role.
Fast forward a little further.
You court them.
They join based on a loose and generic role description.
Then you, your company and the candidate lose because after six months you part ways because expectations and incentives were misaligned from the start.
Ingredient 2 – Candidate List
When I construct a candidate list I look into my network and those who I trust to make a referral. I don’t want to waste their time so in asking who they might know I ask them to provide a brief description of the potential candidate.
In other words, I ask them to think about how people describe other people, particularly in a professional context. This description usually consists of four factors in one sentence and how I/we know them. For example, Melissa June: Spent 15 years in biotech, launched [product name], went to med school at Stamford, married with kids. Met via John Mayo.
Obviously, there is a lot more detail that sits beneath this description but you get the point. It’s important to succinctly understand why a candidate may be a fit.
My candidate list is full of descriptions like this accompanied by a link to their LinkedIn profile so I can learn more about the candidate if need be.
Ingredient 3 – Candidate Incentives
There is only one way to know candidate incentives. By talking to them. And because incentives aren’t the first thing that comes up in conversations, you’ll need to have spoken to each candidate multiple times. After pitching them on the vision, meeting with them a couple more times to understand their questions and where they’re at, you’ll reach a point where it’s OK to ask what it will take to convince them to join.
Common incentives (like salary and equity) are simple to describe but almost never get to ‘why’ someone is thinking of joining.
I ask one or a combination of the following questions to get a read on a candidate’s incentives:
- What could working with [company name] do to help your family?
- What’s missing from your LinkedIn profile that this role could help with?
- How do you hope you’ll be remembered professionally?
- What interest outside of work do you want to advance the most in the next five years?
Incentives often fall into family, professional and community-related pursuits. While there are some exceptions, this knowledge can help create the conditions through which a compelling offer can be made to a candidate.
Ingredient 4 – Likelihood To Join Framework
This essential ingredient requires judgement. The ‘likelihood to join’ frameworks isn’t just about how convincing you are to get a potential candidate to say yes and join the company. It’s also about determining whether the candidate is a fit, will excel in the role on offer and is available given your timeline and their priorities.
At this point, you will have shared a lot with the candidate. They might have signed a non-disclosure agreement, heard your pitch multiple times, queried parts of your business model, done their own diligence and expressed an interest to join.
In addition to their interest, I also make a judgement on their likelihood to join based on their:
- Performance in a paid audition
- Expectations of what the business needs to be able to offer them (eg must close a financing round of $XXM)
- Appetite to leave what they are doing
- Availability to start
I usually represent these items, where possible, using Harvey Balls in a hiring plan slide.
One last thing …
Hiring plans are powerful tools for many reasons. My favourite is that it helps people close to me weigh in and help add candidates to my list because they know what I’m looking for. These same people can also improve the overall hiring plan by pointing out blind spots in the roles that the organisation thinks are important.
If you found this post useful and would like a copy of the Hiring Plan slide I use in pitch decks, let me know and I’ll send you a copy.