Most startups are in a big bind when it comes to hiring. They don’t have enough money to lure top talent through salaries. Yet without that talent, entrepreneurs will be hard-pressed to develop a world-beating product that customers want to buy.
Fortunately, there is a way around this dilemma that can help you convince the most talented people to give up a bigger, steadier paycheck. Here are five strategies you can use to recruit and retain talent when you're on a tight budget:
1. Grab potential hires emotionally.
If you hope to lure the best employees, your startup must have a compelling mission. I once interviewed the co-founder of a software company who had been one of Facebook’s first 100 employees. Walking away from Facebook before its initial public offering was a big financial loss, but to him, the startup -- whose software decodes the genetic basis of cancer -- offered a more compelling goal than increasing ad click-throughs.
If you can convey your company has a mission that's more compelling than others in your industry, you will have an easier time hiring top employees.
Related: 3 Unique Hiring Techniques to Find the Right Person for the Job
2. Show them you only hire the finest.
If you want to hire top talent, you absolutely must staff your executive ranks with leaders in the field. The reason for that is very clear -- A-players want to work with other A-players.
The best way to hire A-players is to be one yourself. In my many interviews with Silicon Valley venture capitalists, I learned that the best startup CEOs have great reputations among the people they've worked with in the past. Make sure you can tell compelling stories that show you have superior industry knowledge and a strong vision for your company's future.
3. Present them with a challenge.
If you're trying to attract the best hires, there is nothing more compelling than offering a chance to work on the most challenging problems in their field. It costs you nothing to define your venture's strategy in that way, but top talent loves it.
If you want to make this clear to potential hires, tell them about your customers' enthusiasm for the way your product solves a big problem that has gone unsolved for years. Highlight the new challenges you plan to tackle and make it clear to them that they have the chance to make a big difference in coming up with that solution.
4. Be clear about the potential for growth.
Prospective hires look at your startup through a lens similar to that of a venture capitalist. The best hires in your field like a compelling mission and challenges, but they also have a mercenary side. So when you're trying to bring those kingpins to your startup, make it clear that they are going after a big opportunity.
Conveying this message credibly is a challenge for entrepreneurs. Potential employees -- not to mention investors -- expect you to overestimate the size of the potential opportunity. But you don't want to overpromise. Be very specific in distinguishing the specific segment of the market that you are targeting.
5. Know your customer inside-out.
You also want to give potential hires the confidence that you know your customer very well. Interview at least 50 potential customers. Based on those interviews, you should know the specific criteria that customers use when they buy products in your market and why your product beats the competition in the minds of those customers. Letting potential employees know this gives them the confidence to come on board.
Recruiting top talent boosts your venture's odds of success. Without offering big salaries, these five intangibles can make a vital difference to your hiring effectiveness.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.
Peter Cohan is president of Peter S. Cohan & Associates a management consulting and venture capital firm. He is the author of Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision (Berrett-Koehler, 2012).