How to Recruit and Hire the Team You Need at Each Phase of Startup Growth
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Around the end of 2010, I decided take a bit of a career gamble. After working in investment banking and private equity for five years then going on to get my MBA, I took a job as one of the first 10 hires at a mobile gaming startup called Pocket Gems. In the four years that have followed, I’ve helped it grow to a 175-person company that’s been profitable since launch.
Along the way, I’ve learned more about startups than I could ever hope to fit in a blog post. For example, embracing company failures and discussing what was learned from them will do more to boost company morale than a team-building exercise. I’ve also learned quite a bit about growth and recruiting in a startup.
Startups are living, dynamic organizations. Strategies can change, tactics can shift, and entire company missions are just one pivot away from a complete restructure. As such, a startup’s needs are drastically different throughout its various growth stages.
Related: Hire Better: Recruiting 2.0
The inherent problem with startup scaling is the ‘the perfect candidate’ is a moving target. The ideal employee for a 3-person unfunded incubation may not be the best fit for a 50-person company looking to expand overseas. I’ve found that it helps to manage the growth of a startup team by thinking of it in different phases.
Of course, different startups will probably use different recruiting strategies based on what they’re trying to accomplish. Here are the four phases of growth that Pocket Gems has seen so far.
1. 1-50 employees. Just because your startup has a specific goal (hopefully), doesn’t mean your first few hires should have specified skillsets to accomplish it.
Most early startup employees have a ridiculous story about all the hats they wore in their company’s early days. The person assembling Ikea desks might also be drafting the mission statement. The person sketching the website layout might also be responsible for business development. For this reason, it’s important to hire generalists, talented jacks-and-jills-of-all-trades, at phase one. Early stage companies need dynamic people who can tackle ever-changing startup challenges.
Early employees are also the first vision-holders of the company. Finding a culture fit with the right communication style is most important at phase one.
Phase one recruiting tips:
- Don’t be afraid to go all Animal House and recruit heavily out of college campuses. Experience at this stage pales in comparison to ambition and a desire to learn and adapt.
- It takes a village. All founders and early team members should take an active role in recruiting- from finding new hires to closing them.
- The alma matters. Have your early team reach out directly to their alumni networks.
- Hire your first dedicated recruiter when you know you have the projected future headcount to warrant it.
2. 51-150 employees. At the second phase of your startup, you should be seeing traction and need for more people to evolve your company.
At this stage, word-of-mouth recruiting remains critical. As your company carves out a space for itself, it’s crucial your team puts out feelers to their networks for potential hires. At Pocket Gems, the first early hires came from our existing team shaking every tree to get the best people they knew to come and build something with us.
Although generalists will always be important, in phase two you should begin filling more specialized roles. One such role you should consider hiring, if you want to increase headcount, is an in-house recruiter.
You probably wouldn’t let your head of marketing try out coding because you are short on devs, so why would you have your CTO handle recruiting alone? Getting a recruiter ensures you have a constant source of new candidates.
Phase two recruiting tips:
- Venture out for help. If you have venture funding, tap your VC’s network to help you find the right hires. Sequoia Capital was influential for Pocket Gems in this stage.
- Consider using recruiting agencies and understand the difference between contingency and retained firms.
- Who recruits the recruiters? Build your recruiting team which could include specialized recruiters and coordinators.
3. 151-200 employees. As your startup continues to mature, so should your recruiting procedures.
By phase three, you should be the A-Team of hiring and your processes should be running like clockwork. Everyone involved in interviewing should have clear understandings of the role and its required skills. Your hiring team should also have a shared standard for the caliber of hires you’re looking for.
Equally important in creating an effective hiring process is being able to accurately forecast your hires. This means you should have a clear understanding of what your hiring funnel looks like. To do this, you’ll need to estimate the average time a hire takes from start to finish. You should also gauge the cost of each new hire. This will help you to effectively predict the time and resources it will take to reach your growth goals.
Phase three may also be the time to start casting a wider net for your candidates. This often means recruiting internationally. If you can forecast a headcount for the year, you can begin to allot for more international hires. Recruiting internationally can be expensive but can pay off exponentially when filling certain roles.
Pocket Gems is always trying to hire more engineers, a position for which the Bay Area has a lot of demand. We’ve found that looking overseas has been a great way to fill more technical roles. Currently, we have about 38 international employees working here on visas.
Phase three recruiting tips:
- Make sure your process is recorded and well communicated. It is important that hiring managers and recruiters are held equally accountable for getting the best people.
Leverage online recruiting and sourcing tools like LinkedIn, Startuppers, and Angellist.
Make a culture club. At phase three, your company will have changed some from when it was only 20 people. You’ll need to work harder to keep your early team on board. Building a strong and inviting culture will do wonders for retention at this stage.
Are you experienced? You’ll probably need more experienced managers, and possibly VP-level hires, at this point. Your VC and employee networks can be helpful in recruiting at that level.
4. 201 employees and upward. Phase four may be the final growth stage for a startup.
At this stage, the need for specialized roles is greater than ever. Startups that have grown past 200 employees need to consider roles like in-house PR, social media and international consulting. The challenge is specialized candidates may be outside the network of your current employee base, especially if you have an engineer-heavy tech startup.
Phase four recruiting tips:
- Have a team of in-house recruiters working in conjunction with hiring agencies.
- Offer larger referral bonuses.
- Increase your presence at job fairs and conferences with job expos.
Obviously, these phases can come at different times for different companies. These represent the three stages of growth I’ve seen at Pocket Gems and the fourth phase that we’re currently entering. At every stage there needs to be a company-wide belief that you'll only win if you have the very best people. When the company shares that feeling, everyone will make recruiting great people a high priority. Because, at the end of the day, it takes effort from everyone.