I once hired a developer who had more experience in his field than I did in mine. His resume touted roles at companies I one day hope to emulate, and his Rolodex read like a who’s who of tech startups. I was excited by the possibilities of having someone like this on our team, and I anticipated a long and rewarding career for him at our company.
No doubt he was talented–but the sad reality was that he had no genuine interest in building the company I envisioned. He stayed with us less than six months.
When hiring for roles like this at Betterment.com, the investing startup I founded two years ago, I soon learned the formula for a successful startup. It’s simple: create a product that people need, and hire ridiculously talented, highly motivated people to build it.
As I experienced then (and many times over), finding the ridiculously talented, highly motivated people is the more challenging side of this equation.
I don’t want to downplay the need for a great product–but a great product is rarely born on day one. Instead, it takes modifications, iterations, and adjustments based on user feedback. You need smart, thoughtful employees to imagine and implement these changes.
We break the pool of promising candidates into three buckets:
- A-Players: These candidates have the unique combination of talent and drive. They are rare gems and we do everything in our power to hire these applicants right away.
- Brilliant Misfits: Undoubtedly talented candidates who, much to our disappointment, don’t demonstrate enough drive and passion for our company. While we want to hire these folks to get talent in the door, we know that drive and ambition can’t be taught, and so we must pass on these people.
- Future Stars: Driven candidates who don’t have the technical skills or expertise we are looking for. While these candidates can be quick learners, we ultimately have to decide if we can afford the time it will take to teach and onboard them.
For many startups, hiring “A-Players” is the only option. While a Future Star would be a great hire for a later-stage venture, it is likely that the onboarding time would prove detrimental to the accelerated pace at which startups must move.
It will come as no surprise that it’s difficult to find “A-Players”: they are few and far between, and everybody wants them. We’ve been fortunate enough to find and hire a number of highly talented and driven people; here’s our game plan for winning the talent competition:
- Be obsessive about networking: By networking, I don’t mean LinkedIn or career fairs. The best candidates are not looking for a job, and are passively considering opportunities at best. You need to go where these candidates are and build relationships with them. That means if you want to hire a developer, you need to attend tech meetups, hack-a-thons, and product launch parties. It means having a lot of conversations, then following up after the event to tell the A-Players about the awesome role you think they’d be a great fit for.
- Look for the love: The worst thing a candidate can do is send over a generic cover letter. I’m impressed by people who demonstrate that they’ve taken time to understand our product, and that they’re excited by it. It becomes clear fairly quickly whether he or she understands our mission, values, and message. This is one of the core requirements. Passion is a powerful drive and an important part of what makes an employee truly valuable.
- Stay close to home: If you have a consumer-facing product, you may have users who already know, use, or love your product, and would be a great addition to your team. Don’t forget to share jobs with your community of users, and ask them for referrals. Sometimes the best candidates come to you. One of our customers caught our attention when he contacted us with a browser plug-in he’d written to retrieve and process the raw data we use to build our charts. His code published the buy and sell data from his Betterment account right into his personal money management tool. Talk about impressive. We contacted him right away.
- Hire Specialists: We focus on hiring employees who are specialists in multiple areas–so that they can transition to different areas if needed. Flexibility is important for a startup, since roughly 65% of startups undergo a significant pivot at some point, according to Union Square Ventures Managing Partner Fred Wilson. Even if the actual go-to-market strategy for the startup doesn’t pivot, it is likely that there will be significant changes to the technology or process as the product evolves.
- Pay for talent: If you want to hire “A-Players,” you should expect to pay a bit more. A-Players have likely been recognized for the work they do at their existing companies, and may be making 10-30% more than their peers. Don’t get too caught up in this difference. The delta in pay is incredibly small compared to the delta in value. Steve Jobs described the difference between an average programmer and a great programmer as being at least 25:1. Given these odds, paying 30% more for talent seems like a bargain.
- Be Timely: If you find two good candidates, hire them both. Don’t waste time trying to determine which candidate is better than the other. A-Players will likely have many options. Don’t give them time to consider alternatives. Conversely, if you find two average candidates, don’t hire anyone. Move on and keep looking.
Reserve spots on your team for A-Players only, and you’ll be more than halfway to startup success.
Jon Stein is the founder and CEO of Betterment. Passionate about helping people make smart decisions with their money, he founded the online brokerage in 2008. Jon is a graduate of Harvard University and Columbia Business School. His interests lie at the intersection of behavior, psychology, and economics. What excites him most about his work is making everyday activities and products more efficient, accessible, and easy to use. Follow Betterment and Jon on Twitter.