There's a set of soft skills that candidates must possess in order to thrive in the controlled chaos of an early-stage start-up. Here's how to identify star employees.
Life as a start-up employee is nothing like putting in your daily graft for a big corporation. Long hours, incredibly diverse to-do lists, insecurity, and the promise of a future payoff make start-up culture uniquely exciting and challenging. So what kind of employees can tolerate the craziness and thrive in this sort of atmosphere? It's a key question for founders, who need to find team members suited to the reality of life at a fledgling business. An experienced entrepreneur thinks he can help.
Serial entrepreneur Todd Vernon most recently founded Boulder, Colorado-based advertising and analytics company Lijit Networks, and led it through an acquisition by Federated Media Publishing, where he now serves as an executive vice president. He spoke to Inc.com about the qualities he thinks are essential when hiring for a start-up, outlining five questions he asks of every potential team member.
Can you delay gratification?
"Applicants that are specifically targeting a start-up, you have to drill down and go, OK, what's the motivation?" says Vernon. "You'll find people who are enamored with the idea of working for a start-up, but three questions in they want to get market compensation and cash is really important to them—these things are contradictory to what you're trying to do. You're trying to change the world, build a different kind of company, and build enterprise value that someday will be an outsized return for you. So if in sentence two they're like: 'I'm worth a lot of money,' they almost instantly opted themselves out."
Sussing out a candidate's capacity for delayed gratification, according to Vernon, is all about discovering, "are you in it for building enterprise value and an eventual exit or are really just a cowboy that wants to get paid a lot and likes saying you work at a start-up because it's sexy?"
Can you roll with the punches?
"Just by definition, nothing works right in a start-up. At least the first year is a train wreck, with constant disappointment, nobody calls, once in a while something positive happens. You have to be able to deal with that. It's sort of like being self-confident but you have to be able to project that on the company and go: 'Whatever! We'll figure it out.' That's one of the hardest traits to find in people," says Vernon.
It's a characteristic that links back to the first question on Vernon's list. "Did they ever really belong there in the first place? If they had the right mindset, it rolls off their back. If they had personal doubts to begin with, the minute anything negative happens, they think the sky is falling."
To get at this quality Vernon tries to "anti-sell" candidates on the idea of working for his company. "I'll go: 'This is really tough. You're going to work really hard and no one's going to call.' You put them in an uncomfortable position because you ask them to promote that they're still sitting there. If they stay bright eyed through that it's a good indication. If you're selling people hard to work there that's a bad thing to do, in my opinion," he says.
How risk averse do you consider yourself to be?
"A better way to put this one is, 'How sell confident are you?'" clarifies Vernon, or to put it another way: "If you got fired tomorrow, how confident are you that you would figure out how to eat?"
"When I think of 'risk averse,' I think, 'how comfortable are you with being uncomfortable?' If you're OK with that then you're perfect for a start-up. A good start-up should always tell you when they're out of money--'We're out of money August 23!' If that freaks you out then you're in the wrong place," says Vernon, who feels founders shouldn't have to spend precious time and energy reassuring nervous employees.
"Once in a while someone will come in your office and go: 'Hey man, I got kids and I got to eat.' They're hand wringing and they want you to make them feel better," but Vernon sends them away with the suggestion that if they're stressed they should find employment elsewhere.
"I'm not here to make you feel good about it," he says.
Are you a control freak?
The final two questions Vernon offers have less to do with absolute qualities demanded of all start-up employees and more to do with matching the right type of candidate for the stage of your business.
"In a start-up, the control freak should be the founder. Jack-of-all-trades is probably more important to have around you as a founder in the early stages. When you have 10 to 20 employees, then you want a couple of control freaks," explains Vernon. "By definition you need to stop doing everything as the entrepreneur. You need to hire a couple of people who will just obsess over part of the business and take it to ground."
Do you consider yourself a jack-of-all-trades?
"This is the converse," says Vernon. "At the beginning that's the person you need. It's great that you're the VP of engineering or the head of sales, but you also have to deal with the lawyer, the payroll. You're going to get divvied up all this stuff."
"The challenge is as you transition to the 20-, 30-, 40-person organization, they need to switch gears. They need to turn into the control freak because now you need somebody to really kill it at sales and I don't want you to be calling HR to handle payroll. Now I want you to just be awesome at sales," Vernon says, warning that, "it's very difficult with employees because they view it as losing scope. Jack-of-all trades is super important at the beginning but they have to be able to morph. I've actually had to get rid of people that were really good under-10 employees that were jack-of-all-trades that just couldn't transition."
So what's the ideal mix of control freak tendencies and ability to do a little of a lot of things? "The best profile is someone who has a really deep discipline--they're excellent at sales or engineering--but they're OK doing a tour of duty for a couple of years where they do all this other crazy stuff and they don't get insulted by it," Vernon concludes.
In addition, Vernon, while enthusiastic about hiring young, aspiring entrepreneurs, cautions against hiring veterans of big corporate teams for still tiny start-ups. Too much formal process too early, "gets in the way of the magic." For his first 10 employees, "I actually don't want to hire corporate people," he says bluntly. "They're kind of broken. You have to deprogram them."
Does your profile of the perfect start-up hire line up with Vernon's?
More from Inc.com: