Hiring Momentum: Underrated Component of Startup Success

There’s an old adage about if you want to see what matters, just follow the money. But with startups, capital is a lagging indicator of success. If you want to really figure out the future, you follow the talent. Where do the smartest people want to work? What problems are interesting them? What companies are they joining?

From an investment perspective, the ability to recruit talent is a key sign of promising founders. Since we invest in seed stage companies, there’s often only a small team (or no team beyond the founders). But there are signs to look for, such as (A) do their former coworkers want to work with them again and (B) asking about their hiring plan. And don’t fall back on the crutch that hiring is hard because you didn’t go to Stanford or work at Facebook. Shyp made a key hire before their seed round had even closed and has built an incredible team without founders having the valley pedigree. In fact, I’d say to a company, the top performing founders we’ve backed rarely talking about “hiring” as their greatest challenge. Sure it still takes effort (some people suggest CEO should spend 50% of their time recruiting) but these startups have nailed the trifecta of:

1. Product vision and work that resonates

2. Core team + culture that others want to be a part of

3. Equity that’s perceived to have upside

Combine those three and you have Hiring Momentum, an underrated and IMO underdiscussed component of startup success and scaling. I experienced this at breakouts like YouTube where the early engineering team were largely referral based hires and observed it from further out at a number of other startups.

Harsh reality is, if you have trouble hiring the problem isn’t with the market, it’s with you. Do you lack candidates or not seeing any referrals from your current employees? Are you getting good folks at top of funnel but losing them during process? Are you making offers but failing to convert or pry them loose from their current employer? Each of these conditions suggest different challenges to be unpacked and understood. Satya and I spend time with founders on sourcing, interview process and helping to close but ultimately if you can’t articulate 1, 2, and 3 above, no one amazing is going to join your startup. Sorry, there are too many other opportunities out there to compromise.