MichaelScottAAA

I recently spoke to a close friend and founder who was considering shutting down her start-up after working on it for about two years and raising over $1 million in seed funding. When I asked her what had gone wrong she simply said, “I hired the wrong people.”

I probed further to find out what she thought had gone wrong. My friend is one of the proudest people I know, so I could tell that admitting defeat on something as essential as hiring was hard for her. She went on,

I hired people with good resumes who had gone to great schools, but I didn’t ask the right questions. It turned out that many of the people I hired were either wrong for a start-up or didn’t really believe in what I was working on. The crazy part is that I didn’t just make this mistake once… I made it over and over again because I thought it was just a fluke each time, not something inherently wrong in my process.

So how do we avoid this situation? What are the best ways to hire? In my role at HireArt, I’ve helped dozens of startups and tech companies hire. The biggest mistake most start-ups make is rushing through the process and trusting making their decision based on the initial impression. To make a good hire, you need to invest time and effort.

Here are a few things you should do every time you hire:

1. Conduct a structured interview

After a phone screen, bring a candidate to your office for a one to two hour structured interview.  My advice is to go through each job on the resume and understand exactly what person’s job was and why they left.  Your gut might tell you that this is overkill, but you can discover a lot about a person this way. Make sure to ask them:

  • What accomplishments they were most proud of at each job?
  • What low points they had at each job?
  • What their manager thought of them at each job?
  • Why they left?

The most important advice is to make sure to go slowly and interrupt the candidate frequently (if you’re not interrupting constantly, you’re doing something wrong). If you don’t understand something or if the candidate is trying to change the topic, make sure to ask for more information — this usually means there’s something they don’t want you to find out.

My approach is similar to the Topgrading Interview created by Brad Smart — he has outlined a set of five questions you need to ask candidates about each of their jobs.

2. Do a trial (if possible)

If at all possible, bring the candidate in for a trial. This can be as short as a day (e.g., spend a day coding together) or as long as a week. Milo (now owned by eBay) asks all its applicants to spend a day working alongside its team. One of our clients was trying to hire a fairly senior person who wasn’t willing to come in for a day of unpaid work, so the company offered to pay the candidate a consulting fee to do a week of paid work. At the end of that period, the team had much more confidence in making the hire and the candidate knew she’d enjoy the work in the long term. Remember that firing is much harder than you’d think – it’s hard on your team and on your budget, so invest the time in bringing the candidates in and making sure it’s a good fit.

3. Do reference checks (not the usual kind)

Many managers ignore doing reference checks because they take a lot of time and can be a waste if you don’t do them the right way. There are two ways to get honest reference checks:

a)  Talk to people the candidate did not tell you about. The easiest way is to find common connections on LinkedIn or Facebook.

b) Ask the candidate to introduce you to specific managers based on what they said in their interview. One candidate I was interviewing for a client once gave me five references – none of them were direct managers, and three of them were colleagues from five years ago. This is useless. If the candidate seemed to struggle at their last job, you need to talk to the manager.

For any reference check you do, the key is understanding that it’s hard for the reference to say anything bad. This means that even soft clues should be a red flag. Unless the reference is praising the candidate profusely, it means that they were only so-so. Give the reference ample opportunity to talk about all the candidates’ strengths (which makes them feel good) before you delve into weaknesses and opportunities for improvement.

4. Make sure the applicant understands what working at a startup really means

In an effort to get the candidate to join, some start-ups are opaque about the basics of working at a start-up. I recommend being very clear about:

  • Number of work hours per week
  • Amount of grunt work required (candidates who have only worked at corporations don’t always understand this)
  • Open questions your team is trying to answer (e.g., if there is ambiguity on what the product should really be, have an honest conversation about this)
  • Runway (if you only have a year of runway, I recommend being completely transparent and letting the candidate know that you’re going to raise a round in a few months)

In fact, I recommend trying to scare the candidate a little bit. With all the hype around start-ups, there are too many people who don’t know what start-ups really are.  Be sure to set expectations before you make the hire.

5. Take them out to lunch with the team

We came close to hiring a candidate after conducting a long set of interview (including a two-hour trial).  But when we took her out to lunch, we realized that none of us had any real chemistry with her. What’s worse, she didn’t seem passionate about our product and vision. During lunch we were all having a conversation about hiring (we’re a recruiting start-up) and how excited we were to change how hiring is done. We were brainstorming ideas and throwing around concepts for how hiring could be done better. But the candidate added almost nothing and seemed somewhat bored during the conversation. For a start-up, hiring candidates who are passionate is one of the most important things. If you take them out to lunch and they can’t engage, find someone else to hire.

Hiring should be fun and exciting. But before you make an offer, make sure to invest enough time to really get to know the candidate.  If not, you’ll suffer the consequences later and it will cost you much more time and effort.

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