Building teams and culture: talent acquisition in pre-seed startups
As anyone who’s spent any time in the tech ecosystem knows, the battle for talent is real. Nowhere is this truer than at the very early stages. The challenge is twofold. Not only can pre-seed businesses struggle to attract the talent they need to realise their full, world-changing potential – they must also attract the very best-in-class, in recognition of a truth: that the first hires will do as much to set the culture of an organisation as a decade’s worth of workshops and away-days.
Compounding that, early-stage founders are not time rich. The demands of getting a startup off the ground, turning a great idea into a minimum viable product (MVP) or an MVP into a market-ready solution, at the same time as initiating conversations with investors, soliciting market feedback, finding offices – well, it’s a lot.
In this blog, I’m going to explore some of the qualities those all-important first hires will need to exemplify and look at some of the best strategies for attracting the individuals in possession of them.
To change the world, a business needs visionary leadership, plus a paradigm-shifting idea. But as importantly, it needs the right team. And building that demands the right approach. Here’s what every pre-seed founder should be thinking about as they approach the challenge.
Culture and mission
The key thing to remember is that your first few hires will play an outsize role in shaping the whole of your company’s cultural tone going forward. This means any misalignments (such as individuals who don’t encapsulate the culture you’re hoping to set, or who come into conflict with your aspirations for it) risk becoming baked in and sending the whole thing off in the wrong direction from the get-go.
As a rule of thumb, this holds true for about the first 20 hires. As a founder, you’ll need to ensure that these people align with your core beliefs. Even though you may not yet have a set of values codified, when hiring make sure you have a clear idea about how you want to work and operate, and how you want your company to see the world. Then, make sure these hires are in alignment with that vision.
One way of doing this is by finding individuals who feel a deep connection to your company’s mission. The first hires outside the founding team need to buy in with the same degree of belief as you bring to your startup – and they need to engage its challenges with the same degree of passion.
Happily, these kinds of individuals will often make themselves plain. The applicant profile of very early-stage talent trends towards a prioritisation of founder belief and mission alignment over other questions, such as compensation or the status that comes from working with a major, recognisable brand.
These first hires are likely to either be technical specialists or individuals who can build a pipeline and start selling your product. There’s a difference here – each role is rewarded by slightly different qualities, which we’ll explore shortly. But first:
Structure is everything
Establishing a structured approach to recruitment early doesn’t just ensure your all-important first hires align with your culture – it also sets you up for long-term success. Sure, unstructured hiring can work, but it often comes down to luck as much as anything else. In an ecosystem where risk is in no short supply, recognising and eliminating it where you can is just good practice.
While hiring processes will naturally adjust as a company scales, it’s easier to refine or iterate a process that already exists than pull one together from scratch in the face of the subsequent pressures that come with scaling.
One way to introduce structure is to establish clarity around the role and the outcomes you expect that individual to own. What will success in the role look like in three months? How about six – or 12? What will they be accountable for, and to whom? Answering these questions before the recruitment process starts will create a far more direct path to the right person.
Next, define the competencies and characteristics you’re looking for – setting out what ‘good’ looks like for your business and recruiting against that. Establish a key list of competencies and characteristics you want the individual to bring to the role you’re recruiting for and use these to structure your interview processes. So, what are some of the qualities you should consider recruiting for?
Ownership, autonomy and ambiguity
We’ve written before about the approach non-technical CEOs might use to recruit the CTO of their dreams, and how the attributes required change across a startup’s growth journey. Later-stage companies are likely to need ‘Farmers’ – people content to tend a system. Consider, for example, the role of a software engineer at a large enterprise: working ticket-by-ticket on a tiny part of a far bigger whole, with limited ownership.
It’s a stark contrast to the ‘Hunters’ required to develop a product at the very early stages. Here, engineers will need to be prepared to assume high ownership and high autonomy, shuffling quickly and easily between development functions and pitching in where they’re needed.
Founders should be looking for people who feel comfortable working without any form of precedent, happy to iterate, figure things out and solve problems as they come up. Hires need to be at home with ambiguity and prepared to step into a close working relationship with the customer – handling not only product management and design but also customer support and success, ready to step in and fix anything that breaks.
Looking for engineers with direct experience in your vertical isn’t only going to radically limit the pool of talent you’re drawing from – finding one may actually prove a hindrance. If you’re building in a well-established space, your solution will need to be seriously disruptive. Bringing people in from outside the space tends to create far more opportunities for innovation, as they’re coming to the problem with fresh eyes. The sales end of things, on the other hand, will really benefit from sector expertise, for all the obvious reasons (not least a useful contact book).
Founders should note that investors will be looking closely at your early team. At the pre-seed stage, there’s rarely much in the way of metrics for prospective backers to base their investment decisions on. Instead, things like team become all the more important. Investors need to believe that the team you’ve put together is capable of executing your paradigm-shifting vision: engineers with a proven background in building world-class product, plus a sales function with a strong track record in your vertical (or an adjacent one), will go a long way towards bolstering investor faith in your startup.
Core behaviours and how to attract them (plus a couple of things to watch out for)
So, in summary, pre-seed founders need to be looking for self-motivated individuals with a bias for action. People who aren’t afraid to roll up their sleeves and get their hands dirty, even as they’re prepared to accept total ownership of their function.
Those first few hires will make an outsize contribution to setting your startup’s culture, so even if it isn’t formalised, make sure there’s an alignment with how you see yourself – and who you hire. It’s also important that new recruits fully buy in to your mission.
Other core behaviours and qualities to look out for include growth potential, a strong work ethic and a low ego. It’s worth being a little wary of candidates with an over-fixation on things like titles (especially if they’re pushing a little too hard for seniority), or highly defined job descriptions.
The ideal candidate will accept that in these earliest, critical days, the excitement and reward are to be found in the autonomy, ownership and creativity their role demands. Happily, these positive attributes, in addition to a sense of mission, are often characteristic of the applicants who’ll jump at the kind of opportunity you’re offering.
Still, you will have to think about compensation. Clearly, any compensation and benefits package you can offer won’t be able to compete with bigger and more established organisations. To attract the top talent, and secure their buy in, you’ll need to think seriously about equity. It’s a big piece of the puzzle.
This is something we’re placed to advise on. At Octopus Ventures all our portfolio companies benefit from the deep expertise of our dedicated People + Talent team. From culture building and hiring and retaining top talent, to mentorship programmes and much, much more, the team supports all the founders we back with tailored, hands-on advice. Learn more about our work here.
