7 Hands-On Tips For Hiring Entrepreneurs (And Avoiding Wantrepreneurs)
Tumultuous times, such as the current pandemic, can force people to make dramatic and irrational career choices. In some cases, the need to find employment makes it difficult for people to be intellectually honest regarding their suitability to a particular industry or company.
For instance, in tough economic times, job candidates departing large organizations may under appreciate the risk and ambiguity associated with a startup. In such cases, the applicant might convince themselves that they have the resolve and tenacity to be an entrepreneur, when in fact, they are a wantrepreneur.
A wantrepreneur is a well-intentioned person who wants to be an entrepreneur, but does not have the skills, personality and or appropriate risk profile to be successful. When the going gets tough, as it always does at every startup, the wantrepreneurs are the first to bail and seek stable career options.
The costs of a mis-hire during the early stages of a small venture are dramatic. The time and money involved in recruiting someone who is ill suited to a startup life can have an outsized impact on a small business. As such, startup hiring managers must be especially diligent when assessing a candidate’s proclivities and career motivations.
Entrepreneurs make a job, while wantrepreneurs take a job.
(Mostly) Ignore Resumes
At a large, mature company, the hiring process is straightforward. A detailed job description is defined, candidates who have previously performed similar tasks at other organizations are interviewed and one of them is hired to fill the open position.
At a startup, recruiting is a much more nuanced. Rather than searching for applicants based on their resume credentials, the primary objective is to attract candidates who are wily, tireless, and creative problem solvers. The specific tasks they have previously performed are less germane than their ability to quickly make sound decisions under a cloud of ambiguity.
Many people who succeed at startups are ill suited to work at large, established entities. Conversely, employees who have performed well at large companies often do not excel in a faster-paced, resource constrained environment. Thus, do not be lulled into thinking a person with stellar big-company credentials can translate their past successes into a successful role at your startup – people who perform at a high level at both large and small companies are relatively rare.
Gain Insight In Numbers
Group interviews can be an effective way to gain insight into someone’s true motivations. In one-on-one interviews, the applicant is always on. They maintain eye contact; smile at the right times, say what they think you want to hear and generally make a concerted effort to keep you from knowing what they are thinking.
In group interviews, maintaining an unflappable facade is more difficult, as the interviewers who are not in the midst of asking a question have the luxury of observing the applicant. Top negotiators often prefer to work in teams so that one team member can observe body language, devise questions, take notes and analyze their opponent’s responses, while the other team members engaged in conversation. You can gain similar observational insights through group interviews.
Generally, two interviewers at a time are sufficient. Too many interviewers will heighten the feeling that the candidate is being interrogated and thus, should be avoided. With most interviews currently being conducted remotely, having more than one interviewer speak with a candidate at the same time increases the efficiency of the interview process. Recording the interviews (with the candidate’s explicit permission), also facilitates the interview process as excerpts from promising candidates’ interviews can be passed along to Senior team members, reducing the number of live conversations they must sort through.
Understand Other Job Targets
Consider asking candidates which other companies, types of companies and industries they are targeting in their job search, with the understanding that they are not required to give you specific names. Their response will give you further insight into the applicant’s startup proclivities. In some cases, you may learn that they are also interviewing with a competitor, which may influence how much information you initially disclose regarding sensitive issues.
If all their other interviews are with large companies or in mature sectors, the applicant may not be suited to an entrepreneurial opportunity. Knowing that they are speaking with one or more big entities will alert you to a potential incongruence in their career aspirations. Knowing a bit about the other opportunities they are pursuing will also help you put your best foot forward when comparing your venture with the candidate’s other options.
Another tactic for determining a candidate’s entrepreneurial inclinations is negative selling. For instance, you might say, “You certainly have a great skill set, but we’re a startup and I am not sure we can afford you.” This nicely sets up your future salary negotiations and it gives the candidate a chance to reach for the opportunity. It also encourages them to explain why they are a fit for the position and communicate a degree of flexibility with respect to their compensation.
Someone simply searching for a job will be unenthusiastic about an offer with a below-market salary and will not properly value the equity component of their compensation package. Entrepreneurial candidates will be willing to make reasonable monetary concessions to join an exciting venture, if they are offered material potential upside in the form of stock options.
Negative selling the adverse aspects of a startup (long hours, market, finance and technology risks, etc.) also avoids the applicant hearing only what they want to hear during the interview process. Challenging job applicants with frank, honest and potentially off-putting facts forces them to confront the realities of life at a startup. This approach also ensures that new hires will join your team with a realistic understanding of the challenges that must be overcome to thrive at your startup.
Ask For A Work Product
Assign promising candidates meaningful homework. For instance, you might ask them to research a potential new market, analyze a competitor or assess a new distribution channel. Select a task that will add real value to your team’s efforts and offer to pay the candidate a nominal, but reasonable fee for their work product.
There are several potential positive outcomes from this approach:
(i) you get the benefit of an outsider’s point of view and the insights derived from a project your team hasn’t had time to tackle.
(ii) the candidate becomes engaged in your business and thus can hit the ground running if they are hired, and most importantly.
(iii) it gives you an effective window into their true motivations, as well as an assessment of their skills and abilities. Prospective employees who are unwilling to engage in such assignments may be unsuited for life at a startup.
The recruitment process is not over when you make a candidate an offer, especially when you hire top performers. You should anticipate that their current employer will attempt to win them back with promises of additional compensation, a promotion and possibly more equity, once they announce that they are departing.
You can mitigate the effectiveness of such win-back efforts by discussing them in advance with the applicant. If you have the appropriate level of rapport, remind the candidate that a last-minute scramble to retain them is flattering, but it would be more sincere if such offers were made in the normal course of business, rather than as a last-ditch effort to retain them. Help your candidate understand that the attention they will receive once they announce they are leaving their current employer will feel great, but they should ask themselves, “Where was the love before I announced I was leaving?”
The consulting project referenced above is also a component of your inoculation strategy, as it gives you a legitimate reason to communicate with the applicant during the critical period after they accept your offer and before they complete their obligations to their current employer.
Conduct A Formal Review In 90-Days
Both your company and the employee will benefit from a ninety-day on-boarding period and the associated near-term feedback. Unfortunately, formal employee reviews are too often shirked at startups. By institutionalizing a review early in the employee’s tenure, long-term problems can be avoided and the employee can ultimately become more effective through timely, constructive criticism.