With the slow down in funding take a bite out startups, it’s very difficult for the entrepreneurs to hire the right talent to ensure their success. Today’s young generation has the choice to work for multinational companies and established Indian companies that offer good infrastructure and a comfortable working environment. On the other hand, you run on shoestring budgets to maintain low operational costs. Therefore, if you’re an entrepreneur, you need to ponder over the 4Ps to bank on for hiring success.
The founding team has to sell hard and sell right the vision of the company to onboard skilled and talented people. Therefore, the long term vision of the startup drives passion and enthusiasm among the first set of hires during the initial years. The entrepreneurs who are shaking things up combine a palpable vision with tenacity and the ability to build an organization such as Tesla that attracts other top thinkers.
Almost all recruits do look for a high energy founding team to guide them during the early days. Since your team works extra long hours to compete with established companies (60-hour workweeks are not uncommon), the work culture plays a significant role in ensuring productivity. Though it’s a cliché, it’s true that great people are five times as valuable as good people.
Initial hiring is best done through referrals. Also, it’s important to focus on hiring people with an entrepreneurial mindset rather than job seekers. Product specifications/ customer requirements are very dynamic during the early days of every startup, and teams that are flexible or agile create momentum faster than their competitors and growing unicorns.
You might be finding it very difficult to offer huge cash compensation in the initial years of your startup journey. Almost every new venture sells the value of equity to its first few employees. Unlike the US Silicon Valley, there aren’t many case studies in India where employees have realized an upside through their stock holding. Transparency about valuation step-ups or flat rounds ( where the valuation remains the same in follow-on rounds of financing) and secondary sales by management teams play a great role in creating trust and comfort in the employees’ minds.
The single most important factor that would retain good talent is your startup’s progress. Without business progress, you wouldn’t be able to pay market salaries to your hires. Equity (value) appreciation stalls unless milestones are achieved. Employees show less enthusiasm to accept lower than market compensation without ESOP upsides. Fast-growing startups that attain leadership status do create fatigue/hopelessness and disenchantment in the minds of the employees of other players in the same segment.
So, Purpose, to begin with, People, Pay and Progress on an ongoing basis are very critical for successful hiring. Entrepreneurs, you need to get three out of four right to ensure you are on the right track in terms of building a winning team.