海角社区

September 27, 2022
How To
4
聽min read

How to hire your first team members

Tim Chong
Tim Chong
Co-founder and CEO

Startup hiring is hard

I often get asked, was starting 海角社区 as hard as you expected? The answer is yes, but not in the ways I expected. Fundraising is hard, building a product is hard, but the hardest? Hiring.

Building an early stage team is almost impossible. You need to find the most talented people, who are willing to work twice as hard for about half as much compensation, for a company that is statistically likely to fail. But it鈥檚 these first few hires that will determine the success or failure of your start-up.

We鈥檙e super proud of the team at 海角社区 and I wanted to share some practical learnings on what we鈥檝e done (and learnt). I don鈥檛 have empirical data to know whether our approach was right or wrong but hopefully it鈥檚 useful for other people building early stage startup teams!

Fill your talent gaps

So we had a general principle at 海角社区 that we only wanted one person per area of expertise needed to build 海角社区. That means we explicitly have no redundancy if someone is sick or away - it鈥檚 operationally tough but it means we can build the smallest team possible (I鈥檓 a big proponent of small teams).

It sounds obvious, but we specifically looked at hiring people to fill talent gaps that we as three co-founders had. My background was in consulting and product, our CTO was in tech (but mainly backend), and our Chief Risk Officer was in data, risk, regulatory and financial services.

That means we were seriously lacking on the creative side and so the first couple roles we hired was a marketer and product designer. We later added a mobile engineer and backend engineer, breaking our first principle with the additional backend engineer. Building a credit card is incredibly backend intensive, so two backend engineers significantly improved our build time.

The next four roles were customer support, finance, partnerships and another mobile engineer. Every startup will be different, but we found these roles helped us to have good coverage across all areas of our business. We only hired these roles when we were much closer to launch and the workload was beginning to break us (literally). All in all, we launched 海角社区, a fully fledged regulated credit card in less than 12 months with 11 people.

Know the level of experience you need

There鈥檚 always a tricky debate on what level of seniority do you want to hire for. Some founders typically index on a less experienced team that have hustle - and it鈥檚 worked for companies like Uber in the early days with their 鈥榤arket launchers鈥. In general I was looking for a level of experience that could lead their function independently but still loved getting their hands dirty. That means no C-level executive experience, but also not completely inexperienced team members - most of our early team had at least 6-7 years relevant experience (but everyone happily got their hands dirty writing FAQs, taking out the office rubbish, manually testing the App etc.). This has definitely helped us as we think about how we scale the team, we鈥檝e now got great functional leaders across the team.

Look for generalists

For example, Rachel who leads our member support team isn鈥檛 a chargeback specialist, but she鈥檚 got great experience in team leading, fraud, customer service, and crisis management. That means we sacrificed deep specialisation for people who could do everything. We did this because we weren鈥檛 entirely sure what types of expertise we needed until we actually launched the product. Generalists build startups.

Where to find your unicorn talent

One of the challenges you鈥檒l face early on is having very little credibility, presence or track record to bring in the type of team member you really need. So you need to hustle and overcome these headwinds by using your effort, persuasiveness and network to good use. You really can鈥檛 outsource recruiting in the early days.

Your early team represents a massive part of your culture, more than your founders! I still meet great people 6-12 months before we鈥檙e hiring for a role, most exceptional people aren鈥檛 looking at the exact same time you have a role available so I find it helpful building these relationships over time.

We found all of our early hires through referrals

So here鈥檚 how we built our early team. You might notice a trend鈥

  1. Design Lead 鈥 Personal Referral (former colleague)
  2. Head of Marketing 鈥 Personal Referral (advisor)
  3. Frontend Engineer 鈥 Personal Referral (advisor)
  4. Backend Engineer 鈥 Angel List
  5. Partnerships 鈥 Personal Referral (investor)
  6. Finance Manager 鈥 Personal Referral (friend)
  7. Customer Support Lead 鈥 Personal Referral (former colleague)

Job boards aren鈥檛 effective

Tools like Otta, Cord, LinkedIn, WorkInStartups can be useful, but they didn鈥檛 work for us early on. Partly because candidates are comparing roles primarily based on compensation, something we just couldn鈥檛 compete with as an early stage start-up.

Recruiters aren鈥檛 effective

We tried outbound recruiting, but we didn鈥檛 successfully recruit anyone through this approach either. They鈥檒l charge 15-25% commissions and we just didn鈥檛 get any great talent through them.

How to convince them to join

If you have a brand name like Google, Facebook or Amazon, getting applicants isn鈥檛 the hard part - it鈥檚 finding the best people through the applicants. If you鈥檙e a pre-product start-up, getting people to apply in the first place is the hard part. We were fortunate enough to have tier 1 seed investors, but even then, no one knew who we were (and our website was terrible).

Don鈥檛 forget, they鈥檙e interviewing you too

In the early days, you鈥檙e selling yourself (not the company鈥ecause well let鈥檚 be honest the company barely exists). I treated all our initial hiring chats with people as an opportunity for them to learn about 海角社区 (as much as it was an opportunity for me to learn about them). We typically would spend between 30-45 mins and split the time 50/50 across them asking questions to us, and us asking questions. At this point, you鈥檙e doing a lot of pitching.

Be upfront about your expectations

I think at this point it鈥檚 also worth being upfront with the expectations - I tried to be clear to everyone that the job isn鈥檛 going to be 9-5, it鈥檒l most certainly be one of the toughest jobs they鈥檒l have in their career, but definitely the most rewarding. Building a start-up is unbelievably hard and we鈥檇 rather people opt-out of the process early on, then having them opt-out 6 months after they鈥檝e joined.

How to run your recruiting process

Our recruiting process was adapted from places like Google and ClearScore, it鈥檚 fairly well trodden process and so we didn鈥檛 try to reinvent the wheel.

  • Job Description: Hiring manager wrote a very detailed job description with as much information about what was actually involved in the role, what good looked like, and salary bands. We created a Notion page with information about our company and the jobs we had listed.
  • CV/LinkedIn Screen: Hiring manager was responsible for reviewing the CVs or LinkedIn of people that applied (or we spoke to). We wanted to do things like anonymising the names of people to eliminate bias but with 3 people (and no Applicant Tracking Software), it was practically impossible to do it.
  • Four stages: We did the hiring manager chat first, and then aimed to do the next three rounds as close together as possible (often in just one day). The hiring manager was responsible for scheduling the interviews and also transparently explaining the process to whoever we were interviewing:
  • Hiring Manager chat: This was typically 30-45 mins and could often be an informal coffee chat, walk, drink at a pub, or a call
  • Job fit interview: We had two people do a job fit interview which focused more on the technical aspects of the role, drilling down on the candidate鈥檚 experience and seeing whether they could do what was required of them.
  • Values fit interview: We had another two people do this (which in a small team鈥ould be the same people as the job fit interview), and this was focused entirely on values fit inline with our principles. We emphasised this wasn鈥檛 about the technical skillset, but more about the alignment with our principles.
  • Case interview: The last was a hypothetical case study that people could either do as a take-home, or a live case with preparation time ahead of time.
  • Consensus: We then asked all the interviewers to give a 鈥榯humbs-up鈥 or 鈥榯humbs-down鈥 on whether we should give this person an offer. Neutral wasn鈥檛 allowed, and we asked everyone to close their eyes to avoid biasing another person (think about when you鈥檝e played scissors-paper-rock). Everyone would share their feedback and the hiring manager would make the ultimate call, they didn鈥檛 need unanimous thumbs-up to hire someone.
  • Offer: We aim to make the offer within 24 hours of making a decision

How to think about compensation

Compensation is a bit of a touchy subject but our personal experiences of pay discrimination and painful salary negotiations meant we wanted to take a slightly different approach. From day #1 we implemented transparent pay bandings with publicised salaries and stock options.

Be upfront

We knew we couldn鈥檛 afford to pay as well as other companies, we鈥檝e taken a capital conservative approach from day #1 and we figured that given pay benchmarking data was widely available, we鈥檇 be honest with people upfront that we underpaid relative to market rates. We also shared how we鈥檇 adjust our pay bands as we raised more capital, e.g. Seed raise and Series A raise.

If we paid market rates, our cash burn would鈥檝e easily been 50% higher - which would ultimately jeopardise the success of the company; and we weren鈥檛 willing to compromise on the level of talent we wanted.

Give them ownership

With stock options, we offered everyone a stock option (in terms of a 拢 amount) multiple of between 0.6 - 1.0x their salary depending on seniority with a standard 4 year vest. We explained the stock option grant through different exit scenarios so people could understand what this actually meant in terms of financial outcomes. We encouraged people to do their own research in terms of probability of different exit scenarios so they could make an informed choice.

Hiring takes a long time, but it鈥檚 worth the effort

We didn鈥檛 actually ship much in our first couple of months of 海角社区, we spent about 70% of our time on hiring in the first couple of months. We screened over 1,000 CVs and interviewed about 200 people for our first 4 hires. It was incredibly time consuming and we probably weren鈥檛 as efficient as we could鈥檝e been, but it was worth the effort.

If you think about it, your first few hires, hire your next 10 hires, who then hire your next 30 hires, who then hire your next 60 hires, who then hire your next 120 hires. Getting it right increases your chance of being successful exponentially.

Tim Chong
Tim Chong
Co-founder and CEO

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Become a full 海角社区 member
拢15/尘辞, cancel anytime
new member offer
Get 1 month free membership
Earn 5 points per 拢1 spent
Worldwide travel insurance
No fees abroad
Stunning premium card (3 month min)
Accepted everywhere Mastercard is
Plus 10,000 bonus points
Worth 拢50 at 海角社区 Experiences
REPRESENTATIVE example
Purchase rate
29.94% (var)
Representative
66.7% APR (var)
WTF is APR?!
Based on a
拢1,200 limit
Learn more
Or try our free membership
拢0/尘辞, no commitment
Same 海角社区, just fewer features
Apply to upgrade anytime
Earn 1 point per 拢1 spent
Worldwide travel insurance
No fees abroad
Gorgeous plastic card
Accepted everywhere Mastercard is
Plus 10,000 bonus points
Worth 拢50 at 海角社区 Experiences
REPRESENTATIVE example
Purchase rate
32.9% (var)
Representative
32.9% APR (var)
WTF is APR?!
Based on a
拢1,200 limit
Learn more

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