Recruiting and hiring are a bottleneck for many young startups. But what makes these tasks so time consuming, and what can founders do or avoid to improve? To answer these questions, we have collected some insights from our Merantix Ecosystem to better understand the challenges and give some actionable recommendations.
Special thanks to Adrian Locher, Janette Wiget, Raphael Stücheli and Leigh Marie Braswell for contributing to this article.

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Finding the right talents

Hiring top talent is incredibly difficult and a challenge most startups struggle with. The two reasons for this are the state of the market and the growth successful startups experience. As a tech founder who wants to hire, you face a lot of scarcity in the market for top talent. This is not a new problem, but it gets more severe every year in which the demand for technical talent rises faster than the number of trained specialists. For startups, the situation is even more challenging than for established corporations as they additionally have to fight for visibility and compete with the lucrative benefit packages of established corporations.

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Why hiring is so crucial for startups

Leigh Marie Braswell, partner at Founders Fund, hinted at how vital hiring is at startups. She told us that if she considers investing in a startup, one of the top questions she asks is whether the founders can hire. According to Leigh Marie, it is a knock-out criterion if the founders cannot bring top talent on board. The reason for this, she explains, is that founders will spend up to 50% of their time recruiting to meet their goals. Often, founders are surprised by this, Leigh Marie says. 

According to our co-founder and CEO, Adrian Locher, an exceptional team is a key to success. There is no carefully calibrated bureaucracy in the early startup phases, other than in established companies, that tells everyone what they should do. Instead, everyone needs to be able to take the lead and be proactive. This is why you not only have to take a candidate's dedication and intellectual capabilities into account. In addition, their willingness to grow personally and whether you would be willing to work for them if the table was flipped is essential. 

Further, we at Merantix strongly believe that culture plays a vital role in hiring at a startup. Not only is the right culture something that makes you more attractive to job candidates but early hires in a startup disproportionately shape the company's culture. You have to consider that hiring is not a one-shot game. For example, suppose you hire a few people that destroy your culture. Not only does it directly harm your company, but it also makes it more difficult to hire additional employees in the long run. 

In conclusion, there are many reasons why you, as a founder, should be careful and considerate in your approach to recruiting. Otherwise, you risk breaking the company. On the other hand, startups need to scale fast, which requires strong hiring capabilities. This is the reason why founders have to spend so much time hiring. They need to hire many people in a short period and hire them slowly. 

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How to improve your hiring efforts

Over the years, we at Merantix have been iterating on our recruiting and hiring efforts, and we regularly exchange with our ventures to improve each of our respective approaches. Here we have collected three main tips to consider for early stage startups.

Show presence, build a brand

As an early-stage startup, you need to build up quite some trust for people to buy into you and your idea. So potential candidates must know what that is. Your first hires need to bring the same passion for your vision as you do - or they need to be inspired by it. That is why we enable all of our Founders to work on building a social media presence in a channel that works for their respective industries. This is a great tool to help collect your thoughts and ideas. By sharing them in a meaningful way, it will have the great side effect that you can get them in front of the eyes of potential team members (or down the road, even potential investors).

Another great way is to get an overview of upcoming meetups or conventions surrounding the topic of your venture. These are perfect opportunities to get your name and idea out to a crowd of potential talents. Make sure you have some key messages about you or your venture that you can always bring on stage during these events.

Of course, you will still reach the most significant number of  job seekers on job platforms, so be sure your listings can be found on as many of those as possible. Some great tools can help you distribute your job listings on multiple platforms, so be sure to use them. A great free tool we are using is Join.

Create a scalable hiring process

Once you start attracting more talents, creating a scalable approach for the whole hiring process will be necessary. You will notice how each hiring call takes quite some time to prepare and debrief, which is why preparation is vital.

What we have found to work for us are Scorecards. As the name implies, it is sort of a checklist of skills that the position requires. Sit together with the other hiring managers and evaluate what skills, values and qualifications the candidate should bring. Be sure to make them as tangible as possible, and ideally, create a few example questions to help evaluate them. A clever approach is thinking about what the person in this position would have ideally achieved in a year and then creating questions about how they would get there.

Once you have the scorecard ready, you can map out the calls needed to answer all of them and then assign the questions accordingly throughout the team. That way, colleagues can quickly take over calls and evaluate all relevant aspects. We have found that it is absolutely worth it to take some time creating the scorecards as a team - as it saves a lot of time and confusion down the road. An excellent guide to help you make your first scorecards can be found here.

The ultimate hack: Onsite Days

Once you see more and more candidates coming through, a common trap founders tap into is that they hire too fast. But what can you actually do to be more considerate about recruiting? In this matter, we strongly recommend onsite days as an essential factor in getting to know a candidate. Well-structured onsite days are an excellent way to test whether a person fits into a team. It also allows you to convince them of your work.

It is quite some work to organize and run onsite days for positions, but for us, it has proven time and time again to be a super valuable step. First, we ensure that we create an engaging task which ties into the role and future job for the candidate to run with. Then, we add contacts from throughout the venture and our extended network who can help the candidate along the way. That way, the candidate gets to experience how we work here and meet some potential colleagues with whom they would be working. In a final presentation at the end of the two days, the candidate then presents their work, and all participating team members join in to give feedback.
Since two full days is a lot to ask from candidates, ensure that the experience is just as valuable for the candidate as it is for you. We also recommend offering an attractive compensation for these two days. Gift cards are a great and uncomplicated way to show appreciation.
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Recruiting and hiring are a crucial part of building a venture, and there is no magic trick that can solve these difficulties overnight. As with anything, we will keep iterating our processes as well, and we recommend you do too. Be sure to watch out for the events happening on our AI Campus Berlin, where we regularly exchange or have experts from the field come in to talk about the subject.

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