10. May 2012–
Tao Tao is co-founder at GetYourGuide.com, a startup that has hired 50 staff in the past 18 months and is planning to hire another 30 this year. So how should a founder hire effectively? What are the key points to ensure you've got a great team? Read on for Tao's top tips for hiring without regret...
Good to great
“Get the right people on the bus and the wrong people off the bus”
- Jim Collins, Good to Great
What does a company need? Customers that buy a great product made by great people. Like most startups we believe that acquiring, retaining and nurturing great talent is probably the single most essential requirement for building a great product, or later, a great company. Idea-stage entrepreneurs need great co-founders, early-stage startups need great talent for pushing features and acquiring customers, and mature startups need great talent that can lead teams. Here are some of our lessons learned as we grew our startup from five to 50 people.
1. Hire for the "fantastic four": integrity, motivation, skill and culture fit
Knowing who you want to hire sounds obvious until you get it wrong, as we did in the beginning. As a general recommendation, make sure you hire for four things: integrity, motivation, skill and cultural fit. You don’t want to hire anyone where even one of these traits is missing.
For motivation, I like to frame the CV part of the interview in a way so that the interviewee doesn’t simply recount all the stages of her career but rather explain her motivations for starting and leaving her previous positions, projects and fields of studies. If you’re a pharmaceutical company, you wouldn’t want a biology PhD who started her PhD just because it was easiest option back then.
For skill fit, define clear categories of technical proficiency that you require and even devise exercises to test these qualities during the interview (eg a mock sales call for phone proficiency).
Cultural fit is the most difficult and also the most important category to get right. In hiring as in life, relationship failures are usually due to bad fit. A Wall Street superstar might not be a good fit for an NGO. To get started, you should identify a set of core values that your founding team and company believe in, and ask questions around them.
These core values should not be based on what company you would like to be, but who you really are. Great companies are like tribes and great tribes need purpose (company vision) and values. To learn more about the importance of core values and how to hire people based on them, I highly recommend “Delivering Happiness” by Tony Hsieh (CEO Zappos.com), especially if you’re building a consumer-facing company.
Finally, don’t forget about integrity. In the words of VISA founder Dee Hock: “Hire and promote first on the basis of integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience.
Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind. Experience is easy to provide and quickly put to good use by people with all the other qualities.”
2. Have a set of killer interview questions and exercises built around those four qualities
Modern HR professionals suggest that you ask “behavioral” questions as opposed to hypothetical questions during the interview. The reason is that you want to know how and why people have behaved the way they did in the past as a good (but not perfect) indicator for how they will behave in the future.
Ask questions where it’s not clear for the interviewee what answer you are expecting and where the interviewee needs to provide an example from the past illustrating her answer. It’s also a good test for the candidate’s honesty and integrity when it comes to the tough questions. Start by defining the trait you are looking for, eg “The applicant is passionate about what they do”, and ask a question such as “What are you passionate about and how do you live your passions?”
For a trait such as “the applicant is willing to learn and improve every day”, we ask something like “Tell me about the most three important learnings from your previous job and the three things you most want to learn at GetYourGuide.” We also give a score from 1 to 4 for every tested trait we are looking for so we can track interviews results (your brain gets mushy after more than six interviews per day), benchmark applicants, and measure how successful candidates evolve during their careers at our company.
There are good behavioral questions on the web, but you can also make up your own - just make sure you know exactly which traits you are looking for. In the same vein, we devise exercises around traits and success metrics. I already talked about the mock call to test for phone proficiency. To give another example, for content jobs, we like giving out short writing assignments under time pressure to test for the candidate’s quality of writing and throughput capacity – two important KPIs for content.
And as for my favorite interview question, I like this one for assessing the right type of motivation: “If we were to offer you the job right now, what three things would I need to promise for you to take the job?”
3. Get a second opinion
Hedge your risk by getting a second opinion, either by having a co-interviewer or scheduling multiple interview rounds. You don’t have to go overboard like Google with 8-10 interview rounds, but get at least two opinions.
4. Hire people you would drink a beer with
This is a contested one, but I believe in it. Your employees don’t have to be best friends – it’s more important that they respect rather than like each other – but they should be able to sit down for a beer (or Club Mate).
Your team will see more of each other than their significant others, so why hire people who can’t stand each other? Besides the company’s vision, your teammates are one of the biggest motivators for people to come to work every day. Plus, some of our best ideas were generated over beer.
5. Bad hires are poison: resist making a hire for an immediate need
Which entrepreneur or manager has not faced the situation where a position is desperately needed and you’re willing to take “anyone”. Don’t. As difficult as it is, resist the temptation to hire for the short-term because bad hires are poison.
A bad hire will drag down the entire team for several reasons: you will need to look for someone better sometime down the road anyway, so you’re only delaying the inevitable while wasting your and your team’s resources to onboard and eventually get rid of the bad hire.
Even worse, bad hires will lower your good team members’ engagement and potentially drive them away altogether. As Steve Jobs put it: A-players like to work with other A-players. Get one B-player and your A-players will start looking elsewhere and believe me: A-players have an easier time finding work than you will have finding replacement.
Letting people go is one of the toughest psychological things for you and the company. Regardless of someone’s performance, a bad hire will have formed some positive relationships and people leaving is always a tough morale hit. Letting people go is important and must be done without delay, but good managers must understand that the blame is always on them – for having hired said person or for having failed to integrate her. Letting someone go is ten times as hard as hiring someone, so think twice about getting that quick fix.
6. Take time to integrate new members and listen to your team
Don’t just hire someone and let them fly on their own using some excuse like “I believe in autonomy and self-responsibility for my employees”. Take time to integrate them into your projects, structures and culture. This begins with open office seating: we don’t give our managers separate offices and often sit new hires next to the team lead in the beginning.
Equip your new hires with the tools so can they can gradually fly on their own. Also listen to what other people have to say about the new hire because assuming you already have a team of A-players imbued with your company culture, they will not only know what’s good for the company and can provide additional observation points, but they should also have some say in accepting new team members.
As in all great tribes: the group is greater and will achieve more than the individuals on their own, so you want to make sure the tribe feels united. Of course, if you have a bad company culture, the initial reaction on part of co-workers might often be one of rejection, fear of competition or something else. It’s a virtuous cycle if you get it right and a vicious one if you get it wrong.
7. Get an HR manager
Once you grow to a certain size (more than 10-20 people) and plan to grow further, the two most important hires are not killer engineers or marketing wizards but an office manager and an HR manager (they can be one person in the beginning). Candidate screening, hiring, counseling and career development is a full-time position, so make it one. One of the biggest challenges in startups lies in scaling your team and culture. If you value your talent and culture (and your own time to advance your product), allocate the necessary resources and get a good HR manager early on.
8. Leverage your personal and company network
Some of our best hires came from our personal network. Build and cultivate your personal network because you never know where a qualified lead might be coming from. Once our company hit 20 people, we also set up an internal suggest-a-friend scheme where employees get (financial) benefits for recommending a friend or acquaintance who is hired and passes the probation period. This is a common practice among mature companies with some drawing up to half of their new hires from friend referrals.
9. Accept that you will never get it right all the time
Hiring is about understanding people and about making predictions for the future based on past data points, so errors are always bound to occur. With time I think we have developed a keener sense for the right people, but also accept that we will never get it right all the time - if for the simple fact that you need to make the important decision of hiring someone for months and years based on a mere 60-minute interview.
A former head of HR for a company with more than 200,000 employees once told me: “I have interviewed thousands of people in my life and still make bad hires. All you can do is improve the good-hires ratio and learn to deal with the bad ones.”
Hopefully, this article based on personal errors and lessons learned will help you improve that all-important ratio a little bit!
These books don’t deal with hiring directly but will help you build a great company based on great people. We also give these books to new employees as a welcome gift:
And check out the VentureVillage jobs section for the hottest startup jobs in Berlin