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Startup Recruitment for Founders

rocketshp.com

66 pointsmiraj16 comments

I find it interesting if not a little disconcerting that the equity table has the startup hiring a COO at 2% - 5% equity but no CTO and the closest it has listed is "Lead Engineer" at 0.5% - 1%. I suppose there could be a VP of engineering under that chart since it doesn't specify what type of VP.

This article seems to be propagating the myth that engineers need MBA types more than they need engineers.

The article also advocates heavy contracting.

Speaking from experience, if you are contracting out most of your software engineering and don't have a CTO type role who knows what good code is and knows how to manage the contractors, you are in for a really bad time when you do decide to bring on full time software engineers. You risk overpaying and risk having completely unmaintainable code that doesn't scale with your business.

Conversely, much of what a COO does can be done by the CEO at early stages.

Of course, no two startups are the same. In fact, a bad CTO can be more damaging that not having any. Which is why it is important you screen your hires well. However, your milage may vary.

a bit offtopic but -- imo technical folks don't need MBAs. However you _do_ need a person who can sell. That person might have a technical background, might happen to have a MBA (though frankly very few MBA types are very good salespeople), but honestly the skill is orthogonal to anything else.

The question you ask an engineer is "can you build this?". The question you ask a business cofounder is "can you sell this?"

so true. to get a bit pedantic, there's generally no 'business' to 'administrate' in the early days, so an 'MBA' is... not specifically useful. To the extent an 'MBA' is useful, it's probably in doing things that are tangential to the degree itself.

Late replying but... I completely agree. Tech types do often underestimate the importance of sales. They have a "if you build it they will come" mentality.

But as two counter points...

- I've seen business people make this same mistake. Although probably not as much.

- A technical CEO can hire and manage a non-technical hire (sales person) just as well if not probably better than a non-technical CEO can hire engineers.

As a technical CEO/CTO myself I recommend that one of your first hires when the project nears launch should be a sales person. If you wait until the project has already launched you're late and you will burn through capital while they ramp up and build a pipeline.

These equity tables really motivate me about startups. Motivate me to treat them as gamedev studios - meaning stay as far away as possible.

A curious bit:

> Rookies: Won’t always request equity, Experienced: More likely to request equity

Is this really true? I would think it's the opposite--the rookie has not yet felt the sting of swapping salary for worthless equity and would be more likely to value equity higher, whereas the veteran will know better...

The whole section on equity convinces me that I'm not joining a start-up any time soon. 1-3% for hires 1-5? Fractional percentages for everyone else? What a joke. That's what passes for early-stage equity? These are the people who are literally building your company. People seem to be falling for it though, and start-ups seem to have no trouble hiring, so who am I to argue?

The veteran knows that equity is something you can negotiate hard for and is very negotiable.

Regarding equity comp for early hires, presumably the founders have already done significant derisking by finding initial product market fit, secured initial capital, built a prototype, have buyer interest/commitments, etc.

Every time I see complaints about single digit % compensation, I wonder how many of the people complaining will go out and actually put in the work of validating a market and getting the initial momentum for sales and meeting 100 "investors" and "pseudoinvestors", put in years of networking to even be loosely connected to the money network, getting 90 rejections to get your first $500k, and the shitwork of setting up a corporation and doing all this work out of pocket in exchange for 10x the equity. I mean literally no one is stopping you from setting up a company that you own 100% of the equity of.

This post hightlights the real barrier to entry for startups. Being connected with people with the money.

It's normally the people with best connections and the best relationship with investors and not the best product market fit that can get funding.

Rookies - Will settle for lower wage - Might take longer to achieve certain outcomes. - Will need training

So the conclusion that they are "cheaper" is not necessarily true if you factor in the extra time taken and training. Plus there is a very good chance that maintenance costs will be far greater once the project reaches some sort of maturity.

He's advocating for two classes of employees, those with and those without equity. That in my opinion is a recipe for failure. You will create a huge amount of resentment and pull apart a team that should be working together. Either everybody gets equity or nobody gets it.

> Ask them if they’d like to have a quick phone call

And that's how you fail to get introverted people interested. I'd have to be deaperatelly pissed off at my current position to want to voice chat about "great new opportunity" without getting all the details in writing first...

A wise move to write a guide like this as content marketing. The key market for rocketshp appears to be early stage founders. This is a problem faced by that segment for sure.

Searching shows up ~nothing for rocketshp or Mark Hayes, I would take their opinion with a big grain of salt.

Typo in the first sentence...

> Has your startup has reached the point where you need to make your first hire?

is there a guide on how to hire reliable contractors if you're too busy currently to work on your saas product?

İnteresting

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