Around the end of 2010, after working in private equity for five years, then going on to get my MBA, I took a job as one of the first 10 hires at a mobile gaming startup called Pocket Gems. In the four years that have followed, I’ve helped it grow to a 175-person company that’s been profitable since launch.
Along the way, I’ve learned that getting the right flavor of Gushers can sometimes do more to improve company morale than a team-building exercise. One of the most important things I’ve learned, however, is the way a startup grows.
Startups are living, dynamic organizations. Strategies can change, tactics can shift, and even company missions are just one pivot away from a complete restructure. As such, a startup’s needs can be drastically different throughout its various growth stages.
Related: Hire Better: Recruiting 2.0
The inherent problem with startup scaling is the ‘the perfect candidate’ is a moving target. The ideal employee for a three-person unfunded incubation may not be the best fit for a 50-person company gunning for an acquisition. I’ve found that it helps to manage the growth of a startup by thinking of it in different phases.
Here are the four phases of growth that Pocket Gems has seen so far. Of course, different startups will probably use different scaling strategies based on what they’re trying to accomplish.
1. 1-70 employees. Just because your startup has a specific goal (hopefully), doesn’t mean your first few hires should have specified skillsets to accomplish it.
Most early startup employees have a ridiculous story about all the hats they wore in their company’s early days. The person assembling Ikea desks might also be drafting the mission statement. The person sketching the website layout might also be responsible for business development. For this reason, it’s important to hire generalists, talented jacks-and-jills-of-all-trades, at phase one. Early stage companies need dynamic people who can tackle ever-changing startup challenges.
Early employees are also the first vision-holders of the company. Finding a culture fit with the right communication style is most important at phase one.
Phase one recruiting tips:
- Don’t be afraid to go all Animal House and recruit heavily out of college campuses. Experience at this stage pales in comparison to ambition and a desire to learn and adapt.
- It takes a village. All founders and early team members should take an active role in recruiting- from finding new hires to closing them.
- The alma matters. Have your early team reach out directly to their alumni networks.
2. 71-150 employees. At the second phase of your startup, you should be seeing traction and need for more people to evolve your company.
At this stage, word-of-mouth recruiting remains critical. As your company carves out a space for itself, it’s crucial your team puts out feelers to their networks for potential hires. At Pocket Gems, the first XX hires came from our existing team shaking every tree to get the best people they knew to come and build something with us.
Although generalists will always be important, in phase two you should begin filling more specialized roles. One such role you should consider hiring, if you want to increase headcount, is an in-house recruiter.
You probably wouldn’t let your head of marketing try out coding because you are short on devs, so why would you have your CTO handle recruiting alone? Getting a recruiter ensures you have a constant source of new candidates.
Phase two recruiting tips:
- Don’t be afraid to ask for help. If you have venture funding, tap your VC’s network to help you find the right hires.
- Consider using recruiting agencies and understand the difference between contingency and retained firms.
3. 151-200 employees. As your startup continues to mature, so should your recruiting procedures.
By phase three, you should be the A-Team of hiring. Everyone involved in interviewing should have clear understandings of the role and its required skills. They should also have the same quality bar for the caliber of hires you’re looking for.
Equally important in creating an effective hiring process is being able to accurately forecast your hires. This means you should have a clear understanding of what your hiring funnel looks like. To do this you’ll need to estimate the the average time a hire takes from start to finish. You should also have gauged the cost of each new hire. This will help you to effectively predict the time and resources it will take to reach your growth goals.
Phase three may also be the time to start casting a wider net for your candidates. This often means recruiting internationally. If you can forecast a headcount for the year, you can begin to allot for more international hires. Recruiting internationally can be expensive but can pay off exponentially when filling certain roles.
Pocket Gems is always trying to hire more engineers, a position for which the Bay Area has a lot of demand. We’ve found that looking overseas has been a great way to fill more technical roles. Currently, we have about 38 international employees working here on visas.
Phase three recruiting tips:
- Invest in a good office space and approach remote hires with caution. A lot of collaboration happens physically in the office.
- Leverage online recruiting and sourcing tools like LinkedIn, Startuppers, and Angellist.
4. (201 employees and upward). Phase four may be the final growth stage for a startup.
At this stage, the need for specialized roles is greater than ever. Startups that have grown past 200 employees need to consider roles like in-house PR, social media and international consulting. The challenge is specialized candidates may be outside the network of your current employee base, especially if you have an engineer-heavy tech startup.
Phase four recruiting tips:
- Have a team of in-house recruiters working in conjunction with hiring agencies.
- Offer larger referral bonuses.
- Increase your presence at job fairs and conferences with job expos.
Obviously, these phases can come at different times for different companies. These represent the three stages of growth I’ve seen at Pocket Gems and the fourth phase that we’re currently entering. Scaling is a tough process for any startup but getting the best people should always be a priority.
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