Hi everyone. This is my first post. A quick introduction about myself. I am Vivek and currently located in Chennai. Aspiring to be an entrepreneur in the days/months/Years to come 🙂 This article is an attempt to understand the process of hiring at a startup. Your comments would help me understand what went on.
To understand the situation, you need to know that I have been trying to work for a startup because I thought it would give me the flexibility to learn how to run one down the line. Having said this, I always knew the kind of challenges and sacrifices that I would have to make if at all I joined a startup. But I am also of the opinion that the passion to work in a startup varies with your association with the group. For instance, if you are the founder, you would be practically working 24×7 and also in your sleep you would probably be working out strategies. The level of commitment would slightly reduce say for a co-founder who came on board a little later and keep going down with a new hire. This is true even more for a company which is performing regular hires (post funding).
Now, having said this (and I am sure many of you would agree/disagree), I was called by one of the founders of a company to work with them. We had various rounds of interviews, tests and lengthy discussions. Coming from a product management/marketing background, I was offered a marketing role in the organization. The company itself was funded by an entity and were in a position to offer stable income to the new recruits.
At the end of these interviews, I was selected and offered the job. However the pay was significantly lower than what I was drawing at my current job. The reasons stated included that I come from a different background and the nature of the job would be entirely different from what I have been doing all these years, that a disparity might be created if they even matched my current pay; let alone exceed it.
My expectations were not high at all. To begin with since I knew the pulse of startups, I was ready to accept an offer which would be below my current CTC and also fore-go other benefits which are offered in a corporate world. I was also prepared to work long hours (startups don’t have any working hours, isn’t it?) including weekends if the situation demanded. But the company simply couldn’t meet my threshold of acceptance and the offer was cancelled as a result.
My questions to fellow entrepreneurs here are:
- How do you balance the pay packet for a potential employee? Please give two scenarios – (a) You are self funded. (b) You are financially backed by an angel or a VC.
- Would you consider the prior experience of a candidate from a different domain, or would you simply consider him/her to be a fresher from your company’s perspective?
- What kind of commitment would you expect from the new hire? What kind of notice periods/bonds would you look at?
- What are the legal aspects which you would look into before hiring someone? Would you do extensive background check on the candidate or rely on references or just hire him/her for what value they can bring in?
- Would you have an age criteria to hire? In other words would you believe that a 21 year old could be as valuable as a 40 year old?
Your comments would help me ascertain where I should have my expectations as a potential hire/employer.
- An Attempt to work at a startup - June 24, 2008
Hi Vivek,
I am Chetan and went ahead to start a startup, providing outsourced software/product development services with somewhat different business/software models, after my MBA. After running it for 2 years or so I was not able to pull it up to its potential only because of the lack of experienced or committed employees. Every time I bring in a lead and start searching/recruiting resources I used to end up hiring freshers requiring intensive training. Well, there was no harm in training resources for the project lead BUT problem was/is these resources, after training, just left/leave for a hefty package.
My answers to your questions are :-
1) If someone is eager to work for a startup then he/she needs to get package thingy out of the mind because startups cover this pay gap with knowledge on how a company operates/grows etc. This knowledge is abstract in bigger companies where 10 people do work of 1 person. Whether startup is funded or not this question of hefty pay package should be not a problem.
2) This questions comes into play when you tend to multiply “Number of experience years WITH current market rate”. Startups, if really interested in hiring someone, do consider his/her prior experience BUT why can’t this someone join as a fresher and then move up the ladder with displaying his skills and qualities (gained from prior experience).
3) Startups don’t have enough time/money to do a background check on candidate. In my personal case (a) I never did a background check as I had other important stuff to focus on (b) I never had enough budget to do a background check on potential candidate (c) I have gained some analysis with my experience which when used I can differentiate which candidate lied or not and then take appropriate action. I think each one who runs a startup has this analysis power.
4) I suppose startups don’t go for age. It just depends on the interest of the potential candidate.
Chetan.
I think the two most important aspects (excluding standard stuff like 24×7 commitment) from the perspective of a person wanting to join a start up would be
1. Dynamic and challenging work environment
2. Potential of Wealth creation
#1 seems to be there for most start-ups in their initial stages (it’s all happening inside and not really exposed to the market)
#2 is a tough one as the real test of the founders’ intention to share wealth is their willingness to allocate shares to all employees and not options/RSU. After all that is real ownership and is what differentiates owners and employees.
I dont think there are (m)any start ups who would be willing to give shares as sweat equity to employees who join them.
From my experience with startup.
– No new hires joined at lower pay.
– Relevant experience matters. If you are changing function, rewards come after performance.
– No bond. Stay away if company asks you to sign bond. Notice period is generally 1 month, but it is negotiable. It can be as low as a few days.
– References tend to be good enough.
– No age consideration.
Please don’t use the terms like “sacrifice.” Joining startup is purely optional. If putting more hours is “sacrifice” then you are not enjoying your work.
here is a checklist for you – http://www.pluggd.in/2007/09/five-points-to-ponder-before-joining-an-indian-startup
Vivek,
some real life question you have raised, even i am not ‘startup’ i do in touch with couple of folks,
your question may have broad range of answer, Startup at which stage (very initial, product developing, ready to launch!) [Or even its product based, service based or Mix.]
if you see 80% of india hr market it works in below way…
1. If fresher — join any firm… i don’t have job in hand.
2. experience — my current package is this….my next pay should be like this
while recruting, founder may have long-term/short term goal, many time i have seen its not wise to recruiting other folks (out of domain/technology) as their salary will of essentially of no use. May early stage startup will not hire this kind of people who don’t fit into their domain/tech.
Mostly if startup if VC-funded, i have observed (not with every case) founders are more or like “Managing the VC” and “Not mangaing the product/team” 🙂
to hire experience/fresher, its again my product is at which stage, i do feel every experience should be counted. Commitment level should be high for startup as well as for non-startup…Notice period/bond etc are again situational, and most of them are following standard industry standard.
Many startups i have seen recruting only Freshers (or their major work depend on fresher)(For exp. they are highly looking for advisor or at top level folks who can help them out to connect people, may be part-time, on board but not as daily work like programming,clerikal etc…they are not bound with employee/employer relation, but again important human resource)
Cheers,
Raxit Sheth