The U-curve of startup recruiting

Chris Lengerich
August 20th, 2017

Ask any VP or founder and they’ll tell you that one of their biggest obstacles to growth is recruiting good people. As a founder, I’ve been deeply involved in recruiting myself, and have watched this process end-to-end across a number of Stanford and YC companies. Here's some thoughts on how to recruit great people.

Most students have heard the phrase: “As recruit As, Bs recruit Cs.” While this is true in large companies with established products, it’s not always the case for startups, since the founders of the startup invariably have rare product or domain expertise, and the risk/reward tradeoff for first employees for a pre-traction startup is much worse than other options. As a result, in startups, founder As often have a hard time recruiting employee As until they have traction:

You won't be able to recruit an employee better than the founding team until you have traction.

Good employees for early stage startups are undiscovered stars who have potential but are too young or too remote to have a clear track record. While you can only expect them to stay with the company for a few years, they’ll deliver a lot in terms of energy, enthusiasm and raw growth in the meantime.

A corollary is that you should know well what founding team you need to get traction. Companies sometimes have to completely recap if they don’t allocate enough initial equity to founding roles.

Once you have traction, everything flips and you start to be able to recruit above the quality of your initial founders.

Zooming out, recruiting quality looks like a U-curve over time. The most important thing is to get through the dip of the U-curve quickly (it helps to start high), but if you have to recruit in the middle of it, look for potential, not necessarily experience.