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Entrepreneurial Team Building

Q: How can I find quality candidates interested in working for a startup?

It takes a special kind of person to work for a startup, and these special people seem to be in short supply, according to many Netpreneurs.

According to Bruce Robbins, Vice President & CFO of Millenium Holdings, "It takes more than an MBA to make it in a startup management team." To be a successful entrepreneur, Robbins believes it takes the following qualities:

  1. The true entrepreneurial spirit. The ability to stick with the venture even when the company is in it's darkest hour. When things look the worst they leverage every resource they have to make it turn the corner and keep the flame going until the company is successful.
  2. A concerted belief that the startup's product is viable in the marketplace. Without that, they are of no value.
  3. The ability to bring an added value to the start-up (e.g. a special skill or their network).

More than a graduate degree, it takes vision, common sense, a Herculean commitment and the resolution to weather the storm a startup stirs until you reach calm seas. You need to find someone who is excited to build something with his or her hands. You can't learn it, it's just something inside the human spirit. It's what makes the difference between a "one time wonder", and a person who can start successful businesses over and over again. [Bruce Robbins,]

And while some people suggest that there is a local shortage of these entrepreneurial types both Seth Grimes [] and the Morino Institute's Steve Fleckenstein disagree. First of all, the DC area is home to many young technology companies that have made it big in less than ten years: UUnet, Digex, AOL, and Microstrategy. And there are hundreds, maybe thousands, of startups and other small companies in this region (and more if you count independent contractors). Not all are in the Internet space, but they are entrepreneurial nonetheless. Secondly, how is it different here than most other places? Even in Silicon Valley there are many people who'd prefer to work for a large company like Oracle, Sun, HP, or Intel.

So why do people avoid working for startups? Andrew Forbes [] spoke with many fellow netpreneurs to compile the following list. Chris Hagner [] added his comments. Although not a complete list, the reasons include:

  1. Fear of failure
  2. Losing their place on a clearly defined career track
  3. DC area inspires "up or out" mentality with a new venture equated to "out"
  4. Lack of networking (e.g. no opportunity to rub shoulders with successful entrepreneurs). The more netpreneurs someone knows, the more likely s/he is to consider such a career path.
  5. Apparent lack of interest in startups by VC?
  6. Lack of understanding as to how startups are structured
  7. Overestimation of own importance
  8. Financial obligations (e.g. schools loans, income security to support family)
  9. Unaware of the additional benefits of an entrepreneurial career. Most people, when evaluating such a move, are heavily influenced by the risk and the downside. The numerous upsides (flexible hours, autonomy, higher sense of satisfaction) need to be effectively communicated to non-netpreneurs.

These are all things to look for when considering a job candidate.

But more importantly, why do people join startup firms? Anne Crossman, [] believes that people join firms (both large firms and startups) because:

  1. They believe in what you are doing and think the work is exciting.
  2. They believe in the owner and/or the person with whom they work most.
  3. They trust the owner/company.
  4. Compensation (salary and/or equity)

Ms. Crossman believes that, "All of the risk of a startup goes away if the potental employee truly believes in what you are doing and trusts that you will do your best to act honorably." To get people to believe in your ideas, Ms. Crossman outlines some steps to take:

  1. Put what you do in writing and hand it out liberally. People need to understand what you do before they can buy in.
  2. Create relationships with the people you want to hire. People want to know who you are before they sign up.
  3. Continually work at communicating what you and your company stand for.

If you still find it difficult to hire locally, think globally. John Casey of Sushi Software [] is a proponent of the distributed organization. A distributed organization leverages partners/staff in other locations. This allows you to be regional boosters without limiting your hiring to people that already live here or that will relocate here immediately.

In one example, a small software startup of less than 20 people and initially based in Boston, opened two other offices. They opened a development and tech support office in Albuquerque and a DC office to handle international sales, channel marketing, and business development. This strategy gave them the ability to grow more rapidly by finding good people who would want to work in one (or more) of these three nice locations.

In this particular example, there was no monolithic headquarters since the three people driving the business were in different locations very early in the launch. Naturally, there were lots of challenges associated with a distributed organization model when in startup mode (like the reduced number of hallway conversations, etc.). But the distributed approach worked fairly well, offered some real advantages, and proved viable. As for recruiting, they used to advertise in both the Washington Post and the Boston Globe for positions that could be based in either DC or Boston. This gave them a recruiting advantage, and some of the people who started in Boston later asked to relocate to DC.

Mr. Casey believes that, "On the recruiting front, having multiple "portals" into your venture can make a big difference. If you're flexible, then people can come on board without relocating immediately. They can get comfortable with the company and its viability, and later they can move to another location if that is desired/appropriate. This approach can significantly reduce the real or perceived risk of joining your venture."


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