Long term purpose instead of money
Differentiate from big companies to attract talents.
When I started Playax with my partner Juliano, we did not have money to pay high salaries for tech talent in São Paulo, one of the most expensive cities in Brazil. Our startup was a high-tech innovative platform in the music industry, so we needed the best developers to create complicated algorithms. On a first try, we offered bellow average salaries, but even if some developers were interested in the company’s challenges, they did not accept the job. When we started to offer equity, we attracted exactly the people we wanted to our team: people with passion and long-term commitment with the company. Moreover, people willing to give up high salaries in exchange of being part of the company’s construction and purpose.
When working as CTO at Elo7, a successful Brazilian startup, I organized a developer’s retreat, a week when the engineers would work in a relaxed environment, out of the office. They had pool, sauna, video games and food at their disposal, as well as a working table and Internet access. Besides some communication problems with the main office, the workweek was very productive and the team members had a lot of fun, feeling very connected and engaged after this special and unforgettable moment.
Most startups, especially in the beginning of its existence, do not have resources to pay a salary compatible with market values. Startups need to have other ways to attract talent and motivate people to work on its project. Furthermore, hiring the right people in the early days is crucial for the Startup culture development. The criteria for hiring are very talented people with passion and commitment for the business.
It is very hard to hire talents when you are competing with big companies admired by people.
Big companies have dedicated staff for recruiting and they usually offer high salaries and many benefits to employees. Moreover, known high-tech companies have are admired by people for their achievements. On the other hand, employees in big companies can feel themselves no one in the middle of thousands. They are restricted to companies existing rules and rigid processes.
The first substitute to money is purpose. Startups want to change the world for the better. Show your vision to candidates and let them dream with you. People want to feel pride of their work and like to be part of a big thing.
Another attractive in Startups is the growing potential. In big companies, employees do not have the chance to grow and evolve in career as fast as they can in a Startup. The first Startup employees have the chance to become managers or directors in a matter of a couple of years. They have not only the chance to grow, but also the freedom to dictate the rules and build the company from scratch following their own beliefs. In terms of professional growth, young Startups tends to be more attractive, besides being more risky.
Beside Startups do not have money in the beginning, they can offer the opportunity to earn a lot of money in future, if the business succeed. Startup founders, especially those without investment, can reserve pool of the company stocks and give them to the first employees.
Offer company equity, freedom and job with purpose in exchange of high salaries.
When you offer engagement on a common purpose instead of money, you attract the right people to work with. Workers will behave like founders and will give much more energy to the startup. Daniel Pink argues that people are mainly motivated by autonomy, mastery and purpose. You can offer all three in your Startup. If you are creating an innovative product that will change the world for the better, you have purpose. When you have a participative culture and flexible work environment, you offer autonomy. Startups with dynamic and learning environment permit people to master on their field. You can also offer flexible work schedules or home office days.
To convince candidates to accept equity and motivate them, you need to show the benefits of this option in the interviews process. The interviews must be very engaging. You must show passion and belief on the project. Candidates must feel that you are reliable and strong. In these moments, your reputation counts a lot. Networking is very useful not only to help you to build the reputation, but also to find potential talents in your local community.
If you want to attract people interested in Startups, post job announcements on forums or groups that you believe are aware of the Startup environment. Express your enthusiasm in the job post text. Make it clear that you are looking for people that want to work in startups, people who understand and like this environment. This will save you a lot of time, not only on explaining the Startup context in interviews but also by keeping away the wrong candidates.