Why the next 6 to 12 months will be the best time in a decade for startups
Kevin Roose of our YOLO Economy New York Times described the new attitudes that are engaging workers in certain privileged parts of the economy.
But for many who can afford it, adventure is in the air.
An executive at a major tech company who spoke on condition of anonymity for not having the authority to speak to the media said she and her husband had both been talking about quitting their jobs in the past few weeks. The pandemic, she said, taught them that they were playing it safe in their life choices and that they were missing out on valuable family time.
I’ve seen that in my own circles too. Whether it’s moving to a new region for a fresh start (maybe just a year of adventure for some) or leaving a secure but stagnant career, the inbounds “I’m starting a new company / open to a new gig” have been around since January available 1.
But it’s not just a new appreciation for the preciousness of your own time and focus after a year of social distancing. We also see people voting with their feet against companies that share their values, and not against companies that they believe have violated a social contract. The company’s business also plays a role – the agriculture, healthcare, and financial aid startups in Homebrew’s portfolio have reported an increase in candidates citing mission as the reason for their appeal.
And my goodness, we’re going to see a lot of transitions as companies move back from health-related distancing and embark on a long-term decision about work. Back at the office, hyrbid, completely isolated. There will surely be 5% ?, 10% ?, 20%? by teams for whom a CEO’s decision doesn’t align with what they want a job to be.
Receptionists have to be in the office five days a week, for example, Burke said. However, she envisions that most of the other jobs are “flex jobs” where employees can work remotely at least 50% of the time. There will then be jobs that may still be completely removed, but DocuSign leaves those decisions to senior managers.
“The truth is this is just a big experiment that we’re all part of, and none of us really have an answer,” said Burke. “We just have to stay open and fluid and listen to our employees.”
The staff will vote with their feet, and I feel for People Ops teams that will have an enormous number of emotional conversations.
With understaffed HR teams that increasingly work with algorithms instead of employees, it’s easy to forget that employees are people – people with families, hobbies, and rich inner life who often go unnoticed and unconfirmed at work. Empathy is not a math problem. And even if most of us don’t cry behind the webcam, knowing how the employees are feeling has never been more important.
Overall, however it’s awesome and will give high performing organizations of all phases the opportunity to truly bring talent together before sustaining greater numbers of frictions. Here are some things the best startups do to prepare for the opportunity:
- Create a stretch workforce budget -> Sometimes you have to blow up the personnel plan if there is an opportunity to make key settings. Usually this is a budgeted head that you want to add earlier than planned, or an additional hiring for an existing team (i.e. one more engineer than otherwise planned). I’ve seen many founders rethinking (or overestimating) the financial implications for the first time. Hiring a “bird in hand” just a quarter or two early is usually a rounding error when it comes to extra pay for a high performing venture capital company. Especially when compared to the “cost” of running a full search later and the risk of schedule delays. Also, given the current retention environment (which this entire post is about!), It’s worth adding someone who is great, especially if they are a familiar figure to you or a current team member. So I would recommend speaking to your team leaders and investors now about willingness to beat the FTE count a little this year and run the models to reveal implications. Typically, your payout date will be extended by 15 to 30 days, which again, for a high-growth early-stage startup, is a bet that you should be making often.
- Double the reach of passive candidates -> Flooded the zone! Seriously, ping the people you may previously turned down just for timing. Let your team reach out to the best former colleague or friend in their network and do the pitch. Sort your social media followers and newsletter subscribers by the company and contact anyone interested. There has never been a better time to give it a try.
- Corporate culture “data rooms” -> Collections of internal communications and documents, which the candidates can use to see whether the walk suits the lecture. Sometimes it’s company all hands videos or lightly redeveloped board decks. Private company podcasts are increasingly shared with candidates and new hires and tell the story of the company and the people involved. Particularly effective for questions about authenticity and solving distances in a remote rental situation. Note that these are usually opened to senior candidates and / or shared at the time of bidding.
- Don’t forget the partner / spouse / families -> I can’t believe I’m giving away all of my hiring secrets here instead of holding them back for homebrew founders! Ok, then you get the 50,000-foot round-up instead of a specific tactic (come on, venture is competitive, I have to hold back a thing or two): don’t forget about the other influencers in a candidate’s life. Namely their family / partner / spouse. Given the intensity of the past year in particular, there are often dynamics in which you may not have full visibility. I’ve seen Longshot hiring successful because the startup actively and appropriately “sold” the spouse. And lost 90% + chance of closing candidates because the founders didn’t have full view of the evolving personal situation and game preferences.
Show me a startup’s first 20 recruits and I can usually tell you whether or not they will be successful. Since we’re investing long before this milestone is reached (often it’s just the founders), one of the most important things we can do at Homebrew is to help the startup build its teams. Because of this, we hired a Head of Talent in our early years who works directly with the founders on their hiring strategy, not just on sourcing and processing (although it does too).
There have never been so many talents thinking about what to do next. Rent them!