When I turned entrepreneur, I wrote the first 20 names of my choice whom I wanted to hire, Then I got to a stage where I did all the due deliberations to offer 5 of them, 3 of them eventually rejected the offer for various reasons. That day I gathered a first-hand experience of why boot strapped setups fail to attract talent.
We all know choosing to be an entrepreneur is a brave decision, success is never guaranteed even if you have a rich father, VC friend, ready to copy idea. Only some small % of entrepreneurs survive, few more go on to hog the limelight by making it big by getting crazy valuations, very few get the balance right in terms of making a difference to the customers, getting the business model right and making the company profitable in the right away. We only get to hear about companies who failed big or made it big in terms of funding or few of them on profitability.
In my view, the difference between the successful and failed entrepreneur would be that of the former’s ability to find the right talent during the bootstrapped stage.
Let’s examine how we try to find talent during the bootstrapped stage, we dip into the network of family, friends, former colleagues immediately. This is natural as some of them would have been even part of the ideation, inspiration of the venture. The very nature of a start-up means conserving capital and maximising output, this means you would be initially focusing on getting some traction in business through minimal scale. Going beyond your own network for talent means you are talking to talented strangers who would think about their financial security first before your venture. There would be minimum attachment to your idea/venture. Also, people with special expertise are always paid market salaries by large firms. The employment market is also broken as people are used to changing jobs in India with an increment to their last drawn salary. Many a times that’s the only motive. How can bootstrapped companies thrive if they should hire at above market salary tabs. When I was hiring for my new venture, one of the talented sales lead form a fortune 500 company said, “I am at 26 lacs CTC, I need 42 lacs to outweigh the risks I am taking to join you”. I gave her the phone numbers of the CEOs of few large companies where her need could be fulfilled. I wondered why she didn’t consider the risk to the start-up with such inflated wage bill at the bootstrapped stage. Many talented people are willing to join a start-up only if its funded, that means 95% of entrepreneurs must depend on talent who will ‘join’ them than the talent who they actually want. That’s why the bootstrapped companies struggle and I suspect they do compromise on the talent they hire.
So, what should you do as a bootstrap entrepreneur to hire the right people? First, you should avoid people who are actively looking for a job, I know this makes the recruitment process lengthier, but it’s worth it, for anybody who is an active job seeker your venture would be a means for their change then your need, next ignore people who have worked in large companies with lengthy tenures, in my view this bunch are used to the salary, benefits and comfort big brands provide. It takes a lot of your time to attract them and they may eventually never join. Look for people who have quit their safe heavens and got experience in multiple organisations even if their CV looks unstable. Talent who have their spouses in a well-paid job are the ones you should go after as their appetite for a risk would be relatively higher. Be comfortable with folks who can’t tell you that their previous stint was a roaring success. Try to hire people who are one notch below the role you are seeking, so that’s the punt you take on them to grow into and for you that would provide longevity of talent. The person, the value systems should be the core of your evaluation than the perfect expertise, you can teach the skills not the character. As an entrepreneur, you don’t have the time to deal with people who don’t evoke trust, this is a difficult one as interviews aren’t the best place to discover this.
Once you identify the person meet them multiple times so that you both have time to court and understand each other, meet each time to qualify a different purpose and not to waste each other’s time. The person is joining you, so, your punctuality, authenticity, decision making and your passion towards the cause determines the person who is making the call. Give them the personal touch no large organisations can and the hiring process quality few MNCs have.
But I must admit that hiring during bootstrapped stage is a vicious circle as your idea takes off only when there is good talent beyond Founders, VCs also say they invest in people than the idea. But your ability to attract the talent of your choice without hurting your purse determines your success.
This means at the bootstrapped stage you are likely to court more people through your network; your luck plus quality of network determines your quality of hire and thereby your success.
When you are the pilot , you can always control your flight.