Startup Investor & Cofounder at SingleSprout | 1,000+ Hires | We Build Winning Startup and Legal Teams | Follow for Insights
How does David beat Goliath aka early-stage startups close candidates also interviewing at FAANG / larger companies? Generally, they don’t, but here’s what @SingleSprout's data (80% offer close rate in last 6 months) says: 1) $30k: If the offer from a big company exceeds yours by over $30k, you're very likely not going to get that candidate. 2) # of Competitors: A candidate considering one large company might still be within reach. However, the more large companies they entertain, the less likely you'll get them. 3) Motivation: Understanding why a candidate genuinely prefers your company is crucial. Look for and test for interest in impact, equity, and the entrepreneurial journey. Unfortunately, most startups hiring on their own can't get this level of information from a candidate, and sadly waste a lot of precious time :(
Kim Burgaard
2mo
In my experience, the pool of highly qualified candidates that are both interested in FAANG/large companies, and early stage startups is very small. Candidates who want the name recognition, perceived prestige, and/or higher total compensation mostly aren't interested in early stage startups. Conversely, candidates seeking out early stage startups typically value the opportunity to have a big impact, lots of autonomy, high potential to grow fast with the company etc., over maximizing the total compensation.
Francis Botero
1mo
In my experience, candidates are.thinking more.and more in terms of ROI. You can beat the big firms if you understand their weaknesses and can sell candidates on how working for you has a better return. Most of the time startups can't make that argument because they are just as likely to fire and less likely to promote/grow from within due to time & efficiency pressures. Less money for lottery tickets, less stability, less growth, more grinding. Seems like a bad deal most of the time.
Sell the benefits of working in a startup, which can including learning, fast growth, or an optimistic upside scenario that the large company won't have. And be comfortable with more junior candidates, who may be willing to defer the big tech salaries in favor of learning and upside and may not be on the big companies' radars yet - not everyone needs to come it at L7 from the get go.
Kirk Fernandes
1mo
I've often found the trade-offs and incentives between big tech and startups are so different, that it's almost hard to directly compare and you are often better off directly asking candidates if they want to work at a startup. It helps save time in the process.
Rahul Salota
2mo
We helped multiple startups hire amazing talent and the key to success is to change your hiring strategy. The biggest handcap that FAANG and big companies have is their structured interview process( that is the Goliath in them), so as a startup you need to have a much nimble and sharper interview process. The worst thing you can do for your startup is just follow the same process that is used by FAANG or similar sized companies.
Good points. Startups need to play smart, focusing on the right candidates and offering what they truly value.
$31,500,000+ closed in ARR for B2B SaaS startups (Seed -> Series A, 0-$10M ARR)
2moThe candidate needs to really believe in what the company stands for or offers, or else the big guys are gonna come out on top. That's why recruiters need to be all in, know the company inside out and go above and beyond to sell the gig and dream!