a16z: 10 Traps in Startup Recruiting and How to Avoid Them

Written by: Aurora Petracca

Compiled by: Luffy, Foresight News

For early-stage entrepreneurs, focusing on product-market fit (PMF) is often the core strategy for success. However, once you find PMF and begin to scale, a whole new set of challenges will arise, each requiring new skills, knowledge, and strategic thinking.

Among these pressing issues, what is the most important and challenging? It is hiring, and doing it quickly. But if you act too fast and lack a plan, it can lead to many painful and costly mistakes. To help founders avoid unnecessary growing pains, here are 10 common mistakes we’ve found founders repeatedly make during the hiring process, along with some wise ways to avoid them.

1. Underestimating the time and effort required for hiring

When you are fully immersed in product development, you might set aside networking until you need to hire talent. Many founders are surprised to find how difficult it is to attract the right candidates without prior preparation.

Given that most early-stage companies have not yet established a trusted brand, as a founder, you must sell your mission, yourself, and the future vision of the company to candidates. This work requires long-term, proactive, one-on-one networking, which can take months (or even years).

From the moment you have your startup idea, you should start spending time each week building your network, talking about the business you are building, and establishing relationships with people you may eventually want to recruit, all before you need to hire talent.

2. Not valuing the candidate experience enough

Founders often have tight schedules, but you cannot let your stress lead to a rushed and chaotic interview process. Interviewers who haven’t read candidates’ profiles carefully, aren’t prepared with interview questions, and ask the same questions as other interviewers can lead to interview processes that stall for days or even weeks. This is a candidate's nightmare.

If there is little or no communication between the candidate and the company team, or if communication is delayed, even if the candidate is enthusiastic about the company, they will quickly lose interest.

Remember, candidates are also interviewing the company and often communicate with multiple companies. Worse, the crypto industry is small, and negative experiences can spread quickly, leading to the loss of quality candidates.

Ensure you allocate enough resources for hiring (whether hiring talent experts or leading the process yourself), make sure the interview process runs smoothly, and maintain communication with candidates. Additionally, always reserve time before the interview to research candidates’ backgrounds to avoid negatively impacting their experience due to lack of preparation.

3. Starting every interview with a cliché pitch

Each candidate has different motivations. Unless you understand what the candidate needs or why they are interested in talking to you, how can you effectively pitch to them? It’s important to know the basics of interviewing, asking candidates about their motivations for speaking with you, what they feel is lacking in their current job, what aspects of company culture they value, their decision-making timeline, and their salary expectations. But you must also be ready to tailor your pitch based on what you learn about the candidate, which means you need to take the time to understand them.

Given the relative complexity of the Web3 industry, along with the fact that companies in this space often hire candidates from Web2 who may lack a solid foundational understanding of crypto technology and its potential, this challenge is particularly acute in the Web3 world.

If you don’t understand the candidate, you may inadvertently emphasize things they are not interested in or, conversely, overlook aspects that might attract them. So, start with a series of questions to help you understand the candidate, then adjust your pitch accordingly.

4. Rushing through the screening process

Acting hastily and skipping steps that could save you a lot of trouble later. For example, if a candidate seems perfect, you might want to skip the work trial or in-depth background check, which can help you verify the candidate's abilities and fit. This "time-saving" approach can be a costly mistake.

Think of it this way: any time you think you’ve saved time in the hiring process, it may actually mean you’ll spend more time managing the performance of a bad hire. A poor hire can be disastrous for an organization, especially for small companies (like startups) that need to grow quickly.

Instead, create a strong and consistent process that ideally includes a work trial to test the candidate's work style and fit with the existing team. Don’t skimp on thorough background checks, and if possible, don’t just focus on "surface references" (the references provided by the candidate); leverage your network to seek out additional references.

5. Not clarifying cultural values before team expansion

Building a team before establishing values is another potentially costly mistake. Airbnb co-founder and CEO Brian Chesky described culture as "a common way of doing things with passion." When founders build a strong culture through shared values, it can deepen trust among employees, promote autonomy, and reduce the need for formal processes. A lack of good culture can lead to inconsistencies in how everyone operates during the company’s growth, resulting in performance, communication, and employee turnover issues.

Clearly defining values when building a team can prevent you from hiring individuals whose values are inconsistent, as this can undermine the culture you are trying to build. This creates a vicious cycle.

Values are the common bond and work philosophy that unite a team, helping them come together during tough times. Once values are established, they must be integrated into the hiring process in a structured and consistent manner. For example, you should pre-set questions to assess candidates' alignment with each value and ask these questions in every interview. This way, you can easily find the best answers and avoid falling into the common traps of cultural interviews, such as whether you "click" with the candidate or "can imagine spending time with them." This helps reduce unconscious bias that can easily arise in cultural interviews.

6. Lacking long-term strategic thinking when hiring managers

You are facing an urgent problem that needs to be solved, but you don’t have enough time to think. This problem needs immediate resolution: business development, strategy formulation, marketing, etc. But avoid hiring someone to solve the immediate issue while neglecting your long-term future.

What will happen if the company experiences exponential growth in six months or a year? Is this person still the right fit to lead the overall strategy? Or do you need someone with a broader vision and international network?

Take the time to carefully consider all the management roles you may need next year and how these roles will evolve. Who will be responsible for what?

When building a management team, your goal is to define the boundaries of responsibilities and skill requirements for each position. Long-term thinking can also help you be more strategic in hiring, finding individuals who possess the skills for later roles and are passionate about the opportunities presented by a startup. At the outset of onboarding new employees, be transparent about your short- and long-term expectations for success in the role and the direction of the organization under different growth scenarios.

7. Using inflated titles to attract candidates

To attract candidates, you set lofty titles, such as Chief X Officer. This may be tempting, and some candidates may indeed like it, but setting such titles can lead to problems down the line. For example:

• This person may not actually be qualified for the title, especially as the company scales (see point 6).
• This may hinder your ability to recruit more senior talent later.
• If employees perform well, you lose the opportunity to promote them. (Internal promotions greatly benefit company culture and talent retention, and can enhance recruitment appeal.)
• You set a tone that there is a hierarchy in your company culture rather than a flat "we are all owners" mentality.
• Those who only care about titles may not be well-suited for a startup.

Before granting a candidate a fancy title, give them a chance to prove their leadership skills. Before granting them a senior title, follow the advice in point 6: think about what your company structure will look like in the next six months to a year. What positions do you anticipate needing to hire?

Consider whether the candidate's qualifications truly match the position they are applying for. Ideally, you can bring them on board but at a lower level, allowing them six months to prove they meet the position's requirements.

8. A haphazard onboarding process lacking systematic guidance

Founders sometimes assume that if they hire experienced individuals, giving them a laptop on the first day will allow them to start working smoothly. While it’s reasonable to expect that a rigorously vetted, experienced professional should excel at their job, you cannot assume they can read minds. The only way to ensure you and the new employee are aligned on expectations is through communication.

Develop an onboarding training plan that includes your expectations for the candidate's deliverables and timelines (e.g., 30/60/90 days) as a minimum requirement. Regularly (preferably weekly) follow up on their progress during the initial 90 days, adjusting the pace of follow-ups based on mutual willingness.

Be sure to provide feedback on what works and what doesn’t, and offer new employees a channel to communicate any needs they have to accomplish their work. For founders of early-stage companies (with fewer than 10 employees), it’s essential to personally help new employees connect with others.

As the company grows, investing in a more robust onboarding program becomes necessary. However, good onboarding, whether rudimentary or comprehensive, has one crucial element: establishing expectations and communication channels between new employees and managers, ensuring new hires have all the necessary tools and resources to get up to speed quickly, and fostering good relationships with the team.

9a. Placing too much faith in prestigious school and big company backgrounds

Stanford, MIT, Princeton, Waterloo, and Cornell are all world-class universities. But don’t exclude candidates simply based on their backgrounds.

There are countless candidates who did not attend top schools, but they may have spent their free time working on engineering projects on GitHub or solving real-world problems, which is a strong indication of curiosity and problem-solving inclination.

Similarly, overemphasizing experience at FAANG companies can limit your talent pool. While these companies typically have high talent standards and have established rigorous engineering practices, many other companies also have strong talent brands. Moreover, not everyone who thrived under the structure of a FAANG company will succeed in an ambitious startup.

Look at the candidate's career development rather than their credentials:

• Have they taken ownership and proven themselves successful?
• Have they encountered problems that would be relevant to your company’s work?
• Do they have the drive and right attitude to lend a hand and provide support when necessary?

9. The "crypto-native" fallacy

On the other hand, cryptocurrency founders may believe that "crypto-native" candidates are inherently superior. By limiting your candidate pool to crypto-native talent, you may miss out on excellent candidates with rich experience and a rigorous attitude from the Web2 space. In the early days of Coinbase (around 2014), there were no crypto-native talents, so we turned to candidates from "crypto-related" companies (like payment companies) to see if they possessed core skills and a genuine interest and passion for the field. We then provided new employees with time and support to help them grow quickly.

While an engineer with years of experience in RUST may be able to contribute code immediately, any good engineer should be able to master a new language within a month or two. Therefore, instead of spending eight months searching for the perfect web3 candidate, it’s better to spend half that time filling the position and giving candidates time to adapt to the field.

10. Underestimating the importance of in-person collaboration

On one hand, the flexibility of remote hiring makes it easier to attract talent and better meets the needs of those who are more productive working from home. On the other hand, when everyone is working remotely, building trust and genuine relationships can become more challenging.

Trust is often built through sincere relationships, which can facilitate more direct problem-solving, create better cross-functional collaboration, bonds, and friendships, helping your company unite in times of difficulty.

So, does this mean remote-first companies are unworkable? Certainly not. But remote hiring has a compromise: regularly conducting in-person meetings and work sessions to allow people to collaborate and develop friendships. In addition to more offline collaboration at the team level, you can also focus remote hiring on key areas and hold local meetups more frequently. The remote work culture is a blessing that allows us to be more inclusive in our hiring approach, enabling people to work together regardless of their location. However, it’s important to understand that a lack of in-person collaboration comes at a cost, so you need to establish mechanisms to mitigate that loss.

Conclusion

Running a startup is no easy task, and as a founder, you will be pulled in countless different directions, one of which is recruiting top talent for the company. While hiring is challenging, it is far from rocket science. As long as founders prioritize hiring, they can become excellent recruiters, and this list can help you avoid the most significant pitfalls in the hiring process.