Hiring in web3: Principles for finding talent in volatile times
Crypto markets can be volatile – but crypto innovation follows an underlying order. Builders brought in when prices were high have stuck around, resulting in a steady flow of new ideas, code, and projects. A new generation of web3 startups is working on the next wave of advances, and many are actively hiring.
Meanwhile, the tech talent landscape has shifted dramatically in recent months. Layoffs across all sectors, but especially in larger tech companies, have left hundreds of thousands of workers looking for new challenges and opportunities. And, as a result, web3 startups with cash on hand and an optimistic outlook are seeing a very different talent pool than they were a year ago. But how can companies set themselves up to make smart, well-timed hires in periods of volatility? No matter the season, hiring the right people at the right time is critical to growing a resilient team.
In this post, we go over a few principles and best practices for navigating this new talent landscape as a web3 startup. As former leaders at high-growth web2 and web3 organizations, we have seen a wide variety of scale, talent needs, and market fluctuations. So here are our thoughts on how teams can make the most of their headcount (and budget) as they transform the proverbial hiring abyss into a functional and efficient hiring funnel.
Do the work up front
Hiring fast takes foresight. Without some thorough planning, it can take longer to fill a role that a team already (maybe even desperately) needs. A few principles for getting started:
- Be realistic about hiring needs. A full-time hire isn’t necessarily a cure-all, especially when teams aren’t sprinting through a bull run. Teams may want to consider starting with agencies, freelancers, or other contingent workers in order to be able to scale up and down as budget and workload ebbs and flows.
- Work backwards from business needs to define the role. If it isn’t clear whether to hire a senior individual contributor and a senior director, then take a moment to unpack the company’s needs. Some questions to ask: What will the person in this role do in their first week? What will they do in six months, or a year? And will they need to build a team? Or build out the nuts and bolts of their discipline?
- Define responsibilities and map them to skill sets. Can one person do it all, or does the team need to make multiple hires? For example, a token economist (or mechanism designer) may have the analytical and economic acumen to create a token program but you may want to consider hiring a software engineer to deploy and maintain these models in production.
- Avoid over-hiring by staying focused on immediate needs, now and in the near future. Members of smaller teams often end up doing more than what’s outlined in their job descriptions – trends, technologies, and market conditions can move fast in web3. Focus can help organizations stay nimble and goal-oriented, while identifying obvious skill gaps and opportunities for growth.
- Consult an expert on unfamiliar skills. Small companies must make a lot of “first” hires – particularly in newer, more niche web3 roles that didn’t exist a few years ago. Hiring managers seeking out skill sets that they don’t have (whether that’s writing Solidity or managing NFT communities) might opt to find an external advisor.
- Reconsider “web3 native” as a required skill. Many hiring managers are asking candidates to come in with web3 experience, a qualification that can limit teams to a select cohort of candidates (a small enough pool that challenges many companies, despite recent layoffs). Worst case, teams may be seeking people with a combination of skills that don’t actually exist. Instead, consider which roles are appropriate for deeply experienced web2 professionals, or enthusiastic new talent looking for challenging, career-defining experiences.
These are just a few best practices, but there are, of course, many more to keep in mind before you post that job description. It’s also okay if pieces of this process aren’t quite working — hiring managers should always debrief and make adjustments as they go.
Quality, not quantity
A year ago, many companies (in web3 and beyond) were breathlessly filling seats to keep pace with market pressures. Now the same companies are reducing headcount, or slowing their hiring. Teams looking to fill key roles might need to make some hard choices, and prioritize their hiring plans accordingly. When there are fewer roles to fill, hiring the right person is even more important.
At the same time, the talent pool has deepened, and excellent candidates that weren’t available last year may be interested in exploring new roles, opportunities, and risks. But despite the influx of talent, a good principle to keep in mind isn’t just finding the best of the best – but also finding people who are in it for the long run. If someone is willing to join a project in rockier times, they will stick around in good times, too.
Connecting over closing
As recruiters, we sometimes like to think of ourselves as sales people (and we can be!) – so it’s easy to slip into the habit of treating the time between receiving and signing an offer like a hard sell. This mindset falls short when it focuses more on rattling off selling points of a company, and less on identifying a person’s unique needs, wants, and expectations. (Also: talent is a long game. You want to keep people, not just companies, centered because over time as your relationships deepen with the talent pool they will change jobs multiple times.)
Closing actually starts from that first phone call, and lasts throughout the interview process by learning about a candidate. This is especially important in more volatile times as a focus on quality of connection will help close candidates faster (read: less time spent hiring) and result in less churn and attrition after employees join (read: less time spent backfilling). When big market shifts happen, you may even have to “re-close” a candidate, giving them a call to help them tease apart perception of media headlines from reality.
Closing should focus on two areas in particular:
- Professional fulfillment: What makes a candidate passionate? And what problems are they trying to solve? With so many smart, idea-driven candidates in web3, there’s plenty to talk about.
- Work-life balance: Every company likes to pitch stellar work-life balance to potential hires; but in reality, startups can come with longer hours, greater uncertainty, and a slew of tasks that fall outside of a candidate’s job description. How do candidates rank work-life balance among other benefits? And what can your company realistically deliver?
And also include a few key considerations that are even more important in more volatile times:
- Risk appetite: Is the candidate bought into the space and opportunity? This will matter more than usual to ensure there aren’t too many distractions in the new hire’s journey. Take the time to connect them to the role: Why them? Why here? Why now?
- Experience with ups and downs: Has the candidate experienced a volatile market before? A candidate with less experience may need to hear how a company deals with market cycles: How do you do more with less, and focus on the work vs. external noise?
- Base pay vs. equity: Make sure candidates understand the nuances to their compensation packages. Candidates may rightfully scrutinize packages that include tokens or equity, which can shift with the market. How can you provide information and mental models that help the candidate apply these to different outcomes?
There are many ways to build trust throughout the interview process, and make the best possible impression on potential hires (get to know them, stay transparent about the hiring process, regularly communicate updates and expectations, and more). These insights can also paint a picture of why this role at this company at this time is the best fit. Not every offer will work out, but the right candidates will.
Focus on the future state
Speaking generally, the earlier a company is in its journey, the more work there is to do to help candidates “see the future,” especially if a candidate is more easily swayed by brand recognition. What is the company looking to accomplish? How does this hire fit into that vision? In an industry where change and innovation move quickly, it’s key that leaders keep their candidates (and employees) focused on the problem they are solving.
A prospective hire should be invested in the work a team is looking to do; they should also understand what success looks like, and what path the company is taking to be successful. Building in web3, for example, is dynamic and ever-changing — this can lead to a longer time focused on solving hard problems and being able to pivot quickly as the market evolves.
Often (and especially in web3) this may require taking a step back and explaining a broader world view or ecosystem. Set the stage, and then dive into what matters: What needs to happen for there to be a successful exit here? Maybe a candidate would trade liquid compensation for more long-term incentives like equity. What does this growth story look like?
To truly paint this picture, meet candidates where they are. Do they truly grasp the mission of web3 and understand where this company fits in? Consider trying a mental model for mapping the company’s growth to their personal growth (how can their role grow with the company, long term).
Although every company, candidate, and hiring journey is unique, focusing on building a consistent process and hiring the right candidates will prevent churn in a time when teams need stability and precision the most. Being diligent when hiring is slow can be like building a muscle: The more teams practice, the stronger they’ll be when hiring speeds back up.
The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the current or enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.
This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/.
Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.