Why startups should hire recruiters much sooner than they think

When a startup founder finds product-market fit and secures funding to scale, the advice starts to roll in from investors, advisors, and mentors alike: Hiring the right people will create the bedrock of your company. With limited resources and big plans, hiring the wrong people can stop a startup’s plans dead in their tracks. 

This advice is absolutely correct and completely useless.

It’s useless because it contains no actionable guidance whatsoever. And learning how to hire is a full-time job. That’s why hiring the right recruiting help can also set founders up for success from the start. In this post, I’ll share how.

In fact, a recruiter should be among your first 10 hires. This may seem counterintuitive — if founders are pressed for time and need the right technical talent right away, shouldn’t other hires take precedence? Far from it. Having worked and helped scale Airbnb (which I joined at 50 employees) and Coinbase (which I joined at 7), and having counseled countless other startups, I can attest to the fundamental importance of investing in recruiting talent at this early stage. When I joined Airbnb early on I was actually the third recruiter hired, and when I joined Coinbase I was the second

A recruiter will save time — lots of time

Sourcing (cold outreach) and managing the process for multiple candidates through multiple interview rounds can take a lot of time. In crypto especially, saving time is crucial because there is a limited pool of candidates with specialized expertise, or candidates talking to the same few companies all at once. Founders could easily be liaising with 100 candidates, and with all the other priorities they are juggling, some ball is going to drop. What does this mean practically? A bad candidate experience, missed hires, and a tarnished reputation. Founders can’t afford to give anyone a bad experience. Not only is it a small world, but candidates are usually comparing companies as they interview. A poor candidate experience will easily knock you out of the running not just with that one candidate but with others too. 

In short, hiring well takes up a lot of time. If hiring is not taking up much time, then your startup’s hiring process is likely too easy — or your company may be moving too quickly, which can lead to people problems and churn later. Also remember that as a founder, time is your most valuable resource. Hiring a recruiter means you can focus on other top priorities and allocate your time appropriately. You’ll still be involved in the hiring loops, but your personal involvement will come later — and be more strategic and efficient. 

Here’s a scenario that I often see with first-time founders: They are looking to make their first technical hires, have a good network, but the timing isn’t right for many of the candidates in their network (and it’s a competitive hiring landscape). Maybe they get a couple hires using this approach. So then they need to proactively reach out to candidates. But this raises a new series of questions: How many should you contact? Should your company use a sharpshooter or volume recruiting strategy — researching extensively to find highly qualified candidates with directly applicable skills, or casting a wide net? Your startup will likely need to employ a blend of both narrow-targeting and high-volume strategies. Both have their place depending on the role — but both are a lot of work. 

Sharpshooter recruiting can take a lot of time. But industry stats for engineering outreach using volume recruiting show you need to reach out to between 50 and 100 people to make even 1 hire. Each message to an engineer requires some amount of customization. The response rate from a candidate to a recruiter is at best 30% (that rate can be higher if a founder or technical leader reaches out).

Let’s imagine your company is only hiring 2 engineers. You could easily have 30 candidates running through your process, each doing 2 to 5 interviews with your team depending on how far they get in the process. That’s 60 to 150 interviews to manage and schedule in just a very short timeframe. As the founder, you’re likely leading some blend of product, engineering, marketing, fundraising, customer support, and general operations, as well as liaising with external counsel daily and so on. So even if you have the best of intentions with candidates, the candidate experience will slip. Negative experiences quickly make their way to Glassdoor reviews, future candidates read those reviews, candidates talk to each other at meetups and conferences about companies, and so on.

Having a recruiter partner closely with the hiring managers on outreach strategy alleviates all of these problems. In the early days of Coinbase, I partnered with engineers and leaders like Brian Armstrong, Rob Witoff, and Varun Srinivasan, to help them build out their teams. I’d put together lists of candidates who I thought were great, and, if they liked them, I’d ghostwrite their initial candidate outreach; then they’d do the phone screens while I managed the entire process. These partnerships worked well and landed many hires, at both the individual contributor and executive levels. 

The founder as a talent magnet

The founder has an important role to play in early stage hiring — this includes articulating a compelling vision and mission for the company, defining values that can be implemented by their team through the hiring process, and of course selling and evaluating top-tier talent. Once hired, a great recruiter can help create and run a tight hiring process, pulling the founder in at strategic moments. A founder should remain a part of every interview loop until they have properly trained their leadership team how to hold an excellent hiring bar, and to recognize and evaluate for the right cultural add. 

But there’s another crucial role for founders to play. Great engineers want to work with other great engineers building cool stuff. While this may seem like a reason for technical founders to do the outreach themselves, think about how to scale that outreach. Technical founders need time to write about what novel technical projects they’re working on and why they matter to other engineers — which results in nicely packaged, scalable recruiting content. They can tweet it (and ask those close to them to retweet it); share it on Farcaster, and to Discord, Signal, and Telegram channels; on LinkedIn and in the company newsletter; send it out to the entire network. In this way, founders can act as a magnet for talent in a much more scalable way. 

The entire company  can use this content in all their outreach messages . And don’t forget to refresh this regularly with any new content the team creates. There’s a personal benefit for founders with this approach too: Imagine how much more energized you’d be if you spent your time building an amazing product and writing about it, rather than emailing and chasing candidates for every open role on the jobs page. Of course, founders  will still have to court and sell some candidates from the start. But the idea is to be more strategic with where they spend their time, for a select number of high-impact roles.

Upfront expense will save money in the longer run

This all sounds great, but isn’t hiring a recruiter early too expensive? After all, every startup has limited capital. 

But investing precious capital in someone who can accelerate the team’s growth — and thus accelerate the startups’s product growth — is a sound decision. Having your product delayed 6 to 8 months because you can’t hire engineers quickly enough could allow competitors to swoop in and eat your lunch. That will cost your company even more money in the long term.  

When Airbnb had 18 employees, they prioritized cultural evaluation and candidate experience. As a result, they first brought in a contract recruiter to ensure they had someone owning the process end to end, making sure no one slipped through the cracks, well before I joined at 50 employees. Similarly, when I joined Coinbase at 7 employees, they had already invested a lot of time and resources into recruiting. The founders had invested in a contract relationship with an early-stage technical recruiter when the company was only 4 people, because they knew how much work recruiting was. Once there was a consistent hiring need, that person joined full time, and when hiring exploded into scaling the next phase, I joined. 

In both cases, the companies prioritized bringing in recruiting talent early, regardless of whether they did it in house, to help set them up for the long term.  

How to identify a good recruiter 

How can you tell apart a good recruiter from a bad one? Here are some guidelines. The ideal recruiter demonstrates they can hustle and be scrappy, for instance:

• They proactively meet with hiring managers to brainstorm creative candidate sourcing strategies.
• They implement those strategies the same day.
• In urgent offer closing scenarios, they will find the founder/hiring manager to discuss and sort out any compensation questions, rather than risk losing a crucial candidate by moving slowly.
• They will meet with a candidate “after hours” — in person at 9pm or on a Sunday afternoon if absolutely necessary to close an important role.

They’re not just charming, but also have their operational act together:

• They have a system of organization that ensures they don’t miss phone calls.
• They know who they need to touch base with and who they need to set up for a strategic sell call.
• They always, always close the loop.
• They keep the hiring team on task with submitting feedback and driving forward the process with roundups. 

If recruiters are not organized, balls will drop.

The makings of a great recruiter

Often, good technical recruiters start their career in something competitive like sales, or working at a recruiting agency. Or maybe they worked as a customer support representative for a company with a reputation for a high talent bar, where they had to deal with a heavy caseload.

When sourcing from agency recruiters, ideally I like to see that someone has worked in-house for at least a year because it shows they are able to adapt to the culture and workflow of being in-house. But if someone can show they are adaptable and humble, have a great attitude geared toward learning, and are resourceful enough to figure out how to be successful, I’ll always optimize for these qualities over more years of recruiting experience. 

Beyond those core traits, you are looking for recruiters who have experience: 

• fixing broken processes,
• troubleshooting problems with data,
• navigating challenging hiring manager relationships, and
• developing creative sourcing strategies. 

They can close candidates using startup equity packages (mix of cash, options, tokens, RSUs), and they understand how to use valuation as part of the sales pitch.

Finally, find a recruiter who is passionate about the company’s mission. This may seem obvious, but it isn’t. Many recruiters have experience selling different products and visions, but it’s simply a job to them. Look for someone who truly believes in what you’re building, because their energy and genuine passion will come through in conversations with candidates and get them excited. In most startups, the early employees are often drawn to it because of the  mission — it takes a lot to commit to those hard early days without this! — but in crypto, especially, mission is a must for getting one through industry uncertainties. 

The ideal recruiter is someone who believes in your mission so deeply that they feel ownership over the company and are protective over what you are building. There were definitely times when I heard people say Airbnb was like a “cult.” If it was, then I was a willing member. As a recruiter, my energy needed to be contagious to candidates, otherwise I wouldn’t have been able to convince them to join. When I joined in 2011, there were plenty of skeptics who believed Airbnb was a sketchy idea that would never take off. Cult-like obsession was almost required to be successful in that environment. 

I had a similar level of obsession about Coinbase and the power of cryptocurrency to change the world for the better, which kept me focused through the crypto winters. In addition, the recruiter’s protective instincts toward the company will establish this person as an important evaluator of talent for your company culture. Their role as an early shepherd of company culture — bringing in the talent that would work well for your company — is critical to long-term success as the company scales. 

How to recruit candidates in a volatile environment

The regulatory environment in web3 can frighten some candidates, especially when scary headlines are trending. To be fair, though, we encountered similar sentiment at Airbnb, when it was experiencing public turmoil. I’d imagine any company trying to change our way of life, like Uber and OpenAI, face the same hurdles. 

An approach that worked at both Airbnb and Coinbase was to leverage storytelling — the power of mission and narrative —  around the scope of the mission we were taking on. We also  highlighted the regulatory work our team was doing to enact change. A similar approach can help with other web3 companies.

One thing that is unique to web3 is the market volatility and  cycles between bull and bear markets. Zooming out and leveraging charts that showed broader trends of the Bitcoin and Ethereum markets over 5 to 10 years helped candidates contextualize the current challenges. I also often use articles written by  well-respected industry pundits to assist in the storytelling. 

Do recruiters (and hires) need to have crypto experience? 

Does your recruiter need to be a specialist in web3? I would take a recruiter with more passion for the space than experience in the space, as long as they have the characteristics I’ve mentioned above and have worked for a company with a strong hiring bar.

And what about the talent pools? When I started out at Coinbase in 2014 there were no candidates with “web3 native experience.” And many of the candidates who were deemed “crypto native” were interested in short-term projects and didn’t have the staying power that we were looking for in our full time hires. 

As a consequence, I looked for engineers who had domain expertise in payments, infrastructure, scaling, and security, but who were also curious about Bitcoin or the concept of decentralization and its value. Their experience helped establish a solid engineering foundation for the company. We had the most success finding talented web2 engineers with key domain expertise who were building side projects in crypto. 

If you can’t find web3 talent that wants a long-term gig, hire instead for: 

• analytical skills
• intellectual horsepower
• creativity 
• an open mind

You know what you want in a recruiter. Here’s how to hire one

Recruiters, unsurprisingly, tend to be good at interviewing. So how do you separate the great recruiters from the mediocre ones? 

I’m a fan of behavioral questions that dig into their experience navigating challenges around sourcing, understanding how they partner with hiring managers, and how they close candidates. These three areas are core to a recruiter’s success, and if you can get a recruiter talking about their specific experience solving real life problems in these areas, you can learn more about their thought process, how creative they are, and how they respond to adversity. 

Live role-playing interviews can also help test a recruiter’s skill for navigating conversations with candidates, and their ability to close candidates on the fly. A good recruiter should be able to nail this sort of interview. Plus, seeing how someone responds under pressure with an unconventional interview is a good litmus test to see how they’ll navigate an environment where they will get unexpected curveballs (i.e., every startup since the beginning of time). 

How to tell if your recruiter is doing a good job

Once you have found a recruiter who you feel will be a great ambassador for your company, what should you expect from them? How do you evaluate if they are doing a good job? They should:

1. own the hiring process for all candidates and get people closed. Table stakes. 
2. set up a recruiting process to ensure consistency and organization for all candidates. 
3. partner with you and any other hiring managers on at least a weekly basis on what’s going well, and what’s not, and strategizing on hiring (developing creative sourcing, closing strategies, and so on). 
4. provide an excellent candidate experience, as well as hiring manager experience. (You can measure this through light surveys externally and internally.) 
5. keep meticulous records of offer packages, and work closely with whatever founder/leader is owning finance to educate them on trends they’re seeing (e.g., offer declines due to comp), and pull data to ensure that the packages they’re offering are competitive. 
6. own recruiting operations by implementing an ATS and maintain clean data. They should be able to leverage the data to give a concise high-level snapshot of recruiting progress to leadership. They should also leverage the data to identify problem areas in the funnel, then subsequently develop a plan to address the problems.
7. help you build your company’s cultural values into the hiring process so that your employee base reflects the values of your company. 
8. help you navigate your company’s approach to diversity in hiring. A lack of diversity can hurt your product. And If you don’t put the time in from the beginning, the path to diversifying your workforce will only get harder. But at this early start-up stage, it’s also true that you may have to just hire the person with the right skills to build. A recruiter can help you think your way through this tension and execute the strategy you decide makes the most sense.

Keep in mind that depending on the volume of hiring, all of these tasks could become a job for more than one person. 

Leveraging your recruiter beyond hiring 

But what will your recruiter do once they finish the first tranche of hiring? 

First, remember that someone who doesn’t take initiative to find ways to be valuable should not be let into your company, especially a startup, where many early employees will have to wear more than one hat. Aside from that, there are other areas spanning Talent and HR where a recruiter can be valuable at an early stage company. Note, though, that if you plan on hiring someone to do both recruiting and HR, you must interview for someone with the right skills who also wants to do the HR work. 

A typical recruiter can help out with general onboarding, or managing an HRIS system and benefits administration. But if you need someone to help with performance management, career development conversations, terminations, employee relations issues, and developing offsites, you will want to select someone who has experience doing this work as well. Too often in startups HR is done by people who don’t have HR experience, which should be avoided when hiring talent professionals. 

Second, if a company is growing quickly, this “double duty” will likely be a temporary band-aid until a full time HR person is hired. However, if a company has slower growth, the need for the recruiter to also wear the HR hat might be a longer term solution. As your company scales, each of the below areas will require dedicated resources and will eventually need someone with specific expertise. 

But these are also great places for your recruiter — assuming they have the right HR skills, which can be rare — to spend their time when they’re not hiring. And when hiring picks back up, they’re ready to roll. 

• Talent branding efforts: 
  • Joining conferences and meetups to develop a public talent brand
  • Partnering with engineering leaders to brainstorm interesting technical blogging content that can be leveraged in recruiting brand creation
  • If applicable, partnering with a developer relations lead to ensure that the work is being properly showcased to prospective candidates 
• Onboarding, offboarding, and terminations
• Managing an HRsystem to track employees and their movements internally
• Performance review process
• Employee career development 
• Regular offsites, which is particularly important to do quarterly if you are entirely remote because the connections and trust between your employees are challenging to build without in-person interaction.
• Cultural ambassadorship: Aside from building the values into your hiring process in a structured way, they should also be communicated regularly to the company. Team meetings are a great place to make sure all employees know them and understand their value.

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It often comes as a surprise to most people exactly how much work is involved in recruiting. If you ask an experienced founder, they will likely tell you that attracting, managing, and closing top talent is one of the most challenging parts of the job. But investing in a recruiter early on can help level up your organization. As you consider what will set your company up for success, what will give your company the strongest foundation for scaling, consider hiring that recruiter sooner than later.

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Acknowledgments: Thank you to Jeanne Tsan and Seiji Kawanabe for their contributions, to Craig Naylor for his thought partnership, and to Tim Sullivan for his transformative edits.

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Aurora Petracca is an external startup advisor who has spent more than a decade working in technology in San Francisco. As a recruiter and leader, she grew Airbnb from 50 to 900 and Coinbase from 7 to 700. Prior to Airbnb she worked in HR at Salesforce and was an Engineering Recruiter at Google. Aurora specializes in early-mid size (5-700 employees) hyper-growth startups and now works as an independent advisor working with a16z Crypto as well as other startups both in and outside of the web3 space. You can follow her on X @aharshner. 

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