Originally asked by Tomek: What do you think about bootstrapping vs funding startups? Are there industries where the former is better than the latter? And vice versa.
You raised an excellent point earlier about the difficulty of hiring the best people. So I would like to treat it as a question: “How to hire the best talent as a small company?”
The problem with being small is that it is hard to offer the best salary, the best fringe benefits, the best healthcare insurance, or well – the best anything.
Most of the time founders then succumb to one simple trick: equity and team/culture dynamics. This has been the trend for decades, but frankly – even that is not enough. The best companies know that this is what they are competing with, so many of them are just as agile as startups, quite often they offer option pools even at a later stage, and their salary levels are built to offset the possibility of having equity in a startup.
So if money and fringe benefits do not work, and equity is a semi-good tool – what do you do?
The answer is surprisingly easy, but extremely difficult to communicate and achieve – you offer “meaning”. As esoteric as it may sound – even Google admits that this is the only way to keep the best employees on-board in a recent study.
We also had a company (SRKay) that ran a study on employment in India presenting at Arctic15, and according to their study – the best performing people in the company are those who know their own “meaning” in life and align it with the company.
Which brings me to my answer – to attract the best people, you need to really know and define your company purpose and you need to use it to attract talent.
The way we have been doing that is by working hard on figuring out what each and every single candidate that gets into our interview stage has for their “meaning” in life. Those that could not define it – were not accepted, those who had one – we had a discussion on how our company “why” can help them achieve their “meaning/goal” in life – whatever it might be.
The result? Most high profile people were willing to take a large pay-cut just to work in the team, some were willing to just work for free for a while (which I do not encourage anymore), and the hiring process (which is very unique at ArcticStartup) became very enjoyable and new for them.
That, I think, is the best way to convince the best people to work for you. As for finding them – I think headhunting and scouting for the best is probably the best approach at an early stage.
P.S. If you have a question that you would like to ask or that is bothering you, just ask away here.