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Apr 30, 2020

The Lean Startup Methodology for Hiring

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We have all been there. The calamity we feel waiting for that person to walk into the room. We try to stay calm, confident, and focused but the nervousness sticks its ugly head out one way or another. We prepped and practiced to answer the questions perfectly but somehow it comes out as if hearing it for the first time. Do my skill sets match? Am I what they are looking for? Will I fit in? We ask these questions in our head repeatedly but what about being on the other side of the table? We just assume the interviewer has the power, they know what they want and they are on a mission to find it. But in the startup hiring space, it’s not as easy as it looks. How do we comb through the manicured and perfected resume and interview performance to determine if this person is the right fit for our company? These are just some of the questions that come to mind when navigating through the terrain of start-up hiring. This is our journey through the early stages of hiring in the energy tech startup space in Houston.

We have built Nesh, the Enterprise Answer Engine. When we started Nesh, the co-founders bootstrapped the entire operations from software development, building investor relations, seeking mentors, and creating biz dev opportunities. As a tech startup, some of the principles we follow are based on the Lean Startup espoused by Eric Ries. Ideate-Build-Measure-Learn has been one of our key Mantras from the first day we started conceptualizing Nesh.

In 2018, after we raised our first round and had a couple of projects from a few large Oil and Gas Companies, the next major step was to grow the team. The first hires are the hardest and we had never done this before. We went through a series of trials and errors and came up with a framework around recruiting and adopted the Lean methodology for hiring as well. For this recruitment process, the product was the new hires and we were the customers.

Below are the principles of Lean Startup which we used to hire our first few rockstar engineers.

Ideate

The very first step in the Lean Methodology is to recognize the pain and create a hypothesis on potential ways to resolve it.

Looking back at our earliest stages, we definitely were in pain. We had a lineup of projects to complete but minimal resources to execute and deliver. There were additional risks of under-delivering, clients losing interest, or moving to our competition if we couldn’t hire well and execute fast.

A couple of crucial insights we received were:

  1. Cultural fit is vital. If you don’t have a culture manifesto for your company, create one. (We will share ours in future posts)
  2. Hire future team members who can help you Right Now.
  3. Trust your gut.

 

With a good baseline at hand, we were ready to start the hiring process. We knew that hiring for a startup takes time and we needed additional steps compared to the traditional hiring process of phone screening, face-to-face interview, and decision.

Build

The second step in the Lean Startup methodology is Build. For hiring, it was building the MVP — Minimum Viable Persona.

We laid out the vision for the company, evaluated the product needs, studied our roadmap, and distilled our must-have requirements. After some discussions and deliberations a couple of things surfaced:

  1. The MVP must co-locate with us in Houston. As an early-stage and growing startup, communication is imperative between the team members. Being in the same space will maximize effectiveness and minimize meaning getting lost in translation.
  2. The MVP should have the primary skillset to help us from the get-go, as time is of the essence to build a product and deliver on projects.
  3. The MVP should possess an entrepreneurship mentality. We needed someone who can embrace and drive change. Thrive in uncertainty and perform under ambiguity. They need not be perfect in everything, but someone who can quickly learn and adapt if the need arises. We needed someone who can hustle, needs minimal direction, has a thirst for knowledge, and can deliver under tight deadlines. Easy right?
  4. The most important MVP skill we were looking for was someone who is looking to grow the company with us and seeks success as part of a team, not through personal or individual success. The broader startup culture is all about collaboration and minimizing ranks and hierarchies.

 

Test-Measure Loop

The Next step in the lean-startup methodology is the “Test-Measure” loop.

Hiring at larger companies is, in a sense, easier because the prospective employees know about you and the company already. For a tech startup, especially in Houston, we had to stand apart from other startups by increasing our visibility, creating awareness about the company and marketing our jobs through multiple channels. We posted our job openings in traditional outlets such as Indeed, Monster, LinkedIn, and ZipRecruiter. We also posted on sites that promote diversity like Women in Technology, Women who Code, etc. We also posted to Job portals like Handshake, which has affiliations with several universities. We regularly did A/B testing on our hypothesis on which channel worked the best and which day of posting worked the best. We found posting closer to weekends got us the most hits but not so much on long weekends.

  1. In the job description, we embedded a short 4-question form that asked the future team members a few behavioral and situational questions. This simple modification enabled us to filter future team members who were serious enough to spend 4-mins to fill out the form and gave us some good background info for the first intro call.
  2. We then screened the resume to ensure the right fit and benchmarked it with MVP’s skillset.
  3. Then, we arranged for another video interview with the CEO. This one was focused on introducing the vision, mission, and culture of the company and measure the culture fit. Drive, Curiosity, Creativity, and Mindset were some of the things that were measured on this call. We were also cognizant of the terms that the future team members used in all the interviews such as “company,” “team,” “together” instead of “I want” and “me.”
  4. Next, the future team members had an intro call with our CTO. The objective of the call was to introduce Nesh to them (why we do what we do) and learn more about their background and also gauge their technical prowess. Another goal of this call was to peel back the resume a bit and find out more about the projects mentioned in it.
  5. The next step was a deep-dive technical interview. The objective of this step was to measure the technical competence of the future team members. We weren’t looking for someone who was familiar with our tech stack (it was an added benefit if they were) but for someone who had strong fundamentals.
  6. The ones who progressed through the previous steps were given a technical project to complete within the week (currently, we are trying to reduce the 1-week time frame to a much shorter to see a future team member’s drive in completing the work under tight timelines). They were also expected to create a short video to explain the way they solved the problem and the thought process behind it. We are a “design-first” company so, in addition to the technical implementation, we also scored on the visual aspects (or design thinking) of their solution.
  7. During this phase, we initiated the reference calls to find out more about the future team members from people who have known them for longer than we have. Since all is fair in love, war and hiring, we also reached out to a few back-channel references to ensure we have a well-rounded perspective about them.
  8. Finally, we invited them to visit us at our office where they could meet everyone on the team and have a casual conversation with all of us in a low-pressure setting. The scorecard from all the previous steps, reference feedback, and the team’s input was considered to make a final decision.

A sample ranking of the future team member for one of the interview steps

The Test-Measure phase is a long-drawn process, but we believe this time investment is essential to find a person with the right fit. We haven’t hired anyone yet for a role that is non-technical (sales, marketing, people ops, etc.) so this process will be molded for those roles but the overall framework will remain the same.

Learn

The Learn phase is imperative to close the “Lean-Startup” methodology loop.

Here are a few parting things we learned along the way which could be helpful for you in your hiring process:

  1. Hire future team members who can help you Right Now.
  2. Cultural fit is crucial. If you don’t have a culture manifesto for your company, create one. (We will share ours in future posts)
  3. An internship is an excellent way to evaluate future team members before offering them a full-time position and also great for future team members to test-drive us. For an internship, we follow a slightly abridged version of the same process. We’ve been able to find some great quality interns through that process.
  4. Promote your brand by using social media channels like LinkedIn and Instagram regularly to provide a snapshot of your startup life to prospective hires. Good candidates do their research.
  5. Trust your gut.
  6. Fine-tune your process if you are not satisfied with the outcome. We fine-tuned ours at least four times to arrive at this hiring process and it still has some ways to go.
  7. Be prepared to spend a lot of time in every step. You will reap what you put into the hiring process but move as quickly as possible.
  8. Once you’ve decided on a future team member, send them a great offer immediately. Even delaying the decision by one day can have negative consequences.
  9. For future team members who fall through the hiring process, always send a thank you letter explaining the reason why the fit wasn’t right and offer helpful suggestions. We’ve been able to connect one of the candidates with another start-up whose skill-set was better suited for the other organization.
  10. Look for something that stands out in future team members, something that is hard to quantify. In our case, we look for grit. Find the thing you want to look for in your future team member.

 

All the best in your Hiring Journey! If you have any questions, feel free to reach out to us.

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