Creating leverage when hunting

Howdy y’all 🤠, and welcome to my first ever blog post! This one will be about hiring, and specifically how to create leverage while hunting 🎯.

Reason I’m writing about this is that hiring today is challenging.  VC investments have 10x’d in 10-years ($160B in H121 versus $20B in half of 2011) and that means more startups than ever competing in the war for talent.

In normal times, I’m of the opinion that hunting (seeking out candidates) > farming (posting jobs and going through applications).  That’s because the best candidates are happily employed and not applying. They do great work, they’re appreciated, and so they’re not searching.  But in this war, the hunt is even more important.

So hunting is the way, but it takes a lot of time and you don’t have much to spare. So how does one manage?  Today I’ll cover some thoughts on the topic (teaser for future posts below 😂 ).

For context, I’ve been told hiring is a personal strength so I’m hoping this stuff is slightly more than maybe the way 😉.  I’m proud that at Setter we hired north of 70 folks while maintaining a crazy high bar (<1% of applicants hired).  I also went through McKinsey’s hiring bootcamp which was impressively robust. They claim they make no hiring mistakes, but hey, they hired me!

Alright alright, enough preamble. There’s a few things that I think are interesting to discuss in this post.  Firstly, the people you can get to help, secondly the software you can leverage, and thirdly some musings on one of my favourite trends impacting hiring today.

People.

Contingency-based recruiters.  After trying to work with a bunch of different firms while at Setter for non-eng hiring, I came to love Omna Search (ping Juliette if interested in working with them) and IvyScale (ping Will Champagne).  At the time, these folks charged between 20-25% of first year’s salary contingent on placing a candidate.  It’s expensive but they really can find incredible talent.

Rule of thumb : I think this is the way to go after you’ve tapped your direct network and once you’re hiring >0.5 people per month.  At that point, you should switch to leveraging an internal recruiter (~$10K per month < 0.5 person per month * 20% of first year salary * $100K first year salary).

I haven’t used them yet, but recently noticed a new YC company called TalentDrop which is creating a marketplace for companies to get help from headhunters.  It’s a neat idea and likely worth checking out.

Bryan’s reference for Omna Search

Retained recruiters.  We tried this too but results for us were less than exceptional.  We paid roughly 33% of the first year’s salary upfront on a couple searches and they frankly didn’t move at the pace we needed them to.  I’m sure retained recruiters can work effectively sometimes, like in a really constrained talent pool where one individual is tracking all the talent, but it hasn’t worked well for me yet.  An interesting dynamic here is that some of the premium Silicon Valley firms will take partial payment in equity, perhaps knowing that the right equity pays dividends.

Managed talent platforms.  These are platforms that facilitate the employment of fractional or even full-time employees from low-cost regions or functional segments where it’s too hard or time intensive to hire and retain great people.  One of my former colleagues, Justin, now does this for marketing at Shoelace.  We did this for Philippines-based engineers via a former McKinsey colleague’s company Bld.ai.  I’m a proud supporter of Danny at Bld.ai too.  Larger companies are leveraging these platforms too, employing top tech talent through Toptal and Comet, and business strategy types through Catalant.

Bryan’s reference for Bld.ai

Internal team.  As mentioned earlier, hiring a recruiter is the way once you start hiring >0.5 people per month.  If you are creating an internal team, a suggestion would be to consider pairing your NA-based recruiters with folks from Philippines for some of the prospecting.  I love working with Philippines-based folks. Team members are affordable by NA-standards and exceptional service culture.  These folks can be found on Upwork, or on Kalibrr.  We had a team of 30 FTEs and an office in Manila so at some point I may write a longer post on how to leverage the Philippines effectively (the tldr is that talent there can be highly variant, expect to pay $6-12/hr and as signals, look for folks that went to University of the Philippines, or Ateneo de Manila).

Software.

I wasn’t crafty enough here during my Setter days.  After Setter, I thought about making a software to create some leverage, and in the process, discovered a bunch of software I could have benefited from.  Next time I’ll be leveraging at least one of the following.

Gem, Trinsly and Conversify. These tools enable you to easily capture LinkedIn profiles or upload lists, and create automated outreach and follow-up campaigns.  Of the three mentioned, Gem is the largest and most robust with $50M raised.  Trinsly (I beleive used by DoorDash’s recruiting team btw) and Conversify are small and bootstrapped teams. Worth checking them all out but I’d start with Gem as it’s the most robust and is free for startups!

Entelo.  This is an alternative to LinkedIn Recruiter and makes sense for later stage companies as I believe it’s on the order of $10K per year.  It has a database of (~500-1,000 million) candidates pulled from 50+ data sources and it’s way more searchable than LinkedIn.  Ever been on LinkedIn and been frustrated with your ability to search with specific filters?  Supposedly much easier with Entelo.  It also has automated follow ups and a whole suite of features I don’t quite understand.  I gather Diagram, a very successful venture incubator in Montreal, has used this to help prospect employees for the startups they employ.

Trends.

There’s so many macro-trends today impacting hiring because the pandemic has brought about such an unprecedented amount of change in this segment.  Rather than spread myself thin, I’m just going to discuss my favourite trend, and one that has been the basis for a few of my angel investment bets.

The future of work is doing the work you love, and outsourcing the rest.

There’s a whole number of companies emerging to take ownership of various parts of a company or a person’s workload that is non-core.  Here’s a few examples :

• Homes. In fact, Setter was built off the same principle : a homeowner doesn’t want to be a plumbing, electrical, or carpentry expert.  They want to contribute by doing the work of their choice and/or raise a family.  Setter enabled them to do that by taking their home off their plate.  Not do-it-yourself, but do-it-for-me.

• Creators.  Today we see creators on every platform from Instagram, to Tiktok, to Twitter, to Linkedin.  These folks have worked hard to create mass followings and are now looking for ways to monetize.  One way to monetize is to start selling products to their audience.  However, the product sourcing and logistics, are really tedious and tangential pieces of work relative to their core functions as a creator.  I recently invested in Param Shah’s  startup Badaboom which is finding terrific product market fit, and seeing rapid growth as they enable creators to sell products at zero hassle.  They take care of sourcing high-quality products from Shenzhen-based suppliers, and also the logistics of shipping to their customers.  A friend of mine, Joel Wegner, has a similar startup called Juniper that’s bootstrapped to 8-figures and consistent >100% YoY growth.

• Startups.  Within the realm of startups serving startups, my good friend David of Finalytics is having a ton of success taking care of a startups finances.  We used him at Setter and they really did do a phenomenal job and provide great value.  Related, Jeff Bezos has been the primary investor of Pilot, which recently reached unicorn status to scale up what my friend David is doing.  Another company in the space that I recently invested in is called AbstractOps (backed by Craft Ventures and Hustle Fund) which is creating a scalable way for startups to outsource their back-office tasks.

All of the companies mentioned above are (at least relatively) vertical managed service marketplaces.  In parallel, we’re also seeing innovation in horizontal marketplaces (e.g. LinkedIn, Upwork and Fiverr).

• Contra. Recently I passed on Contra’s Series A due to high valuation.  I think I’m going to regret it as they seem to be executing extremely well and the product just makes so much sense.  Contra is reinventing the resume with a project-based profile.  They’re concurrently navigating the way people currently hire, within networks, enabling you to showcase collaborations, and highlighting references from within the network.

• LinkedIn and Facebook. They recently announced that they’re going to be launching a new feature to help folks hire freelancers called Marketplaces in September, and Facebook has said they’re going to expand their efforts in this vein too.

So in summary, it may be harder than ever to hunt today, but I’m optimistic that all of the innovation happening today will turn that around soon.

Please let me know how you liked this post, your anonymous feedback will help make these posts more interesting. Loved it😍 , it was OK 🤷, it was boring 🥱.

You can also reach me at altmbr@gmail.com, or on twitter @AltmanBryan. Also if you like this post and want to see others 👇

That’s all for this post. Happy hunting! 

Bryan