So, it’s official. We’ve entered the bubble. LinkedIn’s IPO has heralded in 4 or 5 years of serious exit opportunity, before it all comes crashing down around us again. The BIG challenge now is going to be hiring, then holding on to great people.
Cheap cloud computing and open source technologies have driven innovation over the past 5 years. Together with the “not so smart money” about to enter the system – everyone will want a piece of the coming wave of IPOs – we’re going to see many sub-optimal companies springing forth. That means more copycat companies and more niche-within-a-niche businesses. Finding the right people is always the key challenge to building successful start-ups. It’s about to get worse.
Thank God we’re not in Silicon Valley or New York right now. Irina Shamaeva who is recognised as one of the leading candidate researchers/sourcers, recently tweeted “What’s up with the Software Development job market in the Bay Area? Are there ‘any’ strong Java back-end engineers open to a new opportunity?” If one of the best sourcers is finding it challenging to find software development candidates in the San Francisco Bay area then you better believe there is a big problem in the valley. According to Facebook’s Director of Corporate Development, Vaughan Smith, top developers are being valued at between $500k and $1m a head. And Google recently offered an eye-watering $100 million in stock to retain Neal Mohan, a high-level product lead. (That came shortly after the same company had offered employee Sundar Pichai $50 million to turn down a job at Twitter.)
We’re seeing senior executives who would normally be ideal C- or VP-level candidates for our current clients “turn into” future clients themselves. There are a lot of new start-ups in the pipeline in London. At the junior level, we’re seeing a shortage of good developers in the London market. Everyone I know who is building their site utilising the LAMP stack of technologies is desperate to hire in PHP, Ruby and Drupal skills.
CEOs are offering incentives that echo the crazy Google and Facebook deals in the Valley. Tom Allason, CEO of www.Shutl.com recently posted the following on LinkedIn and Twitter: “We are hiring… and thought that you might know someone suitable for this role? Feel free to forward it on to others. We are paying £1.5k (or if you prefer bottle of 1928 Chateau Brane-Cantenac) for intro that leads to a successful hire. Thanks! Tom”
Founders are even joining forces to encourage and build interaction with the developer community in London. The recent siliconmilkroundabout event on the 15th May was set up by a “who’s who” of the London start-up scene to try and tempt developers away from joining the big banks and to build stronger links between the likes of EDITD, Groupspaces, Skimlinks, MindCandy, Conversocial and the developer community at large.
So what should companies do?
- Become desirable. Candidates should want to work at your company. A great team, tier-1 investors, interesting technology challenges, market traction (awareness and buzz) and revenues are all highly desirable to potential employees.
- Build a hiring process that eliminates weaker candidates early in the process. Avoid wasting time with unnecessary interviews.
- Ensure that your internal hiring processes and documentation are in order.
- Make sure that everybody on the hiring team understands what you are looking for in this hire and why. Do this by getting the hiring team’s input into the job profile.
- Make sure that all board members on the hiring team are readily available to interview the final shortlisted candidates.
- Be prepared to hire quickly. Get them through your interview process and make them an offer. Don’t delay when you find the ideal candidate.
- Show the desired candidate that there’s a clear path for them to meet their goals within your company.
- Build up relationships over time with the best people in the industry. If they can’t/won’t work for you, they may know someone who might. Building the right team as the company grows and changes is an ongoing process.
- Work on building up the team spirit in the company. Candidates will invariably meet 2, 3 or more members of your team during the interview process. A strong consistent team spirit is seductive.
- The best candidates may be more expensive than you originally budgeted for, be flexible and be prepared for this.
- Create company perks; the little things can make all the difference in a situation where another start-up may be competing against you for the same candidate.
- Communicate your company’s cultural DNA and your mission, in your blog, on your web site, in the job description and in the interview process.
- Join or create initiatives like http://siliconmilkroundabout.com/.