Competing for Talent as a Startup
As a startup, how can we compete for talent against big companies that can pay more?
Here’s something that’s just not true: BigCorps and startups are competing for the same developers.
It might be true in a few cases, but universally, it’s a myth.
That’s because not every developer is optimising for the same things when it comes to their job.
There are people who are really drawn to startups. They want autonomy, variety, and the financial upside (and risk) of equity at an early stage. Maybe they’re interested in starting their own company one day, or they have learned that they thrive on smaller teams or in early-stage companies.
There are also people who have set their sights on working at a BigCorp (FAANG and adjacent companies). They want the credibility that comes from that company name on their CV, the higher compensation, predictable raise and promotion schedules, and access to ample resources.
Depending on the person, the upsides that I listed here might be perceived as downsides. The structure of a BigCorp might turn off some people (despite higher comp) whereas the vision and mission of an early stage stage company might be meaningless without money in the bank.
Know your Employee Value Proposition
The set of unique qualities that will attract someone to your company is called your Employee Value Proposition. It answers the question “what’s in it for them?”
Gartner has broken down EVP into five main categories, summarised really nicely in this article from Gem:
Opportunity: career advancement, training
People: talented team, company culture, trust and transparency
Organisation: company reputation, sector or market
Work: interesting subject matter, work-life blend/balance
Rewards: cash compensation, equity, benefits, bonuses
Touching on all of these in your reachout messages and job posts will send a strong message to your ideal candidates that this is the place for them. Similarly, people who aren’t a great fit will see the signals themselves.
Case Study: Vygo
Vygo is an edtech startup based in Australia, and I’ve been working with them for over a year. They are remote first, which means that they can cast a wide net for talent. But, being located in Australia can have some disadvantages when it comes to salaries and exchange rates. Australia has a startup culture, but it’s nowhere near what it is in London, Berlin, or in the USA.
When Joel, co-founder and CPO, and I started working together, his hiring approach was to look at people who were currently working at the Googles and Apples of the world, and to try to sell them on the vision.
We talked about what is good about this approach: high trust in Google’s hiring process, so if someone can get hired by Google, they’re probably talented; and also that these people likely have networks of other talented people. He needed people who could come in with high horsepower and just build what needed to be built.
We also evaluated the downsides. Vygo does not have Google money. While Vygo was prepared for competitive cash compensation, bonuses and RSUs were an area where they couldn’t compete. It could be tough to convince someone to take a reduction in overall comp. Also, people that thrive at Google have resources at their disposal. Not just in cash, but also systems and processes. It isn’t the same scrappy environment as a startup with 10 employees. At Vygo, there’s a lot of" “go figure it out.” For engineering specifically, this might look like wearing the hats of product manager and designer throughout projects.
One of Joel’s biggest fears was losing out on great talent because Vygo couldn’t compete on overall comp. But when we got deeper into the details of crafting an EVP, it became more clear that the kind of person who wants to work at Google for the name brand and high salary isn’t necessarily the same kind of person who would be drawn to Vygo, or be ready to thrive in Vygo’s mission-driven startup environment. Instead, we could focus recruiting efforts on people who are chasing after Vygo’s EVP.
Now, Vygo’s EVP is front and center in the job posting. Postings get little organic traffic; rather, they should be optimised for a quick glance when someone clicks on a link in a reachout message on LinkedIn or another platform.
Here’s what Vygo’s posting for a Senior Software Engineer looks like now:
Notice how the EVP components of organisation, rewards, and work are highlighted in the top bullet points, all above the fold. Then, there’s a whole section called “What’s in it for you” that further strengthens the EVP.
This job posting is a magnet. It will attract the right people, and repel others who won’t be suitable for Vygo’s size and stage.
After going through the exercise of defining and EVP and avoiding one-size-fits-all messaging, Vygo’s been able to make some fantastic hires of people who are hungry for the experience that an early-stage startup can bring.
Having an EVP isn’t a list of excuses not to pay people what they’re worth, or to feel okay with having far below market rate salaries because you have a “good company culture.” In Vygo’s case, it was a way to better represent the other upsides (financial or otherwise) of joining a company at their stage.
