3 Reasons NOT to use a recruiter from 1 CEO on Startup number 2

So we’re about to (finally) leave stealth mode in a couple weeks at CES. 2014 has been an awesome year, with no shortages of ups and downs typical of all startups. I’ve been fortunate enough to work on some amazing projects with my good friends to help grow the business. With the new work coming in, we are hiring more engineers. Aside from our own product development we are only working with the best people, on the most exciting IoT projects. That decision which was led by one of my investors and unanimously agreed has really given us an easy way to focus on projects that significant in more than the invoice amount.

At Livio, I created a basic hiring policy that was improved and optimized by the engineering team. I couldn’t articulate at Livio why we didn’t use recruiters, but I knew in my gut it was just a “bad and expensive” idea.

Now at Tome, I think I can articulate why we didn’t use recruiters then and why we aren’t using them now. Here are 3 reasons, learned from 2 startups founded by 1 CEO (BTW, randomly, did you know that the 321 area code belongs to cape Canaveral? — how awesome is that?!?)

  1. Recruiters can’t market startups: I’ve given this some thought, and perhaps there’s a recruitment firm that specializes in startups. I googled it and couldn’t find much. More importantly, I’ve asked recent college graduates where they look for jobs and they couldn’t point me to one good spot (idea for anyone looking to solve this problem…) The core problem is that working at a startup has the compensation knob all the way to the left, and that doesn’t feel natural for most candidates and recruiters that can’t talk through what working for a startup is all about. If you haven’t worked in a startup, you’re not going to be able to explain what the full compensation is working for one. Sure you can read the bullet points off an article at Inc.com, but you really can’t broker a deal.
  2. Unique value propositions make recruiters unnecessary for startups: Startups that are hiring paid positions have product and some revenue (in most cases). To be successful as a startup, the company product/service has to solve a very specific problem and have a very unique value proposition. Candidates that are willing to join our team at Tome already understand and are passionate to solve the problem. In fact, working in the specific space on a specific problem is part of the compensation, in lieu of making fart apps for bags of cash. The value to hiring is that with a specific job description, you’ll draw candidates that find you based on the passion. Case and point is we ran two ads (still active) at Tome, one was generic “Software Engineer” with the cool startup info. The other was titled “Software Engineer to Work on Connected Bikes” with lots of bike jargon in the description with specifics to the gig. Which one do you think attracted the most people. Do you think we needed a recruiter to post up a super specific gig?
  3. Hiring at a startup is too important to pass the buck: At an established company, there is (or should be) plenty of redundancy on a team. Every hire counts at every company, however at a startup, the importance to the overall business success on a single hire is probably 10X of the importance to a large organization. Hiring a recruiter tells a candidate that you don’t have the time to post fliers, post online, and have the first conversation. Aside from the metaphor, there’s literally tens of thousands of bucks passed along which could easily go into more startup Ts, hoodies, pizzas, laptop stickers, and things way more important than saving the startup CEO another weekend of work.