Ask A People Person - 11/12

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📰 Today's Edition: Ask A People Person

We asked our friend Meghana Reddy, who has previously been a People Leader at a variety of fast growth startups including Loom, Framer, NerdWallet, and BioRender, to help founders with some people problems they are facing. Here's this week's issue.

Question: We finally found the perfect engineering hire who knows our space, AI-forward, great culture fit with our small, in-person team. But, he just told us he received another offer from a recently funded startup: 3X what we expected to pay with a six-figure sign-on bonus. That's more than we pay our entire team. How do we compete?

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First of all, that sucks! It's hard to find a great candidate and then learn they're going to be hard to close. But before you throw up your hands and rail at the funding gods, a few things to consider.

Have you been selling the candidate?

Founders can spend an inordinate amount of time assessing a candidate but not enough time on why that candidate will come work for them. Selling doesn't just mean pitching your startup; it requires getting to the bottom of what matters most to the candidate, so you (and your investors and advisors) can make your case.

If he only cares about cash, you may not have a chance. But candidates care about a lot of things: how much autonomy they'll have, what they'll work on and who they'll work with. I've seen plenty of candidates take a lower number because the role set them up better for future success.

Is your offer competitive for his market?

Check your offer against what his market is paying, not just what you pay today. Your current team's pay might not be the right benchmark, especially if they have founding equity or different skillsets. Talk to other founders and recruiters (or me!) to get a gut check on how much of an outlier this offer is.

Then consider whether an above-market offer is worth it to you. How much would this hire increase the value of the business or free up your time as a founder? What is it worth to get this candidate now? Lately, AI-native startups are making more of these outlier offers to lock down talent quickly. I don't know enough about your situation to say you should too, but it's worth knowing what you're up against.

Where do you have an asymmetric advantage?

If your ideal candidate is every other startup's ideal candidate, you'll end up bidding against each other. For example, offers in SF and NYC are eye-popping right now, but other talent markets are much less competitive. Remote roles are also hard to come by, so candidates are willing to trade a lot to live where they want and skip the commute. I know you're in-person, but could a remote candidate work for you?

If it's any consolation, hiring has always been this way (just swap out AI for FAANG or ZIRP-era SaaS or even crypto). The best founders spend a lot of time finding and convincing great talent to join them, so you're in good company. And if you’d like some help with your talent strategy, reach out to me.

-Meghana

Meghana Reddy is a 4X people leader at startups including Loom, Framer, NerdWallet and BioRender. You can reach out to her at meghanareddy.com. Have a question you'd like her to answer in a future column? Send her a message at meghanareddy.com/contact.

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