I’ve spoken to over 50 Web3 companies in the past year alone and over 100 Web2 shops throughout my career. But in the unique and highly competitive world of Web3 hiring, the stakes are even higher. Unfortunately, many startups make a few common mistakes that have serious consequences down the road. Here are the top five hiring mistakes to avoid as a Web3 startup:
1. FAILING TO DEFINE REQUIREMENTS CLEARLY
I don’t know a single experienced hiring manager who doesn’t have a hiring horror story of spending months interviewing for a role, only to discover misalignment with the team, role, responsibilities, etc., and ultimately putting the role on hold. Odds are this could have been avoided by communicating more clearly. I can’t tell you how many times over the past few years where I’ve connected with teams about a search only to find everyone involved looking for different skill sets for the same role.
More often than not, leaders and those responsible for the search are not 100% aligned on the responsibilities and requirements for the role. When misaligned interviewers are looking for different qualities in a candidate, the search for the role takes much longer and requires more resources. Also, misaligned teams in this way run the risk of passing on candidates that could have been an excellent fit. Specificity matters! I can’t overstate the impact of the simple exercise of sitting down with your team to clearly define ‘needs’ and ‘wants’ for successful hiring.
2. NOT BUILDING OUT HIRING PROCESS
Hiring processes are important for so many reasons and very few teams have documentation around this. Here are three reasons why a fully thought out hiring process is key:
Finding the right fit: A well-structured and standardized hiring process helps your team hone in on the specific skills and attributes that make a candidate suitable for the job. This helps ensure that any new hire will be able to perform required tasks effectively, and that they fit in with the company’s culture.
Improved efficiency: A well-designed hiring process can save time and resources by streamlining the recruitment process and reducing the risk of making a hiring mistake. This can improve overall efficiency and reduce the cost of filling a position.
Better decision-making: A thorough hiring process helps decision-makers efficiently and effectively gather the information they need to make an informed decision about a candidate. This includes information about their skills, experience, and cultural fit.
One would assume you take a thoughtful approach in all other aspects of your role, so why not with hiring? If you want to AB test different ways to assess candidates, you first need a baseline. A good recruiting process allows you to start taking a data-driven approach.
3. THE REVERSE PITCH
Interviewing is a difficult skill to master. Period. What many people don’t know is that, in addition to evaluating a candidate, an interviewer also needs to educate the candidate on the role, company, and industry. Web3 is a nascent industry and we are therefore especially responsible for educating newcomers (and natives alike) on why this space is important. Think of it this way: if you can’t properly inform a candidate about your company and its place in the industry, you will not be able to close them when it comes time to deliver an offer. Note: education around compensation in Web3 is also important, especially as it pertains to token-based compensation.
I often see startups conducting “sell calls” to talk about the product roadmap, industry impact, total addressable markets, etc. after an offer is delivered to a prospective hire. This is usually too late, as the candidate-employer dynamic completely changes the second an offer hits the table. Education should be a built-in facet of every touch point of the hiring process.
4. FOUNDERS CAN BE THEIR OWN WORST ENEMY
To be clear: it’s always a good sign when founders are involved in the interviewing process. It means they truly care about hiring and guarding culture. But we frequently see founders in the weeds like this spending multiple hours interviewing every hire, many of whom won’t be hired. I’ve recently had the pleasure of working with a founder who guards their culture and talent bar so closely that they personally conduct three interviews of a six-interview loop… with every candidate! Think about how much valuable time that takes up!
Another thing we see time and time again is that, in the early stages of a company (typically one to ten people), the majority of hires are done through networking. This is great in that referrals are often candidates who are more engaged and stronger fits. But this approach is not sustainable. When startups hit that ten-person threshold, hiring becomes challenging as the company hasn’t stretched their recruiting muscles beyond networking.
It’s never too early to invest in and build an effective hiring process. With the right process in place, early stage founders can partially step away from hiring involvement while leveraging their team to achieve the same results. This frees founders up to focus on more strategic initiatives.
5. JUST GET AN ATS
ATS or Applicant Tracking Systems allow all candidate data to be stored in one centralized location, making it easy to track and manage candidate profiles, resumes, and other relevant information. This makes it easier to source and build a network of candidates, which becomes integral as you hire in the future. The sooner you start aggregating candidate information, the sooner you can start leveraging your system to cut down on time-to-hire and other costs like agencies. Additionally, ATS systems automate many of the manual tasks associated with recruiting, such as posting job openings, reviewing resumes, and scheduling interviews. I can’t tell you how many startups use Excel, Google Sheets, or Notion. Please get an ATS – your future self will thank you! If you’re a Pantera portfolio company, you can find discounts on ATS systems such as Greenhouse and Lever on our Proven page.
These are just a few of the reasons why we started our Talent Audit. At Pantera, we want to help our portfolio companies overcome these common challenges. And unlike many other VC talent programs out there, we want to create scalable solutions for our portfolio companies. One of the best things we can do for our founders is to give them the tools they need to hire successfully and to teach them how to use them if necessary.
For our Talent Audit process, we sit down with startups and look into all of their documentation, any relevant data, and processes. We not only provide recommendations on how they can improve, but actually help them implement the changes. We then help the teams to build scalable processes that prevent future mistakes. Our main goal throughout all of this is teaching our founders how to hire for themselves and mitigating their reliance on third parties… ourselves included.
Web3 is a rapidly growing and exciting space and Web3 startups have a unique opportunity to shape the future of the internet. At Pantera, we could not be more excited to be a part of it!
BONUS HIRING MISTAKES:
DON’T HAVE A GOOD RECRUITING AGENCY?
The choices are sparse here for startups. You either hire an internal recruiter or work with vendors. Many firms choose to work with agencies but recruiting agencies are only as good as the information you give them. And it still takes work to hire – arguably just as much work as managing an internal recruiter. For example, agencies need guidance, insight into the role and culture, time to calibrate, and ongoing feedback and support. It’s still the startup’s job to provide the agency with everything from the job descriptions, to the “sell”, to the interview process, and the compensation bands. Should this route still be attractive, consider treating recruiting agencies as you would employees: give them all the support they need to be successful but you can’t be afraid to let the low-performers go. I promise, there are some good ones out there, but it’s a frustrating process finding the right agency for you.
NOT PARTNERING WITH A VC THAT HAS A SCALABLE TALENT PRACTICE
I can’t tell you how many times VC’s tell prospective portfolio companies that they will take care of all their hiring needs. I’m here to tell you that’s hogwash. A good VC talent program should be equally as adept at telling you what they can do as what they cannot do.