March 7, 2023
Portfolio
Unusual

How startups should hire today, according to leaders of Square, Amplitude, Wealthfront, and more

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How startups should hire today, according to leaders of Square, Amplitude, Wealthfront, and moreHow startups should hire today, according to leaders of Square, Amplitude, Wealthfront, and more
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Editor's note: 

In the first edition of The Unusual Question series, industry leaders weigh in on the upside of hiring and talent development in a tech downturn

Tech recruiting is often punctuated by boom and bust cycles. One only needs to go back three years to remember how the onset of a global pandemic caused the widespread dissolution of most headcount plans, only to see them resurrected in breathless fashion less than six months later. 

If I've learned anything from observing these cycles, it's this: no matter the current economic circumstances, a thoughtful, holistic hiring approach paired with a team-aligned philosophy are paramount toward getting the job done well. 

To provide further perspective, we've invited six leaders to answer this question for the first edition of our Unusual Question series for founders: How do you hire well during periods of economic uncertainty? Among the respondents are Square Co-founder Sam Wen, who was pivotal in hiring the team’s earliest engineers during the 2008 downtown. We also hear from Leslie Crowe, who was early at Dropbox and helped scale the global sales team — experience that prepared her for steering TripActions through a period of massive hyper-growth during a short but punctuated bust cycle following the onset of the pandemic.

Leslie Crowe

People and Talent Partner, Bain Capital Ventures

Previously: Chief People Officer, TripActions; VP of Talent, MuleSoft; sales and operations leadership positions at both Dropbox and Google

When I joined TripActions in 2019 as the Chief People Officer, we were experiencing the very definition of hyper-growth — hiring approximately 1,000 people my first year while “building the plane while flying” and trying to put in the right infrastructure to scale properly. 2020 started with an even more aggressive growth outlook, but by February, travel ground to a halt, and by March, we were laying off more than 20% of the company. Yes, hiring stopped momentarily, but we soon realized we had critical areas of the business that we needed to invest in (for example, our payment and expense product, Liquid — unsurprisingly, people still need to expense things during a pandemic!). 

A few general thoughts about hiring during this time, whether you’ve been hit hard by the downturn or even if your business is still growing and things are great:

• Focus — this seems obvious
Narrow in on the most critical areas of your business to invest and put your energy there. Think quality over quantity, which seems like a luxury after the last few years!

• Downturns are prime time for building your best team
Competition for talent is much less fierce than it was over the past few years. Use that to your advantage! Maybe your team isn’t growing a ton, but you can use this as an opportunity to upgrade your talent and make sure the right people are in each seat. 


Small startups especially have a much better chance catching the eye of great talent. Plus, the megacorps are no longer seen as safe, so people who may have been attracted to FANG stability are now more open to absorbing more risk for more reward. In the same light, if budget is an issue, use this as a time to bet on an up-and-comer. Yes, they may need a bit more time to ramp, but that time exists now, and the impact of a high-trajectory hire can be astronomical.

“If budget is an issue, use this as a time to bet on an up-and-comer. The impact of a high-trajectory hire can be astronomical.”
— Leslie Crowe

• Refine your pitch 

If you were selling the proverbial Silicon Valley dream before (“10x this year and you’ll be on the NYSE podium in a few years!”), you’ve already probably realized you need to re-evaluate your pitch. Take time to figure out what you are really offering candidates — career development? An efficient business operation? A meaningful mission? Narrow in on the small set of things that you believe you can offer and that will attract the right talent to your company.

• Use this time to become great at hiring
The last few years were generally characterized by frenetic hiring, and there’s no way to do that perfectly, arguably even well. With hiring slowing down, spend time to get your infrastructure in place — build a set of effective, scalable hiring processes, put in the right systems, build your org architecture, and refine your employer brand materials, so that you’re ready to go when things pick up. A downturn is the easiest time to implement change — don’t let the opportunity pass you by. Your future self will thank you.

• Don’t get woo-ed by fancy logos on people’s resumes
At BCV, we’ve worked with a lot of founders who are pretty excited to get access to talent from Google, Meta, etc. post-layoff. But you really need to dig in to find the people who can build 0-1. Digging in on level of ownership, scope, scrappiness, etc. is important when you screen.

• Be clear about compensation

It may take a while for candidates to adjust to market changes, so make sure you and the candidate are on the same page about comp expectations upfront. If you have resources to get updated compensation data from tools or your personal network, leverage it and always map to your direct peer companies. Competition is always going to be fierce for top talent in certain functions like engineering. 

Sneh Parmar 

CEO & Co-Founder, Lucky

Nafis Azad

Co-Founder and CPO, Lucky

Instead of viewing hiring during a downturn negatively, we’ve found that it presents many opportunities. Here are a few things we’ve learned:

• Experienced candidates are excited about startups
During a downturn, larger companies may lay off talented people or freeze their hiring.
As a result, we gain access to high-quality candidates who might not have been available during previous cycles. We’ve found that the stigma associated with those laid off by big tech companies is often untrue. In fact, we have discovered interesting and enthusiastic candidates who are excited to take on early-stage opportunities in this market, especially at the senior level. 

That said, it’s important to avoid hiring someone with an impressive big tech resume who does not fit your company culture, as this can be costly and may not align with your operational style at the early stage. Instead, we look for a specific type of candidate who has the structured brilliance of big tech while also having the innate desire and adaptability to succeed at our startup.

“We look for a specific type of candidate who has the structured brilliance of big tech while also having the innate desire and adaptability to succeed at our startup.”
— Sneh Parmar and Nafis Azad, Lucky

• We hire new team members only when our existing bandwidth is exceeded
This forces our current team to operate lean and manage cash more efficiently while learning to execute at the highest level. This approach simultaneously develops a culture of excellence while avoiding over-budgeting for hires.

• We only look for candidates who are better than ourselves at the roles we want to fill
This approach enables our team to become fundamentally more skilled as we grow, as we are bringing in only the best talent who can educate our company on new ideas and best practices.

Sam Wen

General Partner, Green Visor Capital Management 

Previously: Co-Founder, Square

I'm not hiring during the current downturn, but I can offer these insights and a hypothesis worth trying: focus on a few high-quality hires and plan early to develop talent, rather than recruit it. This will be a superpower you'll need to develop in the long run regardless, but given current conditions, I believe that you must invest into this earlier.

• Quantity ≠ quality
The current round of tech layoffs are creating larger pools of potential hires, but the average quality is lower. This will mean that hiring will be more time-consuming than in the past.

• 2008 is not 2023
This economic downturn is not benefitting from a large influx of talent. In the 2008 financial crisis, tech benefitted from the availability of high-performing consultants, quants, and bankers losing their jobs due to company collapses. Tech has no such luxury this time around since it's tech that's been hit the hardest.

• Generalists are always a good idea
Required technical knowledge is both shallower and broader. This means for most cases, hiring someone deeply technical is not necessary. This isn't a result of the downturn but more of a result of steady progress that helps engineers, analysts, and product people be more productive. Generalists have always been a good investment, but under current market conditions, they are even better.

Sandhya Hegde

General Partner, Unusual Ventures

Previously: EVP of Marketing & Growth, Amplitude

Hiring well in a downturn is a true test of how well you understand the strategy your company needs to grow efficiently. Your investments need to be aligned to the best opportunities — impossible if you don’t know what those are. 

A memorable example for me is when there was a big market correction in 2018 while I was leading marketing and sales development at Amplitude. While the advice we received from veteran investors was to simply make cuts and freeze hiring across the board, there was a lot of nuance in how our planning and the market reality actually played out.

Turns out, the demand for deep product analytics is stronger in some customer segments during tough markets. It might take longer for sales cycles to close, and ACVs might be negatively impacted, but new opportunities also emerge. This meant that the way we organized our sales team needed changes. Instead of doing a simplistic freeze/reduction across the board in sales, the right answer was to increase the ratio of SDRs:AEs in some pockets. This also gave us the opportunity to bring some great new sales talent into the company that was pivotal on our strong growth in the years to come.

My takeaway from this experience was to always approach hiring strategy from first principles, whatever the market conditions are. Taking just a simplistic “tighten belts” approach might help you survive but doesn’t help you thrive. In particular, you need to answer three questions:

1. What does a downturn mean for your existing customers and potential new customers?

2. What changes do you need in your product and GTM strategy to map changes in the market demand?

3. How can you raise the bar for the quality of team and new hires you make to increase the talent density in your organization?


Taking this first-principles approach as a leader during a downturn will ensure that you don’t eliminate jobs needlessly and at this same time, create an opportunity for your company to lap competitors who confuse their lack of strategy for austerity.


Apeksha Garga 

VP of Design and Marketing at Wealthfront

Previously: Principal, IDEO


• First and foremost, all candidates need empathy and compassion

In the last six months, many people lost jobs, had offers rescinded, or saw their colleagues and friends lose jobs. People are insecure about their job safety. Some may have lost some self-confidence even though they intellectually understand that it was due to the economic climate that led companies to cut costs and lose employees. They may feel a lot of pressure to find a job in a market where there aren't many available and the competition is intense, which can lead candidates to underperform in interviews. Some may be facing severe stress because of their financial situation or immigration status, and need to find a job urgently. 


If you are a hiring manager, it’s important to be sensitive to the emotional state of candidates and approach the interview with empathy, keeping the candidate context in mind. An interview evaluation is most successful if the candidate represents themselves and their work from a place of confidence, and a hiring manager can play a huge role in making them feel supported.


• A shift from optimizing for risk to purpose first

I believe that very few people truly choose a high-risk, high-reward job, and even fewer do so during times of flux and uncertainty. I also believe that the majority of people care more about the size of their paycheck, and peripherals like brand hype, perceived resumé value of a company, and comfort from benefits rather than company mission and purpose. This is why it will always be very hard for smaller, private companies to compete for the best talent. 


During the pandemic, this problem was elevated. Many pre-IPO companies had layoffs, and I consistently heard from candidates that they wanted to work for a mission-driven company, but first and foremost, they were looking for job stability. Joining a private company felt like too much risk, and many ended up working for a FAANG company. In the last eight months, tech companies of all sizes — including FAANGs — went through large layoffs, and this really broke people’s mental model of large companies as a safe harbor. 


The positive side effect is many people are now taking a much closer look at companies and actually prioritizing purpose first and asking themselves what they would truly find meaningful to work on. They are much more interested in learning about the business model of a company and if it’s sustainable in the long term and aligned to build a customer-focused business. I’ve had candidates specifically tell me that they don’t want to consider businesses that are very dependent on ad revenue.


• Hyper-vigilant about mission fit

At the same time, there are also many people who are very fear-driven, understandably so, and are applying to many companies with relevant roles to increase their odds of landing a job soon. As a result, I’m seeing a lot of applications from people who barely know what we do and haven’t spent any time on our website to learn about us. In a startup, and especially at a very mission-driven company like Wealthfront, it’s incredibly important to hire people who genuinely care about the mission and will be motivated and resilient in tough times. 


Given the volume of interest in open roles right now, we are filtering out candidates whose applications don’t signal genuine interest. I take a lot of interest in sharing with prospective employees how we are thinking about the future and where our biggest opportunities and challenges lie, but I expect them to be informed about what we do today. 


• Leverage your position of strength 

If you are a startup hiring right now, it’s an incredible time to hire great talent. The simple fact that you're able to increase your headcount right now should be a very positive sign for candidates as well. It’s likely that your business is growing well, it’s built to weather storms, may have very healthy operational margins, is a profitable business etc. There are a lot of terrific candidates looking for jobs, and it’s a great opportunity to really dial in on exactly what you’re looking for across many dimensions — level and type of experience, specific areas of strength, values and mindset. To win these candidates, you should leverage this opportunity to explain why your company is still able to hire, speak to the strengths of your business, its operational philosophy, and inspire further trust and confidence in the long-term health of your business. 


Looking for more advice? Read How to recession-proof your startup

All posts

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

All posts
March 7, 2023
Portfolio
Unusual

How startups should hire today, according to leaders of Square, Amplitude, Wealthfront, and more

No items found.
How startups should hire today, according to leaders of Square, Amplitude, Wealthfront, and moreHow startups should hire today, according to leaders of Square, Amplitude, Wealthfront, and more
Editor's note: 

In the first edition of The Unusual Question series, industry leaders weigh in on the upside of hiring and talent development in a tech downturn

Tech recruiting is often punctuated by boom and bust cycles. One only needs to go back three years to remember how the onset of a global pandemic caused the widespread dissolution of most headcount plans, only to see them resurrected in breathless fashion less than six months later. 

If I've learned anything from observing these cycles, it's this: no matter the current economic circumstances, a thoughtful, holistic hiring approach paired with a team-aligned philosophy are paramount toward getting the job done well. 

To provide further perspective, we've invited six leaders to answer this question for the first edition of our Unusual Question series for founders: How do you hire well during periods of economic uncertainty? Among the respondents are Square Co-founder Sam Wen, who was pivotal in hiring the team’s earliest engineers during the 2008 downtown. We also hear from Leslie Crowe, who was early at Dropbox and helped scale the global sales team — experience that prepared her for steering TripActions through a period of massive hyper-growth during a short but punctuated bust cycle following the onset of the pandemic.

Leslie Crowe

People and Talent Partner, Bain Capital Ventures

Previously: Chief People Officer, TripActions; VP of Talent, MuleSoft; sales and operations leadership positions at both Dropbox and Google

When I joined TripActions in 2019 as the Chief People Officer, we were experiencing the very definition of hyper-growth — hiring approximately 1,000 people my first year while “building the plane while flying” and trying to put in the right infrastructure to scale properly. 2020 started with an even more aggressive growth outlook, but by February, travel ground to a halt, and by March, we were laying off more than 20% of the company. Yes, hiring stopped momentarily, but we soon realized we had critical areas of the business that we needed to invest in (for example, our payment and expense product, Liquid — unsurprisingly, people still need to expense things during a pandemic!). 

A few general thoughts about hiring during this time, whether you’ve been hit hard by the downturn or even if your business is still growing and things are great:

• Focus — this seems obvious
Narrow in on the most critical areas of your business to invest and put your energy there. Think quality over quantity, which seems like a luxury after the last few years!

• Downturns are prime time for building your best team
Competition for talent is much less fierce than it was over the past few years. Use that to your advantage! Maybe your team isn’t growing a ton, but you can use this as an opportunity to upgrade your talent and make sure the right people are in each seat. 


Small startups especially have a much better chance catching the eye of great talent. Plus, the megacorps are no longer seen as safe, so people who may have been attracted to FANG stability are now more open to absorbing more risk for more reward. In the same light, if budget is an issue, use this as a time to bet on an up-and-comer. Yes, they may need a bit more time to ramp, but that time exists now, and the impact of a high-trajectory hire can be astronomical.

“If budget is an issue, use this as a time to bet on an up-and-comer. The impact of a high-trajectory hire can be astronomical.”
— Leslie Crowe

• Refine your pitch 

If you were selling the proverbial Silicon Valley dream before (“10x this year and you’ll be on the NYSE podium in a few years!”), you’ve already probably realized you need to re-evaluate your pitch. Take time to figure out what you are really offering candidates — career development? An efficient business operation? A meaningful mission? Narrow in on the small set of things that you believe you can offer and that will attract the right talent to your company.

• Use this time to become great at hiring
The last few years were generally characterized by frenetic hiring, and there’s no way to do that perfectly, arguably even well. With hiring slowing down, spend time to get your infrastructure in place — build a set of effective, scalable hiring processes, put in the right systems, build your org architecture, and refine your employer brand materials, so that you’re ready to go when things pick up. A downturn is the easiest time to implement change — don’t let the opportunity pass you by. Your future self will thank you.

• Don’t get woo-ed by fancy logos on people’s resumes
At BCV, we’ve worked with a lot of founders who are pretty excited to get access to talent from Google, Meta, etc. post-layoff. But you really need to dig in to find the people who can build 0-1. Digging in on level of ownership, scope, scrappiness, etc. is important when you screen.

• Be clear about compensation

It may take a while for candidates to adjust to market changes, so make sure you and the candidate are on the same page about comp expectations upfront. If you have resources to get updated compensation data from tools or your personal network, leverage it and always map to your direct peer companies. Competition is always going to be fierce for top talent in certain functions like engineering. 

Sneh Parmar 

CEO & Co-Founder, Lucky

Nafis Azad

Co-Founder and CPO, Lucky

Instead of viewing hiring during a downturn negatively, we’ve found that it presents many opportunities. Here are a few things we’ve learned:

• Experienced candidates are excited about startups
During a downturn, larger companies may lay off talented people or freeze their hiring.
As a result, we gain access to high-quality candidates who might not have been available during previous cycles. We’ve found that the stigma associated with those laid off by big tech companies is often untrue. In fact, we have discovered interesting and enthusiastic candidates who are excited to take on early-stage opportunities in this market, especially at the senior level. 

That said, it’s important to avoid hiring someone with an impressive big tech resume who does not fit your company culture, as this can be costly and may not align with your operational style at the early stage. Instead, we look for a specific type of candidate who has the structured brilliance of big tech while also having the innate desire and adaptability to succeed at our startup.

“We look for a specific type of candidate who has the structured brilliance of big tech while also having the innate desire and adaptability to succeed at our startup.”
— Sneh Parmar and Nafis Azad, Lucky

• We hire new team members only when our existing bandwidth is exceeded
This forces our current team to operate lean and manage cash more efficiently while learning to execute at the highest level. This approach simultaneously develops a culture of excellence while avoiding over-budgeting for hires.

• We only look for candidates who are better than ourselves at the roles we want to fill
This approach enables our team to become fundamentally more skilled as we grow, as we are bringing in only the best talent who can educate our company on new ideas and best practices.

Sam Wen

General Partner, Green Visor Capital Management 

Previously: Co-Founder, Square

I'm not hiring during the current downturn, but I can offer these insights and a hypothesis worth trying: focus on a few high-quality hires and plan early to develop talent, rather than recruit it. This will be a superpower you'll need to develop in the long run regardless, but given current conditions, I believe that you must invest into this earlier.

• Quantity ≠ quality
The current round of tech layoffs are creating larger pools of potential hires, but the average quality is lower. This will mean that hiring will be more time-consuming than in the past.

• 2008 is not 2023
This economic downturn is not benefitting from a large influx of talent. In the 2008 financial crisis, tech benefitted from the availability of high-performing consultants, quants, and bankers losing their jobs due to company collapses. Tech has no such luxury this time around since it's tech that's been hit the hardest.

• Generalists are always a good idea
Required technical knowledge is both shallower and broader. This means for most cases, hiring someone deeply technical is not necessary. This isn't a result of the downturn but more of a result of steady progress that helps engineers, analysts, and product people be more productive. Generalists have always been a good investment, but under current market conditions, they are even better.

Sandhya Hegde

General Partner, Unusual Ventures

Previously: EVP of Marketing & Growth, Amplitude

Hiring well in a downturn is a true test of how well you understand the strategy your company needs to grow efficiently. Your investments need to be aligned to the best opportunities — impossible if you don’t know what those are. 

A memorable example for me is when there was a big market correction in 2018 while I was leading marketing and sales development at Amplitude. While the advice we received from veteran investors was to simply make cuts and freeze hiring across the board, there was a lot of nuance in how our planning and the market reality actually played out.

Turns out, the demand for deep product analytics is stronger in some customer segments during tough markets. It might take longer for sales cycles to close, and ACVs might be negatively impacted, but new opportunities also emerge. This meant that the way we organized our sales team needed changes. Instead of doing a simplistic freeze/reduction across the board in sales, the right answer was to increase the ratio of SDRs:AEs in some pockets. This also gave us the opportunity to bring some great new sales talent into the company that was pivotal on our strong growth in the years to come.

My takeaway from this experience was to always approach hiring strategy from first principles, whatever the market conditions are. Taking just a simplistic “tighten belts” approach might help you survive but doesn’t help you thrive. In particular, you need to answer three questions:

1. What does a downturn mean for your existing customers and potential new customers?

2. What changes do you need in your product and GTM strategy to map changes in the market demand?

3. How can you raise the bar for the quality of team and new hires you make to increase the talent density in your organization?


Taking this first-principles approach as a leader during a downturn will ensure that you don’t eliminate jobs needlessly and at this same time, create an opportunity for your company to lap competitors who confuse their lack of strategy for austerity.


Apeksha Garga 

VP of Design and Marketing at Wealthfront

Previously: Principal, IDEO


• First and foremost, all candidates need empathy and compassion

In the last six months, many people lost jobs, had offers rescinded, or saw their colleagues and friends lose jobs. People are insecure about their job safety. Some may have lost some self-confidence even though they intellectually understand that it was due to the economic climate that led companies to cut costs and lose employees. They may feel a lot of pressure to find a job in a market where there aren't many available and the competition is intense, which can lead candidates to underperform in interviews. Some may be facing severe stress because of their financial situation or immigration status, and need to find a job urgently. 


If you are a hiring manager, it’s important to be sensitive to the emotional state of candidates and approach the interview with empathy, keeping the candidate context in mind. An interview evaluation is most successful if the candidate represents themselves and their work from a place of confidence, and a hiring manager can play a huge role in making them feel supported.


• A shift from optimizing for risk to purpose first

I believe that very few people truly choose a high-risk, high-reward job, and even fewer do so during times of flux and uncertainty. I also believe that the majority of people care more about the size of their paycheck, and peripherals like brand hype, perceived resumé value of a company, and comfort from benefits rather than company mission and purpose. This is why it will always be very hard for smaller, private companies to compete for the best talent. 


During the pandemic, this problem was elevated. Many pre-IPO companies had layoffs, and I consistently heard from candidates that they wanted to work for a mission-driven company, but first and foremost, they were looking for job stability. Joining a private company felt like too much risk, and many ended up working for a FAANG company. In the last eight months, tech companies of all sizes — including FAANGs — went through large layoffs, and this really broke people’s mental model of large companies as a safe harbor. 


The positive side effect is many people are now taking a much closer look at companies and actually prioritizing purpose first and asking themselves what they would truly find meaningful to work on. They are much more interested in learning about the business model of a company and if it’s sustainable in the long term and aligned to build a customer-focused business. I’ve had candidates specifically tell me that they don’t want to consider businesses that are very dependent on ad revenue.


• Hyper-vigilant about mission fit

At the same time, there are also many people who are very fear-driven, understandably so, and are applying to many companies with relevant roles to increase their odds of landing a job soon. As a result, I’m seeing a lot of applications from people who barely know what we do and haven’t spent any time on our website to learn about us. In a startup, and especially at a very mission-driven company like Wealthfront, it’s incredibly important to hire people who genuinely care about the mission and will be motivated and resilient in tough times. 


Given the volume of interest in open roles right now, we are filtering out candidates whose applications don’t signal genuine interest. I take a lot of interest in sharing with prospective employees how we are thinking about the future and where our biggest opportunities and challenges lie, but I expect them to be informed about what we do today. 


• Leverage your position of strength 

If you are a startup hiring right now, it’s an incredible time to hire great talent. The simple fact that you're able to increase your headcount right now should be a very positive sign for candidates as well. It’s likely that your business is growing well, it’s built to weather storms, may have very healthy operational margins, is a profitable business etc. There are a lot of terrific candidates looking for jobs, and it’s a great opportunity to really dial in on exactly what you’re looking for across many dimensions — level and type of experience, specific areas of strength, values and mindset. To win these candidates, you should leverage this opportunity to explain why your company is still able to hire, speak to the strengths of your business, its operational philosophy, and inspire further trust and confidence in the long-term health of your business. 


Looking for more advice? Read How to recession-proof your startup

All posts

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

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