Brad Feld

Tag: hiring

Chris Moody, president and COO of Gnip, is back with a guest post in his Moody on Management series. Following are Chris’ thoughts on negotiating compensation with a prospective employee. Enjoy and comment freely!

In my last post, I provided a few tips for job candidates when interviewing at a startup.  This week I wanted to cover a simple process for hiring managers to follow when communicating with candidates about salary requirements.

There is the old saying that people spend more time planning their vacation than they spend planning their retirement.  I’ve found the same concept sometimes applies to job candidates when thinking about their compensation requirements.  As the hiring manager, you need to ensure that a candidate has fully considered their compensation needs before you make an offer.  Over the years, I’ve refined a simple and effective approach to facilitating this discussion.  I’ve used this technique countless times with great results.  The process starts with an email to the candidate:

“Dear Candidate,

From a skills and values standpoint, it seems like we are both excited about the possibility of you joining our company.  If you agree, the next step in the process from my perspective is to determine if we are aligned from a compensation standpoint.  As such, it would be helpful to get the following information from you:

– Current compensation.  Please breakout your base salary from any variable compensation if applicable.

– Your view of your current compensation as it relates to your next opportunity.  It is particularly helpful if you provide this feedback by selecting from either

a) I believe I’m fairly compensated and would anticipate making the same salary at my next opportunity

b) I’d be willing to take less for the right opportunity

c) I feel I’m currently under valued and looking for an increase of $x in order to be excited about my next opportunity.

If it works for you, I’d prefer to have this communication via email.  Over time I’ve found that putting this stuff in writing helps people think about it more before responding.

Love,

Chris”

Of course there are no right or wrong answers.  The goal here is simply to get a clear understanding of how the candidate is thinking about their future compensation by using their current compensation as a frame of reference.   Best case, the candidate’s expectations align with yours and the offer moves forward with a high probability of success.  Worst case your expectations don’t align but you now have a thoughtful starting point for negotiations if you still want to move forward with an offer.

A couple of additional points:

1) Even if the candidate has expressed salary requirements during the screening process or during your discussions, I strongly recommend you have this written conversation as the final step before you make an offer.  For example, perhaps your conversations along the way changed their perspective on salary requirements for the position.

2) The key to this approach is to do this communication in writing.  I know it can seem silly or impersonal, but it makes a huge difference in terms of requiring people to give thoughtful answers instead of answering on the spot.

Before using this approach I had more than a few occasions where candidates indicated verbally that they wanted $x, we offered $x, and then they responded with “I was thinking about it more and I really need $y to feel good about joining”.  Once you hit this situation, it puts both parties in an awkward position and it can be hard to recover.  You can avoid this potential pitfall with one simple email.

Oh, by the way, Gnip is hiring!


My long time friend Chris Moody, president and COO of Gnip, has offered to write some guest posts on management – we’ll call the series Moody on Management. In addition to being an outstanding early stage / high growth executive, Chris has made a study of management in startups and is extremely thoughtful about what does and doesn’t work.

His first post is aimed at anyone looking to get a job in a startup and talks about how to be effective at interviewing for a job. Feel free to weigh in if you have other “Stop, Don’t, Nevers” or “Pleases”

I love interviewing people to work at Gnip.  Unless I’m having a really crappy day, I enter each interview full of hope and optimism.  I’ve done countless interviews in the last 20+ years and I can easily slip into autopilot mode if I’m not careful.  In order to avoid this trap, I mentally prepare by reminding myself “today could be the day I’ll meet the next great team member.” I’ve found this mental pep talk helps remind me that there is no better use of my time than investing in the interviewing process.  In other words, the next interview could be a company game changer and I need to be 100% engaged.

Most interviews don’t directly lead to someone joining our company.  Often the person doesn’t have the right skills or experience.  There are plenty of cases where it becomes clear to the candidate that we can’t provide them an opportunity that meets their interest/needs.  Both of these outcomes are normal and healthy.  Unfortunately, I often find another outcome can occur which is frustrating and deflating.  This situation occurs all too often when a person is so poor at interviewing that we’re unable to determine if there is a potential match.  I’ll invest up to an hour in an interview trying to peel back the layers.   However, I’m frequently unable to get to a substantive layer of discussion that will help both parties determine if there is a potential match.   I’ll leave these interviews thinking, “Maybe that person was great, I’ll never know”.   Over time, I’ve started to referring to these as the “who knows?” interviews.

The good news is that I think job candidates can follow some simple guidelines when interviewing at a startup that will help avoid the “who knows?”

Stop, Don’t, Never

  • Stop selling and start engaging.  In order for this to work, we both have to determine if there is a match.   The best way for us to determine the match is to have a thoughtful/engaging discussion.   If the interview process only involves me asking questions and you giving answers that you think will impress me, we’re going to waste a perfectly good hour.
  • Don’t talk in sound bites and buzz words.  You might think they make you sound smart, but they don’t because they lack substance.  We need to have a real discussion.   If you find yourself rehearsing answers before the interview even starts, we’re almost certainly going to have an unproductive meeting.  Speak from your heart and your experience not from a script.
  • Don’t agree with everything I say. I’m wrong… A LOT.  I once went on an all beer and water diet for a week.   Challenge me.   Startups thrive when each person hired is smarter than the person hiring them.  If you agree with everything I say in the interview, I’m left wondering how are you going to contribute when we are working together trying to solve tough problems.
  • Avoid talking about past individual results.  I know this sounds unconventional, but as the interviewer is often very hard to contextualize how these results might translate to our business.  I’m much more interested in discovering what you learned in your last job that we might leverage at our company.  For example, telling me you increased sales by 300% isn’t that helpful.  Telling me how you learned to handle customer objections around price could prove to be very useful.

Please

  • Be honest
  • Ask lots of questions about stuff that matters to you.  Reviewing a company’s web site before the interview will give you some reasonable background. But, I can assure you that no company web site answers all the questions about a business.    It is often the case that an interviewer can learn more about the way someone thinks from the questions they ask than from the answers they give.
  • Ask tough questions.  You are considering investing a huge portion of your waking hours at our company.   Think about the risks and the downsides of the company or the role and freely express any concerns.
  • Figure out if our company is a good culture and values fit for you by asking tough situational questions based upon your past experiences.  Questions like “Can you give me an example of how the company handled a situation where a customer had a bad experience with the product?” can be very revealing about how the company acts/thinks.

Ask CEOs of successful startups about their biggest challenge and they’ll often cite the inability to hire great people.  My theory is there are plenty of great people, but many are just terrible at interviewing.  Hopefully these few tips help lead to more great matches down the road.  By the way, Gnip is hiring!


Chris Dixon had an excellent post yesterday titled Recruiting programmers to your startup. The post, and the comments, are full of super useful stuff that every entrepreneur should read carefully.

I sent the link for the post out to the Foundry Group CEO email list and it generated a great discussion thread, including one of the companies sharing their full day interview / evaluation process which includes a four hour coding exercise. Among the feedback was a great short list of four addition things that Niel Robertson, the CEO of Trada (and an amazing programmer in his own right) has learned over the years.

  1. Be careful who you pick to do the interviewing. You want to showcase your best engineers in the process balanced with those who are good interviewers (which can be wildly different)
  2. Have an awesome engineering process that you are pros at and can showcase in the interview. We lost a great candidate because our process was in flux and he sussed out our eng management wasn’t committed to the new way
  3. Program with the person live. You can do this on a whiteboard or on a computer. We’re going to move to the on a computer version. Over and over I’m hearing this is the best way to learn someone’s skills
  4. Reference check – oh man how many times do I have to learn this lesson.

Trada, like many of the companies we’ve invested in, had spectacular growth (both revenue, customers, and headcount) in 2011. They, and others, continue to aggressively search for great software developers to join their team – when I look at the Foundry Group Jobs page I see well over 100 open positions for developers across our portfolio and I know this list undercounts since not all of the companies we are investors in are listed there.

It’s an extremely tight hiring market for software developers right now. I expect this to continue for a while given the obvious supply / demand imbalance for great people. So – if you are hiring – read Chris’s post and be thoughtful about how you go about this. And, if you have comments for him, me, or Niel about how to do this even better, please offer them up!