***Managers: Many of you have questions on how to hire the best people without a recruiter's help. If that's you, read this:***

$100 product can change your life and your compan's trajectory.

I promise you this will be worth the 2-minute read.

Do you know what you NEED TO get out of each interview?

Hiring doesn't have to be hard, but it DOES have to be thoughtful.

Don't hire someone unless you are 100% on them. Get there by unlocking the POWER OF CHOICE and implementing easy, low-cost hacks to hire right.

By learning the tools of the recruiter, like how to source, you unlock the Power of Choice. Choice ultimately solves all of the hiring problems you will face during the first years of your company. You need to do some things that a recruiter does to unlock the Power of Choice.

I'm here to teach you - the hiring manager or founders or executive - the secrets to hiring and unlock the Power of Choice.

Building the right team is the biggest thing you will do as a manager. I'm here to give you a practical guide on how to do that when you don't have the luxury of a recruiter on staff.

Bootstrap Talent: Time Saving Guide to Hiring Right

Written for Operators, Managers, Founders, Executives and YOU

I wrote this because there isn't a definitive guide on how to hire written for the operator. Everything is inside-baseball recruiter talk. When Hiring managers don't have recruiting support, they need to execute on the minimal, most effective pieces to get hiring done right in as low time as possible.

Being the manager has its advantages. You can move fast, make decisions, and sell all in one unit. Recruiters can't do that. Advantage = You.

Recruiters spend their whole work day learning and improving how they hire, including how to best bring in talent and unlock the Power of Choice. Advantage = Recruiters. You can't afford to do that, so I distilled what they have learned into a simple guide focused on the stuff you can actually do in the time you have.

I wish I had this guide when I got my first big-kid job. Here is what I did wrong:

1. Didn't know what I was looking for. Wrote terrible job descriptions.
2. Other people on my team didn't know what I was hiring for. I wasted everyone's time.
3. I didn't know how to find the right people. I didn't have any pipeline, so I never unlocked the Power of Choice.
4. The great people I did meet, I didn't hire all of them. I failed to build the best team.
5. I didn't do reference checks. I paid for that months later when someone I hired didn't work out and I had to manage them out, which sucks.

That's just a sample! And I was a former recruiter. I knew what I was up against and I still made so many mistakes because I just didn't know how to recruit for my own team. I didn't have a guide to recruiting written for me, the operator. That's this guide.

Building a better team, makes you better. It's the key to success as a leader and a company.

That's the secret. I spoke with a big time VP of Engineering and I asked them what their secret was to being so successful at so many different high growth companies: Team. That was it. That's what separates player-coaches from true managers or leaders: Hiring. This individual spent 80%+ of their time hiring.  They were ruthless about it and took matters into their own hands even when there was a recruiting team. They spent a ton of time doing what was necessary. My goal is to get you those same results while continuing to execute. That's what you need to do and what I can give you.

If you hire the best team you can and things will become easier. I promise you that.But conversely, make some bad hires, and you are in micromanage and manage-out hell for weeks to months. That will kill your ability to execute and the overall output of your team.

Some managers never recover from a bad hire

Save time now by hiring the best people you can and avoid those people that just wont work out. The Power of Choice can eliminate hiring mistakes and bring in talent that you didn't know existed and that you didn't even know you needed.

There is a solution. Internal Recruiters have been plying this trade for 10 years now. There is a reason why every successful company has invested heavily in recruiting teams. That may not be you right now, and if thats the case, or if you want to just up your game as a hiring manager, Bootstrap Talent if your guide to the best team.

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Bootstrap saves you time on hiring the right talent.

Here's what I cover:


The Power of Choice: Great teams come from access and choice.

Laying the groundwork so you hire the right people: Mission, Vision and Values

The right tools at sub-scale: standing up your talent acquisition stack

Why you need to build a diverse team, and how

How to write the right job descriptions

How sourcing works, including how to negotiate with agencies, maximize inbound, leveraging marketing channels, and creating an effective referral program.

Boilerplate hiring process: An easy to implement and low time cost hiring process designed to get you hiring signal

How to close candidates

How to do due diligence: Reference checking and when to dig deeper

Bootstrap a simple onboarding process and unock the keys to employee happiness

How to hire your first recruiter

Why Bootstrap Talent?

Seed-stage Equity is for Suckers: Let's fix that.

The classic Silicon Valley success story starts at the seed-stage. A few people, in a garage in Palo Alto or unheated warehouse in Soma, working on ramen wages and dreams of a big equity pay out. It's part of the lore and part of the appeal of tech and startups generally.

The hard truth is that joining a seed-stage company is almost never a good idea financially speaking. I think the risk that founders take in starting a company is typically well compensated for, but the same cannot be said for early employees.

With that said, there are a lot of other reasons to join a seed-stage company, but equity needs to be fixed to ensure early-stage companies have access to all the talent they need.

Look: I don't want to be the Series B, recruitment tech exec ragging on seed-stage startups. I know how hard it is to hire great people at any stage, but especially at the seed stage.  The goal of this post is to start a conversation on how seed-stage startups, as a whole, need to think about seed-stage employee equity compensation. Seed-stage companies lack cash and need equity to be a motivator for talent. We need to fix it and make it compelling again.

Here are the problems with treating seed-stage equity the same way we treat equity at all other stages of startup growth:
  1. Grants are too small: Even 1% of equity at the seed-stage will get heavily diluted before there is an exit. Moreover, the risk at seed-stage, where product market fit is still a pipe dream requires much higher equity compensation for the founding team.
  2. Vesting doesn't make sense: It is very rare for a startup that is successful to have the same need for the generalist talent from their seed stage at the Series B+ stage. 4 years to vest just does not make sense for early employees and does not accurately recognize their valuable early contributions. Moreover a 1 year cliff also does not line up with early contributions by employees in the early days, some of whom may not make it the full year for reasons out of their control.
  3. 3-months to execute options post-termination is too short
  4. 10-year time period to execute options, whether employed or not, is also too short.
  5. Executing large grants of equity is costly and risky for employees
  6. Onerous terms to liquidate your equity: Some companies don't allow for individual secondary sales. You can only sell some of your shares if the company's board allows it, which is arbitrary.
  7. On top of product and execution risk, there is corporate oversight risk when the board only consists of founders or where the board is defacto controlled by only the founders.

Let's think of a rosy case: You picked the right seed-stage company! You raise an A and have some product market fit. You've just been diluted 20% and maybe just hit your cliff for your first 25% of equity. Your role changes, now you aren't a generalist but need to be shoe horned into sales or customer success. Series B comes around, yeah!  More dilution, another 20%. Now the new VP of Revenue needs to hire true sales people. Specialists. That isn't you. You get laid off in a strategic around of lay-offs. You now have 3-months to execute your options. Lets say you did get a big grant, maybe its 20-50k you need to lay out to buy your options. What do you do? Moreover, if you do hang on, most companies wont have an exit for at least 7 years. That's the mean, some (like the most successful) might not have an exit for 10+ years. You are going to need to execute your shares before there is liquidity.

Right off the bat, even if you happen to pick a winner, which is hard to do at the seed stage, there are a bunch of compounding factors that limit your ability to capitalize on the success of the company.

First, I don't think equity compensation is totally broken.  I think the way things are work pretty well for some Series A and most all Series B+ companies. I don't think at those stages things are really broken. Those companies also tend to pay much better than seed stage companies, so the equity is less of a factor. You have less risk because you are being paid real money as a base salary.

Second, I'm not a lawyer. I'm not even really a HR professional. Changing the way things are done will be hard and very costly for individual companies. We need what YC did with the SAFE: An open source, legally vetted set of documents for seed stage specific equity.

Finally, to riff-off of the first point: The ideas below are perhaps only ideas valid for your first employees. Those you hired right after seed up until you are raising or have raised a Series A. We need to solve for the very early risk-reward imbalance, not for all employees ever hired by the company. What I propose is a special set of terms just to attract top talent to the seed stage and reward them appropriately.

Solving for the size of grants:

A standard equity pool at the seed stage is maybe 7-10% of the company and it is almost never full utilized. You need space on the cap table to hire people, so blowing all of your equity is rarely sensible. A few folks will get 1%, most will get less than a .5%.

First proposal: Double the size of the initial equity grant pool and, likewise, double the average grant size for early stage employees.

VCs have to get on board with this to make it happen. In effect, it means less equity for founders and for the early VCs, but by creating materially larger grants, you will increase the ability to land top talent, while preserving cash, and increasing the chance of execution success. That is worth the cost.

Solving for vesting:

Early stage employees are living in a fast developing ecosystem. Every day matters. What happens in the first year, determines whether the company can raise another round and be successful. Equity should vest according to the value the employee is delivering at the crucial time they are delivering it.

Second proposal: Seed-stage employees should cliff at 6-months and grants should be vesting over 2 years.

VCs and founders will have to agree to larger grants that vest earlier which means more real equity will be going out the door. As with the first point, this will create better incentives for those first employees to join, de-risk the chance that future growth will limit their ability to stay at the company and earn their full grant.

Time to execute options post-employment:

The standard 3-months to execute options post-termination means that many employees will have a short window usually at still an early, risky stage of the company to execute their options.  Executing options takes real cash and is a real investment with real risk.

Third proposal: All seed stage equity grants should have a minimum of 7-years to execute their options regardless of whether they are employed or not.

This has already become fashionable at top companies in the YC network. It should be standard for at least all seed stage grants.

Time to execute options:

We have already seen some companies, like AIRBNB and Palantir, take a long time to reach a liquidity event with some employees who are still with the company reaching the 10-year mark on their initial equity grants.

Fourth proposal: Seed stage employees should be guaranteed a secondary sale after 5 years or have their initial grant reissued in full for another 10 years.

The above companies did right and were able to offer a secondary sale to early employees before their grants expired. It should be baked in early to communicate clearly to employees that their early stage grants will have a chance to be valuable if the company is successful but requires additional time for an exit. There are legal considerations that could be solved here (ISOs have a legal requirement of 10-years maximum to be executed). In lieu of government action, startups should be creative so that these arcane rules don't impact their early employees.

Executing equity options cost real money:

If you are early and you got a large equity options grant, you still need to fork over the strike price to take possession of the common shares.

Fifth proposal: Companies should provide a vesting bonus to account for the cost of executing their shares as well as for the tax consequences of the share execution to employees who make it to the end of their grant or who are terminated before the end of their grant in good standing with the company.

The tax costs are real money, but the cost to execute the shares goes right back into the coffers of the company when they are executed. Some employees will choose not to execute and just take the cash, in effect getting the 409a valuation of their shares as compensation for their early contribution. In those cases, the company still gets the equity back which will likely be more valuable than the cash bonus.

No right to sell equity on the open market:

Many companies do not allow their employees to sell their equity outside of board sanctioned secondary sales. This means that early employees are forced to have material wealth locked up in equity they have no control over.

Sixth proposal: All seed stage employees should be allowed to sell their equity at-will with limited and previously enumerated limitations of who they cannot sell to (like a competitor).

I get that the board and C-level want to have clean cap table, but I think this completely disregards the needs of the early employee to realize value from their earlier forgone wages. Perhaps this consideration is only for early employees to limit the impact on the cap table (which will likely be just 10-20 folks), but allowing for employees to actively seek buyers for their equity will greatly increase the perceived value of early-stage equity.

Adequate board oversight:

Early companies typically have informal boards, which can impair the fiduciary responsibility of the board to ensure the company is being run with appropriate oversight.

Seventh proposal: Early stage companies should have balanced boards made up of 50% founders and 50% current employees or investors.

Boards are tricky and can slow down execution. At the early stage, there are benefits to having few people being able to make decisions and move quickly. With that said, boards need to provide oversight and in lieu of external board seats that constitute at least 50% of the voting board members, early boards should be augmented with senior non-founder employees with 1-2 year term limits.

There are implications to all of the above and some things may literally not be possible. Going with the kitchen sink will have consequences that are unforeseen and could cause issues with the viability of the company. With that said, seed-stage equity needs to change. Seed-stage employees are foregoing cash compensation and taking on serious risk for the privilege of joining something new.  They need to be more adequately compensated with better equity terms, while being modestly de-risked.

If we can change seed-stage equity grants, will have access to better talent and more startups will be successful. More early-stage employees will be able to leave and start their own companies creating fertile ground for more innovation. It needs to happen or else the FAANGs and other behemoths will suck up the best and leave founders with only the scraps, when what they need most in the early days is the best to succeed.

We can fix this. I needs to be fixed.

Who am I?

Trent Krupp

VP of Operations at Triplebyte. Founded an agency in my 20's, sold it to Hired and became employee 5. Recruited for Atomic (VC), Credit Sesame and MakerSights. Helped the founders of recruitment tech startups Shift.org, Terminal and Beacon in the early days.

Decision-making vs Execution: Whats the difference between being a contrarian and being misaligned?

The people in every organization I have been in have had some recalcitrance to saying what is on their mind - especially publicly.  Tools like TinyPulse and Lattice try to create ways to give feedback anonymously, and that is useful. All feedback is useful. But feedback is most useful when it is vocalized face to face.  Then a conversation can happen. The more people in your organization speaking their minds the better the decision making.

Why do people fear speaking their mind?

There is absolutely a power dynamic at play. That is something management needs to be good about acknowledging in order to create a transparent, risk-taking culture and I wont get into that in this post (though it is very important). Beyond that, and the crux of this post, is a misunderstanding of what the expectations are for folks in the decision-making phase vs the execution phase.

So why are some employees celebrated for being contrarian and others are seen as renegades? It comes down to when the employee is pushing back and then ultimately in how that manifests in their execution. Understanding when decisions are being made and when they have already been made (and it is now time to execute) is key to understanding the distinction.

Before going forward, I want to state, that differentiating decision making and execution is a skill and knowing how to be a persistent contrarian in decision-making processes is a super power. It is not necessarily intuitive. So while the concepts can seem easy, in practice they can be tricky to apply, but learning these skills is a must for management and other strategic roles.

Decision Making

First, let's talk decision making. Making decisions is very important, especially for small companies. In a small company, changing tack is pretty easy, but hesitation is deadly (as I blogged about a while ago in "Does your organization make decisions?"). In all organizations, decisions need to be made in order to move forward, but startups specifically need to make decisions more than they need to make the right decisions; if that makes sense.

Decisions can be big or small. Top to bottom or bottoms-up. They can be the color of a button or the purpose of your organization. All of these decisions need to be made, with the bigger the decision typically having a longer decision making cycle and often require more people to be involved.

As an employee, it is key to understand when the room is in a decision making phase. In this phase, it is incredibly valuable to be a voice of dissent, even as just a 'devil's advocate".  This input can help shape the decisions being made and help the organization make better decisions. This can be a super power for an employee and can quickly garner notice from the top of the organization and lead to promotions into management or other strategic roles.

Decisions need to be made. Decision-makers in a company are doing their best to make decisions with the data available to them. Often times these decisions are wrong.  It's important to keep prospective and know that the most important thing is that decisions are being made, communicated and executed on.

Communication

Without the right communication, nothing happens. The tricky thing about communication is that in the early days (when the organization is small) communicating decisions is pretty much free.  Decisions are made as a company, and context is easy to come by. As an organization grows, communication becomes more costly. It is not uncommon for decision-making to be the easy part and communicating the decision being the hard part (and requiring more time and effort to do well).

While working remotely, it makes sense to regularly document and share out decisions using Slack or email. Once you are back in an office, make sure to start putting rigor around communicating decisions whenever you add a layer of management.  Every layer of management will require additional effort to communicate decisions.

Execution

Once the decision is made, it is time to execute on that decision. With a lot of decisions being made, you will often need to "disagree and commit" which is an essential tool for any executive or strategic leader. Dissension is key in decision making but alignment in execution is 100% necessary for a functional organization. As organizations get larger it becomes more common than not for any given employee to be executing on decisions that they don't 100% agree with. That is okay and as organizations and remits grow, providing input into many decisions but deciding on few of them is to be expected.

When the organization is executing it is no longer productive to debate the decision that was already made. Down the road, once something has been tried, the decision-making window opens back up and a new path may be set, but while in the execution phase, not following through on the decision means that the decision was never attempted and the desired learning and output from that decision will be unlikely to materialize. With many folks in an organization, some executing and some not, the organization will flounder and eventually fail. This is the most common type of organizational dysfunction.

I want to note that within executive teams or leadership circles, it is not productive to harp on past decisions made by a colleague. Chronic poor decision making is noteworthy and should encourage exploration by leadership, but I want to caution against introducing conservative decision making or decision-making paralysis by persistently criticizing decisions already made. Disagree and commit means letting past decisions go and looking toward the present and future.

During the execution phase, the focus is on execution, driving alignment and learning.  Anyone in an organization can help in driving alignment. In organizations that have recently grown or where the team fabric is just being knit, there will be gaps in the communications of decisions. In this case, identifying these gaps, seeking answers and proactively sharing information on a decision will help drive alignment during the execution phase. This type of behavior is highly valuable. Also, while executing, think about feedback as objective reporting: Removing any priors, and focusing on dispassionate observation or "What am I witnessing right now?"  That will feed into future decision making.

Where relationships between employer and employee get fraught is in the Execution phase: A decision has been made, and for whatever reason, the individual is not able or willing to carryout that decision. Sometimes this is a failure to communicate, and assuming the best intentions of others is the best first course of action. But in cases where communication can be ruled out, then the individual is likely misaligned with the decision and by extension the organization. To an observer, this may appear as if their colleague is just voicing their dissent, but what is actually of concern is a lack of execution on a decision already made.

Many times, a failure to execute by an otherwise competent employee is a conscious or subconscious recognition that they no longer believe in what the organization is doing or the direction it is going in. To anyone experiencing this, that's okay! That happens all the time. If that's the case, talking through a way to exit is the best course of action for everyone involved.

Take Aways:
  1. If your organization isn't making decisions, thats a red flag.
  2. If there is a decision being made, speak freely.
  3. When a decision is made, execute your face off regardless of whether you think it was the right decision.
  4. Help drive alignment and provide observations (stated as facts) about what you are seeing during execution.
  5. Repeat 2-4.

Hope this helps! Bring on the dissent and then let's all get down to executing.

Who am I?

Trent Krupp

VP of Operations at Triplebyte. Founded an agency in my 20's, sold it to Hired and became employee 5. Recruited for Atomic (VC), Credit Sesame and MakerSights. Helped the founders of recruitment tech startups Shift.org, Terminal and Beacon in the early days.

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