I learned yesterday that the referral bonuses for engineers at some NYC startups are starting to get huge - one prominent NYC startup is now offering its employees $10,000 for each successful referral. This is a classic “throw money at the problem” solution to attracting engineers, and, while economic incentives certainly do impact behavior, I doubt it’s going to help enough.
Hiring engineers is hard, hiring great engineers is harder, and hiring great engineers at scale is impossible if you insist on doing it wrong. Still, I don’t want to write Yet Another Blog Post On Hiring Engineers, so today let’s talk about what I’m going to call the Recruitment Anti-Funnel.
So much of hiring these days is focused on the funnel - increasing a referral bonus, for example, is meant to increase the number of applicants at the top of the funnel, using external recruiters is meant to be a way to get a higher-quality funnel, faster turnaround time from interview to offer is meant to reduce leakage from the funnel, etc. The thing that I see these days is that so many startups are doing so many things outside of the funnel that just broadcast the message “Good engineers should not work here,” and I don’t think they have any clue that they’re doing it.
In no particular order, here are the Anti-Funnel patterns I see over and over again.
You’re churning through the good engineers you already have. This is an oft-overlooked factor, but many big startups in NYC have burned through a number of great engineers, people who have moved for any number of reasons, usually along the lines of unhappiness with the company, the product, or the team. Every time you lose a good engineer, you’re putting someone out into the marketplace who is willing to tell other engineers to avoid your company. This message transmits over drinks, at meetups, in IM conversations - “Oh, you’re talking to X? Ryan worked at X for 8 months and said they have no clue, I’d stay away from there.” There really is a guild of software (and it exists outside the valley!), and the members will warn each other off of joining a company that’s burning through good people.
Really great technology startups fight tooth and nail to keep their good people. If a good person is unhappy, that is more likely a problem with the company than a problem with the person.
You’ve hired an engineering team of “band-aids”. Many non-technical founders, stuck between the rock of “can’t find any good engineers” and the hard place of “have to ship product to keep the board happy”, take the cheap way out and fill seats with any engineer who can string together three lines of PHP. You can convince yourself that this is just a band-aid, something to get you through until you can start to find some stronger people.
Hiring for band-aids is like choosing the Dark Side of the Force: it’s quicker, easier, more seductive, and once you start down that path, forever will it dominate your destiny. It’s a well-known startup adage that B players hire C players, but we less often consider the inverse; I’ve never met an A player or even a B player who wants to join a team of C players. Your band-aid hires become the strongest factor in discouraging strong people from joining your team.
Great talent attracts great talent; bad talent repels great talent.
You’re broadcasting your complete lack of understanding for how hard it is to build software. I am constantly meeting with entrepreneurs who show me a development roadmap that should take two years to build, then tell me that if they can hire two or three great people it should all be done in six months. No one pushes as hard as I do to get more things done more quickly, but the practical reality is that software is hard, and until you’ve been through the cycle of building big systems, you really can’t appreciate how hard it is.
This pattern is particularly poignant in early stage startups, when the founders are not technical and don’t have good help in hiring for engineers. When you demonstrate to engineers that you have unrealistically ambitious goals for what they should be able to do, you’re advertising to them that coming to work for you means endless nights and weekends trying to live up to ludicrous schedules.
Like I said, there’s no good way to learn how hard it is to build software until you’ve built software. If you want to at least get a feel for it, I highly recommend the book Dreaming in Code - it’s a great non-technical account of how Mitch Kapor, the creator of Lotus 1-2-3, set out to build a new open source software product with a stellar team and tremendous backing, and, for all intents and purposes, failed.
If you don’t understand anything about building software, you can’t attract people who are going to build software.
You have shitty office space. This Anti-Funnel pattern is certainly not as lofty than the others, but it’s pragmatic and it’s real. Working conditions matter a lot to good people, and when they come in to interview, they are evaluating your space as somewhere that they will spend 9 to 12 hours a day. No one is saying you have to have offices like Google, but many great startups have great office space. It is expensive, and, if you’re looking at a straight P&L, it looks like a waste of money, but it is a lot cheaper than $10,000 referral bonuses.
Good office space is expensive when viewed as an administrative cost, it’s super cheap when viewed as a recruiting cost.
Now of course, to build a great engineering team, you need to optimize your hiring funnel - you’ll get no argument from me about that. My point here is that you could have a perfect hiring funnel, but if you’re following these Anti-Funnel habits, the biggest referral bonuses in the world won’t be enough to help you build the team you need.