September 23, 2012

Thoughts on Recruiting Developers at Early Stage Startups: Understanding the Job Market

Shortly after leaving Microsoft to work on MarkedUp full time, my founding team and I joined an early stage accelerator here in Santa Monica. We’ve gotten a tremendous amount of value from it so far, and the directors of the accelerator have done a great job helping me prioritize and do all of the things I need to do in order to launch MarkedUp properly.

One of the things they’ve had us do is gradually step up our recruiting efforts, and for the little we’ve invested into the recruiting process so far the results look pretty good.

Most startups at this early stage are founded by 1-2 people who have unique insights and connections into a market, have done some work to validate a new business concept in said market, and are now trying to form a team to help them execute and eventually scale it. Usually the first hire a startup has to make is a founding engineer who can help them build a customer-ready version of the product.

MarkedUp is a little different. Our engineering team is the entire team, at the moment – I’m also our “business guy” in addition to being the technical lead and Erik, a founding member of our team, is 100% committed to technical endeavors. However, we still have to recruit developers! MarkedUp is solving a big, complex problem[footnote: MarkedUp provides in-app analytics for Windows 8 and WinRT developers. You can sign up for a beta at http://markedup.com/beta] – analytics and data visualization are problem domains with large technical surface areas, so even early on in the lifecycle of our company we have to expand the engineering team.

I’ve been asked a couple of times recently by founders in the first category of startup “how do you find and recruit developers?”

The short answer is “I’m still figuring this out, being new to running a startup myself, but here are some ideas.”

So in that vein, I thought I would share with a wider range of people how I try to recruit developers for MarkedUp and what I think is most important.

Take everything I say with a grain of salt – I’m new to running my own company and am figuring out much of this as I go.

Things You Should Know about the Market for Software Developers

Before you start recruiting, you should wrap your head around the market for software developers. Having this information will decrease the likelihood of you making an ass out of yourself when you start recruiting in earnest.

1. It’s an employee’s market – there’s far more demand for developers than there is supply.

The demand for developers has always been high since the PC revolution and the past few years have been particularly high. So what’s the practical implication for your startup?

The answer is that any competent developer in the US can get a six figure salary, with amazing benefits, from a variety of well-funded, stable employers. Before you even start recruiting you’ve already lost the battle of benefits and compensation.

So when you’re recruiting, don’t even bother leading with the promise of wealth, big exits, or any of that sort of puffed-up-chest nonsense. The reality is that most startups fail and if any developer evaluates the prospect of working for you versus their six-figure employer, you will assuredly lose on opportunity cost every time.

2. All of the competent software developers you want to hire already work for someone else. Not only do you have to convince them to join you – you also have to convince them to leave a paying gig. 

Let that sink in for a moment. How hard is it to leave a job? If you give a shit about what you do, then the answer is “pretty hard.”

Convincing someone to leave a gig, even if you have a great opportunity that is more interesting, is a challenge unto itself unless that candidate is utterly miserable with the state of things at their current job.

So, be prepared for a long, dragged-out process for each technical hire – you will have to deal with counter-offers, ludicrously good counter-offers even. Don’t hardball your candidates with “join us now before we raise money and offer you less equity” – keep them sold on the things that money can’t buy: working on projects that they find meaningful, working with people they like, learning new things, and so on.

3. The best source of “available” developers are recent graduates.

If you followed point #2 above, then what I’m about to say next should resonate: the best source of developers who are openly looking for work is recent college graduates.

Many of them get passed over by big software development shops like Microsoft / Google / et al because they don’t have enough time behind the wheel; this is exactly what happened to me when I was graduating from Vanderbilt with good grades, a successful freelancing track record, apps in market, and good recommendations.

On top of being available, recent grads have the absolute best risk profile for working at a startup. They have no obligations, no mortgages, no expectations of six figure salaries out of the gate – they just want to work on something cool and take home enough money to start building a life for themselves.

There is a downside to hiring recent grads, however: having no experience means what it means! You’ll have to invest a lot of time into training them all of the things they didn’t learn in school, which in some cases includes the ability to code.

Truth be told, I only recommend going the route of hiring recent grads if you already have a CTO or another veteran onboard who’s willing to train and coach them.

It’ll take a while before you can get an acceptable level of output out of a recent grad, but as long as you continuously invest in making your new hires better they will (1) stick around because they’re learning and improving and (2) will deliver output at startup speed.

4. It is phenomenally easy to start a company and raise money in 2012 compared to earlier years, and the most senior technologists who fit the risk profile for startups are able to start their own companies. 

One important facet that’s overlooked about the technology market for software talent, especially among startups, is just how easy it is for top-tier technologists to start and launch their own companies.

All of your prospective founding CTOs who are interested in startups and have an idea they’re really committed to could probably raise money and build a v1 product themselves; so how does this affect your ability to recruit?

It dilutes the market for talent – spreads the small slice of the Venn diagram of all developers who are willing to work for free on a high-risk idea across a much larger number of smaller companies. So what’s a startup founder like you to do?

Invest some effort into helping any talented developer who’s trying to build their own company be successful, because even if that developer is unavailable to help ease your pain now they’re someone you want to build a good working relationship with and maybe work together later.

I never try to steal someone away from a project they’re deeply, personally, and fully committed to, nor do I ever suggest something stupid like merging two totally irrelevant ideas together into one company just so we have more developers on the team. Recognize that recruiting is a long-running process – it takes a long time to find the right people.

It’s in your best interest to be someone developers trust, not a self-interested jack ass who constantly tries to poach them away from their passion projects.

“Pay it forward” is my advice here, and for your short term needs – don’t even bother with people who are trying to get their own projects started. If they decide to can their project, they’ll come and approach you if you’re someone they trust and would want to work with eventually.

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I’m going to write a second post on our philosophy when it comes to actually recruiting developers and what we think is important.

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I'm the CTO and founder of Petabridge, where I'm making distributed programming for .NET developers easy by working on Akka.NET, Phobos, and more..