In this week’s “Venture Voices,” KrASIA sought out three venture capitalists who specialize in early stage investments to hear their thoughts about the most important hiring practices in a startup’s nascence.
Here’s how Michele Daoud, a partner at Monk’s Hill Ventures, weighs the cost of making the wrong choice early on:
A bad hire is more costly than no hire at all, and this is especially true for key positions, which are usually the most urgent and crucial ones to fill. While we all know that hiring the wrong person can have seriously negative consequences on the product, customers, and other employees, it is tempting to ignore a candidate’s shortcomings when the need to fill a role feels acute. To mitigate the temptation to move forward on this slippery slope, make it a point to anticipate hiring needs for key hires and start looking for the right person early. It sometimes takes months to find the right fit, so plan ahead.
Daoud believes that young startups should lure the best talent by emphasizing the meaning behind their work:
As a young startup competing for talent with tech giants and cushy jobs, forget about competing on compensation; you won’t be able to come close to the salaries that your top talent is being offered elsewhere—and you shouldn’t! Compete with meaning, not with compensation. Take the time to communicate your vision and what you are all working towards. Make sure all your employees see the picture that you’re painting, and how they are individually contributing to get there. Share customer stories abundantly to help your employees connect their lines of code or excel sheets to the real lives that are being impacted out there daily.
Give your employees more responsibilities than they would get elsewhere, and they will join you for the experience rather than the package. Also, look for complementary skills, not clones of who you are. We all have a bias towards people that we can relate to, but diversity is a real competitive advantage. Look for people with similar values but who think differently, who you will disagree with frequently, who come from different walks of life with their own perspectives and biases. They will stretch you beyond what you had anticipated.
Over in Indonesia, Gitta Amelia, a general partner at Everhaüs, echoed Daoud’s sentiments:
The most important hiring practice for early-stage startups is to recruit and retain those who believe in the mission and vision of your startup. Chances are that you will not be able to compensate them fully for the work they are doing, so the motivation for them to perform and contribute to your company needs to come from somewhere else. You will also face a smaller turnover by selecting employees who understand what the company is trying to accomplish. Turnover at the early stages can kill a startup as dealing with administration takes away energy and effort from developing your product and making sure it goes to market correctly. That being said, be careful not to award equity too early to employees. Implement the right vesting schedules and cliffs if you find it necessary for certain key hires.
Shiyan Koh, a general partner at Hustle Fund, points to concrete definitions and clear expectations as a point of departure:
The most important hiring practice for early stage startups is a clearly defined job scope for the role you are looking to fill. This includes things like responsibilities for the persons, the results you expect, and the anticipated accomplishments in their first three, six, and nine months.
To circumvent potential knowledge gaps about the role—either because you aren’t from this field of work or haven’t hired for this role before—it is then necessary to source for the best manager or salesperson through your network. After interviewing them, you can develop a mental model or matrix of skills and experiences exemplified by these folks, which can then be used when writing your job description, filling your pipeline, and scoring your candidates!
Michele Daoud is a partner at Monk’s Hill Ventures. Daoud started her career as an operator for small and large tech firms. Her decision to delve into the venture capital industry was primarily driven by a strong desire to play a role in shaping the Southeast Asian tech ecosystem. Daoud started her journey in the region in 2009, when she spent a few months working in Jakarta as a consultant for a telco operator. She was blown away by the sheer scale of everything and the energy on the streets of Jakarta, and realized that tech startups have huge potential in Southeast Asia to help people lead a better life. Daoud’s role as a partner means she discovers great entrepreneurs to work with, investing in them and working alongside them as they grow their company. Daoud has been working with startups in various sectors, like education, healthcare, financial services, logistics, and more.
Shiyan Koh is a general partner at Hustle Fund, which is a seed stage venture capital firm that was founded in 2017 by two former general partners of 500 Startups. Hustle Fund invests in startups in the US, Canada, and Southeast Asia, with the primary goal of bringing meritocracy—an emphasis on potential impact rather than Ivy League degrees—back to the fundraising process of early stage startups. Within the first year of operations, it invested in 40 startups.
Gitta Amelia is a general partner at Everhaüs, an Indonesian early stage venture capital fund focused on tech companies in the country. It most recently participated in the USD 1.3 million seed round of Outpost, a co-working and co-living space based in Bali. Amelia concurrently holds the position of investment director at Frontier Data Capital, a venture fund that invests in data infrastructure and data capital. After graduating from The Wharton School, Gitta took up the position of investment analyst at various financial institutions before entering the venture capital sector.
This article is part of “Venture Voices,” a series where the writers of KrASIA speak with venture capitalists based in Southeast Asia to get their takes on topics of interest.