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Sessions

Onboarding in a Startup

 2019-03-26: by Dustin Betz

Onboarding is the process of bringing a new co-founder, employee or intern into an organization, and it is particularly important for a startup. Since startups are resource constrained, the Founder often wants a new team member to get right to work. Unfortunately, this leads to very high attrition rate in the short to medium term.

The ideal onboarding process for a startup begins in the recruitment process. Most successful startups recruit talent with a series of “Test Projects” before the co-founder or new employee is officially working for the company. A sample onboarding process for a startup might look like the following, and you will need to develop your own onboard process:

1. Application Test Project: It is not uncommon to ask applicants to submit some test work right in their application to work with your startup. For example, you might ask a business person to submit a sample model for an e-commerce company. You might ask a marketer to submit sample social media promotions for your product. You might ask a developer to make comments on how to improve the current site or landing page.
2. Interview Call: For the strongest candidates, you will want to conduct an interview call for 30 to 60 minutes. You start out with a description of the company and the role, and you ask the candidates if they have any questions. A successful interview technique is to sequentially walk through the experience of a candidate and ask them why they made the decisions. For example, “why did you enroll in Berkley and decide to study architecture?” “Why did you leave this job after 18 months?” If the interview goes well, you can offer the candidate an opportunity to complete an initial Test Project.
3. Initial Test Project: After successfully interviewing a top candidate, a next step is to engage the candidate with a brief Test Project. An initial Test Project should take between two and four hours for a candidate to complete, and the purpose of this project is to (1) engage the candidate in the vision of the business and (2) test the responsiveness and attention to detail of the candidate. An example may be to have the candidate review and comment on the mission statement of the business, asking “what are the top three things that you like about our mission, and what are three modification that you would make?” Some additional examples include asking the candidate for an analysis of the target market or ideas on how to optimize the business model. (See Test Project Definition below)
4. Tentative Offer: After working successfully with a top candidate on a Test Project and after confirming that you and the candidate share a belief in the mission, a next step is normally to discuss a tentative offer to join the company. Ideally, you will meet the candidate face to face or, if that is not an option, then you can arrange a call. Since startups are commonly resource constrained and cannot afford appropriate salaries, a good way to engage a candidate is to work on longer duration and more important Test Project, which still may be part-time. As an example, you may say, “I really enjoyed working with you on the vision, so I would like to try working together on something larger. I understand that this will be more time consuming, so I can offer you weekly compensation of $x to help out.”
5. Milestones: In most cases, the Tentative Offer will result in some negotiation, which is perfectly reasonable. Your job as the leader is to describe a path for the candidate to get what they want in order to join the company full-time. For example, “We can offer this weekly rate now, and, as soon as we finish this next work together, then we will then be able to attract users. At this point, we can get you on the option plan, making you an owner. When we have 1,000 monthly users, then I will begin to close an angel round, after which we can bring you on at an annual salary of $x. I expect this to be done by this date…” It is important that milestones for success that lead to a position where Tentative Offers become Final Offers (below) are tracked internally each week.
6. Milestone-based Test Project: As a first step of working together with a final candidate, you will want to work on a longer Test Project that might take between two and six weeks to complete. This Milestone-based Test Project should allow you to work closely with the candidate on a critical business objective that will eventually lead to achieving either revenue or funding to compensate the candidate. A sample project may be developing an important proposal in an enterprise sales company. It could be developing an alpha version to start acquiring customers in a consumer-focused business.
7. Final Offer: After the Milestone-based Test Project is successfully completed by the final candidate and you enjoy working together, a next step is to complete a final offer, which may be delivered in multiple parts. The first part of a Final Offer in a resource-constrained startup may be to offer the candidate employee stock options that vest over four years and to continue with a modest weekly compensation, possibly keeping the candidate as part-time. After a key revenue or funding Milestone is achieved, this could be the mutually agreed time to bring the candidate on full-time with a more reasonable full-time salary.

Test Project Definition

Every Test Project with a candidate should have four components, containing as little as one sentence on each competent.

1. Overview: This describes the project and the purpose. An example is: “Review the mission of the company to get familiar with the business and to help improve our positioning.”
2. Deliverables: This describes the expected deliverables that the candidate is expected to produce in a specific way that allows for creative contributions. An example is: “Please copy the Mission Statement, available here (http://fi.co), sharing it with me at [email protected], and track changes for any edits that you would like to make, adding a new page that lists a half dozen of your own ideas that we should consider for the business.”
3. Timing: This describes the timetable to complete the project. An example is: “The goal is to have your thoughts delivered by 5:00 PM on Wednesday, March 15th, 2016, to discuss with our Advisors.”
4. Communication: This describes the communication procedures to complete and deliver the project. An example is: “Please do not hesitate to call me with questions or ideas, and let’s plan to speak at 5:00 PM of the deadline.”

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