How to test for startup readiness for your early-stage SaaS business
By Alan Fecamp. Alan is a Director at Zeren and is based in our London office, as a member of our Customer Success hiring team.
One of the toughest things a founder or member of the leadership team must do in the early days of scaling a B2B SaaS business is hire the key individuals who can set the tone for success and make a significant contribution during what is likely to be an incredibly challenging yet exciting part of a growth journey.
Hiring is critical for all companies, but even more so for a startup where every employee has a significant impact on shaping a company’s culture and defining its future.
It’s highly likely the first employees will be working as a one-person team in specialist function, building processes and playbooks, ahead of hiring a team as the business matures.
Very early-stage companies will depend on very few people to get traction and you’ll find founders will mitigate risk by employing people they know or have worked with previously.
This will work for a while until it’s time to scale, and the immediate network will run out of bandwidth.
For a candidate, joining a startup sounds sexy and they will be attracted by the idea of securing equity and seeing their careers flourish as a company achieves hyper-growth.
However, the realities are often very different from the perception, and I’ve seen many candidates struggle to adapt to a highly ambiguous environment where they are expected to work outside of their comfort zone and assigned responsibilities, roll their sleeves up and get the job done no matter what it takes.
It’s a real challenge for a hiring manager to avoid the financially costly and time-consuming mistake of employing the wrong person. There are a few steps you can take that will help you find a great fit candidate:
1. Track Record
Have they experienced life in a startup?
Find out what role they performed and look to understand the context around it:
- What employee number were they?
- Who did they report to?
- How did the company scale during their tenure?
- What measurable impact did they have?
- What were the biggest challenges they overcame?
- How long did they spend with the company?
- Why are they leaving?
The last two questions are crucial.
You’ll want to see a tenure of 18-24 months as this demonstrates grit and make sure they have a valid and well-thought-out motivation for moving companies. Startups will face many hurdles and it’s important to ensure the candidate isn’t jumping ship at the first sign of a challenge.
What can this person do for your business?
Interviewing is a two-way street and in a competitive, candidate-driven market it’s easy to feel the candidate has the upper hand because they will likely have multiple options in play. It’s tempting to feel like they hold all the cards and end up overselling the opportunity.
The reality is you should care more about what that person can do to help you achieve your company objectives than overselling how you can help the applicant accelerate their career.
You should ask that question too – “What can you do for our business?”
This cuts through the clutter and asks a candidate to pinpoint exactly what they bring to the table and how those skills and experiences will push your SaaS business toward their goals.
Are you clear on what the traits and behaviours of a promising startup employee?
Here are five of the core traits that appear consistently in high performers:
- Determination – It’s not easy to work in a startup and is best described as a lifestyle rather than a job. Candidates will need to have grit and strength of character to meet the exacting demands put upon them.
- Accountability – you can’t afford to employ people who will need to be micromanaged. The willingness to be held to goals and deadlines and the absolute desire to meet them at all costs is one of the most important traits for any start-up to consider.
- Desire to learn – The term Growth Mindset is often overused. However, it is essential. You can be sure that the skillset you employ today will become to some extent irrelevant in the future as the company scales quickly. It’s essential the people in your team love finding ways to stay on top of their game and are continually learning new skills and areas to improve.
- Passion – Hire people who are passionate about your company and truly believe in the growth mission. Things can get tough in a startup, so make sure you are working with a group of passionate individuals who work with high energy to move a company towards its revenue goals.
- Curiosity – They should ask you smart/uncomfortable questions back during the interview. A startup person is curious: they want to know the problems you face, the solutions you have in mind, the challenges you will see on the road, the goals you have as a company, etc — not only the fun stuff (tech stack, benefits, etc)
4. Interview Structure
Having a clearly defined interview process specifically tailored to the specific challenges of each role and function you’re hiring for.
Map out the interview stages, who will be involved, and what their roles will be in the assessment process.
Build a scorecard.
Not only does scorecarding add the necessary structure to your interviewing process, but it also helps startups understand the skills and traits they should be looking for in their ideal candidate. Asking the right questions will lead to making the right decisions.
Every business scorecard will look different, but there are generally three areas you can apply scoring systems to as you move through the process – specific skills for the position, desirable personality traits, and quantifiable qualifications such as academic background or specific industry experience.
Ask behavioural questions.
There are typically questions that start with “Tell me about a time when….” And require a candidate to use an anecdote or experience from their past to demonstrate the required skill.
For example, if you’re interviewing for a Customer Success Manager, a great example would be “Tell me about a large customer you didn’t retain”
These questions can be tricky to answer and leave candidates stumped; however, they’re very revealing for the hiring manager and will give your interview real purpose and structure.
Ask questions that test out your pre-identified DNA.
For example, if you are looking for an innovator, a great question would be “What are some of the new ideas you would implement in this position?”
If you’re looking for coachability “What’s the best advice you’ve recently received?”
This is a great way to gauge how receptive a candidate is to feedback and how much they retain. Plus, you’ll likely get a sense of ego!
And for the ability to deal with rejection “What will you do if you are unsuccessful in securing this opportunity?
This may seem negative to ask during an interview, but with rejection and setbacks so common in a startup, it’s fair to ask.
Ultimately, the key to making a successful hire is designing a great process with proper planning, rigour, and objectivity.
This will also provide a far better candidate experience with increased confidence you take hiring seriously and are committed to driving high standards.
If a candidate has to work for a role, they will feel amazing when you tell them they have been successful. It’s a win-win!
If you want to learn more about how I help B2B SaaS companies build great Customer Success teams, or how Zeren supports clients through the critical early stages of growth, please get in touch.
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