How to recruit engineers for a startup

when i started my first company back in 2011 philippe my co-founder and i pitched investors on this super clever idea that we had we are gonna have our headquarters in new york city but then we're gonna host our dev team in costa rica where we are originally from and i remember that this idea to host a remote dev team like that raised plenty of eyebrows we didn't end up raising money for that company not just because of that but mistakes we made overall but then fast forward a decade and recruiting engineers outside of the us has become a standard for both small startups and for large businesses companies like remote.com have raised hundreds of millions of dollars precisely because they bridged this gap to hire people remotely made it easier and compliant so it's a real option these days for many businesses and even companies like google are struggling to recruit developers in the us oftentimes acquiring or at least aqua hiring companies just because of their tech talent so much so that in this case even valuations are estimated based on the number of engineers that they're recruiting about a million dollars per engineer is a standard valuation these days so in today's startups 101 video i want to talk about three things first recruiting developers at a pre-seat stage when you don't have a lot of money to afford them second recruiting developers abroad or remotely and last but not least the delicate art of keeping an engineering team engaged okay so let's start with the seed stage according to built-in a full-stack engineer in new york city will be making almost 160 thousand dollars a year in silicon valley the average salary is closer to 200 000 a year not including other benefits these are massive sexy venture-backed companies hiring developers with that budget and you can guarantee that the real good engineers are for the most part employed on terms that look more or less like that so you could call bubble on plenty of things on housing and on nfts go watch your videos about that but in this case tech talent is not a bubble it's an essential piece of pretty much any new company these days and it's very evident that supply is not meeting demand so obviously the price will go up so if you have an idea and if you're looking to hire a developer to code this idea for you what do you do of course you raise some money to be able to compete with them right no first of all a great engineer already had an offer from a venture-backed company with an option pool there are thousands of job openings just looking at angel lists so why would they pick you on the other hand investors know how competitive this landscape is these days if that tech talent is not on the team slide of your pitch deck you are just a guy with an idea and no way to execute it nobody is going to fund that so if you have a business idea you are not looking to hire a developer you are looking to recruit a co-founder which is an entirely different conversation it's absolutely not a come work for me talk instead it's a let's work together talk in that very scars list of engineers there's an even smaller more niche group engineers willing to quit their jobs to start a new business that is the type that you're looking for and trust me founders with ideas can go on for years trying to find that persona so my best recommendation is to start with people you know there's a very very good chance your future co-founder is someone you've known for years rather than a complete stranger and that's why these startups silicon valley and new york become so powerful because of that network effect another recommendation as i said is not positioning this conversation as hey you'll be developing my idea but rather i have a few ideas what do you think you know better than me on this i acknowledge your expertise as an engineer rather than just saying hey build what i tell you to build if your idea is not getting traction you may want to accept that that might not be a good idea there was this fantastic asretic thread quotas of reddit how do you politely refuse your friend's million dollar app idea and i think it's worth a read um i'm just going to link in the description one of my favorite funding stories here is a company called peel a company that my former co-founder philippe started a couple years back so this was a business established by two engineers and a product manager who knew each other from their previous jobs so they got together they used their own savings and their own budget to build a prototype and mvp without hiring anybody without raising money and they had this smooth fundraising process afterwards and i believe because of that combination when three product people prefer doing this company than that two hundred thousand dollar job that they probably had it speaks well about their chance of success and investors can smell that so let's talk about early and growth stage now assuming that you have a cto hopefully a co-founder that you manage to ship a product and you manage to raise some money you'll probably find yourself aggressively expanding your engineering team and this time with some actual cash in the back so i'll start sharing my own experience or our own experience at slide being doing this today we have a team of six engineers and they're all based out of costa rica since slide bean is a us entity we need them to be employed officially as remote workers directly by the u.s company so that the ip belongs to the us legal entity we manage the logistics of that using a platform called remote.com which helps us stay compliant with all this so costa rica is a country with a paid sick leave maternity leave and paid vacations and i am all for this type of work so we match the benefits for them even though they're not even though they're contractors of the company but remote.com also has this employer record service which lets you put people on payroll pretty much in any country in the world without having to establish a legal entity there so that part is one of the most annoying and complicated parts of operations because honestly honestly a lot of companies just fear this because legislations are very different across the board you want to stay compliant when being compliant in different countries is a mess but if you're hiring remote you have to compete with benefits with the benefits that other companies are providing locally so for an engineer in latin america for example the benefits of working as a contractor for a foreign startup usually outweigh the benefits of being a payroll employee for a local company salaries are higher even though they're not technically a salary but a contractor compensation some companies make up for these benefits using other contractual causes but many countries have hefty fines if you're cut out of compliance even if you don't have a company presence there but remote.com has a lot of information to make sure that we are being compliant here so we've honestly removed a headache by using them anyway i want to talk a bit about remote teams because my take here is that some positions like marketing benefit tremendously from being in the same place and in the same office and remote work is never going to replace this but for other teams like engineering i think this is probably one of the most remote compatible organizations that you can build now beyond the flexibility of remote work and i want to talk about that in a future video let me know if you want me to do that remember that most engineers are getting to pick where they work when you have choices the decision on where to work doesn't revolve around salary alone but about how passionate you feel about the product about the company culture about how management functions and that company and how creatively challenged with the work you are going to be the reality is that many us companies are now looking to latin america to recruit their tech talent and more and more engineers in latin america are experienced english speakers and happen to be in a very compatible time zone to pretty much anywhere in the u.s now it's not as cheap as you might think a full stack engineer a full stack developer in latin america could still cost you in the range of 100 000 a year especially after accounting for the legal fees and the compliant costs but that is still cheaper than the us but enough blabbering about that i sat with philippe the other day we had a beer and he told me a bit of his strategy as they recruit engineers for their team and you know this is mixed with some of our own experience first always be recruiting we always have job openings if someone applies we look at their profiles if they show promise we usually try and hire them for a small maybe a paid consulting project to assess their skills but the job opening is always there two we navigate our network jorge one of our engineers used to be our cto's boss two developers of our team are brothers-in-law and one of them referred the other so each hire inevitably translates into a new network of engineers and as long as we provide an exciting place to work that network will work number three we often do direct outreach so we've mapped some companies that a nurture good developers and b aren't particularly exciting places to work and we sometimes reach out to recruit and this has worked for us but here are some of the other ideas that felipe gave me pl has been relying on recruiters to expand their team lately i should note that while recruiters are very much extending their network outside of the us these days full stack developers in latin america are getting closer to six digit salaries in the last couple of years still as an engineer if you have worked at some kind of tech company you will either have experienced recruiters reaching out to you or you have worked with recruiters directly to help you build your team so the standard rate for a recruiter just for you know is about 20 of the annual salary of the hire though many of them are willing to negotiate some special terms if your company is super early stage uh philippe also mentioned looking out for newcomer startups in the hiring sector for example tools like near like remote women like higher sweet and g2i have given them good leads on developers and are still undiscovered by the masses another case is my friend phil elvis he's from dev squads and i'll talk about that in a sec but he has a large dev team out of brazil so they put a lot of emphasis on being open about what the engineers will be working on making sure that they work with new technologies so that their job itself is this learning experience and the last thing that's honestly pretty obvious is just talk about it on your channels on your website just have those posts there your careers page visible about social media we might go out and say that we are recruiting a new product manager for slight bean with four years of experience working and managing products a passion for working with startups and tools that help startups flexibility to travel to new york city and to costa rica and that we have a competitive salary and stock options and that you can contact us at jobs at slimy.com if you're interested that's a true story but anyway recruiting goes hand in hand with retention so i talked to phil who's the ceo of this company called dev squads essentially what they do is they build this little squad of a product team in brazil that are made up of a product manager and a ux person and a couple of engineers and companies in the us from small to enterprise super large companies hire them and hire these small squads to work in specific product features and when you're doing work like that one of the biggest challenges over the past few years has been of course retention turnover for example as he was telling me increased from 10 annually to 10 monthly last year post coving i was talking to this friend of mine the other day recently raised money he was trying to set up this team in costa rica and he was struggling because the recruiters that they were using they were going on budgets of 120k for like a full stack engineer in latin america so is that is that real are you seeing that or they just have a bad recruiter i think you can do a lot better it's real i'm seeing that but i feel like if you're a startup and trying to build a product you can still hire developers that are maybe not senior yet but the mid-level great developer a lot cheaper but you really have to be good at selling your vision and making sure these people are not going to put themselves in a situation where they're going to hate their job because they just have too many options the story i hear every day is hey i have this great idea i just can't find a cto and my answer to them is well you have to put yourself in their heads where they're you know they're 120 k 150 150k job in latin america which is a ton of money anyway you see it they're not going to put this to come work for you in your idea like they they might quit this to go work for a company that they believe in that they truly believe in where they are or their partner how how do you do that in the early stage right you have say you have a cto so you have your first two engineers they have their they have some equity uh they have some skin in the game how do you recruit your engineer number three to number five where you probably don't have a lot of money and yes you can't go need picking like how do you recruit those three four or five engineers i think that the one that and the number one and the number two guy you just have to be very great mentors uh so you can bring the other people they have to see the people that you have as someone that they can learn from you know i think after you take money out of the table we really care about learning even paying well sometimes you cannot bring these people sometimes there's no amount of money you can offer someone to come work for you if your team is broken if they don't believe your idea many times we got people from very big companies but what they were doing they were just paying tech that they're not doing anything meaningful they were not creating new features and that's what that's where you have to put people in and you have to give them meaningful work for you a ceo like what do you have control of of over over this retention over their environment is it more operational stuff or do you actually get your hands directly into how they manage work at the technical level yeah it's definitely the cto job but i i'm very involved in making sure like things are going well and i think you bring a good point developers hate to work for organizations that understand their job we had some people in the company or not developers are like look you have to understand this you have to understand their job and working with people that understand what they're doing it's what is going to do a lot of retention you have to do a better job understanding what kind of value they're bringing and when they have some challenges why they're having the challenges what what role do benefits play like company benefits i'm talking medical insurance etc how much how much of a role does that play because when you're hiring from the us to latin america you don't necessarily can do that right because you're you're it's an outsourced developer it's it's it's a contractor in a whole other country how much how much weight does that play in retention you didn't used to but now it does play a big role uh and it's something that you might be able to to use in your favor competing against other companies that that didn't figure out how to do it yet luckily today there's a lot of companies that that can help you with that and here dab squad doesn't matter if they're united states or if they're in brazil or other place in latin america where we hired and we offer our key employees a lot of benefits i'm talking health insurance paid time off the world is becoming smaller and everything that the companies are offering here in the united states it's going it's going down for everyone down there okay so if you're still watching uh it'd be great to hear some of your ideas let us know in the comments what does your team do to keep you or your engineers happy uh once again if you are worried about being compliant with all these different legislations making sure that the ip's assigned correctly being prepared for due diligence and i could speak for hours on this or you could just go and use remote.com it's what we use and they've also sponsored our video for today and they've provided this special discount to our viewers so you'll you're gonna get your first employee for free for 12 months and then two months free for any additional employees that you onboard on their first year and you want to get that by clicking the link in the description and using the promo code slightly thanks for watching and we'll see you next week you

Channel: Slidebean

Views: 37,018

Keywords: slidebean, caya slidebean, company forensics, caya, startups, startups 101, how to recruit engineers, engineer recruiters, how to recruit software engineers, slidebean funding, company forensics youtube, startups 2021, slidebean startups 101, slidebean startup, remote developer, tech recruiting, talent acquisition, tech recruiting 101

Id: cH3u8DOLDYM

Length: 15min 6sec (906 seconds)

Published: Tue Jan 25 2022