Startup Recruiting For MBAs - Discussion with Jessica Brody, Director of People & Talent at Crunchbase
Jessica Brody, Director of People & Talent at Crunchbase, shares her tips and insights for startup recruiting for MBAs.
Crunchbase is a database spun out from TechCrunch that charts startups, other tech companies, the people who work for them, and those who fund them.
Check out the podcast below to listen to the complete discussion!
Here's a sneak peak at what Jessica shares in this episode:
1. While there may be a notion that startups do not value MBAs, Jessica disagrees
2. Pretty much all roles are open to MBAs such as Business Development, Marketing, PM, HR etc. There do tend to be more MBAs in Marketing and Business Development sort of roles that use the MBA skill set more
3. Product roles can also be filled by MBAs - with or without technical backgrounds. Depends on what kind of product you'll be building.
4. Recruiting for startups is not structured at all - candidates need to pursue the startup rather than the other way around.
5. If you don't see a role that's a good fit on the careers page of a startup, don't despair! Still email them and tell them you want to work for them, and they might create something for you.
6. Get a referral for applying. Get to know the employees and use the opportunity to learn more about the company.
7. Don't hesitate from negotiating your offer
Thank you for listening!!
If you have any questions for Jessica or for us, you can email us at [email protected] or tweet at us @led_curator or like us on Facebook at facebook.com/learneducatediscover
Timestamped show notes:
What defines a Startup- size of the organization or level of funding (02:51)
Startups are essentially a company which has one to hundred employees and some sort of annual recurring revenue (04:05)
Qualifier of a startups as per the number of employees and the duration (04:38)
Startups don't respect MBA’s? (05:24)
MBA’s could add so much value for a consulting job but not as much for a Startup. (07:01)
Ways to identify that a startup would be interested in a profile (09:16)
Expectations about compensation (11:00)
How to apply and make it apparent that you’re willing to start small in a startup? (12:09)
Typically good roles for MBA’s (13:04)
Domain expertise to compensate for not having a technical side (15: 57)
Increase in MBA’s in Business Development and marketing as compared to growth or product. (17:15)
Startup employees are expected to hit the ground running. (20:28)
Research to do before applying to startups (22: 00)
Best way to a, learn about the exciting startups out there and b, be noticed by them and be recruited by them? (23:33)
What to do after identifying the industry or product you are interested in (28:28)
How can an applicant stand out in a startup recruiter’s eyes (32:50)
“As a recruiter, I look for something that is very clear in your resume that I can get a full snapshot of what is in your background”- Jessica (33:36).
Examples of ways to stand out in recruitment (34:06)
“It’s hard to say what’s going to make you stand out but being honest and being genuine about what your role actually was- is probably the best way to stand out.”- Jessica(34:25)
Difference between recruitment in a big company compared to a startup. (38:15)
“So it is almost like a test of working with the team on an actual project at the end of which they decide if the arrangement is working or not.” (41:50)
Effective ways to apply to startups. (42:57)
How important are cover letters? (46:01)
Breakdown of compensation provided by startups- cash versus equity (48:45)
“There is a very much a move to standardize the way startups and tech companies pay their employees.”- Jessica (51:48)
“That’s true and I can speak as a woman that it is very hard to negotiate (compensation).”- Jessica (54:12)
“But I think the biggest piece of advice I would give is- get rid of all the pre conceived notion you have, get out of your comfort zone”- Jessica (56:45)
Jessica Brody: Thank you so much for having me. It’s great to be here.
SM: Absolutely. I am so happy to have you here because startups are the rage right now and many people want to get into startups. But it is not very easy for someone who does not have the typical engineering or computer science background so I am excited to get your insight on this.
So when you refer to a Startup what do you mean? What size of the organization are you talking about or what level of funding?
JB: I think that's a great place to start. The term itself means different things to different people. So in every startup of the Bay Area that you will see, you will probably have a different definition of what a Startup is. What that means is that it is some sort of formula that looks at your company's valuation, their profitability, how many number of years they have been in business, etc. So once you reach a hundred employees or you have completed 3 years of business, you may not be considered as startup anymore. Something to think about is that the term startup is often interchangeably used with the term tech. But I think it's a very loosely held definition here.
SM: Yes. For example working at Google does not mean you are working at a Startup. So for the purposes of this conversation, we are essentially talking about a company which has one to hundred employees and some sort of annual recurring revenue?
JB: I would call it somewhere between 1 and 200 or 1 and 300 employees. I think there is a level of how quickly it takes a company to get there. So even if they have been in business for 2 years and they have 300 employees I would still call them a Startup.
SM: Yeah and I mentioned revenue so you could be something like Facebook in the early stages which did not have revenue but maybe you have funding. Or is the only qualifier the number of employees and the duration?
JB: I think it is many things, it could be the valuation of the company. So if the company is worth a billion dollars, it is reasonable to assume that it has been in business for a few years. And they have a few hundred employees to have gotten to that. So there is no exact formula but it is a combination of those things- mainly the valuation, the profitability and how many years it has been in business.
SM: This sets the stage for my next question. There is this feeling that startups don't respect MBA’s. Would you agree with that?
JB: I would absolutely disagree, I think this notion is categorically false. There might be companies like that that do not look for people with graduate degrees. But in my experience that philosophy applies more to people with Ph.D.’s. I worked with 15 different startups in the Bay Area in my consulting days and now even at Crunchbase, never have I heard a company say that we won't hire an MBA. I think this misconception stems from the fact that most startups don't participate in campus recruiting. But there are a lot of other reasons for that and not because companies don't want to hire MBA’s.
SM: Since I am not a part of the startup ecosystem, I cannot be sure of this but I have heard a lot of Paul Graham talks, who's the father of Y Combinator, refer to MBA as suits. Like a bunch of Suits who will come and do something. Another anecdote that comes to mind is that if you hire a rockstar engineer your valuation goes up by a few million dollars but if you hire an MBA your valuation goes down by 500K. Maybe it is to imply that an MBA does not take away from your application but it does not add to it. It could add so much value for a consulting job but not as much for a Startup.
JB: It is an interesting notion but I disagree. Certainly there is a concept of 10X engineers who are going to bring in an incredible amount of value but I don't see any reason why an MBA would not bring value. What is different in a startup is that you do not spend a prescribed amount of time in a given position. So if you went into investment banking right out of undergrad, most likely you would spend 2 years as an analyst and then move into an associate role for 2 to 3 years. Perhaps you move into Business School after that and then you come back. We don't have that many definitions in the startup world so I don't see why they would not attach value to someone with an MBA. There are certain benefits in having someone in that position who’s had that experience. I think the notion can be from that, that if you are in tech right out of undergrad and then you are working for a few years after which you go into business school, then it is not as definitive that you would come back and join in a more elevated position or a higher salary. In many instances, it would be more beneficial for you to stay and not leave tech.
SM: I think what you are saying echoes what Sheryl Sandberg said recently. An MBA is pretty helpful but it is not necessary to work in tech. Which is what you are saying technically but I am glad you are saying it because it is good news for a lot of people who do not have this typical background but want to work in startup. So you mentioned there are a lot of startups who are very open and happy to hire MBA’s. So if I am an MBA student or if I have an MBA and working in consulting, what kind of startups would be open to hiring MBA’s? Is there any category or a way to identify that these guys would be interested in my profile?
JB: I think it is safe to say that every startup is open to hiring MBA’s. The company will have its own philosophy over what level of hires they are making. So maybe in the early days of the company they may not have the budget to pay for salaries for multiple experience hires. So the assumption would be that an MBA is an experienced hire. Either they've been in the business world for a few years after undergrad, went to school for a couple of years and are now likely 5 to 8 years out of school. The company may not have the budget to afford someone like that. So they may choose to reserve that money for a more senior engineering hire or a product hire. But even startups and their 100 employees are not typically hiring in multiples for certain positions. So for example, they may have one marketing mold open or one product manager open so they may not be sending out feelers out for MBA’s, they are absolutely open to hiring someone with a MBA.
SM: So what you are saying is that before applying, an MBA is definitely going to have prior work experience so they are slightly senior. The assumption of the company is that the person will expect a certain level of compensation, so the person is priced out? Is that what you are saying because that would mean that when an MBA applies, they should make it clear in the beginning about what compensation they are expecting?
JB: I think there is an element to it where you can price yourself out. But part of it is the level of the position and the complexity of what you are doing. So companies will develop this philosophy and say “let's look at my marketing strategy, what I think I need to get this done? Maybe do something really simple like social media campaigns”? I don't mean to discount how difficult those can be but if you are looking for someone to get Twitter and Facebook and LinkedIn running, you may not need someone with a business degree to get to that point. So there is an element of the salary piece there. But it also depends on the level of the complexity of the position. So if you are hiring for more managerial or leadership roles, those are the positions that'd be more applicable.
SM: So let's say I'm interested in a company it is a small company and most of the positions that are open or other junior level. Can I still apply and make it apparent that I am willing to start small? Because with any good startup there is a lot of growth so more and more things should come in?
JB: Sure, I mean I think that's ok. Again it depends on the company's philosophy so it might be comfortable with hiring someone with an MBA, who has been out of school for few years, do more of an entry level or junior level marketing position. But their expectations maybe unrealistic. So why would they come to a company in a lower position with a lower salary when they could go to a bigger company with a better salary or senior level of position. Some companies are ok with that but generally speaking people don't want to hire someone who's overqualified for the role.
SM: So what roles are typically good for MBA’s to apply for?
JB: Just about everything. At Crunchbase specifically we have MBA’s for product and market teams but I can see directly applicable skills at something like presales. So if you had worked in a consulting role before and you have done product implementation, you’re frankly doing a presales role where we're trying to understand that technical requirements for your client in order to provide them with the software or technical support solution and that is a great track to get into. But anything from Business Development where you're sourcing and identifying new partners for your company to work with to developing a strategy and developing a software product that the company is building, even things like HR and recruiting are not ……………. If you worked in a consulting firm before doing organizational development, that is an applicable background to have for HR and recruiting world, though typically in a small scale because your clients would be really small with regards to the companies in the consulting world.
SM: I have heard in product roles, having a technical background is really helpful. That probably varies from company to company but they do prefer that.
JB: Absolutely. Again that’s sort of a philosophy. I have found product managers coming from two different kinds of backgrounds. Backgrounds where they were either engineers in Computer Science, IT or a broad engineering degree from the undergrad but have directly gone into an engineering position and then progressed to product rule. Or they’re coming from a consulting background. Our director of product at Crunchbase was in Consulting before he went into………….. And ended up as a product manager here after a couple of stints in at the companies. Depending on the complexity of the product and the type of product management you are doing, you can absolutely come from a non-technical background.
SM: It depends a lot on what your product is. Let's say you’re designing the next machine on algorithm to do something. I guess the PM has to be something like that, fairly technical. But let’s say you’re designing some kind of FinTech product, financial technology product and you come from a banking background then even if you do not have a technical background, you may still have domain expertise which is also very helpful to build a good product. So can you say that’s how you compensate for not having a technical side?
JB: Sure. Depending upon the industry and specifically what you’re doing, using the example of someone coming from banking industry and working for FinTech company, if they are doing things like understanding how to connect to other banks or perhaps their product uses API to connect to other companies or to loan servicing organizations or to whatever it is external, perhaps that would be more technical and would require someone to have that background. But if you’re looking for someone who is understanding what the user experience is like and the interaction the person has with the product while they are using it, which could be done by someone who is coming from a consulting background.
SM: I know you mentioned that pretty much all roles are open to MBA’s. But based on your experience, would you say that you’ve noticed more MBA’s in Business Development and marketing as compared to growth or product?
JB: I don’t often see engineers coming from business school. Sometimes if you get to bigger companies where there is likely a large number of engineering managers who are not technically hands on anymore, that is an obvious progression there. But I would guess that most engineers who are coming from a Computer Science degree or are going into tech immediately after undergrad, they won’t likely see the benefit of going to business school. It makes more sense for them in regards to the requirements of the skill sets, to stay in the industry as opposed to going to school. Because that’s 2 years and that could be a lifetime in engineering.
But you’ll certainly see more people from business background in marketing or business development. There are certainly a lot of skills that are used, even in areas like operation and strategy so these are not necessarily technical roles. Typically the pedigree of the person is more applicable to the roles that they would be doing.
SM: I asked this question because sometimes you are not able to break in or get the role you want, especially the product role for example. You are not able to get in if you don’t have a technical background. So maybe you get into other associated roles first and then you observe the startup ecosystem and then you can move into what your ultimate role is.
JB: I think that’s an absolutely great idea. One of the best ways is to observe what people do within a company or the different departments or disciplines and within those departments. So whether it’s through taking internships between your 1st and 2nd year at business school or even going to bigger companies to do internships that have more developed MBA internship programs or more rotational programs that you can glimpse into. So you have the experience to observe and potentially see the opportunity to move into a different department or a role that interests you more.
SM: Another impression is that when we are talking about small companies, not more than 200 or 300 employees, there is that expectation that people who are hired will hit the ground running unlike in a bigger company where you can take a quarter or maybe 6 months to ramp up. There isn’t that time available and there aren’t people who have the time to coach you or mentor you just because there is so much to do in a startup. So would you say that’s true?
JB: Generally speaking that’s the ideal scenario. Although there are a lot of factors that impact whether having someone who can hit the ground running is even possible. So I talked a little bit about the budget question. Senior engineers typically want really high salaries in the Silicon Valley or Bay Area. The company’s budget or lack thereof could mean they could only hire entry level engineers or people out of boot camps or directly out of undergrad where they don’t have to pay as much. So if the company has developed a philosophy to hire junior folks, they are probably dedicated to train them. That same rule can be applied to marketing roles or product roles and business development positions. Again, that comes from the top or managers from the given departments, about the best way to go in building their teams.
SM: So when you are in the process of applying to startups, there is probably one piece of research you can do- the composition of the team so far. It helps to understand if they are hiring people who have a lot of domain expertise or is there some level of on the job training that’s happening?
JB: You can read into that with a lens but I would caution people to not look into that too much. It’s a great resource if you are looking at pedigrees of people, where they have gone to school or what they have done in the past, but just because a company has done that in the past doesn’t mean that they are going to do that moving forward.
Secondly, a company might say that we need a junior level business development associate, so someone right out of school or someone in a sales position, and will train them. But further down the road, when …….the product market or perhaps we have larger scale customers, likely that means they have to hire more senior folks.
SM: Let’s get into the actual recruiting piece then. I would like to address this from the point of view of two sets of people, one of whom is in business school right now and the other is someone who has an MBA and maybe left a few years ago and is currently in a typical post-MBA career right now. Startups generally do not have much resources so they are not present on campus and do not have active recruiting processes.
So, what’s the best way to a, learn about the exciting startups out there and b, be noticed by them and be recruited by them?
JB: I think that’s a great question. The onus is on the candidate here. Again this is where a lot of misconception stems from startups not wanting to hire MBA’s. So you think of it like dating. You go on a date where there is someone who is doing all of the work for you. They are pursuing you, they are asking you out the second you are interested in them, and they are deciding where to take you to dinner and what time to be there. They ask you on a second date that takes place after a prescribed no of days since the first date, they are constantly letting you know how they feel about you and they are really interested in the relationship and they put a title on it within a reasonable amount of time. Why would you then make the effort of pursuing someone else? Someone else did all this work for you. These same rules also apply to MBA’s.
So often, business school students come from a consulting or finance background where they were being interviewed in undergrad. There are really structured recruiting processes which are standardized. You are given an offer for a second interview after a certain amount of time, you are given an offer on a certain date, likely you knew if you are going to work months in advance or after graduating college. The same thing very much happens in business school. Big companies come to college for recruiting events and students often pick the recruiting track to focus on- consulting, investment banking, and tech. But company’s attendance are a lot larger than what you’re typically seeing in Silicon Valley in the startup phase. There are a lot of well-known companies like the Googles and Facebooks of the world. So deciding you want to go to startup requires a lot more initiative and it’s a role reversal. So you become the one pursuing the company.
So some of the ways you can do that by determining what industries and products interest you. So it might be a specific industry you worked with in the past, for example, you were in finance and a lot of your clients were in the retail space. Perhaps companies in the retail space or who partner with them, companies like Instacart, maybe that is an obvious and good realm for you. And as a bit of a shameless plug, Crunchbase has a search and discovery tool called Crunchbase Pro to search for companies in a given industry, in a specific geographic location you can identify all of the companies that fit that criteria or that fit the industry that you’re looking to get into. Another good spot to go to determine what company you would be interested in are job boards or job aggregator sites like Indeed, go to places like Glassdoor where you can research those companies and see whether or not people like working there. And I think going to LinkedIn and looking at their job boards so you can understand the types of roles that people are hiring for, inducing more searches on job titles that interest you.
SM: I think AngelList is also a good option although a lot of times, they have really small startups than big ones.
I find this insight so helpful. I do relate with this that maybe an MBA student can be so used to a structured interview process and your expectation is that the recruiter will email me if they really want me. Here I feel that a, I should not expect a structured process and b, I should not feel dejected if there is no ongoing back and forth happening all the time.
JB: Yeah, and I think smart companies will have more …………………. recruiting process. Perhaps from point 1 to 10, there isn’t a solidified process in place but usually there are 20 or 30 employees, maybe above 50, when companies are really hiring recruiters. But hopefully there are people in the team who have expressed the importance of having a defined interview process whether it is a phone screen and onsite or two phone screens and an onsite. Again, it never hurts to pursue that company.
SM: I want to go down the process that you identified. So one is, to try and identify the product or industry you are interested in. So let’s say I do that and for example, I want to work at Crunchbase. What should I do next?
JB: So a couple of things you can do, it’s very meta. Look at Crunchbase on Crunchbase, so look at our Crunchbase profile. It will give you a nice idea of the folks that work there, an idea of the products that we have built, who are our investors, how much funding we have raised. It gives a pretty good snapshot, speaking as Crunchbase……... keeper. Crunchbase profile is very up to date.
But a couple of really good resources are options like Glassdoor. Look at what people are saying about Crunchbase, what is the vision of the company, what do they think about our executives, our CEO. That gives you a good glimpse into whether people like working there or not. LinkedIn is another good place to go, you can get a better snapshot into specific people and their backgrounds. So that helps you in knowing if you have a similar background or perhaps you went into the same undergrad or business school. It’s a great place to go.
SM: So I guess you spend a lot of time just understanding the company and the people that work there, the kind of product that they build, what other employees are saying about the company. And then what do I do? I guess I will try and identify which role seems interesting to me.
JB: Take a look at the company’s career site, see what jobs they have open. Again, use that with a grain of salt and don’t think that’s an absolute. That’s what we do, if you don’t see a role that’s the right fit, feel free to email us. Let us know what you are looking for, tell us about your background, you may not necessarily know what you are looking for and that’s ok as well. As a recruiter, I get an email from a candidate that says “hey, I spent 3 years at Delloite, I went to UCLA for undergrad, I went to Kellogg for business school, and I am not sure where to go at this point. Do you have any roles that would be a good fit?” That’s a great way to at least get your foot in the door. Perhaps there’s another role that’s not officially open but is in the plan for the year. Or good companies often hire opportunistically. So they could see someone as a good fit and realize that they could certainly create a role for someone if they have a need for it.
SM: That is amazing. I wouldn’t have guessed it otherwise. So what you are essentially saying is that the career site may not have everything and you don’t have to assume that unless what you are looking for is already there, there is no point in applying or even reaching out to you. Generally are your emails available publicly?
JB: Sometimes companies have their email addresses publicly available. If it’s a really small company, a really good guess is the person’s first [email protected]. Or companies have email aliases like we da such as [email protected]. We typically link to that on our careers page on Crunchbase so any communication goes directly to my inbox. But you can always guess, first initial and last name and if nothing else, you go to LinkedIn and you send them an InMail.
SM: So through some Googling and through some permutations and combinations, you can get people’s email addresses.
JB: I guess I’m pretty well versed in the art of sleuthing as a recruiter. But it’s not too complicated. So let’s say even if you have two people in the company with the same name, if it goes to the wrong person, he will forward the email.
SM: I want to talk a little bit more about this. How can a candidate stand out? As a recruiter, you get a bunch of requests. What will make you respond to a request like this, where the person does not really know what they want to do but want to work in your company? What would make them stand out in your eyes?
JB: I think something highly personalized is important. I get a ton of emails and applications and sometimes people apply to ten jobs at once, so they put the name of the wrong company or send me an email saying ‘Dear Sir’, so just make sure you’re checking your mail again. These problems happen all the time.
I think what stands out to me is being clear and concise. People have this tendency to over exaggerate their experience or use too many words or sound disingenuous- that is the stuff that typically turns people off. As a recruiter, I look for something that is very clear in your resume that I can get a full snapshot of what is in your background. So it doesn’t need to be more than a page but tell me what you actually did there. Don’t tell me what your team was responsible for, but specific benefit you brought to that company and what you did in that role that was beneficial for the company.
SM: Can you illustrate a good way to do this?
JB: Sure. Some of my favorite resumes are from graphic designers. That’s likely not a part of people with MBA’s, it’s great if it is. So they stand out to me because they are typically able to demonstrate their work. For people in the business role, it is less obvious. So you are looking at a lot of different factors like the schools they went to, the companies they worked for, specifically what their roles are. It’s hard to say what’s going to make you stand out but being honest and being genuine about what your role actually was- is probably the best way to stand out.
And write the person an email, keep it less than a paragraph and say, “hey Jessica, I am just about to graduate from UCLA Anderson. I didn’t see anything on your careers page that would be a good fit but I wanted to let you know that I’m specifically interested in Crunchbase for this reason. I think I would be a great fit for this reason. Take a look at my resume and let me know if there is something interesting. If not today, then down the road, let me know if there is a role that is a better fit.” So being honest doesn’t mean too many words but tell what it is about Crunchbase that you like. I get a lot of people that will directly quote our tagline or our short description. They will say that I want to work for Crunchbase because it’s the world’s most trusted business information platform. Don’t use buzzwords from our website. Just be yourself and to me, that stands out the most cause I’m looking for humans to work with me.
SM: These are great ideas and thanks for sharing them, Jessica. One idea I have heard, which is mostly applicable for smaller startups but could work for bigger startups, is sharing not just your interest in the company but also sharing ideas. Like, “hey, just for your information, if I were to join the company, these are the things I would love to do. And sometimes when you are reaching out to smaller startups that have 7-8 people, they don’t even know what kind of person to hire since there is so much going on.
So someone comes in and gives a whole bunch of good ideas, they will be more than glad to have that person join in and run with it. So just showing that level of research and interest can go a long way.
JB: I think that’s right. In smaller companies, you’re likely playing a generalist role in the earlier stages. So you may be doing a little bit of everything. When I came to Crunchbase, initially I had been a consultant. But I was doing everything and anything. I was obviously spending a lot of time in recruiting and human resources stuff but we were getting ready for product launch. And we didn’t have anyone who was working on …….. So I spent a lot of time ordering supplies for ……. If you give people the idea that you can help in certain things, they are going to find a way to make use of you. And assume you are going to do lots and lots of different things. And initially it might not be directly applicable to what your lifelong career goal is but if the company continues to grow and becomes more specialized, that gives you a glimpse into how the business operates, holistically.
SM: If I were to evaluate the assessment process as a recruiter, between a startup compared to a big company, let’s say for the same role, do you think there will be one or two big differences in terms of what they are trying to assess?
JB: It’s hard to say but some of the differences might be- a couple of people might be really well known like Steve Jobs or Mark Zuckerberg or people who didn’t necessarily finish college or didn’t go to college in the first place- so there is a notion in Silicon Vallley which varies from company to company, that there is less emphasis on your education. So whether that means it doesn’t matter if you went to college at all or perhaps you went into a smaller school that’s less well known, that means smaller companies have looser definitions on what the initial requirements are. But as far as testing people, the nice piece is- startups don’t have hiring committees. You think of big groups like Facebook that typically interview you for a general position but a team of people in a smaller company, perhaps you even meet with, sit down and decide if you’re going to be a good fit for a job. So it’s certainly less bureaucratic.
But as far as differences, we can be a little loose around how we interview someone in the sense that we may not prescribe a list of questions that we need to get through. For years, Google had this prescribed way of hiring people that turned a lot of people off. Studies have shown that the questions asked at the time may not be particularly relevant to their expertise in the job. But certainly there is a lot of overlap which will vary from startup to startup on how difficult the process is. For engineers, whether or not they will have a coding test? When they will have a coding test, how difficult it is. Some startups may, for hiring for a business development position or marketing position, ask you to come up with a marketing plan for a product launch. So you can get that at a big company or you can get that at a smaller company. I think the assumption at a smaller company is that you’re doing a lot more and you’re touching a lot more things. Whereas at a big company, you have a much defined role and you are one of many people who are likely doing the same job. So the interview process can be much generalized where you are interviewing for one tiny team on one feature of a product for Google Cloud.
SM: I think one of the things startups look at is whether the person is willing to get their hands dirty or not. That could come in from your past experience. Either you have done your own startup or you have worked at site projects. I remember when I recruited for startups sometimes back. These were really small companies, like 3-4 people companies, and there wasn’t a standard interview process. They would make me work with them for sometimes as long as a month. I mean you are not right there but you are working on some project. Basically, they are not checking the competency but also if they enjoy working with this person. So it is almost like a test of working with the team on an actual project at the end of which they decide if the arrangement is working or not.
JB: I have seen some companies do that. Some companies have this philosophy. Every hire they make, they are hiring them on this temporary or trial basis. I think that could be more ok for junior positions or entry level roles, but given the competitive nature of the hiring market right now, you are not often finding a lot of people out of work. So getting someone to leave a full time position to test something out, you might not get the best quality of candidates or candidates who are risk averse.
SM: So in terms of actual application, what is a good way to apply? Because, one way is to apply on the website and another is to email at [email protected], but I’m not sure how effective those methods are.
JB: I think we can safely assume that startups are getting a lot of applicants. They might not be getting a ton of qualified applicants, because it’s common to get a lot of applications from out of the area or completely underqualified or overqualified for a position. Assuming that a recruiter is reading a lot of resumes and going over a lot of applications, I think employee referrals are one of the best ways to apply to a job. So I talked a little bit about our tool Crunchbase Pro. You can actually identify people who used to work companies you worked for in the past. Or you can find all the companies that were founded by people that went to the same business school as you. And you can do the same search like LinkedIn and search for people who went to the same business school.
So once you have an idea of what companies you’re interested in, see if you have any connections. Whether it’s a first degree connection like somebody you really know, or something more secondary like asking for an introduction to someone who knows someone at a company. Or even do a cold reach out and say, “Hey Jane, I noticed you went to UCLA Anderson as well. I am about to graduate and really interested in working for your company. Would you have a minutes to chat about a position you guys are hiring for?” I think many companies have a referral bonus. Frankly in smaller companies, when people are wearing lots of hats, they are very much incentivized to find good people for jobs.
I am constantly talking to my colleagues at Crunchbase on how much hiring we are doing and how they should send me referrals. And if they know somebody who’s remotely fit for a position, come talk to me and I’ll reach out to that person. So people are typically incentivized in one way or another, whether it’s financially or just for the sake of wanting more people on their team. They are typically incentivized to make those introductions and take time to talk to people. Looking for connections is absolutely the best way to go about it. If you don’t have any connections that’s likely the case, I prefer the route of contacting me directly. All applicants can hit my email inbox in some capacity but if you send me a personalized email, I think that might stand out a little bit better.
I think it helps you to get insight on what it is to work inside that company too. You can hear from the employee firsthand if they like working there and what they do in their jobs. And whether or not what they do can be a good fit for you. So hopefully it’s a mutually beneficial relationship.
SM: Another thing I’m curious about is generally people apply with their resumes, so how important are cover letters?
JB: I think cover letter are a waste of time. I am sorry if I have offended anyone with that but I do not see a benefit for cover letters whatsoever. And I don’t think it gives you any sort of an edge. I could still go back to what I mentioned earlier about sending me a really short personalized email. A quick snapshot of what your background is. You know, “hey I worked in consulting before”, ok great. What kind of consulting? “I spent 3 years in strategic consulting. I did my undergrad from UCLA, my MBA from Wharton or whatever school you went to. I am looking for roles in marketing or operations or business development or sales”. And end it there. Be short and sweet. And I cannot emphasize enough to not hyperbolize your experience or add any unnecessary words. I think cover letters are just not necessary.
SM: I am very happy to hear you say that and I completely agree. I think it’s an archaic thing. But you’ll be surprised to see that many startups ask for the cover letter on their websites and there is no option to apply on the website. I don’t know but maybe they are using some kind of tool, and that tool as part of its template has a cover letter. But it’s good to know that recruiters are not paying any attention to it.
JB: Again, that’s my philosophy. I personally don’t see any advantage in it and I spend a lot of time reading resumes. A cover letter is just an additional thing for me to read. I think it’s really hard to make yourself human in a cover letter. I would rather someone just send me a really quick personal email. Again, when you work in a startup, you spend a lot of time with your coworkers. I am personally looking for people that I want to come to work with every day. They don’t need to be like me but I am looking for human. Give me something that tells me a little bit about who you are.
SM: I think another thing people would be curious about is the level of compensation that can be expected. And I know that it varies a lot. And if you can, maybe break down of how startups think of offering compensation- of stock or equity versus your salary. How do you guys generally think about this?
JB: That’s a harder question to answer. The compensation will vary on the stage of the funding round of the company but the safe assumption is, the earlier you get into a company, the lower the salary but the higher the equity. So that’s the advantage to get into the company when it is smaller. So you have a greater potential upside- the company continues to grow, it raises some funding and perhaps accelerates down the road. So it’s a safer assumption to say that if you get into the company later, you will likelier get higher cash compensation and perhaps a lower stock option and a lower amount of equity as well. But again, it varies very widely since there is no prescribed roadmap of how one progresses. I have seen Stanford GSP grads make 80K right out of GSP, in a marketing role but that person made a considerable amount of equity and is doing very well now, now that the company is at a later stage. But then I have seen people making a 140,000 or 150,000 right out of business school at a later stage of the company. So the important thing to keep in mind is that private companies have stock options whereas public companies give RCU’s which have a specific amount of dollar attached to it. It’s a part of your immediate compensation whereas stock options are to look at a future opportunity as well in the hope that you’re working for a company whose value will increase over the time that you’re there.
SM: Absolutely. That’s the bed that you’re making. So just to bring your example, the Stanford grad that you mentioned was making 80K in cash, what was the associated equity?
JB: I don’t know if I could tell you that off the top of my head. She was an early employee, under 10 employees when she joined the company. If it’s a non-technical position and non-leadership role at that time, you’ll get less equity. So that could vary between 0.5% to 2% if you’re an early hire.
SM: I guess at a later stage, if you’re joining at a 140/150K level cash compensation, in that case what is the range of the equity?
JB: That will vary depending on the stage of the company. There is a very much a move to standardize the way startups and tech companies pay their employees. There are companies popping left and right to open source the compensation data. Sometimes venture capital firms track this data as well, so that they can give it to their co-founders or the companies they are investing in as a way to normalize salaries. For years the bigger companies would throw more money at the companies so it made an even less of an even playing field. So at Crunchbase, we approach it by looking at the data. What other companies are at similar stages, be it the round of funding or valuation or employee size. So you take that and find the philosophy on how to pay someone.
SM: And how much scope for negotiation is there?
JB: I would always encourage people to negotiate. Generally speaking, it is very much a personal decision on whether or not you negotiate on the equity piece or the cash piece. A lot of it is indicative of where you are in life and your personal situation. So for example, someone with a family might be more inclined to negotiate on the cash piece. But perhaps someone right out of school and willing to take more risks or they see the potential upside of the company down the road, might be more willing to negotiate on the equity. But I’ll always encourage people to negotiate and make sure you’re being given the best offer. I have the philosophy to always make the best offer because I don’t want anyone to feel that we are low-balling them or giving them an offer that’s below what the market is paying for the role.
SM: That’s good advice because sometimes people aren’t really sure, especially women, to negotiate. And what I have noticed is that, if you have an offer from another startup at the same time, that can definitely help you negotiate a lot.
JB: That’s true and I can speak as a woman that it is very hard to negotiate. There is a lot of factors that affect your willingness to do so. There is a ton of talk of not feeling like you’re below the expectation, there is the fear “they have given me a really high offer. They are going to expect so much more and I don’t know if I am capable of that”- this is something that plagues women. I have been there personally and it’s a hard thing to get over.
Companies that are transparent about their compensation and evaluation process is very good. I found this especially when hiring for senior leadership positions, they know that the market is hiring for certain positions. The more you show them why you picked a salary package or why you picked an equity amount, the more likelier for them to understand where you are coming from as opposed to picking a number in the dark.
SM: So showing your own research and the data that you found, presenting your case in a data driven way can help you a lot.
JB: Absolutely. People will feel you are more transparent with them. You are not just pulling wool over their eyes and they are not taking lower salary for a position that derives a higher salary.
SM: I guess we are coming to an end. You shared a whole bunch of resources- Glassdoor, LinkedIn, Crunchbase Pro. Any resources that you think you missed out on?
JB: I think that’s a great snapshot. The idea is that Crunchbase is going to be the master record of companies. So down the road we will have a tool called the Crunchbase marketplace which will aggregate data from best data companies. So I mentioned a couple of them- Glassdoor being one of them. And Crunchbase is going to aggregate that data. So stay tuned for that, it is going to be a huge resource no matter what you’re doing. Any type of company will be available to see and it would be hugely beneficial. But I think the biggest piece of advice I would give is- get rid fo all the pre conceived notion you have, get out of your comfort zone. I have lots of friend who went through those investment banking interviews, tracked and done the same things at business school. Get out of your comfort zone, you don’t have to follow that exact path that the school defined for you. You may not be on the same timeline as the rest of your fellow students that you’re going to school with but stick to that. A lot of us really admire, especially in a recruiting role, people that are willing to go out of this prescribed path.
SM: That’s a great note to end with. This is a really great episode, Jessica and I might be pinging you for more in the future. There are so many areas over here where you can deep dive- how to negotiate your offer or what to have on your resume but thank you so much.
JB: Thank you so much for having me. This was fun and looking forward to continue this conversation more.
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