Expert Tips for Sourcing and Hiring Key Executives
Sierra Ventures Team
June 28, 2023
Sierra's Executive Recruiting roundtable featured early-stage experts offering advice to founders and early teams on hiring and souring key talent. Adam Ward, Partner at Growth by Design and previous head of executive recruiting at Pinterest, gave tactical insights into how founders should prepare and execute their executive hires. Varun Badhwar, a 2X CEO who sold his startup RedLock to Palo Alto Networks and now CEO and Founder of Endor Labs, shed insights from the founder's perspective on building great high-growth executive teams. Sierra's Managing Partner, Mark Fernandes, rounded out the panel by shedding insights from the boardroom and 20+ years supporting founders in executive searches. Mark is known for being one of the most active early-stage investors in rolling up his sleeves and helping portfolio founders hire key talent. Anne Gherini, Chief Marketing Officer at Sierra Ventures, led the panel discussion.
Here are the top points made about hiring executive talent:
Signs for hiring an executive leader: Founders should consider hiring an executive leader when they spend too much time on a specific area, leading to underinvestment in other crucial aspects of the business, such as product development and operations.
Timing considerations: It is generally too soon to hire an executive leader during the experimental phases of a startup when the founders are still figuring out their sales, marketing, or engineering strategies. Hiring at this stage can lead to incorrect hires. However, once the startup has figured out its direction and the founders spend excessive time in a particular business area, it signals that they need help in that area.
Hiring mistakes and alignment: Founders often make mistakes by not doing the upfront work to appropriately scope the role and align key stakeholders on what they seek in an executive hire. Lack of alignment can lead to extended search times and misaligned expectations.
Qualities to look for in an executive: Founders should be secure about their strengths and open about their weaknesses. They should be willing to bring in someone who excels in areas where they may not be as strong. Other qualities to consider include hunger and a desire to prove oneself, as well as cultural fit, chemistry with the team, and emotional intelligence (EQ).
Effective interview techniques: Interviews should go beyond basic questions and focus on tunneling, which involves following up with deep, tailored questions based on the candidate's answers. Other evaluation methods include references, work samples, case studies, and assessing cultural fit.
Avoiding interviewer bias: Interviewers should be given specific focus areas and make decisions based on their area of expertise. Structured feedback should be collected individually before a group debrief to avoid early interviewers influencing later ones.
Red flags when hiring: Lack of preparedness and failure to demonstrate ethics can be red flags. Additionally, founders should consider stage relevance when hiring executives, ensuring candidates have experience in early-stage organizations and are accustomed to the unique challenges and pace.
The time commitment for recruiting: Early-stage founders should dedicate a significant amount of their time to recruiting, often around 70% in the first year. Recruiting is essential for selling the vision of the startup, and founders are often the best at conveying that vision.
Hiring an executive before an individual contributor: Whether to hire a VP before hiring a manager or other individual contributors depends on the function and the founder's background. The decision should be based on the specific needs and dynamics of the startup.
- Reference checks: The worst reference checks are open-ended. You have to be intentional. In order to get a 360 view you need to ask references (both those provided by the candidate and those you source yourself) very specific questions.
Overall, the interview emphasizes the importance of proper timing, alignment, and assessment techniques when hiring startup executive leaders. It highlights the need for founders to be self-aware and open to bringing in individuals who can complement their skills and drive the company forward.
Transcript of the conversation
“What are some signs you need to hire an executive leader at your startup?”
Varun responded by noting that this is an incredibly common question by founders, describing how when you’re spending so much of your time on one area that you’re underinvesting time on product and other operational areas, that’s when you know it's time to get somebody there.
"My personal perspective is when you look at your day or week and say, what are the parts of the functions that take away so much of your time that you're under-investing in other areas?
For example, in sales, when I got to a point where probably 40% plus of my time was spent on sales, customer engagement, thinking about hiring, I said, you know, we're at a point where I'm under-investing my time on product and other operational areas of the business. So it was time to get somebody there. I think it's too soon when you're in the experimental phases, and you still don't have the archetype figured out of what your motion is for sales or what is your marketing. Is it gonna be bottoms up or tops down?
Or from an engineering perspective, if you have a CTO in the company, what role will the CTO play relative to the VP of engineering? I would discourage hiring in the experimental phases because you'll get it wrong. But if you figured it out and spend too much time in a particular business area, it's probably time to get some help."
The question was then asked to Mark for his take from the boardroom.
"Yeah, I think about our experience together, Varun, and what you just said about when I've got my first seven customers, I'm gonna get my first rep. When I get my first three reps, I will get my VP of sales. There is a thing which is that it's too early to hire an executive. But sometimes, especially in big hires, it's often that you are six months too late when you realize something is not working, and so you got to look around the corner.
And for us, I think the nuanced thing I've learned over many years of doing this is being able to look forward. Sometimes the entrepreneur or the CEO may not see it and be able to ask questions which encourage CEOs to think about when they should be looking for someone sooner rather than later because, eventually, the CEO has to decide to hire. Most of my mistakes have always been about hiring someone six months too late. "
Adam then chimed in.
"I think it's a great point, Mark because if you think about, like, the median search time might be five to six months to search. So for the moment, you decide that you need someone that starts a many-month clock to get that person identified, onboarded and ramped up.
And so the gap can be, you know, sometimes, several months, even up to a year when they actually needed that person on board.
The other thing you see sometimes that holds founders back is just having the difficult conversation with the person who's in the seat now. They might be the "head of...", now you know you might now need a true VP. Often those early team members are close network associates or people that may be in your friends and family set. And that can be a difficult conversation which can delay the process. "
Looking to delve further, Anne asks about how founders should think through hiring, considering timing as a factor. Adam notes a common mistake he sees founders and CEOs make: “not doing the upfront work to do two things: appropriately scope the role and aligning the key stakeholders on what you’re looking for.”
"I think it probably starts with some common mistakes that we see founders and CEOs make when they're hiring executive teams. One is that they're not doing that upfront preparation work. They often jumped to talking to candidates or looking at profiles, or writing a job description.
They need to appropriately scope the role and align the key stakeholders on what you're looking for. So searches often take a long time when a few months in or several weeks into the search, you have to reset the search kind of because you realize yourself and your co-founder or a board member are misaligned on some key attributes. You only find that out by talking to candidates, and when you get down there, you're like, I love her. And your co-founder is like, she's not a fit. And you're like, and then you realize like, oh, actually we didn't do the work upfront to see, hey, are we aligned on these things that we're looking for? And like that work is really, I think, important in those conversations. "
Mark elaborates from the boardroom perspective noting one of the things he’s learned over time from some of the best is that “you have to get that alignment Adam is talking about in terms of the scorecard, and then a lot of things will fall into place. From our perspective as a board member, the scorecard takes away a lot of the subjectivity of a search, and I find that it’s that work up-front is critical because if you don’t get it right, it extends the search out.” Mark expands on his point by saying “you almost have to impose that on the recruiter because the recruiter’s job is to just ‘fill the role.’ And if you don’t ensure they’re following the scorecard very closely, it's really difficult.”
What does a recruiter need from a founder to source a great hire?
Anne turns the conversation to Adam, asking what he can get from a founder that can make the search so much easier. He begins by acknowledging that founders need to provide clarity.
“You need to be able to know: what does a home run look like from a hire–what is he or she doing differently?
A good recruiter should be shepherding an exec through that process too. But I think it's really around providing clarity, right? So questions that we might ask as CEOs, like what is different in six months with this person on board? What does a home run look like from a hire? What is he or she doing differently? And what's the company doing differently? What's different about the trajectory of the company with this person on board? We start to focus on these outcomes."
What are the key qualities that you look for in an executive?
When Anne asks Varun what characteristics he looks for in executives, he first acknowledges that this question is very personal in many ways.
“First and foremost, I think where mistakes are made is when you're not secure about your strengths, but also open about your weaknesses as a CEO. I think if you're not vulnerable enough about it, you will try to find somebody who's not the absolute best in the areas that you're maybe not so good at because they will look better, and their ideas will be better than you. I think you have to understand and realize that is okay, that's why you're bringing them in.
You know, the other thing, which is a personal choice for me that I've made over the years, is I've looked for in the characteristics scope that Adam was mentioning, especially in early stage, I've looked for people that are really, really hungry and want to get a shot at proving themselves out at that next level. So maybe they've been at a company, they did it, and they have regrets of how they did it and they want to have another shot at it."
Mark echoes Varun’s sentiment and lays out three buckets for his hiring search: IQ, EQ, and domain. Of course, turning those three knobs depends on the founders, the stage, and the chemistry he adds.
"EQ kind of ties to what Varun was saying. You know, it's the hunger, it's the chemistry with the team, all of those pieces of puzzle."
Share some like effective interview techniques or approaches for evaluating executive candidates
The conversation then turns back to Adam when Anne prompts him to discuss different interview techniques for hiring executive candidates.
“Based on the scorecard we’ve built, what is the best medium for us to get the right signal.”
He lists alternatives to interviewing that can often show aspects of a candidate, including case studies, references, dinners, and more. He also suggests intentional interview processes that include ways to track chemistry with founders.
"We put a lot of energy and emphasis and rightfully so on interviewing, but we also are going to be checking references. We're also gonna be looking at experience. We're also going to be doing, we can do work samples. We can do case studies. There are lots of things you have access to to get to the right signal.
So I often think about based on the scorecard that we built, what is the best medium for us to get the right signal for that candidate against that experience, characteristic, whatever it might be. And so it could be a one-to-one interview. It could be a working session with the product and edge teams. It could be a half day, could be a couple of lunches and dinners with the founder to kind of get that, do we have that relationship and do we have that shared values? It could be references, selective references and things like that."
Varun mentions that he likes to ask broad questions such as “What is your superpower,” rather than asking specific questions in an interview. Regarding blind references, he also mentions that these can be a great way to understand cultural fit and personality better.
"Look, the thing you expect out of good candidates is the very least they can sell themselves well. So I typically put 40% weightage on the interview, direct interview conversations, 60% on blind references and conversations of people they've worked with. And so heavy emphasis on that to Adam's point, there's a lot of other ways to suss out a person than just the 60, 90 minutes you spend with them."
Adam chimes in on rating a cultural fit.
“I think it's really important to define what culture is for your company. A lot of companies now versus five years ago are defining core values pretty early. Aligning with key stakeholders on the competencies behind the culture we want.”
"And so when you are assessing for culture, you're doing it somewhat consistently among candidates"
Varun touched on providing feedback as a team.
"The mistake I used to make is everybody get on a call and okay, start with a person one, two, three, four. And what I noticed is by the time you got to person two or three, they were already influenced by what the first two folks had said. So a mandatory requirement in our interview process is everybody has to document their feedback first and then we will have a debrief where everybody gets to see what everybody else wrote."
Do you ask the same questions to candidates?
"I think tunneling is a really important skill when it comes to interviewing. Executives are generally really strong communicators and can sell themselves. But tunneling is the follow-up question where you go deep.
So Veruna might have a set of four or five broad questions and he's then tailoring the follow-ups based on what their answers are. And that's when you start to get to the core nuggets of who that person is or what experience they did. What role did they play in that? What outcome did they drive? What do they truly believe? What is their true characteristic? When you start getting tunneling in on these follow-up questions, it's that real signal."
How do you make sure interviewers are not influenced by each other?
"I think there are a couple of things. One is that you do want to give a focus area to whoever's doing that assessment. So Veruna might have his focus area, and Mark's focus area might be another one. And you ask people to relatively stay in their lane. So I think one mistake that often is unfair to interviewers is you're asking them to make a higher or no higher decision. That's actually incorrect. You're asking them to make a decision based on your area of focus, would you support a yes or no on your area of focus?"
What are red flags when hiring an executive?
Mark tips off by discussing the importance of preparation. Mark goes on to prompt Varun to talk about some of the mistakes he sees commonly, to which Varun responds that stage relevance is really important in early stage. On this topic, Adam interjects to talk about the importance of curiosity in the company, demonstrated by the prep work that someone does to prepare for the interview process. Another bias Adam mentions is letting the perception of the previous place that a candidate worked at “override what they learned about that specific person.”
Varun added the following.
"I think to your point, preparedness is a big signal. We have a recorded demo on our website. If you're coming and talking to us and expressing interest, you haven't seen the demo, that's a problem. Well, you know what's more important? If you own up and said, sorry, I didn't get time, but then you make up your way through telling me that you watched it. And I know you haven't watched it because I have lead forms coming in and I know who's registered for it.
And so I think, you know, kind of testing just your ethics here in some way, like own up. If you're not prepared, sorry, I didn't get time, but let me do a follow-up, and come back to you."
What have you gotten wrong?
"In terms of where it's gone wrong, I would say stage. Stage relevance is really important in early stage. Like early stage companies are chaotic, right? And the way you make decisions, the speed, the velocity of all of that kind of information gathering to dissemination to outcomes happens at a pace that is unprecedented. [00:31:59] Varun Badhwar: And I think the mistakes I've made is you find this amazing star power person at a great company you look up to, but that company is like six years ahead of you, eight years ahead of you. And those people haven't been at an early stage organization. You know, I think that's usually where I've got it wrong is I've kind of fallen for the charisma of the person, but not really mapped to stage relevance."
Adam adds to the conversion.
"The most common mistake we see is that founders ignore things that they said objectively were really important to them because they do get distracted by a logo of where someone was. They give all these assumed traits and characteristics and experiences based on their perception of a company in that logo and like what that company did, even if that person didn't have a direct impact on that piece of work. They kind of like let the perception of that company override what they actually learned about that specific person."
How much time should an early-stage founder spend on recruiting?
“The first year, I probably spent 70% of my time recruiting. You have to do it because you’re selling a vision, and the best person in the company who can sell a vision is you as the founder.” Varun also suggests building an advisory board that can help work in areas of your weakness in terms of expertise as a founder."
Is it ever a good idea to hire an executive before an individual contributor? Like hiring a VP of sales before hiring an AE?
Varun starts the conversation.
"So I will tell you, the answer is it depends. It depends on the function, it depends on the founder. What I mean by that is if you're a highly technical engineer by background, CEO, and you've got to kind of go build this B2B enterprise sales business, as soon as you've at least figure out some part of your kind of ideal customer profile your target market, probably a wise idea to maybe not go to a very high-end VP of sales, but get somebody that has gone ahead of sales or somebody who can independently build a book of business for you, hire first few people.
How do you know what "good" looks like as a first-time founder?
Adam talks about how he works with technical founders who have never hired a marketing or GTM leader and how his team coaches them.
"One tactic we love is to lean on your investors and advisors in your network. Who's the best marketing person you know? Can I do an informational conversation with them? And you meet five or six of them to get a sense of the flavor and seniority of different marketing leaders in this case. And you get to start to form an opinion of not only what great looks like, but what do I need in terms of level, and breadth. Do I need more product marketing or do I need more channel marketing? You know, the wide range of things that might be. And by the way, it could be one of those people who could get really excited, right?"
Executive recruiters are pricey, is it worth it?
Mark started by saying it is all about time.
"At the end of the day, it's the balance of spending the money on a search or my CEO's time."
How do you guys approach reference checks and backchanneling in general?
On the topic of reference checks, Adam opens the discussion of this question with an emphasis on being intentional.
“The worst reference check is the open-ended reference check. You want to get this 360 view on them, and then based on that, you want to ask very specific reference questions that that person would’ve purview into. One mistake we see a lot is recency bias of how you weigh in referrals and back channels against the 20 hours of conversations you’ve already had.”
Here is how to connect with the panel: