Recruit Entrepreneurs

November 2016. We recruited someone I’ll call Carlos. Smart guy, MBA from a good school, five years at a consulting firm. He said all the right things in interviews: “I want to build something,” “I’m ready for the uncertainty,” “I believe in this opportunity.”

We launched a startup with him as CEO. Gave him €30,000 in initial funding, mentorship support, customer introductions (the full builder package).

Three months in, he scheduled a meeting. “I need to talk about my compensation structure.” He wanted guaranteed salary increases, performance bonuses, and benefits comparable to his consulting job. When I explained that early-stage startups don’t work that way, he looked at me like I was breaking a promise.

He quit six weeks later. “This isn’t what I signed up for.”

We’d wasted six months (recruitment + incubation) and €30,000 on someone who wanted a startup on his resume, not the actual startup experience. The mistake wasn’t his; it was ours. We recruited someone looking for a job, not someone ready to build a company.

Recruiting entrepreneurs is the hardest and most important activity a venture builder does. Get it wrong, and you waste massive amounts of time and capital. Get it right, and you build companies with people who thrive in the chaos.

The Builder as a Recruiter

Recruiting entrepreneurs is fundamentally different from recruiting employees. Job seekers want stability, clear roles, and predictable compensation. Entrepreneurs want autonomy, impact, and upside potential, even if it means uncertainty and financial sacrifice.

Recruiting entrepreneurs is radically different from recruiting employees. Therefore, it is difficult to take advantage of ordinary recruitment channels, because they are packed with people looking for a salaried job.

Therefore, recruiting entrepreneurs is an extremely important and highly difficult activity, which ends up being a headache for management, and which, if conducted in the wrong way, can end up generating tremendous inefficiencies and frustrations.

Key Challenges in Recruiting Entrepreneurs:

• Difference from Traditional Recruitment: Entrepreneurial recruitment is distinct from hiring regular employees. Entrepreneurs seek opportunities beyond a salaried position, making conventional recruitment channels less effective.
• Importance and Difficulty: This recruitment is not only crucial but also challenging. Ineffective strategies can lead to significant inefficiencies and frustrations for both the venture builder and potential entrepreneurs.

The Demium #AllStartup Model (2017-2019)

During 2017 to 2019, I had the opportunity to experience the entrepreneurial recruitment processes of Demium Startups as a jury member. Demium Startups, while not a traditional venture builder, excels in incubating pre-idea, pre-team startups. It connects top entrepreneurial talent with global business opportunities to create innovative, scalable, and investable companies.

Insights into Demium’s Approach:

• #AllStartup Weekend: This event is a platform where Demium’s subsidiaries identify and connect the best entrepreneurial talent.
• Creating the ‘Dream Team’: The goal is to assemble the ideal team of entrepreneurs who can transform promising ideas into successful businesses.
• Jorge González’s Perspective: As the Head of Talent at Demium’s Bilbao branch, Jorge González highlights how their recruitment model evaluates and fosters potential entrepreneurial synergies.

Demium’s method showcases an effective approach to recruiting entrepreneurs, focusing on talent synergy and idea incubation.

Recruit Profiles

Identifying and attracting the right entrepreneurial talent is a nuanced task, with significant implications for the startup, the builder, and the entrepreneurial community. A key aspect of this process is distinguishing between individuals who possess an entrepreneurial mindset and those more suited for traditional employment.

The Perils of Misalignment

Incorporating individuals lacking entrepreneurial spirit can be detrimental. People accustomed to traditional employment often expect certain guarantees and rights that are incompatible with entrepreneurship. Discovering the absence of these guarantees in a startup environment can lead to disappointment or mistrust towards the venture builder’s management, sometimes perceiving them as exploitative. Therefore, it’s just as crucial to deter job seekers as it is to attract true entrepreneurs.

Strategy for Recruiting Specific Profiles

One effective strategy is to target specific entrepreneurial roles, such as CEO and CTO, with tailored recruitment campaigns. These roles require distinct arguments, evaluation criteria, and promotion channels.

Recruiting the CEO

• Key Motivation: The quintessential CEO is driven by the ambition to lead and make impactful decisions.
• Recruitment Approach: Materials should emphasize the opportunity to spearhead a project and guide a team. It’s crucial to align with the aspirational aspects of being in charge.
• What to Avoid: Avoid highlighting aspects like salary, stability, or organizational prestige, as these may attract candidates seeking traditional employment benefits.

Recruiting the CTO

• Key Motivation: CTOs are typically driven by technical challenges and the autonomy to make significant tech decisions.
• Recruitment Focus: Emphasize the startup’s sector or the specific technologies involved in product development.
• Understanding the Candidate: Candidates with a deep passion for technology often desire to lead the technical direction, including hiring and decision-making processes. These are the individuals who find value in co-founding a company.
• Salary and Stability: Given that technical roles often come with attractive job offers, it’s more common to discuss financial compensation and job stability early in the recruitment process for CTOs, unlike for CEOs.

In summary, the art of recruiting for a venture builder lies in precisely targeting and appealing to the intrinsic motivations of potential entrepreneurial candidates while consciously steering away from those seeking traditional employment.

The Recruitment Funnel

The process of recruiting entrepreneurs for a venture builder involves a structured and monitored approach. Management typically uses Customer Relationship Management (CRM) systems to track interactions and store information about potential candidates.

Tracking the Recruitment Process

• CRM Platforms: Many builders utilize CRM platforms like HubSpot or Salesforce for control and automation of recruitment processes.
• Alternative Tools: Some venture builders may opt for simpler tools like Google Sheets or Excel spreadsheets.
• Process Similarities: Despite the tool used, the recruitment process shares common patterns in interaction and evaluation across different builders.

Five Phases of the Entrepreneur Recruitment Funnel

The entrepreneur recruitment funnel comprises five distinct phases through which a candidate progresses to become a builder entrepreneur:

1. Validated as a Candidate

This initial phase involves recognizing a person as a potential CEO or CTO. It signifies that management has validated the individual based on their skills, availability, and fit within the entrepreneurial ecosystem.

2. Presentation Meeting

In this phase, management meets the entrepreneur to share experiences and establish a trust-based relationship. This meeting is less about evaluation and more about mutual understanding of contributions and expectations. The builder’s methodology and incubation program details are also presented.

3. Assigned Project

Post-introduction, a specific startup or business opportunity is assigned to the candidate. This assignment can be either a direct allocation by management or a selection made by the entrepreneur from a range of options.

4. Negotiation

This phase involves discussions around terms, conditions, and expectations. The negotiation process varies significantly based on the builder’s and entrepreneur’s specifics.

5. Incubation Started

The final stage marks the beginning of the entrepreneur’s incubation process with the builder. At this point, the individual transitions from being a candidate to an entrepreneur in incubation.

Adaptation of Traditional Recruitment Funnels

This recruiting funnel is an adaptation of typical recruitment funnels used in human resources, tailored to the specificities of recruiting entrepreneurs for a venture builder. It represents a journey from potential candidacy to active incubation, encompassing relationship building, assignment alignment, and negotiation.

The following table shows an example of a venture builder’s recruitment funnel. In the first column, there are two candidates who, while identified by their CEO and CTO profiles, do not yet have an assigned project. We also see a CEO candidate with an assigned project but with whom negotiations have not yet begun. In the negotiation phase, there is a CEO and a CTO who have already been assigned to a project. With luck, they will move to the next phase and begin incubation, as is the case with the CEO and CTO in the last column.

TABLE 2-7
Phases of the entrepreneur recruitment funnel
Validated Candidate	Presentation Meeting	Assigned Project	Negotiation	Incubation Started
Robin - CTO		Sanji - CEO Thou Sunny	Roger - CEO Oro Jackson	Luffy - CEO Going Merry
Franky - CTO			Oden - CTO Oro Jackson	Edward - CEO Moby Dick
				Ace - CTO Moby Dick

Recruitment Events: Key Tool for Attracting Talent

Recruitment events are essential for venture builders in attracting and vetting entrepreneurial talent. These events serve dual functions: identifying prospective candidates and fostering potential team formations.

Event Design: An Agenda for a One-Day Recruitment Event

• 09:00 - Accreditations
• 09:30 - Presentations
  • 09:30 - Introduction to entrepreneurship
  • 09:50 - Venture builder presentation
• 10:10 - Challenge
  • 10:10 - Challenge explanation
  • 10:25 - Individual self-presentations (strengths, weaknesses)
  • 11:00 - Team formation and spokesperson selection
  • 11:20 - Team collaboration
  • 11:40 - Business model canvas workshop
• 14:00 - Meal Break
• 15:00 - Preparation for challenge pitches
  • 15:15 - Pitching workshop
• 17:00 - Team presentations
  • 17:00 - Overview
  • 17:10 - First group presentation + feedback, followed by other groups
• 19:00 - Experience sharing by Startup Eywa (Oroi)
• 19:30 - Awards Ceremony

These events, varying from a single day to an entire weekend, aim to simulate real-world interactions seen in incubation processes, helping assess candidates’ teamwork and presentation skills, as well as their technological and business acumen. They also crucially evaluate the personal compatibility of candidates within the builder’s entrepreneurial community.

Event Promotion

Effectively promoting a recruitment event is vital for ensuring robust attendance. Not only does this contribute to the success of the event itself, but it also serves as a promotional tool for the venture builder.

Key Promotion Strategies

1. Employment Platforms: Utilizing platforms like InfoJobs for advertising the event is a common strategy. These platforms cater to individuals actively seeking new opportunities, making them ideal for reaching potential entrepreneurial candidates.
2. Entrepreneurial Communities: Engaging with communities such as LEINN or ThePowerMBA community can be highly beneficial. These groups are often hubs for entrepreneurial talent and individuals with a startup mindset.
3. Social Media Advertising: Leveraging SocialAds, particularly on platforms like Facebook and Instagram, can significantly expand the event’s reach. These platforms allow targeted advertising, reaching a broader and more relevant audience.
4. Media Engagement: Contacting media outlets and utilizing press releases can increase event visibility. This approach not only promotes the event but also enhances the overall visibility and reputation of the venture builder.

The Dual Benefit of Event Promotion

Promoting a recruitment event serves a dual purpose:

• It ensures a high turnout of potential candidates, crucial for the success of the event.
• It simultaneously acts as a promotional campaign for the builder, enhancing its visibility and brand in the entrepreneurial ecosystem.

Effective promotion is therefore not just an event logistics activity but a strategic marketing move for the venture builder.