The People Market, Part 1
Not Great, Not Terrible Issue 2
Let’s get out of the gates storming on this one: getting people to join Dalma proved an incredibly difficult and frustrating task, and that was (somewhat of) a surprise to us. While none of us are hiring specialists (whatever those may be), we are not newbies either, we’ve been involved in hiring processes several times in our past lives. This wasn’t exactly our first time around the block. So what happened?
The need for additional people had been well-identified for several months prior, but the lack of money — or rather, the lack of sure money — naturally had us pinned in place concerning this matter. We didn’t want to start looking for people before we had a clear way forward. It was only after closing our seed round and being accepted for DIH² (*) that we decided to post our first job openings. This was back in May and we called this our First Wave of Hiring (you know, to keep up with times and trends). If you have been following us since that time you’ve certainly noticed that we have posted and closed several job openings, and subsequent waves came and went. This process was far from linear and easy, but several lessons were learned and a lot of rewarding debates were held, and now it’s time to write about it. In this two-part article we would like to reflect on three major topics.
This PART 1 is an account of our rationale and assumptions before hiring people. This part is all about the methodology.
PART 2 will focus on what it was like, in reality, to go through our first hiring rounds and also our take on the state of the “People Market”: what we enjoyed the most and the least concerning applications we received — maybe some advice for the world, if we’re feeling arrog— ahem! — confident. We are by no means an authority, but we do believe we are a gang of reasonable humans that can produce some judgement-free comments on several matters, this one included. But we could be wrong.
(*) It just dawned on me that we haven’t yet shared anything about DIH²! That’s a wrong we’ll have to right very soon — keep posted.
OUR ASSUMPTIONS AND GOALS
Recruiting for Dalma was not recruiting at all.
We don’t like the word “recruitment” very much, and not because we are woke or politically correct. We don’t like it because we firmly believe it does not convey at all what we were hoping for. We weren’t recruiting because we weren’t looking for employees. In fact, we are actually looking for co-founders, although we didn’t call it that. We weren’t looking to leverage nor expand our intrinsic skills and already-existing areas of expertise, we needed people to do things we couldn’t do very well or at all; we needed people who could think for themselves and be self-accountable. Owners. We weren’t looking for people who were looking for a job (try reading that twice very fast), we were looking for people who wanted to build something from quasi-scratch and who understood what failure would entail. That’s why we were not so much recruiting as we were trying to make new friends and colleagues, as naive as that may sound (we don’t care).
We needed a great cultural fit.
When the First Wave was launched, Dalma was but a handful of people with a few ideas but plenty of ideals. Ideals are important to us and we wanted — needed — to impart that in the colleagues we were seeking. From day one we knew that we needed great professionals that would leverage what we had been doing thus far, but we mostly needed great human beings who would uphold the principles and values of the founding team. We needed good people because we had had enough of assholes. For years we had been witnessing first hand the damage that egomania and general assholery could do to very mature companies, let alone to a young and struggling one; that was a weed we didn’t need rooting in our backyard. With that in mind, we were actually okay with passing on technical expertise for the sake of other, more humane aspects.
We wanted an orchestra but couldn’t afford the musicians. Or the instruments.
If it depended on us we would hire a whole orchestra worth of people. Originally we were seeking at least one mechanical engineer, a couple of electrical engineers, two or three robotics engineers, and, the cherry on the top, a full team of software development with no less than 3 people (BAM!). In hindsight that was really naive, but at the time it was the optimal scenario. Then we put those ambitions into a plan — the dreaded excel sheet — and soon discovered that we had two choices: getting the dream team and a runway of 4-6 months; or the best possible team and yield a more reasonable runway of 9–12 months. Given that we are based in Portugal where money is scarce, we decided on the latter. We then settled for a more modest approach and aimed to expand from 4 to 8 people in 3 months.
We had a solid and logical framework for the hiring process.
The first thing we established was the overarching sequence of the recruitment process. We divided it into three rounds:
- Round 1, Screening: based purely on the emails, cover letters, resumes, LinkedIn profile, etc, everyone would pitch in with a simple Aye/Nay. Sometimes we would make a phone call.
- Round 2, Zoom Call: a Zoom call to get to know the person. Your typical “getting to know Joe” call with a few technical aspects thrown in the mix. Everyone would participate if available, but at least two of us had to attend. Oftentimes there would be a “Round 2.5" for a more technical-oriented conversation.
- Round 3, Shit Just Got Real: the candidates that got to this round were presented with a full account of the company’s strategy, roadmap, and finances. That’s right, full disclosure. We discussed the money in/out and disclosed the planned expenses in a one year span — where our runway was very evident. We also discussed what was our expectations concerning compensation for that position based on our “indicative formula” (see below). With this information in mind, the candidate would be asked to propose the level of compensation he/she deemed adequate. This was also a test of sorts, as you may imagine.
We established a benchmark for compensation.
Another thing we made a point of establishing in advance was some sort of compensation guideline. The last thing we wanted was to bargain with a future colleague, but if we had to, it would have to be based on something. Now, remember, we adhere to a transparency paradigm at Dalma, which means everyone knows what everyone else is getting and why (in our experience the why is more important than the what). This meant we needed a benchmark, a guideline, a reference guide, whatever you wanna call it, in order to make things clear and coherent for those who would come afterwards. We weren’t aiming for fairness, because that’s a unicorn, but at least we could be consistent. So, taking inspiration from other companies who also advocate and practice transparency, we established an Indicative Formula for Compensation.
As the name states, it is a formula and it is indicative. Its purpose is to roughly point the way and pave the ground for compensation discussion, while still allowing for adaptation in a case-by-case fashion. During interviews, we would go over this formula and explain what was the expected compensation from our perspective and the candidate would do the same exercise. The candidate would then reflect on it and get back to us to discuss the terms of surrender.
These were the underlying principles and assumptions of our hiring process. Have you ever gone through the same thought process before? What do you think we neglected or nailed perfectly? Let us know what you think while we prepare our Part 2 of “The People Market”.