When it comes to tech related start-ups, we have found that what your product represents becomes secondary, if not tertiary, for prospective tech hires.
Technologists are first and foremost most interested in:
What is the current tech stack?
What fundamental problems will they be expected to solve, and will there be enough challenges to keep their interest in the future?
Will this enhance their skillset and experience?
Will they be paid enough to keep them interested?
What does the business actually do?
However the global pandemic has changed the way we approach business going forward.
The effects of the pandemic
The virus has impacted the start-up space dramatically and what we have found is that VCs/angel investors are now very much focusing on their existing portfolio first and foremost before looking at new ventures. This has meant that any pre-seed funding has dropped significantly, hence making it extremely tough. For investment to get back to anywhere the levels we had seen pre-Covid we could be looking at the middle of 2021 or beyond.
Valuations seem to have dropped, anything from 10-30%, and investors are now really pushing to get better deals. If the tech is not ready and markets are not clearly identified it could be very difficult for the product to see the light of day. Future projections are very difficult to predict, investors are interested in the here and now.
Spending on promotion
As to be expected, spending for start-ups has also taken a big hit, things like advertising spend will now be cut. Acquiring new customers via online platforms was the norm and some would even spend aggressively. Not any more. Any fees for additional services and consultancy advice will also be reconsidered or renegotiated.
We have also seen varied results from start-ups in regards to hiring. Those that have seen this as a great opportunity to capitalise, such as health tech businesess, medical tech businesess, and online services, are actually growing and increasing head count.
Full year revenues will no doubt see a drop according to Sifted, start-ups expect this to be at least 25% or more, but the enthusiasm and desire for start-ups amongst investors still remains.
Time and investment
After speaking with many venture capitalists (VC) and investors, you might find that very few products even make it out of pre-seed stage. Everyone is looking for the next Revolut. Investor’s like to hedge their bets, and research shows that only 0.05% of start-ups raise any sort of VC.
Getting this right is key. We can’t make hires for the sake of hiring. It might have taken years to create the ideal environment and one wrong hire here can set you back months. This is where the embedded model initiated by Page Accelerate can help clients identify, but more importantly, provide, immediate solutions to such problems.
Page Accelerate is our unique vehicle, designed to work exclusively with small businesses that are keen to scale and unleash their potential through hiring the right people. A business without the right people in place means the product will never flourish in the way it should. In the UK alone, having scaled over 500 businesses in just the last three years, we have learned a thing or two about who accelerates growth and what risks are worth taking.
With access to real time data as to where top talent is located, coupled with an intimate insight into typical salaries from competitors, we have helped countless businesses to successfully scale in line with demand without disruption to existing product lines.
Have the right culture in place
Culture is everything, especially within in a start-up. The working hours are no longer a 9 a.m. to 5 p.m., but more like 5 p.m. to 9 p.m. Workers spend more time interacting with your colleagues than with their family. They are asked to do roles that are not within their job descriptions and contribute in areas where they never thought would need do, but this is what makes the concept of start-ups so exciting.
However, a clear communication stream must be put in place. If conflicting messages and ideas are projected from the top, then this will very quickly manifest into the environment and the very product itself. There is no right or wrong answer as to what the ‘right culture’ is, but what is important is that the right culture and a way of working for your particular start-up should not be compromised. Your interaction, responsibility and leniency will eventually change as the start-up goes through the natural stage of growth.
Financial and emotional trust
Few start-ups begin with their own finance. Most need investment and have to go through a fairly vigorous election programme to be considered and selected. When working with founding stakeholders, especially at Seed A stage, recruitment is always something that is considered a necessary evil. Yet, it doesn’t have to be, because identifying talent is just a small part of what we do. If there is one thing we have learnt from within the start-up community is that you need to be in it to really understand the challenges and obstacles that are faced. By finding the right talent, quickly, efficiently and effectively, founding stakeholders tell us how much emotional stress and time they save. They see the value in the service provided, but more importantly a new relationship and partnership has been created.
How can a new start up get ahead?
Having worked with over 250+ SMEs our answer is simple, people, because the right people are your most important asset. Innovation, ideas and how to make a dent in the world will only come from humans themselves. It is you against the world and a very crowded one too, you can have the best tech available and a blank chequebook, but if the people next to you are not the ones you are prepared to go to that extra mile for you then you will would have failed before you had even begun. If you can create a culture where each idea is heard, no concept is impossible and everyone is given a voice, there is no doubt that together you will succeed.
If you are looking to find the next member of your start-up team, submit a job spec today. To discuss your recruitment needs with one of our specialist consultants, or for advice on how to streamline your recruitment process, please get in touch.