All Things Upwork
October 15, 2012 by Jenna Weiner

Last week, oDesk held a panel in San Francisco on “Talent Wars: How Startups are Fighting Back,” discussing the critical role of talent to growing startups as well as the approaches startups are taking to build successful teams.

The panel confirmed that many businesses are finding it extremely difficult to access the right people, and that the problem is especially acute for startups — which are in dire need of talent in order to grow, but do not have the resources to compete with large companies.

Top tips from the panel:

  1. “Talent is everything,” but we are experiencing a “nuclear talent war” — in Silicon Valley especially, which has a 20% turnover rate.
  2. Startups are looking for new ways to scale, and many are using online workers to empower their teams (60% – 80% of Benchmark’s portfolio).
  3. “At the end of the day it’s about execution” and finding the right people able to perform the tasks needed.
  4. Empower your team to make an impact. Not only does this lead to more engaged and productive teams, but it is key for recruiting efforts.

#1. “Talent is Everything”

“When it comes to startups, I think talent is everything,” said Benchmark’s Kevin Harvey. “Recruiting technical talent … is probably the key gating item for most of our startups. I think that the unemployment situation masks the reality that we all know of how hard it is to find people right now.”

A key point in the discussion was that once you find the best people, not only is it competitive to attract them, but it’s difficult to keep them there. Harvey noted that the average Silicon Valley company has a 20% turnover rate, calling what we are currently experiencing a “nuclear talent war.”

#2. Startups are Looking for New Ways to Scale

Consequently, many startups are looking for new ways to access the talent they need to grow. A study released last week by oDesk found that 64% of businesses surveyed were actively looking for an alternative to traditional hiring.

Harvey estimated that 60% to 80% of Benchmark’s portfolio companies are hiring contractors online.

Singularity University’s Sandra Miller added that learning how to leverage online workers as well as on-premise employees is “setting the groundwork so that your company has the potential to scale.”

Harvey agreed, noting that “learning how to have people work somewhere else is a key attribute that [startups] have to learn as a company, early … The constraint of Silicon Valley is very localized. And if you have only local capabilities, you’re hamstrung.”

With online work still in the early stages of widespread adoption, some startups may be concerned that investors will not be supportive of this hiring model. Foodzie, for example, found that to be the case, so they scaled gradually with individuals working remotely from Buenos Aires. They worked with a team of three individuals for six months, and even sent their VP of Engineering to meet with them, before they started scaling their remote team.  “It was a gradual transition into doing that that built confidence for our team and the people that were backing Foodzie,” co-founder and CEO Rob LaFave said.

#3. “At the End of the Day, It’s About Execution”

Panelists also discussed how you know when to hire online versus on-premise.

“One of the first questions we ask ourselves is, ‘Can this job be done online?’ If not, then let’s hire locally,” said Swart. “And typically locally, we’re looking for more the ‘figure-outers’ — people who can figure out the what, the why and the how.” For the people that are the ‘do-ers,’ those who will actually execute on that strategy, Swart advised hiring online.

Foodzie’s Rob LaFave agreed. “The ones that we would really go to battle for are leads,” he said, noting that he specifically looks for “VP-level types of individuals who are going to be managing and recruiting for talent beneath them.”

“At the end of the day it’s about execution,” said Miller. “Sometimes that means having the expert in something very specific,” and that person may or may not be local. If they’re not, she added, you have to figure out a way to work with them, and you have to determine how much value they are adding for your startup at that particular point. “Because that’s what it’s about every day in the trenches, is making progress,” she said.

#4. Empower Your Team to Make an Impact

One of your best resources in winning the Talent Wars is creating a culture where people are empowered to make an impact, said Swart. Perhaps the most powerful way to appeal to great talent is offering the opportunity to make a big impact on the company and on the world, and to own a meaningful part of the company’s mission.

“People want to work for a great company with high growth and good people, but those are table stakes,” he said. “They’re looking for impact. People want a job where they can make a difference and can get recognized for making an impact. And if the company is doing something impactful, that’s even better.”

If you’d like to read more about this discussion, check out these great posts from ZDNet and Staffing Industry Analysts.

Jenna Weiner

Content Marketer

Jenna Weiner is the former content marketing manager at oDesk and was the editor-in-chief of the oDesk blog. With a background in business and technology writing, she specializes in content marketing and strategy, public relations, and branding. Before joining oDesk, Jenna was a writer and editor for Monitor Group’s marketing department (now Monitor Deloitte) and was the Business & Technology Section Editor for Brafton Inc.… read more