Startup Hiring 101: A Founder’s Guide. Part 19 - Selling and Closing Part A

Welcome to part 19 of our series, where we’ll cover how to sell and close candidates. There’s so much to cover here that we’ve split it up into Part A and Part B.

This selling and closing guide is based on a talk I give at YCombinator to startup founders on how to close candidates. I also incorporated some great tactics and frameworks that I learned from Jose Guardado, who used to give a Selling & Closing talk at YC before me.

Introduction to Selling and Closing

Just like in sales, closing is part science and part art. The science is your conversion rates, iterating on your process, all the way down to your close rate. The art is personalizing how you close each candidate.

There are many things candidates have in common when picking a job, but then there are many things that are highly personal. The art is understanding when to apply general best practices vs. when to tailor to each candidate.

This section will cover high-level best practices, a framework for how candidates make decisions, and specific tactics/best practices for closing at every step of the recruiting funnel.

High-level best practices

• Ask questions to understand your candidate’s motivations - Everyone has different motivations. Knowing what motivates your candidate will help you sell to them. Also, if your candidate has the wrong motivations (e.g., cash comp), they may not be the right fit, to begin with. A big part of this will be asking the right questions.

• Start closing early - Closing is an on-going process beginning with your initial outreach, continuing with your first coffee chat, throughout the interview process, through the offer stage, and even beyond, until your employee’s first day. Don’t wait until you make an offer to start closing someone. It doesn’t feel genuine, and candidates won’t like it.

• Run a tight process - One of your competitive advantages as a startup is speed. Use this to your advantage. Keep momentum strong by always having the next step.

• Make sure your candidate is ready before making an offer - The single biggest mistake I see founders make when closing is extending an offer when they’re ready to make the offer instead of when the candidate is ready to accept.

• Use a comp data set (e.g., Pave) to make your offers - Align on a compensation philosophy allowing you to be consistent and transparent when making offers. If you’re going to negotiate, know what your levers are before jumping in.

• Get creative and involve the entire team - As a startup, you can get super creative with the close by tailoring it to each individual. Get your whole team involved, whether that’s co-founders, founding team members, investors, advisors, or even customers.

• Spot curve-balls and handle them quickly - It’s critical to know about competing offers, counteroffers, and exploding deadlines from other companies so that you can respond quickly.

Understanding motivations

Every candidate has different motivations. Understanding their psychology is key to knowing how to best position your opportunity. There are a couple of frameworks out there, ranging from theoretical to practical (e.g., Maslow’s Hierarchy of Needs, McClelland’s Needs Theory, 5F’s from Who).

I like the 5 F’s (fit, family, freedom, fortune, fun) because it’s practical:

• Fit — Is the company a good fit for me and my values?

• Family — Will I be able to prioritize my family?

• Freedom — Will I have freedom and autonomy?

• Fortune — What’s in it for me financially?

• Fun — And then how much fun are you going to have?

Most candidates will consider at least these five categories and sometimes more. The art and personalization is in figuring out how the stack ranking works.

• Some candidates might value freedom more coming from a big company where they have less autonomy.

• Others may be valuing fortune if they’ve been part of a few startups that didn’t pan out.

A lot of selling is understanding someone’s primary motivations and getting to know the candidate; this will allow you to frame your opportunity along the dimensions that actually matter to them. The best way to do this is to ask discovery questions and listen, starting with your very first conversation.

Tactics for closing at the top of the funnel

The close starts with your very first conversation with a candidate. In fact, at Gem, we call our first touchpoint with every candidate the “initial sell conversation” because it’s mostly about closing.

The initial sell conversation

In the initial sell conversation, you need to get great at:

1. Making candidates comfortable by building a strong rapport. Do your research ahead of time to find a conversation topic that steers the conversation in a natural, non-sales-focused tone.

2. Getting to know what’s important to them, which is very similar to “discovery” in sales.

3. Telling your startup’s story.

4. Doing a small amount of qualification on whether they’re a good fit, but if and only if you’ve done bullets one through three.

5. Suggest, and lock in the next step.

Your main goal with your first conversation is to get the candidate excited about your startup, so they want to take the next step. If they’re a passive candidate (e.g., they agreed to meet you for coffee from a cold email or text), your most important job is to sell them. 90% of your time should be spent closing (10% can be you evaluating them). If you don’t spend enough time closing and spend too much time evaluating, the majority of your candidates will fall out of the funnel here.

And closing doesn’t mean “pitching” your company straight out of the gate. Get to know them first. Once you’ve given them a chance to tell you what’s important to them, share a bit about your company and tailor “your pitch” to what’s important. Only after you’ve done these things should you ask a few questions to evaluate them.

If someone is actively interviewing or applying to your company, you can spend a bit more time evaluating them upfront, but I’d still recommend spending half your time getting them excited once you’ve qualified that they may be a good fit. And if it’s clear they aren’t the right fit, you should still carve out a few minutes for their questions.

Ask discovery questions

So how do you get to know what’s important to someone? In sales, there’s a concept of “discovery,” and it’s how we understand what’s important to our buyer. Before a pitch or demo, we ask questions to get our prospect talking to learn what’s important. Recruiting is the same.

Here are some questions I like to ask to get to know my candidate:

• “What prompted you to reply?” e.g., if I reached out over email.

• “Sounds like you’re starting to think about what’s next. Have you thought about what’s important to you?”

• “What’s motivating you to make a move right now?” This gets at motivations and timing.

• “What kinds of opportunities are you exploring? What types of companies? What size?” Get specific.

• If you learn someone is considering both startups and larger companies like Stripe, ask them if they’ve thought about the tradeoffs? Get them thinking about the tradeoffs and which are most important to them early.

• If someone is coming from a large company, or you learn they’ve just bought a house/have kids, do a little bit of discovery around comp early on. You’re not legally allowed to ask certain questions like what they’re making, or whether they have kids for that matter, but you can ask, “what are your expectations around compensation?”

• It’s common to have other stakeholders, whether that’s a partner, family, mentors, or parents. Ask, “As you’re thinking about what’s next, is there anyone else you need to get on board?”

Just like in sales discovery, you can have a set of questions you generally like to ask going in, but you should tweak them to each situation. If you master discovery, it should feel natural and conversational.

In some cases, you uncover hard blockers where no amount of convincing will win a candidate over.  these cases, be straightforward, verify it’s a blocker, and then try to be helpful. For example, in the early days of Gem, I would sometimes discover an engineer needed to make a minimum cash comp that was too far from what we could offer. My talk track would go something like, “look, it sounds like you need to make $180k, and we probably won’t be able to bridge that gap – is that going to be a blocker? I totally understand; how can I be helpful? We work with some of the best recruiting teams. Can I introduce you to a later-stage startup, like Segment or Plaid?”

Tactics for closing during the interview loop

Closing continues throughout the interview loop. This means running a tight process with clear next steps, continuing to do discovery, and giving them a sense of what it would be like to work with you.

Run a tight process with a quick turn-around

If you grab a coffee with a candidate, follow up the same day. If you bring someone onsite, target a 48-hour turnaround. Speed is one of your advantages as a small startup.

Always have a next step planned

Just like in sales, you can’t move someone forward if you don’t have a next step. It’s easy to move someone from phone screen to onsite once they’ve entered your interview process, but knowing the right next step may require more nuance at the beginning and the end of a hiring process:

• Going into each meeting with a candidate, I have a range of next steps in mind, and by the end, I always suggest a next step.

• If an “initial sell conversation” went really well, I’d ask if they’re ready to interview. If not, I might suggest a coffee with my co-founder or grabbing lunch with the team.

• Usually, I’ll schedule that next step live, “Why don’t we pull out our calendars and schedule it now while we’re both here?”

Continue to do discovery 

I always aim to learn at least one new thing in every single touchpoint. The more you know about a candidate’s motivations, the better you can sell to them. It will feel genuine and like you’re on their team.

Give them a sense of what it feels like to be part of your team

Invite them to optional events. This may pique their interest or help them better understand your company and feel connected. At the bare minimum, we time our interviews so they can grab lunch with the team, but if they’re interviewing on a day when we have All Hands, we time it so they can attend. We’ve done this for team standups, interesting customer meetings, etc.

Use preemptive language

One fun trick is to use preemptive language. If they notice something quirky about your office (e.g., in Gem’s case, all our hot sauces or dogs) or your culture, say, “you’ll see a lot more of this when you join.” This gets your candidate to start imagining themselves at your company. Don’t say this all the time. Feel it out if you have momentum with the candidate. If you do this well, your candidate may find themselves saying “we” a lot.

Up Next

In the next installment, we’ll cover tactics for closing at the offer stage and beyond. I’m going to say this several more times before this is over, but remember, always be closing—always.

In the meantime…

• Want to use Gem for free for 2 years? Apply for our free for startups program

• You can find the rest of our Startup Hiring 101 posts on the Gem blog

• Check out the complete Startup Hiring 101: A Founder’s Guide, a comprehensive guide to startup hiring, including step-by-step instructions, example templates, and best practices