Q&A with Eóin O'Toole
As we move through the second quarter of 2022, the competition for technical leadership talent is stronger than ever, with candidates exerting more control over the hiring process both directly and indirectly. Eóin O’Toole, who leads Riviera’s Emerging and Early-Stage practice, shares his thoughts on the state of recruitment, and recruiting specifically for emerging companies, from concept through product-market fit, and early growth phases.
What is the current state of recruiting for Emerging and Early-Stage Companies? How does this differ from 2020? 2021?
As the funding landscape has broadly continued to shade toward larger investments at earlier and earlier stages over the past 5 years, there is significant investment from sources old and new in the wake of a paradigm-shifting past 2 years. We are on the steep upslope of the bell curve of an innovation cycle.
Early-stage companies are driving stronger-than-ever competition for experienced technical leadership talent. ‘Seed is the new A’ is an understatement: just 5 years ago a small minority of companies were revenue-producing at Seed going to A, compared to today, where 80%+ are producing revenue at the same stage. Accordingly, the talent needed to secure product-market fit, and lay the foundations for scale, is beginning to find its way into earlier stage companies. Seed companies are competing to attract talent that was typically considering only series B or later stage opportunities only a few years ago as more talent realizes that the ‘Seed stage’ no longer necessarily represents the same risk it used to, coupled with stronger conviction by founders in their businesses given early traction.
Equally, technical talent has had 2 years to take a long, hard look in the mirror and reflect on who they work for, and why. Mission-centricity, a desire to make a meaningful impact, and values alignment are all key motivators for great talent seeking a new place to call home. In this candidate-driven market, talent is happy to take the time to explore various types of opportunities across various stages of a company’s lifecycle.
What are your expectations for the future of recruiting for Emerging and Early-Stage Companies?
We are in the midst of an exciting (overdue?) renaissance of ‘venture’ capital; that is investment in new models that are speculative, innovative, and represent risk. While funding and innovation-to-maturation cycles ebb and flow over time, I contend that the shift to placing ‘earlier bets’ (in part to box-out competition), will continue, provided the macro-economic circumstances remain consistent.
Further, I anticipate we will see an emergence of incubators from within the 4 walls of VCs themselves as ideation-to-creation loops contract.
The upshot is that these trends are likely to continue with talent, that was once thought only suitable for or interested in the high-growth phases of a company’s lifecycle, continuing to vie to be the foundational anchor of more nascent companies.
What does the skillset of a leader look like for an early-stage company? How does this differ from past years?
The requirements for leaders vary by the specific point in the earliest stages. For example, a 0-1 product leader is often quite different from the person who can take you from early product-market fit to initial scale. The former is more inclined toward innovation, rapid testing and iteration, being scrappy, and leading a technical team to prototype. The latter is more inclined toward process, people, and customer engagement and is accustomed to defining and refining product roadmaps against a multi-year horizon.
Early engineering leadership talent equally varies based on traction, funding, revenue, and product-market fit. Depending on the DNA of the founding team, the need may be for a technical architect +; or more of a ‘talent magnet‘ engineering leader who has developed a recruiting mindset and has started to get followership; all the way through a ‘celebrity’ CTO or VPE who can be a broader market asset to the company from the outset.
How important is culture fit to these companies? How do you as an executive recruiter assist these companies in finding the right culture fit?
Culture fit is paramount. In the wake of Covid, talent is increasingly unwilling to tolerate anything less than an optimal culture fit. There are new forces acting on any company’s culture, for example, companies who scrambled to become remote in 2020, have often suffered because they have not reestablished a firm sense of identity as a remote organization, nor reassessed how their culture may have evolved in a remote-first world.
We encourage, and prescribe, interview processes that facilitate explicit exploration of culture fit. Too often hiring managers can get caught up in the ‘like factor,’ and treat it as a proxy for culture fit. Liking an applicant should be at once table stakes, and immediately irrelevant. Beyond culture, the glue for candidates who are weary from the trying recent past has been shared values that are personified, not just touted. When it comes to determining a candidate's long-term cultural fit, interview processes that include live whiteboarding sessions, intentional conflict scenarios, mutual challenges, and off-cycle informal interactions are most effective.
What is the importance of culture and engagement in finding and keeping the talent needed to drive these companies today?
Engagement is stimulated in many ways; financial, emotional, social, and professional. The fundamentals have not changed, whereby leaders must remain attuned to the needs of individuals and teams while challenging them accordingly. Leading with transparency and authenticity is valued now more than ever; technical leaders are sophisticated, cross-functional leaders, with whom both challenges and opportunities should be equally shared - especially during courtship.
To keep great talent engaged and driving your outcomes, you must first inform and empower them. As early-stage opportunities abound, most often the match comes down to values, culture, and people building relationships with people. If you solve for those factors, you stand a much greater chance of withstanding challenges as a team in the future.