How do you stand out in a crowded market?
For a top candidates to join your startup, they have to believe two things:
If you are the underdog in a market full of massive competitors, that second point can be tricky to explain.
For example, a young video hosting startup would have to convince candidates that they can succeed despite the presence of Vimeo and YouTube. Similarly, a credit card processing service has to explain how they succeed in a world where Square and Stripe are ubiquitous.
After speaking with several companies that have successfully recruited against the 800-pound gorillas in their markets, we found all of them focused their sell on their startups' vision, impact and culture.
Below, we've broken out each of these in more detail.
The first thing candidates must believe before joining your startup is you are building something your competitors aren't, or even better, something they can't. For this to be true, you need to have a vision for your company that relies on a technology or a strategy your competitors don't have.
For example, Plastiq is a credit card processing service, but it's differentiated from market incumbents by its technology and focus. Specifically, it helps customers take the bills that might be hard to pay using credit cards—mortgages, tuitions, payroll—and connects them to a payment platform that accepts them.
Because Plastiq is focused on building something that is not contingent on bigger payment platforms failing, CTO Trevor Brosnan said he reframes bigger incumbents as “indirect competitors.” While the bigger players certainly overlap in some areas, and could in theory roll out products to compete in Plastiq's niche, Brosnan said he's able to share a vision of success with candidates that doesn't depend on overtaking a bigger company's core market.
Explaining your vision of success—and how it differentiates you from the rest of your market—refocuses the way candidates see your company. Instead of thinking your startup is an underdog going head-to-head with bigger companies, candidates can understand joining your startup would be a one-of-a-kind opportunity.
Vision questions you need to answer:
The ability for a single team member to make a massive impact is oftentimes the thing that draws candidates towards startups over larger companies.
For example, at Shift, a peer-to-peer used car marketplace that competes with giants like Carvana, the team talks about how discriminatory the traditional car-buying process is. When The National Fair Housing Alliance sent “secret shoppers” to various car dealerships in 2017, it found non-white buyers were offered fewer financing options 75% of the time. Similarly, Shift's own survey found “nearly 90% of women have felt spoken down to, belittled, or disrespected during the car buying/repair process.” By removing dealerships and their ability to discriminate from the equation, Shift is helping to solve this problem.
Beyond the social impact of the work they do, candidates also like knowing they will have an opportunity to impact within their company. They want to know they'll be exposed to key problems in the business, and have real decision-making power. George Arison, founder of Shift, said Shift's eventual goal is to be a marketplace where any goods can be bought and sold, rather than just cars. It's an interesting problem, and the engineers solving it are given a great deal of freedom in how they approach it—from executing on their own product ideas to helping pick the tech stack and tools their team uses.
Impact questions you need to answer:
In 2017, the Korn Ferry Institute surveyed 14,000 recruiters to ask what they think candidates care about most when picking a company to join. The most popular answer was culture. As a startup recruiting against bigger incumbents offering better compensation, culture can be your equalizer.
The best way to sell your culture is to explain what types of people succeed at your startup and also what types of people fail.
Dylan Field, founder of collaborative design tool Figma, explained, “There are plenty of completely valid personality types that don't succeed at Figma. If you're looking for a super-competitive environment, you won't find that here. If you're the kind of person who wants to be really head-down all the time, that's great, but we really value collaboration.”
The balance to Field's approach is critical. He acknowledged there is nothing inherently wrong with seeking competition or solitude in the workplace, but he also explained candidates won't find those conditions on his team. This honesty allows candidates to self-select, and it underscores Figma's promise of a hyper-collaborative culture isn't just marketing.
Another key to selling your culture is making sure candidates understand how they can contribute to it. Culture should be seen as something employees have influence over—not an arbitrary set of rules hovering above them. For example, Field is adamant new hires should be seen as additive to Figma's culture, meaning they feel so safe in their work environment that they can suggest and advocate for changes. To Field, this promise of empowerment isn't just effective in closing candidates—it actually protects Figma's culture as the company scales.
Culture questions you need to answer:
While being an underdog in the market presents certain challenges—namely that you have to convince candidates your company can win—it also presents certain advantages. The fact that other companies with similar value propositions have succeeded means, to a certain extent, your market is already validated.
Similarly, a major competitor can make space in a market. Chris Savage, founder of video hosting startup Wistia, has spoken about how YouTube's existence, as a free alternative, has reduced the number of competitors Wistia has to contend with. Instead of dealing with dozens of copycats, Wistia can focus on building a product that services its specific niche of the video hosting market—businesses who need complete control over their video hosting.
Having bigger incumbents in your market doesn't make it impossible to recruit. It just changes the way you approach your sell.