Australia’s startup scene is alive and thriving. But despite what we see, we know too well – launching and scaling a startup is no walk in the park. Especially when it seems like companies are either celebrating another round of funding, or making another round of redundancies.

Public sentiment about startups has always had notes of risk and uncertainty. But at a time like this, how do you convince top talent to join your startup when the perceived “risk” seems about as appealing as a soggy biscuit?

At a recent “Work Sucks” event, we heard from a few successful Aussie startup leaders. To tackle this startup challenge, they suggested flipping the script – instead of downplaying the risks, why not embrace it and be transparent about the reality of working at a startup?

Intrigued, we decided to dig deeper. We picked the brains of Flippa CEO – Blake Hutchison, Red Bubble AI CCO – Cheryl Vize, Fillr Cofounder – Chad Stephens, and Tractor Ventures Cofounder & CoCEO – Jodie Imam, to uncover their top tips for attracting talent during economic uncertainty.

Here are their 3 key pieces of advice:

1. Embrace transparency

As Blake puts it, “Look for people who thrive in risk. Sell the risk. Be super transparent and find the people who want what you have.”

Sure, this full disclosure approach isn’t for everyone. But are you really trying to attract just anyone?

Laying all your cards on the table will draw in people who:

• Understand the risks upfront
• Are excited to tackle challenges head-on
• Want to be part of your growth journey

Which is precisely the kind of people you’d want in a startup.

When he first joined Flippa, Blake knew that being upfront about the 12-24 month runway was scary for some candidates. For others? The thrill of competing against top startups and pushing hard to grow was a selling point which ultimately kept them engaged in the recruitment process.

Cheryl reminds us that no two people are attracted by the same startup challenges. She suggests asking candidates what kind of risk they want to take. Do they want to join a unicorn startup rocketing for rapid growth? Or a bootstrapped business focusing on purpose over pace?

Different startups suit different people.

The key is finding candidates who get fired up by YOUR startup’s particular brand of uncertainty.

2. Offer Employee Stock Ownership Plans (ESOPs)

The maturity of Australia’s startup scene is evolving. There’s an increased popularity of Employee Stock Ownership Plans beyond Silicon Valley. And with talent shortages making it difficult for startups to grow, it’s no wonder ESOPs are getting leveraged to give people a shared sense of ownership and success.

As Blake puts it, “People care about a win, big or small, if it’s related to their worth.” ESOPs align a candidate’s interests with the company’s success and incentivises them to help the business thrive.

He suggests offering around 15% of the company’s equity as an ESOP pool.

But he stresses that you need to clearly communicate how ESOPs work and what the potential payoff timelines are as it may not suit everyone.

Chad echoes this advice. When Fillr sold at the end of 2020, their ESOP made many employees life-changingly wealthy. It created financial opportunities many only dreamed of, including paying off houses and other debts.

The key is finding candidates motivated by the opportunity to have meaningful equity. As Chad says, some think long term, while others just want a quick buck. Understand what makes your ideal candidates tick, how it aligns with your values, and where you can find common ground.

3. Assess cultural fit

Assessing cultural fit is crucial, especially for startups where tight team dynamics can make or break success.

Jodie shares that at Tractor Ventures, cultural fit is more than 50% of their hiring process.

Ensuring candidates mesh with your values and vibe helps build a cohesive team. One that communicates seamlessly. And one that’s likely to stick together when times get tough.

And since values underpin culture, Cheryl reminds us that founders should clearly communicate the opportunities for growth and development.

She suggests that candidates deserve to clearly understand:

• Who they will be working with
• Who they will be learning from

That way they can self assess as much as you are assessing them.

And that transparency we talked about earlier? Must also be embraced when talking about your work culture, not just your company’s runway. If you’re not sure how to articulate your culture, or think you may be too biased (you likely are), ask others on your team for their perspective.

The bottom line? Prioritise candidates who share your startup’s vision and energy.

Key Takeaways

Attracting top talent to startups in uncertain times requires embracing risk and transparency. By focusing on the following, you can build a team of folks who share your values and vision:

Transparency

• Be upfront about the journey the candidates are signing up for
• Draw in people energised by the thrill of uncertainty

ESOPs

• Offer Employee Stock Ownership Plans
• Clearly communicate the potential value and timelines

Cultural Fit

• Ensure candidates mesh with your values and vibe
• Help create a cohesive team built to weather storms

Final thoughts

Hiring for startups is about finding people who share your ambition and vision. It’s about building a team that communicates seamlessly and sticks together when times get tough.

As Cheryl says, “Treating everybody equally is actually about treating everyone individually.”

So be transparent. Offer meaningful equity. And find candidates who get fired up to join the ever-evolving startup journey.

Want to know how your business can be positioned to attract amazing talent? We work with startups every day – from early stage to post IPO – to help them stand out and hire the best folks for their teams. Get in touch!