The current labor market is a gold mine of talent for startups
For any company, great talent is key for hitting goals and building scale successfully, but hiring the best people is by no means done cheaply or quickly. Startups have it doubly hard, though: In addition to finding great talent, they have to convince them to accept lower compensation — and sometimes more work — than they would get from working for a larger tech company.
But the current labor market puts founders in a much better position. Speaking at a panel focused on taking advantage of a softer labor market at TechCrunch Disrupt 2023, Nick Cromydas, the co-founder and CEO of Hunt Club; Samara Hernandez, founding partner at Chingona Ventures; and Noah Gale, the co-founder of Tribe AI, all agreed that founders today have it better than they did a couple years ago.
According to Cromydas, the whiplash we’ve seen in the labor market over the last few years has created an environment that startups can and should take advantage of.
“There was a madness and a mania for getting the best talent the last two or three years that boosted compensation all the way up. If you were an earlier-stage company trying to hire really great talent, you were competing against growth-stage companies looking to go public. So it was really hard to hire meaningful folks, because everyone was chasing the growth-stage gold rush,” he said. “It’s a really good normalization for tech startups.”
Hernandez added that the currently less competitive hiring market also means that expectations are being reset around salary and compensation packages. Startups shouldn’t feel like they need to offer packages they can’t really afford to land the best talent.
The softer job environment means companies can hire slowly and thoughtfully, too, which wasn’t the case a few years ago. Cromydas suggested startups tap their networks and ask for referrals in order to fill roles with folks looking to buy in to the company’s mission. He added that the layoffs have also likely turned off a lot of the “tourists” looking to work at startups thinking they’ll get rich quick.
