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a16z: How to Hire Web3 Staff During Crypto Turmoil — Guidelines and Best Practices

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We’ll cover some principles and best practices to guide web3 startups in navigating this new talent landscape.

Original title: "Hiring in web3: Principles for finding talent in volatile times"

Original author: Ian Dutra & Mehdi Hasan

Original translation: Kate, Marsbit

The crypto market may fluctuate, but crypto innovation follows a basic order. Builders who entered when prices were high have always existed, and new ideas, codes, and projects continue to flow. A new generation of web3 startups is gearing up for the next wave of progress, and many are actively hiring.

Meanwhile, the tech talent landscape has changed dramatically in recent months. Layoffs across industries, especially at large tech companies, have left thousands of employees looking for new challenges and opportunities. As a result, web3 startups with cash and a positive outlook are seeing a very different talent pool than they did a year ago. But how can companies hire smart employees at the right time during turbulent times? No matter the season, hiring the right people at the right time is critical to building a resilient team.

In this post, we’ll cover some principles and best practices to guide web3 startups navigating this new talent landscape. As former leaders of high-growth web2 and web3 organizations, we’ve seen a wide range of sizes, talent needs, and market volatility. So here are a few thoughts on how teams can make the most of their headcount (and budget) in transforming the proverbial hiring abyss into a functional and efficient hiring funnel.

Preparation

Hiring fast requires foresight. Without careful planning, it may take longer to fill roles that your team already (and perhaps even desperately) needs. Here are some principles to get started:

Be realistic about hiring needs. Full-time employees aren’t necessarily a panacea, especially when the team isn’t sprinting into a bull run. Teams may want to consider starting with agencies, freelancers, or other temporary workers to be able to scale up or down as budgets and workloads ebb and flow.

Work back from the business needs to define roles. If the company isn’t clear on whether it should hire a senior individual contributor and a senior director, take the time to sort out the company’s needs. Some questions to ask: What will the person in this position do in the first week? What will they be doing in six months or a year? Do they need to build a team? Or build the nuts and bolts of their discipline?

Define responsibilities and map them to skill sets. Can one person do it all, or does the team need to hire more? For example, a token economist (or mechanism designer) may have the analytical and economic acumen to create token programs, but you may need to consider hiring a software engineer to deploy and maintain these models in production.

Avoid overhiring by focusing on current and near-term needs. Members of small teams often do more than what is outlined in their job descriptions — trends, technologies, and market conditions can change quickly in web3. Focus can help organizations stay agile and goal-oriented while identifying obvious skills gaps and growth opportunities.

Teach experts about unfamiliar skills. Small companies have to make a lot of “first-time” hires — especially in newer, more niche web3 roles that didn’t exist a few years ago. Hiring managers looking for skills they don’t have (whether it’s writing Solidity or managing an NFT community) may choose to bring in an external consultant.

Rethink “web3 native” as a required skill. Many hiring managers require candidates to have web3 experience, a qualification that limits the number of teams (which, despite recent layoffs, is small enough to be a challenge for many companies). Worst case scenario, teams may seek people with skill sets that don’t actually exist. Instead, consider which roles would be a good fit for experienced web2 professionals or enthusiastic new talent looking for challenging, career-defining experiences.

These are just a few best practices, and there are certainly many more to keep in mind before you post a job description. It’s okay if some parts of this process aren’t quite working out — hiring managers should always keep you informed and make adjustments as you go along.

Quality, not quantity

A year ago, many companies (both web3 and beyond) were struggling to fill openings to keep pace with market pressures. Now, these companies are laying off or slowing down hiring. Teams looking for key positions may need to make some hard choices and prioritize their hiring plans accordingly. When job openings are becoming scarcer, hiring the right people becomes even more important.

At the same time, the talent pool continues to deepen, and great candidates who weren’t available last year may be interested in exploring new roles, opportunities, and ventures. But despite this influx of talent, a good principle to remember is to not only find the best talent, but also find people who can do the work for the long haul. If people are willing to join a project during tough times, they’ll also stay during good times.

Connection Over Closure

As recruiters, we sometimes like to think of ourselves as salespeople (and we can be!) — so it’s easy to fall into the habit of treating the time between receiving an offer and signing it as a hard sell. Shortfalls occur when this mindset focuses more on selling the company than identifying the unique needs, wants, and expectations of the individual. (Also: talent acquisition is a long game. You want to be centered around the person, not just the company, because over time, as your relationship with your talent pool deepens, they will move jobs multiple times.)

Closing the interview actually starts with the first call and continues throughout the interview process by getting to know the candidate. This is especially important in turbulent times, as focusing on the quality of the connection will help close candidates faster (ie: reduce time to hire) and reduce turnover and attrition once the employee joins (ie: reduce time to backfill). When there are major shifts in the market, you may even have to “re-close” candidates, calling them and helping them separate media headline perception from reality.

Two areas to focus on in particular when closing:

Career fulfillment: What makes the candidate passionate? What problems do they want to solve? There are so many smart, idea-driven candidates in web3, there is a lot to talk about.

Work-life balance: Every company likes to promote work-life balance to potential employees. But in reality, startups can come with longer hours, greater uncertainty, and a ton of tasks outside of a candidate's job description. How do candidates rank work-life balance? What does your company actually offer?

Also include some key considerations that are even more important during turbulent times:

Risk Appetite: Is the candidate attracted to this space and opportunity? This will be more important than usual to ensure there aren’t too many distractions during a new hire’s career. Take the time to connect them to the position: Why them? Why here? Why now?

Experience with Ups and Downs: Has the candidate experienced turbulent markets before? Less experienced candidates may need to understand how the company navigates market cycles: How do you do more with less and stay focused on the work rather than external noise?

Base Salary vs. Equity: Make sure the candidate understands the nuances of compensation packages. Candidates can reasonably review packages that include tokens or equity that may change as the market changes. How can you provide information and mental models to help the candidate apply these to different outcomes?

Throughout the interview process, there are many ways to build trust and make the best impression on potential employees (get to know them, be transparent about the hiring process, communicate updates and expectations regularly, etc.). These insights can also paint a picture of why this role at this company is the best fit at this time. Not every job will work out, but the right person will.

Focus on the future state

Generally speaking, the earlier a company is in development, the more work needs to be done in helping candidates “see the future,” especially when candidates are more easily swayed by brand perception. What is the company’s goal? How does this hire fit into that vision? In an industry where change and innovation happen at a rapid pace, it’s critical that leaders keep candidates (and employees) focused on the problems they’re solving.

Prospective employees should be invested in the work the team wants to do. They should also understand what success looks like and the path the company is taking to achieve it. For example, building in web3 is dynamic and ever-changing — this can lead to longer periods of focus on solving hard problems, and the ability to pivot quickly as the market evolves.

Often (especially in web3), this may require stepping back and explaining a broader worldview or ecosystem. Set the stage, then drill down into the important stuff: What needs to happen for a successful exit? Perhaps the candidate will trade liquidity compensation for a longer-term incentive like equity. What does the growth story look like?

To really paint this picture, meet the candidate where they are. Do they truly understand the web3 mission, and do they understand where this company is headed? Consider trying a mental model that maps the company’s growth to their personal growth (and, in the long run, how their role can grow with the company long-term).

While every company, candidate, and hiring process is unique, focusing on building a consistent process and hiring the right candidates will prevent attrition at a time when your team needs stability and accuracy the most. Staying diligent when hiring is slow is like exercising a muscle: the more your team practices, the stronger it will be when hiring velocity picks back up.