The new rules for startup hiring

Hiring’s a lot like dating. 

It starts with two people sitting down and having a conversation. Just maybe, it leads to another conversation. There has to be mutual interest for it to work, but there’s often a pursuer and a pursued. Eventually, if all goes well, both parties make a decision that affects their daily lives. Obviously, there are differences (last I checked, most people have more jobs than they have life partners), but in essence—these are highly competitive and deeply interpersonal markets. And in startups right now, particularly for go-to-market and engineering talent, competition has gotten wild. 

“It’s a hiring free-for-all,” said Rhys Hughes, GV executive talent partner. “There’s, of course, the [AI] bonus hilariousness out there, the great talent auction, and all the things making it competitive. Right now, with our portfolio companies, I’m spending a ton of time with them on this proactive approach. If a founder says to me, ‘I’m open to a rec,’ I say: ‘You’re already late. You should already know three to four people.’”

I spoke to six founders and VC firm talent leaders, and there was agreement—we’re in a new era of hiring for startups. Once, it was a “growth at all costs” game, characterized by soaring headcounts. Those days are over, replaced by a push for companies to run leaner teams of exceptional people—who are often already established in their careers. 

“The biggest thing I’ve noticed is that people care a lot more about talent density than about headcount growth now,” said Atli Thorkelsson, VP of talent network at Redpoint. “I think what’s feeding into it is this: There’s more you can automate now, especially within engineering and all kinds of other functions. You can automate a lot of junior-level work, so what you’re really looking for is higher-level thinking. There’s a culture, or ethos, right now—whether it’s true or not—that building the next really cool AI product may be harder than building the great SaaS products of the past.”

Thorkelsson and Redpoint released a report this year that showed that while demand for mid-level and senior talent is high, demand for entry-level talent is declining rapidly across startups. This is naturally linked to AI—as the technology develops and changes quickly, track records and adaptability matter more than traditional credentials. 

“For a while, I was really focused on: Have you done it before?” said Garrett Lord, cofounder and CEO of Handshake. “Now, after hiring hundreds and hundreds of people, I’ve really learned it’s more about learning agility, judgement, and work ethic than about you spending four years at Meta.” 

Lord has chased potential hires across the globe—even recently meeting a prospective executive in Dubai. He says the competition for AI talent is as intense as conventional wisdom right now suggests. 

“If you’re remotely connected to or have worked at one of the AI companies, there are seed funds that will just write you a check on the spot,” said Lord. “You could own your own company. You could go to a big company, and cash in on public [restricted stock units]. Not Meta-style, but significantly more money than many folks have ever seen.”

So, if you find a great candidate, don’t hold back.

“My advice to founders is that when you find a candidate you like and that first meeting goes well, lean into them,” said Paula Judge, VP of talent at Accel. “Start texting them immediately, and build the relationship. Let them know how you’re going to work with them. Act like you’re working together. Show them what it’s going to be. That’s really the dance. That’s how people and companies differentiate. People do say ‘I took this job for less money because I really liked the people.’ Candidates are looking to do their best work.” 

To compete, you have to start early, said Eléonore Crespo, cofounder and co-CEO of Pigment. 

“I think of it like what sports teams do to find the future stars,” she told Fortune via email. “They look at 16-year-olds that show promise, and they keep tabs until the moment is right. I try to do the same every day.”

It’s an essential point, said GV’s Hughes—as in sports recruiting, the long game matters. 

“The best founders are building relationships with talent long before they need them,” he said. “So when they do give them that call, that person will take that phone call, because you’ve invested the time. That’s going to be the currency that matters most for our companies as they hire and scale.”

And, of course, as in dating, hiring is only the beginning: Once someone’s in, it’s tougher and more important than ever that they stay, said Jen Holmstrom, Notable Capital partner. 

“Once you get them in the door, how do you ensure that particular talent is going to stay invested?” said Holmstrom. “Do they feel they have autonomy, that they have room to run, that they’re trusted? You have to create an environment where you retain them, keeping them with you on the journey. And that responsibility sits with the founder. It sits with the leadership team. And it’s not easy to do. It’s not to be underestimated.” 

See you Monday,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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This story was originally featured on Fortune.com