Experience vs. Talent

How do you know when to hire for experience versus when to hire for raw talent? This is an interesting question that I’ve heard come up several times in the past week, and then again as part of an article on VentureBeat called, “Just getting started? Focus on this to get to the next level.”

Author Pamela Springer advises that growing a business — particularly in the earliest stages — is best fostered by focusing on your people, your strategy and your capital. In that order.

She then goes on to discuss cultivating your team in the ways best suited to evolving your business. And while she warns that on-the-job training is expensive, she also points out that skills aren’t always everything.

I see new startups struggle with this question daily. Serial entrepreneurs with a good network that includes lots of other serial entrepreneurs tend to gravitate towards experience born of the excessive scar tissue left behind by a track record of startups.

Or they immediately jump to the other extreme and go with fresh talent, right out of school with almost no experience whatsoever. As with anything, there are pros and cons to each.

Experience Pros
The #1 advantage to experience, of course, is using hindsight to help navigate the dangerous waters of the startup world. Someone with the right experience can help predict, dodge and mitigate the landmines that someone who has not been through the perils of this world cannot possibly foresee.

Experience Cons
The biggest disadvantage I’ve seen to experience is an unspoken assumption that what worked before will work now. This is one of the most dangerous ones, and often the hardest to combat, because someone who has been successful with a particular approach in the past is usually inclined towards using it again in the future.

The second biggest disadvantage I’ve seen to a track record of experience is ego. A few successful turns in some great roles at some companies with flashy brands (or really big exits) can sometimes inflate an ego beyond reason — making the experienced person in question not only hard to work with, but also potentially inclined to take credit for past successes that they really didn’t have anything to do with.

Tactically speaking, the biggest obstacle that small businesses and startups often face trying to hire this demographic is very simple: money. Experience tends to command expensive rates, which is often beyond the reach of a new venture.

Talent Pros
The biggest pro of fresh talent is that, if you help develop it, not only will you build great loyalty, but you’ll also reap untold surprises in areas you can’t ever entirely imagine. My favorite part of working with fresh, young talent is that they are often fearless, curious and a constant source of pleasant surprises.

Talent Cons
This is a bit less of an issue since the economy collapsed than it was before, but the biggest con I typically encouter when it comes to young talent is boredom. There are plenty of things about routine, daily operations that can be tedious and boring, and if that’s all you have for your young talent to do, then be prepared for them to exit about as quickly as they arrived.

All in all, there are reasons to consider going either direction, depending on the role. But also keep in mind that, especially in small and privately owned businesses, the personality of the founder/owner has to be factored in.

There are a lot of qualities that Millenials poses, which are not always as effortless for Gen X and older. Things like collaboration, a dependency on technology, and a craving for work-life balance are all bigger factors for them than for some of us who are older. So if you’ve got a CEO who calls the shots without a lot of input or debate, then an older demographic might be better about rolling with those punches.

On the other hand, if you have a more democratic organization that likes to do a lot of brainstorming and hashing through ideas, then — speaking as one of those “older” demographics — it’s often something that Gen X and older find frustrating, and an abstacle to quick execution.

I think the important thing to remember is that building a good organization really requires pulling from both pools of resources. If you stick to only one or the other, then you run the risk of building a lot of blindspots into your business without having the 360 degree vision to recover. So pick and choose.

Personally, I will usually start by defining my needs and expectations of the role, and then break apart the list and assess if most of the qualities I am looking for require experience to be successful (e.g. auditing, project management and maintaining client relationships), or if they are more inate (like strong communciation skills) or readily teachable (most standard business technology, meeting facilitation, etc.).

Of course, the real trick is, when you find raw talent — even if you don’t have a role to be able to hire them right away — don’t let them go. Find another way to build a relationship with them. Whether you can mentor them, find an internship for them, or connect them to other people who can offer them employment, your long-term best interest is in becoming a magnet for great talent — even if it hasn’t had the chance to prove itself yet.

Alora Chistiakoff is an entrepreneur, blogger, strategist and project manager who has been developing online business and technology for startups for more than a decade.  She co-owns The Indigo Heron Group, Inc., a web strategy firm in Austin, Texas