Building Your Dream Web3 Squad: When to Recruit In-House vs. Agencies (Data-Driven Decisions for Founders)

“Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly” Vitalik Buterin (Ethereum Co -Founder)

Introduction:

You're building something incredible, but without the A-players, it's just an idea. Hiring is crucial, but it can be a real head-scratcher. Should you leverage a recruiting agency, build your own team, or do a bit of both?

The answer, like most things in the startup world, depends on your stage. But this time, we're ditching the guesswork and bringing you data-driven insights to guide your decision-making. Let's break it down by headcount and growth stage, giving you a roadmap to find the perfect recruiting approach for your startup.

Boostrapping Buddies (0-15 Employees/Pre-Seed & Seed)

Cash is king at this stage. Here's where your network shines. According to various reports and studies which includes the Global Startup Ecosystem Report by Startup Genome its clear that a significant percentage of startups at the seed stage heavily rely on their network to find those first rockstar hires. Leverage friends, family, and investors – they'll be passionate about your mission and spread the word organically.

Recent data from ExpertBeacon reveals that the average cost-per-hire in the US in 2024 is $4,700. This amount includes expenses such as job postings, candidate vetting, and onboarding. It reflects both hard costs (like job board fees and background checks) and soft costs (such as productivity losses and time spent by existing staff during the hiring process). Partnering with an agency can be more expensive, but it can save you time—and time is money.

At this stage, however you do need to think twice about using agencies; their fees can eat into your precious runway.

That said, there are exceptions:

Critical hires: Need a game-changing CTO who can build the impossible? An agency can leverage their network to find that hidden gem that is probably sitting with your competitor.

Equity for expertise: Giving up significant equity for a founding member is not uncommon, and to recruit the best, you’re going to need a Web3 head-hunter. They’re going to find you the best leader that aligns with your mission & values, someone who is going to take your startup to the on-chain Olympus.

Surge hiring: Relying on a fee-based agency to assemble a team might endanger your business. It's simply too costly. However, specialized startup Web3 agencies, such as Bloc3, provide services that empower you to onboard someone internally to oversee all your hiring needs. Opting for a Talent Solution Partnership proves to be much more cost-effective and is highly favored among high-growth startups aiming to expand rapidly without compromising on hiring top talent.

Scaling Squad (15-100 Employees/Series A):

You're gaining traction! Now's the time to build a hybrid recruiting approach.

Tough Web3 Talent: Agencies can serve as a secret weapon when it comes to sourcing hard-to-find tech talent. According to a 2024 global Talent report by ManpowerGroup, a staggering 75% of employers face challenges in finding qualified candidates for specialized roles. Moreover, the report highlights that the tech industry experiences one of the highest talent shortages globally, with a rate of 76%. Leveraging the expertise and extensive networks of web3 recruitment agencies can help save valuable time and resources in addressing this critical challenge.

Empower Your Managers: Let hiring managers handle "bread and butter" roles. They know their teams best and can identify cultural fits as well as cultural adds.

Lean & Mean Support: An operations manager or EA can help with the initial screening process, freeing you and your team up for bigger strategic initiatives.

Growth Gear (100-250 Employees/Series B-C):

Congratulations, you're a mid-stage machine! It's time to invest in a full-time Head of Talent. This rockstar will:

Own the Process: From sourcing to onboarding, they'll manage the entire recruiting lifecycle, ensuring a smooth and efficient experience for both candidates and your team.

Build the Machine: They'll implement the right recruiting processes and practices to find the perfect fit every time, while helping you build your new employer brand in the DeFi landscape.

Scale with Smarts: As your team expands, they'll establish a dedicated recruiting team with specialists for both technical and non-technical roles. Here's where the data gets interesting – according to research by Rise (2024), the US currently hosts the largest Web3 talent pool globally. Combined with India and China, these three countries account for 50% of Web3 workers, and they collectively make up about 37% of the total global tech workforce.

To thrive in the ever-evolving Web3 talent market, high-growth startups must ensure their culture and practices resonate with the decentralized, privacy-focused ethos of Web3. Mere lip service won't suffice; you must authentically embody Web3 principles to attract and retain top talent.

Boss Level (250-1000 Employees/ Series D-E):

You're a talent magnet now! Here's how to keep the momentum going:

Dedicated Teams: By now, you'll have a director overseeing both technical and non-technical recruiting, each with their own teams. This two-pronged approach ensures you find the best across all disciplines.

Strategic Partners: Agencies can still play a role. Use them for specialized roles or high-priority c-suite searches where your internal team might be stretched thin.

Remember, Web3 Founders: Employer Brand is Your Secret Weapon:

As you expand into new blockchains, it's crucial not to underestimate the significance of establishing a credible employer brand. This is a pitfall many startups encounter as they progress beyond Series D. According to the latest report by LinkedIn on The Future of Recruiting (2024), employer branding ranks as the second most influential factor shaping the future of recruitment for the next five years.

Engaging with Generation Z presents a significant challenge in talent acquisition, underscoring the ongoing importance of employer branding in the coming years. For Web3 startups, the recruitment of Gen Z talent holds particular significance, making it imperative not to disregard the necessity of cultivating a credible employer brand.

Investing in crafting an exceptional brand and fostering a positive company culture is paramount. Your company's culture and values form the bedrock for attracting and retaining top talent. By developing a distinctive brand and honing your employee value proposition, you establish a clear differentiation for your startup and articulate your mission in a manner that resonates with web3 unicorns.

So, embrace the challenge, seize the opportunity, and continue to lead with integrity, passion, and a relentless pursuit of excellence. The future belongs to those who dare to dream, innovate, and inspire.