To reference Marilyn Monroe, a good developer is hard to find. Which is why startup 500friends is deploying a disruptive new recruiting strategy to lure the most talented developers out there.
500friends posted a call for “entrepreneurial hackers” on Hacker News, a social news site with roots in Y Combinator. In addition to the usual pledges of high salaries, equity, cool company culture, and opportunities for growth, 500friends is offering developers seed capital. After two years of employment and a proven record of quality work, aspiring founders will have the opportunity to receive between $25K and $50K to start their own companies.
Thus far, this fishing tactic has proven effective. The company has been able to hook engineers away from Facebook and Google, and over 50 qualified applicants have responded to the bait.
The mastermind behind this scheme is 500friends founder and CEO Justin Yoshimura. He is currently growing his team and wants to ensure that he finds people who not only have strong technical abilities but who are also ambitious, motivated, and hard-working.
“Like any startup, we want people with problem-solving abilities,” said Yoshimura. “Entrepreneurs are people that can identify a problem, explain it coherently, and propose a legitimate solution. We want people willing to take ownership over their part of the product and make it succeed.”
This strategy works in multiple ways. First, it helps 500friends outmaneuver the competition. Secondly, it increases the likelihood that the employee will be loyal to the company for at least two years. Performing at a high level is heavily incentivized. In order to achieve their ultimate goals, employees have to give it their all. In return, 500friends will see positive returns as well.
“A really great engineer is typically 10 to 20 times better than an average engineer,” Yoshimura said. “Average engineers are much easier to find, but if you get someone really great, they are going to do things more efficiently, and there will be a better user experience. Whatever you are building, whether it is for the web or mobile or hardware, those people are the real innovators behind the scenes.”
It takes more than coding skills to be an entrepreneur. In some ways, working at 500friends resembles an incubator program, where employees can learn about other aspects of the business, acquire relevant skills, and be tapped into a network. Developers have the option to sit in on sales meetings and marketing discussions and learn about product management. Yoshimura also said he will take the time to hear his staff’s ideas, help draft pitch decks, and make investor introductions.
Yoshimura made it clear that this money is not charity. In exchange for the investment, 500friends receives equity, which means it has a vested interest in seeing its “portfolio” companies succeed. All in all, the arrangement seems to work quite nicely for everyone.
The idea was precipitated after the company raised $4.5 million a few months ago. Yoshimura began hunting for developers and realized he would have to do something different to build his dream team.
500friends is a social loyalty platform that helps online retailers identify their most valuable customers and incentivize them to generate the greatest returns. It is for companies that already have a dedicated client base but want an even stronger one. 500friends is backed by Y Combinator and officially launched in April.
The company currently has 30 employees, but as it has made abundantly clear, it’s looking to add more big fish to its pond.