When does an Interview become a consulting gig?

I have this client, see. He is a first time CEO. NIce company, good product- early stage, angel funded (so cash is king) but profitable. Going out for VC funding soon.

The issue is he's not hiring anyone. Well he is for one role but we are sending candidates opportunistically. He's offering them consulting gigs (which is fine as these are exploso candidates) but when the subject of money comes up, he says something to the effect of "well, i'm letting them peek under the kimono and play around, see if they like the product before we talk about a hire.

My response to this is:

if there is an expectation of a deliverable, you probably should pay time and material
Failing 1, you should offer a stock option grant
you need set an expected date of employment because the candidate is on the market

We've run into this before. Some companies ( I won't mention any names but the most used recruiting database is notorious for it) regularly obtains free consulting with the carrot of job consideration.

This is not the case here, but have you run into this before? And if so, how did you find solution?

Thanks.

Comment by David Smooke on January 13, 2012 at 6:43pm: Hey Bill,

Can this client's business survive with only consultants and no full time employees? It is hard for most businesses to do so, but if that is the case, the client would forever be a carrot dangler.

In terms of your points:

1. This is the ideal situation, but there is so much ambiguity in the cost of one's time. Does the candidate not receive benefits from seeing under the hood? There is a large gray area between every business paying for every candidates time in the interview process and labor exploitation through the dangling of the carrot. The only thing that makes the carrot a hire is if CEO sees candidate as lynchpin.

2. This is a big commitment. In many ways it is as big as if not a bigger commitment than committing to hire.

3. This is the solution. Without this commitment I would not want to engage with the person.

How to Interview a Consulting Partner

Comment by Bill Schultz on January 13, 2012 at 8:01pm: Thank you, Maren. That's exactly what I'm talking about. It's a real dilemma and it happens often on the creative side like web design, marketing, and Product management.

As far as coding goes, anything more than a standard coding exercise is excessive and probably underhanded.

I'm sure consultants are more practiced in selling the sizzle without the steak. (whatever that means).

Comment by David Hilditch on February 14, 2013 at 10:12am: It sounds like the company is incredibly young - being profitable is great but you can kill it pretty quickly with bad hires who are not passionate about your product.

I think he's wise to let people see under the hood to measure their passion before hiring - it won't matter so much in the next round of hires, but this round of hires is important for setting trajectory and culture of the company.

If you do a good job for him now at this round then when he is hiring the next batch you will find him a lot more conventional in hiring I'm sure.

Joel Spolsky wrote the best piece I've seen on new company formation and reward structure - based on this it sounds like candidates now are at stage 2 - i.e. the company has been formed already and is making money but they would still be taking a big risk to join as it's not yet an established company.

http://answers.onstartups.com/questions/6949/forming-a-new-software...

I think you should cut him some slack and try and understand the different approach he needs thanks to the stage of his business.

If you get really good at finding him good candidates you could carve out a nice niche for yourself and your business for hiring for recent startups.

Comment by David Hilditch on February 14, 2013 at 10:17am: FYI, I got my job at Skyscanner 7 years ago off the back of a question similar to this. They asked me at interview to solve a database problem they were having currently which was preventing them from moving forward. By answering the question I got the job. They *could have*, in theory, just taken my advice and not hired me but that would be stupid right? If you've interviewed 20 people already and then finally one arrives who can solve the problem, if your company is at this early stage then you're grateful to hire, finally, and get someone on board who can help drive the company forward with new skills.

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