What’s the most costly mistake you can make in your business? Picking the wrong market? Building the wrong product? Not supporting your customers’ success? 

These mistakes are painful, but none of them are as dangerous as hiring the wrong people. The importance of hiring cannot be stressed enough.

But even if you’ve done all the right things in your recruitment and interview process, love the candidate, and are ready to hire them….

Stop! (Seriously, stop.)

Don’t pull the trigger. No matter how much you may think you’ve gotten to know someone during the interview process, you can’t know them as well as people who have already worked with the person before.

So step back and figure out who you know who has had direct experience working with your prospective hire. References are great, but blind references are gold. They will prove invaluable.

Even if all your instincts turn out correct and they’re a great hire, you’ll gather a wealth of other information in the process—how best to mentor them, how to get them up to speed faster, and how to complement them in the workplace. And if you turn up troublesome information, you’ll avoid making that costly hiring mistake.

Here are some critical tips for running an effective reference process during startup hiring:

1) Look for unprepared, “blind” references. 

Blind references are those beyond the obvious ones that your candidate will give you and usually, therefore, ones that will offer an unvarnished view.

2) Qualify who is giving you the reference. 

If they are not an “A” player themselves, you’re not going to get as valuable a reference as you need. So, where possible, ask people who you already know are “A” players. Alternatively, meet references via known “A” players who you know will have the quality bar you want.

3) Seek a 360 reference. 

Collect information from their peers, their boss, and whoever worked for them—bonus points for a customer or external person they served. Each person and their viewpoint will bring a different and important perspective from which to evaluate your candidate. 

This can be hugely informative for sales, services, or other externally facing people. For example, if you call an industry journalist to ask about a PR person and realize that they don’t have a quality relationship, that could be a red flag. 

4) Share context. 

If you can, prepare the person you’re taking the reference from with an overview of the job you’re hiring for. It gives them context and allows you to ask specific questions to understand your candidate’s experience.

5) Be real.

Ask as many questions as you need of the reference to get comfortable and don’t be shy. Ask the hard questions—and ask for raw, unfiltered answers, not sugar-coated platitudes

Tell the person you’re asking upfront that you want them to be real, and ensure they know you will hold this in the strictest confidence—which you must absolutely abide by.

6) Always offer to reciprocate. 

Offer to return the favor on any future reference they may need. And when you give a reference, reciprocate by being raw and real.

7) Remember to start with the basics. 

Always check under what circumstances the person left the job and whether the person would work with them again—and why. And dig to find out what’s behind that. 

If you hear all positive feedback about a candidate, you’re probably not getting a “real” reference. No one is perfect. Even if you’ve decided to hire someone, it helps to know where they have weaknesses. It’s an opportunity to pair them with others who complement them and learn how to coach them. Get the facts, including their weak or blind spots, and at least be prepared to work with those if you hire them.

Overall, when hiring people, you can never take too many references, be too well informed, or too well prepared.

Human capital is your biggest and most impactful investment by far. Invest in it like it’s your only capital. Don’t make startup hiring your most costly mistake. Make it your most profitable investment.



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