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STARTUP

5 Reasons To Hire Locally--No Matter Where You Are

Think you should recruit your talent from far away? You're probably wrong.

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Familiarity may not always inspire contempt, but it often promotes complacency. Rock and roll pioneer Chuck Berry once said he "couldn't draw flies" in his hometown of St. Louis. He had to travel to nearby Chicago to be appreciated. Then there was Jimi Hendrix, who was an anonymous guitarist for a number of soul groups in the early 1960′s. His career went nowhere until he traveled to England and gained a following in London clubs. Rather than a washed-up session musician, Londoners perceived Jimi as an ultra-hip San Francisco hippie (despite the fact that he was from Seattle).

I've seen this firsthand. When The Tearaways, a band I managed many moons ago, play in Santa Barbara, they draw a respectable crowd of a couple hundred people. However, when they perform in Liverpool, they draw as many as 30,000.

(The Tearaways in England.  Photo credit: Ian Hanson, www.satpix.co.uk)

Mankind has long recognized the power of scarcity: We want more of what we are denied or find difficult to obtain. The cliches sum it up--"The grass is always greener on the other side of the hill" and "A bird in the hand is worth two in the bush." But even though every knows this tendency exists, we often fall prey anyway. A number of Rincon's start-ups still assign a premium to remote resources, usually with respect to hiring senior executives. 

Santa Barbara is a highly talented but small entrepreneurial community. Start-ups often must fill one or more of their senior positions from outside our local market. After observing this process for a couple of decades, I have noticed a consistent pattern: The closer to Santa Barbara the person resides, the more his or her talents are discounted.

There's nothing wrong with hiring people from far away. But local talent has significant advantages. Here are five.

1. A back trail.

Local candidates are easy to reference. There is a higher probability you will have a pre-existing relationship with one or more people who can provide an honest reference on a local candidate. Additionally, you are more likely to receive an honest assessment of the applicant's abilities because fellow community members are inclined to share thoughtful input, rather than the generic, sanitized response you might get from a stranger.

2. An accessible network.

Start-ups recruit heavily from their employees' networks, especially in their early stages. This capability is reduced when hiring out-of-market employees due to the inherent difficulties of leveraging a geographically distant network.

3. Known chemistry. 

There is a higher likelihood someone at your current venture has previously worked with local recruits, making a cultural fit more likely.

4. No relo risk.

Start-ups are stressful enough without adding the tension associated with uprooting a family. Locals can focus their energy on their work obligations, without the added distractions from relocation. 

5. Less termination pain.

Although the impact of termination should not be an overriding concern when hiring someone, the reality is that a local person will have a much softer landing if things do not work out at your venture. This will minimize the disruption, should the person not work out.

IMAGE: Getty
Last updated: Aug 28, 2013

JOHN GREATHOUSE is a partner at Rincon Venture Partners, an early-stage VC firm. A serial entrepreneur, John led Computer Motion’s $110 million public offering, and the $236 million sale of Expertcity (creator of GoToMeeting) to Citrix. Check out his hands-on start-up advice blog at Infochachkie. Or, follow his start-up oriented Twitter feed, where he promises not to tweet about koala bears or killer burritos.
@johngreathouse




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