Startup Hiring 101: A Founder’s Guide. Part 18 - Reference checks

Welcome back to part 18 of our startup hiring series, which is all about Reference Checks.

Reference checks are a critical part of hiring your early-stage team for any candidate you haven’t worked directly with. As a startup, one bad hire can set you back months. Getting references will validate or invalidate the information you gathered during the interview process. They’ll usually give you additional signal (positive or negative) and sometimes raise flags you missed during the interview process.

There are two types of references — formal references and back-channel references.

• Formal references are references the candidate offers up. Use 2-3 formal references before making an offer as one final step to dot the I’s and cross the t's. Ask the candidate for a mix of managers and peers who have worked closely with them. If they've been a manager, you can ask for a direct report as well.

• Back-channel references are references you find on your own to get signal on a candidate. Use back-channel references throughout the process to get signal and avoid wasting time on candidates you shouldn’t hire.

High-level best practices

• A standard reference call should last between 15-30 minutes.

• Start back-channel references early to avoid wasting time on candidates you’ll never hire. Try to get at least 2-3 back-channel references throughout the process.

• Out of respect for your candidate’s privacy, be extremely careful about reaching out to colleagues at their current employer for back-channel references. Instead, consider prior employers. If you absolutely have to back-channel with a current employer, try to reach out to someone who’s familiar with their work, and who’s already left.

• Get your references talking, and don’t cut them off. Humans are terrible at making up stories, so this is a great way to get to the truth.

• Round down. By default, references will come back positive, so a mixed reference is usually a bad signal.

• Only move to formal references once you’re relatively sure you’re going to make a hire. If you don’t end up moving forward, it can create an awkward situation for your candidate and your reference where the candidate suspects you didn’t move forward due to something their reference said. If you’re on the fence, get more signal first, or do back-channel references before moving to formal references.

How to conduct a reference call

You should start most reference calls by sharing a bit about your company & role and learning more about your reference & their relationship to the candidate. Then, you can dig into the meat of the reference. Typically, you’ll want to get signal on the candidate’s work, their strengths, their areas for improvement/gaps, and a high-level rating from the reference. You should tailor a few of your questions to specific things important to your company’s role or that you’re lacking signal on based on interview performance.

Here’s a template you can use to structure your reference calls, including many example questions. Note, this is not meant to be an exhaustive list, nor should you ask every reference question every time:

1. Start with some context on your company & the role you’re considering the candidate for

2. Learn more about the reference themself & their relationship to the candidate

   • What was your role at the company?

   • How do you know the candidate?

   • How did you work with the candidate? How long?

   • How was the team structured?

3. Get a high-level overview of the candidate’s work.

   • What was the candidate’s role at the company?

   • Can you share a few examples of what the candidate worked on?

4. Strengths

   • What would you say is the candidate’s biggest strength?

   • Which aspects of their job did the candidate really lean in on?

   • What was the candidate’s biggest achievement while you worked with them?

5. Areas for improvement/gaps

   • What advice would you give to yourself if you were to manage the candidate?

   • What other ingredients does the candidate need on his/her team to be successful?

   • If we are to bring the candidate on board, what advice would you have for me to set them up for success in their first 90 days?

   • If you were to work with the candidate again, what would be the one area you’d coach them on?

6. [optional] Ask about other areas that may be important to understand depending on the specific candidate and/or role:

   • Working style — how would you describe the candidate’s working style?

   • Receptive to feedback — do you have an example of a time you gave candidate feedback? How did they respond?

   • Personality — what is it like to work with the candidate day-to-day?

   • Work ethic — how would you describe their work ethic? On a scale of 1-10, how would you rank the candidate in terms of work ethic?

7. Have them quantify the candidate overall

   • On a scale from 1-10, how would you rank the candidate compared to their peers?

     • If not a 10, what would it take to get them to a 10?

   • Where would you put the candidate on a scale of “the best person I’ve worked with” to, top 5%, 10%, 25%, above average, average

   • Would you hire the candidate again?

Example emails/text messages to ask for references

Here are many example emails/texts you can send to get formal / back-channel references throughout the hiring process. Note, if no one is willing to respond, that may be a bad signal itself.

Early-stage back-channel

Late-stage back-channel (intro)

Formal reference

Up Next

We’re reaching the home stretch of our guide to hiring for startups. Up next week, in part 19, we’ll cover all the aspects of selling and closing a candidate.

In the meantime…

• Want to use Gem for free for 2 years? Apply for our free for startups program

• You can find the rest of our Startup Hiring 101 posts on the Gem blog

• Check out the complete Startup Hiring 101: A Founder’s Guide, a comprehensive guide to startup hiring, including step-by-step instructions, example templates, and best practices