Mihai Mărcuță and his cofounder came up with the idea for cloud platform NodeShift while hanging out in an Istanbul waiting room for 10 hours, keeping a friend company during a hair transplant. They’d originally met at Cisco Systems in San Francisco and kept in touch when Mihai moved to London. International was in their DNA from day one.
I met Mihai at Startup Moldova Summit in Chişinău, where I interviewed him on stage about his hiring strategies at NodeShift. He tells me that bureaucracy, tax incentives and better lifestyle choices for his team stopped him from hiring in his home country of Moldova — instead, he chose to hire out of Dubai.
He shares his top tips for using location as a key component of a company’s hiring strategy.
Hire outside of Europe
Everyone talks about the US, but we went East. Dubai offers discounts on offices, infrastructure and support in setting up a company and bank accounts. Salaries are tax-free if you have a UAE residence visa and use Dubai as your place of residence. The way we did it is we registered the company in the US with a Delaware C corp, to be able to accept US investments. We then set up a branch in Dubai — owned by the Delaware C corp — to be able to set up shop and hire through Dubai.
Prioritise engineers
As a deeptech product, our focus will always be engineers. Hiring a capable and efficient engineering workforce is a struggle for most companies — they have to be able to do what you as a founding team can’t. So ensure your policies, working practices and culture favour engineers, whether that’s the tools that you use, your flexible working policies or the machines that you provide your team. Our first two hires were engineers and we built the company around them.
Leverage country incentives as a negotiation tactic
You don’t have to do compensation like everyone else. Not everyone is motivated by the same things, so leverage what you do have and the right people will come. For example, if we hire an engineer from the US, their expected salary may be $400k-500k a year. We say:
- We’ll offer you 4-5x less than that.
- We will hire you through our Dubai office.
- You will need to spend one day a year there to be considered a tax resident.
- We will fly you out for a few days for your onboarding. All expenses covered.
- We’ll take care of your residency admin.
- You can move wherever you want as long as you have an 8 to 10 hour working hours overlap with Central European Time.
Our team members are often attracted to the opportunity to live wherever they want. The salary difference evens out when their San Francisco handcuffs are removed — they don’t need that salary to maintain that lifestyle if they’re living in Montenegro paying cheap rent for a luxury apartment.
Set a long probationary period
Don’t relocate people straightaway. You need three to four months to check for cultural fit, red flags and anything else that might mean an employee isn’t a fit. In the early days, time is so important, so be honest upfront. If someone is performing badly in their early days, it’s normally a sign that it’s not going to work. So:
- Set out a 30, 60 and 90-day plan with your new employee.
- Set goals together for those periods.
- Explain that they will be given feedback if they’re not meeting expectations. If things don’t improve, they will fail their probationary period and be fired.
In the early days, it’s common to hire friends or friends of friends. Ideally, don’t mix friendship and work. But if you do, it’s important not to let friendship cloud your judgement. If it’s not working, fire quickly as you would anyone else.
Get your team on the same page
When you’re used to working with people in Western countries like the UK and the US, you’re used to a certain way of working that is also enforced by HR. You also know there are lines you can’t cross with colleagues or employees, which is also informed by HR. Working with other cultures can be a struggle. For example, we had a cultural clash with our (incredibly talented) software engineers from Eastern Europe. They were not incentivised by stock options, so didn’t have skin in the game and thought they’d be fired when they got a 1:1 meeting invite. So invest in internal comms and education. When onboarding new employees, make sure they understand what is expected of them aside from their job description. This could be things like expecting a calendar invite to be accepted or declined or providing education around options or outlining the purpose of 1:1s.
Lean into your biases
Realistically, you will have a bias. You want to hire people who can accommodate your working culture. If, like us, you work long hours, you will be attracted to others who can — and want to — do the same. We never set the expectation that you have to work over a set number of hours, but they do as they have skin in the game. Those are the people who you’ll hire and who’ll stay. Bias will define what culture fit means to you and that’s okay, as long as you’re aware of when it can steer into discrimination.
On the subject of...hiring strategies across borders
1. How to open a new country office for your startup. First, you need to decide which country or city is going to give you the best starting point. Ask yourself:
- Where are your target customers based?
- How developed is the startup scene there?
- What’s the investment landscape like?
- How easy is it to interact with other markets?
- What’s the culture and infrastructure like?
2. How do you pay an international team?
3. Do you need a head of remote? The role has helped startups cope with the complications of a distributed workforce.
4. Here’s a 101 guide for large teams to work remotely.
5. How to scale a remote team.
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