It never ceases to amaze me how often we as entrepreneurs have the strongest realizations about our work when we’re the most disconnected from it. Recently, I had a realization about startup hiring while enjoying a long weekend in Miami. Yes, it was as awesome as it sounds (thank you for asking) and no, we didn’t go to South Beach (we wanted a more low-key, family atmosphere).

My wife and I, enjoying a couple of days of much-needed time in our beach chairs, watched our kiddos have a blast in the sand. They commandeered my backpack, filling it with broken shells and other “treasures.” Watching them attack the ocean was the most entertaining, though. It also provided a strong visualization of why startup hiring is so challenging.

Running full speed and hitting the first wave head-on works OK, my kids discovered. But by the time they recovered, the next wave rolled up to knock them over. They quickly figured out that if they wanted to actually play in the ocean (and not spend the day repeatedly asking mom to wipe saltwater out of their eyes), they needed to adopt a different strategy. What worked for the first wave didn’t work for the second.

How startup hiring changes from your first to second wave of employees

Building a team for your growing company also happens in waves. In this case, it isn’t the wind or gravitational pull of the moon causing the waves. Rather, significant company events trigger them, like landing a large deal or closing a round of funding. But much like those ocean waves, what worked well for hiring your early employees will likely not yield good results for the next wave.

Startup hiring: The first wave

The early days of a startup are messy. With an infinite number of things to do colliding with limited time and budgets (you probably can’t afford a startup recruiter or recruitment software at this point), you need creative and talented people that can adapt to the changing needs of the company.

Finding people that thrive in a dynamic atmosphere, who attack new challenges outside of their core skill sets, and feel comfortable with risk and uncertainty, is critical. You may need them to be specialists down the road, but for now, you need generalists. (Don’t be scared of the word “general.” There’s a reason General is among the highest military ranks.)

Where to find your first wave of startup employees

These types of people want to work at a startup and love the energy and feeling of building something cool. How do you find them? By going to the places they hang out:

• Co-working studios.
• Coffee shops and other venues catering creative crowds.
• Entrepreneurial networking events.

What first-wave startup employees want

Attracting them to your company isn’t much different from attracting investors. It requires lots of networking and pitching yourself, your idea, and your vision. As you likely can’t pay market salaries at this stage, it also requires creative solutions for compensation. The right employees will value compensation structures that include:

• Company ownership in the form of stock options.
• Commissions on new revenue generated for the company.
• Individual or team performance bonuses when goals are met.

Startup hiring: The second wave

The above strategies work great for your first wave of employees, but you’ll need to adopt a different strategy when recruiting the second wave. Making mistakes in your product design and learning where you are wrong early in the development cycle are important to a successful launch, but hiring mistakes?  They are costly at this stage, and can slow down your growth trajectory.

Every startup is unique, but somewhere around five to 15 employees, you’ll need to start building functional teams with members that excel at specific job tasks (think content marketing or corporate sales). The right type of person for these roles is different than the versatile utility players that took you this far. Attracting specialists to your company requires a different approach.

It starts with understanding their backgrounds. Specialized, functional employees are often more comfortable in traditional work environments. They tend to be further along in their careers. They have families, mortgages, car payments, and a whole host of other responsibilities that require stability in their employment. This changes where you should look for second-wave employees, and what you should be prepared to offer them.

Where to find your second wave of startup employees

You typically won’t find them hanging around the co-working studios or entrepreneurial events where you found your first wave. They probably aren’t specifically looking to join a startup. They are looking for their next role:

• On LinkedIn and other job boards.
• Through their personal and professional networks.
• By paying attention to industry news outlets.

What second-wave startup employees want

In general, second-wave candidates are more risk-averse. That impacts not just how they search for their next job, but also what they need to feel comfortable accepting it. They want clear, open communication about the company, what their specific role will be, and the advancement opportunities available.

They also place a higher value on more traditional forms of benefits and compensation, such as:

• Company-sponsored health insurance plans.
• Ample vacation time for a healthy work-life balance.
• Retirement plans with company matching.

In short, you need to do everything you can to de-risk the move for them. Security is vital to this crowd, so model your job posts after those of large companies in your industry. Be open about your growth rate and financial position. Above all, clearly communicate expectations. (Speaking of, if your startup is still in stealth mode, get out now!) Not sharing enough information about your company is a great way to turn off the type of people you need in the second wave of hiring.

The right resources attract the right talent

What attracted your first wave of startup employees may deter to the type of people you need in the second wave. So before you get ready to make these hires, put in place the things they will want. Look to providers such as Zenefits, Human Interest, or FullStack PEO to set up benefits packages. (They didn’t pay me to plug them, I just really like these companies. Although if they happen to be reading, I’m available for a chat.)

No matter your stage startup hiring, prioritize company culture

While the strategy for hiring your second wave is much different, the importance of company culture does not change. Make sure that all new hires are a good cultural fit, and give existing employees a voice in the hiring decision. Even though functional teams are being formed, everyone will still be working together towards the same goal. A sense of community and shared vision remain critical.

Hiring the second wave of employees is hard, and though following these tips won’t make the experience a day at the beach, they will help to smooth out the process. Identifying and attracting the right talent in each phase of growth sets your company up for success in the next. (But if you do need a day at the beach, I can recommend some out-of-the-way spots down in Miami.)