Go to various tech meetups/meetings that seem relevant and then try to identify smart people by what they say in meetings. Then approach them.
Maybe sponsor a relevant meeting by buying the pizza/beer for it. This buys you the opportunity to give a company introduction and let people know you're hiring. Very cheap advertising.
meetup.com is probably the generic place to look for these types of meetings, but every city probably has its own, better site. In Seattle, among others, we have http://www.seattletechcalendar.com/ and http://www.seattle20.com/ among probably others.
Sitting in your office waiting for resumes/cover letters is the absolute worst way to try to get people. It also leaves you with only an interview to get to know the potential hire, while at the meeting you may find out all sorts of desirable or undesirable characteristics about them. Additionally you may get input from that person's peers.
I totally agree with Nate75Sanders. And to build on that, when creating your marketing plan, think about allocating a portion of that effort into recruiting and building a brand that's attractive to the people you seek.
Zappos has built a great brand that attracts candidates. I've known people who've read Tony Hsieh's book, then wanted to join them.
There are lots of startups that not only have some good buzz in the press, but also have outspoken founders & employees that - whether they've consciously thought about this or not - have crafted a desirable impression of their company. What attracts you doesn't necessary attract someone else, but I've heard colleagues saying they'd love to work for Justin.tv, Hipmunk, AirBnB, Quora, Codecademy, DuckDuckGo, etc.
Some of that is because they personally love & use those products. And some of that is because they love & follow the cofounders.
Share with the world your thoughts, your culture, and how your product is making the world (or at least, your industry) a better place, and you'll have a better shot at attracting great people.
What do you do at your startup... is it similar to any open source tools, or does it rely on a lot of open source tools / libraries? Who commits to that open source project the most? Is their code written well? Send them a message on github/bitbucket/whatever. Github/Meetups/Conferences/Twitter are +1million more useful than recruiters or most job sites.
I was the first developer hired at an early stage startup and I knew no one in the metro area where I eventually ended up working. It's unfair not to give someone a shot to interview based on a perceived notion that the best hires only come from your personal network.
Having a good resume with skills A,B and C: 5-10pts.
Interview confirms that your resume wasn't full of BS: 10-20 pts
You can perform skills A,B,C on a whiteboard or laptop interview session: 20-50 pts
1 year of seeing you exhibiting skills A,B, and C under real world conditions and interacting with other people: 100-300 pts
No matter how unfair this seems, if you have the same skills as someone in my network, they have an almost impossible to overcome advantage in my hiring equations.
I wouldn't say that was unfair. Ability in the right areas, demonstrated first hand, is a perfectly valid filter and the ranking you give it with your scoring system seems fine to me (unless the difference between the low and high ends is dependent on how much you like them!).
Yes you might lose someone who could be a star, but no system is perfect.
Hiring someone just because you know them is simply wrong, but giving them a chance because they've shown you an aptitude relevant to the position should not be seen as unfair IMO.
My business had just tanked, I needed a job and I was 22. I had people skills, good communication and I was pretty damn good at what I did (systems engineering, sysadmin'ing) and aligning that with business needs (that's the important bit people sometimes forget). I went for a role that was senior, even though I had no actual job in the industry previously. I had four years of running my own business, but 2 years of that was in college and well I didn't really think they'd take it seriously. (I know better now)
I managed to convince them to hire me, but for a mediocre salary (for me, I was still earning in some cases twice what my fellow graduate friends were) and spent 14 months trying to get that raised (pointless at the time, but I was naive, needed a job and ultimately I loved the work and the people were cool)
My boss there landed a job with another company running the department and asked me to come on as CTO-of-sorts of the department and I got the money I had wanted, no interview (I met with the CEO) and all the autonomy I had wanted/needed.
I've hired a couple dozen top engineers since then and been part of two acquisitions (as the acquirer) and I can tell you that you don't _really_ know what someone's like until they work. What I'm looking for is character + intelligence. Smart and get things done. Whatever you want to call it. The Get Things Done part is the bit that's so bloody difficult to tell.
I've seen people who I did not expect to be rock stars come in and just kill it. They were never put in a position to succeed before and suddenly they've gotten the ball and they're just running with it. There's one guy in particular I'm thinking of who worked for a BigCo and his technical acumen was good (not brilliant or exceptional, just good). I didn't hire him, but he just got it. He does what it takes to get the job done (and then some) and figures out what he needs along the way. I've had guys with excellent references (some from people I know) come in and do mediocre. I've seen candidates that were brilliant end up being a menace around the office.
Saying that it's unfair that you're not being given a shot is not recognising what is happening at the other side of the table - a complete imprecise science of judging people's ability to be brilliant (or even good) based on interview scenarios. You need to do things to increase your value and remove as much of the unknown quantity as possible (network, volunteering, meetups, hacker weekends, open source code, portfolios - whatever is relevant to you).
As a startup - I would take a KNOWN quantity each and every time. You are unknown in this situation. If you are good, in the future the tables will be turned and you will be known. The difference is you cannot manufacture these situations easily, no more than you can manufacture who you will marry. Espouse your best qualities, do great work (which isn't just limited to the code you write, servers you maintain, designs you produce etc.) and you will be a known quantity to people in the future.
You sound like you're young (at least job experience wise), not that I'm particularly old - business is people. People are business. Reputation is everything in your circles and if you're good, you'll start to build a rep and that will become extremely valuable and open doors for you.
My point was that people need to be given a chance at an entry level brought on a contract to hire but the argument prevalent here is to exclude anyone who you isn't in your network.
