I feel the economic situation didn't make the hiring process easier, but actually much more difficult. We thought it would be easy since there are tons of talents being laid off from top-notch tech companies, and what happened was the exact opposite -- there are THAT many more resumes out on the market, and it takes THAT much more time to find the perfect fit. Keep in mind because we were still a small team, every hire must has the right balance of cultural fit, technical abilities, and entrepreneurial spirits. Finding good guys who can get the job done is easy, but finding the great guy who can take our product to the next level is much more difficult.

After going through thousands of resumes, and conducted probably 100 interviews, we finally brought on-board our first couple of team members. Some tips to share from my experience:

1. Don't bother with job boards, such as Craig's list, Dice, etc. In this economy, there are too many resumes floating around, and reviewing them is an incredibly time consuming process when you can spend the time building the product. Negotiate a low rate with a recruiter and outsoruce that process. We wasted over a month using job boards, and got tons and tons of junk resumes. Probably only 1% of the candidates we got from job boards were interview-able. We got fed up, so we engaged about 5 recruiters simultaneously, and within the first week we got the perfect guy. If you really want to use job boards to try your luck, I had the best experience with Startuply though it still didn't result in a hire.

2. Be extremely selective, if there's something that doesn't seem right, it's probably your gut telling you he/she isn't the right person. For hackers -- my favorite question to ask is "when did you first started hacking?". I have found most great hackers started hacking when they were very young (middle school to high school time frame). I found most people who started hacking in college is because they were forced to, not because they are interested in it. Of course this doesn't apply to every case.

3. Do reference checks. In fact, ask the references for additional references. A candidate can master the art of interview, but reference check may tell a totally different story.

Also, I don't recommend technical puzzles. I recommend you to just ask a technical challenge you are facing right now. e.g. How would you architect JamLegend? How do you solve so-and-so problem? etc. While puzzles can test brain power, I think it's much more practical to have them solve a real problem that you face on a daily basis specific to your product.

Hope that helps, by the way, if you get referrals from personal network you can probably skip a tons of things I mentioned above, and they are usually the best early hires. Good luck with your hiring process!