We are looking to hire our first two employees and have no prior experience in recruiting.
What are the most important things that we should look for in a candidate?
The first would obviously be competence in the position (software engineering, in our case). Apart from that, what else should we look at?
Firstly I wouldn't hire them both at once if you can help it. This will put a huge amount of stress on you, and you are likely to make mistakes.
You need people who have outstanding communication skills. Start by looking at how they write their CV and Cover letter. Then have a look at their Facebook and Twitter profiles. You want people who can write correctly, and are pretty active in communication.
You also want people who are able to oppose you. There is no point having employees in a startup that simply say "Yes Boss", "No Boss" - Healthy, constructive arguments are great.
Experience is another big one for me. More so than just a degree from some institution. Ring their referencing and find out what sort of a person they are.
Apart from that, run a relaxed but formal interview, invite the candidate to ask questions (if they say "no I don't have any questions" I would question hiring them. They always have questions) - Make sure you like them as people, that they are capable of doing the tasks you require. You will be fine!
1. Can they do the job?
2. Are they willing to do the job?
3. Can they demonstrate they have done a similar job?
4. Can they demonstrate competence in person?
5. Do you like them?
6. Do they like you?
7. Are they violent?
I'll look for the following:
Sometimes you have to rely on your gut feel too if this person will be good for the team.