Hiring

One of the most challenging aspects of a startup is hiring. At the end of the day, an organisation comes down to its people and how good they are at what they do. This is especially important in startups where employees cannot hide behind a partitioned cubical. Every dollar matters and every resource counts so having the right team is generally the difference between succeeding and failing.

Budgets and forecasts are usually done around financials, however forecasting your human resources is just as important, especially if you think you’ll be growing quickly.

As a founder I’m always looking for great people however so it’s very important to have an understanding of what I want the company to look like in the future.

I have created an organisational structure of what I’d like the business to become over time, in terms of positions and roles. In the same way as I would forecast revenue and costs, I have forecasted human resources.

I created a high level organisation chart that projects the future organisational structure of the company. This can be shared with employees so that they understand your vision for the business as well. If you incentivise employees with an introduction payment, they will look for staff as well and become recruiters working for you. At the beginning of the startup, most of the work is done by the founders. They do almost everything in the example above, however over time as the business grows, or if you raise funds to fast track your success, you’ll need to put the right people on the right seats ahead of time to accelerate growth and scale.

This diagram is important as it provides some clarity at to what the company will look like ahead of time. Every time I meet with someone in business I ask myself whether they would be the right fit for someone on my chart in terms of culture, skill etc. If I like them, I will add their name to the position and start a conversation. I’ll also look to other organisation and try to work out who is behind excellent work. If there is a company in the same space as ours, and I like their blog, or their front end design, or any other aspect of the business, I’ll try and find out who is responsible for this work, and then start a conversation. This is how you get to the do’ers, and what you need in startups are do’ers.

These conversations can take weeks or months however a leopard never changes theirs spots, so whether they decide to come across today, or in a month or a years time, it would usually have been worth the wait.

Furthermore, great people are usually already in stable jobs. If you are hiring someone without a job, that is a bad thing.

When hiring it is important to be patient. You shouldn’t just hire to get something done. Hiring should be done with a long term view. You need to feel excited about every hire, as if you’ve just won over someone awesome and that they are truly going to make a difference to your business. You need to put them through tests and understand how they think and work. Resumes won’t cut it. You have to dig deeper. Give your developers a coding assignment, read their blogs and public feeds, give your community managers something to blog about and some resources to base it on and see what they come up with, put potential support hires on the phone and email for a day and see how they measure up. Hire slow, fire fast. Be ruthless and cut out under performers. There is no room for them on the bus.

Once you’ve found the right person, get out of their way and let them do their thing. If you have to over manage them, they are not A players.

The key here is to create a vision for the structure of your company early on – potentially when there are just two or three employees. What will it look like when there are 20 employees? Tech companies grow quickly so you should always be on the lookout to fill positions that will need filling in the future.

Above is an example of the organisation chart I’ve created for BuyReply. We’ve filled a few positions however the point is that we know what we’d like BuyReply to look like in 6-12 months time. This helps manage growth, it helps communicate vision and clarify of direction to investors, and helps you plan ahead and mitigate the risks of failing from growing too quickly.

AIMIA Social Commerce Event

This Friday I’m going to be presenting on the topic of Social Commerce at the AIMIA Social Commerce event. I’ll be talking on these topics:

Recent history would indicate that social and commerce do not mix. Until now monetizing the social graph has been somewhat of a guess. However;
  • What if you could monetize the social graph? 
  • What if the dynamics of the social graph could be extended to commerce? 
  • What if transactions could spread through the graph with the same viral speed of a tweet or re-tweet? 
  • What if commerce could be facilitated via twitter and Facebook?
  • What if you you could ’tweet to buy’ and your followers could re-tweet to buy? 
  • What if it took 3 seconds to pay and check out?
  • What if consumers could buy off of any medium including TV, Radio and Print, using Twitter?
  • What does this mean for brands, businesses & consumers?

I will be presenting on the future of commerce in a connected, social, and offline world, so please come along.

I’ll also provide examples of how BuyReply can facilitate these interactions which will be the first time that the general public will see our new platform.

I have 1 spare ticket (worth $105) that I’ve yet to give away and have reserved it for a reader of my blog, so if you’d like to take me up on this offer e-mail brad[at]lindventures.com with your name, company and position and I’ll have you added to the guest list. First come first serve!

The event is this Friday, 25th May at KPMG (10 Shelley Street Sydney) from 10:00am-12:00pm and you can register here:

http://www.aimia.com.au/home/events/aimia-events/the-virtual-storefront–evolving-social-commerce-platforms

VISION IS TYPE OF TALENT

If you want to be a successful entrepreneur you need to know what it is you are trying to achieve. I spend a bit of time mentoring and working with other startups. The single most common trend amongst successful startups is a clear sense of purpose, direction most importantly, vision. Founders without vision end up meandering around, ‘pivoting’ (a word I despise) and delivering an unfocussed offering that is hard to understand.

The second most important characterising, is thinking big. The amount of work required to build a web service that is a small idea, is probably 80% of what is required to build a really, really, really big idea. Version 1 of Facebook was built in a month. The first version of Instagram was up in 2 weeks. Having a big idea does not mean it needs to be a complicated idea. Google is a complicated idea. Facebook and Instagram are not complicated ideas. They are simply relational databases used at scale. Before you start, you need an idea that can scale and solve a problem that is relevant to most people or companies on this planet. If your instincts are telling you that your idea isn’t a big idea, then don’t start. Wait until you have a fucking big idea, then start. You’ll know whether you have the right idea that is in reach of your capabilities because you won’t be able to sleep at night.

If you have a clear vision and a focused purpose, you end up needing and spending a lot less than you think.

As @fakegrimlock says, having vision is a talent:

 

Having vision is like having a map. All you need to do is drive along the right roads and you’ll get there. Not everyone has vision. Founders often go through rounds and rounds of funding trying to ‘figure it out’ but many great entrepreneurs woke up before they registered their company name, and more or less had their business model figured out.

When you have vision you end up needing a lot less money than you think, simply because most of the thinking work around your overall concept and direction is taken care of. Founders with vision wont bloat the organisation with ‘experts’ that those who lack vision might need. When you have vision, what you need are people who can DO. People who can build stuff. People who can turn your vision into a working thing and make it brilliant, and people who can sell it. This is how small startups achieve amazing things. All you need are one or two founders with a strong vision, a couple of developers and a designer. Thats all you need. Think Instagram, think Google, think Dropbox, think Twitter, think Square, think Tumblr etc etc..

Having vision does not mean you need to know how to code. What is means is that you are able to explain to your team exactly what it is you want to achieve, down to the tiniest detail.

You shouldn’t expect your developers to be visionaries. If they are visionary, that is great, but it’s not their job. Their job is to build stuff that scales and is reliable. They like to be handed a spec or challenge, and asked to make it work well. That is what they like to do and that is what they are good at. Designers are not product visionaries. They like to be given direction and boundaries, then told to make it look and feel awesome. Their job requires a lot of vision, but its a different kind of vision.

So if you want to do something awesome, or you want to invest in someone awesome, make sure the vision is clear, because people who know what they want, end up getting what they want.

Rich Customers

One of my favourite sites is Sequoia Capital’s ideas page. I came across this page about 5 years ago, and it hasn’t changed since then. When Sequoia invests, they look for a number of important investment patterns. You can read them for yourself here: http://www.sequoiacap.com/ideas

The patterns they look for are all as important as each other, however the one I want to talk about is Rich Customers. What does it mean to have Rich Customers? In order to attract Rich customers, you need to offer something that creates value for them, which is scalable. Rich customers are usually large, and large customers are attracted to ideas that can scale across an entire organisation.

These are customers that will pay you $50,000 a month not $50 a month for a similar offering.

For example if you figured out a way to use less water in a shower, would you approach a single motel, or would you arrange a meeting with the Hilton group? The time required to get a deal across the line might be the same for both, however the Hilton group would save ten’s of millions of dollars across their properties whereas the motel might save a few thousand dollars each year. If you could charge based on a factor of money saved, then you’d make a lot more from a hotel chain, than a single motel. At scale, the value proposition for a hotel chain is a no brainer.

This is why investors like companies that target large, rich customers.