Advice for startups looking to staff up–fast.
Startups expect a lot of their people. They need to be able to work withinA the confines of a small company–be creative with tight budgets, willing to wear multiple hats, and eager to put in long hours. But they also need to be suited to big organizations; after all, most startups are designed to grow into big companies.
As the founder and CEO of one such aspirational startup, Betterment.com, I’m often asked how I balance rapid growth of company and team with getting the mix of people right. The beauty of creating a business that does things differently is that innovation doesn’t stop with the product. We, as leaders of these companies, have the rare opportunity to reinvent the hiring process. A trailblazing startup bucks convention, and building a team is no exception.
At Betterment, we don’t seek to fill static roles. We look for people with complementary skill sets; people who can slot right into the team and fulfill multiple responsibilities. Ultimately, we just want people who can execute on our vision and bring their own critical thinking to the table.
Complete the Talent Puzzle
Lots of startups begin with an original team of 2-4 people. In our case, a developer, a product lead, a lawyer and me, a banking and finance consultant. We launched at TechCrunch Disrupt in 2010 and immediately gained 1,000 new customers. It was clear we needed to staff up, and fast.
Luckily, we knew what we didn’t know and quickly identified the gaps–a shrewd marketing head and a whole team of developers who could bring our vision to life. Soon after we needed more bodies on customer service, product development, and to create a stronger brand and voice.
Congratulations, you’ve done it! You started with an idea, launched a company, and now your product or service is selling well. It’s time to grow. But as you know, growing a business isn’t simple.
“The media plays up the overnight successes like Instagram,” says Jay Turo, co-founder and CEO of Growthink, “but for the vast majority of entrepreneurs, it is a long, slow, and gradually upward growth process.”
From an HR perspective, in particular, there’s a lot of work to be done, and it’s up to you. I recently connected with Turo and Dan Roitman, Founder and CEO of Stroll–two entrepreneurs who have successfully grown their businesses from scratch–and posed the question: What does it take to grow a company from startup to small business?
Here are five must-haves they identified to take your business to the next level.
1. A Culture that Supports Your Purpose
You need to decide what kind of culture you want your company to have. That depends, somewhat, on what you want your company to look like down the road. Start with the end in mind. For many entrepreneurs on the cusp of growth, it’s still go-go-go (and likely will be for a while). But stop working for a second and reflect on what aspirations you have for your company. According to Roitman, “Your long-term game plan should be supported by a culture that will take you there.”
For Stroll, the goal was to be a high-growth company. “We defined what values people need to embrace to make sure our employees are accelerating the business.”
One of the strange thing that happens when you decide to move into the startup world is that every person out of that world assumes that you’re in it just for the money. There is a general assumption that people go do startups only to get rich.
But the truth is much more complicated and ultimately comes down to a simple fact: it’s not about the money.
Is it about the idea?
As I’m now on startup number 6, with 4 of the previous 5 being pretty successful, people often ask me about why I keep going back to the startup well again and again and the truth is that I don’t go back to it as much as I’m drawn back to it by an idea.
I’ve often told people asking me for advice about making the jump that there is a simple truth to doing a startup: it’s hard and unless you’re truly passionate and truly believe that you should not do something else, you might want to rethink jumping in.
Startups are about somewhat crazed devotion to the fact that you can make a difference in the market you’re looking to address. Some would say that it’s a crazed devotion to a particular idea but the fact is that the initial idea one kicks off with rarely turns into the final product that enters the market. Through refining and careful iteration, an original idea gets more polished and, along the way, iterates into some variation of the idea to eventually become a product.
US cloud-based talent management software firm Cornerstone OnDemand has released its Recruiting Cloud product.
One of the big advantages of being an entrepreneur and starting your company from scratch is that you get to set the culture, which is much easier than changing the culture of an existing business. The challenge is how to do it, and how to do it right. Why not learn what you can from companies like Apple, who are leading the way with great growth and a great culture?
Jim Stengel, in his latest book “Grow: How Ideals Power Growth and Profit” chronicles a ten-year study of the world’s fifty best businesses, including Apple, and concludes that those who centered their businesses on a culture of improving people’s lives had a growth rate triple that of competitors in their categories.
Here are ten culture building principles, adapted for startups from this study, that I believe have the same potential for tripling the growth and survival potential of your entrepreneurial efforts:
Communicate your dream and operationalize it. Mission statements tend to be narrow, business oriented statements such as “Be the leader in customer satisfaction.” Your dream and your company culture needs to be outward focused with a higher good, extending beyond the company’s financial interests.
- Be clear about what you stand for, inside and outside your company.Your personal priorities, values, and principles set the culture. The best way to be clear about them is to regularly engage team members, customers, and suppliers. People follow what you do, not what you say.
Many of our clients are staffing and recruiting firms, and because of this we have a unique perspective on the industry. So when it comes to our own hiring processes, we try to glean best practices from industry leaders, but we also try things our own way. As we iterate and refine our methods, we thought it might be interesting to share what we’ve learned.
A little background to start. InsightSquared is located in Cambridge, Massachusetts, but for all intents and purposes we are a Boston-based startup, and that means we are in a competitive city for hiring. Yes, the overall Massachusetts economy has slowed as of late, but the technology startup sector is red-hot. In fact, all across the country, some small/medium tech businesses have increased payroll by almost fivefold, and are having a tough time hiring quick enough. Not only are startups competing against each other, but large companies like Apple and Google have increased their workforce size by 50% in the last two years, snatching up a lot of talent. Either way, tech recruiting is an area of growth and we can tell that recruiters are acutely aware of it.
What Recruiters Should Know
If you ask a tech startup whether it’s hiring, you usually get this response: “For the right candidate,” meaning that they are never done hiring. In a field where speed and talent wins, if a stellar developer even comes within the vicinity of the office, he/she will be snatched up faster than an intern can be stuffed in the server room to make space.
We’re over the gimmicky interview logic puzzles as many startups seem to be. Real-world coding questions are given to developers during interviews, most from actual problems we have faced in the company. Thinking on one’s feet quickly is giving way to being able to think through coding problems carefully and thoroughly.
Startup incubator DreamIt Ventures is announcing the first Israel-U.S. accelerator, which will help up to five Israeli startups expand into the U.S. market through DreamIt’s NYC 2012 program. The new program, calledDreamIt Israel, will take place over four months, with the first month in Israel followed by three months in New York. The startups will also participate in two Demo Day events – one in the U.S. and the other back home with local investors.
Despite some VCs’ contention that entrepreneurs still need to be based in the Valley to succeed, Israel has been pushing out innovative new web and mobile startups at a rapid pace, including, of course, Disrupt winner Shaker.
DreamIt hopes to now capitalize on this trend with the new DreamIt Israel program, which kicks off on April 15th. Participating companies will have access to the U.S. and other global markets through the program, plus mentorship, guidance, and up to $25,000 in early stage capital. To qualify, founders must be residing in Israel and holding citizenship or residence.
After the first month in Israel, the startups will work alongside U.S. companies in DreamIt’s NYC 2012 program, which runs from May 14th through August 17th, 2012. After NYC’s Demo Day in August, the Israeli startups will return home to present before local investors, too. They will also be provided with two more months of workspace (location TBD) following the second Demo Day in Israel.
Staffing a start-up
It’s a nice position to be in to be looking for new staff for your start-up. At the very least it means the business is growing, and if you find the right person they can help you accelerate that growth.
At Shooii we have currently been recruiting for a junior role which will help free up time for us to move our business to the next level. It’s a process that has raised quite a few questions and challenges for us.
Firstly, we had to think about which role to hire for. With only a fixed amount of resources available for new staff, we need to ensure that we deliver the most valuable output for the business.
For us, this involved a review of all the work that needs to be done, and evaluating not only what tasks an employee could tackle, but also analysing the most effective use of our own time and how a new hire would complement the best use of our own time.
The next decision involved working out how we would get the word out that we were hiring, without breaking the bank. We posted the job on a free job board that was specific to the interest of our likely candidates, and also asked our network of contacts in that field to spread the word for us.
Luckily the quality of applicants we received were strong, and that in turn has required us to ask ourselves which qualities we deem most important for a member of the Shooii team. We’ve had this discussion in the past that for us, possible cultural fit may even rate slightly higher than technical ability.
Dave and I place a huge emphasis on maintaining the right company culture, and while we have our ideas it’s ultimately up to all staff to shape the way a business works together.
Based on this we’re looking for applicants who are multi-skilled, enthusiastic, vibrant and have an appetite for learning – in addition to being proficient in the skills at the core of the role.
It’s likely that their role will grow and change over time, so it’s key that they bring the right attitude to tackle life in a busy start-up office.
Once we’ve come to a resolution, I’m sure it will be time to immediately move on to the next challenge – finding the time to be a good manager!
One of the generally accepted wisdoms of the Finnish startup and growth company environment is shortage of private money. Startups run to Tekes for funding supposedly due to lack of available private early investments, and growth companies get sold very early when there is no VC money available. Easily available public funding is often cited as the dragon eating away any lucrative investment opportunities, and the vicious circle is ready.
Or is private money simply being directed elsewhere? In fact some very interesting sources for additional private money could be made available, if we take a forward-looking attitude.
By far the biggest investors in Finland are the pension funds. With their €140 B in combined investments they wield a mighty sword. These investments are by definition very risk-averse, concentrating mostly on instruments such as government bonds. Targeted yield is only 4%, and even that is now being lowered. These funds have made some investments in VC funds in early 2000s, but are now reluctant to make new investments. This is partly due to their bad experiences the previous time round, and partly due to the fact that a typical 5-15 M€ investment in a new VC fund is too small a figure to be interesting to them.
By definition, the current pension funds only cover less than a third of the actual pensions. Those still working and paying their pension fees are covering the rest. It is very natural that these funds should be managed with caution in order not to risk future pensions. On the other hand, pension funds need as many people working as possible to keep the payments flowing in.
This in turn means that they have a natural incentive to foster growth and employment. Since the growth companies create a lion’s share of new job opportunities, pension funds would do themselves a favor by investing in them. Also, the few millions that would make a big difference for growth companies amount to little more than rounding errors to pension funds.
There are also other non-obvious sources for private money. Trust funds would be more interested in investing in VC funds, if their gains would be taxed as capital gains rather that income, as Finnish VC Association points out. Private individuals with money to invest would be more interested in startups and growth companies, if there were actual incentives for it.
Many other EU countries have schemes in place to encourage private investments, and the countries with tax incentives have also substantial angel investment volumes, as European Business Angels’ Network has noted. UK in particular has some interesting schemes.
Social entertainment network GetGlue has just raised a significant round of $12 million in new financing, led by new investor Rho Ventures. The company’s existing investors, TimeWarner, RRE Ventures and Union Square Ventures, also participated in this round. The company had previously raised $6 million in November 2010.
The NYC-based company, which launched way back in 2008, has gone through many iterations since then. It now focuses on allowing users to share their activities, like watching a TV show, reading a book, seeing a movie and more, and then comment, reply or vote on comments from others who are doing the same thing.
The service is available online (desktop and mobile) as well as on mobile apps for iOS and Android. Over 30 major media companies now use GetGlue (via its API) to integrate the network’s user activity into their own websites and apps. These include Fox, NBC, Showtime, HBO and DirectTV, which offers a “first screen” experience that allows you to check-in to the program you’re viewing using your remote control.
In addition, over 75 major television networks work with GetGlue to reward fans of their 680 popular shows with stickers and discounts. The group, which includes major networks like ABC, CW, FOX, NBC, A&E, ABC Family, AMC, BRAVO, CNN, Discovery, Food Network, FX, HBO, MTV, Showtime, TNT, and USA, also uses GetGlue’s backend monitoring and analytics offerings to track engagement levels among their shows’ fans.
Over the past year, GetGlue has seen incredible growth. At the beginning of the year, the network had 750,000 users. It now has 2 million. Check-ins grew 1000% over 2011 and crossed the 100 million mark by year-end. And GetGlue’s database of check-ins, ratings and comments has over 350 million entries.
Some of GetGlue’s most recent efforts have been behind the scenes. For example, in September, the company introduced a curation feature that uses homegrown NLP (natural language processing) algorithms to automatically filter and hide comments on TV shows to reduce the “noise.” This includes automatically hiding profane speech and other short-form comments. After implementing the change, GetGlue saw engagement levels climb by 50%. Now, every three or four comments will include a vote or reply.