We announced yesterday that we are looking for a general counsel for Foundry Group. While Jason has proclaimed himself a recovering lawyer for some time now, in reality, he’s been doing the high-level legal work for us since we started Foundry Group. He also runs our fund operations and is a full-time venture capitalist, so it is time to get him some help.
When our prior fund hired Jason as our general counsel, I wasn’t even part of the decision. Back then, people would just show up and occupy various offices. I wasn’t sure that we needed an in-house lawyer, but over the years I realized the importance of this role. In fact, I’ve had several outstanding lawyers, including Len Fassler and Jerry Poch, as mentors, so I occasionally play the role of Jason’s “junior associate” on legal issues that we (and the companies we invest in) face.
One thing I will say about our business – it’s never boring. (Okay, maybe some of the board meetings are, but I’ll leave that one for another day). I think this role will be an incredibly interesting experience for someone who wants to practice in a multitude of areas both for us as a firm but also in helping out our portfolio companies. Jason has been doing this job longer than anyone I know, so getting to work alongside him will be a great learning experience.
I look forward to working with one of you.
I’m on the receiving end of a lot of reference calls. I try to be thoughtful and direct in my responses, but I’m increasingly annoyed by the generic nature of the questions. Over time, I’ve developed an approach to doing reference checks, and my approach actively avoids asking any of the following questions.
- How did you get to know Person X?
- What is your relationship to Person X?
- What were Person X’s different roles?
- How does Person X rank concerning leadership ability?
- How does Person X rank concerning analytical ability?
- What about Person X’s vision and ability to communicate it to others?
- Was Person X well respected by the people he managed?
- What are Person X’s strengths?
- What are Person X’s weaknesses or areas for development?
- Would you hire Person X again? If so, what size company?
- What other questions should I have asked?
- Are there any things you would want to know if you were me?
I don’t know which VC or Private Equity firm first came up with this list of questions, but like many elements of a term sheet, they seem to have been passed down from generation to generation.
My answer to the last question is “Do you ever get tired of doing reference checks this way?”
Thanks to the 75+ people who have reached out about being willing to help me with writing and WordPress stuff. I’ve read all the emails, answered some of them, and will get responses out to the rest on Sunday after I have a nice digital sabbath starting in a few minutes.
On my run today, I thought more about what I was looking to do and decided that my approach wasn’t right.
I’ll put this in the MVP / fail fast category. While many of the responses were from people who are clearly talented and would be able to tackle the stuff I’m said I was looking for help on, I realize that my premise around what I need may be flawed when I think harder about what I really want.
So, for now, I’m going to rescind my previous post titled Looking for a Writer and a WordPress Goddess and keep pondering things.
I’ve decided to hire two people for 2017: a full time writer and a full time WordPress Goddess (or God – I’m good with either gender …)
I’ve been very reticent to add people to our team. However, at this point it’s clear that I can get a lot of leverage from two very specific people.
Writer: I’m looking for a full time non-fiction writer. This is not a research function, but rather a writing / editing / coordination function. The amount of writing I do is significant, but there is 5x more to do than I can handle. I’m turning down a lot of stuff that I’d like to write and putting off stuff into an infinite backlog which doesn’t feel good. So, having someone writing first drafts, editing stuff I slap together, writing some primary content, and helping get it posted in the right places would be a big help.
WordPress Goddess: I contribute to four – soon to be five – blogs that my best assessment of is a hot mess of different configurations. Every time I fiddle around with something on one of them I break something else. Ideally I’d be able to normalize everything into one configuration, but I accept that this will always be changing. The person I’m looking for here has a mix of design skills and WordPress programming / config skills. In addition, there’s a bunch of other stuff in the infinite backlog of goodness to work on.
Each of these people would work directly for me. Optimally they’d live in or move to Boulder, but that’s not a requirement. They must be interested in entrepreneurship and be able to deal with lots of ambiguity. They must be comfortable with a lack of daily structure and reporting. They must be able to work remotely at times.
I’m willing to make a two year commitment to them, so they need to be willing to make a two year commitment to me.
If you are interested, just email me at email@example.com. If you know someone who might be a fit, please forward this post to them.
By definition, as a company scales rapidly, it adds people quickly. There are many things about this that are difficult, but a vexing one has to do with the leadership team.
Often times, the wrong people are in senior positions. The faster a company grows, or the less experienced the CEO is (e.g. a first time founding CEO), the more likely it is a problem. Per Fred Wilson’s famous post What A CEO Does, this is one of the three key responsibilities of a CEO.
“A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.”
I’ve slightly modified in my brain to be that a great CEO has to do three things well. These three things. They can be great at many other things, but if they don’t do these three well, they won’t be successful long term.
Let’s focus on “recruits, hires, and retains the very best talent for the company.” This is where the vexing part comes in. As a company grows from 25 to 50 to 100 to 200 to 500 to 1000 people, the characteristics of who is the very best talent in leadership roles will change. It’s rarely the case that your leadership team at 1000 people is the same leadership team you had a 25 people. However, the CEO is often the same person, especially if it’s a founder.
Stress on fast growing companies comes from a lot of different places. The one that is often the largest, and creates the most second order issues, is the composition of the leadership team. More specifically, it’s specific people on the leadership who don’t have the scale experience their role requires at a particular moment in time.
Take a simple example. Imagine a 50 person company. Now, consider a VP Engineering who has never worked in a company smaller than 5,000 people. His last job was VP Engineering on top of a division representing 25% of the development resources of a very large company, reporting up to the division president. By definition he has never worked in a company that grew from 50 people to 100 people in a 12-month period. He might argue that he’s seen that kind of growth within a segment of the company, but he’s never experienced it working directly for a CEO of a small, rapidly growing company.
In comparison, consider a VP of Engineering who has worked in three different companies. She started with one that grew from 20 to 200 and was acquired. The next one grew from 5 to 100 and then shrunk again to 10 before being acquired. The one you are recruiting her from grew from 100 to 1000 while she was in the role and is still going, but she’s now tired of the larger company dynamic and wants to get back to a smaller, fast growing company.
Which one sounds like a better fit? I hope you chose the second one – she’s a much better fit in my book.
Now, here’s the magic trick – if you are a CEO who is interviewing for a new member of your leadership team, ask the person you are interviewing if they have every been in the same role as a company that grew from size -50% to +200% of yours. So if you are the CEO of the 50 person company, you are looking for someone who has been in at least one company that grew from 25 to 100 people. Ideally, they participated in growth to a much larger scale, but at a minimum they should bracket these numbers.
Now, ask her to tell you the story of the company, the growth experience, how she built and managed her team, and how she interacted with the rest of the team. Keep digging into the dynamics she had with the CEO, with other executives, and with the people who worked for her. Focus a lot on a size you will be in a year so you know how she’s going to handle what’s in front of her.
Remember – you are looking for competence fit and culture fit. By using this approach, you are exploring both, in your current and near term context.
Reid Hoffman, Ben Casnocha, and Chris Yeh have written an outstanding and important book called The Alliance: Managing Talent in the Networked Age. I encourage you to get a copy right now and read it this weekend. If you are a CEO of a company Foundry Group has invested in, there’s no need to buy it – I just ordered 100 of them and they will be in your hands soon.
Reid and Ben previously wrote a book called The Start-up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career. It is also excellent. It’s the first book students read during the course I teach with Brad Bernthal at CU Boulder called “The Philosophy of Entrepreneurship.”
Reid is well known as the co-founder of LinkedIn, a partner at Greylock, an angel investor in many successful companies including Facebook and Twitter, and one of the kingpins of the PayPal Mafia. I got to know Reid while serving on the Zynga board with him and he’s as advertised – a deep thinker, extraordinary strategist, and incredibly supportive partner to an entrepreneur. Most importantly, it’s very clear that the notion of building a strong personal brand (discussed in The Start-up of You) and approaching employee / employer pact with commitment and a very long term view (discussed in The Alliance) is a core part of his value system.
Ben, while less well known, has been Reid’s chief of staff for the past few years. He’s also a successful entrepreneur, having started Comcate, his first business, at age 14. Amy and I have become extremely close friends with Ben over the last decade and we view him as part of our extended family.
I don’t really know Chris, but by association he has a huge amount of credibility with me.
The Alliance starts out by punching you in the face to get your attention. It differentiates between the notion of “company as a family” and “company as a team.” The punch in the face is the idea that you can’t fire a family member (“Susy, you aren’t succeeding at doing your homework, so you are fired as our daughter”) so while “we are a family” is a time-worn metaphor for a company, it’s a poor one. Reid, Ben, and Chris suggest the notion of a team instead. And, instead of permanent employment, they use the concept of a tour of duty to redefine the employer / employee relationship from “lifetime employment” to “a well-defined and clearly stated pact between employer and employee.”
The book, and the concept, is tightly written and extremely readable. The book is an appropriate length – there’s no fat here – just substance. I particularly loved the chapter on Network Intelligence which describes an approach to have every person in your company use their network to get market and competitive intelligence for the company. In addition to the concept, the authors give us piles of examples, including some from Greylock on how to execute a brilliant market intelligence strategy.
When reflecting on The Alliance, I feel that Foundry Group works this way at a meta-level. If you extend “Foundry Group” to include all of the entities that we have co-founded, you quickly add in Techstars, FG Angels, FG Press, SRS|Acquiom, Gluecon, Defrag, and a few others. Then, add in the 70 companies we’ve invested in via Foundry Group and the 20 or so we’ve invested in through FG Angels. Then the 30 or so VC funds we are investors in. And the thousands of companies we are indirect investors in. That’s a big team, configured in lots of different structures, all over the US. Any member in good standing of any of these entities is a long term member of our team, regardless of what they do. Anytime one of the reaches out to me, I’ll always try to help any way I can. Sure – we aren’t perfect at this, but we try hard, and are going to keep trying even harder in the future.
Reid, Ben, and Chris – thanks for writing this book. I hope, in 20 years, it’s as important as The Organization Man by William Whyte was in its day.
In the Startup Communities, I talk extensively about leaders and feeders. I assert than anyone in the startup community should be able to start / create / do anything that is helpful to the startup community. They don’t have to ask permission – there is no VP Activities in a startup community. I also talk about how the students are the precious and most valuable resource of a university.
This morning I got the following email from Fletcher Richman, a student at CU. It’s a perfect example of what I’m talking about and it is immediately actionable for every entrepreneur in Boulder and Denver.
Dear Founders and Friends,
As students at CU Boulder, we have noticed that there are many startups that would love hire more interns and full time employees from the university, and lots of students would love to work at a startup. However, there seems to be a disconnect between the two.
We would like to fix this issue. We have created a simple form to get a better idea of the positions available for students at startups that we would greatly appreciate if you could fill out:
The data from this form will be used for two things:
1) To help start an online startup jobs and internships board for students that we are currently building.
2) To build a contact list of companies for the Students2Startups fair early next year, which will be bigger and better than ever before!
Thank you so much for your help! Please let us know if you have any questions.
So – what are you waiting for. Go sign up to hire some CU Students!
This first appeared in the Wall Street Journal’s Accelerator series last week under the title Cultural Fit Trumps Competence. Also, I’m going to be doing online office hours with the WSJ on Friday 12/21 at 3pm ET – join and ask questions!
The first people you hire in your startup are critical to your company’s success. So it’s easy to say that you need to hire the “absolute best people you can find.” But what does this actually mean?
Take two different spectrums – (1) competence and (2) cultural fit. Imagine that you have a spectrum for each person – from low to high.
Now, you obviously will not hire someone who is low on both competence and cultural fit. And you obviously will hire someone who is high on both competence and culture fit. But what about the other two cases?
Many people default into choosing people who have high competence but a low cultural fit. This is a deadly mistake in a startup, as this is exactly the wrong person to hire. While they may have great skills for the role you are looking for, the overhead of managing and integrating this person into your young team will be extremely difficult. This is especially true if they are in a leadership position, as they will hire other people who have a cultural fit with them, rather than with the organization, creating even more polarization within your young company.
In contrast, people with low competence but a high culture fit are also not great hires. But if they are “medium” competence, or high competence on in a related role, or early in the career and ambitious about learning new skills, they may be worth taking a risk on.
While you always want to shoot for high competence, high cultural fit people when you are hiring early in your company’s life, it’s always better to chose cultural fit over competence when you have to make a choice.
If you are interested in working with a company that is an expert at figuring this out, go take a look at RoundPegg.
Chris Moody, president and COO of Gnip, is back with a guest post in his Moody on Management series. Following are Chris’ thoughts on negotiating compensation with a prospective employee. Enjoy and comment freely!
In my last post, I provided a few tips for job candidates when interviewing at a startup. This week I wanted to cover a simple process for hiring managers to follow when communicating with candidates about salary requirements.
There is the old saying that people spend more time planning their vacation than they spend planning their retirement. I’ve found the same concept sometimes applies to job candidates when thinking about their compensation requirements. As the hiring manager, you need to ensure that a candidate has fully considered their compensation needs before you make an offer. Over the years, I’ve refined a simple and effective approach to facilitating this discussion. I’ve used this technique countless times with great results. The process starts with an email to the candidate:
From a skills and values standpoint, it seems like we are both excited about the possibility of you joining our company. If you agree, the next step in the process from my perspective is to determine if we are aligned from a compensation standpoint. As such, it would be helpful to get the following information from you:
– Current compensation. Please breakout your base salary from any variable compensation if applicable.
– Your view of your current compensation as it relates to your next opportunity. It is particularly helpful if you provide this feedback by selecting from either
a) I believe I’m fairly compensated and would anticipate making the same salary at my next opportunity
b) I’d be willing to take less for the right opportunity
c) I feel I’m currently under valued and looking for an increase of $x in order to be excited about my next opportunity.
If it works for you, I’d prefer to have this communication via email. Over time I’ve found that putting this stuff in writing helps people think about it more before responding.
Of course there are no right or wrong answers. The goal here is simply to get a clear understanding of how the candidate is thinking about their future compensation by using their current compensation as a frame of reference. Best case, the candidate’s expectations align with yours and the offer moves forward with a high probability of success. Worst case your expectations don’t align but you now have a thoughtful starting point for negotiations if you still want to move forward with an offer.
A couple of additional points:
1) Even if the candidate has expressed salary requirements during the screening process or during your discussions, I strongly recommend you have this written conversation as the final step before you make an offer. For example, perhaps your conversations along the way changed their perspective on salary requirements for the position.
2) The key to this approach is to do this communication in writing. I know it can seem silly or impersonal, but it makes a huge difference in terms of requiring people to give thoughtful answers instead of answering on the spot.
Before using this approach I had more than a few occasions where candidates indicated verbally that they wanted $x, we offered $x, and then they responded with “I was thinking about it more and I really need $y to feel good about joining”. Once you hit this situation, it puts both parties in an awkward position and it can be hard to recover. You can avoid this potential pitfall with one simple email.
Oh, by the way, Gnip is hiring!
My long time friend Chris Moody, president and COO of Gnip, has offered to write some guest posts on management – we’ll call the series Moody on Management. In addition to being an outstanding early stage / high growth executive, Chris has made a study of management in startups and is extremely thoughtful about what does and doesn’t work.
His first post is aimed at anyone looking to get a job in a startup and talks about how to be effective at interviewing for a job. Feel free to weigh in if you have other “Stop, Don’t, Nevers” or “Pleases”
I love interviewing people to work at Gnip. Unless I’m having a really crappy day, I enter each interview full of hope and optimism. I’ve done countless interviews in the last 20+ years and I can easily slip into autopilot mode if I’m not careful. In order to avoid this trap, I mentally prepare by reminding myself “today could be the day I’ll meet the next great team member.” I’ve found this mental pep talk helps remind me that there is no better use of my time than investing in the interviewing process. In other words, the next interview could be a company game changer and I need to be 100% engaged.
Most interviews don’t directly lead to someone joining our company. Often the person doesn’t have the right skills or experience. There are plenty of cases where it becomes clear to the candidate that we can’t provide them an opportunity that meets their interest/needs. Both of these outcomes are normal and healthy. Unfortunately, I often find another outcome can occur which is frustrating and deflating. This situation occurs all too often when a person is so poor at interviewing that we’re unable to determine if there is a potential match. I’ll invest up to an hour in an interview trying to peel back the layers. However, I’m frequently unable to get to a substantive layer of discussion that will help both parties determine if there is a potential match. I’ll leave these interviews thinking, “Maybe that person was great, I’ll never know”. Over time, I’ve started to referring to these as the “who knows?” interviews.
The good news is that I think job candidates can follow some simple guidelines when interviewing at a startup that will help avoid the “who knows?”
Stop, Don’t, Never
- Stop selling and start engaging. In order for this to work, we both have to determine if there is a match. The best way for us to determine the match is to have a thoughtful/engaging discussion. If the interview process only involves me asking questions and you giving answers that you think will impress me, we’re going to waste a perfectly good hour.
- Don’t talk in sound bites and buzz words. You might think they make you sound smart, but they don’t because they lack substance. We need to have a real discussion. If you find yourself rehearsing answers before the interview even starts, we’re almost certainly going to have an unproductive meeting. Speak from your heart and your experience not from a script.
- Don’t agree with everything I say. I’m wrong… A LOT. I once went on an all beer and water diet for a week. Challenge me. Startups thrive when each person hired is smarter than the person hiring them. If you agree with everything I say in the interview, I’m left wondering how are you going to contribute when we are working together trying to solve tough problems.
- Avoid talking about past individual results. I know this sounds unconventional, but as the interviewer is often very hard to contextualize how these results might translate to our business. I’m much more interested in discovering what you learned in your last job that we might leverage at our company. For example, telling me you increased sales by 300% isn’t that helpful. Telling me how you learned to handle customer objections around price could prove to be very useful.
- Be honest
- Ask lots of questions about stuff that matters to you. Reviewing a company’s web site before the interview will give you some reasonable background. But, I can assure you that no company web site answers all the questions about a business. It is often the case that an interviewer can learn more about the way someone thinks from the questions they ask than from the answers they give.
- Ask tough questions. You are considering investing a huge portion of your waking hours at our company. Think about the risks and the downsides of the company or the role and freely express any concerns.
- Figure out if our company is a good culture and values fit for you by asking tough situational questions based upon your past experiences. Questions like “Can you give me an example of how the company handled a situation where a customer had a bad experience with the product?” can be very revealing about how the company acts/thinks.
Ask CEOs of successful startups about their biggest challenge and they’ll often cite the inability to hire great people. My theory is there are plenty of great people, but many are just terrible at interviewing. Hopefully these few tips help lead to more great matches down the road. By the way, Gnip is hiring!