Bringing ‘B’ Players in to Scale Fast

May 30, 2012 3 Comments

Recently a VC, when asked how to scale fast after a large funding round, said the solution was to bring in ‘B’ players and have a process and structure to make them successful. Of course, you want all ‘A’ players, but when raising institutional money you have a mandate to grow as fast as possible — and that often means hiring faster than you can find ‘A’ players.

There’s a saying that ‘A’ players recruit ‘A’ players and ‘B’ players recruit ‘C’ players, not knowing any better. The thought of lowering your standards in order to hire people fast enough to meet investor expectations sounds bad to me, but I understand the pressure. Some startups, with a focus on corporate culture. know that they are sacrificing growth, while maintaining long-term organizational health, by sticking to their hiring standards throughout high-growth periods. One of the biggest challenges is not getting frustrated with hiring for key positions such that you accept someone that has domain expertise but isn’t a good corporate culture fit — don’t do it.

What else? What are your thoughts on bringing ‘B’ players in to scale fast?

Filed under Corp Culture, Entrepreneurship

3 Unconventional Steps for the Hiring Process

May 24, 2012 3 Comments

Hiring great talent that’s a strong corporate culture fit is one of the top responsibilities of a CEO, regardless of being a startup or established company. As part of hiring great talent there are three main areas to think through: casting a wide net to get candidates into the recruiting pipeline, assessing their culture fit and ability to do the job, and finally convincing the select few to join the team. For many types of positions there are plenty of quality candidates and the hiring process becomes the challenging area.

Here are three unconventional steps for the hiring process:

  1. Written essays for all positions – a candidate’s ability to write correlates with the ability to do the job, regardless of position, more than anything else
  2. Culture checks by the founders and/or culture team – have people in the hiring process that are exclusively assessing corporate culture fit to build the strongest culture possible and to add checks and balances for hiring managers that get anxious to fill a position
  3. Unanimous approval – require 100% yeses from everyone involved in the hiring process regardless of seniority or position

The idea isn’t to make the process as burdensome as possible but rather to build the best team. Spending more time in the hiring process makes sense considering the extensive amount of time you’ll spend with the person once they’re hired.

What else? What are some other unconventional steps for the hiring process?

Filed under Corp Culture, Entrepreneurship, Operations

Consider Hiring Speed When Raising Money

May 23, 2012 Leave a comment

Many times over the past two years I’ve been asked why we haven’t raised money from VCs. There are a number of answers to that question but one of the big reasons is that once money is raised it has to be put to work as the goal is to grow revenue as fast as possible. For us, that involves hiring tons of people and spending more money on lead generation. It’s easy to spend money on lead generation but much harder to significantly increase our hiring rate and still maintain our corporate culture standards, which we’re going to maintain at all costs.

Startups need to consider their hiring speed when raising money and building an expected budget for investors. Too often the model shows hiring numbers for each department (e.g. X engineers, Y sales people, Z support people, etc) with too short of a time horizon to hire the right people. A financing round is often viewed as raising enough money to last 18 months with the idea that 12 months will be for reaching the next milestone and the final six months will be used for raising the next round. Well, if the round is large, and you plan on hiring 50 new people, and it’ll take at least six months to find those people, six months for them to ramp up, and then six months to see results, you’re already 18 months out, thus you need to adjust the model and expectations with investors.

Entrepreneurs need to consider their hiring speed when raising money, especially when raising money from institutional investors.

What else? What are your thoughts on paying more attention to hiring speed when raising money?

Filed under Corp Culture, Entrepreneurship

Think of Startup Employees as Volunteers

May 18, 2012 3 Comments

Earlier today I was having lunch with an entrepreneur and we were talking about corporate culture when she said something that really stuck with me: the newest generation of employees are best thought of as volunteers like at a non-profit. Now, this isn’t volunteers in the sense of not getting paid but rather volunteers in the way they want to be treated and the way they approach things.

Here are a few reasons why startup employees should be viewed as volunteers:

  • Mission and purpose is more important than the money
  • The best work is done when you care deeply about something
  • Volunteers often need praise and encouragement to feel appreciated
  • Length of tenure is shorter

Treating startup employees as volunteers makes sense as the employer is beholden to the creative, mobile, sought-after employee. With the creative class, the volunteer mindset is very prevalent.

What else? What are some other reasons why startup employees should be viewed as volunteers in the non-profit sense?

Filed under Corp Culture, Entrepreneurship

Culture Checks to Help Scaling a Startup

May 16, 2012 Leave a comment

One of the changes we made recently was to put in culture check teams to help us scale our interviewing process. As we add more and more team members it becomes difficult for the founders to personally interview everyone (although we still do it currently). Here’s how the culture check idea works:

  • Teams of two people do culture checks together (we have two teams for a total of four people)
  • People on a culture check team strongly embody our culture and can identify culture fit with candidates
  • The culture check interview is only done at the very end of the process when the candidate is in the finalist stage
  • The culture check interview isn’t for assessing domain expertise but for fit with core values (candidates that don’t make it through are great people that just don’t quit fit our culture)

Culture checks are working out well and we plan on expanding the number of teams as the number of people we’re hiring grows.

What else? What are your thoughts on culture checks for scaling in a startup?

Filed under Corp Culture, Entrepreneurship, Operations

Costs of Amazing Startup Benefits and Perks

May 2, 2012 4 Comments

Earlier this week I was talking to an entrepreneur and he exclaimed that we must be spending a fortune on the amazing benefits and perks that we offer. After pausing for a minute I thought about and realized that I didn’t know how much it cost for an individual employee for benefits and perks.

Here’s the cost for the different monthly items we pay for for each employee:

  • Full individual-only health and dental benefits – $270/month
  • Full short term and long term disability insurance – $20/month
  • Free lunch Fridays – $30/month
  • Catered daily breakfast – $60/month
  • 401k with 50% match up to 6% off salary with $3,000 max – $150/month (avg across company)
  • Unlimited drinks and snacks – $60/month
  • Weekly Friday massages – $15/month
  • Month car wash and detailing – $25/month
  • Free Braves tickets (2 per season) – $5/month
  • Total: $620/month direct expense of benefits and perks for the standard employee

Yes, ~$7,500 per year is a fair amount extra on top of the 10% employer tax on wages but in the grand scheme of things it’s priceless to have such a great team of people with an awesome corporate culture.

What else? What are your thoughts on the costs of amazing startup benefits and perks?

Filed under Corp Culture, Entrepreneurship

Two Requirements for Success from The Advantage

April 29, 2012 Leave a comment

Patrick Lencioni’s most recent book, The Advantage, is one of the best business books published in the past year. Early on he argues that there’s two requirements for success in business:

  1. Smart – strategy, marketing, finance, and technology
  2. Healthy – minimal politics, minimal confusion, high morale, high productivity, and low turnover

Most executives focus on the “smart” side of the equation because it is easier to deal with, taught in school, and believed to be the differentiating part of running a successful business. The reality is that the “smart” requirement is now much more of a given due to the availability of information, educational background of executives, and competitive nature of most markets in the Internet age.

The “healthy” side of the equation is the one that isn’t given enough attention and over the next 10-20 years will become just as top-of-mind and worked on as the “smart” side. Entrepreneurs and executives that don’t embrace the “healthy” side will have more limited lifespans and outcomes compared to those that do. Some people will deride it as being fuzzy and a corporate culture ploy but in the end a strong corporate culture is the only sustainable competitive advantage completely within the control of the company’s leaders.

What else? What are your thoughts on the two requirements for success from Patrick Lencioni’s book The Advantage?

Filed under Corp Culture, Entrepreneurship, Leadership

Thoughts on Pardot as AJC #1 Best Place to Work

April 23, 2012 4 Comments

Yesterday the Atlanta Journal Constitution named Pardot as the #1 place to work in the small business category (50 – 149 employees) — we couldn’t be more honored, humbled, and thrilled by the recognition. It truly is our greatest accomplishment as an organization and is also external validation of our goal to be the best place to work and the best place to be a customer. Our guiding purpose is to be a platform for good work, good people, and good pay with the people side being the most important. Good people to us are ones that are positive, self-starting, and supportive. Yes, it’s really that simple.

Are we perfect? No, not in the slightest. We still have significant work to do around team member alignment, clarity of career paths, and leadership development. We do know some of our weaknesses and we’re working hard to make them better.

Here are some of the things that we do well and that contributed to us being named the best place to work in Atlanta:

  • Amazing people that fit our culture (most important!) — we hire people that already fit our style and recognize that the way we operate isn’t for everyone
  • Great benefits — we pay full health, dental, short term disability, long term disability, and 401k with match for all employees combined with catered breakfasts daily, catered lunches on Fridays, all you can eat and drink snacks throughout the week, and free massage therapists on Fridays
  • Encourage work/life balance — we work standard 40 hour weeks, in fact, most people work from home a couple days a week to avoid traffic, run errands, etc
  • Constant communication — we aren’t afraid of meetings, but we do them with a purpose and consistent rhythm between daily check-ins, weekly tacticals, monthly strategics, and quarterly off-sites
  • Celebrate success — every quarter we have a big company-wide off-site event where we celebrate as a team
  • One page strategic plan — a simple one-sided document has everything

One of the hardest things about this approach is that it limits our growth. We’re confident we could grow revenue much faster but we’d have to sacrifice our hiring standards and we’re not going to do it. Our long term bet is to build the best company, not the largest company. We’re going to do everything in our power to achieve that goal.

The amazing people on our team deserve all the credit and I’m extremely proud of what we’ve built. We’re just getting started.

P.S. We’re hiring!

Filed under Community, Corp Culture, Entrepreneurship

Team Members Scaling From Front Line to Executive

April 16, 2012 2 Comments

When a company is just getting started it’s critical to get ‘A’ players on board that are excited to roll up their sleeves and do whatever it takes to be successful. As the startup grows and matures, one of the most difficult things is developing the early team members to scale as the business scales. It’s super tough to go from front-line team member to an executive managing a fast-growing department.

Here are some items to look for in team members that aspire to scale as the business scales:

  • Executive presence – a level of confidence and professionalism that reflects strongly on the company
  • Penchant for bigger-picture thinking – getting the job done is great but successful executives need to be thinking about long-term strategies, metrics, and ways to improve
  • Strong communication skills – in-person discussions, team meetings, and conference calls should be productive and facilitated in an effective manner (great public speaking skills are a nice bonus)

As team members express a desire to scale with the organization, set proper expectations and ask hard questions regarding their ability to deliver as an executive at the next level.

What else? What other thoughts do you have on team members scaling from front line to executive?

Filed under Corp Culture, Entrepreneurship, Leadership

Organizational Health as the Next Corporate Frontier

April 10, 2012 2 Comments

Yesterday I started reading The Advantage: Why Organizational Health Trumps Everything Else in Business by Patrick Lencioni, one of my favorite authors. So far, it’s another must-have book in an entrepreneur’s collection.

Lencioni uses the term “organizational health” and explicitly says he doesn’t like the term “corporate culture” because it’s over used. I disagree. He uses the subtitle “Why Organizational Health Trumps Everything Else in Business” and corresponding book content is nearly identical to my favorite saying that corporate culture is the only sustainable competitive advantage completely within the control of the company.

Another interesting point he makes is that management teams are so strong, on average, with strategy, operations, marketing, etc that those are much less of a differentiator than they used to be. Talent is still extremely important but for companies of size the managers are good enough in the main functional areas. Now, the real differentiation comes from organizational health and the softer, internal people side of the business.

I’m looking forward to reading more of the book and can already recommend it to entrepreneurs that believe a strong corporate culture is critical to success.

Filed under Corp Culture, Entrepreneurship, Leadership, Operations

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