David Cummings on Startups

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  • 5 Recruiting Resources for Entrepreneurs

    Several entrepreneurs have asked for links to other resources on recruiting after posts on the Top 3 Hiring Mistakes, 5 Non-Standard Recruiting Tactics, and 7 Non-Standard Interview Questions. Here are five recruiting resources for entrepreneurs:

    1. How Startups Can Build a Recruiting Machine by David Skok
    2. Post-Traction, You Need to Spend 20% of Your Time Recruiting by Jason Lemkin
    3. How to Improve Hiring at Startups by Mark Suster
    4. Why Recruiting Isn’t Over When an Employee Accepts Your Offer by Mark Suster
    5. Turbocharge Your Recruiting Machine — Here’s How by First Round Capital

    Recruiting is one of the most important skills for an entrepreneur and needs the appropriate attention. Read these resources and learn from others.

    What else? What are some other good recruiting resources for entrepreneurs?

  • Top 3 Hiring Mistakes

    Alright, now that we have 5 Non-Standard Recruiting Tactics and 7 Non-Standard Interview Questions let’s talk about hiring mistakes. As much as we work hard to build an excellent recruiting and hiring process, mistakes happen. Here are the top three hiring mistakes:

    1. Sacrificing Culture Fit – When the hiring manager and team feels pressure to deliver, and few candidates are available, people start talking about sacrificing culture fit. Don’t do it. Everything starts with culture fit.
    2. Rushing the Process – Assuming you’ll be working with this person for the next 2-3 years (if not more), that’s thousands of hours. Don’t you think you should spend several hours with the person in the hiring process, especially if they’re a manager (see Chronological In Depth Survey Interviews)?
    3. Not Moving Fast Enough When Ready – Great candidates don’t hang around for long. Once you’ve finished the process, and it’s the right person, move quickly and seal the deal. Don’t linger.

    Don’t make these hiring mistakes. Ensure culture fit, follow the process, and move fast.

    What else? What are some other common hiring mistakes?

  • 5 Non-Standard Recruiting Tactics

    Now that we have the 7 Non-Standard Interview Questions from yesterday, let’s go up a level and talk about non-standard recruiting tactics. When an entrepreneur needs help with recruiting, I ask about their current tactics and it’s typically LinkedIn listings, job boards, and recruiters. Well, here are five non-standard recruiting tactics:

    1. Culture Blog / Engineering Blog – At Pardot we used to have a culture blog called Pardot Wave where Pardashians shared stories and experiences to help prospective employees better understand our culture. At Netflix there’s an excellent engineering blog called The Netflix Tech Blog that highlights many of their open source contributions.
    2. Sponsor Meetup Groups – Go to where the potential team members do their networking and continual education. For example, if recruiting for iOS developers check out The Atlanta iOS Developers Monthly Meetup.
    3. $10,000 Employee Referral Bonus – Don’t do the basic $1,000 employee referral bonus. For really hard to find positions, make the referral bonus substantial (it’ll still be much less than using recruiters).
    4. Public Career Fair – Host a happy hour at the local pub for anyone that’s interested in learning more about the open job positions. A casual group setting is a great way to meet potential candidates that aren’t ready to go through a full recruiting process but might be with a little more information.
    5. LinkedIn InMail from the Entrepreneur – Found a good candidate on LinkedIn but haven’t received a response? Have the entrepreneur reach out with a personalized InMail message expressing how much they’d enjoy getting together and start the process that way.

    Recruiting is a serious endeavor that requires tremendous effort to do well. Run a process with the basics and incorporate some of these non-standard tactics as well.

    What else? What are some other non-standard recruiting tactics?

  • 7 Non-Standard Interview Questions

    Continuing with yesterday’s post on Chronological In Depth Survey Interviews, I’ve enjoyed testing a variety of interview questions over the years. While there are a number of excellent resources with example interview questions available, I’ve found a few non-standard interview questions I like. Here are seven:

    1. What did you do to prepare for this interview? More details.
    2. Why do you want to join our company? More details.
    3. How would you describe our product or service to a stranger on the street?
    4. What are our core values? How do your values align with ours?
    5. What are three things you like about your current company? What are three things you really don’t like? Why?
    6. What are three things you like about your current manager? What are three thing you really don’t like? Why?
    7. What’s your work style? In what type of environment do you thrive?

    Remember that an interview should be a conversation where the interviewee does most of the talking. Combine these non-standard interview questions along with your existing favorites and the Chronological In Depth Survey Interviews.

    What else? What are some more non-standard interview questions that you like?

  • Chronological In Depth Survey Interviews

    Nearly 10 years ago I first learned about Topgrading and the chronological in depth survey interviews. Generally, the idea is to do an incredibly detailed interview of every past job for people in management and senior management positions. Start from college, regardless of stage of career, and ask deep probing questions. Find out how the person thinks and why they moved from position to position.

    Here’s how to do chronological in depth survey interviews:

    • For each and every single job, ask about the following:
      Job title
      Start and end date
      Starting and ending compensation
      Roles and responsibilities
      State of affairs when joining
      Results and accomplishments
      Mistakes and failures
      Most enjoyable and least enjoyable aspects of the job
      Circumstances that led to change of jobs
      Manager name and phone number
      Manager strengths and weaknesses
      What manager would say about candidate’s strengths and weaknesses
      Names of direct reports, their strengths and weaknesses, and rate them A through F
    • After the jobs review sections ask questions about the following:
      Analysis skills
      Judgement/decision making
      Creativity
      Continuing education
      Integrity
      Organization/planning
      Independence
      Stress management
      Interpersonal competencies

    Plan for this process to take 3-4 hours, minimum. Hiring great people is one of the three most important things an entrepreneur does and chronological in depth survey interviews are key.

    What else? What are some more thoughts on chronological in depth survey interviews?

  • Video of the Week: Patrick Collison on Hiring at Stripe and the Role of a Product-Focused CEO

    For our video of the week we have Patrick Collison on Hiring at Stripe and the Role of a Product-Focused CEO. Enjoy!

    From YouTube:
    This is session 11 of Technology-enabled Blitzscaling, a Stanford University class taught by Reid Hoffman, John Lilly, Allen Blue, and Chris Yeh. This class features John Lilly interviewing Patrick Collison, the Co-Founder of Stripe.

  • The Emotional Journey of Anything Great

    Last week I met with an entrepreneur that had been working on a startup for two years and it was clear he was having a tough time. Late in the conversation I asked about the The Trough of Disillusionment and there was an affirmative that it was happening currently. After that, I saw Chris Maddern tweet this excellent graphic titled The Emotional Journey of Anything Great:
    emotional-journey

    Steps along the journey, as taken from the picture:

    • This is the best idea ever!!
    • This will be fun
    • This is harder than I thought
    • This is going to be a lot of work
    • This sucks and I have no idea what I’m doing
    • #%@}!!!!!
    • Ok but it still sucks
    • Quick, let’s call it a day and say we learned something
    • Hmm…
    • Hey!
    • Wow
    • This is one of the things I’m most proud of

    Every entrepreneur goes through dark times. Unfortunately, it’s part of the process but the ones that break through have a greater appreciation and resilience that makes it even sweeter.

    What else? What are some more thoughts on this emotional journey of anything great?

  • The 10 Year Anniversary of Pardot

    Today marks the 10 year anniversary from when Adam and I started Pardot. I first registered the domain name on January 30th, 2007 (whois lookup) and Adam had to give notice to his current employer, InterContinental Hotels Group. We first started out as a PPC lead generation service for tech companies before pivoting into marketing automation in the first 60 days (more key milestones). After hiring 11 interns and building v1 of the product, we were off and running on the adventure of a lifetime.

    Here are a few things about the Pardot journey that I’m especially proud of:

    Overall, I’m most proud of Adam and me building an enduring business that’s 15x larger than when we sold it and making a small mark on our community. Here’s to everyone that helped make Pardot a success and a thank you for the last 10 years.

  • The Science of Enterprise Software Sales

    Jyoti Bansal, founder and long-time CEO of AppDynamics (see S-1 IPO notes) that was recently acquired by Cisco for $3.4 billion, has an excellent blog post up titled The Science of Enterprise Software Sales — My Lessons from AppDynamics. Here are a few notes from the post:

    1. Your Path to $100 Million (or $1 Billion) Sales
      • Need to get to $100M of revenue growing fast than 40% a year to get a $1B valuation
      • Calculate the number of customers required for $100M in revenue based on average revenue per customer (e.g. 5,000 customers paying $20K/year)
    2. The Sales Capacity Model
      • Four key variables:
        1. Number of “ramped” sales reps.
        2. Productivity of each rep.
        3. Churn in ramped sales reps.
        4. Time to ramp a newly hired sales rep.
      • Track these variables and build a financial model
    3. The Demand Generation Model
      • Three key variables:
        1. Average deal size
        2. Deal close rate
        3. Average sales cycle
      • Track these variables and build a demand generation model
    4. The Sales Process
      • Three main objectives:
        1. Eliminate opportunities that aren’t well qualified.
        2. Justify the business case for your solution.
        3. Eliminate surprises.
    5. The Growth Constraints
      • Only a few constraints:
        1. Not enough product demand to achieve a higher growth rate
        2. Can’t compete effectively on product/pricings, etc.
        3. Need more cash than investors are willing to spend
        4. Can’t recruit, train, and absorb new people fast enough

    Want to learn more? Go read The Science of Enterprise Software Sales — My Lessons from AppDynamics.

  • Quantifying Account-Based Engagement Efforts

    Continuing with this week’s theme of account-based engagement (see here and here), there’s another element that needs more discussion: quantifying account-based engagement efforts. Let’s say you have accounts rated by tier with the ‘A’ accounts being best-fits, the ‘B’ accounts being the second tier, the ‘C’ accounts being the third tier, and so on. How do you decide how much effort to devote to each tier?

    There are two common approaches:

    Minutes-Based

    • Take the most common activities (call, initial email, email reply, demo, etc.) and allocate a number of minutes for each as a proxy for effort (e.g. 5 minutes for an email, 20 minutes for an email reply, 90 minutes for a demo including prep work, etc.)
    • Figure out the ideal mix of activities and the corresponding minutes per rep per week, assuming 40 hours:
      • 5 hours – general meetings, coaching, etc.
      • 25 hours – 50 Tier 1 accounts at 30 minutes each
      • 10 hours – 40 Tier 2 accounts at 15 minutes each
      • Total: 90 accounts engaged
    • Build a CRM report by activity type with a formula to multiply by the number of minutes allocated and then group by the account tier to see the results

    Touches-Based

    • Take the most common touches (call, email, social media interaction, InMail message) and assume each is roughly the same amount of effort
    • Take the number of Tier 1 accounts and Tier 2 accounts and start with 2x the effort for Tier 1 accounts
    • Assign a required number of touches per Tier 1 account and per Tier 2 account each week (a touches quota)
    • Build a CRM report by activity type grouped by the account tier to ensure the efforts match the touches quota

    Quantifying account-based engagement efforts takes work to setup and requires an on-going process. Every sales leader knows that more effort equals more results, and this strategy is excellent for more predictable revenue.

    What else? What are some more ways to quantify account-based engagement efforts?