Who is the Best Wrong Person for the Job?

I asked a founder the other day the following question:

Can you describe a candidate that would be a fantastic hire somewhere else that would never thrive in your organization?

If you can't answer that, it's going to be really difficult to find the people that *will* thrive in your company.  Not every candidate is a great hire for every company.  Obviously, you want to hire above a certain level of competency and work ethic--but if you're going to find people who really thrive, you need to understand the unique place your company is to work at, and who succeeds there.

Moreover, you need to define it from day one, and it needs to be pervasive throughout all the decisions your company makes, especially the hiring ones.

What do you value in people and how will the presence of those people affect your culture? 

Which of these values are unique to your company?

What processes, incentives and language will you use to help shape the environment they work in?  

Which of these are unique to your company?

Ideally, a company should be able to announce to the world, "This is what we value in people and this is how we work" and it should attract the right people and dissuade the wrong ones.  

Most seed funded companies either never get around to these definitions, or create ones that could apply anywhere, valuing "hard work" or "diversity" without really ever stating in specific terms what that means.  

A company's culture and values should turn away super qualified applicants that would succeed elsewhere, but clearly wouldn't be a fit for this specific environment.  Otherwise, prepare to cycle through a lot of people without a clear idea of why they didn't work out or perform up to and beyond expectations.

Trump is everyone's problem now.

Just realizing that I forgot to list one risk factor in my Fund II PPM--the possibility that the US turns into a fascist dictatorship.  That probably won't have a positive effect on venture capital returns.

I mean, think about it--how well do you think those late 1930's German venture capital vintages did?  How about Venezuela funds from 1998?  

So, if you're annoyed or distracted by all your favorite tech and startup people talking about Trump--you should probably get used to it because this administration has become a real problem for our industry.  It's no longer just a political issue when you're operating in an environment where the government is threatening the otherwise very stable national platform by which you've built your business on.  Investors are willing to take early stage risk because they don't have other risks like nationalization of industries, martial law, dissolution of human rights, etc.  It's easy to take that for granted, but that's why places like Russia have trouble getting their startup community off the ground.  What investor wants to take that extra layer of government risk?

Does it get to the point where a VC has to say, "Well, I'd love to back you, but you're Muslim and the chance that you'll be deported is a founder risk I can't take."

That's the path we're headed down now if we don't stop it.  Never in my lifetime have I ever seen a US government enact a law that favored one religion over another.  That's a line I never thought I would see crossed--and we're barely a week into the administration.  

This should be everyone's problem just because of human decency, but if that doesn't get you, now we've got a serious business risk on our hands, too.  Don't think that a war with China won't put a damper on your quarterly earnings or the pre-money of your next round either.  

Oh, and don't forget paying 20% more for all the goods and services not made here.  Get ready to have to start paying your software engineers even more so they can afford to live.

Even if these terrible things don't come to pass, you're going to have a serious talent crisis unless your company starts speaking up.  Startup workers tend to be younger, more educated, live in cities--meaning that whether you agree with them or not, these aren't the kinds of policies they can get behind.  They want to live in a tolerant, global world free of discrimination--and they care a lot about the missions of the companies they get involved with, both as employees and as consumers. 

So while you might be worried about pissing off half your red state customers if you sign an anti-Muslim ban petition, you might lose half your dev team if you don't, and then where are you?  What are you doing as a company to show that you have core values these days?  What does it say to your employees that are immigrants or children of immigrants if you stay silent?

No matter who you voted for, these issues are now on your doorstep, begging for action, because they touch all of us.

The Feminine Will Save Us

I just spent a weekend at a professional development retreat for venture investors.  It wasn't about how to be better price negotiators or about tactics for getting dealflow.  

It was about investors trying to be better people.  

On that journey, there was honesty, and with honesty came pain, and eventually, acceptance.  People cried.  They asked for help and depended on each other for strength.  

I contrast that with our first taste of leadership from Donald Trump--sending his Press Secretary out to try and convince the public that the inauguration was better attended than it was.  

His dishonesty wasn't just with us, it was with himself.  His insecurity was so powerful that it was painful to watch.  I found myself shifting from anger to pity--pity that he has to live with himself, alone in a shell of lies that he not only tells others, but himself.  Watching him lie is like watching someone stab themselves over and over again.  

That gut wrenching feeling isn't being inflicted on me by him--it is my empathy feeling what it must be like to be him.  I can only withstand a fraction of the pain his insides must endure.

Donald Trump isn't the strong leader he aspires to be--he is the weakest form of leader, because he clings to outdated masculine ideals out of place and out of touch with the modern world.  

We know now that he is not alone.  His pain resonates in great numbers.

So many men who grew up being told that their worth was in their ability to provide, to be strong, to not cry in the face of pain, and to be protectors, find themselves hopelessly, and dangerously, lost.  

They voted for Trump in the hope that they could turn back the clock--that emotionless physical strength, the kind that proves itself by being unyielding, by eliminating opponents in a zero sum game, could still win.  If they could reestablish a real *man* at the top, they might be able to turn the world back to a place that made sense to them--and to put a lid on their innermost feelings of pain and fear threatening to escape.  

Hillary Clinton wasn't a threat because she was a women--she was a threat because she was feminine.  She endured pain and embraced it.  She turned the other cheek to a cheating husband and forgave.  Both women and men held her association with Bill against her--as if those trying moments in life ever have clear and perfect answers.

She might have won more votes had she taken Bill out back and shot him.  

She listened first--asking others for help before forming her opinions.  She reconsidered her stances when new information emerged.  

Leaders don't change their mind or reconsider--not if they want to be strong.

This is not what men do.  

So many men had a similarly hard time with Obama--and why they elected Trump in response.  He was comfortable enough with his own sense of self to display emotion--a taboo in a world where people of color who share their feelings are derided as "angry black people".  Many felt that Obama was weak, because he cried over gun violence--our symbol of American strength.  

A sensitive, weeping black man that cried about guns and tried to make peace with Iran versus wiping them off the map was a threat to so many layers of monolithic American masculinity standards that one could lose count.  

This is not what men do.

"What men do" is what Trump does--deny, lie, fight, bully, shout, all while dating supermodels and showing off their wealth--their hollow, empty, meaningless wealth that never seems to be enough.

Watching Trump as President is like watching a movie caricature brought back from the past struggling to come to grips with the fact that the world has changed--a caveman, a knight, a cowboy.  His friends are dead and he doesn't understand this new and confusing place.  He acts out, making a mess and embarrassing himself in the process, and he is shunned.  There has been no greater shunning of a candidate in modern history and he knows it--which is why he is so preoccupied with remind us that, the way the game is set up, he won.  

Undoubtedly, it's how so many men feel today in a world unfamiliar to them. 

Trump and his fury doesn't belong any more than these masculine ideals.  Our world has complex social problems that require unity and compassion, not the biggest bomb or the most tanks.  He is no more the answer than a bottle or a gun, but there is no denying that both provide comfort and the power to escape, even if it doesn't last.  

Trump will not save these pained men.  How can he face these difficult challenges if he isn't strong enough to cry?  Our issues around violence, poverty, and disease fail to upset only those who cannot understand them.

Could you even imagine such a thing--the man who can't be around crying babies or who accused news anchors of crying on election night, as if there was something wrong with that?  

How many times do you think he was yelled at, or beaten for crying as a child?  He was schooled in a military academy known for its abusive environment.

How many of his supporters who accuse liberals of crying experienced the same kind of threats and experience of violent punishment?

Unfortunately, women will not save us from these men.  They cannot, on their own.  They do not hold nearly enough positions of power.  They are hamstrung by a system rigged against them, intentionally.

But the feminine--the feminine will save us all.  

Our only way forward is with empathy, collaboration, and long-term thinking.  We need the strength to admit and undo our wrongs, to accept help, and to engage in dialogue with and find common ground with those who oppose us--to co-exist versus dominate.  We need these "feminine" traits to emerge and be embraced in all of us, particularly our men.  

We need to teach our children to embrace that which we do not understand as a lifelong study, not with gut reactions.  We need to set that example for them.  

We need to care for the weak and the oppressed.  Their struggles are our own failures--because we are in this together.  They are not to be blamed and forgotten about.

We need to embrace change--because things change, and we must change with them.  

We need to admit that tears are the appropriate response to tragedy.  They are a sign of human capable of the fullest extent of emotion, which is the only kind of human with enough resolve and strength to find solutions.  

Anyone else will crumble into the dust from which they came, becoming a relic of an idealized but problematic past.  

 

** Thank you to Jerry Colonna for inspiring the title of this post and for helping me create the space, both physical and emotional, to explore these emotions.

Five Pitfalls of Seed Round Hiring

Most companies don't get to do more than a handful of hires during their seed round--so the idea of a "recruiting process" might seem a little bit heavy handed.  However, these early employees will not only have a lasting impact on the DNA of the company, but hopefully they'll be some of the most important hires you'll ever make.  (If they turn out not to be, you probably hired poorly.)

Startups that don't create a process tend to fall into the following traps:

1) They never identify values and therefore fail to use them in the screening process.  Are there things that you want every last employee to care about?  Did you ever bother writing them down, telling interested hires about them, or using them as any kind of meaningful filter?  There's a saying that goes "If you don't stand for something, you'll fall for anything."  As keepers of the brand, what your employees believe in will ultimately be reflected in how people think about your company as these values make their way into your products and marketing.

2) They hire a guy they know.  Most venture backed startups are started by men, and one's network tends to look a lot like them--so when guys start companies (and often when women do, too, especially on the tech side), they tend to make the first few hires from their network.  Every single time you add someone who looks like the person hired before, the chances that the next person will look and think differently decreases.  How excited will a female engineer or a marketing professional of color be to be the first non-white male hired when the team is already ten or fifteen people?  If you don't go out of your way to not only create an outbound recruiting process, but track its metrics, you'll be fishing in only half the lake, or less.  

3) They run out of leads.  You might know a lot of very talented people, but once you put them through your hiring funnel, you probably don't know as many as you think.  Some just took a new job and others aren't quite the right fit.  Even if you do know a lot, if your company is successful, you'll need to know a lot plus more tomorrow, and even more the day after that.  Maybe you can hire your first five employees from your network, and maybe even ten or twenty, but then what.  What happens when you start making ten new hires per month?  When do you think that lead generation process should start?  Answer: As early as possible.  Not only are you going to need to sift through great numbers of people if you're ever going to build a company of any kind of size--but to make sure you get the *best* people, you'll want as many people in the top of the funnel as possible.  Just like in sales, if you don't put in lead generation tools for talent as early as possible, and start tracking it, that well is going to run dry very quickly.

4) They underhire.  Startups don't have much money in their seed round, and so they tend to be very cost conscious around salaries--even though they say that talent is the most important thing in their company.  They'll even tell themselves a narrative that unless you're willing to accept below market wages, then you're not the right fit for a startup.  First off, how many founders are taking below market wages?  If you're 25 and you're making 80k, plus, you own 75% of the company, that's a pretty sweet package compared to your peers who teach kindergarten or work in book publishing.  Maybe you should raise a little more money, take a little more dilution, and get out there with fair offers to the people you've identified as the people most able to make your disproportionate ownership of the company worth millions (especially since their share isn't likely to be worth millions).  The area I see the worst underhiring is in marketing--where the first hire has likely not done more than pitch for PR or worked a few years at an agency.  They've never built a brand or thought strategically about what a marketing team should look like or that it's their job to generate enough customers to build one.  

5) They hire for the wrong set of needs.  I encourage all startups to build out at least two or three years of an org chart, identifying which hires should come in when.  What I should also encourage is for someone to line that hiring plan up against a product plan and a sales plan.  When seemingly great hires churn out quickly at companies, the complaint I most often hear is that "They didn't need me" or "I could have helped them earlier, but now it's too little too late."  Identifying what you need when is one of the biggest startup challenges, which is why founders should spend a lot of time networking with other founders who have built similar products.  That's how you learn when a COO should come in, or that you need a release engineer when you're managing a suite of apps, or when a second PM can be helpful.

 

The Only Thing an Investor Can Give You that Matters

VCs promise a lot of things.  

We've got all these platforms, advisors, special partners, communities, networks...

...special economic bells and whistles, spaces, programs, partnerships, etc...

Meanwhile, they most useful thing we can give you when you're first starting out seems to be the hardest to get:

Honesty.

VCs see a lot of deals.  We see successful companies and others that fall on their face--so getting our actual opinions about something, pass or fund, can be really useful.  If nothing else, we're seeing what's out there now and so we can give you a sense of how it compares to what we're currently seeing.

Instead, what the average VC provides in terms of feedback is about as committal as the answers given at a Senate confirmation hearing.  It's generally some form of "interesting"--supportive but not decisive, with some extremely vague indication of what more they'd like to see before writing a check.

The other day I told a founder that she was missing a marketing lead and that I didn't think her team was capable, as currently composed, of launching product successfully her market.

Right after that, I told some another founders that the money they were raising wasn't enough to really get them off the ground.

Last year, I told a founder who had previously sold his company for $400 million that I didn't think there was a mainstream consumer need for what they wanted to build--and even if there was, I didn't see a path to making enough money from it.  

As the end of the day, all I really have to give is my honesty.  If I don't give you that, then I've given you nothing.

That's why so many founders walk away from VC pitches feeling like they wasted their time--because they have no idea what the investor really thought.  You can get money from elsewhere, and you'll make the hires you need to.  You'll sell what you need to sell and connect to who you need to connect come hell or high water.  But an honest opinion--that's a rare find in your early startup days.

What I ask in return is that you come in with honesty.  Don't try to blow smoke.  Be honest about what you know and what you have yet to figure out.

And be honest about whether you're the best person to start this business, or have the best team, and whether or not you've really done enough work to decide if this is worth doing.  

There's nothing more a founder can do to help their cause than to be honest with themselves from day one.