Hiring, Firing and Cofounders

The Founder Institute

January 10, 2010

Dave Schappell - CEO, TeachStreet

What Makes a Startup?

What Makes a Startup?

• Owner Mentality– Wear lots of hats (dirty hats)– Hard/Smart work (not 100 hours/week)

• Passion• Involvement / Anti-Silo• Strategic Plan = Do Stuff– Doers vs. Planners

• Fast/Frequent Pivoting

Your Culture Must Be Alive!

Your Culture Must Be Alive!

• Office Design– Door Desks– Team Intermixing

• Everyone Involved– Weekly Inspiration– Learn Something New Fridays– Snack buying / Trash

• Policies– Benefits / Vacation / Sick days / Layoff treatment– Offsites to recalibrate

Recruit For Your Culture

or…

Define & Recruit Your Culture

• Job Postings should convey culture• Know what you want & have guts to hire for it– For TeachStreet Web DNA, Learners– For Everyone Passion/Results-Delivery

• Can-Do-It Mentality (and experience) is critical

– Set Clear Expectations– Don’t hire non-Stars (expect Greatness)

• Don’t oversell yourself on a new employee

– Bad Hire/Disconnect, Address Quickly– Tolerate a lot, as long as working hard/passion

• Leverage your Network

Define & Recruit Your Culture

• Make multiple/varied Cash/Equity offers– Base Cash & Equity– ½ Cash (for 3 mos.) & 2x Equity– ½ Cash (for 6/mos.) or $0 cash (for __ mos.) & 3x Equity

• Try Before You Buy / Contractors• Salary / Equity Ranges (see FI Archives)• Avoid Big Company Lifer Dogs– e.g. Microsoft, Amazon, Starbucks, Real, …

• Better at PowerPoint & Politics than actually Doing Stuff

Behavioral Interviewing

Behavioral Interviewing

• People Do What They’ve Done Before• Tell me about a time that you…– Solved a Difficult Problem

• How did you know you solved it?– What metric? How could you have been wrong?

– Innovated to delight customers• How did you know? What could you have done better?

– Used data to make a decision– Went above & beyond the call of duty…

• With References, look for GREAT– Probe on ANYTHING where not raving about candidate

30 Days to Impact (or, Exit)

30 Days to Impact (or, Exit)

• Quick Hit / Tactical Impact– If Developer, commit code in first hours/days/week max– If Marketing, blog/customer-interaction/CS– All, involve immediately in Product Discussions

• If not working in 30-90 days, act quickly• Keep People Fresh – change roles

You Can’t Polish a Turd

You Can’t Polish a Turd

• You Can’t Effect Change by Osmosis– Hope is not a Strategy– If you want something, tell them (either get it, or end it)

• Communicate Performance Gaps & give chance to fix– PIP (Performance Improvement Plan)

• Rinse, Lather, Repeat

Cut Deep, Cut Once, Keep Core

Cut Deep, Cut Once, Keep Core

• When Decide, act quickly (word will get out)• Premise: If had to hire everyone all over again, who?

– Layoffs, in best interest of remaining team/business– Should impact entire org (Generals AND Soldiers)

• Plan the day, to the minute– Write any e-mails, assuming will be posted online– Team arrival/private meetings/time to pick up items– Backup docs/change passwords/keys/signed docs– External Communications / Press (the facts)

• Stay on Point– Business Decision Made – effective today– Leave emotions out (don’t share your own problems)

Cut Deep, Cut Once, Keep Core

• Take Responsibility (for impacted & remaining EEs)– How you treat departing EEs important to existing EEs– “Culture of company more determined by firings vs. hirings”

• Treat Fairly (if you can afford) – departing EEs are now ‘external BD’• Help find jobs• Be ready for references, where appropriate

– Be 100% Available (last one out of office)

• Make All Cuts at once– Salaries / Bonuses– Programs / Projects

• Consolidate Office (avoid Ghost Town)

Want Other Advice?

• Hops and Chops– http://www.twitter.com/HopsAndChops– http://www.HopsAndChops.com

• Dave Schappell– http://www.twitter.com/daveschappell

• This presentation borrowed from many, including:– http://twitter.com/#!/glennkelman– http://twitter.com/#!/neilr– http://twitter.com/#!/fredwilson– Other Founders Institute Presos