JumpStart: IdeaExchange Blog

In June, I told Crain’s Cleveland Business that startup companies should always be on the lookout for talent, even before a formal need or open position exists. As Findaway co-founder, Christopher Celeste once said, “I’m climbing a mountain and always looking for mountain climbers.” Indeed, getting to the Promised Land requires that entrepreneurs be opportunistic both about spotting market needs and top talent. Likewise, job seekers should always be interviewing prospective employers. I’m not saying that you should have your resume with you at all times or be out on the street looking for better opportunities instead of doing your job. I mean that every interaction (with partners, co-workers, managers, subordinates, consultants, customers, Ted from Accounting…) is and should be treated with the same care and respect as a job interview. Great results, hard work, diligence, and respect never go unnoticed, regardless of the audience. Credibility and trust are like baggage (the good sort): they travel with you wherever you go, and prove beneficial in some of the most unexpected ways.

This all might seem obvious. That’s because it is obvious. However, most people make two mistakes. First, many people see their professional relationships as a one-way affair. “If I sell to you or work for you, I’d better treat you well and be on my game. If I buy from you or you work for me, who cares?” However, when you become a job seeker (or the more politically correct, “professionals in transition”), everyone you’ve ever known, in any capacity, becomes an ally (or impediment) in the journey to your next job. Second, it’s just as important that you create opportunities to work, engage and network with people in a real way. With all of the tools available to connect with people, from blogs and Twitter to global discussion groups and social networks, we cannot replace good, old-fashioned relationships. Earning trust and credibility is still a contact sport. Engaging with a broad and diverse network of people creates opportunities for you to grow professionally and make an impact. This is not just about passing out your business card or attending as many networking cocktail hours as you can. It’s about getting to know people, providing value, and bringing people together in ways that create opportunities. Finally, many people neglect keeping their relationships fresh and real, or forming new ones, until they need something (like a job). Don’t be that guy/gal who only calls when they need something.

A couple of stories…

In 2005, I was living in London and looking for a job. A year prior, I had been transferred to the UK by Netflix to help launch their first (and heretofore last) attempt at expanding their DVD-by-mail service into an international market. After Netflix pulled the plug to fend off competition at home (my wife and I decided to stay in London), I spent three months in formal interviews for a job with eBay’s European business development group. Three months! The same day that I finally received an offer, I learned of a different position at Apple that was a perfect fit with my background and would give me a chance to do what I had hoped to do with Netflix — launch an American product into European markets. I interviewed for the position, received an offer and accepted in six days. Bam! How did it go down so quickly? I wish I could say that it was my incredible ability to close. The truth is that I started interviewing for the position three years earlier.

In 2002, I was working at a Virgin Mobile, partnering with independent record labels whose catalogs we wanted to convert into ringtones and sell to our wireless subscribers. To help broker introductions, and to advise on the deals, I worked with a consultant who came out of the music industry and had previously founded his own record label. He’s the guy that recommended me for the Apple opportunity three years later. But wait, there’s more. Prior to joining Netflix, I had talked to a recruiter about a position — one that didn’t quite match my skills — at Apple. Though I didn’t get that job, the very same recruiter was staffing the position in London two years later. She knew me and my work by that time and expedited the interview process (over pints in a Covent Garden pub).

While at Apple, I was able to sit on the other side of this equation. Our group grew from five to thirty people in two years and we were always looking for smart and entrepreneurial people to recruit to our team. While working on a co-marketing deal, the project manager assigned to the deal by our marketing partner impressed me with his work ethic, smarts, and personal style. He wasn’t interviewing, or even looking for a job. He actually had an awesome job. But to me, every interaction with him was another interview where he came through with flying colors. A few months after the project was completed, we created a position for him on our team. He’s still at Apple today, doing great work. This is one of a half-dozen instances where I’ve found great people and recruited them to join my team outside of a formal interview process.

Many of the job seekers I meet lament the fact that the only professional relationships that they have are with a handful of former co-workers. These are important, to be sure. After all, Ted from Accounting can open doors or act as a reference to your next employer. But most people don’t think of their customers, subordinates, or vendors that work for them as future opportunities as well. Be sure to treat all of these relationships with care, and to keep them fresh and real in good times and bad. With startups, this is especially important, since serial entrepreneurs love getting the band back together. Companies start, grow, and crash really fast in startup land. So a team might work together through multiple iterations and incarnations. By actively engaging with a wide sphere of contacts in real ways that demonstrate your Adaptive Excellence and winning charm, you have a safety net(work) when you need it most.

Robert Hatta is the Vice President of Entrepreneurial Talent for JumpStart Ventures. He has worked at several startup companies in Northeast Ohio and Silicon Valley, as well as other high growth, technology companies across the U.S. and Europe. Through these experiences, Robert has gained an extensive understanding of the culture and needs of high growth companies with a particular focus on talent.

Many entrepreneurs know firsthand what it takes to bootstrap - to work with limited resources (financial and human) and stretch them as far as possible without relying on external resources. But try as you might, it is unlikely that you can do it all alone. Eventually, you will need to bring in people with skills and knowledge that you don’t have.

You have three options:

1. Continue in bootstrapping mode. Find someone with the expertise you are looking for and convince them to provide their sweat equity on the if-come that the business will grow and succeed.
2. Delay growth until you have the ability to hire the A+ players you need.
3. Outsource. Lawyers, accountants, and marketing specialists are just a few of the highly trained service providers that are available on an outsourced basis when a hire isn’t possible. Reach out to service providers to focus on what is most important: generating revenue.

Unsure where to find the most reliable Service Providers? Here are some suggestions:

1. Ask for recommendations. You are not the first entrepreneur in need of a lawyer well-versed in patent protection. Other entrepreneurs will gladly provide referrals. Once you find a service provider you trust, it can also be helpful to ask who they partner with. Attorneys usually have an accountant they can recommend, and vice versa.
2. Poll a general audience using social networking tools. Online communities such as Twitter and LinkedIn are now vital tools for business discussion. With the number of professionals online rising daily, the internet is a great place to engage a wide variety of individuals. Post the criteria you are looking for on Twitter or in a LinkedIn group, and watch as the suggestions come in!
3. Check online directories. IdeaCrossing.org is a free online resource that has a searchable online database where entrepreneurs can find and connect with service providers. Users can search by keyword, zip code, and business category to find a list of providers that meet their criteria. The Better Business Bureau also has a searchable online database where you can find accredited service providers in your area. These businesses meet the necessary standards of trust and transparency.

Don’t try to handle all aspects of your business on your own. Know where your team’s weaknesses lie, and seek experts to fill those gaps. Find the right people for the job, and move forward with a better business. 

Tiffan is the Vice President of IdeaCrossing, a free online community created by JumpStart, which connects entrepreneurs with the national resources necessary to grow their businesses. Tiffan has worked at several venture-backed startup technology companies and strategic marketing agencies in both Boston and Cleveland. Through her work, she has facilitated the necessary growth of early-stage companies.

Ten years ago, I joined a 2 person wireless startup in San Francisco. The good news is that I had a job with an employer that didn’t have a “.com” in its name. Silicon Valley in the summer of 2000 was a bloodbath. I had just been laid off by a trendy, “can’t miss” internet startup funded by a “can’t miss” dotcom icon, Marc Andreessen; scores of friends and former colleagues were jobless; and applications to business schools soared nationally. The bad news is that our office was located in a  tenement building, above a buffet-style Asian restaurant specializing in chicken feet, in the heart of San Francisco’s 6th and Mission neighborhood (for a flavor of what the 6th and Mission neighborhood is like, a fun and colorful report can be found here). In the first 6 months, there were 6 of us sharing less than 400 square feet of office space with no air conditioning, shared bathroom facilities that required the use of a key (gas station style), and some unpleasant smells from the aforementioned restaurant. We started our days early, 7 AM typically, so that our 12-hour days didn’t require us to leave the office after dark. It was cheap and we were running on a lean budget. It was then that I learned the importance of culture. 

Up to that point, I’d worked for a handful of now-defunct, trendy startups that defined company culture as air hockey tables, “crazy shirt Fridays” or an endless stream of catered happy hours for every possible birthday/milestone/holiday. In that stinky, sweaty, cramped office, I learned that real culture is not about how you play together, but how you work together. We shared a focused, united vision of what we were trying to build. The room was filled with talented, experienced entrepreneurs still willing to learn from each other as we scribbled on white boards and threw ideas against the wall to see what stuck. Further, we shared the same personal values and would talk shop over drinks after a long day working the trade show floor, when we should have been catching an hour or two of sleep. I was lucky to be there and had the time of my life.

From that experience, I’ve learned three things: 1) chicken feet are an acquired taste; 2) be wary of companies that talk about their cultures in terms of dress codes, Xbox gaming systems, and company parties, and; 3) it’s critical that you hire people that fit into your startup’s culture. This may seem obvious, since startup teams are small groups, spending long hours together in non-ideal working conditions. Cash is tight, the margin for error is razor thin, and the stress level can be measured by the number of crumpled Starbuck’s cups piling up in the waste bin. However, many startup entrepreneurs do not take the necessary time to establish core values in their young companies. Core values are the behaviors and skills sought out in all new hires (and existing staff) that define the culture of your company. Real core values are not just a plaque on the wall or a page in your employee handbook (Enron had their core values pleasantly engraved in its marble-walled lobby: “Integrity. Communication. Respect. Excellence.”). Real core values are a set of shared principles that unite a team, big or small, and are reinforced each time someone is hired, rewarded or fired. They are non-negotiable, even as strategies, competitors, and business challenges come and go. Further, core values by definition cannot easily be taught. They are part of a person’s character. As Jim Collins puts it, “People can learn skills and acquire knowledge, but they cannot learn the essential character traits that make them right for your organization.”

What are the right core values for your company? There is no single, universal set of core values that can be applied to all companies, even startups. They are a reflection of the dynamic entrepreneurs, early employees and managers at your company. That said, I’ve gathered a few that I think, in some form or another, are important in any entrepreneurial culture:

Tenacity
What it is: Tenacious confidence in the pursuit of your vision as well as the avoidance of that which is not core to the vision.
What it’s not: Unwillingness to consider alternative perspectives and outside input. Irrational optimism.             

Entrepreneurial Intelligence
What it is: Makes wise decisions despite ambiguity. Quickly grasps key concepts and focus areas before diving into details. Can re-conceptualize issues to discover practical solutions to hard problems. Broadly knowledgeable about industry, market dynamics, competitors, trends and technologies relevant to the job. Intellectually curious, seeking deeper understanding of topics that are outside of specialty area.
What it’s not: Deep technical knowledge, but cannot relate to business objectives. Overly analytical and unwilling to act or make decisions with limited data. Needs to be the smartest person in a room.

Adaptability
What it is: Thoughtfully but quickly adapts strategies or tactics to changing market conditions, available resources or underlying assumptions. Is comfortable with ambiguity and is able to speak off-script. Embraces and initiates change. Considered an “athlete,” able to contribute effectively in multiple roles.
What it’s not: Job-hopper. Dilettante who has done lots of things but not to a level of excellence.

Initiative
What it is: Acts like an owner. Executes with a sense of urgency, seeks to “get there first.” Spots opportunities for improvements in efficiency, product quality, customer service, etc. that are not core to their responsibilities. Never says, “that’s not my job.”
What it’s not: Easily distracted by opportunities not core to strategy or at the expense of critical activities. Ball-hog: “if you want something done right, do it yourself” attitude.

Impact
What it is: Accomplishes amazing results in a short period of time. Surrounds themselves with A+ Players in order to achieve superior results. Seeks to eliminate complexity at all times. Identifies root causes, and gets beyond treating symptoms. Smartly separates what must be done well now, and what can be improved later.
What it’s not: Someone who is merely busy, works a lot of hours, but not much in the way of results. Works hard, but not very effective.

Communication
What it is: Seeks to understand before being understood (good listener). Is concise and articulate in speech and writing, explaining complex details in simple, understandable terms. Provides frequent and consistent relevant updates to stakeholders, investors, customers and employees. Not afraid to say what you think even if it is controversial.
What it’s not: Someone who talks a lot, but says very little.

Selflessness
What it is: Seeks what is best for the company, rather than what is best for his/her interests. Casts a wide net and is non-political when searching for the best ideas. Gives credit when things go right and takes responsibility when things go wrong. Shares information openly and proactively.
What it’s not: Passivity or inability to communicate a strong point of view. Martyr who goes down with the ship when the market is going in the wrong direction.

Tips to help startup entrepreneurs establish their core values:

1. Start now. Reinforcing, let alone establishing, meaningful core values will become increasingly difficult as your organization grows and adds new people. Each time you bring someone into the company that is a culture mismatch, you run the risk of disrupting the momentum you’ve worked so hard to achieve. Take the time now, which will save you time and headaches later as you scale your team.
2. Seek input. Ask your board of directors, mentor/coach/advisor and management team to list out the personal characteristics that are most important to them — both personal and professional. List the things you enjoy most about working at your company. Describe the ideal employee, the “company” man/woman.
3. Keep it real. Distill it. Boil it down to its essence, its core. But make your core values real, specific, and actionable. Overly broad or pie-in-the-sky, idealistic fluff will get you nowhere. Google famously uses “don’t be evil” as one of its guiding principles. Seriously, “don’t be evil”? Google has done a lot of great things in the last decade, establishing real core values, unfortunately, is not one of them.
4. Talk about it. Start introducing your core values into the everyday language of your company. Recognize and acknowledge when someone on your team displays or exemplifies your core values. Talk about them a lot. Calibrate and refine your team’s understanding of what they stand for and set the standard through your own behavior.
5. Walk the walk. Hire, reward, and fire using your core values as a compass. Your team needs to see that these are real core values, not simply slogans and words. Core values are like trust, they take a long time to build and can be lost in an instant. I suspect there was a time (long, long ago) when those core values at Enron meant something. It likely started with one transgression overlooked, one corner cut, and quickly unraveled from there.

So what are some of your core values?

Robert Hatta is the Vice President of Entrepreneurial Talent for JumpStart Ventures. He has worked at several startup companies in Northeast Ohio and Silicon Valley, as well as other high growth, technology companies across the U.S. and Europe. Through these experiences, Robert has gained an extensive understanding of the culture and needs of high growth companies with a particular focus on talent.

Larry Page and Sergey Brin did not invent their mathematical PageRank algorithm technology or build their company, Google, alone. They had a mentor, Rajiv Motwani, a Stanford professor of computer science. Brin wrote last year, “…Rajeev helped to coordinate a regular meeting group on [the subject of data mining]. Even though I was just one of hundreds of graduate students in the department, he always made time and effort to help.”

“…always made time and effort to help”: a true sign of a mentor, and Motwani left his mark as a mentor or advisor on many more Silicon Valley startups, among them one of our favorites at JumpStart, StumbleUpon.* In fact, most people know intuitively how important advisors, coaches, and mentors are to a startup’s development and success, but it’s rare indeed that we actually celebrate advisors, coaches, and mentors. Do we even know what a mentor is vs. an advisor vs. a coach is, never mind having an iconic image of a mentor like we do of an entrepreneur (the equivalent, mentor/advisor/coach-wise, of a Brin, Khosla, Gates, Jobs, Ellison)?   

Advisor
I think of an advisor as a professional who advises the company and not the individual entrepreneur, though this role is more informal than that of a Director. That said, it is not a totally casual role either. For instance, at JumpStart Ventures, we typically advise that companies that put together an Advisory Board should absolutely pay those advisors, albeit a very small, even token amount. $250 per meeting (plus expense reimbursement) is fine for a startup; the point is for the entrepreneur to show that she values what she is getting and to add a hint of formality to the advisory process. Paying in options or restricted units also works so long as an entrepreneur is able to issue those options with minimal administrative cost (ie, don’t spend $3K on legal fees to get the stock issuance mechanism right just for the BOA alone; if it’s part of a bigger strategy, then OK). .1% (that’s one tenth of one percent) per advisor is OK for a startup, and of course is probably rich for a company that is beyond startup stage.** Getting creative is smart too. If you’re a pet food company, pay advisors not with cash or equity, but with a year’s supply of pet food. If you’re a $5MM+ dollar travel company, then offer a free cruise or something like that.

With regard to coaches and mentors, I once heard an interesting differentiation between coach and mentor, specifically:

• A coach focuses more on results; a mentor focuses on attitude
• A coach focuses on skills; a mentor focuses on vision
• A coach encourages you to fix problems; a mentor encourages you to lead a great life
• A coach helps you understand the “hows” of your career; a mentor helps you understand the whys

Coach
The way I would also boil this down is that a coach focuses on the individual, but is also aware of the team and company overall. A coach is trying to get the most out of an entrepreneur for the benefit of the company. Some coaches are paid; executive coaching is a whole industry. In startup land, vs. big company executive land, cash is tighter (what a revelation, eh?) and so you see entrepreneurs finding creative mechanisms to get coaches. Sometimes they find a peer to coach them. Or, they find a group like YPO, EO, or Vistage International. Maybe they wait until they are past startup stage, more in positive cash flow stage, to get a coach. Occasionally, they are able to find a coach who will do the job at a significant discount or for free. Honestly, it’s all over the map.

Mentor
A mentor is the most personal connection. It is that person who will help you grow as an individual, and here I now reveal the answer to the question posed in the blog title: Obi, Dre, and Sir Laurence were all mentors to, respectively, Anakin Skywalker, Eminem, and Jack Nicholson. The idea of the mentor is to help the individual reach their fullest potential in life. That personal connection can be impactful enough that it ends up benefiting the company, but that is not necessarily the goal. I have had a mentor, coach and advisor and I can definitely attest to the fact that while the coaches and advisors helped the company and me, the mentor did have the biggest impact on me in life. In fact, I still have his three primary pieces of advice to me as the top Memo in my handheld device so that I see it every day, kind of a security blanket (or, a hair shirt perhaps, since it is also brutally honest) for the soul.

Whether service providers, professors, investors, serial entrepreneurs, or big company executives, these forces behind the forces — these advisors, coaches, and mentors – are really important to a company’s, and/or an entrepreneur’s, and/or an individual’s success. What’s common about them is that they take more initiative than they need to take, really believed in the company, concept or individual in some way, and expect little (and deserve much) in return.

At JumpStart Ventures, we have nearly 50 portfolio companies run by nearly 50 diverse entrepreneurs, so I have been able to see tons of great advisors, coaches, and mentors. I have a running list of some tops, and it’s surprising how different one is from another other than their genuine desire to help, just like Motwani — but I would love to know who you think is top. Drop me a line or better yet reply to this blog with your thoughts on some top entrepreneurial advisors, mentors, and coaches. Celebrate them.*** They deserve it. By the way, they don’t need to be based in Northeast Ohio: I am, alas, open to the possibility that there may be some entrepreneurial passion, talent and skills beyond the NEO area…

Notes:

* Actually, I’m not sure whether he was advisor, mentor, or (the more mercenary, mortal) investor, or all three, in StumbleUpon

** Full disclosure: the “math” here is very back of the envelope. Say the average high growth start-up nationally is valued at inception at $1MM total. .1%=$1000. I suggested that $250 per meeting might be a good token cash amount. Board of Advisors might meet 4X/year = $250 per meeting = $1000 in cash. On the one hand, the options are not liquid and are slightly an administrative pain to deal with (accounting, vesting, remembering you have them). On the other hand, they ostensibly have big upside and one wouldn’t be on a board if one didn’t believe that. In a very scientific manner worthy of a blog, I figured those two pros and cons equaled each other, and so came out at .1%. Also, I saw somewhere that someone else expert-like recommended approximately this amount, which only reinforced my back-of-the-envelope, non-Black-Scholes calculation. Also, I have not to-date seen anyone recommend >1% for a member of an Advisory board (BOD is different) so that may set an upper bound. 

*** Twinsburg, Ohio celebrates twins every year with a festival that draws national crowds. Maybe Mentor, Ohio — beautiful, and right here on Lake Erie — ought to celebrate mentors every year with a similarly large event.

Becca Braun is President of JumpStart Ventures. She founded and led a number of early-stage companies and organizations, as well as worked as a private equity investor and management consultant. She received her MBA from Harvard Business School and her BA in Linguistics from Harvard University. She is keenly interested in the intersection of wealth creation and broad-based regional economic growth.