How small businesses can hire the right people
Doug and Polly White have seen small businesses use all kinds of questionable hiring practices. There was the entrepreneur who hired anyone looking for work. Then there was the woman who hired and fired her sister twice. The list goes on.
In their book, Let Go to GROW: why some businesses thrive and others fail to reach their potential , the Whites found from their business consulting that entrepreneurs often don’t know how to hire employees.
“No one is born knowing how to hire and manage people,” said Polly. “You come into this with no clue how to hire and manage people. So entrepreneurs often end up hiring friends and family. While your friends and family may be right for a job in your organization it’s not always the right way to go.”
Entrepreneurial interviewed the Whites about the five steps businesses can follow in order to hire the right people.
1. Know what you need
Hire someone based on their behaviors and cognitive capabilities.
Small business, America and the “Disenfranchized Diligent Optimist” gene
– John Krubski is an entrepreneur and the architect of The Guardian Life Index: What Matters Most to America’s Small Business Owners. He is currently working on his next book, “Cracking the America Code: How to Get US Back on Track”. The views expressed are his own. –
In their latest book — “That Used To Be Us: How America Fell Behind in the World It Invented and How We Can Come Back” — authors Thomas Friedman and Michael Mandelbaum maintain that our hope for a happy future lies in how we address four critical issues: resolving the impact of globalization, the revolution in information technology, the nation’s chronic deficits, and its pattern of energy consumption.
These are all very big issues requiring equally big solutions and presumably requiring some form of central planning.
The Messers Friedman and Mandelbaum have written a wonderfully articulated, excellently organized, and very informative book. The trouble is that they have pretty much altogether missed the point. The future of America will not be decided by how we tackle any one, or four, or any hundred particular issues. The future of the U.S. will be decided by how well we understand who we are, how we got here, and how effectively we tap into the fundamental operating system at work here for more than 250 years.
In other words, our future will be decided by us with the same tools we used to define our past. The real question is: Who that “us” will be?
Based on years of direct experience with thousands of America’s small business owners (not to mention being one since age 24) in combination with extensive original research, I can categorically affirm that these folks possess a certain “something” that makes them more alike on the one hand and more different from everyone else on the other.
“Disenfranchised Diligent Optimists”
I completely agree that America’s current challenge will not be addressed through concentration on a small finite set of issues. As such, allowing the disenfranchised diligent optimist to survive, and not smothering him with the requirement to adhere to rules and financial pressure established via linear large corporate thinkers’ conventional wisdom and broadstroke actions, is the important element. Krubski has it right. How can we simplify his language so that it gets adopted by the broader US population? There seems to be a strong correlation between some of Krubski’s statements and a recurring part of the Wall Street protesters themes.
from Reuters Money:
Secrets of wealthy whiz kids: How to make a million by 21
Earlier this month, Reuters Money featured a story with advice on how to get on the road to Millionaire Row. But what if you're in a hurry, like so many multi-tasking teens of the 21st Century? What if your goal is to make that million by the time you turn 21? Can it be done?
The answer is yes, if you take the fast lane as an entrepreneur on steroids — something common to the four millionaires we polled for this follow-up. Three made it to the seven-digit milestone by 21; the fourth reached it when he turned 24. Here, those wealthy whiz kids past and present share the secrets that contributed to the fortunes they made.
Position: Owner and designer of the Private Stock denim line, marketing guru and manufacturer of auto accessories.
How he made it: A licensing and fashion marvel, Koon made his first million at 16 as a pioneer in car tuning, where vehicles are modified with special parts to enhance appearance and performance.
Top tips for millionaire hopefuls: Get a business plan. Koon saved $5,000 to start his first company, but the business plan helped him get substantial backing. “Investment is always tied to a clear opportunity for profit and that exact stream of profitability needs to be identified from the beginning,” he says.
Bringing order to the unruly world of early stage entrepreneurship
This article originally appeared in the Venture Capital Journal, a Thomson Reuters publication.
Eric Ries, author of the “The Lean Startup”, offers a worthy attempt to bring the scientific method to the often intuitive exploration of young companies.
What leads most startups astray is the lack of a disciplined, empirical procedure for making decisions, says Ries, who also writes on the blog Startup Lessons Learned and is a 2010-11 entrepreneur-in-residence at Harvard Business School.
Ries is by equal measure upbeat and cautionary. He sees a worldwide renaissance of entrepreneurialism, but worries about wasted, misguided efforts.
Venture investors take heart. He has an answer, which he details in the October 2011 issue of Venture Capital Journal.
“The nice thing about relying on human judgment and using the scientific method is (we develop) a system for training judgment to get better over time,” he told VCJ Senior Editor Mark Boslet. “We will eventually start to develop better entrepreneurial instincts.”
VCJ subscribers can read the full story here, which we’re posting ahead of the October publishing date.
Some lessons learned as an entrepreneur and VC
– Chris Dixon is the co-founder of Hunch and of seed fund Founder Collective. This blog originally appeared here. The views expressed are his own. –
Note: Google was kind enough to invite me to give a short talk at their Zeitgeist conference earlier this week. It was a really interesting conference and I got a chance to meet a lot of people I admire. For my talk, I decided to use material from some of my blog posts over the years that I thought might appeal to a broader audience. Unfortunately, I was still recovering from a nasty cold/flu so I didn’t deliver the talk as well as I’d like. Below is the text.
Today, I wanted to talk about some of the most important lessons I’ve learned over the years from my experiences as an investor and entrepreneur.
1. If you aren’t getting rejected on a daily basis, your goals aren’t ambitious enough
My most humbling and educational career experience was when I was starting out in the tech world. I applied to literally hundreds of jobs: low-level VC roles, startup jobs, and various positions at big tech companies. I had an unusual background: I was a philosophy undergrad and a self-taught programmer. I got rejected from every single job I applied to.
The reason this experience was so useful was that it helped me to develop a thick skin. I came to realize that employers weren’t really rejecting me as a person or on my potential – they were rejecting a resume. As the process became depersonalized, I became bolder in my tactics. Eventually, I landed a job that led to my first startup getting funded.
One of the great things about looking for a job is that your payoff is almost entirely a max function – the best of all outcomes – not an average. This is also generally true for lots of activities startups do: raising money, creating partnerships, hiring, marketing and so on.
Stanford entrepreneur: If you’re 20 and you haven’t started a $1 million company, “you’re kind of a failure”
– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Recently, New York magazine featured Feross Aboukhadijeh in a piece titled “Bubble Boys”. Aboukhadijeh is a Sacramento-born, 20-year-old computer science student at Stanford who has been characterized as among the school’s most heavily recruited students by a course adviser. The piece suggested he may ultimately be among those geeks to succeed the Mark Zuckerbergs of the world.
While perhaps a stretch, it’s easy to see Aboukhadijeh’s appeal. A year ago, Aboukhadijeh created a small media sensation with YouTube Instant, a site that invites visitors to scan YouTube videos in real time, and which Google was at one point interested in acquiring – along with Aboukhadijeh.
“They were talking about adding (the code) to YouTube and having me come on, but it never really worked out,” said Aboukhadijeh, who speaks quickly and breathlessly, like someone needing to get to wherever he’s next expected. “I’d only been in school for two years at that point. It seemed silly to stop and take a job. Then they said, ‘You can do an internship while you’re in school.’ But I wasn’t really interested in doing that. I knew that to do well (at Google), I’d need more than 15 hours a week. Also, when you join a new company, it takes three or four months before you’re even up to speed.”
Aboukhadijeh has some idea about what happens inside companies. Two summers ago, he scored an internship at Facebook, and it took “two months before I was going all out, doing stuff.” This past summer, Aboukhadijeh snagged another enviable internship, at the question-and-answer site Quora.
Still, Aboukhadijeh said he’d rather start his own company than work for someone else’s. At least, he thinks he knows that’s what he wants. Aboukhadijeh, who is starting his senior year, told me he’s applying for Stanford’s computer science master’s program and that he’ll “then possibly complete it or do something else, like put it on hold to go start a company.” A lot of his friends are making the same choice. “They’re saying, ‘I’d like to take a leave for a year or two and try something risky.’ And if it doesn’t work out, they can come back and finish their master’s degree. It’s kind of nice. Stanford is pretty flexible compared to most schools.”
The school has little choice, evidently. In fact, “probably half” of Aboukhadijeh’s friends are already working on projects that they think could become viable companies, he said.
what I mean is that if someone were to actually say “you are 20 and you haven’t started a 1M company??? you are a failure” I would say to that person ” you are an arrogant a$$ hole”…
VC firm to form “Jedi Council” of entrepreneurs
– Joanna Glasner is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Menlo Ventures’ newest managing director, Shervin Pishevar, is getting off to a fast start.
The serial entrepreneur turned Internet VC announced that his firm has formed a new early stage investment vehicle, the Menlo Talent Fund, which will fund rounds up to $250,000 in promising startups. As part of the effort, Pishevar told attendees at San Francisco’s TechCrunch Disrupt conference this week, the firm will be forming a “Jedi Council of incredible entrepreneurs,” known as the Menlo Founders Council, to work with startups.
The $20 million fund is all about quick action. Menlo said it will make investment decisions on startups within 72 hours. However, Menlo partners will not take board seats on any companies funded by Menlo Talent Fund.
The fund was financed last October with the closing of Menlo Ventures XI. It has already invested in eight companies, including: The Backplane, CakeHealth, Comprehend, LeanLaunchLab, Parse and Tracksby. Two companies are yet to be announced.
The Menlo Founders Council, meanwhile, will include a group of mentors, advisors and investors to support entrepreneurs at Menlo-sponsored retreats and events. One member is Troy Carter, founder and chairman of Atom Factory, a music management brand, who manages artists such as Lady Gaga.
While it’s not a newcomer to seed investing, Menlo Park, California-based Menlo Ventures’ core focus has been early stage and growth rounds for technology companies. Founded in 1976, the firm has $4 billion under management and is currently investing Menlo Ventures XI, a $400 million fund.
Two Degrees co-founders draw on 35-year age gap
With nearly 30 million small businesses in the United States, it can be tricky to find a business model to set you apart from competitors.
The co-founders and entrepreneurs behind Two Degrees Food, a company that produces nutritional bars and feeds children across the world, have used one of their best assets to maximize their reach: a 35-year age difference.
Lauren Walters, 60, and Will Hauser, 25, teamed up to found Two Degrees in 2010, a move that Walters said strengthens their ability to tackle everything from solving business problems to embracing social media.
“It’s interesting to think of it as a ‘model’; I think it’s just sort of evolved,” said Walters, a seasoned entrepreneur and chairman of The Concord Consortium, a nonprofit research and development organization based in Concord, Massachusetts. “I think as we’ve been building this business for the past year and a half, these complementary perspectives make us more effective in delivering on the promise of connecting a range of people.”
Their vegan, gluten-free nutritional bars are sold at Whole Foods chains across the U.S. as well as in coffee shops, gyms, museums, hospitals, a number of large corporations (including HP, Cisco, Microsoft, GE and AOL) and will be available at college Barnes & Noble stores in October. The company uses the “one-for-one” model – meaning for every bar purchased, a nutrition pack is sent to a needy child in a developing country.
Two Degrees has donated nearly 45,000 nutritional packs to its partners in Malawi, Kenya, Somalia and Haiti. The packs are sourced from local manufacturers in whichever countries they are to be distributed. (One of their purchasing partners is Valid Nutrition in Malawi, where peanut, sugar and oil is sourced from local farmers and factories.)
Hauser, a Harvard graduate and former Goldman Sachs analyst, said although the inter-generational model alone cannot explain the success of their business, “the range of customers and retailers that have gotten behind Two degrees is tremendous.”
Startups run the gamut from the sublime to the mundane
– Mark Boslet is a contributor to PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Investors navigated the halls. Luminaries such as LinkedIn’s Reid Hoffman and SoftTech’s Jeff Clavier took the stage.
Demo Fall 2011 was in full swing yesterday. What stood out at the tech conference was an eclectic assortment of startups that varied from the sublime to the silly. Several of the most appealing enterprise-focused companies seemed poised to attract considerable interest. Several developing consumer technologies did not.
Here are some from both sides of the aisle:
FLUXX
Among those destined to draw attention was Fluxx of San Francisco. The company hopes to develop an online dashboard where businesses can integrate information from key internal systems and better manage their operations.
Fluxx argues the product’s value is its ability to put the data in one, easily accessible place. Already the company sells a cloud-based dashboard product to half a dozen non-profit foundations, for which it expects $1 million in revenue this year.
Why venture capitalists invest in pigs, not chickens
– Jeff Bussgang is a former entrepreneur and partner at Flybridge Capital Partners. This article originally appeared on his blog Seeing Both Sides. The views expressed are his own. –
There is an old parable about the concept of commitment when it comes to breakfast. The story goes that when looking at a plate of the traditional fare of ham and eggs, it’s obvious that the chicken is an interested party, but the pig is truly committed.
When I tell this story to entrepreneurs, my point is usually to contrast the approach venture capitalists have to startups as compared to entrepreneurs. The VC is an interested party, but at the end of the day, if their startups live or die, they typically still have their job, their office and their portfolio of other investments. The entrepreneur, on the other hand, is the pig – truly committed to the outcome, with no fallback.
But lately I’ve been thinking about the parable of the pig and the chicken in the context of the characteristics that make a great entrepreneur – and the kind of entrepreneur that we VCs in general, and my firm Flybridge Capital in particular, like to back. In short, we like to back pigs – entrepreneurs who are truly and completely committed to the outcome of their venture, have a lot of stake, and no fallback.
How do we discern the difference between the two entrepreneurial archetypes? It’s usually relatively easy, but sometimes subtle. Here are a few of the top characteristics we see in entrepreneurs who appear to be exhibiting behavior that suggests they’re more like “chickens” when it comes to their startup:
1) Prefer to wait to start their venture only after they receive funding (“We are ready to go, as soon as you give us your money.” …um, does that mean you won’t start the company if I don’t give you my money?).
2) Don’t quit their day jobs before receiving funding. (“This has been a side project for a year, and I can’t wait to focus on it full-time” … um, if you can’t wait – why are you waiting?)
I think these are very good suggestions. However, good communication skills can be taught and there are extremely cost effective resources that can teach the entire staff to communicate more effectively.
Often, people with high levels of communication skills will not be priced for the small business person to hire. They will be picked up by larger companies with more attractive offers.
So, it is important for the small business owner to understand where cost effective resources are.
Yes, you can screen for skils and attitudes. But probably more important is for the small business owner to decide the type of culture they are operating from and the values and behaviors that support this.
The small business owner, for example, that is very command and control oriented when the rubber meets the road will be out of step with the idea of building cooperation, for example. And, again, these skills can also be taught when the small business ower is self reflective and willing to grow, too.
Dianne Crampton
corevalues.com