Bootstrapper.com - Confessions of Serial Entrepreneurs

One of the most important things for a successful startup or any company for that matter is a sound HR policy. Most young companies neglect HR and just hire friends or because a resume reads well. It is very important to build a cohesive team that works together. A bunch of brilliant people that hate each other is recipe for disaster. This should be common sense but rarely is down correctly.

Before you hire, please make sure you know the goals of the person, define a mission for the organization, a mission and milestones for the position and attempt to build a culture for the company. If your company doesn’t have a soul, why would anyone stay?

theres a psychological aspect to my compensation strategy. i used to be really cheap, super bootstrapper type and then i noticed that when i was cheap with comp, everything took longer so it ended up costing me more and taking longer since the time costed more than i saved by being cheap. so i thought about it and talked to a bunch of people and tested it out in some cases and realized the most effective way to do it, is ask what people need first (cover thier living) then ask what they think is fair and as long as they are being reasonable, offer a bit more than they said because then they feel grateful and feel they have something to prove to deserve the extra bonus and you actually save money in the long run because of increased productivity. of course i dont believe in ever aggressively overcompensating, that causes people to sit on thier earnings and get lazy because their making so much. in general ive found you always want to pay slghtly above expectation with slightly more kicker than expected but the kicker (equity/bonus) should either be subjective (up to employer) or stricter to get than standard (make peopel work for the bonus instead of get a bonus)

So I just had a discussion with a friend of mine who runs an ATM company. What’s an ATM company? He owns and manages several hundred bodega ATM machines. They earn a fortune but he hasn’t had any luck recruiting people to outsource some of his work. Now the person he’s looking for doesn’t need to have a college degree, doesn’t need to be all that intelligent and could easily earn $75k a year, which is great for not having a college degree. What does the job require? Being diligent, work nights and weekends and be a people person. For one thing he was looking in the wrong place, he was looking for a college grad and the average college grad will think this job is below him. So i crunched it down and this is who i determined would be the ideal candidate:
- someone who is naturally likable and a good talker
- someone who wants a degree some day
- someone who isn’t earning more than 40k a year currently
- a few college credits but dropped out for personal reasons (had a kid, take care of family, out of money etc…)
- offer to pay for college for the person (city college is cheap anyway)

of course, you can’t legally write that in an employment post but thats the candidate your looking for because thats the kind of person who will appreciate the job and take it seriously.

Now the second issue is that i think it is MUCH harder to find a skilled People Person than an MBA. You can find thousands of MBA’s for every truly good people person. I know very few people that are great people people but plenty of MBAs. Its just a lot harder i think to find people that understand the human psyche then it is people with a fancy degree. That’s also why i would take a psych major over any other major for most business positions any day of the week. You can learn to be a quant a lot easier than you can learn to be a people person.

So here’s my attitude on NDA’s with potential business partners. They are pointless. 2 reasons:

1) Our world is small, if you steal something it will get back to bite you in the ass. Esp. bad if you screw someone like me that talks non-stop and doesn’t give up easily.

2) If I share my idea with you and I can’t execute it better then you, then i shouldn’t be executing it in the first place.

Don’t ask me to sign NDA’s and I won’t ask you. We are gentlemen. And i believe in my ability to execute.

When you think of how people have the time/resources to steal your ideas - you can probably count them on your hand. Think about it…

With that said I have had one idea stolen from me long ago - but that’s another story and I am still bitter.

In the last few months I have been all over the place. I have recruited people. I have looked for a job, I have tried to find founders for startups and founding execs. Throughout all my varied searches I learned an important lesson today that all recruiters at companies should grasp.

You are NOT competing with other companies for top executives. You are competing with the person himself. Barriers are so low that any smart person can start a company.

If you want to recruit and retain top talent you need to keep them happy and make them feel they choose to have your job.

Most companies think its about money or its about stock. It’s not. It’s about making a difference. In truth most people are too scared to start their own company but you as the corporate master should make them feel they are choosing you.

Anyway can hire a programmer in india for $800 and build their big idea. What is stopping them from doing that on the side?

The only thing stopping people from doing that is to make them feel like they have a home.

When you are talking compensation and positions, ask the candidate what is their dreams and aspirations and how your company fits in. No one really dreams to be a corporate beaurocrat. Then ask them what kind of compensation they think is fair and what you can do to keep them for 3 years, 5 years, hell even 1 year in todays environment.

Actually provide value to your employees so that they do not think of an alternative. Most people think people should want to work for them because of X, Y, Z and they could be a great place to work but a new recruit doesn’t know this - so instead flip it on its head - and give the person what he wants so he’ll be happy instead of you telling him why he will be happy. It’s a subtle difference. A few questions and a few concessions and then FOLLOWING THROUGH But you will have a much stronger work force and more loyal people as a result.

Some great companies people rarely leave: Google, Bloomberg, 3M, used to be Microsoft, Ritz Carlton etc…..

The most important thing in business is customer service. I don’t care how good your product is. If you want to last for the long term, provide good customer care. Build a relationship with your customers.

Sending your customers to a call center in india, pakistan or whereverthefuck to read a predefined script is not customer service, it’s customer disservice. This is from someone that used to run a large call center company, which I did.

Care for your customers. LISTEN to what they want and give it to them. Empower your employees to give refunds, discounts or whatever they need to save customer. Don’t just have reps pass the buck. If t hey have to pass the buck then they shoud’nt be your customer service reps. Customer Service defines your business and quality care is the BEST WAY TO GET REFERRALS.

For those of you enamored by viral marketing, a little information, VIRAL MARKETING IS ANOTHER WAY TO SAY REFERRAL MARKETING.

Create positive buzz and your brand will survive even bad calamities. Handle situations by owning up to it, not denying it. The coverup is always worse than the scandal.

Me, I give all of my clients my cell and AIM and they can reach me 24/7. If you need me, call me. I rarely get late calls but when I do i take them. People appreciate it and actually call you less as a result knowing that they can is usually enough.

Think of yourself in your customers shoes. How would you want to be treated?

This message is intended for bankers and other such people that think saving money on cheap call centers is a good thing. IT IS NOT.