Bootstrapper.com - Confessions of Serial Entrepreneurs

So I wanted to take a minute to talk about recruiting. Some background, I have several friends that are recruiters including my partner in Takes All Types and I have been recruiting founders, VP’s, board members, advisers for startups for years.

Most people don’t understand what it is, even most people that hire people. When you hire a recruiter, there are 2 basic ways to do it, Contingency or Retained.

Contingency basically means you post a job and offer any recruiter who finds you someone a commission, usually 20% of the first years base salary for the person if they find someone.

Retained Search means you give the position to a recruiter exclusively and pay them $x down to start and run the search for you.

Which is better? It depends if you have very good internal recruiters. If you have good internal recruiters and a full infrastructure and experience in interviewing, reference checking and marketing your positions then go with contingency. In general contingency recruiters, will not dig deeply into the position and will simply fwd resumes of almost -matches and hope something sticks.

However, if you do not have a well trained hiring manager in house, retained search makes a lot more sense since your retained recruiter will do the due diligence on the candidate and will only present you with the best ones.

Why the distinction? It’s simple really - a contingency recruiter has no guarantee of getting paid so he will shotgun you candidates hoping one sticks. A retained recruiter knows he will get paid so he will make sure to give you the best people so he gets more assignments.

Most startups don’t understand recruiting and don’t have a wide net to cast into the community where a referral bonus or a laptop of a few bucks to existing employees will work. (if you have a wide net to cast then do it) but if you are a startup and need help recruiting and have not hired a lot of people in the past before, get a retained recruiter so you can take some stress off - just make sure to check your recruiters references first.

So someone applied for a job and you need to interview them. What do you ask? In general asking random questions about a persons resume or past usually gets you canned responses. I have a couple of tricks I use to dig into peoples minds’

1) Ask people, what are their dreams and goals? If they give clearly canned answers, just keep prodding the question.

2) Ask them what they think is the biggest flaw in your strategy? Make them think critically of the company they are trying to work for. It will definitely get an awkward reaction as they likely will not want to criticize you. Think about the intelligence and integrity of their answer.

3) Ask them to pretend they are the CEO and you are the investor and ask them to pitch you on your business.

4) Ask them to give you 3 ideas to help grow the business. This is true even if they are a technical person, 3 ideas could be simple technical or design suggestions.

5) Ask them about their biggest failure and biggest weakness.

6) Ask what is the least rewarding thing they’ve done.

7) Ask them what their ideal hours are and what they do for fun.

Those questions should give enough info to evaluate the candidate and get some true info about their intelligence.

So one of my friends and partners just did this awesome just post, i think it’s classic and sings the songs of startups very nicely…Ridiculous opportunity for LAMP developer with early stage start-up. Help partners who have already built world-class companies (and sold them), to do it again. If you want a job that you can do mindlessly in between Guitar Hero gigs, don’t read any further. If you want to stretch your brain and get excited about your work every day, keep going. You will be lead developer, VP of Engineering and CTO all in one and all in your spare time.You can do the work from anywhere but you must be available to meet in NYC at least twice a month. No, we ain’t paying your airfare. We’re a start-up.No HTML, CSS or any graphic work or knowledge is required. You are hard-core back-end. Javascript, AJAX, optional.Job duties:Help complete writing (you think, we’ll write) technology specification (SDLC). Architect and help build complex, social advertising marketplace.VERY IMPORTANT:- Expert knowledge of PHP5- Expert knowledge of relational database design and deployment for dynamicsites using MySQL 5- Minimum of 3 years of Object Oriented design andprogramming experience- Knowledge of basic Linux systems administration skills- Entrepreneurial fervor and desire to knock heads together (to get things done)SOMEWHAT IMPORTANT:- Experience with (AJAX) / Javascript /- Familiarity working with the Symfony PHP framework- Experience with one or more or cachingengines, eg. APC, Zend, etc. WE DONT CARE:- You live with your momma- You sing while playing the drums in RockBand- You like cats- You only read non-fiction- You wear chinos and hush-puppiesLots of stock options and an uncompetitive salary.Sincerely,Nate BrochinBootstrapper.comnbrochin@lse.ac.ukPhone: +1 (973) 477-2576Web:    http://www.bootstrapper.com
 

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…..

Nivi asked me to write on this, hope it helps some people…

One of the biggest challenges facing entrepreneurs is being “fundable” also known as being “in network” or “known” by the venture firm. Unless your product is complete or has an existing following or is profitable, it is very hard to get in cold…

Here is a version of a conversation repeated many times around the world…

BootStrapper: Hi, I’m John Smith with SaveTheCrack.com.

VC: Hi John, pleased to meet you (looks at his watch)

BootStrapper: Well, I noticed you invest in early stage startups in technology.

VC: Uh yea, we are proud to be one of the most savvy venture firms out there and are very in tune with entrepreneurs and current trends. (glances around the room for somoene he knows)

BootStrapper: Well perfect, then i’m sure you’ve heard of social crack. It’s the latest trend and we are set to take advantage of it.

VC: Yes, we invested in a social crack company last week, we see a lot of good things happening in that space.

BootStrapper: Perfect, well my company kicks the space for yadayada reason. This is my third start-up unfortunately the last one failed and I’m broke but I have these great sketches and almost an alpha.

VC: Great, that sounds exciting (thinks “When is lunch?”)

BootStrapper: Look here on my treo (demo’s product). What do you think?

VC: Very cool, it has some potential but I’m sorry I have to go, I have a meeting in the conference room down the hall (free buffet)

BootStrapper: (following on heels of the VC) So do you think maybe, uh, well, you may want to, ehh invest?

VC: If you want you can send me a business plan (hands card) but I don’t think this is really for us. (only 3 feet from the door to the buffet now)

BootStrapper: But why?

VC: You have no track record of a real exit and we don’t know you so why would we give you money. (as he walks into the buffet and away from groveling entrepreneur)

BootStrapper: But I thought you take unsolicited business plans and I paid $400 for this conference….(no one hears this as he sulks off to the next VC)

Now, I’m sure this has happened to many of you out there if you are reading this site. A version of this even happened to me and I’ve founded two successful companies. Never fear though….there is always a hack!

So without further ado…how to hack your way in the door…

There are 2 ways to do this. The first is the easy one, pester that VC (after all he did readily give you his card) until he responds and gives you a references to someone else. Keep following the chain of referrals, eventually someone who likes your idea will think the person who referred you actually likes your plan and will take you seriously and wala! you have an investor really looking at your business and possibly investing.

Now, that is not always going to work and takes the right type of pestering networker to do it right. The other way to do this is tough but easier then raising capital.

REMOVE YOURSELF AS CEO. Go out and find a CEO (or at least a Chairman or President) to come on board as an equity level founder who has been there and done that. Someone who has taken a company public before.

Now, you say, why would someone of that calibur want to work with me? Well, if you are saying that, forget about investors, your company will fail, try again next year. If you don’t have the confidence and guile to make someone on that level believe in you, go back to the drawing board and try again.

There are hundreds of executives out there frustrated with their $250,000/year corporate jobs. There are also many hundreds of executives that sold a company and are now bored. For an entrepreneurially minded person boredom is worse than bankruptcy. If your pitch is right and you write the proper job postings and put them in the right places (like executive job boards, linkedin, soflow, offline networking group boards etc…) you will be able to find a bored exec looking to take another company to the promised land and interested in coming on board as a founder. Sure, it’ll cost you equity but wouldn’t it better to have an experienced CEO that knows the investors on a first name basis or at least has a track record to get in door than be left broke with your pants down?

Hope this helps.

Richie “The BootStrapper” Hecker
www.BootStrapper.com
www.RichHecker.com