SacStarts - startup101

Hiring Hacks

Adam Kalsey — Fri, 16 Oct 2009 21:37:41 +0000

Dan Arkind has some great advice for hiring in early stage companies over at FBfund.

Ask for advice, not referrals. It’s best if you call people you know and describe a problem you are having and ask for help (which will prompt them to refer you to awesome people who solve problems) than to call them and ask if they know anyone looking for a job (which will prompt them to refer you people who are unemployed).

Getting your VC's attention

Adam Kalsey — Sat, 06 Oct 2007 14:27:26 +0000

A few days ago I wrote about using your board more effectively. Related to this is how you use your VCs.

The VC’s job doesn’t stop when they write the check. They want to see the investment succeed and have a wealth of business knowledge and contacts that can help that happen. But too many entrepreneurs see their investors as the enemy and don’t include them in the everyday business.

Fred Wilson, a VC blogger, says

If you want to get more attention from your VC than you are currently getting, and you don’t want to get that way by struggling, then you should find ways to rope them into your internal discussions.

He goes on to list a few reasons a VC will pay close attention to one of their investments. The trick is to get them paying close attention to you so you can use their expertise to grow your business.

Unfortunately Fred talks about people he knows that do this well, but doesn’t offer any ideas on how to do it yourself. If you’re interested in engaging your investors in the business, try these tips.

Forward them interesting discussions. If you’re having an email discussion about a new strategy, a new feature, or even a potential client, forward a copy of the email thread over too him. Do it before it gets too long and before you’ve made any concrete decisions. You’re not informing him of what you’ve done, you’re asking for input. A short note at the top that says “Fred, we’re thinking of X, any thoughts on it?” will help him understand what you’re looking for.

You’re looking for private feedback here, and by forwarding the message to just them, you’re shielding the rest of the team from his reply. Treat his guidance as confidential.

Add them to discussion. Occasionally copy him on emails that you think they might be able to help on. Say you’re looking for an advertising partner and you’ve tossed a few names and ideas around. Perhaps you’ve even picked a short list. Copy your investor into the email chain and as their opinion. “Fred, do you know any of these companies? Or someone else that might be suitable?”

The trick is knowing when to ask. You don’t want to get him involved so early that he’s getting copied on replies every few seconds. He gets enough email already. You also don’t want to wait so long that his counsel isn’t helpful.

Inform them of your direction. Got a new product, a big customer, or a feature that you’re testing out? Send your investor a note about it. “Hey, check this out…” can help focus his attention on what you’re doing and if you do it at appropriate intervals, it will give him a good picture of where you’re going and how fast you’re moving.

Remember that your investors aren’t the enemy. They want you to succeed and have a great deal of help they can offer to get you there. But they’re not around the office each day and don’t know what your challenges and next big ideas are. It’s up to you to get them involved.

Effective use of your board

Adam Kalsey — Wed, 03 Oct 2007 23:40:23 +0000

VentureBeat has a guest editorial by Nick Sturiale, a partner at the venture capital firm Sevin Rosen Funds that describes how board meetings can be run in a way that’s helpful to your company.

Regrettably, these meetings often end up a waste of time, and not for dubious reasons. Well meaning CEOs frequently underutilize their board and subsequently set up a dynamic that can lead to directors questioning whether the CEO should be replaced.

His suggestion is to make your board part of your management team and not just a group you need to get approval from.

The idea is to enlist members in helping solve the problem because when a board works on a problem it becomes invested in the outcome.

Financial modeling for startups

Adam Kalsey — Tue, 02 Oct 2007 16:57:44 +0000

Redfin has posted an interesting peek into their financial models. They show their assumptions going into the business and their actuals after running the business for a while.

When first putting together our financial model, we looked online to calibrate spending assumptions. So many people have blown venture capital, we thought, there must be a manual somewhere on how to do it, at what rate, avoiding which follies. We couldn’t find anything. So we took some wild guesses and figured we’d see how they turned out. And now two years later to the day that we built our first model, here are the projections and actual results. Hopefully, you can learn from our experiences.

They cover everything from employee costs to legal fees, and provide an explanation for the differences between their projections and actuals.