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People Management – Best Practices

August 25th, 2011 Comments off

As a startup entrepreneur, having effective people management skills is an important priority and one that will ensure continued growth and success for years to come. Obviously many of the best practices for people management being applied in large businesses and conglomerates can and do cross over into startup companies, however there are certain strategies which should be emphasized and catered to within the entrepreneurial environment. Among these are:

Involving your employees in the development of the business – this is what working for a startup is all about and a main reason why an individual chooses to work for a startup. Everyone wants to feel that their input matters and that they are helping build something.

Communication with all levels of employees is another element that sets a startup apart from larger businesses. Employees want to cultivate a relationship with upper management and owners as this makes them feel closer to the action and that they are cared about as well.

Startups can also offer flexible work and policies that cater to equality and diversity. Entrepreneurial companies can be far more fluid with the scheduling of work and company policies and thus offer a more flexible environment that can be designed to their own schedule.

Another advantage startups have for employees is the ability to easily reward for reaching set targets and offering training and development support that will also increase the value and skills of employees while also increasing their confidence.

By engaging in all these management best practices, your fledgling company will grow exponentially and your employees will grow and develop into real and valuable assets. As a startup owner you can offer your employees a closer relationship, more flexibility, better working environment, and foster that entrepreneurial spirit within everyone that will reap rewards over and over again.

The Legalities of Interviewing: What you can and cannot ask

August 9th, 2011 Comments off

As a successful entrepreneur, the time arises when hiring additional staff becomes critical to continued growth and prosperity. Deciding on the skill sets, educational background, and previous employment history is the easy part, the difficult task for any employer is the interview. The legal aspects of what can and cannot be asked of a potential new hire often makes the interview process as stressful and uncomfortable for the recruiter as it does the recruit. However, there is no need for sweaty palms and hand wringing as all it takes is a small amount of due diligence, some prepared questions, and a few responses for volunteered personal information, should keep any entrepreneur out of any legal land mines during the interview process.

The U.S. Equal Employment Opportunity Commission (EEOC) is the federal law enforcement of the following employment acts: 1) Title VII of the Civil Rights Act of 1964; 2) the Pregnancy Discrimination Act; 3) the Equal Pay Act of 1963; 4) the Age Discrimination in Employment Act of 1967; 5) Title I of the Americans with Disabilities Act of 1990; 6) Sections 102 and 103 of the Civil Rights Act of 1991; 7) Sections 501 and 505 of the Rehabilitation Act of 1973; and 8) the Genetic Information Nondiscrimination Act of 2008 (EEOC). All of these statutes are applied to any business with more than 15 employees. Regardless of the size of a company, the best practice in hiring would be to incorporate all facets of these laws into every aspect of human resources, management, and employee relations.

Basically, there are several rules of thumb to follow in order to avoid asking any illegal interview questions:  1) cannot ask a person’s age (either by birth date, high school graduation year, birth year, etc.); 2) marital/ family status; 3) height, weight; 4) disabilities, recent illnesses or operations, last physical exam, family health; 5) obvious physical impairment questions; 6) nationality, native language; 7) arrest record; 8) military discharge information; 9) social affiliations; 10) race, color, religion; 11) use of lawful products like tobacco and alcohol; 12) lowest acceptable salary; 13) language proficiency; and 14) friends or relatives already employed by the company.

Example legal questions: 1) are you over 18 years old? 2) Can you travel or relocate if necessary? 3) Can you lift up to 60 lbs. and carry it 50 feet? 4) Will you be able to perform the job’s essential functions with or without reasonable accommodations? 5) Are you authorized to work in the United States? 6) Have you ever been convicted of a crime? 7) What branch of the military did you serve?

When going through the interview process, potential employers have a legal obligation to correctly handle the questions in a manner that is not offensive or discriminatory to the recruit. By no means is the above list complete or exhaustive and it is always prudent to review the current hiring and employment laws whenever beginning the recruiting process.

References

The U.S. Equal Employment Opportunities Commission. (n.d.). Laws Enforced by EEOC. Retrieved from http://www.eeoc.gov/laws/statutes/index.cfm.

Interviewing Skills 101

July 31st, 2011 Comments off

Regardless of the job market, having effective interviewing skills is paramount if you wish to go from potential candidate to new-hire. A good interview is comprised of several components including physical appearance, communication skills, and positive energy flow.

Positive Energy Flow

Positive Energy Flow

Physical appearance for an interview dictates wearing a suit, polished shoes, neatly trimmed hair and nails, no over powering fragrances, no gum chewing or tobacco smoking, limited to no jewelry, fresh breath, and an organized portfolio. Your portfolio should contain at least 5 copies of your current resume, your previous employment history including addresses, phone numbers, and supervisor names. Also have three references listed. Make sure you have two working pens and pencils with you as well as note paper to use during the interview.

Communication skills include preparation and knowledge of your strengths and weaknesses and how to emphasize or minimize them (know who you are and why you would be an asset to this company), have extensive knowledge of the company and the employment opportunity under discussion, always make good eye contact with the interviewer, no fidgeting, be an attentive listener, honesty is imperative, asking questions is vital to understanding and making an accurate response, and always be relaxed. Answer all questions fully, do not hem and haw, and do not give short single syllable responses whenever possible.

Positive energy flow is your attitude, affability, and demonstrativeness and it requires a careful balancing act that should be undetected by the interviewer. Be candid, natural, pleasant, confident, out-going, and easy to talk with. Do not be over-bearing, over-powering, arrogant, cocky, demeaning, or flippant as all of these traits are negative energy. People tend to be drawn to friendly, happy, positive people and often shy away from those who are quiet, sullen, and negative. If you are naturally shy, work on becoming more out-going and relaxed.

Interviewing is nerve-wrecking enough when you are fully prepared; don’t make the mistake of not handling all your due-diligence prior to walking in the door. Your behavior, communication, and body language will always give away your lack of preparedness and the interviewer will know it. Preparation is the key to achieving a successful interview – make sure your physical appearance, communication skills, and positive energy flow place you in the position of being the new-hire.

14 Tips for Building a Startup Sales Team

August 18th, 2009 Comments off

by Dharmesh Shah
Your sales force if your company’s lifeblood. No matter how good your product is, it won’t sell itself, no matter how much you believe otherwise. Establishing a competent, effective team to draw customers is often challenging for entrepreneurs, though, who would rather focus on research and development or chase VCs.sales-up

First off, a few disclaimers: I’ve never been a sales person. I’ve never even played a sales person on TV. All the points below have been pulled from startup sales teams that I think work pretty well (including the team at my marketing software startup).

1. Don’t hire sales people too early. In the early days, the founders should be able to sell (and should be selling).

2. You don’t need sales people, you need sales. Don’t think VP of Sales – think “Revenue Engineer”. (Not the greatest analogy, but just like you won’t hire a development “manager” as one of the first 5 people in a startup, you shouldn’t hire a sales “manager” either). Don’t get caught up in fancy titles – focus on dollars in the door.

3. Don’t hire several sales people at once. Your goal is to figure out the “pattern” of what kinds of people are best based on what you’re selling and who you’re selling it to. You need some feedback from the system so you can continue to iterate on your hires.

4. If you’ve never hired or been around sales people before, be prepared for a bit of a shock to the system. They’re not bad people, they’re just different. If you’re an introverted geek like me, it’s helpful to remember that your startup needs to sell stuff.

5. Resist the temptation to create complicated compensation plans. If it requires a spreadsheet to figure out the commission, it’s too hard. You’ll have plenty of time to confuse sales people later – start simple.

6. Agile methodologies can work in sales as well. Iterate! Refine your demo script, your slides, and any other collateral information. Capture the lessons learned by the best-performing people and spread it to the rest.

7. Sales people will generally act in mostly rational (but often surprising) ways based on incentives. The rules of the game define the behavior of the players. You were warned.

8. Always connect incentives somehow to ultimate customer happiness. If you reward just “deals getting done”, you’ll get deals – but at too high a price. You might get push-back that sales people don’t control/influence customer happiness, but they do. They “pick” customers. They set expectations. And they control the degree of “convincing” applied.

9. Make sure you understand the economics of your business. Figure out your total COCA (Cost of Customer Acquisition). This includes sales people, marketing people and marketing campaigns. Quick example: Lets say you paid a sales person $10k, a marketing person $10k and you spent $5k on Google AdWords (for a total of $25k) last month. If you sold 10 customers last month, your COCA is about $2,500. Different businesses have different needs in terms of sales vs. marketing spend. Make sure neither is too far out of whack.

10. Your life-time-value (how much revenue you expect to generate per customer) should be higher than your COCA. (No, I did not need a degree from MIT to figure that out.) Once your LTV is a multiple of your COCA, you’re ready to start turning the knob and scaling the business a bit (hiring more sales people). But, if your LTV is way lower than your COCA, proceed with caution. If there is no hope for LTV getting higher than COCA, you’ve got a problem. Don’t try to hire additional sales people until the economics sort of make sense. If the car is pointed towards a brick wall, hitting the accelerator is not a good idea.

11. Track data maniacally (even if it’s just in a spreadsheet). Information you will want includes: What was sold, who sold it, when, for how much, etc. This data will be invaluable later as you start to scale. For example, you should be able to answer the question: We had 14 customers cancel last month – who sold those customers? Is there a pattern? In the early days, you likely won’t have the volume (or the time) to analyze the data – but you should at least capture it for future use.

12. Your pricing should be in line with your sales structure. For example, you can’t expect to have an outside sales force (that meets with customers in person) if your average deal size is only $10,000. The math won’t work.

13. Once you get beyond three or so people, running your sales in a spreadsheet will become painful. Start looking at CRM systems (like Salesforce.com).

14. Start watching the shape of your “funnel” as early as possible. How many leads are you getting a month? How many turn into opportunities? How many of those convert into paying customers? Once you understand your funnel, you can slowly start tweaking your system to fix the “leaks”.

That’s all I’ve got for now. For those of you that have built early-stage sales teams, what are your ideas and insights?


About the Author

Dharmesh Shah is a serial software entrepreneur. He is currently the founder and CTO of HubSpot, which provides marketing software for small businesses. The company, based in Cambridge, Massachusetts, has raised over $17 million in capital, and has over 1,400 customers. Dharmesh also authors OnStartups.com, a popular startup blog with over 15,000 subscribers and 80,000 members in its online community. He is an angel investor and a frequent speaker on the topic of startups and inbound marketing. He has a B.S. from UAB and an M.S. from MIT. He can be found on twitter as @dharmesh.

Image from http://www.sacbee.com.
Article originally posted on VentureBeat.

StartUp SF v1.3 “Design for StartUps”

September 9th, 2008 Comments off

StartupAgents will be demoing at StartUp SF September 10th. Come on by and check out how we can help your startup or help you find a startup to work with. The whole family is welcome to come.

Festivities start at 6pm and go until the cops break up the party.

StartUp SF is a regular meetup in San Francisco that is designed to provide helpful tips and tricks to startups, bootstrapped companies, Web 2.0ers and other interested technology and business professionals.

Reserve your ticket today…

http://www.startupsf.com/2008/08/21/startup-sf-v13-design-for-startups-sept-10th-2008/

“Hiring is my #1 problem”

June 12th, 2008 Comments off

were_hiringI attended Launch Silicon Valley on Tuesday and watched some great companies launch, but what struck me the most was a comment made by Seth Sternberg of meebo. He said in his keynote speech that with all the capital he has raised, $37.5 million to date from top-tier VCs (Sequoia, DFJ, Jafco, Time Warner and KTB), hiring is his #1 problem.

I suppose there are many entrepreneurs that think that as soon as they raise capital, bringing on team members will become a lot easier. One of the reasons you take a firm’s capital is to have them help you find talent.

What I find interesting is that with each capital raise a different personality becomes attracted to your company. When in the seed stage, you are usually tapping your personal network for co-founders. Co-founders are more willing to work for 100% equity, which is a very large risk and, hence, attracts that high risk taking personality.

Once you’ve raised a seed round, be it self-funded, angel, family & friends, you immediately attract a different personality. Someone that is willing to take less risk, which translates into a mix of cash and equity. With each subsequent round, the candidates risk level diminishes.

Since risk profile of the people that are attracted to your company changes, your talent acquisition strategy must adapt as well. Unlike at an established company, where an HR Manager can call on a candidate that submitted a resume a year ago, startups must constantly be on the hunt for the candidate that fits the company’s current stage. I believe one of the reasons hiring is Seth’s #1 problem, as it probably is with most startups, is that you are constantly looking for a moving target.

I’d be interested to hear what your experiences have been pre and post a capital raise, and how the personality profile has changed throughout your company’s evolution.

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