As a take-off of the saying “Always Be Closing” (ABC) by Alec Baldwin in Glengarry Glen Ross, startup companies should “Always Be Hiring” (ABH).

I’ve found that the best startups are always looking to hire the best and brightest that would also fit with their small team’s culture. If they wait to hire after a capital raise or they are drowning in work, they are already behind the curve. This lack of foresight can result in loosing a competitive edge.

Being proactive in team building process by constantly searching for the best matches, startups can outpace the competition and drive their companies towards success.

Tom Kosnik

Last Thursday, StartupAgents attended the AAMA Connect ‘09 Entrepreneur Workshop led by Professor Tom Kosnik of the Stanford Technology Ventures Program.

The three-part workshop was very informative and covered the following topics:  (1) Is it an Idea Worth Pursuing, (2) How to Go to Market, and (3) How to Grow the Business.  Professor Kosnik incorporated real-life examples and stories from his 25+ years of mentoring entrepreneurs and companies in Silicon Valley.   Below are a few lessons learned from the workshop, but we would encourage you to download Professor Kosnik’s entire presentation at OpenWebU.

1.  Listen to your customers — Whether they are potential customers or your early adopters, listen to them and get a deep understanding of their needs.  Try to uncover the real issues and problems they have.  Build trust with your customers as you iterate the product.  Interact with your customers’ customers (who your customer sells to) to create value and help your customer come up with a better solution to their customer’s needs.

2.  Create your positioning for each target customer segment — To create your positioning for each target customer segment, state:

• the need or opportunity for your product
• the key benefit or compelling reason to buy your product
• your primary competitive advantage
• your primary differentiators

Test your positioning by using the CRUDE test.   Is your positioning: Credible, Relevant, Unique, Durable (and Dynamic), and Emotionally Appealing?

(Sources: Moore (2002) Crossing the Chasm, and Kosnik (2008) “Dynamic Positioning”)

3.  Marketing Communication Decisions — when making marketing communications decisions and measuring their effectiveness, use the “6 Ms:”

• Market — Who is your target audience?
• Motives — What is the objective of the communications?
• Message — What is the point you want them to learn?
• Media — What media will best get the message across?
• Money — How much should you spend?
• Metrics — When and how will you measure the impact?

(Source:  Dolan, Robert J. (1999), Integrated Marketing Communications, HBS Note # 9-599-087)

4.  Customize your hiring strategy — Ask talent what motivates them and customize your hiring strategy accordingly.  Maslow’s Hierarchy of Needs should be applied when recruiting and when trying to retain your employees, from satisfying physiological needs, to safety/security, belonging, esteem/achievement, and self actualization needs.

Entrepreneurs, what are some valuable lessons you have learned from starting and running your own company?

Talent, what factors are most important to you when deciding whether to join a startup?

Please feel free to comment below.  We value your input, and would love for you to share any advice you have.

Search & Post – Startups can now post open positions and Agents can search through those positions and contact startups directly. Agents can also search through a list of startups and contact the ones they are interested in.

Metrics – We have enhanced our ability to view what is going on in the network. Initially, this will help us serve you better. In the future, we will make some of this data available to you to enhance transparency.

Mail Service Integration – We have integrated with MailChimp, so you can now expect to receive regular emails from us about industry updates and events.

We also integrated with other networks to help keep you informed about StartupAgents and the industry at large. Please connect with us on Facebook, Twitter, LinkedIn and YouTube.

Like any software it’s not perfect, but sometimes it just time to launch and set the new features free. This reminds me of a video I saw a little while ago…

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?

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.

Thank you for stopping by the StartupAgents booth at the Crunchies. We enjoyed sponsoring the event and hope you had a great time too.

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The 2008 Crunchies is TechCrunch’s (co-hosted by GigaOm, VentureBeat, and Silicon Alley Insider) second annual competition and award ceremony to recognize and celebrate the most compelling startups, internet and technology innovations of the year.  For more information, check out http://crunchies2008.techcrunch.com

Get your tickets here:
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Agents can now import their LinkedIn profile information into their public and private profile. The profile information gathered consists of your summary, work and educational history. You can find the link “Copy profile from LinkedIn” on the grey title bar, when you are on the Edit Profile screen.

View Profile in Search Results

Agents can now see how their profile will look in search results. The link is found in Public Profile View under your Agent Statistics and reads “As seen in search results”. The link is only on your public profile, because only public profile information is seen in search results.

Risk Preferences Descriptions Added

Descriptions have been added to the Stages and Series under Risk Preferences. Now when you select Series A or Beta Test, can learn more about the dynamics of a company in a specific stage or series.

Values Added to Startup Profile

Startups can now express themselves better by selecting the what they value the most at their company environment and in the team members they bring on.

Link Fields Added to Startup Personnel

Rather than fill out a new bio of their management team, board members and advisors, startups can now just link to each persons bio on their company or organization’s site.

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/

Multiple Email Alerts – You now have the capability to assign an email alert to each of your saved searches, which you may have up to five.

Values Changed – An agents values section is now more granular to allow them to better communicate the values they hold most dear.

Risk Preferences Added – We have added a Risk Preferences section to an agents profile. You can now see if their risk preferences match with the stage, series and size of your startup.

Headline Added – Agents can now create a headline that will show up as part of the search results. This will hopefully provide a faster searching experience.

Summary Added – We have added a summary section where agents can summarize their experience, skills and personality, to allow you to find a better match.

Explanatory Text Added – We have added more explanatory text around the site to provide for more clarity on how StartupAgents works. You can view much of the information when you click on the Learn More link found on the home page.

We have been working diligently to get new startups and agents onto StartupAgents. Please let us know if you have had success in connecting with any agents. We also welcome your feedback and suggestions at anytime.

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.