- Factors to consider –- What are the important roles in a start-up -

- Differences between US and EMEA -- Options for hiring -

- Types of search firm and working with them -

James Brocket, Managing Partner, EuropeCalibre One

Hiring for success

Great businesses happen when.........

Product

Investment People

The growth stages of the ‘typical’ technology company

Growth

Value

Seed

1st stage

2nd stage

3rd stage

- Complete development

-Secure first reference customers

-Drive sales

- Build reference sites

Expansion – new products/markets?

Where do we take the business now?

How do we grow and change the team?

Should we restructure?

How do we do things differently?

Change Change

Changing management

• Be decisive. There never is a ‘right’ time to do it – the trick is avoiding the ‘wrong’ time

• Make sure you are sure – you need to be confident that you can hire someone better

• You can never fire the wrong person quickly enough - “Firing is not something you do to someone, it is something you do for them”

• Can you achieve what you need to without hiring a permanent replacement?

What are the 2 critical functions in value creation?

What are the 2 critical functions in value creation?

In hiring you need to be VERY systematic

• Create an org chart and think carefully about the jobs that need doing and create job profiles – get them vetted by an expert

• Start-early, if “Rock-Stars” exist in your market, try and start a dialogue with them

• Create a hiring plan and budget - plan on investing more than you budgeted for

• Think carefully about why a first-class person will want to join you on your journey - ££££ will be the #1 motivator, what are #2 and #3?

The hiring plan

Four parts;

1.Defining the role and ideal candidate profile2.Finding the candidates3.Selecting the candidate4.Securing the candidate

1. Defining the role/person profileSome general rules

• There is no ‘wo/man for all seasons’ • They will share your vision, but don’t have to be as passionate about it as you• Bags of very directly relevant experience to your business and target markets• A proven track record of success – reference this thoroughly• Pragmatic – and ‘start-up’ friendly – execution orientated• Look beyond the CV – recruit the person, not a press release

• Think carefully (and be realistic) about your strengths and weaknesses and recruit complementary skills

• Is this a full-time role or is there another way around this? – a NED perhaps?• Keep it as simple as possible – 6 to 10 points as a rule• Be very clear how you will be measuring performance in the short/medium and long-

term• Visualise how you want the function to look in 12 months time and work back• What are the key relationships internally? ....and externally?

The role

The person profile

2. Finding the candidates• Word of mouth/networking

– LinkedIn/Xing/Jigsaw/Direct approaches – use InMails– Through customers– Create an org chart and think through people in your network that you

couldwork with in the various roles – reach out and start a dialogue with them

• Advertising– Traditional media eg, Sunday Times, Daily Telegraph– Internet advertising eg, Monster, GoldJobs, Experteer, LinkedIn

• Benefits – breadth of reach/active and motivated job seekers• Drawbacks – cost/no guarantee of success/administration

• Recruitment ‘agencies’• Benefits – ‘success only’/speed• Drawbacks – active job seekers are often not the best candidates

• Search firms

Where to look – domestic search or US/International?

Share of the Worldwide software market (%)

Questions?

Source; PwC Software 200

Number of software vendors in the top 200 European market

Within the Top 20, the 15 US Software vendors account for more than 37% of the worldwide market

Capital invested in tech Europe vs US

Number of tech deals Europe vs US

Differences between Europe and the US

1. Its bigger

2. The talent pool is therefore deeper

3. In Europe there is less margin for error – businesses need to be better managed than US competitors if they are to succeed

3. Selecting the candidates

1. The interview– 2 parts, the ‘sales pitch’ and then the interview– Assume the CV is correct but ascertain reasons for moves – allows more time to focus on

important matters– Keep control and set the agenda– Dig deep with the questions;

• Get them to draw an org chart to understand the context of their role• Greatest achievement/failure and strengths/weaknesses • Training needs• Try and get to the bottom of the matter ask “Why” until you cannot ask “Why” any more• There are no killer questions

2. Referencing– 360 degree referencing if possible– Approach customers/advisors for their view– Use LinkedIn referencing functionality– Use a friendly Headhunter

4. Closing the candidate

Thoughts on process• It’s a process of seduction, not a ‘one-night-stand’ - don’t just sell to them – make

them want it – interview them hard – show them you have other options• Follow-up quickly – keep on top of the admin• There’s normally at least one other person involved in the decision....don’t forget that• If it doesn’t work then move on quickly

The offer• Make them motivated – late ‘co-Founders’ are much more motivated than early

employees• They need to be paid a premium – the days of options in lieu of salary are gone• There is a world of difference between shares and share options

Equity for these key hires

Position ProfileLow end – unproven –probably lacks some core skills and needs support, likely arrived in role through circumstance

Market – experienced and done a similar role before...well

High-end – ‘Rock-Star’ has done similar role several times with consistently great results

CEO 2-4% 4-6% 6–10%VP Sales 0.5 - 1.0% 1-2% 2 - 4%CFO 0.25- 0.75% 1-2% 2 - 3%VP Engineering 0.25– 0.75% 1-2% 2 – 5%CMO 0.25– 0.75% 1-2% 2 – 5%

US companies hire differently(borrowed heavily from ‘Hire Hacks for Founders’ by Dan Arkind, on Slideshare)

1. How do I design a hiring plan?How do I compensate people?How do I create a compelling recruitment process?

2. In early stage businesses your hiring plan is your business plan

3. Compensation; the only meaningful input on compensation is what the people you want to hire make right now – you have to pay more

4. The market is never in a recessive mode for top-talent5. Hire like an investor; equity is your currency. Get it. Spend it6. Make bets; cliffs and vesting are your friends7. You can’t pay key contributors too much equity and you can’t get rid of

the wrong people fast-enough

The Executive Search process

1. Desk research - identification of target markets/companies/people

2. Intelligent and forceful approach to prospective candidates 3. Interview aimed at ascertaining aptitude for the specific

role4. Shortlist preparation with supporting documentation5. Management of interview process6. Referencing of finalist candidates7. Management of the offer process8. Post-placement follow-up

The Executive Search process

1. Desk research - identification of target markets/companies/people

2. Intelligent and forceful approach to prospective candidates

3. Interview aimed at ascertaining aptitude for the specific role

4. Shortlist preparation with supporting documentation5. Management of interview process6. Referencing of finalist candidates7. Management of the offer process8. Post-placement follow-up

Executive search - where it works and where it doesn’t...

• Realism is important – search firms are in sales mode when you see them and are incentivised, to an extent, to tell you what you want to hear

• Experience in working with companies as a similar stage is very important – VC relationships/roles are different/they need to be sold harder

• Large firms/multiple offices can cause issues• Search firms manage a process. Keep in touch regularly and ask

for regular full written updates. If you need to get more involved then you can...quickly

• Demand references and speak to some yourself• Don’t push too hard on the fees (!)

Calibre One – overview of the firm

• Est 1999 in London, SF office opened 2001. 25 employees• 1700 searches completed over 10 years• c.60% of work is for VC/PE backed businesses• Focus on TMT sectors• Significant experience in transatlantic work• 50% of work in London office is outside of UK• 40% of work in US is outside of CA