Should Your Startup Hire a “Big Company” Exec?

Successful startups usually reach a tipping point: they find their footing, build a significant mindshare, and (probably most importantly) establish a solid model whereby the ARPU (avg revenue per customer) exceeds the cost of customer acquisition. If you’re part of a startup and you’ve checked all of the above, it’s time to start hiring and start putting your foot on the gas. Inevitably, the question of whether to hire a “big company guy” to scale the operation comes into play, whether the referral comes form an investor, or a friend or professional search.

Then…

The team is pumped, person comes in to much fanfare.  A few months later, the rest of the executive team can’t wait to get rid of the “expensive guy” who “doesn’t get it” and “isn’t carrying his own weight”. The tidal wave of customers hasn’t materialized. Out goes the “pricey”, “self absorbed” big company executive with a nice compensation package to the detriment of the company.

WTF happened?

Focus on Focus

Welcome to the next entry in the “startup toolbox” series. My hope is to calibrate your thinking on the one thing that sets startup execs mindset apart from “big company management” mindset.

Ben Horowitz, in what’s become a must-read blog suggests the answer is twofold: a skills mismatch and a “rhythm” mismatch. My take on it is this: it’s almost always the latter.  Larger companies I’ve worked in certainly prioritize immediate interruptions: meetings, emails, phone calls, etc. Inbox zero becomes a goal in and of itself. Startup founders know that those interrupts will never happen. They have to create traction, buzz, and ultimately a place in the marketplace for their companies. They understand that their job is to create value, not manage distractions.

Startups are creativity focused, whereas larger companies are interrupt focused. Place an interrupt management driven executive in a creative environment, and the result is predictable. You’ll end up with an executive who awkwardly wonders when the interrupts are going to happen and a founding team which wonders when the “big company guy” is going to get off his butt and make things happen.

Large companies tend to teach executives to focus on their inboxes and voice mailboxes – that is, they focus on an interrupt based work model rather than a focus work model.

Screen for Creativity to Avoid a Disaster Later

Creativity is the key – look for a creative mindset during the hiring process rather than a mindset than emphasizes inbox management, fancy lunches, and other non core activities. My company is in the process of hiring a number of key roles right now, and here are a few questions we use to screen for the right kind of startup “mindset”:

“Why do you believe you would successfully transition from <Large Company> to us?”

The most common answer I’ve heard is “well I managed a small group”. It’s also a clear indication that the person doesn’t get it startups, since he equates size rather than creative bent to startups. Frustration with launching initiatives is a good sign. Frustration with internal politics, job growth, etc indicates a focus on extraneous stuff.

“What would you accomplish by the end of month one?”

As above, the idea here is to look for someone who wants to create content: create opportunities for the company, create mindshare in the market, create a great product, create revenue streams, etc. I’d also suggest drilling down to make sure the person understands and can manage innovation at an atomic level. I’d suggest a pass on anyone who over emphasizes learning, internal coordination, or process definition.

“What are the first three phone calls you’d make your first day on the job?”

I ask this question to understand how proactive the person is (a critical skill in a startup). Look for answers involving launching initiatives: communication to potential customers, media, testing product ideas, etc. Beware of answers focused on process over-engineering. One doozy I’ve heard: “I’d call up my team and set up a meeting to establish the kind of culture and work ethic I expect”.

“Why do you want to join a startup?”

Look for a person who understands the concept of creating something out of nothing. Answers involving working in a nimble organization or the excitement of taking on an “important” role usually get a yawn and a pass from me.

One Last Thought

Content free executives have no place in a startup, so get a sample of content before you take the plunge. Try asking them to open a few doors to sales opportunities, suggest new marketing initiatives, or create a few sketches of ideas they would like to follow through to execution. A work product that is cookie cutter or a “google cut and paste job” is a sign the person may not be focused on creating content. As one CEO I spoke to recently said to me: “delivery is relentless and ruthless in its honesty”. Very true.

Advertisements
This entry was published on September 16, 2010 at 6:51 PM. It’s filed under Uncategorized and tagged , . Bookmark the permalink. Follow any comments here with the RSS feed for this post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s