Joshua Baer, Director of the Capital Factory in Austin, invited me to join in an evening session with this summer’s crop of startups. They practiced pitching their company concepts to a group of mentors, who provided appropriate critiques and guidance and even tolerated some insights from myself in the peanut gallery. One of the companies had a very similar model to one of our prized failures at Cordova Ventures in the early 00’s, but I think now the idea will work whereas then it was just way too soon. Advances in tools combined with dramatic cost reductions have made a lot of bad ideas from a decade ago now plausibly good ideas. (Someone should start a resurrection fund; our graveyard has several that we’d like to “dig up.”) (Groan.)
Next on the agenda was Michael Trafton, CEO of Blue Fish Development Group, who gave a thorough presentation on the importance of defining your core values as a company and making you sure you hire (and fire) accordingly. I don’t have his list, but, oddly enough, just Googling that topic turns up at the top of the list Google’s core principles, as good a template as any.
Anyone who was around Atlanta’s tech scene in the 90’s will likely recall Mindspring’s core values as constantly preached by CEO Charles Brewer. I remember them even being laminated on a wallet-friendly card, and they were always front and center in any discussion with Charles. Clearly they worked; I still see plenty of Mindspring email addresses many years now after the company was merged into EarthLink.
Trafton went so far as to say the only way an employee of his could get fired would be to violate one of his core principles. He has created strong loyalty in his team, and he’s competing for talent in a market where there are plenty of great jobs to be had.
There was much discussion on the hiring process, using examples like Southwest Airlines. Someone mentioned Chic-fil-A; I don’t know their hiring strategy, but it’s pretty obvious they find people who deliver much higher service quality than most other fast food chains, and they are drawing from the same labor pool as all. The Cathy family has stuck to its most noted principle of never opening on Sunday, and I’m sure that tradition will continue.
Clearly it’s critical to match hires correctly with the jobs to be done. Trafton’s company is in the F1000 IT services business, and he needs customer-minded employees and not ones who only want to work on the latest cool idea. (One of the mentors turned to me and noted it’s hard to get any duller than accounting software, but, hey, it was a good living at the time and great for our investors.) There are many approaches to this matching process – from tests to team interviews to multiple sequential interviews to reviews of social graphs like contributions to Stack Overflow. And, companies with some history soon develop a pretty specific profile of what type of person is likely to succeed in their particular cultures.
One point that prompted considerable conversation and that stuck out, and one that I heard also at an earlier event here, was the admonition to avoid hiring crazy people. Most of the mentors seemed to have had some direct experience to that point. I’ve made plenty of hiring mistakes in my career; I’ve had my share of eccentrics that come along with technology and creative endeavors, and I’ve seen people do plenty of crazy things, and yes I can also recall a couple of senior execs in the 80’s and 90’s that did literally go crazy on me. I don’t know exactly how a young company translates that advice into action, however, other than steering clear of Vancouver hockey fans.
Now if you asked me about crazy customers, there’s a long list I can drag out. You’ve had them too.
If there had been time I’d like to have extended this session to the topic of personal leadership in a startup company. Core values complemented by a strong leadership style can work magic. Look at the individual influence of people like Steve Jobs and Larry Ellison, for example. It’s hard to imagine any statement of principles standing alone without the extraordinary force of their personalities and styles.
One company I admire for leadership is not in the tech business, barely present in Austin, but ubiquitous in the Southeast – Waffle House. Every one of their senior team constantly works in the field, staying close to employees and customers, and in particular they all work as cooks, servers, or cashiers on every major holiday. Waffle Houses never close, and they have developed an extraordinarily successful style of management that provides well for them. I recall attending a GA Tech Foundation meeting at Sea Island where Waffle House CEO Joe Rogers flew in his G4 to the airport on St. Simons Island, worked a shift in their restaurant nearby, and showed up for the GT meeting in his uniform with nametag. Joe and his team seem to value nothing more than staying close to the frontlines of their business. They event bought out a franchisee in one state who put in some POS automation in lieu of the iconic paper tickets at Waffle Houses; any perceived efficiency was counter to one of the key elements of the “user experience” at that chain.
Unemployment is distressingly high for some geographies and some skills, but one can sense that many companies in the tech industry will succeed or fail based on their abilities to find the right people amidst a what is now a tightening supply of talent. And, at the very least, they’ve got to “avoid the crazies.”