Join the global conversation
Chilean TV Show Brings Endeavor Stories to Life: Arch Daily, Buscalibre and Prey Among Highlighted Companies
This past weekend marked the launch of Demprendedores, broadcast on CNN Chile and Vive TV Chile, an 8-part series that looks at the challenges and successes of five Chilean tech entrepreneurs. Three of the five [...]
May 20th, 2013 — by adminRead more
In the news
Endeavor seeks strategic global thinkers to join its team for 6-10 weeks this summer in our New York office. Interns will have the opportunity to learn about every component of Endeavor’s model, spend time with [...]
January 30th, 2013 — by adminRead more
Latest Video(video) Chilean TV Show Brings Endeavor Stories to Life: Arch Daily, Buscalibre and Prey Among Highlighted Companies
May 20th, 2013
By Mark Suster.
I recently wrote a post about negotiating with suppliers called “The End of the Mexican Road.”
The post talked about how to find the lowest acceptable price & terms in a deal through testing.
In the post I made clear that I believe that all negotiations should seek to find fair deals where both parties can feel good about the outcomes. But that doesn’t mean always just saying “let’s split the terms 50/50 down the middle.” Often that doesn’t make sense.
But what about when you’re negotiating with buyers and not suppliers?
This process is obviously very different as you will likely have much less leverage.
Most people claim to not want to deal with the hassles of negotiating. I think most of us feel this way, really. But it’s not a reality in business. While you may be able to offer a price & terms for your service and not ever negotiate (especially if you’re an Internet company that sells cheaply to small businesses over the web and without onsite support & service) – you’ll still likely have to negotiate on business development deals. So please see this post through that lens – at some point when you deal with larger companies: enterprise buyers, biz dev partners, VCs or one day acquiring companies – you’ll like encounter these negotiation issues.
I could sum up my negotiation mentality as a seller in one phrase that I’ve used as short-hand for my portfolio companies for years, “Everybody wants their pound of flesh.”
It’s short-hand for showing that despite our aversion to the process of negotiations – as buyers we’re conditioned to it and even rewarded for it.
Here’s what a big company negotiation looks like:
Hiring is a process and should be treated as such. It is serious business.
The first step is building a hiring roadmap which should lay out the hiring plan over time by job type. This should be built into your operating plan and budget. You want to be very strategic about how you invest your scarce resources into hiring and think carefully about when you need to add resources.
Once you have done that, you want to have a system for opening up these positions for hire. This should not be done lightly because each position will require a fair bit of work by a bunch of people to hire for. Don’t open up your hiring process lightly.
The first step in opening up a position for hiring is to define the position you are looking for. Most companies call this a job specification (or spec). The spec should outline the role that is being filled and the characteristics of the person who will be successful in the job. Here is a job spec for a brand strategist job in Twitter’s office in NYC. If you click on that link, you will see that it starts with a high level description of the role within the context of the larger Twitter organization. Then it gets into what it will take to be successful in the role. Then it lays out specific responsibilities and finishes with the background and experience that Twitter is looking for in the candidate.
The manager who is directly responsible for the person being hired should draft the job spec and it should be signed off on by the CEO and whomever is in charge of HR (which could be the CEO in a small company). Once this job spec is published on your jobs page, this position is officially open for hire and the process begins.
Your company should have a jobs page. Even if you are a five person startup, you should have one. It should articulate what it is like to work at your company and list any open jobs. It should be linked to at the bottom of your webpage, right next to the link to your about page. This is important. Don’t put it off. Here is Etsy’s “careers page”. It’s a good example of what you want to do on your jobs page.
There are web-based solutions to get your open positions onto your jobs page, track the candidates through the hiring process, and provide workflow for your hiring team. In the industry vernacular, these systems are called Applicant Tracking Systems (ATS). Many of our portfolio companies use Jobvite, but there are plenty of other options out there as well. You do not need to build this stuff yourself.
Once the position is open, you want to crank up the sourcing process. We talked about where to find strong talent two weeks ago. Do not take the “put the job opening up and let the applicants come” approach. That will not get you the best people. You must go out and find the talent you want to hire. You can use your existing team, that is where the best leads always come from. You can use your network. You can use recruiters, both contingency and retained, and you can use services like LinkedIn and Indeed. You want to cast a wide net and work hard to source the best candidates you can. This is a time intensive process. Many companies will hire an in-house recruiter to help with this process, particularly when recruiting engineers, designers, and product talent. I’ve seen companies as small as ten employees bring on in-house recruiters. I am a big fan of making that investment because it pays dividends in terms of better talent.
Once the candidates start coming in, you will need to vet them to determine who gets an interview and who does not. Someone inside the company must lead this process. If there are HR resources, this vetting process starts with them. But the manager who is hiring for this position must be directly engaged in this vetting process. A HR professional can identify the candidates who don’t come close to meeting the requirements of the job and filter them out. But the hiring manager should go through the applications of everyone who is close to being a viable candidate. He or she knows best what the job entails and can make the kind of “gut calls” that often lead to the best candidates.
You will want to interview a decent number of folks for every position. There are no hard rules for this, but the more people you meet, the better job you will do with the hire. Of course you can’t meet everyone. Many companies like a 15 minute phone call (the phone screen) as the first filter into the interview process. A skype video call is also a good way to do this. At USV we have experimented with a video application (using a service called Take The Interview), with good results. The phone or video screen is an efficient way to identify the small group (a half dozen to a dozen) that you will want to do a face to face interview with.
Once you get to face to face interviews, you will want to figure out how to get as many folks in the company to meet the candidates as possible. Our portfolio company Return Path has each candidate meet with four to eight employees during their interview process. That is a lot but Return Path makes a huge investment in team, culture, and their employees and they feel it is worth it. It may be worth it for your company as well.
Many employees don’t know how to interview and you should teach them the basics as well as educate them on what you are looking to learn from their interview. Some training on interviewing as well as a quick feedback form for each employee to fill out will provide consistency and clarity from the employee interview process.
Most CEOs I know interview every hire their company makes until they get to be more than 100 employees (or more). Even if you have a head of HR and a top notch recruiting team, the responsibility for hiring is yours and yours only. A bad hire is your fault. A good hire is your success. So do not abdicate your responsibility to make the final call on each hire until your company is developed enough and strong enough to start making these hires themselves. This is how you build a great team, a great culture, and a great company.
Once the successful candidate is identified, you will want to do some checking on the person. I am a fan of making reference calls on everyone. They are not that hard to do and you will learn more from them than any other source of background checking. LinkedIn is particularly good for this. If you connect to the candidate on LinkedIn, you can quickly figure out who you know that knows them. Call those people and do your homework. It is also pretty wasy to do a simple background check for criminal or civil information. We don’t do that at USV but I know a lot of companies that do it as a matter of good corporate practice.
When you are ready to make the hire, you must prepare an offer letter. The offer letter will outline the compensation you are offering and any other salient terms of the employement offer. Have your lawyer help you draft the first one you send out and use it as a template for all future hires. Offer letter are written agreements between you and the employee and treat them as such. Sign the employment offer and have the employee sign it to acknowledge that they are accepting it.
That’s the hiring process. Done right, it involves a huge investment in each and every position. So many startups cut corners on it because they simply don’t have the time or the resources to do it right. I would encourage everyone to take a step back and think about the costs of not doing it right and commit themselves and their companies to doing it right. You will see the benefits in time. And they are large.
By Mark Suster.
Raising money is hard. And when you’re relatively new to the process it’s easy to be confused by the process. There is all sorts of advice on the Internet about how to raise capital. Of course much of it is conflicting.
I’ve raised money as a “hot company” and I’ve raised capital when no one would return my phone calls. I’ve raised in boom markets and when everybody thought the Internet was a fraud. I’ve raised seed rounds and A-D rounds. I raised money as an entrepreneur, like you, in 1999, 2000, 2001, 2003 and 2005 for two different companies.
And of course I’ve sat on the other side of the table: As a VC. I now observes the fund raising process as a profession. And I also now have to raise money myself, but this time from bigger institutions that our industry calls LPs (limited partners).
I’ve tried to make this advice as well-rounded and biased free as I can. This is not just the perspective of a VC although I can’t say I have zero VC bias. This is the fund raising perspective from both sides of the table.
For those that want the answer without reading a long post – here it is. Fund raising (as is much of life) is a sale – pure and simple. The sooner you understand that the sooner you can plan your campaign.
As with any sales campaign you need to:
• Qualify your buyers early so you focus your scarce resources on people likely to buy your product
• Spend time researching your buyers and not just pitching them
• Call high. Partners make investment decisions.
• Meet in person. They’re not buying a book on Amazon or shoes on Zappos. They’re buying you. And that doesn’t work remotely.
• Build a relationship with your investors over time. “People buy from people they like, trust, respect and … believe.” (Zig Ziglar). Trust doesn’t come from one 45-minute Powerpoint pitch or 30-minute demo.
• Create scarcity. Three rules in sales: Why buy anything? Why buy me? Why buy now? If you haven’t read my post about that, you should. The hardest is the last: Why Buy Now. People avoid difficult decisions until they have to make them.
Every company is different so it’s hard to listen to advice from the uber-successful fund raisers. Their story will likely be very different from yours. Fund raising is bloody hard. It takes a lot of work. Don’t believe otherwise.
If you want to watch the video version summary of my advice on fund raising it’s here. It’s an hour and has tons of insights on the process. Tell a friend!
And now, the details … (more…)
Reprinted from Emerging Markets Blog. Original article here.
By David Gates, a senior strategy consultant with 10 years of experience in defining strategy for leading companies in the telecom, media, payments, and insurance industries.
Emerging-market multinationals have become more prominent in the last few years. Last week I reviewed a book that documented the rise of some of these new firms. Business publications, consulting firms, and others also have published reports on the topic.
A lot of this attention is based on anticipation for the future. Currently, only a small percentage of the world’s leading firms are based in emerging markets.
Consider the share of Fortune magazine’s Top-500 global corporations (by revenue) in the four BRICs (Brazil, Russia, India, China): China has 46 (of the Top 500) firms. India has eight. Brazil has seven. Russia has six. Many of these firms are commodity producers, operating on the traditional comparative advantages of their home countries.
The BRICs (as well as other emerging markets) have a long way to go. Developed countries are home to the vast majority of the world’s largest corporations. Spain (40 million people) has 10 of the Top 500 corporations. Switzerland (8 million people) has 15.
Even more glaring is the near-complete absence of emerging market countries from the world’s top brands. They are home to only three brands in Interbrand’s ranking of the Top 100 Global Brands: Samsung (Korea), Hyundai (Korea), and Corona (Mexico).
I believe emerging-market brands will become more common in future lists. They may follow the example of some foreign-based brands that expanded in the US market in recent years. As recently as the 1990s, US-based companies dominated US clothes and furniture sales. Today, H&M, Zara, and IKEA are well-known brands in the US.
Several factors will drive the rise of global emerging-market brands:
1. The rapid growth of emerging-market consumer classes will translate into more clout for local consumer brands. Twenty-plus years of strong economic growth in Chile is contributing to the emergence of an increasingly active consumer class. This transformation has fueled the rise of several Chilean retailers, which are now expanding in several other South American countries. Chile’s example will be repeated on a vastly larger scale in other countries, such as China, India, Brazil, and Turkey.
2. People are younger in emerging markets. Median ages in the West trend above 35 years, compared to under 30 years (and sometimes 25 years) in emerging markets. The West will be home to an ever smaller share of people in their economic prime (ages 25-49). New brands will rise to serve this demographic shift.
3. Access to capital for emerging-market firms is easier than ever before.Many developing countries have built functioning capital markets in the last 20 years. Governments are enabling lower interest rates by keeping inflation in check. Western investors are increasing their capital allocation to emerging markets.
4. Regional demand patterns exist. The developing world’s regions (East and Southeast Asia, South Asia, Latin America, the Middle East, Sub-Saharan Africa) tend to share some broad commonalities in taste that are not well-addressed by Western multinationals. Korean pop music, Mexican telenovelas, and Nigerian “Nollywood”films have regional appeal. It stands to reason that we will see home-region multinationals emerge in other “taste” industries, including fashion and food products.
5. Competitive pressures and scarcity of capital will cause some Western multinationals to retrench. If forced to choose between bolstering home operations or expanding in emerging markets, many Western multinationals will opt for the former. US and European telcos bought up most of Latin America’s wireless licenses in the 1990s and early 2000s. By 2007, however, Verizon, BellSouth (now part of AT&T), and Telecom Italia had sold most or all of their Latin American wireless operations, which included Top 3 players in most key markets.
These and perhaps other factors will fuel the rise of new emerging-market brands in the coming years. It’s probably sooner than later that you’ll find yourself standing next to your (Chinese) car, filling up the fuel tank at the local (Russian) gas station, while en route to the mall to buy that new jacket from your favorite (Brazilian) apparel store.
Today, I wanted to talk about some of the most important lessons I’ve learned over the years from my experiences as an investor and entrepreneur.
1. If you aren’t getting rejected on a daily basis, your goals aren’t ambitious enough
My most humbling and educational career experience was when I was starting out in the tech world. I applied to literally hundreds of jobs: low-level VC roles, startup jobs, and various positions at big tech companies. I had an unusual background: I was a philosophy undergrad and a self-taught programmer. I got rejected from every single job I applied to.
The reason this experience was so useful was that it helped me to develop a thick skin. I came to realize that employers weren’t really rejecting me as a person or on my potential – they were rejecting a resume. As the process became depersonalized, I became bolder in my tactics. Eventually, I landed a job that led to my first startup getting funded.
One of the great things about looking for a job is that your payoff is almost entirely a max function – the best of all outcomes – not an average. This is also generally true for lots of activities startups do: raising money, creating partnerships, hiring, marketing and so on.
So, every day – to this day – I make it a point of trying something new and ambitious and getting rejected.
Recruiting & Culture
When Fred asked me to write a guest blog post, I told him initially that I was going to write about recruiting and culture. Both are topics that I’ve learned a lot about in nearly twenty years working in companies of all kinds and contexts: public and private, large and small, struggling and ascendant, on the east and west coasts. As I sat down to write, I realized that how you recruit people and your recruiting approach defines and continually reveals the culture of your company, and it quickly became clear to me that recruiting and culture are yin and yang. In recruiting, a successful outcome usually means a candidate saying yes to your company, and at that moment, the candidate becomes part of the company culture. Below are some of the things I’ve learned to do over the years when it comes to recruiting and culture.
Reprinted from Drew’s Marketing Minute. Original article here.
By Brad Shorr, Director of Content & Social Media for Straight North, a Chicago marketing firm
Don’t be daunted by the complexity of SEO – especially now. Google has introduced a ton of changes to their ranking formula recently, most of which penalize complicated, manipulative SEO tactics. As a result, SEO has become simpler. Today the keys are:
• Having a clean site that communicates well with Google
• Creating great content that naturally attracts backlinks
Here are 10 crucial items for a 2012 SEO tune-up. The first five are onsite SEO activities, and the next five are offsite activities.
1. Update keyword research. Popular search terms change. Your business model may have changed as well. If you’re ranking well for keywords that have lost strategic value, all you’re doing is attracting visits from the wrong prospects.
2. Update title tags and content. Once your keywords are updated, put them in meta title tags and on-page content. Don’t just cram the keywords in: if necessary, rewrite pages to make the new keywords completely relevant.
3. Add new pages for additional keyword terms. Google loves fresh content. Add pages or blog posts steadily over time, using less popular (“long tail”) terms with strategic value.
4. Run an SEO diagnostic. Google’s Webmaster Tools is a great, free online resource that itemizes your site’s SEO issues making cleanup easy for you or your developer.
5. Set up a good internal linking system. The pages you link to most often on your site are the ones Google thinks are most important. We often recommend displaying links to your top lead-generating pages in the footer of the site, using keywords in the anchor text of the links.
6. Update good backlinks. Let’s move to offsite SEO issues. If you know of links coming into your site from popular sites/blogs, check the anchor text on those links. Ideally, anchor text should include keywords. If not, ask if they can change it.
7. Remove bad backlinks. If you know of links coming into your site from content farms, ad sites, and other sources with bad online reputations, remove them. These links could lower your rankings.
8. Do guest posts. A great way to create valuable backlinks is to write useful content on high quality blogs. Guest posts normally include a link(s) back to the writer’s site.
9. Update directory listings. Many people list their site in directories when it launches and never look back. Make sure those directory listings are up-to-date in terms of keywords and pages you’re linking to.
10. Update social media profiles. Along the same lines, keep keywords and links current for your profiles on LinkedIn, Facebook, Twitter – and Google+ if you’re there. People tend to forget about their profiles on peripheral social sites such as Twellow andFriendFeed, so keep those on your SEO radar as well.
Celebrate 15 Years of High-Impact Entrepreneurship at the 2012 Endeavor Gala in New York City!
Celebrate Endeavor’s 15th anniversary with 600+ global business leaders, game-changing entrepreneurs, and Endeavor network members – join us for the 2012 Endeavor Gala in New York City on November 8th! Enjoy delicious food and drink, a fabulous musical performance, and great company while supporting High-Impact Entrepreneurship around the world. To purchase individual tickets or a table, contact firstname.lastname@example.org
In the news
- May 10th, 2013
- April 25th, 2013
- April 24th, 2013
- April 23rd, 2013
- View All