Entrepreneurial Leadership and Management . . . and Other Stuff


Hiring: Learning From the Behavior of Crowds

There are no simple ways to determine if you’re hiring the right person for a job and, in my experience, complex approaches to hiring fail almost as frequently as winging it.  OK, that’s a little extreme, but you get my point. Those who have used regimented hiring methodologies created by behavioral scientists and organizational behavior experts know what I’m talkin’ about. Nothing is better than simply laying down a few basic guidelines, understanding what you’re really looking for, knowing what’s important to you and listening to your gut to maximize your chances of hiring a good person.

The problem is, what if your gut isn’t experienced enough to help you with your decision? You can be logical about it, for sure. You can ask all the right questions, you can have everyone on the team interview, you can even have a checklist to make sure that the candidate meets all the criteria you set out. But how do you know he or she is the right person?

As with most things interpersonal, I think it’s a combination of many factors, many of them barely perceptible. Combined, they make up what our gut feel is. The way someone acts, how they greet you, the amount they talk, the number and kind of questions they ask. I’ve been thinking about the behaviors I look for when hiring and have been noticing something interesting when going out to coffee or a meal with a candidate (which I recommend – it can take them out of their comfort zone). It’s about how they move through crowds.

I lump people’s movement through crowds into four categories:

  1. Those that dive into holes in traffic as soon as any opportunity opens up
  2. Those that wait to see what people around them do
  3. Those that need to plot out their next few moves before making the jump
  4. Those who plow into the crowd without thinking or caring about the people they bowl over

Yeah, yeah, yeah, there’s a major amount of generalization going on here and there are usually roles for each type of person in some organization. The question to ask: is what each of these behaviors represents correct for what you’re looking for right now in your organization?

The last group includes people that don’t have the desire or good sense to be part of the crowd or an integral piece of the action. They think about themselves only and likely do the same when they’re at their jobs as well. Sometimes, behavior like this is a positive, but for the most part, these people are just assholes.

The people in the third group put optimization ahead of speed (no, they are not synonymous). Strong process skills are terrific and can add great value to a team. In heavy traffic or with big workloads, however, these people can often get paralyzed though.

The second group is the most problematic for me. These people usually aren’t particularly aggressive or driven – attributes of almost anyone I like to hire. On the other hand, there are clear places for such people.  Think customer-facing roles.

The first group represents the crowd behavior I like to see. Aggressive without being an asshole about it. These are people who can keep the noise going on around them in their peripheral vision in order to get things done. They move quickly, but not recklessly. For these people, moving forward is often the most important thing on their mind.

OK, I’m biased. The real point here is that people’s behavior – in this case, how they work in a crowd – is strongly indicative of how they will work when they’re your employee. Notice the small stuff like this and you’ll get that gut feel you need to hire the right person.

 March 31st, 2010  

Starting Up on a Shoestring

Viewlogic-Initial FundingA few weeks ago, I ran across a box full of photos I had taken a while back. Actually, they were color slides, which should give you some idea of how old they are. Many of them were of people, events and even documents (photos of documents? Don’t even ask, I can’t remember why) from my second startup (actually, my third, but it was the second one I founded). The company was originally named Qualogy Technology, but wiser minds prevailed and it was later changed to Viewlogic Systems.

Viewlogic/Qualogy was started by a gang of five (including me) out of Digital Equipment Corporation. We worked for a full year refining the idea, testing the market and looking for money before we finally got funded. We knocked on many doors, gave fewer presentations, discussed our plan with even fewer semi-interested VCs and seriously talked with only a handful of potential investors. We rewrote the business plan so many times, I think I had every word memorized. We changed our revenue model, sales model, marketing plan and development schedule, but never changed our fundamental idea. We stuck with it because we believed in what we were doing and always thought that we could convince someone with money that we and our ideas were worthy of investment.

After a full year of effort, we finally beat someone into submission found an investor who believed in us and our plan. What did that initial deal entail? A total investment of only $50K (see the checks above – $25K from two VCs). My friend Dave points out that it amounts to a little over $100K in today’s dollars – not much money. In retrospect, the term sheet was crappy – contingencies, ratchets, board control issues and so forth. But none of that really mattered, we were on our way. If we had to make some additional sacrifices to be successful, they were acceptable. It was all about having the opportunity to execute our dream.

In the end, it worked out pretty well for all concerned. While not an insane, Harvard Business Review case study, cover of the Wall Street Journal, blowout success, the company did pretty well. Viewlogic went public and then sold a few years later for a little over half a billion dollars. Before it sold, it employed about 750 people, had direct sales worldwide and roughly $170M in revenue.

These days, I see startups often putting in even a greater levels of effort and dedication than we did in forming Viewlogic. The focus and intensity of these young companies is really outstanding. Frequently, though, I see a do or die mentality when it comes to getting funded at relatively high levels. Entrepreneurs think of big funding events as milestones and measurements of success instead of just being part of the process of initially refining and focusing their ideas and later growing them. Funding shouldn’t be the goal, it should be an accelerant to help a company achieve its real goals.

With that in mind, young companies should always look for alternatives to the classic substantial (relatively speaking) first round. Can they self fund? Can they get to positive cash flow earlier? Can they do some custom projects (adaptations of the company’s product or service) for specific early adopters? Can they simply take less money to bridge them to more success and further funding down the road?

Don’t get me wrong, time is against almost every company. Getting things done faster is important and having money to spend makes that much easier. Starting on a shoestring, with less money, or even no money, doesn’t prevent success, though. And, sometimes, it can even enhance it. It’s worked before.

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 March 8th, 2010  
 General Business, VC  

Yes, the US “Won” the Winter Olympics

Apolo Ohno - Flag

37 medals, count ‘em. More than the US has ever won in the Winter Olympics (the previous US record was 34 in 2002 in Salt Lake); the first time the country has won the medal count since 1932 in Lake Placid; and more medals than any other country in the history of the event (Germany won 36, also in 2002). It’s sports. There are winners and losers. That’s the way it works. The US won. Celebrate it, America, you deserve to.

Americans are a funny bunch. For the most part, we want to obnoxiously demonstrate our leadership and strength, but in the end, we spend more time questioning and even regretting our exercise of the same than we do celebrating our success – any success. It seems that as a nation, we’re stuck between the polar extremes of being the ugly Americans and being the most stoic, self-deprecating, politically correct, wussiest humans to walk the planet.

The litany of commentary – both print and digital – discounting the performance of the US Olympic Team at the 2010  Winter Olympics is shocking and disappointing to me. Why is the US so afraid of admitting to itself that it won these Games? It’s not like we would be declaring world domination in sports or anything like that. The timers reported and the judges declared that the American athletes were better in more of the individual events than any other country during the 2010 Winter Olympics. Isn’t that simply the fact?

Speaking of facts . . . for those in the US who feel the need to downplay the US victory, here’s an arrow for your quiver.  According to nationmaster.com, little Norway has kicked our ass in the Winter Olympics, as well as everyone else’s, during the history of the Winter event. The US isn’t close to being the all-time leader in the Games. Now do you feel like you can celebrate a little more? We’re not dominant. In fact, for most of the years that the Winter Olympics have run, the US medal count was only in the single digits.

All-Time Winter Olympic Medals by Country - Source-Nationmaster.com

I think the problem here is that we believe that the correct behavior for the world leader is one of introspection and humility. We’re afraid that if we show hubris, other countries will look down on us as not acting appropriately or as a leader should. While I question whether or not anyone should look at things that way and, for the most part, don’t really support it, I certainly understand the position and concern. I believe, however, that this neglects an internal need for certain behaviors. A need that is stronger now than it has been in over a century in this country.

Americans need to celebrate who we are and what we do. Most Americans barely know how the country leads in many scientific endeavors, in entrepreneurialism, in giving aide to foreign countries. These, of course, are the important things to celebrate, but they’re not visible. For some reason, the governing bodies of the US choose not to make a big deal of them – to make Americans feel proud of what they do. Any CEO worth his or her salt knows the value of helping their employees feel great about what they do. The tangible and intangible benefits are profound. The same thing needs to be done for the citizens of a country.

While sports are clearly less noble than other endeavors, they are visible to all and almost always black and white in terms of success and failure. They are a great tool for creating and celebrating success, especially when the stage is a worldwide one. We should use this year’s victory in the Olympics as a platform to declare success for Americans – admittedly, a minor one – to help us feel good about a real achievement. This is about celebrating within the country, not about bragging outside of it.

Before you blow me off here, let me give you two thoughts. We seemed to have no trouble accepting that the success in this year’s Super Bowl of the New Orleans Saints would be a good thing for the city of New Orleans, right? That one’s easy. No one is afraid of pissing off Indianapolis (the Indianapolis Colts lost in teh Super Bowl) residents by celebrating the success of another city in sports. Is there a reason that winning the Olympics is any different? And to those who are fixated on the idea that countries shouldn’t celebrate the success of sports teams, I ask you to look at the World Cup (soccer). If you want to see patriotic declarations of success that dwarf anything America could possible demonstrate, check out how European and South American countries celebrate when they beat other countries in World Cup games. Whew!

Sorry, I know this is a rant and a long one at that, but while I’m on a roll here, I’d like to rebut various arguments discounting America’s victory at the 2010 Olympic Games.

  • While the US won the most medals, it did not win the most gold medals and gold medals are what really count. First, let me congratulate the Canadians who, with 14 gold medals, dominated the top tier of the podium more often than any other country. Second, the number of golds is not a good indicator of the best team at the Olympics, it is most often a better indicator of the team with the greatest genetic anomalies, seriously. If you look at medal counts over the vast majority of previous Olympics, it’s easy to see that a single athlete is the cause of a high number of gold medal wins. Think Michael Phelps or Usain Bolt in the last summer Olympics. It’s simply not a good indicator of team performance.
  • The US only wins because of events created since 1990. Yes, it’s true that Americans have tended to be better at the higher risk sports added to the Games since the early 90’s. At least up until this winter’s Games. In this year’s games, Australians, Chinese, German, Norwegian, Belarus and certainly Canadian athletes often outperformed the Americans. In fact, the reason the Americans won the Olympics is more because of their performance in classic alpine events and even in some nordic events that have been in the games from the beginning.
  • The US does better in judged events (figure skating, half-pipe, freestyle skiing, etc.) than it does in strictly timed events (slolom, super-G, speed skating, etc.). Statistically this has been true, historically. Most US medals in the past have been in skating and most of those in figure skating. But what does this statement imply – that judged events are somehow invalid and shouldn’t be part of the Olympics? Should style and athleticism not be part of the Olympics? Whatever your take on that question, it is part of the Games. The fact that the US wins its fair share of those events shouldn’t discount the country’s overall achievement.
  • The US Olympic team is larger than most other teams and has an unfair advantage. If a country sends a huge number of non-competitive athletes, does it affect the number of medals it gets? There is almost no effect. One country having more athletes does not keep another country from having more. A country enters its best athletes in an event. If the country doesn’t have a competitive entry, fewer athletes are entered. Simple as that. There is no penalty for having either more qualified athletes or more unqualified ones, it just makes sense to only bring qualified ones and the US has more than many countries. The only potential advantage for a country with more athletes is that when an injury occurs, they are more likely to still be in a position to take a medal in an event. That only happens, of course, of when the replacement athlete is qualified enough to win.

I could go on and on. They’re simply reasons to take a victory and discount it to make it modestly meaningless. We don’t have to be assholes to celebrate and there is huge upside to celebrating successes, even ones this trivial.

Just one final thought. For those of you still desperate to somehow discredit the US victory at the Olympics here’s a reasonable, IMO, way of doing it. One can argue that the only appropriate measure of success at the Games is the number of medals won per capita – that is, the number of medals won in relation to the number of citizens of the country winning them. Let’s face it, at the level of athleticism required to be the world’s best in any sport, the size of the genetic pool is really a factor. With that in mind and, again according to nationmaster.com, Liechtenstein is far more successful at the Winter Olympics over time than any other nation on the planet. The US falls to 17th place. There you go. We suck after all.

 Per Capita Winter Olympic Medals - Source-Nationmaster.com

 March 1st, 2010  
 Leadership, Misc Thoughts