How to foolproof your digital startup hiring strategy?

I am convinced that nothing we do is more important than hiring and developing people. At the end of the day you bet on people, not on strategies.

~ Lawrence Bossidy (Former COO of GE and author)

I wish I could’ve mailed the above quote in 70 font size, Arial Bold Face to all the Digital Marketing companies ( especially Agencies & Publishers ). Needless to say that building your startup hiring strategy is a never ending Everest climb for all organisations ( digital or non digital ).

Though bigger digital brands find it slightly easy to attract the right talent, retaining the talent becomes a bigger pain for them as well.

Ask any HR specialist or recruiter, they would say the trend is nothing different from other industries. People are looking to match the pace of their career growth with the rising costs. An average salary increase of 12% is completely disconnected with rising inflationary conditions. This will build a spiral effect, people who are not satisfied with their financial conditions will always be the first ones to look out for better jobs & opportunities.

In an interview (watch the video) given by Mark Zuckerberg, he made a profound statement, I quote:

The best people I’ve hired in my life were those who didn’t have much of engineering experience ~ Mark Zuckerberg

Startup Hiring Strategy isn’t just about hiring the best people with skills or for that matter who are stable in their careers, it is also about getting those who have a strong & relevant point of view about what you believe in, even if they do not have the experience or qualification from reputed engineering colleges.

I also believe, that in every industry, people have their own set of challenges due to which they show unstable tendency at work places. Of course, there will always be few individuals who do not fall in line despite a lot of effort by the management, but in general, people hate updating their resumes every year.

Also Read : Why Job Hopping is no longer a stigma globally?

As a business owner ( especially a start up owner ), attrition is something I should always keep at the back of my mind as one of the challenges which could hamper my growth story. Often start ups do not factor attrition while giving projections to their investors, which I believe is a massive error. The sooner they’ll accept the lack of permanence in the employee-employer relationship, the better it will be for their future enterprise. Once the degree of attrition is understood & acknowledged in any industry, you can then plan your resources a lot better.

The question is, as a business owner, how can you deal with this kind of situation?

Team Composition

First, make hiring a continuous process and not just restricted till the desired roles are filled. Managers should always be on a lookout for quality resources with value added skills for the team. For instance, do not hire resources of same nature & type, hire people with differentiated skill sets which will add value in long term. People love to be in a team where they can learn from each other. Collaborative learning is possible when you have people with different skill-sets.

Long term hiring

Second, do not hire people for solving your short term problems. For instance, if your key Account Manager decides to leave, it is bound to hit your operations & would also create uncertainty at client’s end, but your new hiring should not be to fill the immediate gap, instead it should attract people who are looking for a challenge in their careers to put their skill to test. Employees who join start ups from big companies usually carry a lot of baggage of their esteemed employer. At times it can be fatal for team dynamics.

Performance linked remuneration

Third, hiring people on performance linked remuneration, incentives & contracts could be another option. If you build your digital company’s team dynamics this way, employees would be exactly aware of what they are chasing, what team is chasing & how they can work towards it in a logical yet innovative way, Managers KRA would be to maximise potential of each individual who is working as a part of this contract.The best part, build substantial amount of incentives ( both monetary & non monetary ) which would drive morale among the senior & junior level employees.

The last point needs an Industry buy-in, but we are witnessing this trend already in few small to mid size digital-IT & digital-Infra companies where other than the sales force, revenue support functions like account management/ client servicing & customer support have been connected to measurable performance linked metrics.

The contracts are time bound but readily renewable subject to agreement by both parties (employee & employer). It offers a very flexible working relationship to individuals where everything remains constant except that employees are free to move out after the contract period is over.

One of the main challenges any digital startup company will face is poaching from upcoming start ups. Actually the poor demand-supply ratio of quality resources has made it absolutely imperative for any company  to desperately hold on to their trained resources.

Today recruiters are under severe pressures to find quality talent for their clients. No start up has any time to waste on training semi skilled employees. They have a running train of profitability & projections to catch up without which they would not get their next round of funding from the investor.

So think of it, time bound, performance linked contracts isn’t a bad option in digital business, it may also prove to be a win-win for the individual & start up clients & agencies in the long term.

How to hire talent for your digital startup?

So which version of Android do you own?, a question once put up by a hiring manager in the interview to a young aspiring digital fresher.”I use latest Jelly bean 4.2.3″, prompt came the reply by the youngster.

To my surprise, the kid was later hired for his good IQ, but that organisation did not fire the manager for his oblivion & utter ignorance since 4.2.3 was not even released by google. 🙂

But that’s not the point.

The point is, should we judge any fresh digital marketing talent simply by their knowledge (let me rephrase), by their “borrowed knowledge?”

The answer is a BIG NO!

I agree the quest for hiring digital marketing talent is fairly difficult (for any company) but it need not go through the knowledge lane.

At times,as hiring managers, we must try to find out the intent of individuals, as to what has prompted them to pursue digital marketing as a career option. If digital is a way of life for any individual, then regardless of the smart device they own, they would (and should) have a very strong opinion about its different facets from macro viewpoint.

Finding someone’s perspective (unique or borrowed) can actually become a strong way to differentiate the fresh digital talent available in the market. It will help you to identify who amongst all the candidates, can add some value to the table by their logical &/or lateral thinking.

Another problem which most of the hiring managers would face during this quest is something which is similar to arrange marriages in India. Whenever you meet any new candidate for the interview, often they sound fake in order to get the job.

Now you may argue that faking is not something we can control. Humans are bound to fake, and that’s what my point is. Why to assess them on their borrowed knowledge when you know that they can fake it?

But hang on, you cannot fake a perspective, can you? I agree that you would need to have some knowledge of the subject in question before having an opinion but what you need to judge is whether the candidate offering borrowed perspective (mostly from Google) during the interview?

The hiring needs for digital operations is bound to shoot up exponentially in times to come. A recent review done by 32 marketers on the future of Internet Marketing suggests that the pace of growth in digital jobs in years to follow will outpace any other vertical or horizontal globally.

Now these are just statistical conversations which should  be used in right perspective. What is critical for any HR team/ recruitment firm/ hiring manager is forecasting the kind of resources they would need in next 2-3 years.

Ideally, they should carve their quest well in advance & should also decide if they would like to take a detour from knowledge lane.

On that note, I would like to leave you with this wonderful video chat with Itzhak Perlman (leading violinist), who talks about how to identify creative & imaginative talent?

 

RIP Reports – Worldwide Failed startup trends

Let me start this post by making a simple statement. By the time I would finish writing this post, according to latest startup trends, around 11,000 new startup business would get added to this world. Must be wondering how I found that number?

According to a massive research startup study done by Global Entrepreneurship Monitor– around 472 million entrepreneurs worldwide attempting to start 305 million companies, approximately 100 million new businesses (or one third) will open each year around the world.

reynoldsInterestingly, Dr. Paul D. Reynolds, Director, Research Institute, Global Entrepreneurship Center also says,

” The developing countries of Asia and Latin America are far ahead of Europe in starting new businesses, according to a recent survey of global entrepreneurial activity. But few start-ups have the potential to make an impact on jobs and growth, and a negligible number benefit from venture capital, with the vast majority reliant on informal funding. The 2002 annual survey by the Global Entrepreneurship Monitor (GEM) was carried out across 37 countries representing 92% of world GDP. It finds that 286 million people, 12% of the workforce in these countries, are engaged in starting or running a new business, implying a global figure of about 460 million. “We were quite shocked by how high the index is in the developing countries,” admits Paul Reynolds, the GEM project co-ordinator. “Only now do we have a fuller understanding that half of the people in many developing countries are doing it out of necessity because they cannot find work, and that is what drives the rate up so high.” 

Every now and then we keep seeing these lists on buzzfeed or twitter around “17 coolest startups that can change your life” (like this one) and I’m sure a lot of you feel wow about the whole concept of startups. But let me spoil your party, most of these startup companies typically die around ~20 months after their last financing round and after having raised $1.3 million.

Failed startup Companies By Sectorfinal

  • 55% of failed startups raised $1M or less, and almost 70% companies died having raised less than $5M overall.  Not a big surprise. Companies at the earliest stages are the most vulnerable due to limited financial runway, immature products and businesses and general uncertainty about whether the market needs what they’ve built.
  • In each year since 2010, 70% of all dead tech companies have been in the internet sector. This is hardly a surprise as within tech, a majority of funding and deals has gone to the internet sector and so it would follow that the sector would have the largest proportion of dead companies.  The % of companies dying within the internet sector has stayed relatively range bound over the last several years as well.

On his many failed experiments, Thomas Edison once said,

I have learned fifty thousand ways it cannot be done and therefore I am fifty thousand times nearer the final successful experiment.

Well, it seems a lot of our modern day entrepreneurs have taken that quote to their hearts.

The rate at which startups are failing is quite incredible. Media, quite literally has made the whole idea of startup funeral extremely cool. It is hilarious (even bizarre) that the failed entrepreneur wants to grab the same attention like a war hero. The irony however, is that the media (especially the social media) is happily obliging to do it. Public post mortem of a failed Startup seems to have become a general startup trends in the business circles. A lot of professionals find it intellectually stimulating to visit the #RIP sessions of the startups. 

Dead_startup_Funding_Raised

 

Dead_startups_Time_Since_Funding

According to CB Insights report:

  • While the dead companies on our list raised $11.3M on average, the median funding raised which is a better measure in this case was $1.3M.
  • the average company dies ~20 months from its last funding round in the absence of additional funding or acquirers.

But the question which is bugging me continuously is,

Why do so many startups fail? 

Typically, there could be hundreds of possible reasons for a failed startup like:

  • lack of strong value proposition
  • high risk low return business model
  • longer sales cycles
  • non scalable, non profitable business

and many, many more. You could actually read about reasons of startup failure all around the web.

startups_failed_industry_Rankings

 

According to CB Insights startup trends,

“Death is not specific to a particular type of sector or industry. In fact, the companies on our dataset represent a fairly diverse set of subindustries.”

Interestingly, in the following Ted Talk, Clara Brenner, Co-Founder of Tumml talked about why a lot of social startups face such high failure rates.

She has mentioned about the importance of seed funding & how it needs to be utilized in a startup.

Also, the relevance of Impact Investors to Urban Innovation startups can be co-related with the importance of finding the right investor that matches your company’s vision. 

Finding a right investor for a startup is nothing short of doing matrimony match making. A lot of the startups fail even after getting several rounds of seed funding because the investor does not show enough trust or faith in the founding team’s vision.  

How to attract investors for digital startup?

If ever anyone ask me to describe our current era in one word, my reply would be “ENTREPRENEURSHIP” & “STARTUPS“. I am quite certain that most of you would say “I agree”.

A word, which has truly changed the complexion of our modern day global marketplace.

The world (as we speak) is no longer a bi-colored canvas of small & large enterprise companies. Every passing moment, the next billion dollar idea is taking shape in some small county of California or in the hinterlands of India, which could possibly cause serious disruption in the way people were living their lives.

While, most of us think (and some believe strongly) that our idea has the potential to become the next Facebook, Google, Alibaba or Amazon but very few people actually spend time in crystal gazing into the idea’s future.

It is a lot like visualising bond movie’s starting action sequence or planning your moves in the Chinese Checkers game. You go 3 steps forward in your head and get airlifted to see how the idea looks from the top.

Remember, the person who is investing his money in your business idea wants you forecast not just the profitability but also get him a sneak peek into the near & distant future.

That’s why I said it is a lot like crystal gazing.

The exercise I personally recommend to every budding entrepreneur, is a lot like formula 1 race track simulation where the driver races the entire track in his mind just to get accustomed to the track.

As a startup business owner, you need to see every twist & turn in your business idea even before you are actually in the race to acquire funding?

How you would operationalise the idea?

What would be the day 0 of your new business?

From where would get that first deal?

How would you reward your employees?

How would you make your customer your best friend?

Some investor are not just interested in knowing how much return the business will offer, they are also interested in knowing how will you do it?

The return on investment is non consequential if the path to success is not carved out properly.

Since your idea is your dream, your need to bring your investor into your dream. One has to learn the art of crystal gazing into the business future to attract investors for startup idea.

Remember, being a visionary is of no use if you cannot show the path to others. ~ Anonymous

Startup should madly chase Customer Retention

Startups are often associated with mad race for generating more and more leads, prospects, opportunities, fight for higher conversions & maximising quarterly revenue figures.

No surprises there.

And if you ask any startup CMO, he would tell you exactly the same thing, that customer retention is least of their worries, especially during early stages of their business.

As digital marketing professionals, we all are trained to look ahead and think about “what’s next“, once the sale is completed.

Of course, this race for customer acquisition is never ending. And it should not stop either.

But what we also need to look at is, how we monitor the growth of our existing and new customers?

In my digital career , I’ve been fortunate to work in the SMB marketing team of Microsoft. For the first time, I understood the meaning of digital B2B Marketing. And this is something extremely important for a startup founder.

The thing is , nothing is constant in the technology space, and almost every SAAS product has a very short lifespan to make an impact.

Sooner than later, a better technology or platform will out-manoeuvre the older tech and market trends will respond to it almost instantly due to ever so fast & evolving Digital-Socio-Mobile ecosystem.

The importance of keeping a firm control over your existing customers is indeed a daunting task. Today, on one side, companies like Adobe & Google are adding thousands of customers everyday, but they are making even bigger investments in retaining older customers because their bulk of revenues are coming from the existing customers through the up-sell / cross sell and license renewals.

In a world where every upcoming technology is converging to the cloud, changing platforms and tools would be as easy as changing your mobile carrier because everything (including your company’s data) is on the move.

Interestingly, the talk about data portability is already heating up in the tech sector.

A customer is all the time looking for the best value proposition for his business to optimise his own margins. He would not take a split of a second to change his IT priorities.

Therefore, in order to build a customer retention strategy, tech companies would require to put tremendous effort & investments into customer research, training these customers and helping them create a path to their success by utilising those tools more effectively.

The Zillion dollar question still remains, how to retain your customers?

5 Customer Retention Strategies any startup

Product development life cycle plan

It allows you to outsmart your competitors every time. I know it is easier said than done but only if your product life cycle is truly evolving & dynamic to market changes, you can expect your customer to stay with you for longer duration.

Forecasting

But not just revenue but customers expectations from the product. Repackaging the product into a more current looking avatar. Everybody likes to change, a customer always have this expectation that if their business have grown, the tools they are using should also grow with them. Perhaps this is one of the key reason, open source technologies have better adoption than proprietary softwares. Though, a lot of their updates are full of bugs but it keeps the connection going.

Customer Training Program

Draft a calendar of training programs for your customer and feed him with all the necessary tools to master your product & technology. This could perhaps be the most effective marketing tactic, which if landed properly can fetch millions of extra dollars, not just by up selling your product but by creating a fantastic word of mouth.

Customer is your product manager

Making your customer feel like a product head who is not just using the software but also adding value in its future developments. As a business owner you would realise, that your research cost is approaching towards zero.

KYC – Know Your Customer

Follow your customer’s digital footprint by helping him gain more insights into his business by pointing towards the right resources.

As a startup CMO, you should only think from a customer’s point of view, no customer wants to keep changing the things upside down, if for once he finds faith & value in what your product has to offer, he will become a part of your family.