When Hiring Entrepreneurs, Ignore Their Resumes

Note: This is the third installment in the Startup Team Building series. Read Part I HERE and Part II HERE.

No ResumeWhen hiring ATM Operators at a Big Dumb Company (BDC), assessing each candidate’s ability to execute predictable tasks is of paramount importance. As such, the recruitment process revolves around applicants’ resumes, which highlight what they have previously done in their professional careers.

What is important at a BDC, because most duties performed at mature entities are repetitive, structured and involve minimal ambiguity. Thus, evaluating the tasks a candidate has previously performed is a valid methodology when filling job openings in relatively static organizations.

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Who Not What

When you are interviewing candidates during the early stages of your startup, who is far more important than what, because the tasks the candidate previously performed may be only partially applicable to the role they will play in your adVenture. In addition, the ever-evolving responsibilities associated with their new position will likely be ill-defined, multi-disciplinary and relatively ambiguous.

As noted in Inventors vs. Innovators, early-stage hires do not have to be wide-eyed inventors. In fact, a company filled with inventors would be a dysfunctional mess. However, such early hires should be Bank Robbers with the innate qualities that will allow them to resolve challenges with minimal resources. Reasonable people will attempt to make the best of the status quo – unreasonable entrepreneurs with the proper dose of Confidence, Courage and Conviction will shape the status quo to facilitate your adVenture’s ultimate success.

What a Long, Strange Trip It Will Be

As made clear in Optimistically Pessimistic, most entrepreneurs’ experiences are not linear. Many emerging entrepreneurs have fractured, seemingly random careers. Look past the strange pit stops and extended detours and seek to understand who the candidate is and how you can leverage their disparate experiences to achieve your startup’s goals.

You may inadvertently dismiss a talented contributor if you solely rely on what a candidate has previously done. At Expertcity (creator of GoToMyPC and GoToMeeting, acquired by Citrix), I hired salespeople with disparate backgrounds, including: a bar-band drummer, a customer service agent, a venture capitalist, a financial analyst, a county employee and a technician from a Kinko’s-like store. Per their respective resumes, none of these individuals had relevant experiences which suggested they would excel at selling sophisticated software to technically proficient professionals. Yet, all of them, save the drummer, were successful salespeople during my multi-year tenure as the company’s sales leader.

In order to find out who the candidate is, not just what they have done, consider the following issues:

  • How did they accomplish the tasks outlined on their resume? Did they build a team, did they go solo, did they dive into the task with relish or did they take on the mantel of a martyr?
  • Why did they make their professional life choices? Are they willing to admit when they've made a mistake? Is their explanation reasonable and thoughtful, given their stage in life and the other choices that were available to them at the time? Do they internalize their failures or do they attribute their setbacks to others?
  • What did they learn from their life choices? If the applicant cannot articulate meaningful lessons learned, they may not have the self-awareness necessary to Maximize Their Value at your startup.

Three’s Not Charming

I never hired anyone who was involved in three failed ventures. Great people can turn chicken poop into chicken salad. Adequate people can turn lemons into lemonade. Losers can turn fresh angel food cake into rancid devil’s food cake.

One or two failures spread over the course of an extensive career are not relevant. In fact, failures teach self-aware entrepreneurs many lessons that are impossible to gain from successful outcomes. However, people with three or more failures in their history either: (i) have poor judgment evaluating startup teams and opportunities, or (ii) are incapable of salvaging difficult situations. In either case, shun such unfortunate wantrepreneurs.

An exception to the Three’s Not Charming rule is successful serial entrepreneur who has been involved in a series of successful ventures, which far outweigh occasional failures. Gather as many of these successful serial entrepreneurs onto your team as possible, as executives, addVisors and Board Members.

Hiring Is Like Comedy

In comedy, one of the most important elements is timing. The same is true when hiring. A person who would be a great fit for a company in its early stages may not be an effective employee during a company’s expansion stage.

As shown in the chart below, there are various periods in a venture’s life in which certain types of employees are best suited. This may seem obvious at first glance, but properly leveraging this insight in the real world can be extremely challenging.

Several factors contribute to the difficulty of hiring the right person at the right time. For one thing, it is tricky to properly map candidates to the categories noted below. Candidates are complex and two rational, intelligent interviewers could reasonably differ regarding the proper categorization of a particular applicant.

Startup Phase Appropriate Hires

Another factor complicating the startup hiring process is that most adVentures mature in a lurching, organic fashion. As such, it is often difficult to recognize when your company evolves from one stage to the next. The transitions between the various maturation stages are especially challenging, as the definition of the right person changes as the company evolves from one stage to the next.

For instance, in a company’s early stages and during a turnaround, Bank Robbers are an ideal hire. However, as a company moves into the expansion stage, toward its ultimate exit, hiring ATM Operators is appropriate (as shown below). If you hire Beach Volleyball players when you should be recruiting their indoor counterparts, your company’s morale, productivity and culture will suffer dramatically.

Start Up Bank Robbers & ATM
Job One

At a BDC, the hiring process is straightforward.  A conscribed position exists, candidates who have previously performed the appropriate tasks are interviewed and one of them is hired to fill the open position.  At a startup, recruiting is a much more nuanced process. Rather than searching for applicants based on their resume credentials, the primary objective is to recruit candidates who are wily, tireless, and highly talented, irrespective of the specific tasks they have previously performed.

Each early employee, irrespective of their role, will have a material impact on your culture and your company’s ultimate success. Demonstrate to your team the importance of thorough recruiting by ensuring that at least one member of your Core Team meets with all prospective new hires until it becomes impractical to do so (i.e., once your startup exceeds 100-employees).

Just like the entrepreneurs you seek to hire during the early stages of your adVenture, be unreasonable when you recruit. Do not be satisfied with applicants who have outstanding track records but who are only looking for a job. Adapt the world to your reality by drawing together a team of talented winners, including those with seemingly tangential resumes and unconventional track records.

When interviewing such entrepreneurs, set their resumes aside and determine who they are, rather than what they have done.  Happy hiring.

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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