. Investors that doubt you as a founder/ceo, and your capabilities to execute. Investors that are just meeting with you because they want to invest in your competitor.
Investors that don’t have the money to invest but want to be seen to be active by the ecosystem. Investors that will want every inch of detail about what you will be doing for the next 5 years, when you both know your projections will be speculative at best and hogwash at worst.
Investors that don’t get what you do at all, but will have an opinion about your product because their child or spouse has a view on what you do. Investors that are amazing and give you insanely relevant advice, but unfortunately say you aren’t far along enough traction-wise for their fund’s investment focus.
Investors that provide you with great feedback and would help you greatly if they were involved, but will only invest if someone else leads the round. And then there is the one investor who ultimately believes in you and backs you. That’s all it takes. The earlier the stage your company is in, the more that successful fundraising is about personal human connections and story telling. At the early stages of your business, as much as some investors will want to know your projected numbers (revenues, traction, etc), because there is so little to go on, it will always come back to your inherent abilities and. As such, fundraising meetings are mostly the way that founders can assess investors for value-add to their startup, but also for investors to see if they can work with the founders and to see how they think. Because of this mutual assessment by both founders and investors during fundraising meetings, an analogy that people use frequently to describe the fundraising process is that of dating. As funny as it may seem, I do think the comparison works well Dating and fundraising For example, in dating (as with fundraising):.
You have to be willing to put yourself out there to meet anyone in the first place. It’s a numbers game: you have to meet many people, this can be at in-person at networking events, parties, or online.
Connections usually happen in the least likely of places and are strongest when they come through a trusted 3 rd party. Being a good story teller gets people to laugh, open up, and remember you. Chemistry matters. Sometimes its just plain luck: being at the right place at the right time.
The better you prepare yourself, the better your odds get. Being too eager to get back to someone or waiting too long can end things prematurely. You have to go on several dates with several people before you ultimately feel someone is the right one for you. Therefore, the fundraising mindset is really about four core things:. Understanding that fundraising is a process and that it will take time. Only a very few are lucky to have it be quick and painless.
You have to embrace rejection as part of the process and not take it as a personal rejection. Treat every meeting as a form of practice that is merely making you better for the next meeting, rather than putting the full importance of any one meeting on your shoulders and beating yourself up if it goes badly. Analysing what was said during your meetings and learning how to improve on your mistakes is the most crucial aspect of reducing the time it takes until you find the right investor.
As you will likely never know where, when and how you will meet your future investor as you go through this process, just remind yourself: Good news, Bad news – you never know. Identifying milestones for your company’s development is beneficial for an early stage startup for many reasons: the first is that planning milestones allow you to focus what you will be working on, secondly the process of identifying and planning them make you question when and in what order you and your team should try and execute something, and lastly, from a fundraising perspective (something I cover in more detail in my ) milestones are useful to tie together what you need to accomplish with, and fundraise accordingly. On this post, however, I’d like to address a very important concept that should be considered during this process of outlining and planning milestones. I call it, “keeping milestone optionality”.
The principle is very simple even though you plan your company’s future growth and associated cash needs, you can’t lose sight of the fact that you’re a nimble startup. Not a large corporate that has to report to analysts and public market shareholders. Your nimbleness is your strength. A startup’s growth plan isn’t linear, it’s more like a series of zig zags. As such, whilst it is useful to forecast your milestones so that you have a plan, and understand your cash needs, it is also useful to look at that plan with one eye, while the other eye looks out for actions which might be more beneficial to your company than what you had originally envisaged or agreed with existing shareholders. On my post on I spoke about how a future tranche (a glorified milestone, if you will) could have a negative impact by dictating what a company should do, even if midway through its execution it turns out that it was a bad idea for the company to have that goal.
For example, imagine if your plan had in place a monetization strategy (and associated revenue stream) kicking off in month 6 of your operations. Month 6 comes along and well, uptake is poor and your revenues are not coming in as expected. You have some chats with your customers and you find out that actually, the value they are getting from your product is mostly around the emerging network effect of your product, and because the network is still small, your early monetization is stifling the value they are getting because the barrier for new users to sign up is still high, and thus those that would be likely to pay are reluctant to pay. Well, if you (or your investors) held you strictly to your original plan for the sake of ‘keeping to the plan’, you’d kill your company quite quickly, but by staying nimble and adapting your milestones to what you think should be the new direction, you might actually be better off than you would have been before.
Naturally, this optionality comes at a cost, as your original plan will have changed and thus your cash burn will change and your goals (KPIs) will change as well and that’s ok as long as you are aware how. Good early stage investors (particularly those that invest in pre product-market fit companies) know that this kind of change mid-way through their funding is a possibility and they should be backing you in your ability to make these difficult calls even if it means a deviation from the plan they invested in.
However, you should be mindful that there are many investors out there, that for some reason, still believe highly in the adherence to a stated plan. If you can, avoid taking money from them. At the very early stages in a company’s development, particularly during the pre product-market fit phase, investors should invest in you for your ability to adapt to changing and evolving circumstances, and not in your ability to predict the future 18 months in advance and stick to the plan when it clearly isn’t working. Of course, this isn’t a recommendation to throw out all forms of planning, it still helps to create a milestone plan based around your hypothesis of growth (and relevant KPIs), cash needs, for you can’t be changing strategies every month and you need to keep an eye on cash burn. At the same time, however, you should constantly monitor whether there is another milestone optionality play coming up.
If you do find, however, that you are constantly questioning your original hypothesis for growth, perhaps there is a bigger problem you are facing, but by keeping an eye open for milestone optionality events, you might fare better than if you exert uber discipline to a rigid plan that was built before you learned many new things. In conclusion, as a founder, plan for the future, identify key milestones to grow towards, but always keep milestone optionality, particularly in pre product-market fit companies. “If you have visions, you should go see a doctor” – Helmut Schmidt, one of the most admired German chancellors Because I know how confusing and frustrating the fund-raising process can be for a founder, one of the topics I like exploring is ‘how to get into the mind of an investor’ when an investor is evaluating you for an investment. And whilst the easier topics to tackle tend to be quantitative in nature, the harder ones tend to be the ‘fuzzier’ qualitative ones In that spirit, I think we’ve all heard in a ’‘ and how they want to invest in founders with a ‘strong vision’. But what does that mean exactly? With visions, mission statements, and all that kind of fuzzy talk being part of many self-help books that are often dismissed as snake-oil, do they really have any place in the fast-moving, cold & hard world of startups? In the context of the early stage high growth startup world, what does having “vision” really mean?
Let’s start by defining what a founder’s vision. is not.(feel free to replace a ‘founder’s vision’ with a ‘leaders’ vision’) Vision does not equal power A founder’s vision is not about how much money you want to make once you exit, nor is it about obtaining power or prestige. It isn’t about knowing exactly what the future will bring, nor is it about doing something no one else has ever done before. Rather, a founder’s vision is about how you communicate and put into action your values, beliefs, and ideals in producing & creating something of value for yourself, your founding team, your employees, your investors, and your customers. A founder’s vision is the foundation of a company’s culture and brand. In the words of James Kouzes and Barry Posner, authors of — “ There’s nothing more demoralizing than a leader who can’t clearly articulate why we’re doing what we’re doing.” A founder’s vision, therefore, creates a company’s culture.
This culture may not always be visible to outsiders of the company (nor is it generally communicated to potential investors specifically as such), but it is visible through the company’s culture, the brand and brand values of your company are ultimately determined. It is the brand of your company which is the outward-facing aspect to your company that customers and potential investors engage with. It is this brand that allows you to attract potential employees, customers, investors and partners. Thus, I believe that vision determines culture and culture determines brand. Think of many brands you love and respect and you will likely be able to trace their authenticity to one or several individuals (even if they are no longer there) who created the vision of the company and set the culture for all the employees to guide them through the creation of the products and services you love. Think of the ones that you liked at one point but no longer do, and you’ll likely be able to trace why to a point in time where there was a break-away or ‘sell-out’ from the original vision that started it. How is a founder’s vision applied?
In some startups, a founder identifies a need they personally have (they are the customer), and thus, builds a company around a product or service to satisfy that need. Alternatively, there are other founders that find ideas within markets that didn’t previously exist (they intuit a need for a customer) in some cases this happens by design and research and in some cases by accident, as was the case Whichever way it may come, founders that have a strong vision that is synthesised, communicated and articulated to their team (and their customers) allows them to capture these opportunities and evolve them to become successful businesses. Effectively, a founder’s vision which is synthesized into a company’s culture and brand, facilitates the decision making process you and your team use to create your company’s products and services. It is through the clarity of a founder’s vision that focus is brought to the planning and decision making process within a company, and as a consequence the company can function efficiently and increase its probability of success. Authentically connecting with your clients In a world were new products are constantly popping up and many being copied by unfair competitors, it is the strong adherence to your vision and the culture & brand it creates, that ultimately engages your customers to become loyal supporters and fervent defenders of your company. Unfortunately, if you betray your customer’s trust by deviating from your brand’s values, they will likely throw you and your products, so to speak.
In, Simon Sinek, shares his golden circle of ‘why, how, and what’ and whilst I won’t go into summarising his talk here, the key point is that it all begins with the ‘why’ a leader must articulate to be effective the “why” determines culture and the “why” determines ultimate “how” you do things and “what” you ultimately make. Fundraising for an early stage technology startup is always a challenge. You have to navigate many meetings with potential investors and hopefully reach agreements that make everyone happy so you can continue to work in good faith after the negotiations are over. However, in some cases, after the dust has settled in a negotiation, it isn’t always a win-win for everyone. For example, what do all the following company circumstances have in common? (note: all these companies are real early stage companies.). A founder who gave away 60% of his company for 100K in funding in tranches. A founder that gave away 75% of his company to his ‘investors’ in a pre-series A round.
A company that gave away 70% of their company for. SeedCamp’s hackathon, Seedhack, took place at Google Campus, London, on the 8th to 10th of November. It brought together some of the brightest talent in the startup community from 15 countries with one of the best accelerator programs in the world and mashed it up with awesome content providers like Twitter, Facebook, BSkyB, BBC, Getty, HarperCollins, EyeEm, Nokia Music and Imagga.
There were a total of 12 teams working on interesting and exciting projects. As part of this hackathon, Ali and Will helped me aggregate resources to help founders better understand the process of raising equity and the impact it can have to their founder stakes. We aggregated resources to help entrepreneurs to understand the numbers and implications of raising money and giving out equity. Valuing a company and calculation its impact on your equity is a very complex and confusing for entrepreneurs as well as being far from an exact science, this is the pain point that we wanted to address. In the words of Seedhack attendee Will Martin “Fundraising is one of the most difficult parts of the startup world, as first time founders this is an even more daunting process.
Experience of raising a round and understanding the numbers and implications of that round and the related equity issued to an investor as well as employees in the form of an option pool is vital, but sadly is only fully understood by going through the process for real. Our intention was to give founders the knowledge required by being able to go through the process in a simple and easy way, thus giving the founder the confidence when it happens for real.
Ali and I are first time founders currently actively looking for investment. We know the total value we need in terms of money we want to raise as well the percentage of equity we are comfortable willing to give up to the investor. What we didn’t know and learned through the process is the implications in future rounds as a result of that initial funding round. Having an option pool for employees, advisors, board members etc.
Is something that complicates the issue and is often a requirement in the terms an investor is offering. This complicates the issue for the founder, so being aware of the impact of their shareholding as a result is vital for a founder as it is them that gets diluted in the first round but also any subsequent round, but it is often overlooked. The changes to equity positions of the founders, investors, employees etc. Is very important to understand as it dictates control and value of a company. Having this knowledge now gives us as founders a huge advantage over other founders we are competing with for funding and bridges the knowledge gap that exists for first time founders.” In order to read some of the terms on this cap table model, below are some definitions which you might find useful: Pre & Post Money Valuation – “The pre-money valuation is the valuation that a company goes into raising a round of financing with.
By establishing this valuation, it helps investors understand what amount of equity they will receive in the company in exchange for their capital. Once the financing round has been completed, the post-money valuation is the sum total of the pre-money valuation plus the additional capital raised.
So, if the pre-money valuation of a company is $10 million and they raise $2.5 million from investors, their post-money valuation would be $12.5 million. Investors would own 20% of the resulting company.” – Dave Morin, Source Quora “A PRE-MONEY VALUATION is the of a company or asset BEFORE. If an investment adds cash to a company, the company will have different valuations before and after the investment. The pre-money valuation refers to the company’s valuation before the investment. External investors, such as and will use a pre-money valuation to determine how much to demand in return for their cash injection to an and his or her. This is calculated on a fully diluted basis.
If a company is raising $250,000 in its seed round and willing to give up 20% of their company the pre-money valuation is $1,000,000. (250,000. 5 -250,000 = 1,000,000) Formula: Post money valuation – new investment Source – A POST-MONEY VALUATION is the value of a company AFTER an investment has been made.
This value is equal to the sum of the and the amount of new equity. The Post-money valuation is the sum of the pre-money valuation and the money raised in a given round.
At the close of a round of financing, this is what your company is worth (well, at least on paper). If a company is worth $1 million (pre-money) and an investor makes an investment of $250,000, the new, post-money valuation of the company will be $1.25 million. The investor will now own 20% of the company. The only reason it’s worth spending time on this term at all is that it “sets the bar” for your future activities. If your post-money after your first round of financing is $4 million, you know that to achieve success, in the eyes of your investors, any future valuations will have to be well-in-excess of that amount. Formula: New Investment. total post investment shares outstanding/shares issued for new investment.
“ Source – Option Pools – “An is an amount of a startup’s common stock reserved for future issuances to employees, directors, advisors, and consultants.” – from startuplawyer.com Option pools can also be formed by, but whichever one you use, they are generally still called ‘Option Pools’. The OPTION POOL is the percentage of your company that you are setting aside for future employees, advisors, consultants, and the like. Employees who get into the startup early will usually receive a greater percentage of the option pool than employees who arrive later. “The size of the Option Pool as a percentage of the POST-MONEY Valuation and where ALL of it comes from the founder’s equity. This is the least founder-friendly way to present this, but it is also the point at which most early stage investors will start the negotiations.
The expectation from traditional venture firms is that this will equal 15%-25% of the company AFTER they make their investment. The Option Pool is one of the most complex and, from the entrepreneur’s perspective, confusing terms in an equity financing scenario.” – source Round Size – The investment, or money is how much money is raised in a given round of financing.
However, the decisions (and their implications) surrounding this number are among the most important that a founding team makes. It is not just about how much money is raised, it is about the terms that the money is raised on and, maybe most importantly, whose money it is and what they bring to the table in addition to money. – Source Link to the Model Cap Table: NOTE FOR MODEL TO WORK – It needs to run on Excel (Google docs coming soon) and with circular calculations turned on. This can be done by going to (Mac Excel) Preferences - Calculation - Iteration - Click on Limit Iteration If you are considering using Convertible Notes as part of your round, check out this variant of the cap table with notes on how to convert as well: Additional Equity Calculation Tools (Thanks to Ali Tehrani for finding these – ) –. Search for: Search Tweets. If you're trying to decipher how to best assign share options to your team, check our our latest podcast with.
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. By Identifying milestones for your company’s development is beneficial for an early stage startup for many reasons: the first is that planning milestones allow you to focus what you will be working on, secondly the process of identifying and planning them make you question when and in what order you and your team should try and execute something, and lastly, from a fundraising perspective milestones are useful to tie together what you need to accomplish with.
On this post, however, I’d like to address a very important concept that should be considered during this process of outlining and planning milestones. I call it, “keeping milestone optionality”.
The principle is very simple even though you plan your company’s future growth and associated cash needs, you can’t lose sight of the fact that you’re a nimble startup. Not a large corporate that has to report to analysts and public market shareholders.
Your nimbleness is your strength. A startup’s growth plan isn’t linear, it’s more like a series of zig zags. As such, whilst it is useful to forecast your milestones so that you have a plan, and understand your cash needs, it is also useful to look at that plan with one eye, while the other eye looks out for actions which might be more beneficial to your company than what you had originally envisaged or agreed with existing shareholders. On my post on I spoke about how a future tranche (a glorified milestone, if you will) could have a negative impact by dictating what a company should do, even if midway through its execution it turns out that it was a bad idea for the company to have that goal.
For example, imagine if your plan had in place a monetization strategy (and associated revenue stream) kicking off in month 6 of your operations. Month 6 comes along and well, uptake is poor and your revenues are not coming in as expected. You have some chats with your customers and you find out that actually, the value they are getting from your product is mostly around the emerging network effect of your product, and because the network is still small, your early monetization is stifling the value they are getting because the barrier for new users to sign up is still high, and thus those that would be likely to pay are reluctant to pay. Well, if you (or your investors) held you strictly to your original plan for the sake of ‘keeping to the plan’, you’d kill your company quite quickly, but by staying nimble and adapting your milestones to what you think should be the new direction, you might actually be better off than you would have been before. Naturally, this optionality comes at a cost, as your original plan will have changed and thus your cash burn will change and your goals (KPIs) will change as well and that’s ok as long as you are aware how.
Good early stage investors (particularly those that invest in pre product-market fit companies) know that this kind of change mid-way through their funding is a possibility and they should be backing you in your ability to make these difficult calls even if it means a deviation from the plan they invested in. However, you should be mindful that there are many investors out there, that for some reason, still believe highly in the adherence to a stated plan. If you can, avoid taking money from them. At the very early stages in a company’s development, particularly during the pre product-market fit phase, investors should invest in you for your ability to adapt to changing and evolving circumstances, and not in your ability to predict the future 18 months in advance and stick to the plan when it clearly isn’t working. Of course, this isn’t a recommendation to throw out all forms of planning, it still helps to create a milestone plan based around your hypothesis of growth (and relevant KPIs), cash needs, for you can’t be changing strategies every month and you need to keep an eye on cash burn.
At the same time, however, you should constantly monitor whether there is another milestone optionality play coming up. If you do find, however, that you are constantly questioning your original hypothesis for growth, perhaps there is a bigger problem you are facing, but by keeping an eye open for milestone optionality events, you might fare better than if you exert uber discipline to a rigid plan that was built before you learned many new things. In conclusion, as a founder, plan for the future, identify key milestones to grow towards, but always keep milestone optionality, particularly in pre product-market fit companies.
By “If you have visions, you should go see a doctor” – Helmut Schmidt, one of the most admired German chancellors Because I know how confusing and frustrating the fund-raising process can be for a founder, one of the topics I like exploring is ‘how to get into the mind of an investor’ when an investor is evaluating you for an investment. And whilst the easier topics to tackle tend to be quantitative in nature, the harder ones tend to be the ‘fuzzier’ qualitative ones In that spirit, I think we’ve all heard in a ’‘ and how they want to invest in founders with a ‘strong vision’. But what does that mean exactly? With visions, mission statements, and all that kind of fuzzy talk being part of many self-help books that are often dismissed as snake-oil, do they really have any place in the fast-moving, cold & hard world of startups? In the context of the early stage high growth startup world, what does having “vision” really mean? Let’s start by defining what a founder’s vision.
is not.(feel free to replace a ‘founder’s vision’ with a ‘leaders’ vision’) Vision does not equal power A founder’s vision is not about how much money you want to make once you exit, nor is it about obtaining power or prestige. It isn’t about knowing exactly what the future will bring, nor is it about doing something no one else has ever done before. Rather, a founder’s vision is about how you communicate and put into action your values, beliefs, and ideals in producing & creating something of value for yourself, your founding team, your employees, your investors, and your customers. A founder’s vision is the foundation of a company’s culture and brand. In the words of James Kouzes and Barry Posner, authors of – ” There’s nothing more demoralizing than a leader who can’t clearly articulate why we’re doing what we’re doing.” A founder’s vision, therefore, creates a company’s culture. This culture may not always be visible to outsiders of the company (nor is it generally communicated to potential investors specifically as such), but it is visible through the company’s culture, the brand and brand values of your company are ultimately determined. It is the brand of your company which is the outward-facing aspect to your company that customers and potential investors engage with.
It is this brand that allows you to attract potential employees, customers, investors and partners. Thus, I believe that vision determines culture and culture determines brand. Think of many brands you love and respect and you will likely be able to trace their authenticity to one or several individuals (even if they are no longer there) who created the vision of the company and set the culture for all the employees to guide them through the creation of the products and services you love. Think of the ones that you liked at one point but no longer do, and you’ll likely be able to trace why to a point in time where there was a break-away or ‘sell-out’ from the original vision that started it. How is a founder’s vision applied?
In some startups, a founder identifies a need they personally have (they are the customer), and thus, builds a company around a product or service to satisfy that need. Alternatively, there are other founders that find ideas within markets that didn’t previously exist (they intuit a need for a customer) in some cases this happens by design and research and in some cases by accident, as was the case Whichever way it may come, founders that have a strong vision that is synthesised, communicated and articulated to their team (and their customers) allows them to capture these opportunities and evolve them to become successful businesses.
Effectively, a founder’s vision which is synthesized into a company’s culture and brand, facilitates the decision making process you and your team use to create your company’s products and services. It is through the clarity of a founder’s vision that focus is brought to the planning and decision making process within a company, and as a consequence the company can function efficiently and increase its probability of success. Authentically connecting with your clients In a world were new products are constantly popping up and many being copied by unfair competitors, it is the strong adherence to your vision and the culture & brand it creates, that ultimately engages your customers to become loyal supporters and fervent defenders of your company. Unfortunately, if you betray your customer’s trust by deviating from your brand’s values, they will likely throw you and your products, so to speak. In, Simon Sinek, shares his golden circle of ‘why, how, and what’ and whilst I won’t go into summarising his talk here, the key point is that it all begins with the ‘why’ a leader must articulate to be effective the “why” determines culture and the “why” determines ultimate “how” you do things and “what” you ultimately make. A big thank you to Bretton Putter of the Forsyth group for Feedback and Editorial Input – This post is not about how to hire or how to fire someone.
It is about highlighting the potential reasons why employees relationships can fall apart and lead to a dismissal down the road. Hopefully this is post provides with your the necessary information for you to consider on how you can prevent this from happening by setting up an appropriate hiring process and cultivating an environment where employees are not set up for failure within their defined roles. As you likely already know, hiring and firing are probably two of the most difficult things to do in a company. That’s why usually, for key hires, a company’s leadership is directly involved in the selection and interview process. Ideally, if done right, you never find yourself in a position where you have to lay someone off, but what if you do?
Was it entirely the employee’s fault, or could you have done something to prevent it from happening? Let’s start with looking at your hiring process and mistakes that can lead to an employee relationship breaking down:.
Hiring Process Mistakes – These are mistakes you could have prevented before hiring. No defined internal interview process – By not having a clear process which a candidate goes through to assess the communication skills of the new potential prospect and their fit within the company culture, you run the risk of the employee potentially not fitting in.
Not geographically disciplined – In a startup everyone should be together, if it’s not possible, then people should spend time with the home-team at least 3 months. Having remote teams early on is very hard although some companies do manage to pull it off at the cost of their sleep. Not qualified enough to do the job – In a startup, you don’t really have the time to train someone. Be careful about relying too much on training you could give the candidate, they should be self-sufficient pretty quickly on.
Also, sometimes we can project a bit of ourselves and our ambitions onto people, so be mindful of personal biases when evaluating someone. Not being able to commit to the company’s work ethic – Some companies have the expectation that you will be there from 9-5 or some regular schedule (think of customer services roles that require people to be at their desks by a certain time). Other companies have results oriented work environments where there is no need for someone to be there at a specific time so long as they get their work done. Make sure you define what your work ethic is so that people aren’t caught off guard later. After the Fact Mistakes Analysis – These are mistakes you might have committed unknowingly that led to a dismissal. Poor Role Definition – If you or the hiring manager don’t know what the role this person will have (or main responsibility will be) within a company, you’re just setting up that new employee to linger in role purgatory, not knowing what they can control and what is someone else’s. Poor Title Choice – If you give a new employee a title that is above their experience, particularly if you give them a CxO title, you set them up for potential failure if they can’t live up to it, because then you can’t hire above them to help them out and their ‘power’ position may create tension between other employees as their inexperience causes blunders.
This may affect communication with peers as well. For more on the different philosophies on title choice, read the following:. Poor Communications of responsibilities and expectations – Similar to clear role definition, poor communication of what is expected of them and by when, leads to that employee lacking direction and perhaps not going down a path that is necessarily the one that your organisation needs. Not acting fast enough to rectify a situation – If something is going wrong, or an employee isn’t doing what they need to be doing according to their level, perhaps there is something awry in what they perceive things are they should be doing. Don’t wait because you feel awkward about it or want to see if it improves on its own.
Jump in there and have a structured conversation with the employee to make sure roles and responsibilities are mutually agreed and that you both are aligned on what needs to happen next. Poor Key Performance Indicator definition – defining how someone is doing well helps them to adjust their actions so that they reach the set goals. Not every employee will have a specific KPI tailored to their function, but if it is a key hire, they will likely have awareness of the company’s key KPIs and how their role aids the company in achieving them.
Poor management (in general) – Motivating people is not easy. Getting them to buy in to what you are doing is sometimes beyond just a pay check. You need to inspire them to do more not micromanage them if things aren’t going well. Read the book ‘Drive’ by Daniel H. Pink to get a feel for some of the latest thinking on motivational theory.
Other problematic employees – Sometimes organisations have bullies. You may hire someone that you think is a great fit for the job, and perhaps they would be if it weren’t to an already existing employee who ‘preys’ on others. Typically this bully can also be someone who is really good at their job so it isn’t always readily apparent from their performance. However, organisational bullies can create a reason for why new employees leave. Thus, never rule out this possibility as sometimes its hard for new employees to muster up the courage to report on a peer, particularly if they are senior to them. So, some final things to consider – As I mentioned before, when you see a problem that’s brewing, deal with it quickly. If you need to let someone go, let them go, but don’t be blind that it’s entirely their fault, review your company’s internal circumstances to see if they contributed towards the problem.
Verse yourself well with what the legal requirements are in your company’s jurisdiction. Don’t get yourself into a big mess by not going through the appropriate process, which typically requires warning before dismissing someone. You don’t want to find yourself in a lawsuit for wrongful dismissal. In conclusion, when you hire, consider whether your hiring process is exhaustive, but also take stake and review your company’s situation so that you can prevent things from going wrong for your new team members once they are hired.
Additional Resources:. – Recruitment service and application tracking. Are CEOs to Blame for Short CMO Tenures? –. Startup Hiring: Why You Should Date Before Getting Married – by A big thank you to of and of for feedback and editorial review. Just as driving with your eyes closed is dangerous to your health, so is acquiring customers without knowing what it costs you to acquire them. Both can lead to disastrous outcomes. Whilst acquiring new customers is always something to be happy about, it doesn’t mean, however, that you should throw out common sense in how you account for your time and human resource efforts in acquiring them, typically referred to as your CAC (customer acquisition cost).
Most startups understand that if they pay Google for advertising, that should be included in my CAC costs, but many other items add up as part of the CAC that are less obvious. In tldr format: Companies typically under-account for time costs in acquiring a customer; don’t forget to include your staff’s time in your CAC.
Before going any further, I should caveat that this does not mean you need to go nuts on excel getting this perfect to the nth degree. In a pre-product market fit company, you will likely be experimenting on how to sell quite a bit. The point here is to approach things with a rational sense for what can scale and what cannot and doing a back-of-the-envelope calculation on how this might affect your CAC down the road. Ideally, everything you did in order to get that shiny new customer would be accounted for if you want to get a true snapshot of what that new customer cost you, how much need to charge to cover your costs, and what it might cost to get, say 100 more or 1000+ more similar customers. One tool that we can borrow from the accounting world to help you visualise this, is what is called Activity Based Costing. In the words of Wikipedia: Activity-based costing (ABC) is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. This model assigns more indirect costs (overhead) into direct costs compared to conventional costing methods. You might feel you have ‘acquired’ your new customer for ‘free’ but when you account the time that it took and some of the additional efforts, you might find that your new user is costing you more to acquire than you are charging them and thus, you are accidentally creating an imbalance in your company’s cashflow and experimenting with a non-scaleable method for customer acquisition.
To help illustrate, let’s walk through a few examples: A customer that wants to buy your product says they only will pay if you help to integrate your product into their current systems and help them migrate their data from their old systems onto your new one. Because you are a hot-shot coder, you oblige and bang out the necessary code changes quite quickly and import their data into your system’s formatting. Within 6 weeks, you have finalised onboarding this new customer and you are happy as your first pay check comes in was this truly a ‘free’ customer acquisition process if this is something you plan on implementing as an ongoing way of acquiring customers?
How should you account for that time you spent integrating systems and migrating data? You have a team of 5 people who are in charge of communicating with the outside world via social media and provide them with lots of ideas and communications about your company and its products, because of this, your product gets lots of mentions on the inter webs for a great customer experience. Is this truly a ‘free’ customer acquisition process or do these people act like a quasi-PR / sales team? If we take an activity based costing mindset when assigning costs to your customer acquisition model, what you will find is that it takes more than just a website and some Google Ads to convert customers into paying customers. It requires the time of people, initially you, but later perhaps sales people or sales engineers to get the deal over the line. The time you spent helping someone use your software or installing it or deploying it within their network or employees is part of that cost because you will not be the one doing this for the rest of your company’s life.
You will likely have to hire someone to do this later.
You could argue the search-engine powerhouse takes the car metaphors a little bit far with about the update: Google says the upgrades mostly focus on speed, which comes from a new browser 'engine,' which Google calls 'V8.' For those interested the under-the-hood mechanics of Chrome, Google says the browser tops others because it is able to handle complex Web pages with lots of Java Script very quickly.
From another post to the Chrome blog: Web applications are becoming more complex. With the increased complexity comes more JavaScript code and more objects. An increased number of objects puts additional stress on the memory management system of the JavaScript engine, which has to scale to deal efficiently with object allocation and reclamation. If engines do not scale to handle large object heaps, performance will suffer when running large web applications. I installed the Chrome update (you can ) this afternoon, and it definitely is speedy - noticeably faster than, which I often use. On the downside, the new version still doesn't seem to automatically spellcheck as you write. I'm using Chrome now, so please forgive any typos.
I thought this point from was useful, too: if you use Gmail, Google Reader, etc., Chrome seems extra-fast: JavaScript-heavy webpages (such as Gmail), will now run 30% faster on Chrome,. Given how fast they were already running, that’s fairly insane. What do you all think?
Is this browser worth using? There's always that ol' anti-trust issue floating around, and some have why Google would get in the browser and mobile phone businesses when they don't seem likely to be profitable. Is it scary for Google to creep into yet another facet of our online lives, or is this just expected at this point? And, while we're on the subject of browsers, do any of you use the that lets you skip Web ads?: is it ethical for a writer who makes money from an ad-driven Web site to block Internet ads with his or her browser? I tried out the ad blocker, and it's kind of shocking.
All of the news Web sites look like ghost towns without ads blinking and yelling for your attention. But I think that's something I could get used to. Posted by: Filed under: .
Trollicus May 21st, 2009 6:39 pm ET I have a beta copy of the new Firefox browser. It also features Javascript enhancements. For now I'll stick with the current release of Firefox although I'm willing to change browsers if Crome turns out to be better. Firefox and chrome are comparable in reliability, and correctly rendering pages, although Firefox seems to have the edge in pop up blocking and security. Chromes Javascript speed puts it above the current release of Firefox but I doubt this will last very long. Microsofts IE7 and IE8 still have major problems with rendering some sites, security issues and IE seems to encourage Pop ups and the most annoying site behavior, the only reason I think anyone uses IE is that is comes bundled with the OS. For mac dvdfab x mac bddvd.
Bill May 22nd, 2009 4:45 am ET Chrome is an excellent browser, and is very very fast. It doesn't have all of the bells and whistles that some of the other browsers do, but if you want a clean and fast browser give Chrome 2.0 a try. The current version is Windows only, but a Mac version is in testing and should be ready by mid-late summer (as will a Linux version). The speed boosts are significant in that more and more of the 'applications' people are using for everyday computing tasks are moving to the browser. In fact, as it matures over time, the browser will become the primary 'application delivery' platform. This will signal the beginning of the end of having a single vendor (i.e. Microsoft) control most end user's computing platform.
Trevise May 22nd, 2009 6:09 am ET Seems Firefox is still the only browser you can customize to your needs. As for the ad blocker, I think it's great. I'm not going to click on any of the annoying (at best) blinking ads anyway. If I go to a news site, I want to see news. If I wanted to see ads, I'd turn on the television or pick up a newspaper. The more annoying an ad, the less likely that I'll not only not click on it, but will remember to not buy anything from the offender.
I get 99.9% of my news from the Internet, and that's mainly because I can look at the items that are of interest to ME, as opposed to all the fluff and nonsense that TV news shows and such have. The Flash ads especially seem to be the most annoying. Now if only I could find an ad blocker for my mailbox. Stephan May 22nd, 2009 8:40 am ET As a webmaster who runs four secure sites, Chrome is not suitable for people who want to access password protected areas of the web. The browser ignores standard internet protocol that usually sends your secure password information along with a request for a file.
This causes big problems for anyone using Chrome in a password protected environment where real security is involved. I am not sure why Google chose not to follow standard internet protocol, but all I know is that Chrome will not work with any of my websites. Every other browser out there works fine, EXCEPT Chrome. It took my system admin guy and a technician quite a while to figure out what exactly was going on, but now that we know, we simply tell people 'Do not use Chrome'. Until they re-engineer this major flaw in the browser, I do not see it ever being very successful or used by the masses.
Riesz May 22nd, 2009 8:50 am ET I've tried both, and I'll see how unbiased I can be. To keep up with the car metaphors, Chrome is a mitsubishi/porsche/some fast car.
Very quick browsing, but firefox has something up its sleeve. Firefox is more of a, hm., well, a somewhat faster than average car but not as much as Chrome. Chrome beats firefox in speed. HOWEVER, the Firefox 'car' has a built in DVD player and increased car security. So to put it in perspective, Chrome=speed Firefox=balance between speed and utilities. Nick Marino May 22nd, 2009 9:57 am ET as a marketer than spends a good 50% of my day working on search engine optimization, it's simply not practical for me to use Google Chrome as my default browser. While i see nothing wrong with the browser per se, it's missing a few small touches (such as displaying the complete URL when you roll over a link and flexible options for isolating images) that make it just a bit less SEO user friendly than Firefox.
However, i am almost always concurrently running Firefox and Chrome during the day. This way, i can be logged into the same social media networks under two different accounts (which is often necessary for my job). Even more importantly, i save a lot of my fresh SEO work in Google Docs, which i have permanently opened in Chrome. Meanwhile, if needs be, i can access another Google Account via my Firefox browser at the same time. David May 24th, 2009 11:21 am ET Chrome is a very well-designed, fast browser that handles security fairly well.
The only reason I still use Firefox over Chrome is.well, two reasons. AdBlock Plus and NoScript. There is nothing more secure than Firefox with those two add-ons. I do have to say, as much as I hate to admit it, Microsoft has been catching on by leaps and bounds with Internet Explorer. IE7 was a massive improvement over IE6, and IE8 continues to improve over 7.
It's still not my browser of choice, though, by any stretch of the imagination. Reiser May 24th, 2009 11:34 am ET I just wanted to add that there's nothing remotely unethical about BLOCKING ADVERTISEMENTS, even if you're a writer. What's unethical in that situation is that you're a writer who can't make money unless people are buying products that are promoted alongside your writing. It's a pretty backwards mindset that some people have, where there's this contemporary morality about being forced to see advertisements. Most good content will eventually be free and it won't be put out by large corporations that have to rely on advertising to meet their exorbitant operating budgets.
There will always be a way for users to block ads and there is nothing unethical about doing so. What's unethical is that we have to see the ads in the first place — whether we're trying to read serious news or just trying to drive down the interstate. It's a flaw in the system, but the system will eventually correct itself. Michael Harrison (DAKPluto) May 24th, 2009 12:42 pm ET Not only is Ad-Blocker/ABP/Noscript ethical, it's just good plain common sense. More and more hackers are using flash ads as a way to hack into your system and infest it. The MMORPG scene has had really bad issues with this.
The 'Real Money Trade (RMT)' farms in places like Tiawan, China, etc have hacked into popular sites by these players and injected iframes into them that put a keylogger onto your computer. It then waits for you to put your password in on the game and sends that info to the RMT farms to steal your account. This is one of the largest areas of bad security of IE, Chrome, Opera, etc. I wouldn't touch another browser ever again without my ABP and NoScript plugins.
IT guy May 24th, 2009 1:46 pm ET As and IT student, I must agree with Stephan's comment. If your computer runs slow, you have an old computer. Anybody not using a dual core with 4 gig RAM by now is wasting their computer time. As for a Browser.
I will always support open source content and not allow myself to be funneled into a hold. There are PLENTY of Firefox addons to make Firefox 3.0 a fast, secure, browser. The memory useage/leak issue associated with previous versions of Firefox have been resolved by Firefox 3.0. Configured properly, it's the fastest, safest browser in existence and gaining. Google is such a gimmick. Stephan May 22nd, 2009 8:40 am ET As a webmaster who runs four secure sites, Chrome is not suitable for people who want to access password protected areas of the web. The browser ignores standard internet protocol that usually sends your secure password information along with a request for a file.
This causes big problems for anyone using Chrome in a password protected environment where real security is involved. I am not sure why Google chose not to follow standard internet protocol, but all I know is that Chrome will not work with any of my websites. Every other browser out there works fine, EXCEPT Chrome. It took my system admin guy and a technician quite a while to figure out what exactly was going on, but now that we know, we simply tell people “Do not use Chrome”. Until they re-engineer this major flaw in the browser, I do not see it ever being very successful or used by the masses.
May 25th, 2009 2:01 am ET Currently using Firefox 3.5 Beta with Windows Live as my email client. Before Chrome revved up its Javscript capabilities, Apple Safari v 4.0 beta has been available, and is amazingly fast with it's 'Nitro' Javascript engine. I guess Google had to match 'Nitro' by calling their product, 'V8'. Both insinuate fast. My issue was not with Safari (I love Safari and Opera, never been that impressed with Firefox.) but with MSN. Apparently, when Safari v 4.0 beta was released, MSN had not made Windows Live email compatible with Safari beta, so it basically rendered Windows Live Mail useless (thanks Microsoft.) I have since learned that this has been corrected.
I intend to go back to Safari. I urge you to check out Safari, Opera, and a cool email client, 'Postbox.' Great features on all, and none are Microsoft products. I so wanna be a MAC when I grow up. Dayahka May 25th, 2009 1:51 pm ET I tried Chrome when it was first released, then deleted it after a few hours because it seemed to be causing problems–and I went back to trusty, old Firefox. This time around, however, I've taken a liking to Chrome and use it primarily for browsing. Since it lacks the Firefox function of adding sites to my favorites list, I use Firefox for research or when I want to save sites for future investigation.
I like Chrome's 'open' feeling, but it is still missing a few things. Can't someone, anyone, come up with a browser that actually synthesizes or combines the functions of all browsers? Geno May 26th, 2009 12:59 am ET Oh god yes I use the Ad-block plus! So many times have I been surfing the net and about to click on a link when all of a sudden a stupid ad flies out and gets in the way of my link just as I click on the link, opening a page that I did not want to see. Mozilla is a memory hog, and the reason I use it more is because there are a few websites that are not supported by Chrome. I do like the idea of supporting an open developer friendly browser like Mozilla. Internet Explorer is becoming more of a joke.
Everytime I click on a link or change websites, you hear like a billion clicks and it still freezes alot, even with updates. Sadly, I think they even use Internet Explorer technology on the Xbox 360 'web browsing' or Xbox live and it's horrible. Geno May 26th, 2009 1:02 am ET Oh on this note: 'Slate raises an interesting point: is it ethical for a writer who makes money from an ad-driven Web site to block Internet ads with his or her browser? ' Is it ethical for Adobe Flashplayer to be the only flashplayer available, thus forcing you to see those 'blinking', flashing, or flying pop-up ads?
That should be the real question. I've tried uninstalling the Adobe flashplayer, but would go to a website that required me to 'update or upgrade' my flashplayer. Pretty annoying.
Think about an enviable world wherein workers have all of the help they should obtain the pipe dream of labor/life steadiness. Past simply selecting the best-in-class app, there must be a knowledge sync throughout totally different platforms to enhance predictors round candidate attributes and future churn. With corporations concentrating on segments of HR tech, there’s a transparent want for an overarching information document system that may allow large information evaluation throughout platforms. HR workers spend an excessive amount of time recruiting new workers On common, the within the U.S. Automation is vital to lowering the period of time present workers spend courting a candidate and interviewing, and there are platforms addressing these time-intensive duties, in addition to others.
The recruiting panorama is crowded, however ripe for experimentation with function/profit creep. Corporations like aren’t solely serving to corporations schedule interviews and prep for them, they’re additionally including to their platform skills-building classes and job-coaching sources.
Taking it one step additional, corporations like are creating financial mobility for entry-level employees in retail and adjoining sectors by empowering workers to drive their very own improvement, saving priceless HR workers time. Matching abilities to jobs for blue-collar employees allows excessive efficiency When a restaurant recruits wait workers, they sometimes search for individuals who have labored at different eating places.
The identical is true in retail. In finance, we at all times caveat earlier efficiency or expertise by indicating that it’s not indicative of future efficiency. And this reliance on the previous couldn’t be extra misguided in hiring hourly workers, as a result of it’s the abilities that matter — pace, good interpersonal abilities, reminiscence (for orders), and so on. For those who have been in a position to match ability units solely, a deckhand makes a fantastic waiter. LA-based boasts a capability to evaluate cognitive skill, character, sturdy profession pursuits and particular job abilities within the hourly expertise administration house, theoretically resolving this essential disconnect.
Think about an enviable world wherein workers have all of the help they should obtain the pipe dream of labor/life steadiness. Or one wherein candidates are sifted by ability and never the biases related to background, gender or ethnicity. These are simply two of the tectonic advantages HR tech can ship throughout the board, connecting dots and leaving naked why sure deckhands may make beautiful waiters.
Having explored this vertical, it’s clear to me that HR tech platforms are the surest approach to yield the unquestioned must-haves the market now calls for on either side. It now stays to be seen which corporations can ship on engagement and codify this season’s visionary funding selection into the business’s “new normal.” Are you an entrepreneur with a recent tackle HR tech? Attain out and inform me extra.
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