When to Hire Executives to Accelerate Your Startup
Greg Skloot has been building websites since he was 14 and in college served as the president of the Northwestern University Entrepreneurship Club. So, naturally, he developed a Web app to register the more than 100 people who would show up for club events. After all, large gatherings involve a lot of pain points, such as sending invitations, printing name badges, and tracking attendance. If there were a laptop running the app at the door, people could self-register as they walked in.
"I started to get inquiries from other organizations around town, saying, 'Hey, we heard about your little software app. Could we try using it for our event, and oh, could you make it do this?'" the 23-year-old recalls. "And before I knew it, I decided to quit my full-time job and work on it full time last March."
Three months later, Attend.com raised $1 million from Boston-based .406 Ventures and began growing like crazy. In fact, last quarter, 300 organizations signed on as customers, and the startup recently hired its 21st employee.
Although Skloot says he could have taken it slowly, learned as he went along, and made a lot of rookie mistakes, he chose instead to find executives to bring on board who could help him scale Attend.com quickly and help him avoid pitfalls he likely would have encountered on his own. Here are a few things he says you need to keep in mind if it's a strategy you want to emulate.
Your recruiting strategy will depend on whether you're bootstrapped or funded.
If it's a choice between taking your time on your own and making costly mistakes or stepping on the gas with smart advisers helping steer the direction of the company, most people would probably opt for the latter. Unless you're funded or wealthy, however, you're probably not going to be able to afford executive salaries.
"For a venture-backed company, [hiring executives] obviously becomes a bit more feasible," Skloot says. "At the bootstrapped level, you're looking for less of an early senior employee and more of a partner."
Luring partners who have domain expertise and business acumen then becomes a matter of selling your vision and convincing them to come along for the ride at an early stage by offering them equity.
"These kind of leaders can add a tremendous value around attracting other great C-level leaders, training the more junior people, setting more realistic expectations, dealing with the senior people like investors and I think ultimately unlocking a much broader network," he says.
Start recruiting executives once you've proved you have a product customers want to buy.
Attend.com was right on the cusp of product-market fit when Skloot started reaching out to executives .406 Ventures helped him identify and connect with.
"One of the biggest things is obviously managing your burn rate, so once we started to really see the product clicking, we knew that we had an opportunity to build something that's repeatable and predictable and scalable," Skloot says. "That's when we knew it was time to bring in senior talent."
Sell measurable progress and a "blue ocean."
Luring executives away from established organizations is a challenge, because you're probably not going to be able to offer them the kind of cushy pay and benefits they're getting somewhere else.
To attract them, you need to demonstrate measurable, tangible progress in getting new customers, setting up processes and infrastructure, and hitting certain milestones. In Attend.com's case, Skloot had a customer relationship management system in place early on and a plethora of data around the company's sales and marketing processes.
He says many leaders also are attracted to a "blue ocean," an early-stage company free from political problems and other baggage.
"So demonstrating that that's a reality, I think, really, really excites people," Skloot says. "Then it's ultimately finding the right type of person that's willing to take a balance of cash and equity in their compensation, [someone who is] willing to be in a smaller, fast-paced type of environment."
Spend a lot of time with an executive before hiring him or her.
Skloot says when he was meeting with senior people, he went out to dinner with them, talked to their significant others, learned about their family life and anything else there was to know about them, especially what kind of mentor and adviser the person would be.
Skloot holds up Attend.com's chief revenue officer, John Donnelly, who joined the company in January, as a perfect example of the kind of player-coach he was looking for. He says Donnelly is someone who has had personal successes and is a high-impact contributor but wants to be a teacher and coach a team through building and scaling the company.
"It certainly takes a special kind of person, like John, to want to and be comfortable with mentoring and helping to grow a young CEO, like myself," Skloot says. "So I think that's a really critical key to success, is finding that player-coach."