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A bi-weekly column with timely, relevant and possibly irreverent insight into the BC technology industry.

Something Ventured:
November 29th, 2004

By Brent Holliday
Greenstone Venture Partners


Why Can't We Go Hire?


"Oh, but are you experienced.
Have you ever been... experienced?" - Jimi Hendrix, Are You Experienced

One of the biggest challenges that we all face in growing businesses is the ability to attract and retain good talented people to help grow the company. Hiring good people is a skill that very few of us have. The main reason for this in a start-up is because we are in a hurry. The pressure to get moving, to stay on track, to achieve milestones is constantly getting in the way of deliberate, considered hiring practice. Another reason that we aren't good at hiring people is that we tend to look in the mirror and hire appropriately. In other words, we tend to hire people we like, who are like us and who won't challenge us too much on our vision for the company. A third and final reason we are not good at hiring in the formative stages of the company is that we write poor job descriptions and attract the wrong candidates. Then we complain that there are not enough good people out there...

Venture capitalists are not human resources experts and are not recruiters by trade. But I have seen enough of the same mistakes over and over again in the dozens of companies I have been close to that I think I can speak to the topic. Any discourse we can have about how to hire good people for the right job is beneficial to us all. I see this as the number one challenge going forward to the second half of this decade in BC. The really good news is that the broader idea of attracting and retaining talent in BC is quickly becoming the top issue for BC TIA and other industry groups. A lot more thought and action will go into this at an industry level. But this week, I wanted to get a little more granular.

Stop me if you have heard any of these "fictional" scenarios before:

1) Under pressure from the new investors to get direct sales people into the field, senior management posts a couple of want ads, but then dials through their rolodex and quickly hires people they know. The problem is that these new sales people didn't all sell the product you are selling now and not to the same level in the enterprise. Rationalization of the process is that "selling is selling" no matter what the product and the "process" would have taken too long to find others.

2) Start-up needs VP Marketing to round out management team but hasn't raised money yet and can't afford search firm fees. Good friend of founder gets the job because he is somewhat qualified, but most importantly, he is "a good guy" and can bond with the team quickly. In other words, founder/CEO hired a friend first and foremost, not an executive.

3) Company in development stages is making new technology in a very esoteric field. Group think among management is reinforced by potential investors about the availability of certain specific engineering and product management talent in BC. Want ads written looking for many years of experience in very specific field. No candidates are qualified according to tight criteria. Panic sets in. Thoughts of moving to California where, apparently, this type of talent is falling out of trees. Becomes central reason why company is now unfundable.

4) Company successful in first big account. Engineers going crazy doing professional development work to satisfy every need of this critical customer. Senior engineer's spouse leaves them and she quits, at least temporarily. Gaping holes in professional services management and replacement engineer needed ASAP. The dreaded panic stasis cycle erupts: No time to qualify and interview candidates properly and deliver for customer at same time. No money or time to hire contractor who you would have to train and then just lose them with their knowledge. Realization that senior engineer candidate would take 4 months to get up to speed, so would rather wait for possible return of well trained, but likely Prozac enhanced incumbent. Result: no one gets hired, everyone stretched to breaking point.

5) Senior management candidate presents during proper hiring process. Has great resume and talks very eloquently about market. Charms the socks off the founders and investors with easy manner and name dropping about his times in California in the late 90's. Has references supplied and they all rave about the candidate. Other candidates with good resumes don't charm as well and besides, they wore cheap suits. Candidate hired without a single reference sought that was NOT supplied. No one checked with previous employers through other channels. Candidate fired 12 months later for non-performance. Then someone hears that they were a disaster at two previous employers. Oops.

Hiring mistakes are so underrated. They really are tremendously bad things to do for your company. People ill-equipped for a role in a company cause enormous pain and suffering because our labour laws make it even more difficult to get rid of them. Hands up everyone who has kept a lousy hire on because the cash situation means that it might be too expensive to pay them severance and get rid of them!

Take the time to hire correctly. Seek advice and best practices on hiring from the sources in this technology community. Use a recruiter when you don't have a clue or you don't have the time. They are professionals ready to make it happen and the extra you pay them should soon be forgotten if they got you a good employee. Most importantly, don't be fooled by charm. Always, always, always check the references and then check with the companies listed on their resume to find references that they did not list. Spend some time with them and let your team spend some time with them. It may be enourmously politically incorrect, but the "wife" test is a good one. A woman's intuition can be much more accurate than your gut. Make sure you listen to the feedback from all team members and make the call accordingly.

No one has a perfect track record in hiring. We all get fooled. But following the advice of the experts can help you miss some serious pain and actually find candidates instead of hand waving complaints that there are no good people.

Letters From Last Time –

Hi, Brent:

After Alexander's death, his empire fragmented, leaving only a legacy of common culture. As an open source advocate, I can't help hoping that the parallels you make continue. ;->

Bruce Byfield

Bruce: I intended the Bill the Great to be a comparison only, not to shower praise on Gates. Just as I am sure you aren't wishing for Bill to die. You have a great understanding of the Alexander legacy so I hope you enjoy the movie too. So far, the critics have not. Just like Windows XP SP2 upgrade...

What Do You Think? Talk Back To Brent Holliday


Something Ventured
is a bi-weekly column designed to supplement the T-Net British Columbia web site with some timely, relevant and possibly irreverent insight into the industry. I hope to share some of the perspective and trends that I see in my role as a VC. The column is always followed by feedback (if its positive or constructive. I'll keep the flames to myself, thanks).

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