Scaling Startups

Scaling Startups September 12th 2013. London

#ScalingStartups @TalentPuzzle

Scaling StartupsBen Fletcher, TalentPuzzle

@benfletch

Chris Tottman @NotionCapital

Building a winning team:Recruiting Star Players

2FUNDS

6 Inv.20 to go

9 Inv.4 Fund Ret.

$30m $110m2000 Cos Reviewed

3$1 billion2k jobs7yr Hot 100

9yrs to build9m users

20k customers

$150m revenues

$700m exit

0 to 650 people

MessageLabs

30 Biggest SaaS providers solved the 3 biggest challenges facing every founder/CEO:

• Acquiring capital• Consuming customers• Hiring the best talent

We believe category leadership is a talent driven economy…

What we look for: Functional View

You must fill the gaps with world class talent & remain capital

efficientYou have to

continue to out hire the competition in

each area YoY

What we look for: Cultural View

Personality – of the businessExperience - of the engagementSmart & intellectual capacityDomain expertise in the spaceThird party validationThe bottom line - financial

The Big Questions

Early - Winners are always winners so tell me about your track record of winning?

Early - Whats the gap btw what we need and where you're strong? (needs analysis)

Middle – Deeper analysis of the above

Final - How will you transform our business? (whats in it for us)

Final - How will you migrate into our business over 100 days?

Top Tips Selling then Interviewing Exciting then formal (but always expressing

the entrepreneurial personality) Make it competitive Direct & Recruiters (an extension of your

Exec) Design the Org in detail & then hire explicit

to that (don't design jobs around people) They have to be world class in 3 or 4 areas

not good at a long list of areas Everyone can blackball any candidate with

good reason Loads of formal and soft references all the

way through Go for a pint / dinner

Smart & a little mad?

Big Market & Big Pain?

Scalable Business?

Let’s Talkctottman@notioncapital.com

www.notioncapital.com

Andy McLoughlin, Co-founderFollow me @bandrew

Users in 100,000+

organizations

Content collaboration for government & enterprise

London, San Francisco, NYC, Washington DC

Founded in London in late 2006

170 staff across four offices in two countries

Raised $40M in venture capital across three rounds

Investors include Eden Ventures, Matrix Partners, Jafco

Ventures, DAG Capital, In-Q-Tel and Webex founder Subrah Iyar.

International expansion,culture and comms

(or how I learned to stop worrying and love the 8 hour time zone difference)

REALLYDo you

need to be there?

Everything I’ve learnt about *international expansion in about 20 minutes

(* to the US generally and SF in particular)

Gaping void silicon valley

Navigating the US

http://gapingvoid.com/2008/08/05/silicon-valley-map/

Google map – SF to San Jose

San Francisco(hipsters and winos)

Google map – SF to San Jose

Silicon Valley(khaki and Googlers)

It’s kind of like Reading

(but with sunshine and palm trees)

Borrowed from http://www.orkposters.com/sanfran.html

For Huddle, it was always going to be San Francisco

Location sorted. You’re on your way!

• Create US entity• Register to trade in

State of California• US banking• Visas• Hiring + benefits

Regardless of where you trade, incorporate in Delaware• Generous tax benefits, well-defined body of case law• Suck up the cost and get a lawyer to sort this• Valley lawyers often willing to defer costs until VC

financing and trade cost for equity

US banking for business

• They’re connected to everyone in the valley

• Regular networking events

• Venture debt and working capital facilities

• Set up US accounts from the UK

• Now also offer UK banking

www.svb.com/accelerator

US banking for you

• Opening a personal US bank account is easy but getting credit isn’t

• Every ATM charges a fee• The answer = HSBC Premier• Free, instant transfers between

international accounts, all ATM fees repaid, credit card based on UK credit

• Accounts can be opened from the UK

Company sorted! Let’s get to work!

FACTIt’s very naughty to come to the US and

work without a visa

With the ESTA you are allowed to stay for up to 90 days, do business for your foreign company (partner meetings, client meetings, board meetings, conferences) and perhaps take a holiday.

But you absolutely cannot work for a US company. Oh no.

Many visas, many options

There are a ton of options (including temporary and student visas) but the most popular are:

• H1-B (Highly skilled migrant)• L1-A (Intercompany transfer)• O-1 (Alien of extraordinary ability)• E-2 (Investor visa)

Hands up who likes filling in forms?

Visa applications are paperwork-intensive process and one slight error will void your application so use an attorney!

Suhi Koizumi & Olivia Serene Lee

Minami Tamaki LLP

360 Post Street, 8th FloorSan Francisco, CA 94108www.MinamiTamaki.com

Premium processing L1-A

You must be outside the US to apply You must attend the local embassy in person Entering the US during the visa application is allowed but

frowned upon. Make sure you can prove the trip is temporary!

Company Submits Petition

Application[day 1]

Petition Approved[day 20]

Submit Visa Application

Online [day 21]

Embassy Interview[day 25]

Passport Returned [day 30]

My visa hell experience (2010)Submit application and begin ‘business trip’ to US [day 0]

Begin hassling attorneys [day 45]

Lose temper and cancel 1st application

[day 50]

Re-apply, paying for premium processing

[day 51]

Learn colleague’s application

approved. Lose shit. [day 52]

Application returned with Request for

Extra Information [day 66]

Submit Extra Information [day 75]

3 month visa expires, leave US quickly [day

Application approved. [day 95]

Approved Petition +

Passport with L1-A +

Stamped I-94

Making your first US hires

International hiring 101

Hiring in the US is broadly the same as hiring anywhere else.

Don’t hire people you might hate, make sure they can do the job, use your network, use LinkedIn, hire an in-house recruiter at scale, avoid agencies etc.

(but if you do need a recruiter)

Connery Consulting (conneryconsultingllc.com) have staffed for Salesforce.com, Zendesk and

many others.

Betts Recruiting (bettsrecruiting.com) specialise is sales, marketing and business development. They

throw fun parties.

Gross generalisation #1

Hiring in the US is relatively easy

True! Firing is also easy. Get at-will contracts from your lawyers. 3 month

probation period and let go early if not working.

Valley people are more start-up savvy

True! It’s all about the options pool. Bonuses less common. 15 days

vacation. More flexibility but people know their market value and expect

to be looked after.

British humour is always acceptable

False! Keep it out of interviews. No bad taste jokes. Don’t ask people their age or personal questions. If you think it might

be inappropriate, it probably is and you may get sued for it. Just don't.

A great package of extras is expected

True! The more you offer, the more attractive you will be. This means great healthcare, lots of snacks in

the office, lunch (and dinner) provided, Aeron chairs...

Actual start-up snack room

Primer: US healthcare• Healthcare with vision and dental is expected• This will cost around $500 per employee (extra for

spouses and children)• Even the best health insurance only covers 90% of

cost of an accident• Most popular plans in CA are Anthem Blue Cross,

Blue Shield, Cigna, Kaiser• We chose Anthem Blue Cross EmployeeElect (with

$20 copay)• Use an HR partner to coordinate (unless you’re a

masochist)• Trusted local partners include Advisor (advsor.com)

and TriNet (trinet.com)

The other stuff: US payroll, social security, IRS etc

Like company formation and healthcare, don’t even bother doing this yourself. It’s a massive, massive distraction.

Again, Advsor or TriNet are recommended.

It’s f*cking expensive!•$50k to get a team up and running (visas, flights, office, accommodation, payroll, taxes, incorporation)•5-10% of this cost to cheat

Dealing with distance

Transplanting culture

• If you can, start with a founder• Consider bringing a small number of

established team• Bring what’s best about your company• Be prepared to spend a lot of time with

your new team outside of the office• Try and make each new office better than

the last

Communicating with home

• You get up earlier (7am starts are normal)

• UK team work later• VOIP office phones• Google Voice for cheap calls

via your mobile• Weekly all-hands with video

conferencing

Thank you!Thank you!@bandrew | @huddle

Innovative approaches to recruitment and the roles of the founders

Alicia Navarro & Joe Stepniewski – Skimlinks founders

What have we done right?

• Currently have 66 employees

• Out of our current employees:

– 100% of people that started with us in 2008 are still with us

– All but 1 person that started with us in 2009 are still with us

– All but 3 people that started with us in 2010 are still with us

– 100% of people that started with us in 2011 are still with us

Hiring in early days…

Costs matters more Culture fit matters more

General skills matter moreSense of ownership matters more

Look in unlikely places

Make it hard to apply

Try to shock during interviews to find out the truth

Look open-source & project involvement

Hire future entrepreneurs

Widen pool of potentials: become a visa sponsor

Personalised packages that show you listen & care

“Leithification”

Aim for a Rainbow Family

70% 30%

Ratio Men:Women

21 nationalities

Australia, Austria, Brazil, Canada, China, France, Greece, Hungary, Irish, Italy,

India, Japan, Pakistan, Poland, Portugal, Singapore, South Africa, Sweden,

Ukraine, United Kingdom, United States

CEO lunch

Be open-minded about matching people to roles

Blogger with no degree

Personal Assistant

Communications Manager

Marketing Director

CS grad with no experience

Data input intern

Business Development

Product management

Grad with no experience

Account Management

Business Development

Future CEO

CS grad with no experience

Categorisation intern

Operations Manager

QA Manager

Interns and grads are the lifeblood of a startup

15% of our current employees joined us as interns

Don’t hire too many or too quickly…

… else expect churn

Create traditions

Fleetwood Fridays Christmas parties

Welcome questions #skimlove

Understand and foster your culture

Make start-up education part of overall package

Celebrate wins, especially technology successes

Hire internal HR at about 20 people

100% of employees interviewed by a founder

Founders will spend 30% on hiring & retention

Alicia Navarro

@alicianavarro

alicia@skimlinks.com

The Secrets of Creating A Great Company Culture

titus.sharpe@mvfglobal.com @titussharpe

MVF helps Companies Acquire New Customers Across the World.

A B C 0-5 6-50

How Many Staff In Your Company?

1. The End Goal2. Six Human Needs

3. Hiring Secrets4. Scaling Culture Secrets

5. Acquisition Culture Secrets

The End Goal

a. Great Lifestyle Businessb. Exit from Trade or Float

The End Goal

Business Model Scale Culture

Business Model:The Importance Of Gross Profit

Define the Culture You Need To Achieve Your End Goal

MVF Culture

Energy & Ability to energise othersPassion

Gets the job doneSmart

Energetic and Smart Marketing Culture

MVF Culture

Energetic and Smart Marketing Culture

Energetic, Smart, Data Driven Sales & Marketing Culture

1. The End Goal

2. Six Human Needs3. Hiring Secrets

4. Scaling Culture Secrets5. Acquisition Culture Secrets

We Are Apes98.8%

Six Human Needs

1. Connection & Love2. Growth

3. Significance4. Contribution

5. Variety6. Certainty & Comfort

Huge Salary

Build A Family

Real World Gamification• Employee of the Month• Awards Ceremonies• Big Gun Prizes• Flags

Fact For Granny• Awards • Press• Milestones

Celebrate Events

Encourage the Extra Curricular

Six Human Needs

1. Connection & Love2. Growth

3. Significance4. Contribution

5. Variety6. Certainty & Comfort

Build A FamilyReal World Gamification

Fact For GrannyCelebrate Events

Encourage The Extra Curricular

Happier StaffLower Salaries

2.2 ClassGeographyCambridge University

1st ClassGeographyBolton University

Energy

The Extra Mile

Sporting, Organisational, Intellectual• Organised a Rock Concert• Fulbright Scholar• Captain of Local Football Team• Completed an Iron Man• Organises Coding Dojos• Published in Scientific Journal As An Undergraduate• Won Commonwealth Silver Medal

Hire Slow, Fire Fast

• Never, Ever, Ever, Ever Rush A Full Time Hire • Google’s Six Interviews• Felix Dennis’ 30% Certainty Rule for External Hires vs Internal

Hiring Grads

• Hire Aptitude, Over Experience• Hire Energy, Brains and Passion• Look For The Extra Mile• Ensure Interest in Digital Media (if Internet Start-Up)

Hiring Techies

• Moving to London/UK for first time• Give them their London/UK Community• Gumtree• Github & Stackoverflow• 1+ years experience @ quality company

Non-Execs

• Entrepreneurs Vs Financiers• Private Equity and Venture Capital Networking

Cheap Job Posting

Right People On The Bus, Right People Off The Bus

Promote

KeepFire

Develop

3. Hiring Secrets

4. Scaling Culture Secrets5. Acquisition Culture Secrets

Hunt In Packs

The Big Jump

<50 100+

Hurdling The Big Jump

100+Making the Company Network Tighter• Socials & Sports• CEO & Management Lunches• Company Buffets• Yammer vs Google+• Employee Survey

• OMMA – Once Monthly Management Assemblies• All Directors & Managers Run Training Programs• Cross Company Mentoring• Performance Management/Objective Setting Systems• Structured Company Levels

6 Levels

6.Executive

5.Senior Executive

4.Manager

3.Senior Manager

2.Head

1.Director

Management OR Specialist

Employee Survey

Hurdling The Big Jump: From Pivot to Process

CommercialPivoters

Process Builders

Timeline

Pivot1

Pivot2 £1m £10

Main Business

New Ventures

The CEO’s Evolution

Timeline

Pivot1

Pivot2

£1m £10m

Product

What They Do

Recruiter C-level Headhunter

Product Manager Product Strategist

Salesman Public Face

1on1s Management/Board Meets

Everything Delegate

Great White Sharks

Market Leaders vs Tuck Ins

£1,400,000,000

*Source - UK M&A Market – Experian CorpFinance

titus.sharpe@mvfglobal.com @titussharpe

Make the product do the work

Jasper Westaway

1 7 13 19 25 31 37 43 49 55 61 67 73 79 85 91 97 1031091151211271331391451511571631691751811871931992052112172230

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000User growth (weekly, 5%)

Year 2 Year 3 Year 4

1,204 users

192,460users

100users

Year 1

15,223users

2,433,240users

Scaling = Year 4

Stressed & tired

Under-resourced

Distracted by new projects

Bored by existing project

Let the product do the scaling

Keep the product simple

Rethink your product as a virus

k = i * c

Focus on the product machine…

…not the sales team

• Delay building sales and marketing teams until unavoidable

• Let the product be the sales engine

Let your culture be the product

When product does your work, users do your work

www.schuch-associates.com

How founders can add the most value to their businesses: Focus on core, Delegate choreLen Schuch

September 2013

Len SchuchSchuch Associates – Director

Ubiquisys - Co-FounderOrange

Vodafone

Other Stuff

Why we do it!

Ubiquisys Profile

• Three Founders: Len Schuch, Will Franks, Pete Keevill

• Investors: Accel Partners, Advent Venture Partners, Atlas Venture, 5 Continents Consulting Group, Pacific venture partners, Sercomm Corp, UMC Capital Corp, Yasuda Enterprise Dev Co. T-Mobile Ventures (Past Investors include Google and NEC)

• Consistently Rated No. 1 in Industry Rankings

• Staff: 120

• Customers across Europe, Asia, Middle East, Americas

• Key Partners: NEC, NSN, Cisco, Intel, Broadcom, 169

• Leader in Intelligent multimode LTE / 3G / WiFi small cells deployed by operators around the world.

• Pioneers on a $billion industry

• Founded in 2004

Turning an idea into reality

The Idea The Product

How the technology worked

171Copyright: Ubiquisys

The changing environment

12 Months

2 Months

9 Months6 Years +

From dining room….. to glass fronted office

A Few Pre-Funding Activities for the Founders

Business Plan

Customer Traction

Company Accounts

Monitor Cash Flow

Fund Raising

Develop Prototype

Develop Eco-system

Find Software DevelopersRegister IP

Find Technical PartnersRaising Awareness

Building Advisory Board

When you need help…….get it!

Its very easy to be overwhelmed

Where to find your resources

Previous business colleagues

VC / Advisory Board contacts

Find / hire a trusted HR consultant

Scaling the Company

Evolution of the company structure

Growth StageScaling the business

Establishment StageDefining of processes & roles

Nascent Stage“All hands on deck”

• Established Departments• Procedures / systems in

place• Design for Efficiency• Transformation of culture

The Founders

Skills Audit

What are my skills?

Can I take the company toits full potential?

Is this a $10m or a $100m+ company?

Can I carry the investors & board?

A founding CEO or a hired CEO

“Rich or King”• Study by Noam Wasserman of Harvard Business School

• 460 start-ups since 2000

• Founders predominantly maximised value of their equity stakes by giving up CEO position and Board control

• Another Study of 212 start-ups

• Less than half of founders were still CEO after 3 years

• Less than a quarter reached IPO

When to make the transition?

• Skill audit must be made from the start

• Bring in early to shape the business:• Product

• Organisation

• Influence on Culture

• Still be able to Bond with the Founders

• Prior experience to scale the company

Source: Essay on Entrepreneurship by Reid Hoffman: 2013

Our decision to hire externally

Scale Visible that potential industry size would be in $100m’s (is now a $billon industry)

Investment Successive funding rounds required - 5 rounds in total

Partners Global partners and customers – contacts at CEO level

Engineering Breakthrough engineering required

Strategic Strategic thinker for a new paradigm

Finding Roles for the Founders

Seed & A’ Round After A’ Round

CEO VP Business Development

Chris CEO

Chief Technology Officer

VP EngineeringVP Engineering

Chief Technology Officer

What brought us Success

• A strong bond between the founders - similar goals and vision each bringing a different but compatible skill to the venture

• Being open and honest – creating a culture of respect

• Succeeding at what we did know, gaining help for the things we didn’t.

• Hiring a heavyweight and visionary CEO at the right time – not too early – not too late

• Bringing in appropriate advisors when required

• Delivering the best in breed technology

• Continuous Innovation – keeping us ranked at No1.

• 101 other things

Thank You

Remaining agile and repricing risk as you scale

Jonathan QuinCEO, World First

@world_first@jonathanquin

Agility

i. Why scale?ii. What is agility?

i. Adapt rapidlyii. Maintain/Improve efficiency

iii. Why by agile?iv. Transform and reinvent

Maintaining Agilityi. The stages of growthii. Adapting starts at the topiii. Delegate, delegate, delegateiv. The 5 tiers of potential managersv. Employees must understand growth

plansvi. 26%vii.The weekly meetingviii.The PA

Organisational Intelligence

i. HR managerii. Beermat Entrepreneur

“Product/Operations, Sales, Marketing, IT, Finance, HR”

iii. Hire for now, 1-year and 3-years’ ahead

iv. 6-monthly management assessment

Organisational Progress

i. Need process people and project people

ii. Jung, Myers-Briggs, Keirsey, Belbiniii. Need balanced teams iv. Role definitions = less fluidv. Understand your strengths and

weaknessesvi. Hire to complement you

Designing for agility

i. Periodic redesign processesii. User Centred Designiii. Bottom-up and Top-downiv. Team “champion”v. Business changevi. Technologyvii.STP/APIs

Being Objectivei. See the wood from the treesii. Can’t grow if fighting firesiii. Understand how the business

can evolveiv. Your role >1 monthv. Total disciplinevi. Think!

Process [vs bureaucracy]

i. Locking the stationery cupboard ii. Evolution vs planningiii. Management Information and

analysisiv. All about balance

Risk (business)i. “The biggest risk is not taking

any risk... In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” (Various - recently borrowed by Mark Zuckerberg)

Risk (business)i. Understand the risk, then de-risk itii. Can’t stay flatiii. Calculate your risk thresholdiv. Get buy-inv. Must be material – don’t be

distracted by small risksvi. Don’t mix up systemic risk and

growth risk

Risk (business)i. The challenge for you isn’t

coming up with the great idea, it’s having the risk appetite to follow it through.

ii. Failure: UK vs USiii. Calculating riskiv. 70%

v. Bailing out

Risk (business)

SME (<£5m) Medium (£25m+) Large Corporate (250m+)

Risk of Failure

Risk Appetite

Risk (business)i. Coca Colaii. Appleiii. Yahooiv. TomTomv. World First

Risk (personal risk)i. Risk ≠ Recklessii. Nervous… or excited?iii. Gut instinctiv. Listening to others vs taking

decisionsv. Understand your motivationvi. Can you live with the worst case

outcome?

Summaryi. Be agile or dieii. Risk Reward

iii. Take a risk but de-risk it

iv. Regret

v. Questions

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