Blog

Startup HR

The 7 Sins of Startup HR

By | People

People Fails from the Field (And How to Avoid Them!)

Most startups are fiercely focused on their moonshot, finding product-market fit and figuring out how to keep on keeping on (and growing on!). When it comes to HR, to riff on John Lennon, in startup life people and culture is what happens when you’re busy making other plans.

The thing is unless you are a solopreneur, you have a team and if you’re keeping on keeping on, your team is growing. Enter HR. Yes, it’s happening (whether you focus on it or not!) and here are the most common mistakes startups make on the People front:

1. Not Having an HR/People Function

We get it – in the heady days of early startup land, survival (and then, if you’re lucky, growth) is the name of the game. You have customers and markets to understand, products to build and revenue to chase. What you don’t have time for? Thinking about People. Uh, wait, hang on: turns out it’s people who are going to do all those critical things. And in the early days, people (as always) are critical indeed. So, you will have to start thinking about why you’re there, who you need and how you are going to find, attract, retain and reward your team. You may not have a dedicated People function until much later (typically 50 people or more) but you will have the need for a People (formerly known as HR) function. Do yourself a favor and think about who and how you’ll resource the People function (fractionally, as part of your leadership team). And start thinking now about the kind of company you want to build (hopefully one that you are your teammates will be proud to work for and to recommend). Not thinking about HR is a surefire fail.

2. An Overly Transactional Focus

Again, time is of the essence so it’s fairly common that early stage HR/People takes on an overly transactional focus, meaning it’s only concerned with things like the market comp required to hire a super developer or web ops engineer, the minimal benefits plan that will keep people keeping on, making sure payroll is indeed happening (yay for cash flow) or hanging out taxi chits at your holiday party (in your workspace, natch). Don’t get us wrong, the administrative and transactional aspects of People are imperative (after all most people, save for some founders and committed equity holders, won’t keep on keeping on if their paycheque ceases) and being compliant with workplace legislation is also critical (we say it’s tablestakes, must do stuff). Transactional HR is necessary but not sufficient. You need to move beyond the must-do to the can-do – so you can elevate the People function to one that is about inspiring people, cultivating a unique culture aligned to your disruptive mission and galvanizing (the right) passionate people to work collectively to achieve the (seemingly) impossible: startup success. Do yourself a favor and think big with your People aspirations – after all people are going to make or break your company. For real.

3. Defining Your Culture in Trite Sentiments

Think of culture as your internal brand: it’s everything about your reason for being as a company, who you are, how things are done, who gets rewarded and why. It’s your values, your employee experience, the way you describe your company and the opportunity to prospective new recruits and the way you treat people, the way you communicate and the way you deal with both adversity and crushing it. So with that in mind, it’s gotta to be unique; don’t borrow values and corporate culture from a bullshit bingo board. Seriously, take the time to define your unique values and articulate your distinct culture. It will take some effort to do but it will pay off in terms of attracting and retaining the right people so you can grow together and grow your company together.

4. Culture is As Culture Does: Not Walking the Talk

At Netflix, they call it “no brilliant jerks” and other organizations have their takes on this idea, meaning, even if someone is ultra-talented, if they don’t align with the culture, if they are making it difficult, challenging or uncomfortable for other team members, then they don’t have a place there. I’ve even seen this include customers (i.e. clients that don’t align with the company culture are shown the door). It’s about alignment, consistency and doing the right thing (not the easy thing) to stay authentic. People will notice. The right people will notice. It will be good.

5. (Inadvertently) Creating a Culture of Compliance & Building Bureaucracy

When things get growing and more people are added to the team, things can change. This change – and the real challenge of leading and managing a growing team – often spurs people to add rules and layers of management and processes. Likewise, growth often means new leaders are heading up teams and it can be a lot easier to look up policies that apply to a situation instead of having hard conversations and working through things together. Sometimes this happens even before significant growth (I’m thinking here of companies that ‘borrow’ (er are inspired by?) employee handbooks and employment contracts enterprises where they used to work. The result? Five-person shops where they have dress code and policies. Again, don’t get us wrong, we are all about being compliant with all workplace legislation and regulations. What we’re saying though is that, inadvertently when you introduce policies and thick handbooks you may well – and unintentionally – be creating a culture of compliance and a workspace where bureaucracy burgeons rather than cultivating a culture of innovation. Stay lean and stay innovative!

6. Recruiting Pure Play: Post (and Pray)

Take it from Laszlo Bock (CEO at Humu, former SVP People at Google and author of the book Work Rules): hiring is the most important part of HR and hiring the right people is the best return on investment for HR. Yet most startups are making many typical mistakes when it comes to recruiting the critical talent they need to grow and thrive. Waiting too long to identify people needs, ill-defined role descriptions, lack of alignment between positions and the moonshot, lack of proactive recruiting (instead hiring and external recruiters and/or posting (and praying), no defined recruiting process.. we can go on. Let’s put it concisely: recruiting is the most important part of HR so focus on it in a meaningful way and the results will pay off your growing company.

7. (Not So Great) Expectations: When Good is the Enemy of Great

Startups are hard going. There are real constraints in terms of time, money, resources. It’s hard, really hard. And yet, here we are. There’s also opportunity and potential and the real excitement that comes from being in on the ground floor of an organization that’s setting out to be the change. That’s the height of possibility. The challenge is making sure that everyone holds each other accountable to do their best work and to continuously be better collectively. Sometimes, in the midst of all the challenge and constraint we can (sometimes, not always) let things slide, let standards slide or not be transparent about how someone can improve. The role of the company’s leadership is to decide what matters, guide and inspire the team to deliver on what matters, and give everyone the courage to let go of what doesn’t.

So there you have it.

If some of these #HRfails sound familiar, and you’re looking for a fresh way to manage your People function, check out our brand-spanking-new People 101 course – registrations opening soon (or registration is open now).

 

 

Customer Acquisition: Keep it Close!

By | Product

When it comes to customer acquisition, our view is Augment > Outsource

In startup land, things are hard. (Yes, so hard that there’s actually a (great!) book called “The Hard Things About Hard Things”; I digress but check out our 321 Brain Food post for more on that…) And on the top of the list of hard things: Customer Acquisition. It’s so hard that sometimes, it seems like it would be so easy if only you could hire someone else to make it happen. Enter outsourcing.

Yes, there are many a firm out there that professes to be the solution to your Customer Acquisition challenges. On offer are services that allow you to outsource customer calls, appointment setting and turnkey inside sales solutions. There’s no question that these services, for the most part, are run by professionals with sales street cred and that they are well-intentioned (in the best cases, their service offerings include win-win provisions so their fees are tied to results). Yet the challenge is this: talk to most companies, founders and sales and marketing leaders who have used one of these services and their stories are similar: “We tried and it didn’t work”; “We tried it and the number of conversions from it: 0”; or “We tried it and we got appointments but they weren’t the right people.”

So what’s up with that? It seems like such a great (and needed) idea. Great in theory, if you will. Yet typically not so great in practice. Hmmm. After twenty years of adventures in tech growth companies, we have some thoughts on this. Read on!

We’ll start with some (unsolicited) advice on the Customer Acquisition front:

Keep your customers (and the process to land them) close. Retain leadership of Customer Acquisition in-house to maximize learning and results.

And hastily we’ll add what I’ve come to call the Houston Law of Customer Acquisition, which is:

Customer Acquisition: Augment, yes! Outsource, no!

Let’s dig in deeper to explore this further…

Core vs. Ancillary

Here’s a question to ask before outsourcing (anything, really): what is core and what is ancillary? If we have a tech company that has fully outsourced all product development (i.e. has no in-house developers and no in-house point person overseeing product development) is it really a software company? Likewise, if we have a tech company that has fully outsourced all aspects of customer acquisition, processes or person leading the charge of acquiring customers) are we really a tech company, or just a “dev shop”? In the spirit of radical candor, on both fronts, we’d bet against you. In other words, we believe product development (including owning and overseeing development of your product or service) and customer acquisition (including understanding the why, who, what and how of acquiring – plus retaining and expanding – customers) is critical. Customer acquisition is a core activity that you need to know, lead and continuously improve in order to grow and thrive. It’s just too important to fully outsource.

Learning

In growth companies, learning is growing. When you start out, your first order of focus is to find (strive, try, fail, learn, try something new!) product market fit. And part of that is acquiring customers. That acquiring customers part then becomes even more important to continued growth and scale. When you try different approaches, different traction channels and different tactics, you end up with heaps of learnings. These learnings inform your future customer acquisition (since you can change course, build upon things that work, try another tactic, etc.) as well as other aspects of your growth. For example, through the trials and tribulations of customer acquisition, you’ll also glean client and market feedback that will help inform your product direction, your customer experiences, and your sales and marketing efforts. And if you’re leading this in-house, you will have the opportunity to use all of this valuable learning. Trust us, it’s gold. Sadly, though, these nuggets will be lost if you fully rely on a third party.

Outcomes

We alluded to this earlier in this post: when companies fully outsource their customer acquisition function, the typical results are less than stellar. Between the two partners at 321, we’ve both lead sales and marketing in over 8 startups and have worked as advisors and in senior marketing roles at many more. We’ve drunk the kool-aid on service provider pitches only to be… disappointed. Reflecting earlier today we recounted at least 5 such experiments where the cumulative number of conversions was… 0. Gulp. How can this be? It’s not because, in our experiences, the solution providers didn’t do anything or shirked out of the scope of work. It’s more, in our vide, because, even though they were amply briefed (here’s the space, market, target customer, process, scripts, etc.) they just didn’t fully understand and internalize the prospect’s needs and the value proposition. And even though they were conscientious professionals, they just didn’t have the same level of commitment and passion for acquiring new customers.

Augment and Continuously Learn

So here’s what can be helpful: augment instead of fully outsourcing. Ensure that you have someone internally who “owns” Customer Acquisition, who is the lead person that will oversee the process, who will act on (and share!) the learnings, and who will shift course when the results are not headed in the right direction. And keep building your internal skills and competencies by developing your people and cultivating customer acquisition as a core skill. It’ll pay off. In growth.

Want more Growth Marketing in more detail? There are still a few spots in the 321 Growth Marketing course kicking off October 23. Learn more and join us!

 

Challenges Aligning Sales & Marketing in B2B Organizations

By | Marketing, Sales

Right hand, meet left hand.

In many B2B organizations, there are real challenges aligning sales and marketing. We believe there are 3 key reasons why this happens, and 3 ways these organizations can work to address this misalignment.

Why is this misalignment happening?

1.Lack of alignment on the customer

In many organizations – especially ones with large or distributed teams – there can be a lack of alignment as to the customer being served. Marketing is working on a great new campaign for enterprise customers, while sales is working on a sales blitz to farm existing accounts and drive renewals before year end. Getting clear on specifically who is the ideal customer, which are the “best” projects, and how marketing and sales will treat prospects that fall outside that definition, is critical for gaining alignment.

2.Lack of shared understanding of the buyer journey

Sales typically has a strong sense of how the buyer buys – the steps or stages, timing, and who’s involved in what stage. However, in my experience, few marketers take or have the opportunity to learn this first hand, and thus lack the critical context of where their marketing efforts can best be leveraged to support a buyer through their buying journey.

3.Metrics that don’t incent collaboration

In many large organizations, there are no shared metrics that assess sales and marketing success. Marketing may be focused on the number of leads delivered to sales (MQLs); while Sales fusses about the quality of those leads. Instead, ensuring that Sales and Marketing win (or lose) together is a key step in gaining alignment.

So, then how to fix this misalignment?

1.Joint strategy and planning sessions – that start with the what (goals), who (customer) and how (buyer journey)

When preparing operational plans, have Marketing and Sales work together to define:

  • Clear goals
  • The ideal customer profile they will both target
  • The strategies and tactics they will use to get in front of those prospects
  • A shared understanding of how best to reach, engage and convert prospects to customers
  • And the roles of marketing efforts vs. sales efforts in achieving those goals

2.Shared success metrics

I strongly believe that success metrics must be defined such that Marketing can’t win if Sales doesn’t hit its revenue target; and Sales can’t win if Marketing doesn’t deliver on the support it needs. As a VP marketing, I like simple metrics and have typically preferred my personal performance be measured by revenue. Nothing like a clear metric to drive clarity in a broader team! If revenue isn’t your preferred metric, then be sure to include metrics that are true outcome metrics – not just those that measure activity (like website visits, event attendees, emails opened) and trace success all the way to closed opportunities to assess true ROI.

3.Regular and open cross-team communications

It’s key to have the Marketing and Sales teams aligned on strategies and metrics, but those, too, will be insufficient if there’s not a mechanism for regular ongoing communications between the teams. In my companies, we’ve typically had regular “schmarketing” meetings. bringing together Sales, Customer Success, and Marketing – to discuss how we can best hit our customer acquisition, retention and renewal goals. Getting the cross-team communication flowing freely is a key job for the leaders of the company, and will empower the rest of the team to share lessons learned, ideas, and feedback.

This post originally appeared on Alberta Enterprise Corporation’s Start Alberta portal.

Our last 321 meetup was all about great company, and hearing from one great company…

By | Marketing, People, Product, Sales

Last week, we hosted our quarterly 321 Meetup with our 321 alumni and crew, to chat traction and growth.

In addition to drinks, snacks (so many snacks!), and bonbons from The Chocolate Lab, we also enjoyed hearing the Benevity growth story – directly from their founder and CEO, Bryan de Lottinville.

All of us had heard about Benevity, seen its logo light up our skyline, and knew it was one of Calgary’s tech ‘anchor tenants’. But few of us had heard the path the company has taken to becoming a global leader in employee engagement.

We had a great discussion as a group – on how growth isn’t always linear, on how companies of all stages have different paths to growth, and how culture can be a driver of growth.

I think we all left the 321 Meetup #inspired.

A big thanks to Bryan de Lottinville, and Benevity, for hosting our meetup. And for sharing and connecting with the YYC innovation ecosystem!

The power of community…

Meeting other 321’ers who share the same struggles is so valuable. But doing that while hearing first-hand the growth story of a company who’s gone global? Priceless.

This post originally appeared on Alberta Enterprise Corporation’s Start Alberta portal.

#TractionConf Takeaways: We Went to a Growth Conference and Heard Heaps About… Culture!

By | People

Last week 321 Growth Academy geared up and went west to Vancouver to take in #TractionConf, a growth conference whose 2018 theme was (fittingly) Scaling Up.

Over a jam-packed day featuring a myriad of supercharged speakers from Box to Intercom to FreshBooks to Bumble (thankfully, a diverse lineup with nary a “manel” in sight!) we expected to hear stories, insights and ideas about growth hacking, lead gen and raising capital.  We did and they definitely delivered.

What pleasantly surprised us? An overriding theme of #TractionConf was all about People, specifically the role that people and culture play in starting and scaling companies.  After too long of being an afterthought, People has (happily!) come to the forefront of how Founders, Investors and Leaders think about growing successfully.  So what are some of the highlights? Read on for a recap.

Culture for Startups: Start Early, Stand Out and Keep It Real

We were happy to see the advice to Founders to start thinking about culture at an early stage, to make sure your culture is authentic and unique and to make sure your culture in action aligns with your culture as you articulate it.

Sameer Dholakia, CEO of SendGrid noted that early stage startups aren’t investing enough in culture early enough in their company lifecycles.  He noted (we hear you!) that

building startups is hard and suggests that companies create core values at the start and cultivate them as you grow.  He shared the core values at SendGrid, called 4H

  • Happy
  • Hungry
  • Humble
  • Honest

Dholakia noted that at SendGrid they both named the core values and created descriptions of what they mean by these values.  Importantly, Dholakia also stated that startups have to make sure their values and culture are unique.  In his words: “Make sure it has edge. It can’t be ‘apple pie.’  It has to be unique.”

Culture as you Scale

What we heard here from speakers is to, as Dave Pickles at The Trade Desk put it: “pay attention to and plan for culture.”  Again, the theme of being authentic and real was prevalent. Dave’s advice: “Talk a lot about mission, values and culture.  Talk and do: if you talk about it and don’t do it, that’s worse; and Strongly reward people for collaborating and working together.”  We also heard speakers talk about how important it is, especially as companies’ scale, to get everyone involved in cultivating culture.  Culture is not just the job of the Founder, the CEO, the Leadership team or the People team.  Culture is part of everyone’s job.

Hiring

We are big fans of employee experience and attribute-based hiring assessments at 321 so we were excited to hear this articulated by speakers at #TractionConf.  Sameer Dholakia, CEO of SendGrid talked about operationalizing culture by infusing it into the employee lifecycle.  Specifically, he talked about how SendGrid thinks about how their 4H values in Recruiting.  SendGrid uses the 4Hs (Happy, Hungry, Humble and Honest) to assess candidates and have developed templated questions to get at those attributes in prospective employees.  This approach was echoed by Max Lytvyn, Founder of Grammerly who notes that: “Values are a perfect filter for hiring.”

Overall, what we saw through the prominence of People as a theme at #TractionConf is the growing recognition of the importance of HR and Culture on the growth trajectory.  No longer thought of as transactional, secondary or stuff that just happens, People is taking its place as an essential element and driver of growth.  At 321, we couldn’t agree more.  In our view, People is one of the core growth areas, equally as important and super tightly integrated with Sales, Marketing and Product.

Here’s to more attention, focus and action on building better People practices and cultivating Cultures that grow!

This post originally appeared on Alberta Enterprise Corporation’s Start Alberta portal.