February 18, 2014
We’ve written in the past about our ongoing focus on building assets and resources that will have material operational impact on our portfolio companies. We think that’s our job as investors in and partners with the founders we back. Picking winners is the easy part – helping them win is where we can have a truly differentiated impact.
Since Ben and I formed this partnership a year and a half ago, we’ve been working our butts off to put our money where our mouth is on this front. We announced late last year a first piece of our operational platform, the Operating Partner Network. Today we’re very excited to announce another piece of the puzzle: our Talent Program, and a new member of the High Peaks team: Adam Redlich, our Talent Partner.
Adam is a startup recruiting veteran. In addition to running the recruiting practices at three high-growth startups, he also led Northeast tech recruiting for Google, hiring hundreds of engineers for their NYC, Boston, Pittsburgh and Waterloo, Ontario offices. He’s hired over a thousand engineers in his day and has the breadth of skills to attract business side folks and C-level executives as well. He’s studied and developed a point of view on the best practices of the recruiting function through tours at staffing firms, Google, and in-house at a handful of smaller tech companies. Suffice it to say, he’s seen pretty much every angle on the recruiting game. We feel blessed to have him and are excited to watch him help our companies grow.
So how’s he going to work?
We’ve studied the recruiting models of a bunch of venture firms – talent programs are understandably in vogue at larger firms these days – and we’ve been largely uninspired by what we’ve seen. The typical model of hiring a single resource to ‘serve’ a large portfolio ends up being pretty low impact in the eyes of founders and CEOs we’ve spoken with. That’s hardly surprising when you imagine the life of a single recruiter trying to support 30, 40, 50 or more companies.
The venture firms who are having real impact on recruiting are doing so by throwing lots of resources at the problem. Notable amongst these are Andreessen Horowitz in the Valley and OpenView in Boston. The recruiter-to-company ratio is the key, we think. Lots of resources and a heavy investment in connecting with and understanding the needs of their portfolio companies leads to real results.
As a small firm with limited resources, we knew we couldn’t duplicate what those firms have done. But we weren’t satisfied simply throwing up our hands and concluding we couldn’t have an impact. As we wrestled with this, we focused on what our early stage companies are facing. And we saw a conundrum resulting from a collection of truths:
- Effective hiring will often be the single biggest determining factor driving success or failure of an early stage company.
- These are small teams for whom recruiting is never a core competence. Some teams might be lucky enough to have good networks to help them source candidates but they can’t spend enough time nurturing them.
- Even companies that are decent at sourcing aren’t good at the critical but underappreciated process management side of recruiting. How do you make sure that when you’ve managed to source that dream candidate you run a process that both identifies her and makes her want to work for you?
- While they need more help, they’re simply too small to hire a full time resource (~50-75 employees seems to be the breakpoint for that).
So where do they turn? Generally they go it alone and hope to get lucky and/or work with transaction-oriented contingent search firms who might help with the sourcing part, but not the process part. Some end up doing OK, but most end up pulling their hair out and throwing too much money at outsourced recruiters.
We believe that a focused, dedicated resource is the only good answer. You need someone who will actually come to understand the companies, who will be an informed and insightful sourcer, and who will educate management teams on optimal process. We’ve found a way to make that capability affordable to companies who are at only 10 or 20 employees – maybe a year or two before they’d be ready to hire someone full time.
The model Adam is now building is a high touch, shared resource model. The companies will pay for it on an entirely opt-in basis, so those companies that choose to participate will really focus on it. And given the skills of a guy like Adam, we think they’ll be getting a screaming bargain.
We’ll match all-star recruiters with portfolio companies on a 5-to-1 ratio, building an expanding team of recruiters over time. Those recruiters, like our portfolio, will be geography and sector focused, increasing the efficiency and effectiveness of our efforts. And they won’t sit in our office, they’ll live in the offices of their ‘clients’, coming to deeply understand the cultures of and hiring managers at those companies. We start with Adam and five lucky SaaS companies, and as the model is proven out Adam will add talent experts to his team, each of whom will serve five more companies.
We’ve been up and running now with Adam for a few weeks, and if the early returns from his clients are any indication, we’re onto something. He’s fast at work helping source key hires but also working with those companies to implement world-class recruiting processes and evolve and optimize their company cultures.
Startups and venture investing is all about the people. We’ve known that for years and now we’re finally putting real resources behind making a difference. Adam has already improved our team. We can’t wait to watch him improve the teams – and as a result the performance – of our companies.