July 24, 2014
Six months ago, we launched a major experiment when we formalized the creation of the High Peaks Talent Program, bringing Adam Redlich on board to lead our efforts at addressing the #1 challenge on the minds of almost every startup CEO – talent acquisition and team-building. Next week marks Adam’s ½ year anniversary, so we figured it would be a good time to check in on his progress against what we set out to achieve.
We started from a belief that recruiting support is something that VCs do either (a) not at all, (b) opportunistically, driven solely by GP networks, or (c) underwhelmingly via some in-house resources. There are a very, very small handful of exceptions that are truly high impact, and strategically designed to deliver repeatable success – Greylock and OpenView we’ve witnessed at close range, and they deliver. There are a couple others we’ve heard rave reviews about. But the rest seem to have only limited success, and it’s opportunistic rather than reliable and repeatable. And they generally focus purely on sourcing talent, not on broadly impacting a company’s full recruiting operations.
When Ben and I decided to get into the recruiting business, we agreed to the same rule we apply to everything we build into our strategy: we’ll only do it if we believe it will have a powerful and measurable impact on our portfolio companies. We’ve got very scarce resources at our small fund’s management company, so we can’t afford to spend time or money on incremental improvements – we need to pick the handful of things that are going to be really impactful and go all-in on them.
As I wrote when we launched the program, we took a unique approach. We did not attempt to address every company right out of the gates – that’s a losing proposition. We took a curated, high touch approach, focusing first on just a handful of companies, and growing from there. We focused from the start not only on helping companies source talent, but also on ensuring that their recruiting practices and processes improved materially. We wanted to make sure that when they sourced great talent at the top of the funnel they were then able to close it. This, we anticipated, would be dependent on getting our talent resources embedded in our portfolio companies – forming deep partnerships, not just transactional vendor relationships.
So now, 180 days in, how are we doing? So far, we give ourself a B. Adam has been fantastic, and he’s done exactly what we hoped he would. Not only has he sourced and helped close a whole bunch of terrific talent, he’s made the companies he’s worked with much, much better at recruiting. He’s shared his point of view on recruiting best practices and has helped improve their processes, from interview process development, to interview assessment and feedback best practices, to behavior based interview training, and systems and tool implementation. And he’s impacted not just the five companies he’s focused on, but also advised and consulted more broadly across the portfolio.
As for the hard metrics, Adam has produced better than we hoped. He’s recruited 15 high quality hires in the past 6 months across the five companies he works with. Add to that three currently outstanding offers and it seems safe to say he’ll hit 17 or 18 by this weekend. That’s one hire every 10 calendar days from the day the program launched – a rate that is well beyond the expectations of a senior recruiter who’s already well up and running at Google (where Adam formerly ran northeast US tech recruiting).
This hiring hasn’t just been quantity, it’s been quality. Adam’s companies have seen only one declined offer on his watch – a sign that the right candidates are getting through the process, and the process is leading them to be excited by the opportunity.
Perhaps the most interesting metric we’re excited by – and one we did not expect at all – is Adam’s performance on outreach response rate. Recruiters often track the rate at which “passive candidates”, i.e. candidates who are not actively looking for a job, but who the recruiter contacts proactively, respond to this cold outreach. In Adam’s history, he’s experienced two realities on response rate. When he was at a couple of very successful but not household name growth companies, he would generally get 8-9% response, which is typical in the industry. Pretty low, but not surprising given the not-too-exciting messaging, “Hi, I’m recruiting software developers for XYZ company you’ve probably never heard of. Give me a call back.” At Google, which one might reasonably expect to get about as strong a response as anyone, he saw outreach response of 18%. Twice the generic company rate, but still not great.
Now, through 6 months of calling as the Talent Partner at High Peaks, Adam’s response rate is over 35%. And this in arguably the most competitive hiring climate since the late 90’s bubble – with top SW developers getting calls every single day from recruiters. We thought Adam would have an advantage by being able to play the role of both VC and portfolio company talent manager, but we had no idea he’d have this level of advantage. Why is this? First, Adam starts with the deep understanding he gets as an insider at these companies, which leads to smarter outreach. Then because he’s recruiting on behalf of a portfolio of interesting opportunities, his initial outreach can be that much more tantalizing. It turns out, according to Adam, that developers are just way more likely to return a VC’s call than a recruiter’s.
What this adds up to is a candidate sourcing mechanism that is 2x as effective as Google’s and more than 4x as effective as the growth companies he’s recruited for. Combine it with the genuine insider’s view of his clients’ culture that comes from living in their offices every week, and you’ve got a sourcing machine that produces both better quantity but also screens that quantity more effectively, enabling portfolio company managers to spend their time only with the most qualified candidates. That is the sort of unfair advantage that any company would kill for.
Adam has also had the incentive and ability to impact the broader portfolio, too. He regularly takes interesting candidates that aren’t a good fit for any of his five core clients and passes them on. And he has jumped in on a number of occasions to advise and counsel other portfolio companies on their hiring practices. For example, he recently worked with a CTO to help strategize on the positioning of and sourcing strategy for a critical mobile developer hire. This Fall, he will be teaching a set of recruiting best practices classes to the whole portfolio.
So while we’re excited by the results thus far, we give ourselves a ‘B’ because we think we’ve only scratched the surface of the program’s potential. Adam’s early successes have given us some insights and ideas that we think will enable us to expand his impact even further. We’re working now on a few new strategy tricks that we think could improve our sourcing capabilities dramatically further. And, as anticipated, we’re going to start growing the program. This will happen both in breadth, as we add to Adam’s team so that we can support more companies in the same way, and in depth, as a couple of Adam’s companies add full time junior recruiters who will work under Adam’s direction on an even more focused basis.
Stay tuned for more developments.