Reference calls. We all have to make them. Whether you’re considering hiring a new employee or as an investor whether you’re looking to do a background check on the founders of a company.
My friend Jason Hirschhorn Tweeted about this today
References on hires are often useless.
— Jason Hirschhorn (@JasonHirschhorn) April 6, 2014
1. Ask for at least 5 references
As your candidate for at least 5 references. You specifically want to ask for people who have directly worked with the person before. I like to get a mix of people who have reported to the candidate, whom the candidate has reported to (2x) and peers.
Don’t worry about the fact that these are the references that the candidate has hand-picked – that’s part of the process. I would start by asking the candidate, “How did you decide on these five people” as part of your review process. You also should have mapped out their key employers and if they chose not to list their boss at one of them that obviously forms a source of discussion for you (and possibly a person you might be more interested in calling).
2. Call each of the 5 references looking for “glowing” feedback
You should expect to get glowing references unless the candidate has told you in advance something like, “Look, I’m listing Susan as a reference. We had some great moments working together and some tough ones. I think you’ll get a balanced perspective from her but I wanted you to get that anyways. Know that we had a conflict over “x” and that may come out.”
But that kind of reference being listed is the 0.05% case. Usually they are hand-selected to say the best possible things.
Most technology startups seem to be funded by product people or business people. Specifically what is often not in the DNA of founders are sales skills. Nor do they exist in the investors of early-stage companies.
The result is a lack of knowledge of the process and of sales people themselves.
My first startup was no different. I had never had any sales training so everything we did for the first couple of years was instinctual. While we did fine learning on the fly, it turned out that a lot of what we did was wrong.
As we grew into several millions of dollars of sales per year it was no longer acceptable to “wing it.”
So I did want any rational person who wants to improve does – I hired a coach. We focused together on improving our sales methodology, our training and our comp plans through a larger than life ex country manager from PTC named Kai Krickel. He taught me much – most of it unconventional. Most of it worked and his philosophies have proved enduring to me.
His business was called TEDIC – The Excuse Department is Closed. That mindset always stayed with me and even rung true at the time. Excuses.
There’s an old joke in software development, “How much time does it take to design software?” Answer: As long as you have scheduled for the design phase.
I know. Not funny, “ha, ha” but pretty apropos.
If you’ve been involved with a number of software projects you already have an intuitive sense for this. We’ve all been involved with projects that seem to drift and drift and make progress. There’s a healthy balance between allowing a design team to dream up functional requirements, talk with customers, analyze competitors and for technical projects – research the latest cool-kid tools to play with.
Design with no constraints becomes a research project.
You see there is a creative tension along the spectrum of time and scope. If you pull too hard at the scope end of the chain your time drifts. If you pull hard at the time end of the spectrum you end up shipping inferior product.
If you’ve watched any industry in the last 20 years where technology has begun to transform how the industry works the results are always predictable driven by what Clay Christensen appropriately called “The Innovator’s Dilemma” (one of the most influential books that changed my thinking about markets).
Young startups claim they are going to change the world, large companies that dominate that sector scoff at how low quality these new entrants are, until like frogs boiling in water they come to the realization that “this shit is real.” The next step is the industry tries to fight back.
TrueCar is the first ever Internet service that tells you exactly how much other people in your area paid for the car you want to buy. You enter your make, model, trim & year and out pops a price curve of purchases in your area and in most states you will then be offered a fixed price to purchase that car.
One of the hardest things for most entrepreneurs to know is how hard to push in situations where people tell you “no.”
But then again most entrepreneurs fail. There is that rare breed that doesn’t accept “no” for an answer. It is impossible advice to give because there is such a fine line between being persistent and being annoying and it’s something you probably can’t teach. I often describe “chutzpah” as being able to skate right up to the line of acceptability without crossing over it.
And being persistent I believe is the most important attribute for success in an entrepreneur (assuming of course that you have all the other requisite skills).
Years ago I started using the term “politely persistent” to remind people that you still need to be likable even if you have gumption.
I’d say less than 20% of of entrepreneurs fit into that bucket.
Of course at one end of the bucket are entrepreneurs who are persistent but just aren’t polite.