Innovation and Talent, How to Get Them in Your Corner In the course of our daily practice here in Silicon Valley, we often host various groups seeking to understand the methods and platforms that continue to deliver accelerating, disruptive innovations. We can talk about the ecosystem, the environment, the institutional context, but central to this stream of disruption is Talent – the people that show up to work at companies and organizations, new and established, huge and just starting, every day. There is talk these days of the ‘war for talent’, which speaks to the growing demand for engineers, designers, architects, product managers – the human capital that is creating massive valuations. In examining the scene we asked ourselves questions such as: ‘what is the role for HR in innovation – is there one anymore?’ And with the wave and pace of acquisitions, we might ask ‘Is M&A the new R&D in a period of uncertainty when many CEOs are losing faith in the ability of their internal forces to compete at the right speed?’ And of course behind all of this are the urgent questions raised by velocity and volume – never before in history have talented people been able to have such massive impact, particularly the new generation joining the work force. What do we mean when we talk about Talent? In this context, we talk about people in various organizational roles: people in action, in positions, associating with other talents to create world-changing innovation. As a result, we have organized this report into five personas – representing the crucial roles in the trajectory of a talent into hopefully ascending levels of achievement. These personas are: the Founder, the HR/People Officer, the VC, the Corporate Dev/M&A executive, and of course the Talent herself. Each of these personas is described in a multifaceted way – especially through the use of quotes, much as you would find in a job interview. Our focus is Innovation, and the changing ways in which Talent engages to create that magic. We hope it will trigger thoughtful discussion, open some new doors, and expand the already-global impact of creative innovators. Sincerely,
Georges Nahon, CEO, Orange Silicon Valley
Where (and How) Innovation Gets Hired Today This study examines changing patterns in the recruitment of innovative talent in the cause of creating world-changing products and services that also generate wealth in the process. It incorporates multiple methodologies: firstperson interviews, literature reviews including surveys conducted on related topics, and original case studies prepared by the research team. As befits the topic, which is people, the study is structured around personas. There are five personas, each with its own section: Talent, Founders, Corporate M&A, HR, and VCs. As noted, these are supplemented with interviews and case studies, as well as a core set of quotes and stats that collectively open up the domain for discussion.
Content 3 Founders 5 HR/People Officer 7 M&A/Corp Dev 9 VC/Angel 11 Talent 13 Findings 14 Interview: Tracy CotĂŠ, MobiTV 16 Case Study: 42Floors 18 Case Study: Intuit 20 Case Study: Google Wave 22 Sources
The best hires don’t apply for jobs through traditional means. Jason Freedman, Founder of 42Floors
Building a Business + Building the Team
Lean development methodologies have lowered barriers to entry, but paradoxically raised the bar for attracting the make-or-break technical, design, or product lead that is crucial to scaling your start-up. Traditional methods in an intensifying war for talent are driving Founder CEO’s to go public, social, and personal all at the same time. Human capital is now more important than venture capital. How much time does the founder spend sourcing talent?
Job postings are fundamentally broken. Want the best talent? Be proactive & get out there and find/court them.
Jason Freedman, Founder of 42Floors
[You] need to let CEOs know how important their job is in recruiting. Rick Marini, Founder & CEO of Branchout
% founders intend to "Change The World."
% founders intend to "Build a Great Product."
% more money is raised by start-ups founded by 'balanced teams with one technical founder and one business founder.' SGP*
% entrepreneurs agree with "I care about rules." % entrepreneurs agree with "I don't care about rules." SGP*
Facebook got to the point where it was in a really good position. And things were set up so that I felt like the company didn’t really need me. I felt I could make a bigger impact on the world by starting something new rather than just continuing to optimize Facebook. Adam D’Angelo. Co-Founder and CTO of Quora, on leaving Facebook to start Quora with Charlie Cheevers
Whether it’s your investors, your board members, your employees, or your cofounders, work with people you believe in, and people who believe in you. Lane Becker, Co-Founder, GetSatisfaction
Your job is to collect amazing people. You can take someone who was doing something else and plug them into something else…Don’t only talk to people when you need them because that’s not a relationship. Keep people warm all the time. Jessica Alter, Founder/Chief Connector, Founder Dating
Create the company you want to work for. And work on it everyday.
Justin Moore, CEO & Co-Founder of Axcient
42Floors: Courting Talent in Public
I spent a tremendous amount of time recruiting. Percentagewise 25–50% of my time was spent on the internal culture of the company or bringing people on board. Your only job from 0-30 is ensuring you get talent. Russell Glass, CEO of Bizo
39 26 25
% entrepreneurs "think they are doing something new."
% entrepreneurs are addressing "existing market better."
tion of commercial real estate.” They enable companies, especially smaller ones to “discover and search for dream office space.” By simplifying the search process and showing listings from all the brokerages, landlords, and even Craiglist for free, 42Floors hopes to ease the challenge of finding office spaces. They also make the arrangements for viewing property. As a start-up without a big budget for salaries, a significant HR department, or a highly evolved brand, 42Floors has to be creative in trying to hire talent. Strategy: By targeting exactly the kind of employee they need and trying to find them early in their careers, 42Floors is betting on “courting” talent and building relationships for both immediate and future job prospects. Dispensing with traditional hiring processes like “interviews,” 42Floors hopes to appeal to the more entrepre-
% entrepreneurs are exploiting a niche within existing markets.
The Situation: 42Floors is a start-up focusing on “the digitaliza-
neurial talent they feel they need for the foundational base of the company as they grow. One example of this strategy is to identify talent through untraditional means like Y Combinator’s* social news website “Hacker News.” Another strategy is make job offers public
I would really recommend you do some soul searching and ask if you are ready to be a company founder. If so, you really need to do a reboot and approach your next company from a position of abundance, not scarcity. Of trust, not wariness. And of generosity, not stinginess.
via the company blog. Results: The effectiveness of this strategy is hard to measure. Courting talent is a long process that might not yield results for months or years, if ever. The publicity garnered by the public job offer will be one of diminishing returns as the novelty of this recruitment strategy wears off. Yet 42Floors garnered a lot of publicity and
Michael Wolfe, serial entrepreneur
positioned themselves as a company that values talent.
Always be engaging [your talent].
*Startup Genome Project (SGP)
Jessica Alter, Founder/Chief Connector of Founder Dating
Read the full case study on p.16.
* Y Combinator is a venture fund with a biannual cycle that invests small amounts of money (averaging $18K) to a large number of startups. Since 2005, Y Combinator has funded over 450 startups.
We believe our leaders and managers should be spending 20% of their time every week thinking about people: development of people and management of people. Colleen McCreary, Chief People Officer, Zynga
Fitting Inside vs. Going Outside
The New Math for HR includes assessing intangibles such as Culture Fit and Judgment, as well as Skills. In an increasingly acquisitive world, HR is working in a context where onboarding through acquisition is more prevalent than ever before. In a pervasively social world, there’s more to look at, and likewise, there are more ways for candidates to assess your company as well. How do you sell your company to talent?
…for us, humble was really important…the biggest thing that we focused on during that humbling process for folks was do they know how to say yes? The one thing we found that entrepreneurs and game designers have in common is that all of them know how to say yes. Colleen McCreary, Chief People Officer, Zynga
% respondents answer 'Yes' to: “Are you more likely to submit your information to a job if all you have to do is email a resume vs. fill out an application?” 12Recruiters
How you hire great HR people: you hire great business people who care about your business.
Commonsense and judgement trump everything. It's what you want to look for in everybody you hire. Not only are they smart but do they make good calls, do they have good judgment. Patty McCord, Chief Talent Officer, Netflix
Patty McCord, Chief Talent Officer, Netflix
Jerome Ternynck, SmartRecruiters founder and CEO
Your employees know the best potential recruits for your company. The smaller you are the harder it is to institutionalize a process around recruiting. Need to empower employees to sell the company.
Go on Quora to see who the expert is. Engage with them and figure out their connections.
Sahil Gupta, Bain Capital Ventures
Laurie Deneschuk, Chief People Officer of TinyCo
…we actually expect that on the very first day you will have an impact and that within your first week you are going to ship code. For a lot of people that’s too much pressure. Lori Goler, Vice President of Human Resources and Recruiting, Facebook
secs average length of time HR reviews a resume, enough time to scan name, current title and company, current position start and end dates, previous title and company, previous position start and end dates, and education. TheLadders
Russell Glass, CEO of Bizo
% of recruiters already use social media in their searches. % of recruiters plan to use social media in their searches. Jobvite
Superstar players want to work with superstar players. It’s the people they meet during the interview process – those relationships that flourish before they even start working.
% of recruiters 'always' check a candidate's online profile.
growth in the use of the term "Chief People Officer" from May 2010-2011 (3.9 million Google Search hits) versus May 2011-2012 (77.8 million hits).
Recruiting is a $400 billion problem that affects every business in the world.
During the initial acquisition screen" ing phase, Intuit deliberately targets great technology developed by strong talent who can ultimately add value across the whole of Intuit. Grieg Coppe, Former Chief Strategy Officer, Intuit
Bring it in: Transformative Acquisitions Corporate Development officers are on the prowl for differentiating innovation, and the checkbooks are out. With new chasms to cross and disruptive challengers springing up like weeds, incumbents are focusing earlier in their deal-flow on strategy-based vs. pure revenuebased valuations. The risks are higher, but as our case studies show, the returns can be solid – and transformative. Is HR still relevant?
It’s too costly to acqhire*. Paying a premium for " a business for a set of employees to whom you will then give salary increases and you’ll struggle to retain …Better off just hiring them in the open market. Mark Westover, SVP Corporate Development & Strategy at LiveOps
We’ve gone from a one-product company to having three big growth areas. Now we have nine General Managers, each coming with inorganic growth ideas…Last year we did 7 acquisitions, I wouldn’t be surprised if we do 10 this year. Andy Cohen, Senior Director Strategic Development, Citrix
Tracy CotĂŠ, VP Human Resources, MobiTV
In the consumer world, an acqhirer (like Facebook) will buy for the team and toss the product. Shift to the world of enterprise software where the technology reflects the team. Ken Gonzalez, Former SVP, M&A, McAfee
MobiTV: Fishing in the Stream for Innovative Talents A seasoned HR executive shares her views on how focus, inclusiveness, and patience creates a holistic approach that outperforms
companies acquired by Citrix since 2007.
% rise in Citrix' stock price in same period.
companies acquired by Salesforce since January, 2010.
% rise in Salesforce's stock price in same period.
hair-trigger acquisitions, and positions the organization for long-term competitive advantage. Read the full interview on p.14.
Intuit: Acquiring for Tech + Talent Situation: Intuit constantly needs new technologies and people to
1461 56 49 23
patents acquired by Facebook.
drive the innovation they require to remain a top player in the SMB software industry.
patents actually filed by Facebook.
Strategy: Augment internal innovation and leadership development efforts with external acquisitions. Identify key leaders in acquired companies who are likely to emerge as internal leaders who can drive innovation and growth.
% respondents expecting Global M&A activity to increase in 2012.
Result: Analysis of the last five acquisitions by Intuit since 2008 suggests this strategy is working thus far. However, given the
% respondents expecting a decrease, according to a survey of 100 dealmakers by Brunswick Group.
vintage of its senior management team and their lack of turnover to date, the real test of this strategy has yet to come. Read the full case study on p.18.
* definition: 'acqhire', to acquire an early-stage startup (often pre-revenue), for the purpose of hiring its engineers, not for the product or service.
M&A may also be effective for companies with less than stellar reputations as an employer of choice; while it may be hard to attract talent, sometimes you can buy it.
I invest in the people first and the idea second. Ron Conway Angel Investor, SV Angel
Managing Talent as Well as Money
Developer-friendly Barbarians are besieging the gates of classic venture capitalism: Angels, Seeds, Incubators all offer a welcome alternative to the grueling pitch-driven chase for money. Add to this the fact start-ups are far more capital-efficient in the Age of the Cloud, and new competition from major platform players invasively ‘acqhiring’ earlier in the start-up lifecycle, and it's definitely not business as usual for VCs with a legacy of massive returns. How to adapt to the new world?
[Mark Zuckerberg] has shown a preternatural ability to anticipate the innovator’s dilemma and sidestep it; that’s his strength. He knows the problems the company has can be solved by M&A. Roger McNamee, VC, on Facebook founder Mark Zuckerberg's approach to 'acqhiring'
Often big companies buy start-ups before they're profitable. Obviously in such cases they're not after revenues. What they want is the development team and the software they've built so far. When a start-up gets bought for 2 or 3 million six months in, it's really more of a hiring bonus than an acquisition. Paul Graham, Co-Founder, Y Combinator
Anyone is recruitable.
The abundance of start-ups means there will be scarcity of both talent and classic venture level returns…Acqhires aren’t just for big companies anymore…big companies and scaling startups, with increasingly valuable equity, are enjoying a perfect storm for acqhires. Bryce Roberts, Managing Director, O'Reilly Alphatech Ventures
Ron Conway, Angel Investor, SV Angel
Eric Wiesen, Venture Investor, RRE
Don't spend too much time arguing with VCs if they don't like your idea. Generally they'll either like you and the idea and invest, or you'll prove them wrong with traction and they'll invest later…If you're doing your job right, you'll know one hell of a lot more about what you're doing than they ever can hope to.
number of acquisitions made by Google (127), Facebook (20), Amazon (12), Yahoo (8), and Zynga (6) since 2009.
% of people VC firm Andreessen Horowitz speaks to who are not looking for jobs. Shannon Callahan, Andreessen Horowitz
Garry Tan, Partner, Y Combinator
hours a day - amount of time Mark Zuckerberg spends on 'talent development and recruiting', according to Ron Conway. number of people VC (Greylock Partners) recommends be contacted in order to fill 1 position. Dan Portillo
average base salary for a Senior Partner/Managing Director as surveyed among 98 VC, Leveraged Buyout, and Investment banking firms as measured by Holt/Thomson Reuters in 2011.
Our world is suffering from a lack of innovation, and you can’t build a world-changing company in between classes or while servicing six figures of debt. Jonathan Cain, President of Thiel Foundation, which is encouraging potential founders to drop out of college by giving out $100,000 grants
Typical revenue mix in VC firms:
% proceeds (profit-taking).
% funds under management (management fees).
To create the original innovation to start a company, founders must exhaustively understand the technology required, the likely competitors (past, present, and future), and the market in all its variations and segmentations. Ben Horowitz, Partner at Andreesen/Horowitz, from "Why We Prefer Founding CEOs"
Virtually everyone agrees that good investors back great teams…If the investor doesn't think the particular company is the only team capable of executing on that business, she should go out and find an alternative and, if there isn't one, form one.
Eight years ago I had my one hit: my brother and I started a little company and it eventually turned into Google Maps. When I think back on how many times it could have failed it's really quite amazing that it worked…
Lars Rasmussen, Co-Founder of Google Maps and Google Wave
More Opportunity than Ever to Do Great Work
Innovative talent is being torn in more directions than ever before. Recruiters now have to compete not just with start-ups, but incubators around every corner, offering world-class mentoring, peer interaction, and dazzling exits that are difficult to match with a job on the ‘inside.’ New patterns such as ‘acqhiring’ offer de facto signing bonuses far beyond what any offer letter can promise. It’s not about the “dream job” it’s about the “dream.” What dreams to tap into?
When you build a new feature you know already that millions and millions of people are gonna use it the first day you launch it, and that's a tremendous thing. Lars Rasmussen, Co-Founder of Google Maps and Google Wave
I enjoy leading and being the last voice in the room. I enjoy getting things done without a dozen-person conference call. Above all I’m driven to create and to win, and I knew once the chase was over at Mint (our raison d’être was Aaron being fed up with an Intuit product) it was time to move on. Jason Putori, lead designer and employee #5 at Mint.com
Next time someone asks if you want to crash at their hacker mansion for the summer (which has a pool, BBQ and pool table!) or team up for a 24-hour hackathon, think twice. They’re probably just trying to cash in on your youth and optimism. Ryan Carson, Entrepreneur
Some people will urge you to get an MBA and learn more about business. Others will hold MBAs in contempt and tell you to focus on scalability or mobile or programming languages or whatever their favorite subject is. You need to survey the land and learn enough to make up your own mind. Niniane Wang, from “Letter to a Young Engineer”
college degrees held by founders of: Facebook, Apple, Twitter, YouTube. Courtesy Keith Rabois
% of equity Angel Dave McClure of 500 Start-ups advises founders to reserve for rest of the start-up team.
% of talent identify with the statement “I am not currently in my dream job, but I’m happy with my company.”
% of talent identify with the
statement “I’m currently in my dream job, but I’d rather be with a different company.”
Result: The Rasmussen’s pivotal work with web-based program-
Deloitte Center for the Edge
trends, including crowdsourcing (people could append to the Map),
ming opened the floodgates of innovation for several significant
cloud computing (Google Maps has APIs), and of course the Web
sign-ups in 48 hours after Codecademy announced its Code Year initiative, offering a weekly programming lesson via email.
2.0 AJAX legacy of rollovers and pulldown content – Jesse Garner’s seminal paper on AJAX will come out in February 2005, and cite Google Maps as canonical. Lars Rasmussen will go on to work at Google’s Sydney office and deliver, at the Google I/O Conference in May 2009, a radical new approach to email and collaboration
% of talent who agree with the statement “I am generally excited to go to work each day.” Deloitte Center for the Edge
called Wave. Invitations to join Wave were the hottest commodity throughout the summer of 2009, and the platform went GA in May of 2010. Three months later, Google halted stand-alone development of Wave. In October of 2010, six years after Google had bought his company, Rasmussen moved to San Francisco and began work at Facebook. In November of 2011 Google announced an end-oflife roadmap that resulted in Wave closing down in April of 2012. Facebook IPOs in May of 2012. Read the full case study on p.20.
9 Takeaways from the Search for Innovative Talent 1. Corporate M&A and HR – Two roads, one destination.
6. People Officers Manage the Intangible – The level of
Each office feels they are bringing organizational change
discourse about the importance of ‘culture fit’, and
through onboarding of innovative talent – it’s not a com-
associated intangibles such as ‘judgment’ is rising, as is
petition, but it has a ‘coopetive’ aspect. Organic talent
the use of the term People Officer. Technical fit is also
nurture (HR) takes time, while M&A is driven by competi-
diminished as social programming democratizes skills
tive intensity more immediate.
acquisition. Next stop: Boot Camp.
2. Talent is Everybody’s Business – Increasingly, talent ac-
7. As More Founders Get Funded, Competition is Multi-
quisition and retention is seen as a shared responsibility
Sided – Lean development means founders retain more
across the corporate suite, with HR setting roles in the
equity, and the universe of early-stage players who are
interview process, but everybody – especially the CEO –
scaling grows. These two factors mean more intense
working on the pipeline.
competition for established companies, as well as hori-
3. Transformative Deals Involve Both Product and Talent –
zontally between early-stage.
Acquisitive companies can see significant bumps in
8. The Enduring Impact of Impact – Even before the
their market cap as a reward for aggressive dealflows.
Facebook Fizzle, new manifestations of the motivational
Increasing the tenure of targets’ senior teams within the
itch to have an impact on millions of users are emerging.
acquirer is a key objective. Key point: ‘acqhire’ deals are
Massive platforms hire hundreds of coders to ‘optimize’
features, which starts to feel like something less than
4. Social is Driving Multi-Level Change – Social media is a
changing the world. Deliver Impact, get Talent.
multi-layered impact on HR, from increased frontage on
9. Is That Degree Really Important? In the hothouse world
a potential hire’s life and sensibility, to new channels for
of Silicon Valley, influential VCs and incubators are in-
reaching put – even solicitations of key hires in public.
creasingly beckoning to undergrads to drop out/step up
Interviews may never go away, but they are definitely
to entrepreneurship, backing up their faith with financial
more public now.
inducements and enablers. There is plenty of precedent.
5. Happiness = Dreams – Employee satisfaction and
10. What’s Your Formula? Go ahead, share your thoughts
engagement seems disconnected from whether or not
and tips on connecting with innovative Talent, meet us on
she is currently at her ‘dream job’ in her ‘dream company.’
Twitter #hiringtalents and we’ll share.
How important is happiness, anyway?
Interview: M&A/ Corp Dev (from p.8)
Is M&A More Effective Than R&D? by Tracy Coté In this interview, Tracy Coté, Vice President, Human Resources of MobiTV shares opinions she has formulated based on 18 years of experience in the HR field with a number of different companies, including MobiTV, Organic, Inc., Charles Schwab, and American Stores.
Is M&A outperforming HR in bringing in relevant, innovative Talent? It doesn’t surprise me to hear that the majority of Corporate Development professionals you’ve met with promote M&A over traditional hiring as a means of acquiring good talent: it’s what they know. HR people, on the other hand, are likely to tell you that finding talent the old fashioned way (by various recruiting methods) is better, because that is what’s in their wheelhouse. The truth probably lies somewhere in the middle, with advantages and disadvantages to both approaches, and companies should
But why not nurture and find the right talent yourself? If you know what talent you want, if you have the right recruiting team on board to find it, and you have a learning and development process in place to develop and maintain it, hiring the right people should be relatively easy, less costly, and have better odds for positive cultural integration. Not only does the company save the myriad expenses associated with buying a new company and on turnover related to the fallout, but they gain the trust of their employees. Trust contributes to productivity and retention, which builds institutional knowledge and saves countless dollars in the long run.
strategize accordingly based upon their business needs.
Does HR have a role in driving innovation?
Sometimes, politics are the barrier to innovation, because for
There are many surface activities HR can promote to foster
whatever reason, some companies hesitate to replace an under-
innovation, including a casual creative environment, contests,
performing VP or Director, so instead the problem is addressed
rewards and recognition for individual and team achievements
by buying a whole new company. Hiring the right talent tends
related to innovation. At a deeper level, HR needs to focus on
to take longer, but it doesn’t have to. Companies willing to buy
hiring and developing talent, including encouraging teams to
a 50 person company often hesitate to hire an executive, a
innovate and develop skills they may not need now but will use
senior manager and a couple of recruiters to staff and onboard
in the future.
a comparable new group internally.
Contrary to popular belief, the ownership of innovation does
How do you see the Inside/Outside question, is M&A more effective than R&D?
not start or end with HR; it can’t be their sole responsibility or it
Buying a company instead of finding the right talent is a short cut. Doing so can quickly provide the acquiring company with a new
won’t work. In a technology company, the entire leadership team, starting with the CEO and including HR, must understand, believe in, and evangelize innovation, embedding it into the culture.
skill set. This is an approach that works for large companies with
The HR department must understand the business needs of the
pockets deep enough to do it.
company, provide a selection of qualified candidates for open positions, push a pipeline of opportunity candidates even when there are no openings, and keep a focus on employee develop-
ment. The mistake many large and small companies make is that
Finding great talent isn’t all up to the recruiter. Managers often
they focus single-mindedly on what they need in the moment,
fail to look for the right things, slowing down the process and
as opposed to thinking of acquiring talent ahead of the curve in
failing to identify good long-term talent in the midst of the needs
terms of skillsets and turnover. In Silicon Valley, turnover happens
of the moment. A buttoned up interview process is important,
no matter how great the company is; you have to constantly be
and managers have to buy into it. More critical when it comes
in front of it. If you’re not, you are always playing catch up, which
to innovation, companies must have senior level leaders who
is a death knell for innovation; great
space to create. An innovative company hires great talent when they find it,
whether the candidate fits the current opening or not. HR must work with all levels of
evangelize the importance of “holistic
There are times when it makes sense to buy a fully grown tree and plant it, and there are times when it is better to plant a seed and nurture it.
hiring” to line managers, advocating efficient hiring not just in the box, but outside of it as well.
Is HR better suited to bring in the talent to lead innovation versus the M&A team?
management to ensure they
No matter which approach a company
understand the value of fishing
takes, hiring or M&A, HR is critical to
from the stream when acquiring talent; a concept foreign to most middle managers.
the success or failure of bringing in and integrating new talent. With M&A, HR is initially responsible for making sure the people-
What are the best sources of finding great talent?
related due diligence is done, and that cultures and basic HR
Employee referrals are a wonderful source of “backbone” talent…
one of the primary risks with M&A (assuming the talent that
solid employees who will fit a certain job description and get the
has been acqhired is the talent the acquiring company actually
job done. Referrals don’t usually help much from a diversity per-
needs) is the risk of culture clash or culture and value mismatch
spective. Rarely do you get a superstar from a referral. There are
leading to high turnover. HR can and should be extremely
hundreds of places recruiters leverage to find talent: LinkedIn,
involved in making the M&A work from a human perspective
Monster, Dice, user groups, conferences, Twitter, Facebook,
from the earliest stages.
meetups, the gym, your carpool, your neighbor’s Christmas party.
There are times when it makes sense to buy a fully grown tree
None of it matters unless you have a great talent acquisition team
and plant it, and there are times when it is better to plant a seed
that understands the needs of the business, whose members
and nurture it. Both approaches have risks and rewards. As an
know how to find the right people quickly. It takes some time to
HR professional, I tend to be biased towards growing talent
build effective rapport between line managers and the recruiter.
rather than buying it, although the decision is highly dependent
Hiring a random agency rarely garners great results. Agencies
upon the situation. The talent is out there, and regardless of
tend to be an expensive waste of time. The one exception to
how the talent is brought on board, companies need to ensure
this rule is for very senior talent. If your recruiters, leadership
they have the right executive and HR leadership in place to
team and Board don’t have the right person in their network, it
facilitate effective onboarding, integration, and development of
can be very time consuming to find the right person. Selectively
leveraging a sophisticated external recruiter or firm allows you to fill key senior roles fairly quickly.
practices are respected and combined effectively. Costs aside,
Case Study: Founders (from p.4)
Courting Talent In Public by Natalie Quizon, User Experience and Content Lead, Orange Silicon Valley At the recent conference War For Talent 2012: Winning The War
blog, Farmer detailed out his
For Start-up Talent in San Francisco, Jason Freedman, CEO &
company’s logic in not hiring
Founder of 42Floors talked about the types of people that need
Shipper. The blog is titled “We
to be hired in the early stages of a company this way: “Your first
Rejected Dan Shipper (And What
10 people have to be in love with the start-up process, instead of
I Learned About Hiring).” Farmer
the product itself…We want to go for people who want to start
goes on to impart what he learned
their own companies. The first 10 are about entrepreneurs.” This
from the hiring process.
thinking was evident in the public job offer Freedman posted
1. Look For Talent at All Levels: At the time that Dan applied,
on the company’s blog just a couple of weeks earlier in April
we had no plan in place for hiring technical interns. We were
2012. After having followed the work of University of Pennsyv-
focused on building out our “core” tech team, and really
lania college sophomore, Dan Shipper, for a while, Freedman
weren’t prepared for talented but raw engineers to step in
extended the job offer in an open letter on his blog (see following page). In
decided to continue working on Airtime for Email, his start-up, college.
and contribute. We ended up
In a start-up environment that is a constant battle for talent, early stage companies simply cannot afford to pass on talent at any level.
rectifying this situation and finding two incredibly talented engineering interns, but we missed on Dan and several other potential candidates. In a start-up environment that
is a constant battle for talent,
early stage companies simply
already anticipated this: “I think it would be a mistake if he
cannot afford to pass on talent at any level. When we were
dropped college and his company right now,” says Freedman,
absolutely buried with product needs in the weeks leading up
who said he has known Shipper for six months. “But, if there’s
to launch, we wouldn’t have given a damn if Dan did or didn’t
a point where he wants to work for someone else, he’s going
fit our neat round hole of a job description.
to work for us before he works for Google…The offer has no
2. Always Hire A Players: This is repeated often enough that it’s
a truism in the start-up community, yet we still got this one
When interviewed about the 42Floors offer and asked if he
wrong when it came to Dan. As a start-up, if you have the
would ever work at 42Floors, Shipper replied “I certainly would not rule it out.” Since the publicity around the 42Floors job offer, Shipper received multiple offers from other start-ups but he turned those down too. Only the year before, Shipper was getting rejected for internships he had applied for. Quinten Farmer, former VP of Operations at Onswipe, provided an interesting counterpoint by admitting in public that his company rejected Shipper’s application. In a blog post on his personal
opportunity to bring on an A player in a low risk role (like an internship), you do it. No questions asked. Because finding A players is tough. When one drops into your lap, you don’t hesitate or shuffle through your available job listings. You pull the trigger. In a company of less than 10 people, A players will naturally fall into the role that best suits them. They will contribute at a high level, and attract other high level contributors to join the team.
3. Treat People Right: I could have easily made the mistake
process, and most important, they learned from their failure
of sending Dan a polite rejection email and nothing else.
to hire Shipper. And of course, Shipper got the recognition he
Instead, I followed up and worked hard to help him find
deserved and will benefit from this public courting, be it in future
another opportunity that made sense. We got coffee the next
jobs he applies for or getting VC funding for his own company.
time he came to the city, and met up when our schedules allowed over the summer. I took something that could have easily been a negative interaction and turned it into a positive opportunity to build a friendship. Whether we end up working
The Job Offer
together, competing, or just staying in touch throughout our
Dear Dan Shipper:
careers, it’s great having a smart friend just an email or phone
Please join us. Consider this a job offer to work at 42Floors.
Because you have never applied for this position, this may come
Farmer ended his blog post with his conversations with Shipper
as a little bit of a surprise. But you have known for awhile that I
after the 42Floors job offer and all the publicity it generated:
have been really impressed with your work.
“Dan joked that maybe I finally owed him an apology for our
You’re only a sophomore in college, but you’ve already started
rejection. Even though that statement was made entirely as a
several companies. You’ve taught yourself to code, and you are
joke, I don’t mind eating crow: Like 42Floors made their offer
a maker at heart. And you have that rare gift of having a sense of
as an open letter of recruitment, consider this my open letter
style in your design work as well. AND, your blog posts that reach
of apology.” Many insights can be gleaned from Farmer's and
Hacker News are eloquent and well thought out. It would be an
honor to have you join us here at 42Floors.
• Perhaps the job title is not so important. Talent is more
Here is your job description: You will make gorgeous products that
interested in the actual work itself. Notice Freedman’s offer
help entrepreneurs find their dream office. There are dozens of
did not include a job title.
things we need built -- you will pick what you most want to work on
• The public online presence becomes the de facto
or come up with your own project.
resume. And it is a dynamic one at that. Shipper's presence on Hacker News and the ongoing documented conversations he has with companies recruiting him are included in that public resume. • Recruiting has to be thought of as courting. A process that takes time – months and years. • High-caliber talent needs to be identified and brought on early. Internships are critical to this. • Keeping the interaction with talent positive will yield only good things for everyone. Ultimately, these public exchanges of job offers and apologies ended up benefiting all parties involved. Freedman and 42Floors come away looking innovative and non-traditional to prospective talent and they have established a relationship with Shipper. Farmer and Onswipe come across as deliberate in their hiring
If you ever decide you want to go back to working on your own start-up, you have my full support, and I will personally do everything I can to help you be successful as an entrepreneur. You will never be asked to sign a non-compete. You will be free to contribute to open source, free to blog about anything and everything, and never be required to submit a patent that could be used offensively. This offer has no expiration and, regardless of whether you decide to work with us, I hope to personally be there on your side in everything you do. Most sincerely, Jason Freedman Co-Founder, 42Floors
Case Study: M&A/Corp Dev (from p. 8)
Acquiring for Technology and Talent by Kristen Badgley, Consultant Since it’s founding in 1983, Intuit has built its reputation and market position as a leading small and medium business (SMB) software company on three core strategies – empowering its employees, delivering innovative products and delighting its customers. Here we look at how Intuit uses strategic acquisitions to obtain both innovative technologies and bolster its base of future leaders.
The Strategy Intuit’s
team has made a number of significant acquisitions since 2008, some
with the objective of “acquiring” key talent. The February 2008 ac-
Historically, Intuit’s senior management has been groomed and
quisition of ECHO (Electronic Clearing House) for $131M and the
recruited from within its own ranks. The company has one of the
July 2009 acquisition of PayCycle for $170M both contributed
longest-tenured leadership teams in the software industry, and especially within Silicon Valley. As a result, over the past several years few new senior leaders have been recruited into Intuit’s organization. Given the accelerating pace of change within software and the advanced tenure of its senior leaders, Intuit needed to line up the next generation of leaders to maintain is market leadership and growth. Intuit’s former Chief Strategy Officer, Grieg Coppe, clarified that “during the
key technology and market-
Given the accelerating pace of change within software and the advanced tenure of its senior leaders, Intuit needed to line up the next generation of leaders to maintain is market leadership and growth.
driven benefits, and were notable for the lack of mention of key personnel brought on board through the deals. The November 2009 acquisition of Mint.com for $170M and the May 2010 acquisition of Medfusion for approximately $91M both demonstrated a shift in strategy for
management talents. In the
case of Mint.com, CEO and
phase, Intuit deliberately targets great
founder Aaron Patzer was
installed as VP/GM of Intuit’s
talent who can ultimately add value across the whole of Intuit.”
Personal Finance group – key early hire, lead designer Jason Putori, did not stay. Aaron assumed P&L responsibility for Mint. com as well as Quicken Online, desktop and mobile offerings.
Reaching almost $4B in revenues in FY2011 with 8,000
With strong talent acquisition overtones, the Mint.com ac-
employees, Intuit constantly seeks to innovate, particularly
quisition was a strong move to bring a young innovator in to
around emerging SAAS, social and mobile technologies. While
the Intuit leadership team. It may also be viewed that Intuit's
Intuit is moving away from shrink-wrapped boxes and mailed
team was finally ready to embrace a market inflection point
CDs, the new 24/7 “always connected on all my devices”
when users appeared ready to share access to their personal
consumer expects Intuit's products’ functionality and user
interface to stay current.
from the Medfusion acqhiring of
existing nascent offerings and infused them with new life. After running the group for 20 months,
…during the initial acquisition screening phase, Intuit deliberately targets great technology developed by strong talent who can ultimately add value across the whole of Intuit.
Aaron took control of Intuit’s
Aaron became the VP of Product Innovation where he is “bringing Mint.com design principles and ease of use to a wide range of Intuit’s products.” We
its founder, Stephen Malik, who became President of the newly created mash-up of Medfusion and the Quicken Health Group. The new division, Intuit Health, is riding the wave of innovation in electronic health records and increased consumerization of health care.
evolution, and has taken steps to embed the concept deeper into the culture of the company. In 2008, Intuit created the role of the Chief Innovation Officer when
Halvorsen, transferred into the role. We also know Intuit created an Open Innovation group in 2010, and an Intuit Collaboratory in 2011. "The talent at Intuit is impressive, but we know that we don't have all the answers." said Jan Bosch, Vice President
of Open Innovation at Intuit. "Our history is built on a mix of home-grown and outside innovation. Fresh ideas from the outside are a key element to our innovation program. These new models enable Intuit to mine new channels to crowd source solutions to elusive business challenges on the roadmap.
Despite being one of the oldest players in the software industry,
Clearly, Intuit has made some key acquisitions to improve
Intuit has maintained enviable growth. In 2007, Intuit reported
its market position with emerging technologies. And they’ve
revenue of $2.7B and grew that to $3.9B in 2011. That is a great
identified and thus far retained top talent as part of the acqui-
accomplishment for any software company, especially one
sition strategy. These acquisitions have bolstered the ongoing
hitting its 30th birthday in this next year. Its challenge will be to
innovation efforts of the internal teams as well.
maintain industry-leading growth as its senior leadership, largely
Intuit publicly states the importance of innovation in its product
in its mid- and late-50s, starts to retire. Only then will we know if Intuit has acquired enough talent to keep the growth going.
Kristen S. Badgley is a Professional Services executive with more than 20 years of expertise working with geographically diverse technology clients, especially telecommunications, software, semiconductor, and biotech.
Case Study: Talent (from p.12)
Multiple Chapters for World-Changing Talent by Mark Plakias, VP, Knowledge Transfer, Orange Silicon Valley
A PhD in theoretical computer science suggests the recipient
to-be-HTML5 browser is a broadly
did not adhere to the dropout/start-up model aimed at getting
shared common vision – back then,
undergraduates focused on building companies and generating
Google Maps became the example
exits for investors. Yet in his talks to entrepreneurs it is clear Lars
of what was coming.
Rasmussen is one of them, and is driven by the dual motivations of changing the world and working on interesting hacks.
The other context we take for granted of course is smartphones. Indeed, if they didn’t exist, we would have to invent one just
He almost did it twice, and there’s
so we could use Google Maps on
the possibility he’ll have a third pass
the street when we need to get
search had been demonstated
We were not quite the success that Google was hoping for, and trying to persuade them not to pull the plug and ultimately failing was obviously a little stressful…It takes a while for something new and different to find its footing and I think Google was just not patient.
by the stock’s performance, and
at it in his new role at Facebook. His road to Silicon Valley and working with Mark Zuckerberg is one that illustrates how fast things move, and how quickly we forget, here in Silicon Valley. This article is being written on the eve of the Facebook IPO. It was 8 years ago that the Google IPO, also eagerly anticipated, occurred in August 2004. The power of
directions. But in 2004, the idea of a phone with sufficient display, UX, and sensor data to deliver the realtime performance of the Ajaxian Google Maps was still embryonic (Google’s acqhiring of a small firm called Android wouldn’t happen until 2005, and the iPhone was three years away). Rasmussen’s
option of then-exotic browser standards and protocols such as XSL and VMG presaged today’s
change was in the air. Tim O’Reilly
rapid appropriation of emergent
published a post in September of
NoSQL tools at the backend and
2004 about a new conference he was starting to focus on, a trend he was calling “Web 2.0.” In this third phase of the Internet, after the web, O’Reilly saw a massive shift from software to data: “open source and the open standards of the web are commoditizing many categories of infrastructure software, driving value instead to the data.” No wonder then that the Larry Page’s instructions to the two Aussies who had combined search and maps in a compelling new way was to do it on the Web, with a browser. Today, the idea of APIs delivering value from the cloud to a rich, intelligent soon-
advanced presentation capabilities inherent in HTML5. When the convergence of Web 2.0, search and location took off in the next few years, accelerated by conferences such as O’Reilly’s Where 2.0, the next thing around the corner was glimpsed by knowledgeable VCs tracking the rapidly-expanding web platform available to college students called ‘thefacebook.’ Sharing was a new concept. By 2009, the idea of a stream, a ‘wall’ that could reflect incremental changes over time, was settling in with a vengeance. Lars and Jens put their creative energy to work, harnessing this
Other Publications from Orange Silicon Valley latest experience into a problem they defined as “what if we were
Read and download these publications at
The result, Google Wave, broke in 2009. Using a controlled, inviteonly approach and releasing a slick introductory video, the Wave
team generated enormous buzz – the introductory video was viewed 9.6 million times. Yet so many elements were involved in this new framework for sharing and posting multiple data assets – including chat – that adoption was not straightforward. Also, the analogy to email as the single killer app for Wave did not materialize. In less than a year, Google’s Wave had receded, and Rasmussen would leave the company to work at Facebook. News accounts at the time showed the tensions between a ‘fail-fast’ culture at Google and the talented developers. In an interview with an Australian journal, Rasmussen stated “We were not quite the success that Google was hoping for, and trying to persuade them not to pull the plug, and ultimately failing, was obviously a little stressful…It takes a while for something new and different to find its footing and I think Google was just not patient.” Indeed, the wooing of Rasmussen to Facebook in 2010 was another habringer – of the looming war for Talent that would reach frenzied heights in the following two years. Citing what he called a “compelling personal pitch” from Mark Zuckerberg, Rasmussen was quoted as saying, “Obviously they’ve already changed the world and yet there seems to be so much more to be done there. And I think that it’s the right place for me to be.” The third chapter in this particular talent’s story is being written now. Navigating the Post-I.T. World Users Create
Sources 3 Founders
Talent is a topic that everyone has an opinion on, and achieving
War for Talent Conference 2012, http://http://www.warfortalentcon.com ibid. ibid. Startup Genome Project ibid. ibid. http://www.articles.businessinsider.com/2012-04-22/tech/31381199_1_mark-zuckerberg-quorafacebook/2#ixzz1vXdbpSaU War For Talent Conference 2012, http://www.warfortalentcon.com Ibid. Ibid. Startup Genome Project http://www.quora.com/Do-you-trust-your-cofounder-with-anything-everything-company-related War for Talent Conference 2012, http://www.warfortalentcon.com 42Floors: see p.16 sources below
clarity involves finding and listening to the right people with experience. We’d like to thank those people who have guided us to the conversations and themes that hopefully have illuminated the many facets of innovative organizational development. Foundational to our understanding has been John Hagel and
his talented team at Deloitte Center for the Edge, especially Research Lead Duleesha Kulasooriya. Along with John Seeley Brown from DCE, their work on passionate workers was an early and profound influence.
http://youtu.be/0BdzXRzOLKw Ibid. http://12recruiters.wordpress.com/ http://youtu.be/o3e1lnixKBM Ibid. http://www.hrtechblog.com/vcs-love-recruiting-hr-tec War for Talent Conference 2012, http://www.warfortalentcon.com Ibid. http://youtu.be/pFF7B4lLhkI http://articles.businessinsider.com/2012-04-09/news/31311078_1_recruiters-study-decision http://recruiting.jobvite.com/resources/social-recruiting-survey.php War for Talent Conference 2012, http://www.warfortalentcon.com http://recruiting.jobvite.com/resources/social-recruiting-survey.php 20x: Growth in the use of the term "Chief People Officer" from May 2010-2011 versus May 2011-2012. Original research by Orange Silicon Valley.
When we first met Kristen Badgley at Korn/Ferry, we knew we had found a kindred spirit. Kristen’s enthusiastic support and generous sharing of her rich network of people was greatly
appreciated value-added on top of her written research for this project. In that network we were graced with the insights shared by Tracy Coté, Grieg Coppe, and others who furnished us with powerful perspectives from both sides of the CorpDev/HR spectrum.
Dan Olsen, for his postive words and suggestions. Also, this is a good place to acknowledge the seminal work at the Start-up Genome Project by Max Marmer and Bjoern Herrmann. Here at Orange Silicon Valley, the vision of CEO Georges Nahon has been the inspiration for the journey. This particular
War for Talent Conference 2012, http://www.warfortalentcon.com http://www.post-gazette.com/stories/business/technology/facebooks-purchases-may-hint-at-its-future635853/?print=1 http://www.paulgraham.com/hiring.html War for Talent Conference 2012, http://www.warfortalentcon.com http://bryce.vc/post/11994670978/acqihire-heaven http://www.quora.com/Is-it-ethical-for-a-VC-to-pull-people-together-to-start-a-company-to-directly-compete-with-a-company-they-decided-not-to-fund/answer/Eric-Wiesen http://www.quora.com/Venture-Capital/What-is-a-polite-way-to-tell-a-venture-capitalist-to-stop-talking-toyou-because-you-do-not-need-his-money/answer/Garry-Tan http://techcrunch.com/2012/01/27/google-spent-nearly-2-billion-on War for Talent Conference 2012, http://www.warfortalentcon.com Ibid. Ibid. http://www.investmentbenchmarks.com/pevc_compensation.html http://www.businesswire.com/news/home/20111121006654/en/Peter-Thiel-Opens-Application-Period%E2%80%9C20-20%E2%80%9D http://www.investmentbenchmarks.com/files/2011_preview_pe_na.pdf http://bhorowitz.com/2010/04/28/why-we-prefer-founding-ceos/
topic was especially suited to Dr. Natalie Quizon’s academic training as a cultural anthropologist, and as always, the visual engagement that we strive for with all our publications has
been artfully constructed by our multimedia intern Hizuru Cruz. Finally to the Talents that make Silicon Valley one of the richest grounds on earth for innovation, our respect and admiration. Mark Plakias, VP, Knowledge Transfer
See Intuit case study, p.18 Interview with Mark Westover, SVP Corporate Development & Strategy at LiveOps Remarks at Citrix Synergy Conference Interview with Ken Gonzalez, former SVP M&A, McAfee; See MobiTV Interview with Tracy Coté, VP Human Resources, p.14 http://seekingalpha.com/article/279266-citrix-uses-cloud-to-emerge-from-microsoft-shadow?source=email_ watchlist; http://thomson.mobular.net/thomson/7/2699/3238/; http://en.wikipedia.org/wiki/Citrix_ Systems#Acquisitions http://en.wikipedia.org/wiki/Salesforce.com#Acquisitions http://techcrunch.com/2012/04/23/facebook-patent-fortress/ http://www.brunswickgroup.com/Libraries/Reports/2012_Brunswick_M_A_Survey_Booklet.sflb.ashx
From the start-up world we wish to acknowledge the early encouragement of veteran entrepreneur and multiple founder
http://youtu.be/iY1hDBHUIlg Ibid. http://gigaom.com/europe/hack-weekends-ryan-carson/ http://www.quora.com/Jason-Putorti/Posts/From-Mint-to-Votizen/ Niniane Wang, from "Letter to a Young Engineer" http://www.quora.com/Silicon-Valley/Is-there-a-glass-ceiling-for-people-without-graduate-degrees-orMBAs-in-Silicon-Valley War for Talent Conference 2012, http://www.warfortalentcon.com http://www.deloitte.com/view/en_US/us/About/Catalyst-for-Innovation/Center-for-the-Edge/scaling-edges/ index.htm http://techcrunch.com/2012/01/03/codecademys-codeyear-attracts-100000-aspiring-programmersin-48-hours/ http://www.deloitte.com/view/en_US/us/About/Catalyst-for-Innovation/Center-for-the-Edge/scaling-edges/ index.htm
Orange Silicon Valley
16 Case Study: 42Floors
www.wire.inc.com/2012/05/04/start-up-seeks-college-dropout/ www.42floors.com/how_it_works www.42floors.com/blog/posts/consider-this-a-job-offer-to-work-at-42floors www.quintenfarmer.com/2012/05/02/we-rejected-dan-shipper-and-what-i-learned-about-hiring/
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