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In last week’s “Nuts & Bolts” talk at Stanford GSB, Lecturer Robert Siegel (MBA ‘94) shared insights on hiring and compensating employees at a startup. Read three key takeaways below, and view the slides from his talk here

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1. Hire a star executive team
“Your executive team will be the single most important hire that you’ll make,” says Siegel. “Your ability to scale is directly related to the capability of your direct reports.” Think about skill sets when building this team; you want a group of people who are smarter and better than you.

Some of the common roles to fill on the executive team include vice presidents of marketing, sales, engineering/CTO, and product. There will also be “outlier leaders,” or executives who come later with more years of experience. In any case, the founding team should think about bringing on people who are going to help change the game. Hire people with long “runways,” and consider how they could grow into different roles as the company scales.

2. Hire technical talent who can get your product out the door
Looking for a technical cofounder? You have to be aggressive in going out and finding someone, says Siegel. Look for local meet-ups and talks where you can cross paths with engineers. Ask all potential candidates: “Have you ever delivered and shipped a product?” You want to hire people who can get your product out the door and working to spec because in the end what matters is that the product functions correctly and shows up on time. 

3. Pay your team what is fair
Don’t overpay and don’t underpay. All that most people who believe in your product and company want is to be paid fairly, believes Siegel. Make the compensation conversation data-driven versus emotional.

Also remember that not all founders are created equal; sometimes when you start a company, one person has more experience or a broader skill set. You need to talk upfront about divvying up the compensation. It’s never an easy discussion, but if you don’t deal with the financial issues at the start, they’ll come back to haunt you later. (View the slides for more on compensation best practices.)

Follow Lecturer Siegel on Twitter: @RobSiegel

Al-Hassan Hleileh’s (MBA ’12) mobile and desktop web app Nudge crowdsources inspirational activities from hiking to hang gliding to help people discover unique experiences in their area and around the world. Learn more: http://stnfd.biz/ojDPg 

Entrepreneurs, doing something that matters to you more than money is a great way to succeed because even if you don’t succeed, the world will be in a better place.

-Tim O’Reilly, founder and CEO of O’Reilly Media

In this Stanford University Entrepreneurship Corner podcast, O’Reilly shares 10 important lessons for startups: http://stnfd.biz/nXBG3 

One advantage to launching a startup in college is that it’s easier to find a great cofounder, shared Bastiaan Janmaat (MBA ’13) of analytics company Datafox. In this Fast Company article, Janmaat explores the pros and cons of pursuing a venture while in school: http://stnfd.biz/nLMTs 

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Fast Company Senior Editor Chris Dannen shares 4 tips for developing your brand:

BE ACTIVE ON MANY PLATFORMS
Your startup needs to have a presence across multiple social media platforms. Don’t forget that each community attracts people with different interests; your job is to tailor the message and content to the medium.

Dannen thinks about the social media landscape as a network of nodes. You want to produce content that is specific to each channel, but also interlink them so people can bounce between platforms until they find the one that really resonates with them.

HIRE INTERNS TO CAPTURE BEHIND-THE-SCENES STORIES
No one ever wants to hear you talk about something you’re not an expert in. What are you an expert in? Your own story. Don’t give away your secret sauce, but do share struggles and breakthroughs to offer others a peek into your world.

Give interns cameras and have them capture your story on a daily basis. You never know when the magic moments will occur. Later, someone on the marketing or social media team can centralize the content, filter it, shine it up and push it out through your distribution channels. “There’s no better way to get publicity than through curious interns with smartphones and apps,” says Dannen.

In turn, the interns will get to know everyone on staff and learn how your business really works since they are essentially interviewing the whole team.

PACKAGE CONTENT WITH A “SERVICE” ANGLE
People are always looking for a better way to process their world, and if you can give them an edge with practical advice or knowledge, they’ll keep coming back for your expertise. Provide value to your readers and they’ll eventually return the favor.  

HONE YOUR TWITTER PRESENCE
Test different “headlines” in your tweets, but don’t actually capitalize your words like a headline. Use different phrases as a litmus test to understand what people are interested in reading or sharing. The more capital letters and tagged handles you include in a tweet, the less often people tend to click the link. People want something conversational. Every single person on your team should be blogging and tweeting, from the founder to the engineers.

At a recent talk at the Stanford GSB, Fast Company  Tech Editor Chris Dannen shared tips on how to get press for your startup:

1. Never email a word document to a journalist. Journalists often check emails on their phones, so make it as easy as possible for them to read your message via mobile. If you’re pitching something, include screenshots as links and hyperlink keywords in the body of your email.

2. Keep your pitch to 3-4 sentences max. Make your pitch easy to understand and compelling to the journalist. Journalists don’t want to dig the story out of you.

3. Your pitch shouldn’t be product-centric. Pitch person-to-person, not thing-to-person, says Dannen. Share your story, not the product specs.

4. Get to the “why”. Just come out and say why you are trying to solve this problem. Why are you even bothering to do this? If you can make the journalist care about the “why”, then he or she will definitely be interested in the “what” and “how” of your story.

5. Be constantly active and interesting, everywhere. Google yourself. An active blogging presence or posting on Twitter or LinkedIn shows Dannen that you’re going to contribute ongoing value to his readers beyond the story.

Check back tomorrow for more media insights from Dannen.

From @TheEconomist: “The Valley is big enough and old enough to have clusters within clusters, from makers of semiconductors and network equipment near San Jose to Google and Facebook farther north and a host of smaller young internet companies in San Francisco. Even within the city, there are divisions between districts: South of Market, or SOMA, with lots of smaller start-ups; the Design District, which houses Airbnb and Zynga, a games company, in bigger premises; and Mission Bay, the base of Dropbox, a cloud-storage firm.” Read more: http://econ.st/PLItIT

Map credit: The Economist 

Ben Casnocha, co-author of The Startup of You, believes you can accelerate your own career by running it as a startup. What if you looked at your career problems as opportunities? What would you do differently?

This post is from Anthony Yu, who is a social entrepreneur with Urban Light, a 501c3 providing direct services for sexually exploited boys and teenagers in Chiang Mai, Thailand. He is interested in applying Steve Blank’s principles of customer development in the social field. You can follow him at @baconstarvation.

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The following is a synopsis of Steve Blank’s interview as part of the E-Provocateur series at the Stanford GSB.

All credit for the concepts below should be given to Steve Blank - for developing these ideas - and to Stanford’s Center for Entrepreneurial Studies and Andy Rachleff, for hosting and being an awesome interviewer, respectively.

For those angry with the tenets of customer development, please immediately direct all apples, oranges, and sasquatch meat stick projectiles at Steve Blank. His wonder-beard will subsequently consume these items and fire a comically large cannon ball at you, for we know these customer development tenets to be honorable and true. 

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Technological startups are not smaller versions of larger companies. (Here are Steve Blank’s slides on this subject matter.)

  • Startups search, for at least two years, for new, scalable, and repeatable models.
  • Large companies, on the other hand, execute large business models. 
  • Business school skill sets can be toxic to early stage start ups.
  • If a person is in fact an entrepreneur, both McKinsey and startups should not both be seen as equal, viable life paths.

Entrepreneurship is a calling, not a job.

  • It’s like being an artist: it’s something you have to get out of your system.
  • Founders are not normal people and see things that normal people do not.
  • Caveat: A lot of founders, however, are hallucinating.
  • (The points above do not necessarily apply to joining a founder’s team as a non-founder.)

Customer development cannot be outsourced.

  • It’s not possible to outsource customer development and do something along the lines of hiring a customer development manager, or pushing the role to a VP of sales.
  • Founders must do customer development themselves.
  • It’ll take a while, but a great founder will listen to customers and determine ways to pivot their products into product market fit. (More on this topic from Steve Blank.)

MBAs are not necessarily suited to be sole founders of a technological startup.

  • However, MBAs are capable of being co-founders in a good mix of individuals, operating executives, and founders of non-technological companies.
  • Engineers almost always run the teams of successfully technological start-ups.

In many situations, second-mover advantage provides more benefit than first-mover advantage in a new market.

  • Simply having first mover advantage does not push tech ahead a few years. 

The venture capitalist secret memo for founders:

  • For some venture capitalists, if a company has discovered liquidity, then they’ll start to look to replace the founder with an operating executive. 
  • Many business school graduates are adept and can perform the role as operating executive quite well.
  • When it comes time to execute, not all founders will have the chance to move onto the next steps of execution. Again, a lot of founders can be replaced by an operating executive. 

Other key points:

  • Steve Blank has cracked the code, not to make one specific individual a great entrepreneur, but rather to make a larger population of entrepreneurs less likely to fail overall.
  • After customer development proof, the next challenge for startups to figure out is how to scale.
  • Military organizations (ex: Roman legions) reflect the growth of startups very well. 

Twitter highlights with #seprov:

Stanford Business (@StanfordBiz): "We have a special word in Silicon Valley for what we call failed entrepreneurs - they’re called experienced entrepreneurs. @sgblank #seprov"

@karenlee: "A simple but clear distinction by @sgblank: Large companies execute known business models. Startups search & create new ones. #seprov"

@alanchiu: "You cannot outsource customer development. The founder has to do it personally. @sgblank #seprov"

@mduboe: "A disproportionate # of founders are from dysfunctional families. Ability to see order out of chaos is a huge advantage" #seprov @sgblank"

@mduboe: "Consumer Internet companies are NOT technology companies" #seprov @sgblank"

@StanfordEntrepr: "The most successful entrepreneurs are technologists but there are no hard and fast rules @sgblank #seprov"

@kslicer: "a start-up = temporary organizaton designed to search for a repeatable and scalable business model @sgblank @StanfordBiz #seprov"


karenpoilee:

Geoff Yang, founding partner of Redpoint Ventures, shared his perspective on what makes someone a successful entrepreneur at Stanford ETL’s talk today. His talk was jammed with great bite-sized insights, so I present them to you in a series of bullet points:

  • Build a foundation.
  • Learn (and make mistakes) on someone else’s nickel.
  • Expand your network. This will pay dividends for you when you start your own company and hire people you know, rely on and can trust.
  • Do your homework. 
  • Think huge. Have a driving passion to change the world and make it a better place.
  • Recognize patterns where others see chaos.
  • Have conviction and clearly articulate it (along with your company’s strategy and purpose). 
  • Turn your idea into a company. Once you decide to go, do it and move quickly.
  • Be genetically paranoid.
  • Recognize and support your own weaknesses. Get more help than you think you need.
  • Solicit advice and listen, but make your own decisions and take responsibility.
  • Make decisions on incomplete information, and fix the bad ones quickly along the way.
  • Sweat the details. 
  • Lead by example. 
  • Recognize that you win as a team.
  • Never give up, but adapt to opportunities along the way.
  • Hire the right people. Hire after growth.
  • Raise what you need to get to the next milestone.
  • Stay lean and mean. 
  • Maximize the pie, not just your slice. 
  • Choose your investor as you would a true business partner.
  • Don’t focus on dilution, focus on outcome.