Businessweek has a nice refresher on recruiting top management. While it primarily seems to be written for large companies, the lessons are equally relevant to startups. Of course, there are some additional points one needs to keep in mind when recruiting for startups:
- Sell a personal vision - not just of where the company wants to be, but also why the prospective candidate should get involved. Money? Significance? Career advancement? Broad-skilling?
- Build credibility - let others speak for you. Customers? Investors? Advisors?
- Prepare well - have a detailed view on why you need this person - is he going to feel overqualified once he comes in?
- Hire the best - this is a motherhood statement, but one which cant be emphasized enough, especially for startups.
Any others that have been useful in your experience?
Kamla Bhatt sent me a link to this post, and it sparked off a few thoughts. What has worked well on the internet so far is performance advertising/ lead generation. Most people who are looking to building a business around enhancing brand presence on the web seem to be taking a PR oriented route to it. Unfortunately, PR budgets are not large. I think there is an opportunity to take another route.
Someone needs to figure out how to dip into the brand advertising pocket of companies for the internet. Few interesting observations:
- When we talk to using blogs or videos or other social media for enhancing the image, its not just PR - PR often tends to promote people at expense of brands - “Boss’ day out”, “What am I reading” - these are personal profiling tools and seldom help the company/brand. Social media promotions (i promise i will stop using a new term very soon) cuts away from this, and actually helps project the brand
- Conventional PR is about influencing a medium on which one has very little control, and hence very little promise of delivery. On the internet, the understanding and control of medium is far higher, where agencies can take ownership of deliverables such as reach
- Given the large spends on brand advertising, metrics obviously play a big role - be it reach/frequency, share of voice, top of mind recall, etc. PR has relatively fewer (column centimeter of coverage!) Internet has the power to support brand-relevant metrics - again, the trick is not to get lost in clicks and impressions, but to have metrics that are relevant to brand salience, positioning, competitiveness, etc.
Most entrepreneurs looking to do the above are taking a PR approach (retainer fee, best effort basis, tap PR budgets). The opportunity is far bigger, and requires an approach to build a system that enables large scale execution and measurement. Bringing brand advertising on the net in significant magnitude can be a big business. Any takers?
We are launching another section on VentureWoods - the VentureBuzz section - post any buzz you have heard - might be a rumor, might be a gossip, might be just some juice! Is that hot startup on its way down? Or is it getting bought? Did they announce a deal that never existed? Share something here that news doesnt know! We will try and keep this as free as we can, except wont allow personally disparaging remarks.
If you would like to make the comment anonymous, make sure you are not logged in when posting the comment.
Go, have fun!
Don Dodge covers the Angel Capital report from Center for Venture Research for the US Angel space. Some quick stats:
- 258,200 active angels invested $26b in 57,120 companies in 2007. VCs invested $29.4b in 3,813 companies. The ratios are revealing in the kind of pipeline it takes for a vibrant ecosystem, and proportionate amount of dollars invested by each constituent.
- Average angel group invests $2M per year in 8 companies ($250K per investment). One thing I have always maintained is that there are too few angel groups in India - some of them being Indian Angel Network, Mumbai Angels and TiE Chennai Fund. At IAN, our average deal size has been similar, though intuitively it might seem that seed stage in India might take lesser money.
- Annual returns for angel exits are 27.7% - that number is low! For the risk and time investment that angels make, I would reckon the expectations are higher, especially since 2007 was a reasonably good year from exits perspective
I believe that angel investment is not just a function of putting money, but about deep understanding of specific sectors, and hence the ability to value-add in those kinds of investments. The formation of angel groups is another enabler, as it provides diversification, with the same money and time commitment. I would love to get the group’s views on what can be done to encourage and facilitate more angel investments in India.
I might be calling this a little early, but in times such as these, its better to be early than dead. Now that the Sensex is 30% (Nasdaq 25%) off recent peaks, and US economy heading downwards, here are some lessons from the last time we went through this:
- Cash is king - raise money if you can; dont vacillate on valuations
- Put your blinkers on, and build the business - avoid distractions
- Focus on the customer - build what you can sell in near term
- Building brands can get cheaper - but will still take cash
- Enterprise sales (software or services)? Count on longer sales cycles
- Beware of old receivables - a lot will evaporate
If we do get to a full bust, I will come back with some more. Remember, the great companies of today were built on surviving the last bust. Here’s your chance.
BarCamp Mumbai 2 was a big hit with over 200 attendees and a day full of discussions on many interesting topics and ideas. BarCamp Mumbai 3 is now on the cards for 29th March at School of Management at IIT Mumbai. In the true spirit of BarCamp it’s an open platform which anyone can make her own. Anyone can participate, anyone can speak, agenda is drawn collectively at the start and any topic is welcome as long as you have others interested as well.
This time the infrastructure has been extended in view of the overwhelming participation last time. The venue can accommodate around 400 people. In addition, the open spaces within the building will have mattresses which can be used by groups of people to discuss or to just take a break.
This edition will also host a BlogCamp which will have people talk about all things blog and also other aspects of social media and marketing. There is also FireTalk where you can talk about your idea and exhort like minded people to join you – it can be a cool app or a full scale business plan. The people gathered thus prepare a broader blueprint offline and then present it to larger audience later in the day.
Come and make this your own BarCamp. Over a 100 people have already registered.
Register your participation for free at the wiki: http://www.barcampmumbai.org/BCM3_registrants
Register your topic at the wiki: http://www.barcampmumbai.org/BCM3_topics
Tittle Sponsorer of Barcamp Mumbai3 is Sun Microsystem & Associate Sponsorer is Directi.
Please respond directly to Netra Parikh | netra30@gmail.com
Well, this came out of a comment on our fund announcement post. Someone asked, what do we mean by a great team. While it is almost impossible to provide a precise definition of the same, I would like to offer some things that we look for. Every team might not have all of them, but these matter (in no particular order):
- Hunger and passion, sense of purpose driving the specific business
- Relevant experience and execution capability
- Alignment of objectives - focus on scale, profitability and value creation/realization
- Team dynamics and ability to work together
- Leadership qualities such as driving change, hiring and developing top talent
- Value system match - Integrity, Intelligence and Intellectual honesty
I could elaborate on each of these, and that would make up a book. I do realize that I might have walked into a minefield with this, but feel free 
Happy to report that we have announced closure of our eighth fund at $650M. The fund will continue to focus on early stage technology businesses in US, India and Israel. India could account for upto 25% of the fund commitments.
For our India operations, this is a significant increase in commitment. We started investing in India in 2000, and opened our office here in Mar 2006 - one of the very early VCs to do so. Over past couple of years, we have made four investments. More importantly, we have been able to establish a finer understanding of the Indian venture opportunity amongst the entire partnership. Going into our next fund, we feel more and more convinced about the potential that India offers, and more educated about the kind of opportunities we would involve ourselves in. The broad areas of investment will continue to be Internet, Mobile applications, Managed services, Software products, Transaction platforms and the like.
Over past couple of years, we have also grown our team to respond to the increasing set of opportunities we see in India. Recently, we brought Harish Gandhi on board, and he has been a great addition to the team.
Look forward to more exciting times ahead, and an opportunity to partner with great teams in building great businesses.
Remember vortals from the dotcom hey days? For those who dont recognize the term, it stood for vertical portals - go after a particular target group, and provide range of services to them - our first business before we gravitated to jobsahead was a “vortal” called zipahead for Indian youth!
Well, the vortal is back. I was at the alwayson media conference in new york yesterday, and a lot of companies seem to be building destination sites for particular target groups. It begs an interesting question of what has changed, and will the outcomes be any different this time around. Three things that have changed massively in favor are:
- Critical mass of users on fairly targeted groups
- Growth of online advertising to support such models
- Maturity of community capabilities on the web
What has not changed though, is the difficulty of creating truly great content at one place, when the user has a choice to get best of breed content at different locations. In my view, that remains the single biggest challenge for such sites. So a college goer may use different sites for his academics need, versus dating, versus sports, and so on. The new model of aggregation of web content adds another dimension to these sites - they now have an opportunity to aggregate best of breed content, as well as syndicate out to wherever the user is (a la facebook). In some sense, the battle for the vortal is really a battle for the homepage.
Any thoughts on how you see this evolving?
Happy to announce that Harish Gandhi has joined Canaan Partners’ India team.
Prior to joining Canaan Partners, Harish headed the Value Added Services (VAS) Business and the New Product Development team at Bharti Airtel. In his product development role, Harish was responsible for working with a number of VAS product, service and content companies as well as system integrators to bring several new products to the market for Bharti Airtel. Harish has also worked in the capacity of Vice President Business Strategy and Planning at Bharti Airtel where he was responsible for leading the 3G effort at Airtel.
Harish has also served as Director Marketing and Technology at Nokia and as Director Business Development for Dilithium Networks (a telecom start-up) in his earlier assignments.
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Alok is a first generation entrepreneur, now in the venture capital business. Alok heads up venture operations for