Author: Ray Tenenbaum

7 Things I learned examining 199 recruiting startups newly added to AngelList

Several times a week I get asked if I’ve heard of some new recruiting startup, and I jokingly respond that there is new one started daily and it is impossible to keep track. Well, it turns out I was off by a factor of about three.  There are 2800 companies that are tagged as Recruiting Startups on AngelList , of which 199 were added in August and September 2015.  I decided to take a look at each of these recently added companies to see what trends can be gleaned from them.  After ignoring 31 firms that weren’t really recruiting-related, here is what I found about the remaining 168 companies – so almost three per day.

AngelList Recruiting Companies

1.       Is recruiting broken?

One theme I saw consistently in either the company description or on their website is some form of the statement “recruiting is broken” and their mission is to either reinvent how companies and candidates find each other or improve the process. Inefficiency and friction plague end-to-end recruiting. Companies are trying new methods to match candidates with companies like having candidates bid on being able to apply to a company or a tool for candidates to supply a form for recruiters to complete about the role before being allowed to contacting them.  Who knows if any of these companies will truly reinvent talent acquisition, but at least there are many that claim to be trying.

2.       Niche marketplaces are very popular

Nearly half (80) new companies reviewed are trying to bring recruiters and candidates together more effectively. In particular, niche market places for any type of narrow market you can identify is being created.  Examples include two marketplaces for the cannabis industry:  Hemployed and Greenseek;   hyper-local job boards   and sites for professional specialists to connect like healthcare and cyber security experts.  For any marketplace, the challenge to is to get enough traction with both job posters and candidates to have a reasonable size marketplace and achieve some level of network effects. If nothing else, each of these sites should at least appear in the top 3 organic search results for ‘{name of the niche + jobs}’.

3.       Big data is a big deal for sourcing candidates

Fifteen different companies using some form of big data and secret sauce algorithms to find the right match for your job. Terms like AI, machine learning and predictive analytics showed up several times.  Each of these companies claim to be able to look at resumes, LinkedIn, Twitter, GitHub and other social sites and crunch all the data and then be able to spit out the winning candidates using their magical secret sauce tool.

4.       Next generation digital resumés:

Given the dominance of LinkedIn, many candidates feel there are better ways to project themselves online and provide a more accurate portrayal of their capabilities.  There were seven new companies trying to integrate great visual design, multi-media and social media to give candidates more opportunity to showcase their personality and experience.

5.       Not another ATS company

As if there aren’t enough Applicant Tracking Systems (ATS) companies already out there, another seven declared their intent to reinvent managing the recruiting the process from job req to onboarding.   While this industry segment is not yet a complete commodity, given how poorly most companies rate their ATS, the level of competition is so high that taking a truly different approach will be the only way any of these companies stick around for a meaningful amount of time.

6.       Point solutions solving specific needs

The companies that interested me most were the 20 or so companies trying to solve well know challenges in the recruiting process in a more efficient manner. Whether it is targeted skills assessment, new tools for interviewing or a new wave of mobile social recruiting and referral apps, several of these new companies are trying new ways to leverage your personal network to find the right match.

7.       AngelList can be challenging when looking for real recruiting startups

Many companies have their industry misclassified or Recruiting is clearly a secondary element to their primary strategy and therefore shouldn’t really be tagged as such. In particular, College Admissions should be a distinct tag, separate from College Recruiting.

It is also amazing how many typos and grammar errors there are in company descriptions. Finally, if you are service company like a placement firm, you really should not be putting your site on AngelList;  many companies or people are using Angellist for SEO juice/ link building rather than using Angellist for its intended purpose: to connect startups with investors and potential employees

Summary

The good news for recruiters is that there is a lot of innovation taking place in the space and a handful will surely bubble to the surface and be successful. The challenge for companies and talent acquisition folks is being able to pick from the many solutions out there that match their specific needs.

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Ray Tenenbaum is the founder of Great Hires, a recruiting technology startup offering a mobile-first Candidate Experience platform for both candidates and hiring teams. Ray has previously spent half of his career building Silicon Valley startups such as Red Answers and Adify (later sold to Cox Media); the other half of his career was spent in marketing and leadership roles at enterprise organizations including Procter & Gamble, Kraft, Booz & Co. and Intuit.

Follow Ray on Twitter @rayten or connect with him on LinkedIn.

Don’t hire bad hires

In my last article I wrote about four causes of bad hires that I’ve encountered in my career.  Now I will discuss a few ways to avoid making a poor hiring choice during the candidate selection process by addressing each of the causes one by one. While many of the recommendations might seem obvious, it is amazing how many large companies we work with do not employ any of them. Many talent acquisition organizations just let the hiring manager use an unstructured process which relies heavily on personal choice and entropy to evaluate a candidate.

  1. Try before you buy: To address “Lack of technical/functional expertise”

Anyone can claim they are an expert in something and stick it on their resume or LinkedIn profile, but how do you really know they have the specific skills needed for your role.  If it is a deep technical skill requirement there are many assessment tools available from a variety of online and offline companies.  My preference is to have a test drive with the candidate where you create a simulated experience to the actual job they would perform. Ideally it would be an actual task or problem that currently needs solving (or was recently solved).  It is uncanny how this type of exercise can quickly separate the wheat from the chaff.  For someone who is really an expert, the simulation should be a breeze – and it should also quickly expose the fakers. The challenge with these trials is that they take time and (many times) money.  Depending on the situation, paying people for their time is quite valuable and makes them feel that they are being compensated for the ‘work’ they are performing.  In the end, investing a few hundred dollars up front to see if someone really has the technical chops for the role, can save you thousands of dollars down the road.

 

  1. Pattern recognition: To address “Inability to develop domain expertise”

When you hire someone from a different industry, market or customer segment, there is risk that they are a hammer who thinks everything is a nail.  Therefore, it is important to assess how good they are at pattern recognition and if they notice the differences between industries, markets and customers for the job compared to their past experience.    For more junior level positions you can have a candidate take a pattern recognitions test like Procter & Gamble does for all their entry level positions.  For experience roles it is important to spend the time seeing if the prospect grasps the differences and has the business acumen to appreciate the situation.  How much research has the candidate done into the market, customers, company & job?  Can they articulate the similarities and differences between their past roles and this one?  Do they have the intellectual curiosity to dive deep and appreciate the different dynamics? Without the ability to articulate both the strategic and tactical contrasts, then you risk hiring someone who won’t adapt well to their new situation.

  1. STAR methodology:  To address “Can’t deliver results”

Past experience and results are usually the best predictors of future success.  Even though past roles may not be the same level of responsibility or challenge as your job opening, seeing that someone has succeeded in similar situations or has shown a trajectory of results and expanded responsibility are pretty telling.

Using the STAR interviewing methodology is the most common behavior-focused method to understand what results the candidate was able to deliver.  The key to this approach is making sure the candidate talks specifically about what they themselves did, not the team or the company.  Teasing out the specific results that were directly tied to the candidate’s efforts is not always easy and without peeling back the onion on the unique contributions they made is what’s most important.

Implementing the STAR method takes time and effort to prepare before candidates ever come in the door.  How much time do you spend with the hiring team discussing what to look for when during their interviews?  We have a client who has the entire interview team get together for at least one hour to holistically discuss what success looks like for the role, get alignment on the competencies to evaluate for the job and then divides and conquers the competencies/ questions amongst the team.   This is a big up-front investment, but it is uncanny how it pays off for them.

One of my favorite pieces of advice I received about ensuring someone can deliver results is to show them exactly the results they would be expected to deliver for the role. Yes, the actual targets. And then have a collaborative discussion the strategies and tactics that they would employ to deliver the results. It’s amazing how this can both help the candidate self-select if this is the right role for them and also set expectation & motivation for the a new employee – since they knew exactly what they were signing up for when they took the job.

 

  1. Self-Awareness triangulation: To address “Lack of self-awareness”

A lack of self-awareness is a killer trait for a bad hire. Someone who is self aware will pro-actively make adjustments to address gaps in the performance and typically will also be open to feedback.  Without self awareness, the opposite holds true. But how do you measure self-awareness?  This isn’t as simple as asking ‘What is your biggest weakness?’.  I recommend using a combination of techniques to triangulate information collected from the candidate, the hiring team and references.

 

During the interview process, asking probing self-awareness questions about specific projects can be very revealing about a candidate.  Here are some of my favorites:

“Looking back what would you have differently for this project?” –Note: this question can be used for both successful and unsuccessful situations.

“’What skills are you lacking?’

“If I called the past manager that has liked you the least, and what would they tell me about you?”

“What would you do if you realized you were failing in this job?”

 

References are another way to learn about a candidate’s abilities and development areas.  Asking a reference to compare the former direct report to the best person for the same role they held and understanding the gaps is very telling.

Taking the candidates responses, your hiring team’s probing questions , triangulating them with the candidate’s professional references and your own observations can be a powerful way to assess self- awareness.

If you’ve ever made a bad hire you know that there was likely at least one piece of data captured during the selection process that signaled a red flag for a candidate.  But for whatever reason it was ignored and eventually came back to haunt you.  Being able to recognize the sources of a bad hire and how to spend the extra time, effort and money to tackle them head-on before an offer is essential.  Hopefully these methods will help you learn from the mistakes of others and avoid making a bad hire.

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About the Author: Ray Tenenbaum is the founder of Great Hires, a recruiting technology startup offering a mobile-first Candidate Experience platform for both candidates and hiring teams. Ray has previously spent half of his career building Silicon Valley startups such as Red Answers and Adify (later sold to Cox Media); the other half of his career was spent in marketing and leadership roles at enterprise organizations including Procter & Gamble, Kraft, Booz & Co. and Intuit. Ray holds an MBA from the University of Michigan as well as a bachelor’s in chemical engineering from McGill University.

Follow Ray on Twitter @rayten or connect with him on LinkedIn.

Four Sources of Bad Hires

Making a bad hire sucks. And usually you have no one to blame but yourself.  In hindsight, 99% of the time, you could have figured it out before making the offer. So why does it happen?

A lot has already been writing about how expensive a bad hire is to an organization when you add up the hard costs of salary, sunk recruiting & training costs plus the lost productivity and/or revenue.  And it is easy to place the blame on needing to fill the role quickly.  But when you look at the underlying causes of a bad hire, it has more to do with what you are looking for than making a hasty decision.

No one ever plans to make a bad hire. In fact, at the time of the offer most people feel like they are making a well thought-out decision.  However, within a short period of time (2-6 weeks) you realize that you made a bad choice.  Surprisingly, more times than not, there was a voice of dissension to making an offer to the candidate which you had ignored. Whether it was that little voice in the back of your head that you didn’t listen to, or a member of the interviewing team that raised flags that were either trivialized or not sufficiently followed-up on…now that voice you either ignored or rationalized starts telling you ‘I tried to warn you’.

When you have a bad hire, there isn’t usually a single item that is wrong with a hire unless the role is very technical and the person clearly does not have the technical chops for the job.  While it typically comes down to ‘skills’ or ‘company fit’ as the cause, that is too general a classification to be very helpful. Instead, by peeling the onion on the most common ways a bad hire fails, you can then adapt your candidate selection process to address the issues at their core.

From my experience, the reasons someone does not work out falls into four buckets.  In some cases, multiple buckets are at the root of the person not being right for the role. Here they are:

1.       Lack of technical/functional expertise:  Yes, I’ve kinda done that before, ahem.

Unless a new employee is brought in at an entry-level position and is expected to be trained for the functional role they were hired for, they are expected to have some basic technical knowledge required for the job. Whether they are a sales person who has sold before, a developer who has coded before or a designer who knows how to design, there is a repertoire the hire brings with them in their competency portfolio.  But each specific role has a different emphasis on specific functional skills. For example someone who is considered a consumer marketer may know search-engine marketing and display ads, but that is very different from television advertising and market research.  A Rails developer may know how to write decent code, but also needs to know how to write tests and make sure their code fits the architecture of the entire system – which can be different for every product. While some of the principles for a function are transferable, the differences and nuances of a specific role may cause an experience worker to struggle to be proficient in areas they have had limited past hands-on experience. The good news is that this could be the case of ‘right person, wrong role’ if the organization is big enough. But the key is that every functional job is different and being able to prioritize the specific traits for that job are critical to ensuring the right alignment of experience and skills.

2.       Inability to develop  domain expertise:  The hammer who thinks everything is a nail

It is very common to hire someone with functional expertise in one industry and expect them to be able to apply them in another industry.  But many times it can be a struggle to adapt to these differences.  In my career, it is amazing how often I have seen someone who comes from a different industry who does not have the ability to recognize difference between markets and customers and blindly tries to re-apply practices from their previous industry to their new one.   This is where an individual’s ability to take the initiative to understand the nuances between domain and industries is important. They must also have the analytical skills, patience and perseverance to figure out why something seems to work in one industry but not the other.  The awareness to go back to first principles to compare and contrast company- or industry-specific models are not skills everyone has.  In my experience, people who have demonstrated the ability to adapt well to a new domain typically have had at least two completely different career experiences, which made them adept at being ‘multi-lingual’.  People who have had a past life in moving between two industries, working in different countries or roles in very different functions, tend to be able to mentally wear different hats. This gives them an appreciation to better diagnose a situation before prescribing a thoughtful solution instead of the generic ‘this is how we did it at X’ statement.

 

3.       Can’t deliver results – Look at all the effort I put in!

Let’s begin with the end in mind. If someone can’t deliver results, they are a bad hire. If someone doesn’t have the drive to focus on the achieving their goals and working a project from beginning to end they aren’t going to be successful.  But knowing the ‘how’ to deliver the ‘what’ is critical. At most companies, this involves teamwork, influence, tenacity, and some form or leadership or functional excellence to play nice with the rest of the organization. This is where fit, adapting to the cultural norms and using soft skills to get stuff done make a big difference.  If someone doesn’t play nice with other or doesn’t have the talent to figure out how to leverage existing company systems and practices, they will struggle to be successful. It is very much like sports where an athlete’s statistics look good on paper, but when you are looking for them to perform on the field, they disappoint.  Despite all the activities and energy they may (or may not) put towards the inputs, the output isn’t there.    Evaluating passion, ownership and drive are not always part of candidate evaluation feedback forms, but it is an intangible worth measuring.

4.       Lack of self-awareness – {silence}

If there is one trait I have seen in nearly every bad hire I have made, is that the person was        mostly unaware of the cause of their ineffectiveness. While several of them knew things weren’t  going great, there was a lack of inward analysis and curiosity to try and discover why. They did  not have the ability to look retrospectively on themselves and reflect at what is transpiring. If  they did seek guidance, they simply didn’t (or weren’t able to) apply the feedback.  Instead they       just keep repeating the same methods over and over and seeing the same outcomes.  Not being            able to self-identify the problem or apply feedback is one of the most frustrating aspects for the     hiring manager, because now you have two problems to solve. The first is the competency gap      between the new hire and the job and the second is expending a large amount of energy      preparing and delivering the reality check to the person. This is a big time and emotional           investment.  Ugh. There is nothing more draining than having a conversation with someone who             is oblivious to their performance.

If you’ve made a bad hire before, at least one of these items probably crossed your mind (or was pointed out to you by a hiring team interviewer) before you made the offer.  It is perfectly reasonable to ignore a flag that was raised if it can be fully dissected and weighted against the role’s critical success factors.  But if a debate about the qualities of candidate is identified by a single voice of dissension, you may be missing a potential bad hire’s Achilles Heel even before making the offer.

In my next post, I will discuss how to address each of these buckets/ issues during the candidate selection process so you can catch bad hires before the offer is made.

About the Author: Ray Tenenbaum is the founder of Great Hires, a recruiting technology startup offering a mobile-first Candidate Experience platform for both candidates and hiring teams. Ray has previously spent half of his career building Silicon Valley startups such as Red Answers and Adify (later sold to Cox Media); the other half of his career was spent in marketing and leadership roles at enterprise organizations including Procter & Gamble, Kraft, Booz & Co. and Intuit. Ray holds an MBA from the University of Michigan as well as a bachelor’s in chemical engineering from McGill University.

Follow Ray on Twitter @rayten or connect with him on LinkedIn.

Four career paths to financial success

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Recently I’ve been asked career advice by both recent college graduates and experienced workers still in the early stages of their professional life.  Since I have had broad experience in different types of companies and roles, these young guns are either seeking insights into a specific industry (or company) or starting their own venture.  Almost every one of them is very ambitious and is trying to find a way to make a lot more money than they do today.  To frame the conversation, I begin the discussion with a simple framework which postulates that there are basically four routes to make a lot of money in your business career.  Here are the four options I discuss and the implications for each one:

1.       Work at established companies and work your way to executive level roles

While this may sound a little old school and take several years, working your way up the corporate ladder is still a great way to make a lot of money. Note that I used the word ‘companies’ not ‘company’.  This does not in any way endorse or recommend working at a single company for your entire career (although if you find the right fit that can help accelerate your progression to the executive ranks).  It just means that working in established companies gives you the opportunity to be financially rewarded as you climb towards the top.  Staying focused on a particular industry like packaged goods, technology, defense, financial services etc. can lead you to the executive level faster . All you need to do is read a public company’s annual report to see the kinds of compensation packages the executive team earns.

As I compare myself to my peers with whom I started my career, so many of them are now VP level or higher at well known companies (such as GE, Pepsi, Kraft and Viacom) with tremendous compensation packages. The key is that they became functional or business experts and either stayed in one industry or had transferable skills to adjacent industries. Most importantly, they stuck with their career path and did not jump roles at the drop of a hat. Instead, at one point in their career they stayed at a single organization for many years, climbing the ranks to reach a level with large responsibility and scope. This dedication and commitment pays off if you are a solid performer throughout your career. Even average to slightly above average performers tend to keep climbing over the course of several years as they become expert specialists in their function for their industry.

2.       Work as a professional service provider

Examples of these would be as a management consultant, investment banker, lawyer, accountant, real estate agent, doctor etc. In these types of professional services roles, if you are good at what you do and work very hard you will get paid very well.  The tradeoff is of course the lifestyle you lead and the dues you need to pay when you are first starting out.  Most of these roles require very long hours each week and many require travel. In addition, you typically start at the bottom of the organization and it typically take 7-10 years to achieve a level of success  where you can finally have a some control over your work life and the financial rewards start to scale. On balance, if you are willing to put in the years and accept the lifestyle, this is probably one of the best risk/reward choices to make if you are focused on the financial benefits of your career choice.

I have several friends who are lawyers, management consultants and accountants who after many years working for companies like McKinsey, pwc or Accenture left to start their own firms. While it took time and persistence for their practices to take off, they now run successful firms of their own and are reaping the financial rewards.

3.       Become truly world-class at something  for which there is real market demand

This can be anything: a scientist, a mathematician, a public relation manager, a designer, a software developer, athlete etc.  If you are one of the best in the world at something – you can make a lot of money either working for a company that specifically needs your skills in order to succeed or creating your own invention that you can sell directly as a one-person company.  You can also make additional income as a professional speaker or writing books in your field of expertise.  The obvious challenge is you need to be truly world class at what you do, and typically this takes years and years of dedication and passion. And it is very possible that the financial reward will be uncertain until there is confirmation that there is indeed a market for your area of expertise or you are viewed as truly world-class. But once you are considered world class there are many ways to monetize your abilities.

4.       Try being an entrepreneur.  

As a rule of thumb this is the biggest risk, biggest reward option.  There is a lot already written about what profile makes a good entrepreneur and various types of companies an entrepreneur can pursue (small business, franchise, tech startup etc.).  Not everyone is cut out to be an entrepreneur based on personality, risk profile and skill set.  Given the large standard deviation in possible outcomes and the commitment required to have a reasonable chance of success you really need to know if this path suits your competencies and mindset.

My general advice is to only pursue starting your own venture when you have some level of expertise in a specific area that can be applied to your venture. Really having some unique skill sets combined with understanding the market, customer need and how to solve them usually requires some deep knowledge of a function or domain. While there are some very notable exceptions (e.g. Mark Zuckerberg at Facebook), this is by far the exception and not the norm and experientially knowing how to solve a problem better than what already exists should be your starting point.

As I tell the folks I talk with, you don’t have to make a commitment to any of these options. You are not necessarily locked into any one, but there are tradeoffs as your career progresses and you close some doors to opportunities.  You can still do quite well financially trying out two or three of these options, but in order to be on track to a certain level of expected wealth, picking a lane will enhance your chances. What is most important is that you understand the trade-offs for each one option.

 

About the Author: Ray Tenenbaum is the founder of Great Hires, a recruiting technology startup offering a mobile-first Candidate Selection platform for both candidates and hiring team success. Ray has previously spent half of his career building Silicon Valley startups such as Red Answers and Adify (later sold to Cox Media); the other half of his career was spent in marketing and leadership roles at enterprise organizations including Procter & Gamble, Kraft, Booz & Co. and Intuit. Ray holds an MBA from the University of Michigan as well as a bachelor’s in chemical engineering from McGill University.

Follow Ray on Twitter @rayten or connect with him on LinkedIn.