Rippling launches computer inventory management as more workers remain remote

Rippling, a startup building a platform to manage all aspects of employee data, from payroll and benefits through to device management, launched Rippling Inventory Management, what founder and CEO Parker Conrad is touting as the “world’s first cloud IT closet.”

The dashboard enables businesses to automatically store, ship and retrieve employee computers in a way that is remote and hands-free. Rippling stores and monitors company devices so they no longer need an “IT closet” on-site or utilize an employee’s home. Rippling also manages the logistics related to the devices, including wiping and assigning devices and issuing prepaid mailers for machines that need to be returned.

Customers pay a per employee, per month fee to use the dashboard to hire, or fire employees, and set up all of the apps (and access) that the employee will need on their computer. In addition, the user can see all of the outstanding shipments and where they are in the process of being delivered or returned.

The product launch is buoyed by a massive $145 million Series B round in 2020 that gave the company a valuation of $1.35 billion.

Rippling inventory management gif. Image Credits: Rippling

The inventory management platform stems from a problem Rippling saw as remote work became more prevalent over the past 18 months, Conrad told TechCrunch. The company itself used to have an IT closet, which he considers “the last physical part about managing employees.”

“What this does is kill the IT closet,” he added. “If you don’t work in an office and decide to leave, some companies don’t have a process on how to get the former employee’s device back. We had a situation ourselves where employees would ship computers back to one person, and she had them stacked up in her apartment.”

The leadership team spent a long time looking for an inventory management service, and also saw customers posting about it on social media. However, Conrad considers this a problem that didn’t really exist until March 2020.

He explained that with the exception of a few outlier companies, most were not remote and physically handed a computer to new employees or gathered them from the desk of someone who left. Once they were remote, it was difficult to keep track of who had which device and how to get them back if needed.

“Everyone can be done online now, and you don’t have to come into the office to sign paperwork,” Conrad said. “This is the last piece that companies need and works to solve the last-mile problem.”

 

#enterprise, #funding, #hiring, #it, #logistics, #mobile-device-management, #parker-conrad, #personnel, #rippling, #saas, #social-media, #startups, #tc, #telecommuting

CodeSignal secures $50M for its tech hiring platform

In less than a year after raising $25 million in Series B funding, technical assessment company CodeSignal announced a $50 million in Series C funding to offer new features for its platform that helps companies make data-driven hiring decisions to find and test engineering talent.

Similar to attracting a big investor lead for its B round — Menlo Ventures — it has partnered with Index Ventures to lead the C round. Menlo participated again and was joined by Headline and A Capital. This round brings CodeSignal’s total fundraising to $87.5 million.

Co-founder and CEO Tigran Sloyan got the idea for the company from an experience his co-founder and friend Aram Shatakhtsyan had while trying to find an engineering job. Both from Armenia, the two went in different paths for college, with Shatakhtsyan staying in Armenia and Sloyan coming to the U.S. to study at MIT. He then went on to work at Google.

“As companies were recruiting myself and my classmates, Aram was trying to get his resume picked up, but wasn’t getting attention because of where he went to college, even though he was the greatest programmer I had ever known,” Sloyan told TechCrunch. “Hiring talent is the No. 1 problem companies say they have, but here was the best engineer, and no one would bring him in.”

They, along with Sophia Baik, started CodeSignal in 2015 to act as a self-driving interview platform that directly measures skills regardless of a person’s background. Like people needing to take a driver’s test in order to get a license, Sloyan calls the company’s technical assessment technology a “flight simulator for developers,” that gives candidates a simulated evaluation of their skills and comes back with a score and highlighted strengths.

The need by companies to hire engineers has led to CodeSignal growing 3.5 times in revenue year over year and to gather a customer list that includes Brex, Databricks, Facebook, Instacart, Robinhood, Upwork and Zoom.

Sloyan said the company has not yet touched the money it received in its Series B, but wanted to jump at the opportunity to work with Nina Achadjian, partner at Index Ventures, whom he had known for many years since their time together at Google. To work together and for Achadjian to join the company’s board was something “I couldn’t pass up,” Sloyan said.

When Achadjian moved over to venture capital, she helped Sloyan connect to mentors and angel investors while keeping an eye on the company. Hiring engineers is “mission critical” for technology companies, but what became more obvious to her was that engineering functions have become necessary for all companies, Achadjian explained.

While performing due diligence on the space, she saw traditional engineering cultures utilizing CodeSignal, but then would also see nontraditional companies like banks and insurance companies.

“Their traction was undeniable, and many of our portfolio companies were using CodeSignal,” she added. “It is rare to see a company accelerate growth at the stage they are at.”

U.S. Department of Labor statistics estimate there is already a global talent labor shortage of 40 million workers, and that number will grow to over 85 million by 2030. Achadjian says engineering jobs are also expected to increase during that time, and with all of those roles and applicants, vetting candidates will be more important than ever, as will the ability for candidates to apply from wherever they are.

The new funding enabled the company to launch its Integrated Development Environment for candidates to interact with relevant assessment experiences like codes, files and a terminal on a machine that is familiar with them, so that they can showcase their skills, while also being able to preview their application. At the same time, employers are able to assign each candidate the same coding task based on the open position.

In addition, Sloyan intends to triple the company’s headcount over the next couple of months and expand into other use cases for skills assessment.

 

#a-capital, #artificial-intelligence, #codesignal, #developer, #engineering, #enterprise, #funding, #headline, #hiring, #hr-tech, #index-venture, #menlo-ventures, #nina-achadjian, #recent-funding, #startups, #talent, #tc, #technology, #tigran-sloyan, #upwork

3 strategies to make adopting new HR tech easier for hiring managers

Recruiting for technical roles can be challenging. There are often too many roles to fill, too many or too few candidates to interview and not enough time to get it all done and develop relationships with your key stakeholders: Hiring managers and the executive team.

Working with talent acquisition (TA) leaders and technical recruiters can help companies scalably, accurately and fairly assess potential candidates’ technical skills to fill high-value engineering roles. Technology also offers many advantages that help achieve TA objectives. But in my experience, many TA and HR leaders get frustrated when new tools fail to launch or deliver underwhelming results, because they aren’t adequately adopted, trusted or utilized by end users.

I find that hiring managers are more open-minded to “mechanical” or automated hiring tools if those tools aren’t evaluated on their own, but are evaluated relative to status quo hiring processes.

All of this leads to technical decision-makers and stakeholders developing a natural skepticism for mechanical or automated hiring tools. If your hiring managers seem doubtful about using tech for hiring, here are three strategies to help them embrace hiring tools.

Expect skepticism, it’s natural

Researchers studying how to make scientific hiring tools more effective have discovered an interesting phenomenon: Human beings are naturally skeptical of tools that outsource our decisions (Highhouse, 2008). Left to our own devices, we are hardwired to trust gut instinct over external data points, especially when developing and nurturing new relationships, including who we work with.

Scientists have offered up a few explanations for this preference of gut over data. Some people consider external, mechanical decision-making aids as less trustworthy because of a lack of familiarity with how they work, or because using them reflects poorly on the decision-maker’s value and worth as a leader or manager.

It could also be because there’s a fear of surrendering control and agency to a tool that doesn’t seem to consider or understand context clues. However, research has shown that people make better choices when using mechanical decision support tools than when either humans or mechanical tools make decisions alone.

#column, #ec-column, #ec-enterprise-applications, #ec-how-to, #hiring, #hiring-engineers, #hr-tech, #management, #personnel, #recruitment, #startups, #tc

Glassdoor acquires Fishbowl, a semi-anonymous social network and job board, to square up to LinkedIn

While LinkedIn doubles down on creators to bring a more human, less manicured element to its networking platform for professionals, a company that has built a reputation for publishing primarily the more messy and human impressions of work life has made an acquisition that might help it compete better with LinkedIn.

Glassdoor, the platform that lets people post anonymous and candid feedback about the organizations they work for, has acquired Fishbowl — an app that gives users an anonymous option also to provide frank employee feedback, as well as join interest-based conversation groups to chat about work, and search for jobs. Glassdoor, which has 55 million users, is already integrating Fishbowl content into its main platform, although Fishbowl, with its 1 million users, will also continue for now to operate as a standalone app, too.

Christian Sutherland-Wong, the CEO of Glassdoor, said that he sees Fishbowl as the logical evolution of how Glassdoor is already being used. Similarly, since people are already seeking out feedback on prospective employers, it makes sense to bring recruitment and reviews closer together.

“We’ve always been about workplace transparency,” he said in an interview. “We expect in the future that jobseekers will use Glassdoor reviews, and also look to existing professionals in their fields to get answers from each other.” Fishbowl has seen a lot of traction during the Covid-19 pandemic, growing its user base threefold in the last year.

The acquisition is technically being made by Recruit Holdings, the Japanese employment listings and tech giant that acquired Glassdoor for $1.2 billion in 2018, and the companies are not disclosing any financial terms. San Francisco-based Fishbowl — founded in 2016 by Matt Sunbulli and Loren Appin — had raised less than $8 million, according to PitchBook data, from a pretty impressive set of investors, including Binary Capital, GGV, Lerer Hippeau Ventures, and Scott Belsky.

Microsoft-owned LinkedIn towers over the likes of Glassdoor in terms of size. It now has more than 774 million users, making it by far the biggest social media platform targeting professionals and their work-related content. But for many, even some of those who use it, the platform leaves something to be desired.

LinkedIn is a reliable go-to for putting out a profile of yourself, for the public, for those in your professional life, or for recruiters, to find. But what LinkedIn largely lacks are normal people talking about work in an honest way. To read about other’s often self-congratulatory professional developments, or to see motivational words on professional development from already hugely successful personalities, or to browse developments relative to your industry that probably have already seen elsewhere is not everyone’s cup of tea. It’s anodyne. Sometimes people just want tea to be spilled.

That’s where something like Glassdoor comes into the picture: the format of making comments anonymous on there turns it into something of the anti-LinkedIn. It is caustic, perhaps sometimes bitter, talk about the workplace, balanced out with positive words seem to get periodically suspected of being seeded by the companies themselves. Motivational, inspirational and aspirational are generally not part of the Glassdoor lexicon; honest, illuminating, and sobering perhaps are.

Fishbowl will be used to augment this and give Glassdoor another set of tools now to see how it might build out its platform beyond workplace reviews. The idea is to target people who come to Glassdoor to read about what people think of a company, or to put in their own comments: they can now also jump into conversations with others; and if they are coming to complain about their employer, now they can also look for a new one!

In the meantime, it feels like the swing to more authenticity is also a result of the shift we’ve seen in the world of work.

Covid-19 mandated office closures and social distancing have meant that many professionals have been working at home for the majority of the last year and a half (and many continue to do so). That has changed how we “come to work”, with many of our traditional divides between work and non-work personas and time management blurring. That has had an inevitable impact on how we see ourselves at work, and what we seek to get out of that engagement. And it also has led many people to feel isolated and in need of more ways to connect with colleagues.

Glassdoor’s acquisition, it said, was in part to meet this demand. A Harris Poll commissioned by Glassdoor found that 48% of employees felt isolated from coworkers during the COVID-19 pandemic; 42% of employees felt their career stall due to the lack of in-person connection; and 45% of employees expect to work hybrid or full-time remotely going forward — all areas that Glassdoor believes can be addressed with better tools (like Fishbowl) for people to communicate.

Of course, it will remain to be seen whether Glassdoor can convert its visitors to use the new Fishbowl-powered tools, but if there really is a population of users out there looking for a new kind of LinkedIn — there certainly are enough who love to complain about it — then maybe this cold be one version of that.

#binary-capital, #ceo, #enterprise, #fishbowl, #glassdoor, #hiring, #labor, #lerer-hippeau-ventures, #linkedin, #ma, #microsoft, #recruit, #recruit-holdings, #san-francisco, #scott-belsky, #social-networks

Ford hires new chief digital information officer as it seeks to expand into software and services

Ford Motor has hired Mike Amend as its chief digital and information officer as the automaker seeks to expand into software, subscriptions and in-vehicle connectivity. Amend, who was president of Lowe’s Online for three years, will focus on Ford’s “use of data, software and technology” — all areas central to Ford’s new Ford+ strategy, the OEM said.

The hire is just the latest sign that Ford is serious about beefing up its digital offerings for customers, as the company seeks to pivot toward high-tech segments. The company calls this plan “Ford+,” which it unveiled earlier this year. Central to this plan is electric vehicles, which Ford wants to comprise around half of its global sales by 2030, as well as expanding into new sources of revenue via subscriptions and digital services.

To that end, Amend will oversee a number of teams, including Ford’s technology and software platform function and its global data insight and analytics section.

Amend isn’t Ford’s only recent hire of note. The automaker also recently poached Doug Field — the tech executive who was leading Apple’s special projects team, and who also led the development of the Model 3 at Tesla — as chief advanced technology and embedded systems officer. The two will work closely, along with chief of product Hau Thai-Tang, Ford said.

Amend’s career includes growing the online businesses of major retailers, including Lowe’s, The Home Depot and JCPenney. Ford’s interim chief information officer, Sakis Kitsopanidis, will continue to serve as director of integrated enterprise resource planning.

#automotive, #electric-vehicles, #ford, #ford-motor, #hiring, #transportation

LinkedIn doubles down on development with new learning hub, free courses and new search fields for hybrid working

The wider world of employment has seen a huge shift in the wake of the Covid-19 pandemic. Looking for a job, finding someone to fill a role, or simply developing professionally are just not the same as they used to be for many of us. So it’s no surprise to see companies that have built business models catering to these areas changing, too: today, LinkedIn, Microsoft’s social networking platform for the working world, announced a wave of news aimed at moving ahead with the times.

It’s launching a new Learning Hub aimed at organizations to provide professional development and other training to employees. And it’s making 40 courses free of charge to LinkedIn members specifically to address some of the changes afoot, such as how to adapt to hybrid working, how to be a better manager in the new normal, and how to return to the office, and run facilities when they are spread beyond a building to also include people’s private homes. Lastly, it’s also starting to tweak details that people can use to list and search for job openings to account for these kinds of working conditions, and more.

The Learning Hub was first previewed back in April of this year and has been running in a limited beta. Today, as part of a bigger event hosted by Microsoft CEO Satya Nadella and LinkedIn CEO Ryan Roslansky where they are discussing new trends in the world of work, the Hub is being rolled out more widely.

For some context, LinkedIn has been long on education for years, with acquisitions like the remote learning platform Lynda back in 2015 bolstering its own education strategy and position as a go-to platform for professional development; partnerships to bring in significant amounts of third-party content (for example, when it added some 13,000 courses via third parties in 2018); and efforts to tie together the concept of skills development with professional profiles, running research and building interactive tools for its users.

The free courses that are being launched today (and will remain free until October 9) are a timely set of videos to help companies as some of them start to make (or think about) the transitions from remote to in-office environments, but the bigger product launch, The Learning Hub, is not exactly an altruistic endeavor in that longer journey. It is being sold as a premium service for businesses — existing LinkedIn Learning Pro users will be able to use it for free until July 2022, potentially longer, it said. In addition to being a salient business, it is also connected to the company’s bigger efforts to bring in more businesses-focused services, and more engagement from HR departments, to bolster one of its other main revenue drivers, recruitment.

As a learning experience platform (often described as LXPs), LinkedIn’s relaunch of its own learning hub will bring it into closer competition with the likes of 360Learning, Coursera for Business, Workday, Cornerstone, and the many other platforms used by organizations to manage their own in-house and third-party professional training content. In addition to this, LinkedIn says it will be using its own data on employment trends, plus AI, to personalize content for organizations and users. The fact, however, that it’s also a platform whee those HR teams can also list jobs and source candidates makes it a significantly stickier experience, and one that might feel more cohesive at a time when so much else might be more fragmented.

The new fields that LinkedIn is bringing into its recruitment service are also notable in that regard. It will now let recruiters indicate whether a job is remote, hybrid or onsite; and soon those looking for jobs will also be able to indicate which of these it’s looking for in a new role. Companies will also be able to start indicating more details on their own company status as it relates to things like vaccination requirements, and to let the world (employees, partners, customers, interested others) know whether your physical offices are open for business or not.

These new fields may sound a little trivial, or at least very specifically related to concerns and circumstances that we live with today, but I think they are more notable than this. They speak to what LinkedIn sees (and what many of us feel) are strong priorities in how we view jobs today. That opens the door to how and if LinkedIn might consider other kinds of details in company and personal profiles, as well as details that could be used in recruitment. This is something the company has also been working on for a little while already: in June it started to give users the option of adding pronouns to their profiles. All of this is pretty important, considering that there are a lot of smaller companies and calls for someone to knock LinkedIn off its pedestal. As LinkedIn dabbles with new formats and sunsets others, it’s all signals that it’s attempting to be more adaptable to counteract that.

#education, #enterprise, #hiring, #personnel

How engaged are your employees?

Managers are occasionally evaluated by their team’s occupational wellness — the sometimes-hazy calculation that rates employees’ professional and personal contentment. What may not be as commonly tested is the connected concept of employee engagement, which measures how committed employees are to helping their company succeed. While 71% of executives cite employee engagement as essential to their success, a mere 15% of U.S. employees consider themselves engaged.

Unfortunately for employers, when we look through either the contentment or engagement lens, we see a workforce in crisis — upward of 70% of U.S. workers are so unhappy in their roles that they are thinking about and/or actively looking for a new job.

What’s behind all this? Developmental stagnation at work and the opportunity for a better role elsewhere, often defined not merely as one with more pay, but as one presenting a pathway toward personal and professional growth and upward mobility.

Rather than list out the litany of errors, let’s gauge your company’s employee development and engagement efforts.

The pandemic has only exacerbated the dissatisfaction of many employees — at varied levels — who feel stuck in unfulfilling jobs, with little guidance on how to advance or pivot in their careers and achieve the dignity of meaningful, impactful work.

This piece aims to deliver a simple action plan for assessing your employees’ engagement level and taking targeted steps to build the kind of committed and reliable workforce necessary to survive and thrive in today’s marketplace.

Common failures in corporate career development efforts

While researching employee retention when building our startup, we identified a number of common and recurring shortcomings in career-development practices — ones that are likely to be familiar to most Fortune 500 companies, as well as scaling, high-growth startups.

We focused on the activities and strategies companies use to align their skills needs with workers’ capabilities and aspirations — specifically, their approach to advancing staff toward jobs deemed both desirable to employees and essential to employers.

We found significant behavioral-design failure points across three main areas: Their strategic framework for employee engagement and advancement; implementation process and templates; and goal setting and rewards.

To understand the companies’ strategic framework, we examined upskilling and tuition reimbursement policies and spend; individualized employee future-fit assessments; tools for employee career pathway modeling and advancement; and early-in-career and diverse-hire career-progression programs.

For implementation processes and templates, we examined onboarding; employee performance and development cycle; manager feedback; and succession planning.

For goal setting and rewards, we examined manager and VP-level goals and rewards connected directly to their activities and performance in developing and advancing employee careers.

Take this employee development survey

Let’s gauge your company’s employee development and engagement efforts. How many of the following can you answer with a “yes”?

  1. Has your company run a process to define skills or talent-gaps across organizations in the past two years?
  2. As part of such a process, did your company define a role taxonomy for essential roles?
  3. Do you have a process and the tools for mapping existing personnel to that taxonomy, whether from within or outside the relevant organization?

    #column, #ec-column, #ec-how-to, #employee-engagement, #employee-learning, #employee-management, #employee-wellness, #employment, #hiring, #human-resource-management, #performance-management, #startups

Spain’s Factorial raises $80M at a $530M valuation on the back of strong traction for its ‘Workday for SMBs’

Factorial, a startup out of Barcelona that has built a platform that lets SMBs run human resources functions with the same kind of tools that typically are used by much bigger companies, is today announcing some funding to bulk up its own position: the company has raised $80 million, funding that it will be using to expand its operations geographically — specifically deeper into Latin American markets — and to continue to augment its product with more features.

CEO Jordi Romero, who co-founded the startup with Pau Ramon and Bernat Farrero — said in an interview that Factorial has seen a huge boom of growth in the last 18 months and counts more than anything 75,000 customers across 65 countries, with the average size of each customer in the range of 100 employees, although they can be significantly (single-digit) smaller or potentially up to 1,000 (the “M” of SMB, or SME as it’s often called in Europe).

“We have a generous definition of SME,” Romero said of how the company first started with a target of 10-15 employees but is now working in the size bracket that it is. “But that is the limit. This is the segment that needs the most help. We see other competitors of ours are trying to move into SME and they are screwing up their product by making it too complex. SMEs want solutions that have as much data as possible in one single place. That is unique to the SME.” Customers can include smaller franchises of much larger organizations, too: KFC, Booking.com, and Whisbi are among those that fall into this category for Factorial.

Factorial offers a one-stop shop to manage hiring, onboarding, payroll management, time off, performance management, internal communications and more. Other services such as the actual process of payroll or sourcing candidates, it partners and integrates closely with more localized third parties.

The Series B is being led by Tiger Global, and past investors CRV, Creandum, Point Nine and K Fund also participating, at a valuation we understand from sources close to the deal to be around $530 million post-money. Factorial has raised $100 million to date, including a $16 million Series A round in early 2020, just ahead of the Covid-19 pandemic really taking hold of the world.

That timing turned out to be significant: Factorial, as you might expect of an HR startup, was shaped by Covid-19 in a pretty powerful way.

The pandemic, as we have seen, massively changed how — and where — many of us work. In the world of desk jobs, offices largely disappeared overnight, with people shifting to working at home in compliance with shelter-in-place orders to curb the spread of the virus, and then in many cases staying there even after those were lifted as companies grappled both with balancing the best (and least infectious) way forward and their own employees’ demands for safety and productivity. Front-line workers, meanwhile, faced a completely new set of challenges in doing their jobs, whether it was to minimize exposure to the coronavirus, or dealing with giant volumes of demand for their services. Across both, organizations were facing economics-based contractions, furloughs, and in other cases, hiring pushes, despite being office-less to carry all that out.

All of this had an impact on HR. People who needed to manage others, and those working for organizations, suddenly needed — and were willing to pay for — new kinds of tools to carry out their roles.

But it wasn’t always like this. In the early days, Romero said the company had to quickly adjust to what the market was doing.

“We target HR leaders and they are currently very distracted with furloughs and layoffs right now, so we turned around and focused on how we could provide the best value to them,” Romero said to me during the Series A back in early 2020. Then, Factorial made its product free to use and found new interest from businesses that had never used cloud-based services before but needed to get something quickly up and running to use while working from home (and that cloud migration turned out to be a much bigger trend played out across a number of sectors). Those turning to Factorial had previously kept all their records in local files or at best a “Dropbox folder, but nothing else,” Romero said.

It also provided tools specifically to address the most pressing needs HR people had at the time, such as guidance on how to implement furloughs and layoffs, best practices for communication policies and more. “We had to get creative,” Romero said.

But it wasn’t all simple. “We did suffer at the beginning,” Romero now says. “People were doing furloughs and [frankly] less attention was being paid to software purchasing. People were just surviving. Then gradually, people realized they needed to improve their systems in the cloud, to manage remote people better, and so on.” So after a couple of very slow months, things started to take off, he said.

Factorial’s rise is part of a much, longer-term bigger trend in which the enterprise technology world has at long last started to turn its attention to how to take the tools that originally were built for larger organizations, and right size them for smaller customers.

The metrics are completely different: large enterprises are harder to win as customers, but represent a giant payoff when they do sign up; smaller enterprises represent genuine scale since there are so many of them globally — 400 million, accounting for 95% of all firms worldwide. But so are the product demands, as Romero pointed out previously: SMBs also want powerful tools, but they need to work in a more efficient, and out-of-the-box way.

Factorial is not the only HR startup that has been honing in on this, of course. Among the wider field are PeopleHR, Workday, Infor, ADP, Zenefits, Gusto, IBM, Oracle, SAP and Rippling; and a very close competitor out of Europe, Germany’s Personio, raised $125 million on a $1.7 billion valuation earlier this year, speaking not just to the opportunity but the success it is seeing in it.

But the major fragmentation in the market, the fact that there are so many potential customers, and Factorial’s own rapid traction are three reasons why investors approached the startup, which was not proactively seeking funding when it decided to go ahead with this Series B.

“The HR software market opportunity is very large in Europe, and Factorial is incredibly well positioned to capitalize on it,” said John Curtius, Partner at Tiger Global, in a statement. “Our diligence found a product that delighted customers and a world-class team well-positioned to achieve Factorial’s potential.”

“It is now clear that labor markets around the world have shifted over the past 18 months,” added Reid Christian, general partner at CRV, which led its previous round, which had been CRV’s first investment in Spain. “This has strained employers who need to manage their HR processes and properly serve their employees. Factorial was always architected to support employers across geographies with their HR and payroll needs, and this has only accelerated the demand for their platform. We are excited to continue to support the company through this funding round and the next phase of growth for the business.”

Notably, Romero told me that the fundraising process really evolved between the two rounds, with the first needing him flying around the world to meet people, and the second happening over video links, while he was recovering himself from Covid-19. Given that it was not too long ago that the most ambitious startups in Europe were encouraged to relocate to the U.S. if they wanted to succeed, it seems that it’s not just the world of HR that is rapidly shifting in line with new global conditions.

#barcelona, #booking-com, #brazil, #ceo, #crv, #enterprise, #europe, #factorial, #general-partner, #germany, #hiring, #human-resource-management, #human-resources, #ibm, #k, #k-fund, #labor, #mathematics, #onboarding, #oracle, #payroll, #people-management, #performance-management, #personnel, #sap, #software, #spain, #tiger-global-management, #united-states, #zenefits

A founder’s guide to effectively managing your options pool

There’s an old startup adage that goes: Cash is king. I’m not sure that is true anymore.

In today’s cash rich environment, options are more valuable than cash. Founders have many guides on how to raise money, but not enough has been written about how to protect your startup’s option pool. As a founder, recruiting talent is the most important factor for success. In turn, managing your option pool may be the most effective action you can take to ensure you can recruit and retain talent.

That said, managing your option pool is no easy task. However, with some foresight and planning, it’s possible to take advantage of certain tools at your disposal and avoid common pitfalls.

In this piece, I’ll cover:

  • The mechanics of the option pool over multiple funding rounds.
  • Common pitfalls that trip up founders along the way.
  • What you can do to protect your option pool or to correct course if you made mistakes early on.

A minicase study on option pool mechanics

Let’s run through a quick case study that sets the stage before we dive deeper. In this example, there are three equal co-founders who decide to quit their jobs to become startup founders.

Since they know they need to hire talent, the trio gets going with a 10% option pool at inception. They then cobble together enough money across angel, pre-seed and seed rounds (with 25% cumulative dilution across those rounds) to achieve product-market fit (PMF). With PMF in the bag, they raise a Series A, which results in a further 25% dilution.

The easiest way to ensure you don’t run out of options too quickly is simply to start with a bigger pool.

After hiring a few C-suite executives, they are now running low on options. So at the Series B, the company does a 5% option pool top-up pre-money — in addition to giving up 20% in equity related to the new cash injection. When the Series C and D rounds come by with dilutions of 15% and 10%, the company has hit its stride and has an imminent IPO in the works. Success!

For simplicity, I will assume a few things that don’t normally happen but will make illustrating the math here a bit easier:

  1. No investor participates in their pro-rata after their initial investment.
  2. Half the available pool is issued to new hires and/or used for refreshes every round.

Obviously, every situation is unique and your mileage may vary. But this is a close enough proxy to what happens to a lot of startups in practice. Here is what the available option pool will look like over time across rounds:

 

Option pool example

Image Credits: Allen Miller

Note how quickly the pool thins out — especially early on. In the beginning, 10% sounds like a lot, but it’s hard to make the first few hires when you have nothing to show the world and no cash to pay salaries. In addition, early rounds don’t just dilute your equity as a founder, they dilute everyone’s — including your option pool (both allocated and unallocated). By the time the company raises its Series B, the available pool is already less than 1.5%.

#capitalization-table, #column, #ec-column, #ec-how-to, #entrepreneurship, #funding, #hiring, #options, #startups, #stock-options

3 tips to align your values with your startup’s culture

You’ve heard the phrase “leading by example,” but what about “leading with values”?

I’ve always led by example by using my values as my guide. Still, it wasn’t until I founded my first company that I fully understood the importance of embedding those values into the company, too.

Integrity, individuals, impact and innovation are the “4 I values” that drive my decisions and the actions of those at my company each day. These are not just words on a wall at our HQ or on a mousepad for our remote crew, but values that everyone in the company lives and breathes. Over the last two years, these four values became even more important and continued to guide me, my family and the leaders at our company.

As organizations map out their “return to the workplace” (NOT “return to work,” because we never stopped working) plans, we should not simply go back to how things were before. Instead, let’s all take a moment to redesign something that sets everyone up for success, with values as the compass. I think you’ll find this approach helps people not only survive, but thrive in the workplace.

Leading with values is, in my experience, the best leadership position to take, and there are three ways to accomplish this goal.

Leave behind old-school mentalities on workplace hierarchy

The tone of the company’s culture comes from the top. The culture you envision for your company will only come about if your employees believe in the practices that you are asking them to implement.

At some point in your career — probably right out of school, a few years in or somewhere in the middle — you experienced a company where treating lower-level employees with less respect is just “a part of the job.” Companies with this type of “paying your dues” mentality tend to work these lower-level employees like grunts until they burn out and leave.

Or they eventually crawl their way up into management-level positions, and the cycle perpetuates itself as they deride the newer crop of employees, eroding any semblance of a healthy culture.

This is not the way.

As a leader, if you want your work environment to indicate inclusivity, support, collaboration and have the essence of a team mentality, you must set the precedent right away. This means stripping away the hierarchy that accompanies work titles and making it clear that your company values contribution based on merit, regardless of position. You are one team, united in your purpose to deliver on your mission, based on your values. This level setting ensures that everyone has skin in the game, and no one has the leeway to treat people poorly.

Don’t get caught in an ivory tower mindset

Early on in my career, I began sharing an office when I could. Those office spaces were purposely not what anyone would consider cool or nice “digs” — not the furniture and certainly not the view. Even as CEO now, I’ve had someone on the team describe my current office as a closet. But it gets the job done.

Simple signals like this send a powerful message, and the signal must remain consistent. Don’t take a limo; rent a cheap car. Don’t fly first class; fly coach. These may seem like minor details, but one of the biggest pitfalls any CEO can encounter is falling victim to an ivory tower mindset — when you become so out of touch with the people you manage, your employees start to notice.

Make a cognizant effort to know your people. Implement a “management by walking around” strategy. Don’t sit in your office all day; get out on the floor among your people. Drop by their desks and ask them how their day is going. Eat lunch in the break room. Put in the effort to attend new hire onboarding.

Not physically back in the office? Drop into Slack channels and Zoom meetings. I once “Zoom bombed” a baby shower for one of our crew members just to hear all the well wishes, and it made my day and theirs. Overall, just be present and humanize your workspace. It pays off in spades.

Be thoughtful and consistent with workplace practices

The tone of the company’s culture comes from the top. The culture you envision for your company will only come about if your employees believe in the practices that you are asking them to implement. More importantly, you will not grow a solid culture if you don’t give these initiatives and practices 100% of your own effort.

For example, one new initiative we rolled out last year is a campaign we call “Free2Focus.” Twice a week, the SailPoint crew is asked to avoid booking meetings for a couple of hours during Free2Focus time. Not only does this address Zoom fatigue, it also gives our crew the chance to catch their breath whichever way suits them best — whether that’s taking a walk, helping with their children’s schooling or just turning off the camera for a bit.

If I want my team to show themselves some grace during the week, I’ve found that I need to apply the same practice. This means not setting up meetings during Free2Focus, not sending emails all hours of the day and night and not judging people for taking breaks when they need them. I trust my team to get the job done largely on their own time and own their own terms. I promise, your employees’ performance will be better because of it.

Being a CEO is more than building on a vision, a product or an idea. It’s about leading your people with values to accomplish mutual goals in a way that doesn’t zap them of their morale or dignity. It’s easy to get caught up in all the things that come with a job, but if you don’t put in the effort to immerse yourself and your values into the entire company, you’ll end up too big for your own good — and certainly too big for your company’s good.

It won’t happen overnight, but remember, the smallest things are often the ones that have the biggest impact. If you’re the leader, lead by example. It’s the only way to build teams that stand the test of time.

#ceo, #coach, #column, #hiring, #human-resource-management, #leadership, #leadership-tactics, #personnel, #sailpoint, #startups

Job offer management platform Compa emerges from stealth with $3.9M

If you haven’t noticed yet, the hiring market is a hot one — and getting more complicated as enterprise talent acquisition leaders face technology gaps while assessing candidates. This leads to difficulty in determining compensation.

Enter Compa. The offer management platform provides “deal desk” software for recruiters to more easily manage their compensation strategies to create and communicate offers that are easy to understand and are unbiased.

Charlie Franklin, co-founder and CEO of Compa, told TechCrunch it was frustrating to lose a candidate at the compensation stage, so the company created its software to reduce the challenge of relying on crowdsourcing data or surveys to compare pay.

“Recruiters often lack the data and tools to figure out how much to pay people and communicate that effectively,” Franklin told TechCrunch. “We see talent acquisitions teams like a sales team. If you think of it from that perspective, they need to close a candidate, but to ask the recruiter to operate off of a spreadsheet slows that process down.”

Compa co-founders, from left, Charlie Franklin, Joe Malandruccolo and Taylor Cone. Image Credits: Compa

With Compa, recruiters can input pay expectations and compare recent offers and collaborate with other team members and hiring managers to reach pay consensus quicker. The software automates all of the market intelligence in real time and provides insights about compensation across similar industries and organizations.

The company, based in both California and Massachusetts, emerged from stealth Thursday with $3.9 million in seed funding led by Base10 Partners. Participation in the round also came from Crosscut Ventures and Acadian Ventures, as well as a group of strategic angel investors including 2.12 Angels, Oyster HR CEO Tony Jamous and Scout RFP co-founders Stan Garber and Alex Yakubovich.

Jamison Hill, partner at Base10 Partners, said via email his firm was doing research in the ESG “megatrend,” particularly looking for startups focused on compensation management, when it came across Compa.

He was attracted to the founders’ “clarity and conviction” on the company’s vision, their understanding of the pay gap in the market, how Compa’s solution would “create a new wave of smarter, more-data driven recruiting teams” and how it was enabling employers to use compensation and a positive offer management approach to differentiate itself from competitors.

“They deeply understand the nuances that come with enterprise-level HR teams and bring that expertise to every aspect of Compa’s product offering, which is why we believe Compa can emerge as a leader in this trend and chose to partner with this very special team,” Hill added.

Franklin, who previously led human resources M&A at Workday, founded Compa last year with  Joe Malandruccolo, who was on the engineering side at Facebook and Oculus, and Taylor Cone, who has done innovation consulting for organizations like Stanford University.

The company was bootstrapped prior to going after the seed round and will use the capital to expand the team and create additional products that fit into its mission of “making compensation fair and competitive for everyone,” Franklin said.

Going forward, he adds that job offers and compensation need to catch up to how quickly the world is changing. As more people work remotely and companies want to attract a diverse workforce, compensation will be an important factor.

“This is a long-term trend we are seeing in HR — compensation becoming more transparent — not just a spreadsheet shared internally, but a transition from secretive to open and accountable, Franklin said. “Technology is catching up to that, and we have the ability to produce outcomes that drive differences in pay.”

 

#acadian-ventures, #artificial-intelligence, #base10-partners, #charlie-franklin, #compa, #compensation, #crosscut-ventures, #enterprise, #funding, #hiring, #human-resources, #jamison-hill, #personnel, #recent-funding, #saas, #startups, #tc

Workstream’s text-based recruitment tool gets a $48M bet from BOND and beyond

It isn’t only tech giants that are struggling to fill open roles with talented individuals, it’s your local Jamba Juice, too.

Since 2017, San Francisco-based Workstream has been working on an answer to recruitment for the hourly worker. The subset of employees are in high demand right now by employers managing high turnover, as the labor market evolves amid the pandemic. These tailwinds in mind, Workstream announced today that it has landed a new round of financing to scale its recruitment efforts.

Workstream has raised $48 million in a Series B round co-led by Mary Meeker’s BOND and Coatue, with notable investors including Zoom CEO Eric Yuan and DoorDash CEO Tony Xu. Jay Simons, a GP at BOND and former president of Atlassian, joined Workstream’s board of directors. The raise comes a little over one year since Workstream raised $10 million in a Series A led by Founders Fund.

Per CEO and co-founder Desmond Lim, Workstream landed 12 term sheets in 9 days. He chalked up the interest to investors appreciating his startup’s differentiation among the flurries of other recruiting tools out there.

Even in the crowded world of recruitment software, Workstream has been able to carve out some attention for itself by focusing on text-based recruiting. Front-line and deskless workers are often the most disconnected members of the global job force due to a lack of access to company-issued e-mail addresses. Thus, by Workstream communicating with candidates over text, it is able to give workers on the go some real-time updates. This differentiation of mobile-based recruitment has helped bring down the time to hire for employers too, by bringing candidates in by going to where they already are.

Lim, who grew up in Singapore with parents who both spent their days as hourly workers, sees this strategy working. In July, his company filled more than 18,000 jobs. Down the road, Workstream wants to serve hourly workers in healthcare and retail.

“There’s a football field [of software] for hiring software engineers,” Lim said. “But if you think about hiring for this space, there’s very few of us – and I think that has really helped us to go far from a team point of view, client sales, and even trying to raise funding.

While Workstream didn’t disclose specifics on revenue, it said that it has experienced “10X” ARR in the past year. One signal that it’s doing ok? The company has 1,500 customers across 10,000 different stores, which include the likes of McDonalds, Subway, and of course, Jamba Juice. Lim claims that Workstream has 20% market share in the top 20 brands.

Workstream views itself as an end-to-end recruitment tool for the hourly worker, but its distribution is still tied to the some 25,000 job boards that it partners with to post listings. Lim said that his company is more focused on the “recruitment and engagement” bit of hiring, “helping to push people through the funnel very fast” versus trying to get them in the funnel in the first place.

#education, #future-of-work, #hiring, #recruitment, #tc, #work, #workforce, #workstream

Accel leads $18M Series A for Knoetic, a startup that wants to make HR professionals’ lives easier with software

Knoetic, a startup that has built a software analytics platform for chief people officers, emerged from stealth today with $18 million in Series A funding.

For the unacquainted, chief people officers are also known as heads of human resources, or HR.

Accel led the financing, which notably also included participation from over 100 angel investors, including a number of executives, VCs and former and current chief people officers (CPOs) of companies such as Mozilla, Pinterest, Gusto, Box, Twilio, Fitbit, Kickstarter, Looker, Hired and GitHub.

For founder and CEO Joseph Quan, the fact that so many people who worked in the industry put money in the round as angels was huge validation that Knoetic is on the right track.

Founded in March 2020, the New York City-based startup has built a platform that combines a social network and a SaaS analytics tool for chief people officers. When the COVID-19 pandemic hit last year, human resources leaders found themselves in a position they’d never before been — hiring talent remotely and having to work virtually to retain workers that previously came to an office.

Quan himself has worked in a variety of roles in the HR technology space, including at Twine, Knoetic’s predecessor company. 

Image Credits: Knoetic; Founder and CEO Joseph Quan

“The reason we exist was really born out of the pandemic. We noticed in our ecosystem of chief people officers that their role was thrust into the spotlight and it was a really tough time for them, and also a really lonely time,” Quan told TechCrunch. “Everyone was kind of scrambling for answers and we just realized this was a time to actually put together a network that allows all these people to commiserate and tackle some of their hardest questions, and then from that, form the basis for a broader vision.”

Over 1,000 HR professionals are members of Knoetic’s social community, which the company has embedded directly into its people analytics software. The result, Quan said, is an “Insight Engine” designed to give CPOs both quantitative and qualitative insights with the goal of helping them make “smarter, holistic” decisions about their workforce. The network is a referral-only community aimed at giving HR professionals a forum to discuss best practices and their “most pressing challenges,” such as how to navigate the COVID Delta variant and transition to and from remote work, Quan said.

 Chief people officers can also use Knoetic to do things like build board decks and present data to their CEOs. The company also claims the platform can help CPOs improve employee retention, compensation and hiring. 

Image Credits: Knoetic

In a short amount of time, Knoetic has built an impressive customer and community base, including the likes of Lyft, Squarespace, Amplitude, Discord, Dollar Shave Club and Zapier. 

Vas Natarajan of Accel believes that Knoetic is solving “a deep pain point.”

“We see how overstretched people teams are trying to wrangle information to make organizational decisions,” he wrote via email. “Across our best companies is a strong people function backed by great data to help inform all kinds of decisions around compensation, performance, and diversity and inclusion, among other things. Knoetic is uniformly solving this for everyone.”

The startup will use its new capital toward building out new products and hiring. It currently has about 25 employees, and Quan expects that number to grow to “north of 40” by year’s end.

“We want to build the single greatest network for HR professionals and build a dedicated community team,” he said.

Down the line, Quan also envisions creating an analytics engine that is “prescriptive and predictive” and can do things like tell HR leaders what kind of turnover their companies are seeing, what they can do about it and how to improve retention.

“And then it would be predictive as we gather more big data points as more people use the platform,” he added. “Then we could use that data to proactively predict who’s going to be a fast-rising company or who’s going to trip over the next 12 months. We’re starting to build those kinds of models on the back end.”

#accel, #chief-people-officer, #hiring, #hr, #knoetic, #new-york-city, #recent-funding, #startup, #startups, #vas-natarajan, #venture-capital

Greycroft leads $3.5M into Breef, an online marketplace for ad agencies

Breef raised $3.5 million in funding to continue developing what it boasts as “the world’s first online marketplace” for transactions between brands and agencies.

Greycroft led the round and was joined by Rackhouse Ventures, The House Fund, John and Helen McBain, Lance Armstrong and 640 Oxford Ventures. Including the new round, the New York and Colorado-based company has brought in total funding of $4.5 million since its inception in 2019 by husband-and-wife co-founders George Raptis and Emily Bibb.

Bibb’s background is in digital marketing and brand building at companies like PopSugar, VSCO and S’well, while Raptis was on the founding team at fintech company Credible.com.

Both said they experienced challenges in finding agencies, which traditionally involved asking for referrals and then making a bunch of calls. There were also times when their companies would be in high demand for talent, but didn’t necessarily need a full-time employee to achieve the goal or project milestone.

While the concept of outsourcing is not new, Breef’s differentiator is its ability to manage complex projects: a traditional individual freelance project is less than $1,000 and takes a week or less. Instead, the company is working with team-based projects that average $25,000 with a length of engagement of about six months, Raptis said.

Breef’s platform is democratizing how brands and boutique agencies connect with each other in the process of planning, scoping, pitching and paying for projects, Raptis told TechCrunch.

“At the core, we are taking the agency online,” Bibb added. “We are building a platform to streamline a complicated process for outsourcing high-value work and allow users to find, pay for and work with agencies in days rather than months.”

Brands can draft their own brief to articulate what they need, and Breef will connect them to a short list of agencies that match those requirements. Rather than a one- or two-month search, the company is able to bring that down to five days.

Bibb and Raptis decided to seek venture capital after experiencing demand — millions of dollars in projects are being created on the platform each month — and some tailwinds from the shift to remote work. They saw many brands that may have originally utilized in-house teams or agencies of record turn to distributed or smaller teams.

Due to the nature of agency work being expensive, Breef is processing large amounts of money over the internet, and the founders want to continue developing the technology and hiring talent so that it is a secure and trustworthy system.

It also launched its buy now, pay later project funding service, Breef(pay), to streamline payments to agencies and reduce cash flow challenges. Users can construct their own payment terms, mix up the way they are paid and utilize a credit line or defer payments to control external spend.

To date, Breef has more than 5,000 vetted boutique agencies in 20 countries on its platform and is able to save its users an average of 32% in product costs compared with a traditional agency model. It boasts a customer list that includes Spotify, Brex, Shutterstock, Bluestone Lane and Kinrgy.

Kevin Novak, founder of Rackhouse Ventures, said he met Raptis through the Australian tech community. He recently launched his first fund targeting startups in novel applications of data.

“When they were talking to me about what they wanted to do, I got intrigued,” Novak said. “I like finding marketplaces where the idea is well understood by the people involved. Looking at the matching problem, Emily and George have found a unique way to find ad agencies that hasn’t existed before.”

 

#advertising-tech, #breef, #emily-bibb, #enterprise, #funding, #george-raptis, #greycroft, #hiring, #kevin-novak, #lance-armstrong, #online-marketplace, #outsourcing, #payments, #rackhouse-ventures, #recent-funding, #startups, #tc, #the-house-fund

Dear Sophie: Can I hire an engineer whose green card is being sponsored by another company?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie,

I want to extend an offer to an engineer who has been working in the U.S. on an H-1B for almost five years. Her current employer is sponsoring her for an EB-2 green card, and our startup wants to hire her as a senior engineer.

What happens to her green card process? Can we take it over?

— Recruiting in Richmond

Dear Recruiting,

Congrats on finding the right candidate for your role. Your startup’s ability to take over the EB-2 green card process for this candidate — or whether you have to start the green card process from the beginning — depends on where she is in the green card process and whether the position you are offering is similar to her current role.

Take a listen to my podcast in which my colleague, Gilberto Orozco Jr., an associate attorney at my firm, and I discuss the American Competitiveness in the 21st Century Act — or AC21 — including “green card portability.”

Enacted in 2000, AC21 gives international talent in certain situations the flexibility to change jobs during the green card process and the ability to extend an H-1B visa beyond the six-year limit to avoid having to leave the United States while waiting for a green card. I recommend discussing your situation and goals with an experienced immigration attorney to determine your options.

A composite image of immigration law attorney Sophie Alcorn in front of a background with a TechCrunch logo.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

The process for EB-2 green cards

As I mentioned earlier, what happens to the green card process if your candidate changes jobs depends on where she is in the EB-2 green card process. There are two types of EB-2 green cards that have slightly different processes:

The EB-2 green card requires an employer sponsor and has a three-step process:

  1. Getting PERM (Program Electronic Review Management) labor certification from the U.S. Department of Labor.
  2. Submitting a green card petition (Form I-140) to U.S. Citizenship and Immigration Services (USCIS) for approval.
  3. Getting USCIS approval after filing an adjustment of status to permanent residence application (Form I-485), which can be filed along with Form I-140 depending on whether an EB-2 green card number is available based on the candidate’s country of birth, and being interviewed by a USCIS officer or obtaining a green card abroad through consular processing and the State Department.

#column, #dear-sophie, #ec-column, #ec-future-of-work, #green-card, #h-1b-visa, #hiring, #immigration, #sophie-alcorn, #startups, #talent, #tc, #u-s-department-of-labor

Gamified home rowing machine Aviron raises $4.5M

Along with a surge in connected fitness funding, it seems that rowing machines are really having their moment. In April, Ergatta announced a $30 million raise, last month, CityRow announced a $12 million round for its studios and home machines, and today, Aviron is announcing a $4.5 million round. A rising tide and all that good stuff.

The round, which includes Samsung Next, Formic Ventures, GFC and Y Combinator, follows $750,000 in early-stage funding. As we noted in January, the Toronto-based startup spent much of the pandemic (understandably) pivoting from gym equipment to connected home fitness. As more people look to rowing as a full-body alternative to cycling that’s much kinder on your knees than running, the company’s looking to differentiate itself through gamification.

Image Credits: Aviron

“We’re going a lot harder on the gamification side of things,” founder and CEO Andy Hoang tells TechCrunch. “And that’s the biggest differentiator between, say, us and a Peloton or a Hydro. They focus almost exclusively on instructor-led classes, while we focus on these high-intensity races and fully animated games, where you’re shooting bugs or running away from zombies.”

Last month, however, Peloton announced plans to compete more directly on the game side of things, with plans to roll out in late-2021/early 2022. The first product is a Tron-esque racing game. “Peloton created Lanebreak to complement instructor-led classes with a fresh new experience for members, giving them more ways to stay engaged and motivated with their workouts,” the company wrote in a release last month. Aviron says it’s trying to add something deeper.

“What makes Aviron really different is we’re not gamifying the fitness experience by added new graphics or achievements to the end of your workout,” says Hoang. “What we’re doing is gaming the fitness experience. What makes games really fun and exciting isn’t the bells and whistles. It’s the characters, it’s the story, discovering new things and unlocking them.”

Image Credits: Aviron

The company has already begun to increase headcount. Last time we checked in, Aviron was at 10 full-time employees. The company has increased to 25, roughly half of whom are involved in its game development team.

“We’re constantly looking for people. Content is our focus, and we’re hiring the right people for marketing and branding,” adds Hoang. “We’re doing a whole new rebrand.”

 

#aviron, #connected-fitness, #funding, #gfc, #hardware, #health, #hiring, #home-fitness, #samsung-next, #y-combinator

How to hire and structure a growth team

Everyone at an organization should own growth, right? Turns out when everyone owns something, no one does. As a result, growth teams can cause an enormous amount of friction in an organization when introduced.

Growth teams are twice as likely to appear among businesses growing their ARR by 100% or more annually. What’s more, they also seem to be more common after product-market fit has been achieved — usually after a company has reached about $5 million to $10 million in revenue.

Graph of the prevalence of growth teams in companies, by ARR

Image Credits: OpenView Partners

I’m not here to sell you on why you need a growth team, but I will point out that product-led businesses with a growth team see dramatic results — double the median free-to-paid conversion rate.

Free-to-paid conversions in companies with growth teams are higher

Image Credits: OpenView Partners

How do you hire an early growth leader?

According to responses from product benchmarks surveys, growth teams have transitioned dramatically from reporting to marketing and sales to reporting directly to the CEO.

Some of the early writing on growth teams says that they can be structured individually as their own standalone team or as a SWAT model, where experts from various other departments in the organization converge on a regular cadence to solve for growth.

Graph showing more growth teams now report to CEOs than marketing, sales or product

Image Credits: OpenView Partners

My experience, and the data I’ve collected from business-user focused software companies, has led me to the conclusion that growth teams in business software should not be structured as “SWAT” teams, with cross-functional leadership coming together to think critically about growth problems facing the business. I find that if problems don’t have a real owner, they’re not going to get solved. Growth issues are no different and are often deprioritized unless it’s someone’s job to think about them.

Becoming product-led isn’t something that happens overnight, and hiring someone will not be a silver bullet for your software.

I put early growth hires into a few simple buckets. You’ve got:

Product-minded growth experts: These folks are all about optimizing the user experience, reducing friction and expanding usage. They’re usually pretty analytical and might have product, data or MarketingOps backgrounds.

#brand-management, #column, #digital-marketing, #ec-column, #ec-how-to, #growth-hacking, #growth-marketing, #growth-tactics, #hiring, #hiring-for-growth, #marketing, #neologisms, #personnel, #product-management, #startup-hiring, #startups, #user-experience

A blueprint for building a great startup founding team

In a company’s early days, the difference between C-level executives and the rest of the organization is simple — employees can walk away from a failure, but the leaders cannot. Under these conditions, certain kinds of people thrive in leadership roles and can take a company from ideation to production.

While there’s no magic formula for what works and what doesn’t, successful startups share common traits in terms of the way their foundational leadership teams are built.

We’ve all experienced what it looks like on the negative end of the spectrum — people making points simply to hear their own voice, leaders competing for credit and clashing agendas. When people would rather be heard than contribute, the output suffers. Members of a healthy leadership team are unafraid to let others have the limelight, because they trust the mission and the culture they’ve built together.

An honest self-assessment is necessary and this is something that only exceptional and selfless founders are capable of.

We are all imperfect human beings, founders included. There are always going to be moments that leaders can’t predict, and mistakes come with the territory. The right leadership team should be able to mitigate the unexpected, and sometimes make the future easier to predict. Putting the right people in the right roles early on can be the difference between success and failure — and that starts at the top.

Start by determining who will lead as CEO

Investors love founder-CEOs, and founders are often fantastic candidates for this role. But not everyone can do it well, and more importantly, not everyone wants to.

Startup founders should ask themselves a few questions before they lose sleep over the prospect of handing over the reigns:

  • Do I even want to be CEO? If yes, for how long?
  • Can I maximize the potential of the company if I’m not the CEO?
  • Am I really the best person for this job at this stage?

An honest self-assessment is necessary and this is something that only exceptional and selfless founders are capable of. In many cases, founders decide they need outside help to fill the role. While a CEO may not be your first hire — or even one of the first five — the person you choose will ultimately occupy your organization’s most critical leadership role, so choose wisely.

What to look for: Ambitious vision grounded in execution reality. Your CEO should have hands-on experience that allows them to see around corners, predict pitfalls and identify opportunities.

What to watch out for: Leaders who lack respect for the founding vision or the ability to hire and balance an executive team quickly. A good CEO should be able to manage short-term cash flow and go-to-market needs without compromising the true north, while building a foundation and culture for the long term.

Then, hire a leader for your engineering team

#business-models, #ceo, #column, #ec-column, #ec-how-to, #entrepreneurship, #hiring, #leadership, #private-equity, #startup-hiring, #startups, #tc

The MKT1 interview: Growth marketing in 2021, hiring versus outsourcing, and more

Emily Kramer and Kathleen Estreich are the founders of of MKT1, a strategic marketing firm that does much more than just marketing. As we mentioned the last time we spoke with the company, it offers a plethora of services ranging from marketing consulting and organizing recruiting and mentoring workshops to angel syndicate investing.

The two founders took to Twitter Spaces on July 20 with TechCrunch Managing Editor Danny Crichton to talk about about the growth marketing industry. They offered some new perspectives, like thinking of growth marketing as an engine and other subdivisions of marketing that make up growth marketing, as the fuel.

After talking about what they were seeing in marketing, we opened the floor for a Q&A session that founders took advantage of to ask how to know when to hire a marketer and when is it good to outsource.

Below is an excerpt from the Twitter Spaces event, edited for length and clarity.

Help TechCrunch find the best growth marketers for startups.

Provide a recommendation in this quick survey and we’ll share the results with everybody.

What is growth marketing?

Emily Kramer: I think the easiest way to think about it is: Marketing consists of the fuel and an engine. Growth marketing is the engine and content marketing, product marketing, comms, events — all of that are your fuel. It’s building that engine: Everything from building marketing ops and making sure that you’re tracking and can get everything out the door, to what you’re doing with email, ads, SEO and on your website. All of these things that are used to drive your audience throughout your funnel.

“Marketing consists of the fuel and an engine. Growth marketing is the engine and content marketing, product marketing, comms, events — all of that are your fuel.”

It’s not just getting someone to sign up or getting someone to be a qualified lead to pass over to sales. It’s also supporting the customer success team and the product team. Anything that is communicating with your audience in a one-to-many way is how I think about the marketing function. Specifically growth marketing in general — it’s a full funnel, it’s the engine, and it’s ever changing.

We in marketing have 5,000 names for everything, including growth marketing. You’ll often hear in top-down sales organizations it is called demand gen, but I really think of demand gen as a subset of growth marketing focused specifically on driving leads to sales. That’s kind of what it is and how I define it. Every marketer you talk to would define it a little bit differently.

What does the landscape of growth marketing look like in 2021? What are you seeing in summer 2021?

Kramer: We’re seeing two major shifts. One is thinking about how community is a part of this, or at least throwing around the word “community” for things that have always been done. “Community-led growth” is obviously a big buzzword; that’s basically getting people in conversation to drive growth. The phrase “product-led growth” is another, and that is really just another way to describe self-serve.

Having growth marketers who can collaborate with product growth roles and product growth teams and having one centralized team has been a trend over the past 10 years. But now the term product-led growth is what we use for all of that. Marketers love to rebrand even their own functions.

Kathleen Estreich: A lot of companies are starting to think about growth marketing earlier. We’re seeing a lot of companies thinking about hiring their first marketer. It used to be you’d hire at Series A, but because all the funding rounds are sort of being moved up a level, a lot of seed-stage companies are thinking about growth earlier.

The skill sets of growth marketers are in high demand. They always have been, but it feels pretty acute right now. Given that a lot of the companies are raising money earlier and starting to try and build that traction faster to grow into the valuations, we’re starting to see a huge need. Pretty much every company we talked to is wanting to hire and thinking about growth levers they should be using earlier.

Where is there an oversupply of folks? Where is there an undersupply? Where’s the demand today? What’s underutilized today?

Estreich: In general, marketers are in pretty high demand. Product marketing in particular has been pretty interesting. We’re seeing a lot of folks in product marketing roles, because typically, the first marketer at a startup is someone who has product marketing experience and there are many companies being started and they’re looking for product marketers. And finding someone who has the experience in product marketing, who’s not just coming from a big company.

I think product marketing at a larger organization, you’re very much tied to a product line; you’re doing just product marketing. But at an early-stage company, you’re not doing just product marketing; you also need someone who understands distribution. So we encourage a lot of companies to hire someone that is what we call a pi-shaped marketer: Someone who has depth and competence in two areas of marketing.

Usually it’s product marketing and growth marketing, and finding that person is really challenging in a normal market. I would say in this market in particular, it’s a pretty tough role to fill. But if you can find the right person, you might have to make some trade-offs on either the level or the experience that you’re bringing someone in. But if you can find a person who has competence in product and growth marketing, I think that’s someone a lot of companies can benefit from in the early days of building their marketing teams.

Kramer: I’ve had a couple of startups that I’ve talked to, even in recent weeks, and I’ve heard, “Oh, our first marketer is going to be a community marketer.” That role is evolving and changing a lot. Back when I started doing startup marketing, about 10 years ago, community really meant social media, and it doesn’t mean that at all anymore. So finding people that have had that exact role before is really difficult.

In some cases, when people say community marketing, they mean they’ve done a lot of content, virtual events or customer success. I think when people post that role, it’s kind of like square peg, round hole or not knowing if it’s square peg, round hole. I sometimes see this mismatch on roles that are posted and the talent that is actually available.

I think my advice to marketers based on that is: Really read the job description, and maybe the title — does it match exactly what you’ve done, or does the title even match what you think you should be doing? Maybe there’s an opportunity there to kind of educate on what you can do and also educate on how to define roles in really early-stage companies.

When is a good time to start working with a growth marketer?

Estreich: A question we hear quite often is, “When do I know is the right time to hire my first marketer?” One of the things that Emily and I often tell founders is, the founding team is the first marketing team. You’re doing a lot of the early messaging and positioning. Usually kind of the early vision — that’s probably how you raised money. I think the way to think about it is to take a step back and ask, “Okay, what are the needs? What are the things that we’re trying to get done?” And thinking about product-market fit.

I think a product marketer, growth marketer or pi-shaped marketer is generally the first person that you would bring on. You want to make sure before you bring your first marketer that you actually have a product that’s ready to go to market. And if not, then it’s probably worth waiting until you have the product out there with some semblance of a handful of customers. Once you have that, then it might be time to start thinking about who that first marketer is.

I think the first marketer then is usually some combination of a product marketer with growth experience or a growth marketer with product marketing experience. Someone who, like Emily said at the beginning of the call, has experience with your business model and is ready to roll up their sleeves, because the first marketing job when you’re an early-stage company involves wearing a lot of hats, testing a lot of hypotheses and doing a lot of the work.

So you want to make sure that you don’t hire someone too senior who is not going to want to do the work. They’re just going to want to hire a team, which you’re probably not ready for. You also want to make sure they’re not too junior and they don’t even know what to do yet. Finding that balance, a midlevel person, is also going to be important.

Kramer: You mentioned that a product marketer can help you find the right niche to focus on. I think you should have some customers and a starting place. A better way to describe product marketers is actually audience marketers — they are figuring out how to communicate what you do to a specific audience. You probably have some idea, but they’re going to help you continue to explore within your team, like, “Should we expand to other audiences? Should we stay within this niche? What do those different audiences need? Are we talking to customers? What are they saying?”

They are responsible for knowing everything about your audience and also helping you grow into and test new audiences. That’s a huge part of the product marketing role. But again, it can be really risky to bring that person on too early at the sacrifice of building product and getting things out the door.

Is MKT1 seeing any trends with B2B and growth-stage businesses around the balance between hiring FTEs and outsourcing certain marketing functions?

Kramer: Early on, I think founders think, “I don’t need to hire a marketer. I’m spending so much time on marketing, but I don’t need to hire a marketer, or I’ll just hire a contractor or agency for content. I’ll hire a contractor or agency for paid or for SEM or even for SEO.” Then you end up with all of these contractors. But contractors, even the best of contractors, are only good when they have a contact or someone to help them review things, and when they have clear instructions on what they need to do. Because you’re working with so many clients, you can’t get up to speed on all of that quickly.

The management overhead of a contractor agency is sometimes just as much as doing the work yourself, especially if you are not experienced in that area, because of all the back and forth. Many times, marketing is more iterative than some other areas of the business where you can hand over some things, especially when it comes to the creative aspects, because you’re figuring out what your brand is. There’s just going to be a lot of back and forth.

I think there are a couple of areas where agencies and contractors are better to hire. One of those areas is paid searches. You won’t need to hire an SEM specialist for a while. And it is definitely a specialty; it is a unique beast and kind of changes a lot, what’s working and what’s not. Having someone who understands how that works and is inside AdWords all day is really helpful, so that’s a good area to bring someone on. So no matter the size of my marketing team, I think I’ve always had a search agency to augment. Even when I’ve had a dedicated search person on my team, I’ve still had an agency to augment them. That’s something you’ll always need; you’ll need different agencies as you scale to do different things.

I think another area where it makes sense is on the content side, to augment the content people or your product marketer. Again, you need to have a clear understanding of what you’re trying to write about, what you’re trying to say, what your unique perspective is, what your brand is, before you start paying a contractor to write a bunch of content. Because what you’re going to end up with if you do that, is just a bunch of content that doesn’t really say anything; it doesn’t really drive a goal.

So content, paid search, always really good areas. And then as you scale — not at the beginning, most likely there are some exceptions depending on what type of business you are — but PR is the other area where media relationships, I mean, we’re talking to TechCrunch here, but like they can probably speak more to this. But media relationships are something where economies of scale really come into play. So having an agency that is a master in media or has a bunch of media relationships makes a lot of sense. That’s more later on. PR, content and paid search, but make sure you have people internally to manage them or it can become more detrimental than helpful.

#content-marketing, #experts, #growth-marketers, #growth-marketing, #hiring, #marketing, #online-marketing, #startups, #tc, #verified-experts

Building back better means hiring more workers skilled through alternative routes

When I first came to the United States from the Dominican Republic, nobody wanted to hire me for a job in tech.

Rather than recognize the skills I possessed, employers could only see my still-developing English and my lack of a college degree. They failed to take into account my years of experience working with technology and electronics because the route I had taken was too unfamiliar.

It’s a situation all too common for the more than 70 million workers in the U.S. who are skilled through alternative routes (STAR) — especially for the 13.5 million Hispanic STAR workers like me out there today. If the employers who are struggling to fill open tech roles want to overcome the growing “skills gap,” then it’s a situation that must change.

When I arrived in the U.S., I applied to countless IT jobs, from customer service to computer repair. Every company rejected me before they even gave me the chance to show what I could do. Had employers taken the time to talk to me, they would have learned I started fixing my neighbors’ phones and computers at the age of 12, and that I had already sailed through a series of computer classes on networking, basic coding, cybersecurity, scripting and computer repairs.

About 31 million workers — including millions of Hispanic workers — possess skills that qualify them for higher-paying roles they are never considered for.

Even as I continued to learn English and mastered coding and cybersecurity concepts, companies failed to recognize what I could bring to the table. My background was too unfamiliar to make it past most employment filters that relied on degree requirements. I was often screened out of the hiring process before showcasing my talents, and I faced the biases of hiring managers who weren’t used to candidates like me. I could only get cleaning jobs or work at factories and fast food restaurants — places where I felt all my skills were going to waste.

I ended up getting lucky, and thanks to mentoring and hiring support through a follow-on to President Obama’s TechHire Initiative, doors began to open. After years of struggling, I could finally get my foot in the door, meet hiring managers and showcase my skills. I am now working as a cybersecurity associate, but my career could have begun much earlier.

Sadly, this story is a familiar one for far too many STAR workers, especially Hispanic people. Many of them aren’t as lucky as I am.

The statistics are sobering. About 31 million workers — including millions of Hispanic workers — possess skills that qualify them for higher-paying roles they are never considered for. Recent research shows, for instance, that there are 114,000 Hispanic workers employed as food and hospitality service managers, who have the skills to transition to similarly skilled jobs as community and social services managers, where wages are nearly 50% higher.

Hispanic STAR workers are also less likely to transition to higher-wage jobs than their white counterparts, and even when they are able to make such a transition, they are compensated less for their skills.

Employers must begin building more promising pathways that are accessible to all workers. The need for this shift has only grown over the last year as the COVID-19 pandemic disproportionately impacted Hispanic and Latino communities. Hispanic or Latino workers accounted for nearly one-quarter of the pandemic’s initial job losses. Even as the economy continues to slowly recover, the unemployment rate for those workers sits at 8.6%, compared with 5.7% for white workers. The fallout has been especially pronounced among Hispanic and Latina women. In December, they accounted for 45% of all job losses.

All this is happening while employers say they are struggling to find workers to fill open positions, even as millions remain unemployed and job postings have begun to return to pre-pandemic levels. The narrative around skills gaps continue to be perpetuated by employers, and they may have worsened during the COVID-19 crisis. These gaps are expected to cost the U.S. economy $1.2 trillion over the following decade, but most of these gaps aren’t actually real. They’re just the consequence of employers ignoring workers who learned their skills through alternative routes.

By rethinking hiring barriers like degree requirements, employers can more easily find job-ready talent and improve diversity at the same time. Such shifts can lead to even more systemic change down the road.

My success doesn’t end with me, as there is a multiplier effect to hiring STAR workers. Now that I have a strong foothold in the industry, I am able to help other members of my community. I formed an organization called Rhode Island Group for Hispanic Technology (RIGHT) to provide training in basic computing, coding, cybersecurity and digital literacy — all in Spanish.

If America is going to build back better, employers need to seek out and hire more workers who are skilled through alternate routes. They must begin to look beyond the traditional signals of employability and expand their understanding of what makes a good employee. Those who fail to do so will continue to miss out on the more than 13 million talented Hispanic STAR workers like me.

#column, #diversity, #economy, #employment, #hiring, #hispanic, #labor, #obama, #opinion, #tc, #unemployment, #united-states

3 critical lessons I learned while scaling RingCentral’s customer support team

There are many things I wish I knew when starting out with my small customer support team at RingCentral, but in the end, we figured it out. I’m going to share some critical lessons I learned along the way that I wish I had known at the outset, so that when it comes to scaling your own support team, you’ll have an idea of what to expect.

When I first started with RingCentral, we were working with a small-scale support team undergoing rapid growth. Our main goal was to maintain an excellent level of customer service with smart operational decisions.

You have some choices when it comes to scaling up customer support:

  • Increase your employee headcount to cover the increase in customers. This is an expensive option, and onboarding employees too quickly can result in lower-quality training that results in lower-quality customer service.
  • Operate with a reduced staff and rely on decreased customer interaction. This increases wait times and can prove catastrophic to customer satisfaction.

Hiring the right employees is critical. You want to find people with the right foundational skill sets and not necessarily the technical know-how to execute the job.

But the real strategy to embrace, and the one we instituted at RingCentral, was investing in the employees we were onboarding and ensuring all our existing processes were running efficiently.

While automating processes and developing new strategies to address customer support is essential, building an efficient and empowered support team is the real key to scaling your customer support operation.

Hiring the right employees is critical. You want to find people with the right foundational skill sets and not necessarily the technical know-how to execute the job.

A foundational skill set combined with robust training enables employees to thrive with whatever is thrown at them, like adapting to remote support in the past year. An enabled employee can resolve support issues faster, making your whole operation more efficient. That’s a real win-win.

As you scale and onboard employees, make sure they know their importance — emphasize the stakes in their role related to the business and value that responsibility. We want our employees to feel engaged, so we offer them opportunities to pursue passion projects tied to business initiatives and the opportunity to shadow across different organizations.

As you adapt to growth by scaling your support team, you’ll develop operational elements and firm work streams that increase efficiency, enabling you to further grow without the need to hire additional support.

It’s been a team effort to get to where we are now, so keep that in mind as you plan your growth scaling. Your support team is your most important asset.

Lesson 1: Go beyond simplistic support

While it’s convenient to buy into the accepted truth that customer support consists of only two departments — inbound and outbound, at RingCentral, I encouraged diversity within our support teams.

With different skill sets come support agents who bring something unique to the table. While developing our support frontline, I soon learned that talents could be utilized in a query-specific function. By placing the support associate in the most suitable role, we increased job satisfaction for employees while remaining highly focused on the customer experience.

Here’s an overview of the teams we developed:

Professional services team

#column, #customer-experience, #customer-service, #customer-support, #cx, #ec-column, #ec-how-to, #hiring, #personnel, #ringcentral, #scaling, #startups

SmartRecruiters raises $110M at a $1.5B valuation to expand its end-to-end recruitment platform

The global Covid-19 pandemic had a chilling effect on a number of industries and their workforces, resulting in mass furloughs and layoffs. But now, with countries now taking steps back to “normal”, that has been leading, in many cases, back to a hiring surge. Today, SmartRecruiters, one of the companies that has built software to handle that process more smoothly, is announcing $110 million in funding to seize the moment.

The funding, a Series E, is coming in at a $1.5 billion valuation, the company confirmed. Silver Lake Waterman is leading this round, with previous backers Insight Partners, and Mayfield Fund also participating.

The investment will be used in two areas. First, SmartRecruiters plans to continue expanding business — its primary customers are large enterprises with Visa, Square, McDonald’s, Ubisoft, FireEye, Biogen, Equinox and Public Storage among them, and the plan will be to bring on more of these globally. Jerome Ternynck, SmartRecruiters’ CEO and founder, pointed out that one of its clients made a move recently in which it had to swiftly ramp up by 10,000 people in 90 days.

“That is the scale of the great rehire that we are aiming to serve,” he said.

And second, it plans to hire and invest more in product. Specifically, Ternynck said the company is looking to build more intelligence into its platform, so that it can help customers find ideal matches for roles and provide them with tools to automate and reduce the busy work of managing a recruitment process.

This is a notable area for growth, and one that smaller startups have also identified and are building to fix: just yesterday, one of them, Dover, announced a Series A.

Ternynck likes to describe SmartRecruiters as “the Salesforce of recruiting”, by which he means that it provides a system of record for large enterprises who can manage 100% of the process of recruitment, from sourcing candidates to hire.

“In recruiting tech, we are the mothership,” he said, with some 600 vendors integrated into its platform — a mark of how fragmented the wider industry really is.

(Salesforce, incidentally, is an investor in SmartRecruiters, and while right now it’s not directly working with its portfolio company to build recruitment into what it operates as essentially a massive CRM behemoth, it’s an interesting prospect and seems like a no-brainer that it might try to some day. Ternynck would not comment…)

There are already a lot of application tracking systems in the market that can handle the basics of logging candidates and managing their progress through the screening, interview, references, and hiring/rejection cycle — Ternynck, in fact founded and sold one of the pioneers in that space, But the problem with these is that they are limited and often work within their own silos. He refers to these ATS systems as “the first generation” of recruitment software, a generation that is now getting replaced.

There are some big changes driving that evolution, and specifically SmartRecruiters’ growth. One key area is the bigger shift in “digital transformation”, precipitated by the pandemic but also a bigger shift to cloud-based computing and evolutions in big data management. Fragmentation is rife in recruiting, but we now are equipped in the world of IT with many, many ways of navigating that and using the wide amount of information out there to our advantage.

But there is another, more epistemological shift, too. Recruitment, and talent in general, has become a critical part of how a company conceives of its future success. Get the right people on board and you will grow. Fail to hire correctly and you will not, and you might even fail.

“This round and our progression signals the fact that CEOs have been forced to care more about recruiting,” he said. They want want to hire the best, he added, but that is fundamentally different from how recruiting has traditionally been approached, which is focused on cost per hire.

“This means recruiting is coming out of the administration function and into value add and sales and marketing,” he added. (That’s another interesting parallel with Dover which has gone so far as to conceive of its recruitment approach as “orchestration”, a word more commonly associated with sales software.)

The pandemic has had an impact here, too: employees and “hires” today are not what they used to be. It has become more acceptable to work remotely, and what people have come to expect out of jobs, and what roles they are coming from when applying, are all so different, and that also demands a different kind of platform to engage with them.

Indeed, that bigger area — sometimes referred to as “the future of work” — is part of what attracted this investment.

“Hiring talent and building human capital is more complex and important than ever, and SmartRecruiters is well positioned to help companies attract and land top talent,” said Shawn O’Neill, Managing Director and Group Head, Silver Lake Waterman, in a statement. “Their scale and customer growth are testament to their strong leadership and industry leading platform. We are excited to help fuel SmartRecruiters’ next growth chapter.”

Interestingly, Ternynck noted that even despite the mass layoffs and furloughs experienced in some industries in the last year and a half, SmartRecruiters has seen business grow, even through some of the worst moments of Covid-19. Over the last 12 months, bookings have grown by 70%, he said. That’s a mark of how recruiting priorities are indeed changing, regardless of whether it’s a SmartRecruiters, or another kind of company entirely — and there are many, from Taleo and Cornerstone, through to smaller hopefuls like Dover, and even Salesforce — who might reap the spoils longer term.

#enterprise, #funding, #hiring, #personnel, #recruitment, #smartrecruiters, #talent, #tc

WayUp merges with Yello to diversify recruitment

Despite studies, statistics and oh-so-many pledges, a vast number of companies continue to struggle with recruiting diverse talent. Some say that it’s not the pipeline problem, it’s an issue with how recruitment rounds and technical interviews are conducted. Others point to success with hiring entry-level diverse talent, but then companies fail to retain and reinvest in those individuals as they progress through their career.

While entrepreneurs continue to poke at the gap between talented, diverse individuals and scaled recruiting, a new merger today between two venture-backed companies paints an ambitious picture of what a promising solution could look like.

Today, WayUp, a sourcing platform for diverse candidates, announced that it is merging with Yello, a recruitment software company. The two HR tech companies will operate under Yello as a legal entity but continue to keep their independent branding with a now combined 200 employees.

“We can send all the diverse applicants into applicant tracking systems or CRMs, but if companies don’t have the automation workflow, and the tools and analytics that they need to make sure that those candidates are truly making their way through, then these candidates are sitting in a black hole,” Liz Wessel, co-founder and CEO of WayUp, said in an interview with TechCrunch.

Wessel’s realization of the “black hole” that candidates fell into soon turned into conversations with Yello, which she describes as the “most robust [candidate relationship management solution] in the market for early career.”

Now, by combining forces, the startups will be able to create an end-to-end recruitment tool that helps aggregate a group of diverse candidates who have varied backgrounds from across core and non-core schools, ethnicity, majors, location, gender and ethnicity, and then place them with recruiters into a software-powered job funnel.

Data-driven diversity

Wessel has spent the past seven years building up WayUp around the concept of “data-driven diversity.” The platform differentiates from other sourcing and job platforms by asking candidates to self-report race, ethnicity, gender and veteran status. As a result, employers, which are WayUp’s clients, can prioritize diversity when hiring, while early-career professionals can explore curated opportunities based on their profiles.

More recently, WayUp launched a dashboard to help employers see where their recruiting process loses diverse candidates. While that dashboard was WayUp’s first foray into the world of candidate recruitment management, today’s merger with Yello suggests it was just foreshadowing the partnership to come.

Yello handles recruitment processes for companies, from top of funnel events such as career fairs through virtual candidate engagement and interview scheduling. The company has landed clients like Johnson & Johnson, Tableau, eBay and Adobe for its sourcing, engaging and placing software.

“They provide a ton of automation workflow to make it so that companies can significantly, quickly, efficiently and easily get applicants through in a fair and equitable way,” Wessel said. “Companies often don’t struggle with, ‘how do I get more applicants’ at the early career stage, it’s really, ‘how do I get the most qualified, diverse talented candidates hired’.”

Yello’s been working on a sourcing arm for years in its campus recruiting solution. Now, with WayUp, the database will grow to over 6 million candidates across 7,000 campuses. Candidates, while self-reported, are 71% Black, Hispanic or female, along with “tens of thousands” of veterans, a statement about the merger disclosed.

“In addition to offering a powerhouse of data, recruiters will benefit from the automation opportunities of two solutions from a single company,” said Corey Ferengul, CEO, Yello, in a statement announcing the merger.

Yello, which didn’t previously have an explicit diversity angle in its software product, is now adding WayUp’s database of talent to its suite of services. And WayUp, which didn’t previously have a candidate relationship management tool, now can offer one to its talent.

Handshakes

Even with 6 million early market professionals in its sphere, the companies have a billion-dollar competitor worth paying attention to. Handshake, which last raised money at a $1.5 billion valuation, is a networking and recruitment platform for college students. The job recruiting tool recently passed 18 million users across thousands of universities, including some 120 minority-serving institutions, which include Historically Black Colleges and Universities, and Hispanic Serving Institutions in the U.S., as well as community colleges. Handshake’s focus on diversity isn’t as marketed as WayUp’s, but its footprint, as well as a curated network that brings HBCUVs into conversations with its 550,000 employer clients, shows its commitment to underrepresented groups. Canvas, another venture-backed startup in the HR tech world, similarly offers a recruiting platform that is based on self-reported data, aimed at helping diverse candidates land jobs.

With WayUp joining Yello’s brand, it is strengthening its competitive advantage over Handshake, Canvas and other competitors by adding software services to its recruiting tool. It’s been almost four years since both Yello and WayUp last raised venture capital money, but the move to merge doesn’t appear to be a lifeboat, as Wessel pointed out that her company beat sales expectations four quarters in a row.

“Yello isn’t competitive to Handshake at all,” Wessel said over e-mail. “I’ve never heard of one of them winning a deal over the other and we only compete with Handshake if a company isn’t prioritizing D&I as their main goal. [For what it’s worth], we’ve yet to lose an RFP for D&I sourcing.”

Long-term, it’s unclear what’s stopping more companies from combining CRM tools with talent tools, Handshake included.

“It’s really hard,” Wessel said. “We have both an Enterprise-grade software that took a decade to build to get it where it is today.”

#college, #corey-ferengul, #dei, #early-stage, #handshake, #hiring, #hr-tech, #liz-wessel, #ma, #recruitment, #talent, #tc, #wayup

MKT1: Developer marketing is what startup marketing should look like

MKT1 is a strategic marketing firm founded by experienced startup executives that is everything but a marketing agency. It advises startups on marketing approaches, recruiting and mentoring workshops, with some angel syndicate investing as well. It also provides a job board, a newsletter, and workshops for marketers.

Founders Kathleen Estreich and Emily Kramer say they are responding to a few big trends in the startup world. These days, young companies are raising more capital than ever and facing increased pressure to maintain rapid growth, but founders are typically focused on technology and product problems. The result, as they have sometimes seen first-hand, is marketing coming in too early or too late to truly help a startup grow. Instead, Kramer and Estreich help companies make marketing a core part of how they execute from their early days.

Estreich, previously at Facebook, Box, Intercom and Scalyr, and Kramer, previously Ticktfly, Asana, Astro and Carta, were recommended to us through our survey seeking recommendations for top growth marketers in the startup industry. (If you have your own recommendation, please fill out the survey here.)

In the interview below, they share more about how they recruit startup marketers and advise founders to approach marketing based on needs and several other issues that are critical for early-stage startups.

(This interview has been edited for length and clarity.)

TC: You’re both accomplished marketers and have worked at big-name companies. What made you decide to leave that career and open your own marketing firm?

Estreich: It was different for both of us. I was working in sales, and I left actually and had a baby. COVID hit and we were uncertain… Emily and I have known each other for several years, so she and I started talking over a year ago about what we were up to and what we were thinking about.  One of the trends that we were seeing was a lot of the companies when we started were typical founders [focused on technology and product], and there was a gap around helping them go to market and helping them with marketing.

We started talking and realized that we love working with founders; we love working with early-stage companies. We wanted to do that full-time. So we started doing that fall of last year and it’s been awesome. We’ve gotten to work with a lot of interesting companies and we’re starting to see a lot of trends. Hiring is a huge, huge thing, and it’s figuring out who’s the right person, when do you hire them, how do you find them, and how do you hire them.

Kramer: It’s somewhat similar for me. I had been the first, or first-ish, marketer at TicketFly and then at Asana — I was a marketer there and built up a team to about 25 people. I really love building teams, and I like them at scale too. I love the puzzle that is building a marketing team with all of the different functions, whether its hiring or figuring out what to do strategically.

Then I joined a seed-funded company — again, because I love building — a company called Astro. I actually had this experience where they hired too senior, too early on the marketing side, which is also a mistake I see people making. While we were trying to find product-market fit, I realized I was probably too senior coming off my experience at Asana. I then went to Carta — but Carta was 300 people. We didn’t have marketing at all. They had stops and starts and had a large-scale organization, so I built that marketing team up — just much later [stage].

I ended up filing a lawsuit against Carta, that is fairly public, for discrimination on equal pay, retaliation, among other things [Ed. TechCrunch coverage here]. After an experience like that, you start to re-evaluate things. So Kathleen and I started advising companies together and it’s become more than just advising. We help early companies build their marketing functions across the board.

TC: You focus on SaaS companies. Is there a reason that you have that focus versus going broader?

Estreich: That’s been our experience. Since leaving Facebook, I worked at B2B SaaS companies, with different audiences and different stages, so that’s been my experience. I think there’s a huge opportunity for marketing and it is changing in the B2B SaaS world.

Kramer: While we do focus on SaaS marketing, I think our sweet spot is in modern marketing, and significantly, self-serve as well as a lot of developer marketing. We actually think that developer marketing is how all of our things should be. It focuses on adding value, and it focuses on treating people like humans.

TC: You’ve written extensively about how to think about marketing in the earliest stages of a company. So what are the biggest mistakes that you see founders still making in 2021?

Estreich: I would say either they go too early or too late with who they’re hiring. Or one of the things that we talked about is that your first marketers are actually your founders. They’re the ones who help tell your story and do your early marketing.

I think a big part of it is finding that right early team on, and one of the key insights that we’ve written about is that the first marketer should be really a pi-shaped marketer. It’s someone who has breadth and depth, who has experience with product marketing and growth marketing. It is your first marketing hire. Regardless of what you’re hiring them for, they do everything since you don’t have anyone else. They are the default of every aspect of marketing.

Kramer: It’s not necessarily that you’re an expert in two areas instead of all the areas — product marketing, growth marketing, content marketing. So two of those areas, and normally, that is growth marketing and product marketing, based on what they need.

Estreich: When you’re thinking about going to market, some companies think that content is going to be the most important thing, so your first marketer should be pretty competent in it.

Kramer: I think the number-one thing that we look for, when we help companies with job descriptions and planning, is someone that is strategic and scrappy. But they also need to be able to set their own goals and figure out what to do, because the other trend that we see in marketing and marketing hires, is that founders will give marketers goals like “write 10 blog posts.”

That’s not the goal. What are you trying to drive? Are you trying to drive web traffic, because it actually just disincentivizes me as a content person or as a marketer to write good content if I have to write 10 pieces. It instead drives 50,000 page views. I could go write one really amazing data study or well-researched piece that does all of that that drives way more than 10 shitty posts.

Estreich: You could do a smaller number of things better and get the same outcomes. So it’s really that balance of a bunch of things you could do. And one of the most common conversations Emily and I have with marketers right now is, “How do I prioritize? What should I do?”

Kramer: “How do I set goals really about prioritization and how do I have my goals set in a way that is focused on these different activities?” Find that sweet spot of someone who still wants to get their hands dirty and wants to go early but can think strategically about what we are doing uniquely and how are we going to have an impact.

Estreich: People who have experience with your business model is another thing that we look at. So if you’re a top-down enterprise sales company, the marketing function in various fields are very different than if you’re bottom, inbound-driven. So hiring someone that matches what you think your go-to-market is going to look like, I think, is an important thing. It’s a different way of viewing the world, and if you compare companies, they might hire someone who has done one or the other. But you want someone who actually is new because that’s more important than almost the industry experience.

Kramer: Sometimes consumer stuff might be more similar to your business model. To amplify what Kathleen was saying about the industry, I think a lot of times I work with tech companies and they’re like we need people that have done fintech or finance. Now, you’re narrowing an already small pool for an early-stage marketing role to an even smaller pool. Getting a person that’s not too senior in their career, that’s full of ambition and can learn quickly is worth it versus them having the experience. Your company should have other people that are experts in the areas.

Estreich: So I think part of that, too, is a willingness and excitement around the audience. Similar to Emily, I’ve worked in marketing for very different audiences in my career. And part of it is like, am I excited about diving in and learning about this space?

TC: What are the major trends that you’re seeing in marketer hiring right now?

Kramer: Companies are going to marketers early on. One reason is that companies are in the larger rounds earlier than ever before. When you have more money to spend on go-to-market and marketing earlier, you’re bringing on marketers while earlier on.

Now some founders still aren’t. And they’re like, “Oh, we don’t need marketing.” But founders that really know that they need to differentiate how they’re doing distribution — which in my opinion would be a company that’s successful — are like, “Oh, we have more money to hire earlier on.” So there’s a shortage [of marketers], I think. I imagine that we will start to see turnover right after Labor Day, when some companies make people go back to the office.

Estreich: Yeah, we’re keeping a very close eye on going back to the office.

Kramer: I think it’s harder than ever with early-stage marketing goals.

Estreich: There are many more companies that are starting earlier and getting funding, and then when you get that funding earlier, there’s pressure to grow earlier. You’re like, “OK, we need marketing help sooner.” And then the bigger companies are doing great, people are like, “I’m sitting on this large exit package — what’s my incentive to go?”

Kramer: And I think there is starting to be a little less stigma on the job bouncing; people are like, “This isn’t great, I’m super lonely and I’m at home, I’m not being treated great. … I’m going to go somewhere else.” I think there’s also just more attrition in marketing roles than in other roles. Because to be the head of marketing you typically need to understand these different areas of marketing, and if you’re at a large company then you’re going to get siloed and you’re not going to learn these things and you’re going to stifle your career.

Estreich: Yeah, being clear about the benefits and the downsides of a big job is important. I’ve always appreciated this about companies that I’ve talked to, or about joining, that tell me everything so that when I get there, I’m not surprised. Because if you try and surprise me, I’m gonna find out anyway. To the extent that, you know, you could learn as much as you can without joining.

I think that’s important. And that’s what we’re trying to do on both sides, like help companies, you know, set these jobs up for success. And then on the marketer side, help them know what it’s actually going to be like and to the extent that we can do some sort of matching to help find good people for these companies that we think are good fits.

In one of your Substack posts, you said that “marketing strategy needs to be a healthy mix of testing new things, scaling what works, and optimizing what’s already working. Setting goals is critical here.” How do you work with companies to ensure that their goals are appropriate for the stage that they’re at?

Kramer: There are things that we say “keep the lights on,” like traffic numbers, conversion numbers.

Estreich: The steady state of marketing.

Kramer: And then there are things that can cause step-change growth, if you measure to find them. If you’re measuring everything against the same measures/metrics, you’re never going to get there, because the tests are never going to perform as well as the stuff that has already been up and running.

So it’s also about breaking up your goals. “Here are the big steps we’re taking and here are the step-change drivers that we hypothesize are a good idea and here’s how we’re going to test these things.” It’s the balancing of these quick wins and things that keep the lights on and long-term projects and how to bite off a little bit to test it.

Estreich: “What are we trying to do?” And then, “What’s the action plan we need to put together?” Other than that, “What can we do in the next three months?” And then, “What do we need to do and invest in the next several months?”

Kramer: You know, this is why I always say there’s so many different things that you can do. And I don’t think founders realize how many things there are to do, because founders often think of marketing in a couple of pockets. They’re like, “Oh, it’s ads, PR.” But it’s a lot more than that; it’s many things that are going to drive growth, both short-term and long-term. That’s a very fast definition of marketing, but that’s basically what it is. But there’s so many different things to do.

You’re more than most agencies, you’re angel investors and advisers. Is that how you think about yourselves, are you an operator rather than a growth marketing agency?

Kramer: We’re not a marketing agency; we are strategic marketers. We’re going to recommend agencies that you should work with. Part of this is like, “Could we go be operator VCs? Could we go raise a fund?” Yeah, probably … we’re doing this as advising and investing. We actually treat a lot of what we’re doing like you would at a SaaS company. We realized everybody wants help with recruiting. So we iterated on some stuff [and] launched a new job board.

And then we do angel investing. We’re always interested in iterating on what we’re doing there. So yes, there’s a huge switch towards people raising money from operators who are definitely part of that shift. We want to help as many companies as [we can whose] values are mission-aligned. And we also want to elevate markers. … I’m a marketer. That’s what I do. It’s marketing.

So it’s a bad word and marketers are/aren’t angel investors, and marketers often get paid less and marketers are often thought of as second-class citizens in the company. So we want to elevate the role of marketing to and help other workers. As much as we want to help companies grow, we also want to help marketers. We’re still trying to figure out the best way to do all of those things.

Estreich: We started off like, “OK, what do we like to do? Where do we see the market?” We like helping founders sort of think through early-stage marketing jobs, as we could do that as advisers then, you know. What are the common themes that we’re seeing? Everyone needs help on recruiting: How can we help not just these companies, but generally as well, which is like the job board that we talked about.

And I think there is a need in the market, like we talked about at the beginning, where there are many companies that started earlier with technical founders dealing with exposure to a lot of the business side. Companies that have good marketing are going to be more successful. That’s why we’re advising them, and that’s why we’re working with those marketers. That’s a main reason we started what we’re doing.

#emily-kramer, #entrepreneurship, #facebook, #growth-marketers, #growth-marketing, #hiring, #marketing, #marketing-strategy, #personnel, #product-marketing, #startups, #tc

Before an exit, founders must get their employment law ducks in a row

Successfully selling a business has much to do with timing. For many entrepreneurs, it’s the high-stakes end game where they cash out and reap the rewards of their efforts. At a certain point, when both buyers and sellers are working hard to close the deal, negotiations can move very quickly. If you’re the seller, this is not the time to discover unanticipated problems in your business.

Distressingly often, these problems are related to employment. Inattention to employment issues can have a significant impact on deals — from preventing closings and reducing the deal value to altering the deal terms or significantly limiting the pool of potential buyers.

Poor compliance, lack of policies or flawed practices mean potential liability exposure or expensive policy revisions and employee retraining — all of which can devalue your business.

Fortunately, such issues typically can be resolved well in advance with a little forethought and legal guidance. It’s important to get your employment ducks in a row long before you start planning your exit.

What follows is an overview of the three main categories of employment issues that can derail or delay a sale. For the most part, these assume an asset sale, but may vary in the case of a stock sale.

Compliance

By far the most significant problem is general employment law compliance. This means creating strong employment policies and practices that are documented, in place and operating long before you pursue a deal. The key area is wage and hour issues — timekeeping and payroll practices, worker classification issues (employee vs. independent contractor; exempt vs. non-exempt), meal and rest periods, PTO policies and payouts at termination.

#articles, #column, #ec-column, #employment, #employment-laws, #executive, #hiring, #labor, #law, #startups

eqtble, a platform that uses data analytics to create healthier workplaces, raises $2.7M seed

A composite photo of eqtble founders Ethan Veres, Gabe Horwitz and Joseph Ifiegbu

eqtble founders (from l to r): Ethan Veres, Gabe Horwitz and Joseph Ifiegbu

“People are the backbone of any organization. People are more important than the product. Without people, you don’t have a product,” says Joseph Ifiegbu, who is Snap’s former head of human resources technology and also previous lead of WeWork’s People Analytics team.

Ifiegbu’s startup, called eqtble, wants to give HR teams the same kind of detailed analytics that product, sales and marketing departments have had for a long time, with the goal of creating more engaged and inclusive workplaces. The company, a Y Combinator alum, announced today it has raised $2.7 million in seed funding, led by Initialized Capital, with participation from SB Opportunity Fund, RS Ventures and other venture capital firms and angel investors.

Ifiegbu joined WeWork’s People Analytics team in 2017, when the company had a total of about 2,000 employees. By the time he left in 2020, that number had grown to 15,000 people. One of Ifiegbu’s first hires at WeWork was Gabe Horwitz, the first data scientist on the People Analytics’ team and now eqtble’s co-founder and chief product officer. The startup’s third co-founder and chief technology officer is Ethan Veres.

At many companies, especially ones that are growing quickly, workforce data is scattered across different HR software, including human resources information systems (HRIS), engagement platforms, benefit programs and employee surveys.

Because information is so fragmented, companies can miss important correlations. For example, they might not see the links between why top employees are quitting and how long it typically takes to promote people, or overlook pay inequality. This in turn impacts a company’s culture, including its approach to diversity, equity and inclusion, and ability to retain talented people.

 

As WeWork was rapidly scaling, the People Analytics team built tools to analyze data from across the company.

“There were a lot of questions being asked, like what is our promotion like? What is our attrition, are we hiring more men than women? There were all these questions and bottlenecks in our processes, and we wanted to have an understanding of our employees,” says Ifiegbu. “So we built systems to capture all that data, clean it, structure it and deliver dashboard insights to our leadership.”

The process took about two years, and the People Analytics team eventually grew to 15 people. Ifiegbu and Horwitz realized there were many companies that needed the same kind of analytics, but didn’t have WeWork’s resources. This prompted them to start working on eqtble.

“It took us such a long time and quite a bit of money because we had this team [at WeWork],” he says. “So how do we build something that delivers these insights to them, but doesn’t take that much time to do it, because we realize it’s very important that leadership and decision makers have the data to make decisions about their employees.”

How eqtble works

The current version of eqtble can be onboarded in six weeks, and Ifiegbu says the company’s goal is to shorten that process to just two days. Eqtble is sector agnostic and its target customers are high-growth companies that have between 250 to about 3,000 employees.

The human resources analytics platform can collect data from more than 100 sources (including Workday, ADP, Oracle, PeopleSoft, Qualtrics and Culture Amp, to name a few), and deliver insights and visualizations about four main areas: talent recruitment, workforce, engagement (including attrition, or when workers quit) and compensation.

A screenshot of HR analytics eqtble's dashboard

One of eqtble’s summary dashboards

One of the things the platform can help HR teams do is identify why top candidates are declining offers.

For example, one of eqtble’s clients realized that their hiring managers were being passed more applications than they had time to look at. This created a bottleneck, because they weren’t able to interview people quickly enough. Other clients saw that candidates were dropping out because the interview process was too long.

“If you as an organization are saying ‘we’re going to have six rounds of interviews, it’s going to take three months to interview, you’re going to lose out on good candidates,” says Ifiegbu. “Other people are closing candidates within one to two weeks.”

Using data to increase diversity, equity and inclusion

It’s easy for a company to make DEI pledges, but even the best of intentions don’t result in progress if an organization isn’t willing to scrutinize itself. Because eqtble combines data from across a company, it can highlight potential issues before decision makers realize what is happening.

“Last year, all the companies were saying, ‘oh, we’re going to do this, we’re going to do all these things,’ and it’s like, ok, great, you can say anything, but the truth is you cannot change what you don’t measure,” says Ifiegbu.

For example, a company might be be proud of having a workforce that is divided equally between men and women, or that has a large percentage of people of color, when the reality is that many of them aren’t getting raises or being promoted into management roles.

“That 50/50 doesn’t mean anything if you don’t see representation at higher levels for women and people of color. What we’re doing is showing you a picture of your organization. If you can see the different parts of it, you can see the parts you can improve on and take actionable steps, not just lip service for the media,” says Ifiegbu. “Eqtble surfaces places you can improve or places where you are doing well so you can keep doing that.”

Ifiegbu is excited that the HR analytics space is gaining attention. “I feel like using data to drive decisions is such an important thing, and ultimately builds a healthier company.”

The seed funding will be used to grow eqtble’s engineering team and its platform’s machine learning and visualization capabilities, and user acquisition.

In a statement, Initialized Capital partner and president Jen Wolf said, “Important organizational issues like DEI or equitable compensation are not simply a box a company can check, they take honest commitment. Companies willing to make that commitment shouldn’t have to wait months or be discouraged by the financial investment it takes to understand the data they already own to make these meaningful changes. The eqtble team knows how to solve this, and they’re empowering other companies to do so.”

#compensation, #dei, #eqtble, #fundings-exits, #hiring, #hr-analytics, #human-resources, #initialized-capital, #recruitment, #startups, #talent, #tc