Artificial intelligence marketing is becoming a staple in the retail industry. Companies like Amazon.com use algorithms to learn what individual customers like and then show them tailored messages.
Now an Indianapolis-based entrepreneur wants to bring that kind of marketing to the restaurant industry.
Matt Tait, a former attorney and software salesman, is about six months in leading a six-person startup called Füdē (pronounced foo-dee). It sells a software product to restaurants that mines existing customer data and automates personalized marketing messages. For instance, if a person's interactions with the restaurant suggests an affinity toward steak, he'll probably see an email about a new rib eye on the menu.
Füdē has three restaurant customers so far. But Tait said the company has been able to raise nearly $500,000 in seed capital from investors—including Scott Webber, the former CEO of BidPal, one of Tait's former employers—and it plans to expand that client base in the coming months. He said his software is not just about personalization, but also analyzing responses so that restaurants can gauge their return on marketing investment
"One of the big things we're trying to do with Füdē is tell these restaurants owners ... that they deserve something they can actually measure at the end of every month," Tait said. "You spent this much on marketing; it put this many butts in seats in your restaurant."
The product works like this. Füdē tracks online and offline data on customers, including interactions with the restaurant, social media data and more. It then builds tailored content for each customer, including emails that "capture the essence" of how a chef would talk to people individually, Tait said.
The software also can predict the best time to remind people to make wedding anniversary reservations, based on last year's visit.
"I know there are a lot of people that run restaurants, and it's a really hard business to be in," Tait said. "So if we can provide them with consistent, measurable sales on a monthly basis, I know for me as a business owner that'd put my heart as ease."
Füdē was co-founded by Tait and two of his former colleagues at BidPal—Zach Myers and Jonathan Runes—who worked together from 2012 to 2014. The idea started a few years ago as an app that allowed people to share restaurant recommendations with people they knew, but market research and advisers steered them in a different direction.
Füdē is in a new accelerator program at DeveloperTown called DT Starts, which essentially surrounds portfolio companies with resources to grow. DT Starts participated in the investment round and is considered a co-founder, Tait said.
By Business Wire
ALEXANDRIA, Va.--(BUSINESS WIRE)--
A new research report released by the Winterberry Group proves that guest data is playing a critical role in the way the restaurant industry is responding to challenges like increased competition, declining guest loyalty, and measuring marketing effectiveness. More than 200 leading restaurant and hospitality brands participated in the research initiative co-sponsored by Fishbowl and The Coca-Cola Company.
“Actionable data insights continue to emerge as the real trade secret to success in almost every service-oriented market, and the restaurant industry is no exception,” said Dev Ganesan, Chief Executive Officer of Fishbowl. Fishbowl, the leading customer engagement platform provider, provides deep guest insights that enable restaurants to execute data-driven decisions and personalized marketing. “Being able to make informed, data-driven decisions and engage guests with a high degree of certainty and minimal amount of risk is an absolute must for our clients. This report underscores that requirement by demonstrating the results a data-driven approach delivers to brands that have made it an integral part of their businesses.”
Among the key findings in the report – which can be downloaded at http://bit.ly/winterberryreportdownload – is that an overwhelming 87.3% of marketers surveyed agreed with the notion that restaurant businesses stand to gain competitive advantages by initiating and maintaining strategies to support the collection and analysis of guest data.
The report also revealed that progressive marketers are collecting a broader array of data points that go beyond simple demographics and email addresses. Preferences, attitudes, lifestyles, buying patterns, and other guest behavior insights are informing the development of innovative engagement strategies and programs. Data on responsiveness to offers, redemption information, and mobile engagement are also increasingly relied upon to provide actual, real-time intelligence on the success of campaigns – and can offer even more value when aggregated by geographic market, date range, and individual store performance.
As one survey participant said, “Going into 2017, we are focused on being able to use customers’ preferences in order to deliver relevant content. We are aiming to understand our customers better to be able to deliver them something that will drive them to our website, and drive them to make a reservation. It can’t just be offers all the time anymore.”
Other marketing trends such as shifts in media budgets and allocations, mobile and app development, social media participation, and performance metrics are unveiled in the report, with notable changes to digital media approach being reported by more than half of respondents.
Jonathan Margulies, Managing Director of Winterberry Group, notes, “Data insights enable companies to be more nimble and adept in responding to challenges and changing trends and empower them to rise above competition. Understanding and embracing the shifts currently underway in the restaurant industry from the marketers’ perspective can have monumental impacts on the future of any brand.”
Download a complimentary copy of the full report here.
About Fishbowl Marketing
Fishbowl empowers restaurants to become best in class marketers. Through its intelligent multi-channel customer engagement platform, Fishbowl drives sales and traffic by revealing powerful insights used to execute more effective campaigns across multiple channels. Fishbowl’s big data platform aggregates and enriches data from a myriad of sources to drive more effective marketing, and uncover guest and business insights that can be leveraged across the entire enterprise. Relied on by more than 70,000 restaurant locations, Fishbowl is headquartered in Alexandria, VA, with offices in Silicon Valley, UK, and India. For more information, please visit our website or follow us on Facebook, Twitter, and LinkedIn.
Research from Winterberry Group found that guest data plays a key role in the way restaurants handle challenges, including increased competition, declining guest loyalty, and gauging the overall effectiveness of marketing efforts, according to a news release from study co-sponsor, Fishbowl. More than 200 restaurant brands took part in the study, which was also sponsored by the The Coca-Cola Company.
"Actionable data insights continue to emerge as the real trade secret to success in almost every service-oriented market, and the restaurant industry is no exception," Fishbowl CEO Dev Ganesan, said in a news release. "Being able to make informed, data-driven decisions and engage guests with a high degree of certainty and minimal amount of risk is an absolute must for our clients.This report
underscores that requirement by demonstrating the results a data-driven approach delivers to brands that have made it an integral part of their businesses."
Among the reports key findings are:
"Data insights enable companies to be more nimble and adept in responding to challenges and changing trends and empower them to rise above competition," Winterberry Group Managing Director Jonathan Margulies, said in a news release. "Understanding and embracing the shifts currently underway in the restaurant industry from the marketers' perspective can have monumental impacts on the future of any brand."
By Erica King
At 38, I decided to start running (or rather, shuffling) because I was at a crossroads in my life. I was the unhealthiest I’d ever been and was seeking a new fitness challenge. Over the years, I’ve seen first-hand how the way we treat our bodies, dictates our quality of life. Here are 10 tips that’ll keep any small business owner fighting fit, regardless of what life and business throws their way.
More and more these days, most of us are spending our time sitting inside and at a desk. If you’re working in an office with a few people or even alone at home, you’re exposed to stale air. Getting out and about helps to boost your immune system and ease your stress levels. Best of all, research shows that getting outside and surrounding yourself with nature increases energy levels for 90% of people. No need for that energy drink!
As a small business owner, I’m sure you’re always on the lookout for tools that make running your business easier and save time. But with so many online tools available it can be difficult to discern the best small business apps for your needs. Look no further. These fresh new apps pack a big punch.
1. Flock & CompanyWebsite: http://flockandco.com/
Uses: Networking and collaboration for female creative entrepreneurs
Features: Searchable directory, various types of collaboration listings, customized member profiles and Etsy shop integration
I have connected with so many amazing, successful, creative business women in a short amount of time using Flock & Company. And these connections have already led to podcast interviews, guest blog posts, and industry support systems.
Description: There are so many benefits to connecting with other business owners. Whether it’s to network, collaborate, or share strategies, building relationships with like-minded entrepreneurs can take your business to the next level.
Flock & Company offers a unique opportunity for female creative entrepreneurs to do just that.
The online platform features a searchable directory full of qualified business owners — making it easy to find experts with a particular product, service, target audience, industry, niche, or even geographical location. You can respond to or create your own collaboration listings to find guest blogging opportunities, podcast interviewees, product reviewers, virtual or in-person coffee dates, and more.
With this beautiful, well-designed platform, the possibilities are endless.
You don’t even need to know what you’re looking for to get value from Flock & Company because they have a personalized, data-driven suggestion feature to help you make the perfect connections. Whether you’re a blogger, a maker, a podcaster, or designer, Flock & Company is an excellent tool for building your online business.
2. PlannWebsite: http://plannthat.com/
Platforms: iOS and Android
Price: Free trial, then nominal one-time fee for one to three accounts or monthly fee for unlimited accounts
Uses: Instagram scheduling and strategy
Features: Drag-and-drop feed planning, image and video scheduling, save and manage multiple hashtag sets
Description: Instagram is a powerful and effective platform for small business — and Plann is a leader in the lineup of must-use small business apps for anyone serious about maximizing their marketing efforts.
With Plann’s unique features, you can save time, get more followers, increase engagement, and curate a designer feed.
Effortlessly create a beautiful, customized feed using the drag-and-drop tool to make the most of Instagram’s three-column gallery layout that puts visual branding front and center. Load previous posts and plan up to 120 images in your gallery at once to easily achieve a designer feed such as the checkerboard look, the mind-blowing seamless look where images span across all three columns, or the revolving color scheme look.
Even if you’re not looking to get fancy, Plann’s scheduling and posting functions are top notch.
Unlike some other small business apps for social scheduling, with Plann you can schedule an unlimited number of images and videos per month. It’s a beautifully designed and robust app with new features being added all the time. If you’re ready to take your Instagram account to the next level, this is the app for you.
3. WebinarNinjaWebsite: https://webinarninja.co/
Price: Free test drive, then monthly fee based on number of live attendees
Uses: Webinars with robust features and integrations
Features: Live, recorded, evergreen or hybrid webinars; chat, polls, offers, screenshare, auto email reminders, paid webinars, Facebook ad and email integrations, analytics and much more
Description: WebinarNinja is a new webinar platform with a generous number of useful features. But don’t worry, they make it incredibly simple to create and run a webinar.
The clean and easy-to-use interface puts you in control during your webinar — chat, live polls, time-stamped Q&A, show an offer with the click of a button, share your screen, or even share the stage with a co-host at any time. WebinarNinja has it all.
You can create different types of content such as live webinars, evergreen recorded content, or anytime webinars to build your list of email subscribers. WebinarNinja uses the latest webinar technology, so your webinars will be in real-time. That means you can engage with participants without the awkward delay of most other live options out there.
I love having the ability to offer recurring webinars to accommodate various time zones.
WebinarNinja makes it easy for small businesses to offer powerful webinars to build relationships with their target audience and convert them into paying clients.
4. UmmoWebsite: http://www.ummoapp.com/
Platform: iOS only
Price: Very minimal one-time fee
Uses: Speech coaching
Features: Annotated speech analysis including filler words, speed, pronunciation
Description: Livestream video, podcast and radio interviews, guest speaking at events, video course recording — these are all really powerful tools for marketing your small business. But public speaking doesn’t come naturally to most of us.
Poor speaking skills can make us sound less experienced and confident than we are. Or worse, they can stop us from doing these things for our business at all. Ummo is here to help.
With the tap of a button, you can get word-by-word annotated results on your speech patterns to help you improve your speaking ability. It monitors speed, volume, pauses, filler words like ‘um’ ‘like’ ‘you know’, and even your pronunciation. With its powerful speech recognition and analysis algorithms, Ummo can give you useful feedback that helps you feel more confident when speaking. And, um, like who doesn’t need that, you know?
5. RenderforestWebsite: http://www.renderforest.com
Price: Free to moderate monthly or per-export fee
Uses: Online professional video creation
Features: Customizable video templates, licensed music collection, unlimited storage and sharing, HD-quality exporting
Description: I don’t have to tell you how hot video is right now. You probably know that it’s the fastest way to build the know-like-trust factor with prospective clients. But did you know that video content gets preferential treatment by algorithms on most platforms? And according to Forrester stats, including video in an email increases click-through rates by up to 300 percent.
Bottom line: If you want anyone to pay attention to your content, at least part of it needs to be in video format.
For most people, video sounds overwhelming and time-consuming — particularly if you want it to look professional and not like a first-grader shot it with their mommy’s iPhone. But video content doesn’t have to be complicated, especially with Renderforest. They make it easy for you to create professional looking videos for your business.
Choose from countless, customizable templates to suit your every need — whether it’s an intro to your video training course, a blog post, a company overview, or business presentation. With features like licensed music, storage, sharing, editing, exporting and more, Renderforest offers everything you need to create professional, high-quality videos.
Put these small business apps to work for your businessAs entrepreneurs, we are used to doing “all the things” to run and grow our businesses. These small business apps let you do it more efficiently and effectively. Not only will they save you time and money, they will also give your business a polished and professional vibe. From video to social media to forming valuable connections with fellow small business owners, these tried-and-true apps help you rock it online.
This new legislation eliminates a huge burden on small business owners.
Small business owners can breathe a sigh of relief.
Pres. Barack Obama has signed bi-partisan legislation that will prevent the IRS from issuing fines on small businesses that reimburse or directly pay their employees for healthcare costs.
KEEP UP TO DATE WITH LEGISLATION AFFECTING SMALL BUSINESS.
“Both the Senate and the House have now passed critical legislation to protect small business owners from outrageous IRS fines,” said NFIB President and CEO Juanita Duggan. NFIB was a major advocate for this bill, fighting for small business owners at local and national levels. “Our research showed that a significant percentage of NFIB members reimbursed employees for the cost of health insurance, a practice the IRS tried to stamp out despite the lack of clear direction from Congress. Now Congress has acted to make it clear that businesses should not be punished just for trying to help their employees pay for healthcare costs.”
In part because of NFIB’s efforts, small business owners will now be allowed to compensate employees for the cost of individual insurance premiums or medical visits.
Prior to this new provision, owners who violated the rule had to pay a fine of $100 per day, per worker. That could amount to $36,500 a year, which is 18 times larger than the penalty imposed on larger employers that don’t offer insurance to their workers, according to NFIB. The IRS began enforcing the penalty on employers last July, despite it not being a part of the ACA.
The legislation also includes a number of other healthcare provisions, such as “more funding for research into diseases, improvements in the mental health treatment system, and an overhaul of the regulatory system for medical devices and pharmaceuticals,” according to Accounting Today.
Not only that, but the legislation also includes “funding to fight opioid drug abuse, collect genetic information from a million volunteers for medical research purposes and provide money to back Vice President Joe Biden’s ‘moonshot’ effort to find a cure for cancer,” Accounting Today reports.
For many small business owners, QuickBooks is a popular choice for accounting software, but it’s just one choice they need to make. Which version should you get?
Although many QuickBooks users find themselves gravitating to the online version of the product, some still prefer (or can only use) the desktop version of QuickBooks. QuickBooks Pro and QuickBooks Premier are both excellent products. QuickBooks Desktop, in general, is one of Intuit’s all-time best products. So, if you are evaluating which is right for you, use this ultimate comparison of QuickBooks Pro vs. Premier.
The Perks of QuickBooks ProQuickBooks Pro is a simple, deceptively robust, and powerful solution that solves the following everyday small-business accounting needs:
QuickBooks Pro is bookkeeping legend, with some old timey folklore built in. Your mama’s mama used it. Your dad still has 2003 Pro installed on an old Windows 98 machine down in the basement of the house you grew up in … and it still works. It was Intuit’s accounting answer to AOL’s “You’ve Got Mail” for email.
Every business that invested in an accounting solution at one point installed QuickBooks Pro. It is bread and butter, the T-bone next to the mashed potatoes, the Chevy ’57 of bookkeeping software.
But that doesn’t necessarily mean it is the right product for you.
The Power Behind QuickBooks PremierSo what makes a QuickBooks Premier not Pro? Meaning, what features does Premier have that Pro does not, and why is this important?
Now, I need to qualify something: I am about to list the key accounting maneuvers that Premier has over Pro. But you need to know that Premier has several different versions itself, and they do not all have the same feature set.
For a detailed breakdown, please see the QBO Show’s QuickBooks Matrix. Woody Adams (long-time Intuit employee and friend) tries to keep it up to date. Having very little short-term memory left, he commits to 98% accuracy most days (he told me to write that!). However, I do not plan to go into depth regarding what Premier Contractor has versus Non-Profit, etc. (I will one day, though, I promise.)
So, to generalize it as best I can, the main features of QuickBooks Premier that are not in Pro:
A better way to think about it might be the most popular reasons someone would choose QuickBooks Premier over QuickBooks Pro. Here’s what I usually see:
QUICKBOOKS PREMIER’S “TOP SELLER”1. Back orders: Let’s say you need to know what products were invoiced and what is left over to still ship to the customer. Pro has no such visibility.
2. Sales orders: A non-posting sales transaction to hold the order until you invoice against it. Premier also has the sales order fulfillment worksheet and easier sales order workflow management, too!
3. Current availability tracking: Not in all flavors of Premier … but super critical to know what you can promise to a customer against not just the stock you have on hand but the stock already committed to another customer. In QuickBooks Pro, you will be blind.
4. Estimate to purchase order: For contractors, this is quite possibly the main reason to upgrade to Premier. Imagine an estimate with 30 lines of materials you need to purchase for the job. How cool would it be to just create a purchase order from that estimate?
5. Previous reconciliation reporting: One of the main reasons accountants want their clients to use Premier.
6. Reverse journal entry
7. Price level by item: Leveraged for a great many purposes, nice to not be limited solely to a fixed percent price increase or decrease, but one of your own desire and across the items you want the level to impact. For manufacturers, wholesalers, distributors, retail, this can often be critical. Fixed percent is nice but not flexible enough.
Deciding on QuickBooks Pro vs. PremierNow that you know the fast facts about these products, I want to leave you with some general advice to keep in mind as you decide between QuickBooks Pro vs. Premier:
1. Do NOT buy the Retail version of Premier. There really is no point to it at all. You should invest in a true point-of-sale product.
2. For QuickBooks Premier, the popularity of the versions are as follows: QuickBooks Accountant, Contractor, Manufacturer & Wholesale, and then Non-Profit. If you’re in one of those categories, they’re worth exploring.
3. Every desktop edition of QuickBooks has the Loan Manager, which is lacking from QuickBooks Online and is a great feature.
Lastly, you could consider the Accountant Edition of Premier even if you are not an accountant. Here are a few tools you’ll find in that version that you won’t in the non-accountant version. My favorites are in bold:
New businesses have a 50/50 shot at surviving past the five-year mark, so identifying unique ways to save could mean the difference between success and failure.1 Bonus: When implemented correctly, cost-cutting strategies can also save busy business owners time and energy, providing you with more than just financial relief.
Capitalize on free publicity
Consider free or low-cost marketing efforts. Social media channels are free to set up and can have a broader reach than even traditional (and pricey) advertising channels like television or radio.2 (It’s no wonder 50 million small businesses have taken advantage of company Facebook Pages).3 For those already using these platforms, tools like IFTTT and RiteTag can help automate and optimize your posts to better reach your target audience.
Research startup-friendly partners
Some businesses, like cloud providers and invoicing companies, may provide a limited number of free or deeply discounted services for small or newly founded businesses.
Save the planet while saving your budget
Save paper and printing costs by filing away important documents in a secure cloud storage system instead of in old-fashioned hanging folders. And by spending a little more upfront on energy-efficient appliances such as workstations and servers, you’ll likely save on future utility bills (and might be eligible for a tax credit, to boot).
Shop around for effective workforce solutions
Conduct research for different ways to process payroll or track employee hours. If you are handling most of the bookkeeping yourself, finding the right low-cost provider could save you time and money.
Want more ways to cut costs and boost your bottom line? Visit the SunTrust Small Business Resource Center for more information that can benefit your small business.
Find affordable ways to upgrade
Did you really need that NEW office furniture at double the cost of the “gently used” piece? There are plenty of consignment stores in major metropolitan cities (and online) so you can find an inexpensive piece that still reflects the appearance you’d expect in your office.
Rethink your personal finance options
Talk with your accountant about savings options that might not be so obvious. Plans such as 401(k)s or IRAs may provide the opportunity to stash pre-tax income while saving money for the long term.
By Steve Hawk
Even in the biggest, most stable corporations, putting together a small team can be a perilous process fraught with personality clashes, hierarchical imbalances, and conflicting visions.
But in a startup, the challenge of assembling a solid team — and then keeping its members inspired and focused — carries the added stress of being potentially fatal. When a company consists of a half-dozen people, a single recruiting misstep can topple the house.
Stanford Graduate School of Business professor Lindred Greer has been studying and teaching the art of team-building for 12 years, with an ever-increasing focus on startups. In Greer’s course The Psychology of Startup Teams, students spend time outside of class analyzing the interpersonal dynamics at a nascent business, report their findings to the class and visiting experts, and then return to the startup to offer advice.
Much of this course-related fieldwork has made its way into Greer’s scholastic studies and even directed her future research. “It’s a nice feedback loop, because there isn’t a lot of good research on the people side of startups,” she says. “There’s a lot on product and strategy and structure and funding, but not a lot looking into the social interactions.”
She recently sat down with Insights to share what she’s learned about how startup founders can assemble strong, motivated teams.
What are the key differences between creating a team for a startup versus creating a team for an ongoing business?First, there’s the intensity of interaction. If you’re on a project team at a big existing company like, say, Google, you’re not really married to the people on your team. But if you’re starting a business and choosing co-founders and making your first hires, you’re looking at one of the most intense relationships you’re going to have in your life. It’s similar to marriage.
At Google, there’d be more room for error, because the team is more likely to be a small cog in a huge machine.Yes. But with a startup, it’s more of a life-or-death situation. Issues around power and fairness are bigger, because your entire life is probably vested in the business. You might be living hand-to-mouth while waiting to get funded. With so much at stake, little obstacles are harder to navigate.
It’s essentially a hiring challenge?It’s hiring decisions, and it’s having a clear culture and clear statement of values even before you go looking for a co-founder. And then when you start the first phase of hiring, it’s making sure that you and your founding team have an aligned vision, so it’s clear who’s going to be a cultural fit. One of the things that can really break an early-stage team is bringing in the wrong person and then not having any idea how to fire them. That can be a train wreck, especially if there’s equity involved.
You might not even have an HR team in place.You usually don’t, so you’re doing it on your own. And that’s rough because most people aren’t trained in this.
Would you go so far as to actually sketch out a dream team and then go find them?Definitely. You don’t want to just be grateful for the first decent coder you find. You want to be intentional about it. That’s the main takeaway from my course: Be as intentional about your people as you are about your product.
Does that mean looking beyond personality and experience?It means looking at everything. Make a list of your own competencies. What are you great at? What are the skill sets you need to have in other people? And, just as important, what common values are you looking for?
Can you define values in this context?Things that you hold dear to your heart. Things that you’re not willing to compromise on if you get into a conflict over them.
So that’s a squishy, ethereal thing?Not necessarily. The best value systems for startups are directly tied to the product. One startup that I know, they have a 3-D printing company, and their value system is, “We love to build things, and we love sharing what we build.” So there’s a passion for building things, but also some gregariousness and intellectual playfulness.
You should also ask, “Am I in it just for myself, to make a million bucks, or am I in it to make the world a better place?” That’s a fairly big, basic value decision.
That would seem to be one core value where you’d definitely want people aligned.You need to find people who are excited by the company’s mission statement. Like Disney makes families happy. Adidas is competitive.
Would you consider that a primary filter?I would apply an ability filter first and then choose between my top five candidates based on who is the closest fit in terms of values. It’s easier to siphon out people based on ability — you can do that with their resumes. And then once you have them in for interviews, that’s when you start thinking about values and culture. Is this person going to be happy here? Are they going to fit in with you?
So maybe you’ll end up selecting someone who’s a slightly less talented coder.If they’re a cultural fit, absolutely. But there’s a caveat. You want them to have similar values, but they don’t need to be your best friend. Too often, founders think, “Oh, I need to get along with them.” We overrate that. It’s important to have a diversity of personalities. Risk aversion, for instance, is more of a personality preference than a value. And that’s actually a really good thing to have diversity on.
I know one founding team that has a CEO who’s extremely risk-prone. If it were only up to him, he would scale way before his company is ready. But he’s paired with a great CTO who’s very good at putting on the brakes. And together the two of them balance out. So it’s also knowing yourself and your personality. And then finding complementary teammates.
But when it comes to personality traits, how do you narrow it down? There are dozens of personality types.Whatever is more salient to you. If you had to describe yourself in five words, what pops into your head? Like I said, risk aversion is a big one. Optimism and pessimism are also important.
Do you actually want a pessimist on your team?Yes. There’s research on that, showing that too many optimists can be bad for startup performance. Having a contrarian can be a great thing, especially at startups, where people tend to have such rose-colored goggles about the future. Having someone who’s more realistic can help turn around some pretty bad decisions.
How do you make sure that you’re asking the right questions and doing the right research on someone so that you get to know their personality?Take your time. My favorite advice I’ve heard from VCs to founders is, “Hire slow, fire fast.” That one rule alone could save a lot of startups, because people are often far too quick to jump into relationships. If you meet a new coder who’s a friend of a friend, a one-day interview isn’t sufficient to say, “OK, you’re hired.”
You need to go slow because it’s really hard to fire someone after you bring them on board and get to know them. Beyond the legal issues, it takes a lot of emotional gumption to make that decision, especially if you’re an early-stage founder and you haven’t done it before. Some startups will take six months to fire someone who doesn’t belong. But in six months, the wrong person can corrupt your culture.
Because, like you said, it’s a marriage.And it’s really hard to end a marriage. Emotionally, financially. You just don’t want to go there. That’s why it’s so important to take your time before you hire. You want to engage with them in a lot of different contexts. If you’re hiring a CTO, give them a task similar to what they’d be doing in your company. Give them two weeks to work on it, and see how they do.
Also, spend time with them one on one and in groups. Look at them across a variety of social situations, and look for indicators in behavior and personality. Just asking someone questions doesn’t tell you everything you need to know. It’s very easy for smart people to appear socially desirable.
There’s a startup I know where they really value having a positive, kind culture. The CEO has arranged his office so that when he’s at his desk, he looks out at his secretary. When people come in for an interview, his big thing is to watch how they interact with his secretary. If they’re kind and courteous or dismissive and abrupt, that’s a strong yes or no indicator for him.
Taking your time must be especially important when choosing co-founders.Definitely. You want to spend months with someone before you formally commit to a partnership. We’re actually doing new research now in the realm of close-relationship analysis, looking at the benefit of prenuptial agreements between founders.
With my students, one of the big things I ask before they commit is, “Have you had a fight yet? Do you know what this person is like when things get stressful and ugly?” And if you haven’t seen that yet, then you need to find ways to gently explore how this person will react if you disagree with them or stress goes up.
Really?Yes. Push back on something much harder than you usually do, and see their reaction. That can reveal a lot. I’ve had students come back to me saying, “Oh, my gosh. I’m so happy I did that. That was terrifying.”
Have you ever heard any stories of people who feel like they’ve been falsely seduced during the founder-dating period?Oh, yeah. It can happen.
Are there ways to guard against that?References. Talk to people who’ve worked with the person before. See how they are with other people.
Once you’ve hired a new team, how do you keep them marching in the same direction?You have to put more effort than many founders realize into communicating your mission and your vision
What’s your distinction between vision and mission?It’s something that we talk a lot about in my class. Mission, to me, is a very brief statement of purpose. “What’s our reason for existence?” So, again, for Disney, it’s “we want to make families happy.” For Stanford, it’s “bring knowledge to the world.”
A vision, on the other hand, is, “Where are we going with that? How are we going to do it?” It’s action-oriented. The best ones usually also have a timeline and goals that you can benchmark against.
Richard Branson has a great saying: “A good mission statement should fit on a coat of arms.” And that mission statement should not only dictate your hiring decisions, it should also be embedded in your rituals. How you celebrate success. How you decorate your office. What you do with your off-sites. That mission should be everything. And the vision should be, “Where are we going?”
Do most of the companies you study succeed at that?Hire slow, fire fast. That one rule alone could save a lot of startups, because people are often far too quick to jump into relationships.
Lindred GreerActually, no. When my students go in to study startups, the single biggest problem they see is lack of alignment around the mission and vision. We usually look at companies with about 10 people. They’ve done their first round of hiring, and they’re often still in Series A funding. My students go through and ask people, “As a company do you know where you’re going? Do you know how to contribute?” And most employees say, “No, we really don’t.” And you tell that to the CEO, and he or she will say, “Well, I told them six months ago what the vision was.” It doesn’t work that way, especially in startups. Things change so much and so quickly. Six months is forever. You have to keep emphasizing in all your internal communications: “Who are we and what are we doing right now? What is our goal?”
Is building a team something that you can get better at with training?Second-time entrepreneurs are astronomically better than first-time entrepreneurs in building teams and creating startups that succeed. The number one reason startups fail is people problems, and the second time around, entrepreneurs realize this.
Catch up on my current posts along with industry articles