startups as the path to enlightenment

So if you didn’t work at PayPal during their halcyon days, what else makes for an attractive startup résumé?

I would say that ideally startup hiring managers should try to get folks who’ve been through at least two of the four private company stages, including at least one that the hiring company has not yet been through.

Well, I would say that, except I find that these “stages” are not particularly well defined by anyone.  Or at least not anyone I could find in 28 seconds of Googling.  So like any moron with a digital pen and printing press, I can just make up my own definitions.

Some of the typical “stage” terms are seed, early, expansion, and late – these are often used by investors, are vaguely defined, and don’t always track to a company’s internal status and expectations.  I’ll try to align the four stages of private company progress with some more-fun-if-equally-irrelevant quadrilateral perspectives, from psychology and Buddhism.

Stage I:  pre-product

psych: unconscious incompetence – the individual neither understands or knows how to do something, nor recognizes the deficit or has a desire to address it

Buddhist: the path to stream-entry; the fruition of stream-entry

This stage is everything before you have a product launched to anyone outside your “friendlies” (relatives, friends, close contacts) – from the idea on the napkin to your Hello World! launch to the general public.

What others call ‘seed stage’ is often short of this – just the idea through a prototype, with ‘early stage’ then following from pre-launch to revenue traction.  But although that division may be natural for funding demarcation, from a product perspective you just don’t know what you have until it’s in the hands of the buying public, so I regard all of this period of not knowing as a single period of sustained ignorance.  It is all the pre-product path before the fruition of entering the great stream of commerce.

Stage II:  maximum iteration

psych: conscious incompetence – though the individual does not understand or know how to do something, he or she does recognize the deficit, without yet addressing it

Buddhist: the path to once-returning ; the fruition of once-returning

This is the period where the company has both the maximum flexibility and the most urgent need to rapidly iterate development.  Not just product development – everything about what the company makes, does and is.  The flexibility is there because the product has been launched, which not only lifts the inchoate burden of launch, but begins the collection of data (customer feedback, product metrics, use data etc) which can now be mined for insights about how to shape and reshape the product.  The need is there because if you don’t iterate, you will not grow and then you will not exist.

And again, it’s not just product iteration but an opportunity to examine and tune everything you do as a company:  recruiting and review systems, management team and tools, compensation, cultural principles, office design, everything.  The things you do to shape the company during this period will have an enduring effect on everyone who works there for years to come.  Too bad you don’t really know what you’re doing just yet.  But now is the time to get on the path to once-returning, to reincarnation and rebirth into the next stage.

Stage III:  revenue optimization

psych: conscious competence – the individual understands or knows how to do something; however, demonstrating the skill or knowledge requires a great deal of consciousness or concentration

Buddhist: the path to non-returning ; the fruition of non-returning

Unless you were oh-so-clever enough to launch without a revenue model, the company began to enjoy early revenues during the maximum iteration stage.  Iteration remains critical, but now your flexibility is naturally limited by the existence of paying customers, who often have a limited tolerance for change.  You have to optimize existing lines of revenue while making careful tradeoffs in launching new lines of revenue.  You may for the first time begin pursuing meaningful acquisitions or divestments that could change the face of the company.

This stage may be the most difficult among the four; your hard-earned knowledge seems to have the perverse effect of increasing the challenge.  When you were young and ignorant, it served you well to underestimate the difficulty in changing the world.  Now that some corner of the world has bent to your dream, you find that the dream is a shared hallucination of many rather than your own private trip – and your role isn’t to enjoy the ride but to supply the vehicle.

Nonetheless you are on a path of no return:  in returning there is only defeat and regression to a lower form of living; you can only move forward for true enlightenment.

Stage IV:  maturity and liquidity

psych: unconscious competence – the individual has had so much practice with a skill that it becomes “second nature” and can be performed easily (often without concentrating too deeply)

Buddhist: the path to enlightenment; the fruition of enlightenment.

The mature company does not have to be moribund, there is a vitality and pleasing grace to the well-oiled machine.  You know what you’re doing and you’re at the height of your powers, freed from the mixed blessings of youth.

And no matter your personal attitude towards money, getting the company to liquidity is the last barrier to enlightenment.  (Here I’m putting aside the case of those who want to build a big, sustainable private company without calling it a “lifestyle business” – the more typical startup dream involves shareholders and employees who want to be able to freely trade their stakes in the business on the open market.)

With your first big liquidity event, you find out if the other side of that barrier really is nirvana.  You find out whether the money has changed you, or whether it exposed who you really are.

That is the startup path as self-actualization, the startup path to enlightenment.  When you’re hiring for a startup, you need to pay careful attention to which of these stages your candidates have progressed through, and uncover their self-knowledge about their enjoyment in what has been learned and their eagerness to learn what hasn’t.

btw, if you are on that path or would like to be, and have skills in javascript, php and/or other web programming-fu: send me your résumé! (just a link to your LinkedIn or other relevant online bio would also be fine.)  use the intarwebs to find how to contact me.

résumé gold

If you are a hiring manager for a tech startup, what is the one company you’d most like to see on the résumé of a prospective candidate?

A lot of people might reflexively answer ‘Google’ on the belief that it’s still the most interesting and profitable company in technology.  While this isn’t as bad as saying ‘IBM’ or ‘Microsoft’ it’s still an undue faith in the benedictory power of large companies.

Not that there’s anything wrong with folks from IBM or Microsoft, mind you – I’ve worked with many and hired some, and don’t regret any incidences from either.  However, as a statistical matter, you’re not likely to find the kind of employee that really thrives in a small startup if they’ve spent a ton of time working in longstanding behemoths.

Doesn’t mean that big companies can’t innovate – in fact these days some say that only big companies can innovate big.  Of course, it may be that the people saying that tend to reap consulting dollars from big companies for advising on innovation . . .

Anyway, Google is a slightly different case than IBM and MSFT, in that it hasn’t been around as long and is not quite so large in terms of revenue and employee base.  However, because of the neck-crimping trajectory of Google as a company, I think it might be hard to get startup-ready employees out of Google:  the good ones that are still there are engaged on the big premium projects, many of the not-so-good more recent vintage are as big-company-minded as anyone, and the truly great early employees who departed are retired or VCs – too rich to be enticed into a little startup unless they start it themselves, which they rarely do as it distracts from counting the money.  Even if you follow startup news, you don’t hear so much about Google guys leading startups, with the notable exception of Paul Buchheit at FriendFeed.

So, if not Google, what company should be the most desirable to see on a résumé, all other things being equal?  I think I’d pick the one company that spawned founders and early investors and employees at YouTube, LinkedIn, Facebook, Yelp, Slide, Zinga and Yammer:  PayPal.

See, the ideal company – at least in terms of educating talent for the next venture – doesn’t have a Googlerian or Microsoftesque trajectory.  From founding to acquisition by eBay for $1.5 billion, PayPal lasted about four years and grew to a profitable company with over 600 employees, having been through a lot of growth, innovation, regulatory challenges and corporate evolution.  People in key positions through the bulk of that time saw the whole arc of company development, but never got so fat and happy that they didn’t want to do another startup.  Yep, if you’re hiring for a startup, the name you’d most like to see on that résumé is PayPal, pre-acquisition by eBay, natch.