Remember your first business loan? Or, if you're like many entrepreneurs, you may have initially bootstrapped your startup by buying some stuff on your credit card. You were excited and apprehensive: Excited because now you had the cash to invest in your business, apprehensive because you had just taken on a debt you would have to repay.
But that was okay, because you were confident you could create more value than the interest you would pay. Even though you eventually have to pay off a financial debt, gaining access to the right resources now often marks the difference between success and failure.
That’s true for financial debt – but it’s almost never true for culture debt.
Culture debt happens when a business takes a shortcut and hires an employee with, say, the “right” the skills or experience… but who doesn't fit the culture. Just one bad hire can create a wave of negativity that washes over every other employee, present and future – and as a result, your entire business.
Unfortunately the interest on culture debt is extremely high: In some cases you will never pay off the debt you incur, even when a culture misfit is let go or leaves.
Here are five all-too-common ways you can create culture debt that can keep your startup from achieving its potential:
1. You see the ivy and miss the poison
The star developer who writes great code… but who also resists taking any direction and refuses to help others… won't instantly turn over a new interpersonal leaf just because you hire him.
The skilled salesperson who in the short-term always seems to outperform her peers… but who also maneuvers and manipulates and builds kerosene-soaked bridges just waiting to go up in flames… won’t turn into a relationship building, long-term focused ambassador for your company just because you hire her.
The interview process is a little like a honeymoon. You see the best the candidate has to offer. If a prospective employee doesn't look like a great fit for your culture before he is hired, he definitely won’t be after he’s hired.
Never risk making a deal with the culture-fit devil. The soul of your company is at stake. Seriously.
2. You discard the attitude and play the skill card
Skills and experience are worthless when not put to use. Knowledge is useless when not shared with others.
The smaller your company the more likely you are to be an expert in your field, so transferring those skills to new employees is relatively easy. But you can't train enthusiasm, a solid work ethic, and great interpersonal skills – and those traits can matter a lot more than any skills a candidate brings.
According to this study only 11% of the new hires that failed in the first 18 months failed due to deficiencies in technical skills. The majority failed due to lack of motivation, an unwillingness to be coached, or problems with temperament and emotional intelligence.
Think of it this way: The candidate who lacks certain hard skills might be a cause for concern, but the candidate who lacks the beliefs and values you need is a giant culture debt red flag.
3. You try to sell a used car
It’s tempting to over-sell a candidate on your company, especially when you desperately need to fill an open position and you've been recruiting for seemingly forever.
Don’t sell too hard. Great candidates come prepared. They've done their homework. They already know whether your company is a good fit for them based on what they've read about you online. The really great recruits might have been stalking your company for many weeks or months -- seeing what the company feels like.
Describe the position, describe your company, answer every question, be candid and forthright, let your natural enthusiasm show through… and let the candidate make an informed decision. But, don’t oversell.
The right candidates recognize the right opportunities – and the right cultural fit. If you have to try too hard to convince someone, and the love is unidirectional, it's not setup for long-term success.
4. You mistake the rumblings for hunger
Nothing beats a formal, thorough, comprehensive hiring process… except, sometimes, a dose of intuition and gut feel.
At my company HubSpot (grew from 0-500 employees in 6 years) there are five key attributes we value:
· Humble. They’re modest despite being awesome. They’re self-aware and respectful.
· Effective. They get (stuff) done. They measurably move the needle and immeasurably add value.
· Adaptable. They’re constantly changing, life-long learners.
· Remarkable. They have a super-power that makes them stand out: Remarkably smart, remarkably creative, remarkably resourceful…
· Transparent. They’re open and honest with others – and with themselves.
In short, we look for people with H-E-A-R-T, because they help us create a company we love. So we always weigh our impressions against more qualitative considerations. You should too. Think of it this way: The more experience you have – the more lumps you’ve taken and hard knocks you’ve received and mistakes you’ve made – the more “educated” your “gut.” While you should never go on intuition alone, if you have a funny feeling about a candidate… see that as a sign you need to look more closely.
And look more closely.
For a detailed insider’s peek into how we think about culture at HubSpot, check out our Culture Code slides (embedded below for your convenience).
Bottom line: Define the intangibles you want in your employees and never compromise by hiring a candidate who lacks those qualities.
5. You decide to double down
There are two basic kinds of risk you can take on a potential employee.
First the worthwhile risks: Taking a shot on a candidate you feel has more potential than her previous employer let her show; taking a shot on a candidate who is missing a few skills but has attitude in abundance; taking a chance on a candidate you feel certain brings the enthusiasm, drive, and spirit your team desperately needs. Those are good chances to take.
Now the foolish risks: Taking a shot on a candidate with a history of performance issues that you hope will somehow develop a strong work ethic; taking a chance on the candidate who left his last two jobs because "my bosses were jerks;" taking a shot on the candidate who has no experience yet only wants to talk about how quickly and often she will be promoted.
Why do you rationalize taking foolish risks? You're desperate. Or you're lazy. Or you have "other issues to focus on." Or you figure your culture is strong enough to withstand the impact of one ill-fitting employee.
Don't take foolish risks. They almost always turn out badly. Occasionally take potentially worthwhile risks, because they can turn out to be your most inspired hires and, eventually, your best employees.
And never, ever take a chance that creates high-interest culture debt.
The cost to your organization is just too high. And, life is short.
A variation of this article was also posted as part of my participation in the LinkedIn Influencers program.
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I came across on article on TechCrunch this morning announcing an update on Linkedin.
I think it's great that LinkedIn is continuing to talk about an API. But,
here's why I believe they're missing the boat on this stuff:
1. Moving Too Slow: The last update we heard on the
LinkedIn API was June, 2007. That's over 5 months ago. Sure, I understand some
of these things take time, but this is one of those clear examples where
capturing mindshare early is important. Hundreds of developers are making
decisions right now as to where to invest their time, energy and
creativity. How many developers will spend the time building on Facebook -- and
as a result, likely not switch to LinkedIn?
2. Not enough information: If the goal is to attract lots
of developers to the platform, there likely needs to be more information than
availability than "sometime next year". If the goal is not to attract lots of
developers, then I don't know what the goal is.
3. Where's The Creativity and Innovation? Right now,
there's only a single identified partner, "BusinessWeek". In today's day and
age, brand name partners are still useful, but I think LinkedIn would have done
better with a list of half-a-dozen companies (maybe even including a couple of
startups) to apply some creative use of the API. I've got a bit of a bias here,
as I'd love to include some LinkedIn-powered data into WebsiteGrader, our free
tool for internet marketing
For some reason, it just seems that LinkedIn is taking a very "old school"
approach to this. Rather than putting something simple out there as quickly as
possible, that lets people tinker, experiment and create, they're seemingly
working on something "perfect" and only trickling information out to those that
care the most.
I have just six words of advice for LinkedIn: Release early.
Release often. Engage passionately.
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I came across an interesting article on the NYTimes.com website today:
LinkedIn Plans To Open Up In A Closed Sort of Way
The article is an interview with Dan Nye, the CEO at LinkedIn.
A few points from the article:
1. LinkedIn will have to "approve" any company that wants to tap into its system.
2. Nye wants to keep the apps "all business".
3. There will no food fights on LinkedIn. So, unlike Facebook there will be no "frivolous" apps that allow users to throw food at each other, send each other virtual beers or some of the other fun and frolicing that occurs.
4. LinkedIn will take a revenue share from any apps that are built on it's platform.
As a Facebook user, I personally find most of the applications built by third-parties inane and time-wasting. I don't want to be a vampire or throw food at my Facebook friends. Perhaps you don't either. But, that's not the point. As a software entrepreneur, I think what makes a platform appealing is the ability to exercise some creativitiy -- within technical and infrastructure limits.
When I first started developing for Windows (and for that matter DOS), I knew there were restrictions. But, the restrictions were not that I needed to seek approval from Microsoft -- they were technical limitations and market limitations. If I wanted to develop a silly application that reversed the characters in a string and printed it out, so be it. If I wanted to make that application available to everyone. So be it.
Though I can understand the motivations for LinkedIn focusing on its users/customers in order to ensure they are getting maximum value, I'm not sure that trying to be highly selective about which apps are approved and available is the optimum strategy. One of the big advantages of building a platform and allowing third-parties to create value on top of it is that you are not limited by your own creativity. Others with interesting ideas can try them out. Some will succeed and some will fail.
Back to Facebook. Sure, lots of the apps are silly, but I get to decide which ones I use. Just like Windows (another platform), there are literally tens of thousands of apps that are out there. I use a small fraction, but in many cases, it’s a *different* small fraction than the ones you use. A good platform allows this "free market of ideas" and fosters creativity. You're going to get a lot of crap, but that's the price you pay for the good stuff.
So, although I agree that virtual food fights are a waste of time, sometimes you have to allow a bit of fun and frolic in order to flourish. And, there is such a thing as going too far in order to "protect" your customers. As a customer myself, I'd rather decide what I find useful or interesting. What do you think?
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I am on vacation in Norway for a couple of weeks (for those that are curious, I am on a farm about half an hour outside of Skien).
Regular readers of OnStartups will likely know that sometime ago, I started a LinkedIn group so that those interested in startups would have another forum in which to gather. Today, the LinkedIn group for OnStartups reached 1,000 members. This is not too bad given that the community is "closed" and I manually approve all members.
However, I have been playing around with Facebook recently and I must say that I am very impressed with the application and the degree of flexibility it provides just with their basic "groups" feature. Here are a few observations now that I have used both systems to some degree:
1. Starting a group on LinkedIn required a manual application. Nothing happened for the first couple of months. I followed up again and resubmitted the application and finally the group was created. Starting a group on Facebook took 30 seconds, 15 of which was figuring out how to navigate the Norwegian version of Windows that I happen to be using right now.
2. LinkedIn provides no notification when new members have requested to join the group. I have to login manually to figure this out. I do this once a day or so and it is very annoying (and clearly unnecessary).
3. On Facebook, I have the ability to designate other administrators to help manage the group. Though I do not need this just yet, I have a strong feeling that I will. This is an exceptionally important feature.
4. On Facebook, the feature-set available within their groups app is just much more compelling than LinkedIn. However, this is not saying much because the LinkedIn groups feature is brain-dead.
5. The only thing that LinkedIn provides that Facebook does not (that I miss a wee bit) is the ability to get a custom link that users can use to join the group. It lets you send out email invites to friends to join (and invite those in your network), but a simple "join" link would be useful. If I just happened to miss this feature, please leave a comment.
What is particularly impressive is that all of this functionality in Facebook does not even require building a custom Facebook app (though I will likely experiment with this someday). It is really, really easy to get started.
So, if you are a regular reader of OnStartups, have joined the OnStartupsLinked group or are otherwise just a startup fanatic, I encourage you to join the OnStartups group on LinkedIn. I think it will be a great way for the 7,000+ members of the OnStartup community to convene online.
Update: Here is a link that I think should let you access the group:
Access OnStartups Facebook Group
P.S. It took months to get the LinkedIn startup group to 1,000 members. Lets see how quickly it grows on Facebook.
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I came across an interesting article today on CNNMoney.com titled "LinkedIn Says It Will Own Business Networking".
Basically, Dan Nye, the CEO of LinkedIn is saying that people will build one online profile of their personal life and one for their professional life. He could be right. He's probably smarter than I am (and Reid Hoffman, the founder, is definitely smarter than I am). But, I don't think it's necessary to concede this ground just yet. Often, the best defense ("we want to keep our professional customers" is a great offense.
I were chairman of the board, master of the universe and grand poo-bah at LinkedIn, here's what I'd do:
1. Create A Simple API: I cannot tell you how surprised I am that LinkedIn has not done this yet. It is a perfect platform to allow others to extend and create value for. The data model is relatively simple and the user-base is large and growing. If they need an example of a simple, well implemented API, they should just look at the new digg API.
2. Get Better At Groups: At the request of several members of the OnStartups community, I created the OnStartups LinkedIn group. First off, it was a pain in the neck to actually get this done (there's no automated way to do it). It took multiple attempts and several months. After all was said and done, I've got the group setup and it's grown (over 800 members now). But, it doesn't really do anything other than list people in the group. There are no social networking or group features like one would expect. Digg is not the perfect example here, but it's a start.
3. Get On Board With RSS: I'm an RSS fiend. I don't read emails anymore (especially not automated ones that update me regularly on things). That's why god created RSS, so my inbox can be clogged with a combination of SPAM and real emails of carbon-based life forms. LinkedIn should have at least one master RSS feed that told me when new people came into my network, when others have accessed my profile, when folks have joined my group, etc. It's not that hard to do. Digg supports RSS in a whole bunch of places -- and especially where it counts.
That's it. These three things alone might not win them the battle -- but it sure would help. If nothing else, they'd have at least one (paying) customer that was happy. What do you think? Any more ideas of how LinkedIn could improve it's service and fend off the powerhouse that is Facebook? Also, If you're in an early-stage startup and building out a community or platform at least two of the above items are probably good advice.
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I've been a LinkedIn
for a pretty long time. People use LinkedIn in different ways. Some are trying
to amass the largest possible network (i.e. the most "connections"). Others are
simply using it as a search tool to find opportunities.
My general practice has
been to limit the size of my network in order to keep the signal to noise ratio
pretty high. As such, I only connect to people that I know personally or have
had some personal or professional dealings with.
One aspect of LinkedIn that
I think is underused is their concept of groups. Basically, a group is a
sub-network within LinkedIn for a specific area of interest. For example, I'm a
member of several groups, including several affiliated with MIT (where I was a
graduate student last year).
Several months ago, a
number of members of the OnStartups community asked if I might setup a group
that could be used by entrepreneurs to network and connect with each other. I
thought it was a good idea, and put in the request. After a bit of back and
forth with LinkedIn, the group is now setup.
So, why would you want to
join the OnStartups LinkedIn group?
5 Great Reasons To
Join The OnStartups LinkedIn Group
1. Find other people in
your area interested in startups (even if you live in the middle of
2. See if you can locate a
co-founder for your maniacally brilliant startup idea.
3. Recruit unsuspecting
victims to join your startup team
4. Locate a promising
startup to join and try your hand at this whole entrepreneurship
5. Find funding for your
current startup so you don't have to beg and plead with your friends and
Of course, you may find
your own creative uses as well (such as using it as a gauge for the level of
entrepreneurial activity in a given area).
So, how do you join the
OnStartups LinkedIn group? It's easy (and free). Simply register for an
account here at OnStartups.com. This will give you access to the OnStartups
forums where there is a link in the announcements area to join the group. This
is the preferred way (and I'll immediate approve members that use this
Another option is to submit
a request directly to join the group by clicking the link
Of course, the value of the
group increases with the number of passionate startup people that join. So, if
you are a member of digg
or other social networking sites, please help
spread the word by voting on this article on those sites. If you have ideas or
comments on how we might use the group more effectively, please leave a
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