Tag: Recruiting

Pre-Closing: How Founders Can Prevent Hiring Surprises and Secure Top Talent

We get it. You’d rather think about closing sales deals than think strategically about pre-qualifying or pre-closing leadership talent for your startup. It’s awkward and may even feel premature to have compensation conversations or address key motivators early on. Or maybe you’re avoiding it because you figure all that stuff will magically fall into place if the person is really invested in your mission and the problem you need to solve. But delaying these conversations often leads to heartbreak and makes it impossible to prevent hiring surprises, disrupting both your hiring process and the leader you are trying to recruit.

This was originally published in the Hooked newsletter on April 23, 2023

What’s going on?

This problem has been going on forever. But it’s not just a money problem. Sure, people decline an offer because of “money” all the time, but truth be told, it’s more complicated than comp alone. And, even knowing all these “hot buttons” or pre-qualifying compensation may still leave you empty-handed at the end of your process, given the competitive nature of the market. This just makes it even more important to get really good at figuring out what these things are as early as possible and then continuing to touch base and understand any candidate diversion from them along the path to offer close. It’s never too early to have this conversation. In fact, most recruiters will have it during the first call. The best recruiters will come away from the first call with a rough estimate of TTC (total target comp) and the top things standing in the leader’s way to reach offer acceptance.

Why does it matter?

As an early-stage founder, you don’t have the luxury of a recruiter. You also don’t have the luxury of time. Yet, taking the time to qualify the deeper-level motivations of potential leaders requires patience. Digging deep and gaining a clear, holistic picture of motivations is a must, as early as possible, because it plays a major role in your ability to close later. People are complex. Surprisingly, even they haven’t always taken the time to fully identify their own needs and objectives. Especially if they weren’t actively looking to begin with. Often you have to help candidates unearth these things through conversation. And, just as you can’t be satisfied with a surface-level interview response, the same holds true with motivators. It’s critical to take the time to understand the “career problem” or what someone is trying to solve for so you can help them validate that what they want can be found (or not) at your startup.

What do others think?

“Qualifying what matters most to your candidate upfront and assessing mutual fit of those criteria throughout the process, will minimize potential surprises and drive the desired outcome for both sides.” — Marcus Holm, CRO, Forter

What do we think?

There’s nothing more frustrating than getting down the path with a candidate only to realize there is massive misalignment in compensation or other key considerations of equal importance. To prevent hiring surprises, your most important goal is to ensure you get to the end of the process without gaps, misalignments, or impossible hurdles to overcome. Achieving this requires serious investigative work and pre-closing — not just once — but throughout the entire process. We’ve included several topics needing deeper validation in conversations early and often.

Take Action

  • Be transparent. Alignment begins with honest, open questions about the opportunity, the team, the state of the business, and a host of other things. Much of this is fed by the role spec and the employee value prop. This transparency is essential to prevent hiring surprises and ensure talent is opting in for the challenges they will face as they step into the role.
  • Negotiating compensation at the end of the process is so 2022. Discuss your compensation philosophy early. The new salary transparency laws can work in your favor, helping you prevent hiring surprises by setting clear expectations upfront. On the first call, provide narrow ranges and indicate where there is/isn’t wiggle room. If an external search firm is handling the first calls for you, then you should not be meeting any candidates who haven’t been pre-closed on your total cash and rewards package. Take the extra step to identify which aspect of total target compensation (and rewards) is most important and why. Listen. Often you must read between the lines or help people through a process of discovery. Resist punting this conversation when a candidate tells you, “Let’s talk about compensation later.” Qualify who else needs to buy in. Their life partner? Remember, other factors are usually at play, like being the breadwinner, bonus payouts, sign-on bonus clawbacks, equity vesting, etc.
  • Discuss equity. The equity story at an early-stage startup is one about building value. Framing ownership matters, especially in cases where liquid stock is a topic of consideration. If someone is excited to step away from quarterly cash in the bank for your value-building journey, be diligent in understanding why. Doing the math to frame what someone is walking away from in a year or over the next 4-year vesting cycle is a great way to show the tradeoff. The biggest key is to sell the vision and tap into someone’s innermost passion for builder/value creation.
  • Identify talent’s top motivators — the real ones (read more below). Many times, real motivators are camouflaged. Define terms. For example, “growth” to one candidate can mean the ability to quickly build out a team. But to another, growth could be defined as learning. Confirm what these things mean, why they are important, and what would happen if they were delayed months, a year, or even longer in reaching these goals. This level of understanding is critical to prevent hiring surprises and ensure the candidate’s goals align with the realities of your startup. We tend to operate in the best-case scenario when trying to court talent. Instead, operate in reality. Things don’t always happen as quickly as we’d like.
  • Keep your finger on the candidate’s pulse (and the influencers in their life) throughout the process. This will help you know if anything shifts or evolves. If this happens, work to re-establish alignment. Sometimes shifts are too big to overcome. In these cases, you may need to cut bait.
  • Throughout the process, leverage hot-button motivations strategically. One way to do this is to repeat these motivators during your conversations, reminding candidates about things they mentioned earlier and how they can achieve their goals at your startup. This also establishes trust because reiterating what they’ve shared validates you are listening.
  • More often than not, candidates are having conversations with multiple companies. Each of these conversations — especially the ones with founders or leaders who are really good at pre-qualifying and closing — will bring up other questions or thoughts. This is another reason to be intentional as you move through the process. Things can be in constant flux.

Pre-Offer Talk Tracks

You’ve reached a place where you have strong signals from the candidate that they are interested in the role and shared the compensation ranges at a high level. Pre-closing on potential objections at this stage helps prevent hiring surprises and ensures a smoother offer acceptance process.

  • If we put together a package that looks like X, what would keep you from accepting it?
    Then work through each potential objection: I’d have to speak with my significant other. Great, if they are supportive, are there any other reasons you wouldn’t accept?
  • I need to understand the valuation of the company.
    Great, let’s talk about that now. Given what I’ve just outlined, is there any reason this equity package would not be acceptable? Keep working through this until you get a positive outcome. It may take a few iterations and multiple conversations, so don’t expect to close them immediately. Speed is important, but allow the candidate space to percolate.
  • I need to talk to my current boss to see if there’s growth for me here.
    Great, let’s talk about that. What outcome are you looking for with your boss? Why don’t you have that convo now before we move forward?

And so on …

If a candidate insists on an offer letter before considering the questions above, that’s a red flag that they are shopping the offer internally or externally. Do not extend a formal offer under these conditions. The minute you extend a formal offer, you have given up control of the ball.

Extend a formal offer only after pre-closing on every single objection.

Onboarding starts before the offer is closed.

  • Always Be Closing (ABC) even after the close.
  • The no daylight rule: Don’t let one day go by without communication between the candidate offer and a successful start.
  • Many declines happen after the acceptance and before the start date (this is called fall out).

Events, Tools, Insights

Investment News —> Groundlight
Entrepreneur Community —> Leap!
Madrona Insights Newsletter —> Subscribe

Why Thoughtful Role Specs Are Key to Startup Hiring Success

As a founder, you are no stranger to navigating issues and solving problems. In fact, it’s what you do best. But when it comes to startup hiring, particularly for a new leadership role, the thought of sitting down and giving as much thought to a role spec as you would a product spec can sometimes feel unnecessary or like overkill at an early-stage startup. But why is that? You wouldn’t build a product without thoughtful consideration of the problem you are trying to solve. Why cut corners when building the right team?

This was originally published in the Hooked newsletter on April 16, 2023

What’s going on?

Startup hiring is hard. There is no silver bullet solution leading to a meaningful outcome when building a high-performing team. Literally, everything matters. But role specs sit in a class all their own. These “human product roadmaps” are often never fully realized in the most advantageous way. Many leaders tell themselves, “I’ll know it when I see it,” but will you actually? Recruiting by braille only circumvents the vital process required to fully understand why you are hiring in the first place and what the consequences would be if you didn’t (or, more commonly, if you hired the wrong person). These more profound and meaningful questions are the foundation for building out a role spec and aligning your early team so everyone agrees and stays in lockstep throughout the interview process. This, in turn, unlocks critical information for how you source, conduct talent outreach, and eventually communicate with the candidate as they assess your team, the problem, and how they can solve it — the magic of two-way fit.

Why does it matter?

Not convinced this matters? Consider the impact lack of role clarity can have during a 1:1 interview session in the absence of this. Those involved in the startup hiring process will fill in their own blanks and possibly undermine the goal of the process. Without even realizing it, everyone might be solving for different or competing things or speaking to a value prop that isn’t competitive or cohesive. When this happens, the outcome can be devastating. It can be the difference between finding talent that can accelerate your business, ensuring your startup hits quarterly goals, and having to extend your search for additional weeks or even months. Crafting a role spec for your startup is more than just compiling a list of qualifications and nice-to-haves. It’s a strategic roadmap, guiding you to consider every element necessary for finding the best leader. Taking shortcuts in this process causes friction within your team, slows the business, and produces underwhelming candidates. When you don’t do this important upfront work, the interview process becomes a way to indirectly spec the role, which leads to an arduous time suck. This haphazard approach can ultimately damage your startup’s reputation and negatively impact the candidate experience.

What do others think?

“Everything comes down to people. Whatever we build at Spotnana that delivers value in the world is built by the people we hire. Hiring is the most important decision I make every day, and skills are only one aspect of what I’m looking for. It’s essential that the people we hire help us build a culture where we rally behind the best ideas and execute well against our goals. A good spec helps save time, but even more important, it builds the skills needed to make great hiring decisions at all levels of the organization.” — Sarosh Waghmar, Founder and CEO, Spotnana

What do we think?

Don’t recruit blindly. Recruit with intention and transparency. Remember, people are your product. In startup hiring, the quality bar you ultimately hire ties directly into the quality of everything else: your culture, the product you build, your ability to sell, your relationship with your customers, and ultimately your brand. Thorough specs are critical. They aren’t just a roadmap for success — they hone sourcing efforts, feed into talent marketing, aid in candidate evaluation, inform interview/feedback/decision guides, onboarding, and even year-one performance management. Taking the time to thoughtfully build this now will save you time in the longer run and feed into creating your go-to-market job description. We’ve included the beginning steps below.

Take Action — Begin your talent spec

  • Define the problem: Just as you would when creating a product spec, start by defining the problem you’re trying to solve with this new leadership hire. Triangulate around the specific challenge — what needs to be solved in the business? Team, Product, Operations, GTM, Customer?
  • Identify the goals & outcomes: What measurable impact do you want this new leader to have on the business? Define the milestones. We recommend crafting SMART goals for at least six months — 8-12 months is ideal.
  • Identify the ramifications of not hiring: What is the business impact (missed opportunities surrounding growth, innovation, expansion delays, other costs)? What are the tradeoffs?
  • Pre-mortem: What is the impact of hiring the wrong person and creating talent debt? How does that impact customers, team, product, revenue, and fundraising?
  • What are the specific skills an individual must possess in order to succeed? Consider the difference between the required work knowledge and what can be learned. Can other people compensate for the shortcomings of an imperfect candidate?
  • Behavioral attributes: What soft skills are necessary to get work done and thrive at your startup?
  • Historic achievements: What have they done that will enable them to succeed, considering the unique constraints in your startup?
  • Motivations: What might be missing from their career trajectory? Who will they work with? Who can they learn from? Are they motivated to do the work you have to offer?

Tools, Events, Insights

Investment News —> Fixie
Aspiring for Intelligence —> The AI Watchdogs are Coming
Entrepreneur Community —> Leap!
Madrona Insights Newsletter —> Subscribe

How Founders Can Attract and Hire the Right Talent

The best way to find the needle in the haystack is to remove all the hay. In our previous issue of Hooked, we discussed how talent debt accumulates when your hiring bar is poorly defined. But why not take this further up the funnel and increase your odds of success before a candidate even pushes the “submit resume” button? We think the key lies in the already well-known practice of transparency in recruiting. Yeah, we know it’s nothing new, but that doesn’t mean you’re thinking about it or leveraging it in an impactful way.

This was originally published in the Hooked newsletter on February 26, 2023

What’s Going On

Founders and early-stage teams are tackling applicant overload, struggling to comb through hundreds of resumes to hire the right talent. In the game of quantity vs. quality, they’re losing. A founder put this into perspective for us recently when she shared her applicant-to-hire ratio — 500:1. Why is she rejecting 499 resumes? Because her job descriptions are attracting the wrong candidates. The real criteria for success at her company is not the list of qualifications she cuts and pastes into her job descriptions. What the role really is, what to expect, and what success looks like is a total black box to candidates. Is it any wonder that 499 candidates lob resumes over the fence? Some teams are making progress, telling the story about why talent should join their startup. Hyping up values, culture, and other elements of their employee value prop. That’s a great start. But what’s the point of showcasing all the pros if you aren’t open about the real challenges that impact someone’s ability to succeed in your interview process or thrive in your ecosystem — or even just make it through their first month? These are the real questions plaguing your ability to get the right talent in the door and on your team. You’ve got all this data. Leverage it.

Why Does it Matter

More is more when it comes to candidate transparency in recruiting. Some may argue that airing anything less than positive decreases your competitive advantage in recruiting great talent. But what’s the point of getting them in the funnel if they weren’t a good fit to begin with? Being direct and honest about these things sets candidates up for success and, in return, your business. Even if your early founding team has a solid understanding of the hiring bar, it doesn’t necessarily mean these realities are successfully translating to candidates. Accurately describing what’s to be expected in the interview process, how candidates can be successful, and what makes your environment hard provides candidates with a better perspective. This increases their probability of solving your biggest challenges because they self-select to do so. Some may suggest this practice gives candidates a leg up. But really, is there something wrong with setting candidates up to shine? A more transparent and detailed understanding of what works in your ecosystem and, more importantly, what doesn’t, sheds light on this experience in a whole new way. It’s the difference between taking a picture of the front of a hospital instead of the chaos inside the emergency room on a busy night. It’s the real deal.

What Do Others Think

“I fully agree that transparency plays a major role in getting the right talent into the recruiting funnel. At Coda, we believe in promoting transparency and do so in all areas of the talent lifecycle. This starts with being open about our interview process and expectations so candidates are set up for success and continues with demystifying the upside value of equity during our offer process to encourage ownership from the very beginning. We want to continue to push the boundaries of transparency in meaningful ways. It’s a big part of our culture and guiding principles.” — Kenny Mendes, Head of People and Operations at Coda

What Do We Think

Transparency in recruiting is your team’s competitive advantage. The more transparent you can be with your talent brand at all stages of your interview process, the better. We’ve come miles and miles from the archaic processes of even five years ago. We say push further. Embrace your entire startup identity — the one that kicks ass but also makes mistakes. The one that makes data-driven decisions but also a few that brought some heartburn. These are the stories and conversations that matter. This is what candidates need to know before even applying. Not just the narrative that shows up on Glassdoor lacking context. When you take control of the narrative, you can share how you overcame the pain and challenges and what you learned in the process. The amazing byproduct of transparency is that it builds trust internally and externally.

Take Action

  • Early-stage founders — You may not have a career site, but you do have channels like LinkedIn. In a recent issue of Hooked, we discussed leadership storytelling. This is the moment for you and your team to highlight not just the good but also times of struggle.
  • For founders with career sites — assess them through the talent lens. Do you get a clear picture of challenges? You live these daily, but would anyone else really know what they are? Is the story 100% shiny?
  • Solicit feedback from candidates who have gone through your interview process end-to-end. What are the themes in successful and unsuccessful outcomes? This feedback will guide you as you take steps to open source your interview process expectations and why people succeed (or don’t) based on your hiring bar. Add this candidate guidance to your careers site.
  • Have individual contributors on your team write a “day in the life” of a time they had to fix something that broke.
  • List the pros and the cons of the role. The real ones. Include 30/60/90-day expectations with outcomes. Share critical paths for the business tied to people’s work. Describe what onboarding looks like – this is sometimes non existent or unstructured.
  • If someone voluntarily leaves, take this valuable opportunity to do a thorough exit interview. Leverage these learnings.
  • Routinely re-recruit your top employees and ask them what struggles they face and how they have overcome them. This shouldn’t just be about the work they’re doing. It should translate into real-life topics that inform how someone has adapted to challenges in your environment.
  • Transparency considerations are directly linked to your values and culture. When taking steps to increase transparency in recruiting, remember to keep these things in balance.

Tools, Events, Insights

Great insights from Chip Huyen —> What we look for in a resume
Entrepreneur Community —> Leap!
Slack article —>Transparency in Business – the next wave in company evolution
Madrona Insights Newsletter —> Subscribe

SeekOut CEO Anoop Gupta and VP of People Jenny Armstrong-Owen on AI-powered talent solutions, developing talent, and maintaining culture

SeekOut CEO Anoop Gupta and VP of People Jenny Armstrong-Owen

This week on Founded and Funded, we spotlight our next IA40 winner – SeekOut. Investor Ishani Ummat talks to SeekOut Co-founder and CEO Anoop Gupta and VP of People Jenny Armstrong-Owen about their AI-powered intelligence platform, the importance of not only finding and recruiting new hires but also developing and retaining employees within a company, and maintaining SeekOut’s own culture while seeing significant growth over the last year.

This transcript was automatically generated and edited for clarity.

Soma: Welcome to Founded and Funded. I’m Soma, Managing Director at Madrona Venture Group. And this week we are spotlighting one of our 2021 IA40 winners – SeekOut. Madrona Investor Ishani Ummat talks with CEO and Co-founder Anoop Gupta and their Head of People, Jenny Armstrong-Owen. SeekOut is one of our portfolio companies, and so we were very honored that our panel of more than 50 judges selected them for our inaugural group of IA40 winners. SeekOut provides an AI- powered talent 360 platform to source, hire, develop, and retain talent while focusing on diversity, technical expertise and other hard-to-find skillsets.

We led SeekOut’s Series A round of financing, and have worked with the team closely since before then as they fine tuned their initial product offering. The company has had massive success. And earlier this year they secured $115 million Series C round to scale their go to market and to build out their product roadmap, including powering solutions for internal talent, mobility, employee retention and the like- all topics that are Anoop and Jenny will dive into with Ishani today. With that, let me hand it over to Ishani.

Ishani: Hi, everyone. I’m delighted to be here with a Anoop Gupta, the CEO of SeekOut, and Jenny Armstrong-Owen, SeekOut’s head of people. SeekOut is building an AI powered talent 360 platform for enterprise talent optimization and was selected as a top 40 intelligent application. We define intelligent applications as the next generation of applications that harness the power of machine intelligence to create a continuously improving experience for the end user and solve a business problem better than ever before. I’m so excited to dive in today with Anoop and Jenny, thank you both so much for being here.

Anoop: Hey, Ishani, it’s wonderful to be here. Thank you for making time for us.

Jenny: Agreed. Thank you so much. It’s great to be here.

Ishani: So, I’d love to start out by going way back. Anoop, you were a professor of computer science for over 10 years, co-founded the virtual classroom project that quickly got acquired by Microsoft. In 2015, you left Microsoft to start the precursor to SeekOut. Tell us about what led you to the core talent problem that SeekOut is solving today.

Anoop: So, Ishani, when we left Microsoft, we left because you know, Microsoft was just an absolutely fantastic place to innovate, but what Microsoft legitimately wants you to do is to get on an 18-Wheeler and discover some big island, and we wanted to be on a mountain bike exploring opportunities because it’s such an exciting world out there. Given my background of running Skype and Exchange, actually the first thing we settled on, was Nextio, which was a messaging application. And the whole notion was that today people hide their email address and phone number because once you give it out, people can spam them. And we were not being so successful there, so we built an application called Career Insights. What Career Insights was about is you analyze all resumes in the world, and if you do that, then we can say, “Hey, if you are a UI designer at Microsoft, what are the next possibilities? Where are your peers going? And if they were going to Facebook, we could tell you where are the Facebook UI designers leaving for and doing next. So, it became Career Pathways inside that. And we said, “Oh, this is so useful for recruiters and talent people” that we pivoted there, and since then, our passion, our understanding of what is missing and what could be done better has led to our growth of SeekOut and talent acquisition and what we bring to the table.

Ishani: That’s so great. You sort of found your way to the recruiting market, to the recruiter as an end customer, but beginning with this problem of career pathing and pathways. It’s only something that’s amplified over the course of the last decade, let’s call it and it seems sort of prescient, but now that we look at this moment in time that seems like a very acute foresight.

Jenny I’d love your perspective. This talent environment has evolved so much in the last few years in ways that even Anoop and SeekOut could not have predicted with the pandemic and everything like that. We all see and feel the Great Resignation, the ongoing talent war in the tech world. You’ve been in talent teams for 20 years — what elements of this were predictable and what has taken you by surprise?

Jenny: Well, definitely what is very predictable is that the tech world continues to explode and grow. I read a statistic in the New York Times that the tech unemployment is 1.7%, which is basically negative unemployment. So, that’s not a surprise. What was not predictable was COVID, was the ability for folks to literally work from their homes. And it released the boundaries around what was possible for folks. And I think that’s one of the biggest challenges for organizations. And if you didn’t snap and adapt to that, you were not going to be able to meet your hiring goals.

One of the things that I love about being here at SeekOut, is going and finding people wherever they are. And so for us, we’re not restricted to Bellevue, Washington, or Seattle, Washington, and I think that’s one of the things, especially about our tool, that is so incredibly powerful. If you’re an organization that can embrace remote, that can actually make you so much better than restricting yourself geographically. That’s one of the things that I think has been a huge benefit for us. I think we’re embracing a new paradigm of relationships with employees, and it’s going to be a much more virtual relationship at times than it is a physical one.

Anoop: One of the things when we got into this, is we said, “Hey, digital talent, technology talent, is really important,” and what COVID did was, Satya said “Two years of transformation in two months,” right? So the accelerating rate of digital transformation, something we were focusing on, wasn’t there and that really increased the value of what we’re doing. The second thing that’s happened over the last two years is the emphasis on diversity. A lot of young people are saying, “I don’t want to join a company if I don’t see that they are embracing diversity, inclusion, and belonging in a genuine, authentic way.” We believe a lot of talent exists. It begins with how do you hire, how do you understand what exists in talent pools, and then being able to find them. The problem that leaders have — business leaders, talent leaders — is, they have good intentions, but translating those great intentions into concrete actions and results has been hard, and SeekOut really facilitates that.

Ishani: It’s such a good point on the market, evolving in some ways that you are able to control and some ways you can react really responsibly and control around. In other ways, that they are so out of your control where you sometimes tools can help you with that, tools like SeekOut, and sometimes you have to build that internally. It’s a culture thing. It’s an intangible. But let’s talk a little bit about the tool you’ve actually built. The way I think of SeekOut is it’s a product that’s evolved a lot from a talent acquisition tool to really a more 360 degree talent intelligence platform. But it didn’t start that way. Walk us through this journey from a talent acquisition tool to really an intelligence platform.

Anoop: My Ph.D. thesis was on AI and systems. My co-founder Aravind came from building the Bing search engine. When you look at all of these areas, AI is just a core part of it. So, to use an analogy — when you go to Google and do a flight search — UA 236. It understands that you are doing a flight search that UA is United Airlines, and you’re probably looking for arrival or departure times and therefore this is the relevant information. So, in a similar vein, SeekOut is a people search engine. So, we need to understand a lot about people. So, when I search for Anoop Gupta, our search engine realizes that Anoop is a first name and Gupta is a last name — and that it is a common name in India, right. So, we can get a lot of information that helps us. Similarly, normalizing for universities and companies is really important. SeekOut is very special in that it brings data from many, many different sources and combines it together. So, as we want it to go to technical folks and technical talent, and I’m just using that as an example, and you get GitHub, you see the profile on the GitHub, how does it match to the profile, you know, they might have LinkedIn and they are the same person. You know, it takes AI to figure that out. Then you want to look at all the code and information that you find, and you say, what is their coder score? How good a coder are they? Do they know Python? Do they know C++? So, we started bringing those things inside of it and all of those are inferred things. When we do security clearance, as an example, people don’t mention security clearance often, so what we go and look at is we look at job descriptions for the last many years, and we say did the job description say “This role requires security clearance and top secret or whatever?” And then we say, if there are enough of these positions where that is required at that company, at that location — then we say, you likely have security clearance. So, AI is fundamentally baked into the product, but we also take an approach that while AI is everywhere, it is designed as a complement to the human and not as a substitute to the human recruiter or sourcer that is there. That is an important principle for ourselves. The human is doing what they are best at, and all of the AI and logic are doing what they are good at to facilitate the human being more successful.

Ishani: We talk a lot about intelligent applications having a data strategy. And in order to augment workflows and make them solve a business problem really better than ever before. All of what you described is so well steeped in that philosophy around pulling in data from a host of public sources and then being able to really drive a better product around that and surface insights that matter. Customers love as one of the core features of SeekOut, the search functionality. So I’m sitting on top of all that data, the search just works. Can you talk a little bit about how you handle and process all of this data to just make it work like magic for a consumer?

Anoop: So one is, you’re very right. It’s actually a very hard problem when you have 800 million profiles and data coming from lots of sources, and the data is not static data — people are changing jobs, people are changing things. It’s all dynamic data, so, how one makes it work, how one makes it very performant? You know, my co-founder again — one of the movers and shakers behind the Bing search engine, and because we come from that background, Googles and Bings have to handle very large amounts of data, so how do you construct the index structures? How do you do the entity formation combined together? So that is core to what we do. And then on top of all of that big data, when you say can you clone Jenny and find us similar features? Now that is an impossible task. Because people may do the job with her humor, and her other parts are so hard to replicate, and the nice person that she is, then you have to do all of the matching, right? Or when you parse a PDF resume, how do you extract the skills or when you parse a PDF job description, how do you parse the requirements and what are the must-have requirements? What are the nice-to-have requirements? So, there’s just infinite amounts of problems, and we keep tackling them one at a time.

Ishani: It seems like you also, though, have to be so semantically aware of the context, right? That’s exactly what you’re talking about with the job description. How do you parse out requirements versus any of the other components? And how do you parse out whether someone might have met those requirements? So much is evolving in this field of semantic awareness, semantic search, and natural language processing. What are the kinds of underlying models that you use? Have they really evolved in the last few years as we see some of the transformer models or CNNs start to make a step-change in technology?

Anoop: Our models are continuously evolving based on what the users are doing, how they’re using it, and what their needs are. We do a lot of building ourselves, but we also leverage third parties. We also, you know, we have a notion of a power filter or something. So, if you think and look at synonyms, right? So, you say people who know JavaScript, they are a short distance away from TypeScript, right? Or people who know machine learning, there’s so many different kinds of words that people use in GitHub, whether it’s Keras or TensorFlow, PYTorch, whatever kinds of things, how do you find the equivalencies? You can find some things through correlations or other algorithms. What makes sense, what does not make sense. So, Ishani, there’s just a lot of different things that we are continuously doing. There are different kinds of algorithms and networks that get used for different types of natural language parsing and what we do. But I’ve always said from when we were at Microsoft, eventually, it is the data that you have because everybody publishes their algorithm and if you have the right data, you can do so much more. It is the data, and then the intelligence on the top that I think is really important. You got to have the right data. And then, of course, the right people and the algorithms to get to that intelligence.

Ishani: So, it really goes back to this concept of having a data strategy early. Being able to be nimble in evolving underlying technology and application intelligence. We always talk about garbage in, garbage out. So, being able to really understand where your data’s coming from, semantically parse and structure it to then be able to give to your end user as we call it magic.

Anoop: Yes. Yes. The problem with data is data is not clean. So, you know how you can efficiently clean up that data and use ML models to say these are extreme, exceptions and what to look at become super important.

Ishani: So let’s zoom out a bit. We’ve talked about this briefly, but over the last two and a half years or so, work has changed so much. Hiring has become hard. Engaging with employees has never been more important than it is today. Retention is hard, and SeekOut is doing really well in part because of that macro tailwind. From a company growth perspective, how did you recognize and take advantage of that moment in time?

Anoop: Helping companies get a competitive advantage, recruiting hard-to-find and diverse talent was a model for us from the very beginning. Then all these things happened and we’ve grown 30X in revenue over the last three years, our valuation is 50X where it was from three years ago and we have very high net retention and amazing customers. But we hadn’t thought of everything. We were focused on talent acquisition. That is how do we bring external people? Then with COVID, and the great reshuffle, the great resignation, many companies like Peloton stopped hiring externally and we said, what are the opportunities we can create for the people that are inside? So, our more recent focus on retention is really big. So, here’s the big story that we talk about. It is truly about the future of enterprise. We believe winning companies are realizing that the growth of people and the organization are inextricably linked. So, our mission has broadened, and it’s become to help great companies and their people dream bigger, perform better, and grow together. So that’s the mission and it’s a fundamental mission for every CEO and business leader and not just the HR leader. Then what we are doing is, you know, use technology to ensure that companies and talent are aligned and empowered and growing together. Or in another way what we’re saying is, “Hey, we going to help organizations thrive by helping them hire, retain, and develop great and diverse talent.”

Ishani: You know, SeekOut was really the right place at the right time to take advantage of, and actually really help people through that transition. But you have to be experiencing this internally as well? You talked about 30 X in terms of growth, but you also have triple headcount in the last year. I think you anticipate doing it again this year. How do you maintain, and Jenny, this is a question for you, culture and such a high growth environment?

Jenny: It’s one of my favorite questions I get it a lot in interviews. Culture has become probably the most important thing in a world where people are free agents, and they want to work at a place that aligns with their values and the way that they want to grow and develop with a company. So, I will share this. For me, I was looking at a number of different companies, and I met Anoop, and our first conversation, Anoop, I don’t know if you remember this, it was supposed to go for an hour. We went over 90 minutes, and in that moment, I knew that this was different. This was a different place. The culture here really does emanate from Anoop, Aravind, John and Vikas — the folks that started this company. From my perspective, our job is to make sure we don’t have cultural drift because we don’t have to fix our culture. Our culture is phenomenal. Candidates across the board tell us they’ve never had a candidate experience like this before. Everybody they meet with is super kind and helpful and collaborative. So for us, it’s really keeping our eye on these cultural anchors and making sure that we’re staying true to those.

So, in the hiring process, making sure that every single person who comes here, there’s a diversity interview where we talk about what is important to you in terms of diversity, belonging, equity, and inclusion. To Anoop’s point, people want to go where they feel like they’re going to belong. And then diversity can thrive, and equity can thrive, but you have to have that sense of belonging first. So for us, it’s very much staying focused on that. And everything that we do is around driving programs and opportunities and conversations that reinforce that. We start every Friday All Hands — in fact, I will admit, I suggested to Anoop early on that this was not going to scale as we grow. We’re 150 people today. But we start every all hands with 15 minutes of gratitude. I admit that it is absolutely scalable, and we’re going to continue to do it because it is by far the most favorite meeting of the entire week. That moment that we set aside to say nothing is more important for us in this moment than sharing our gratitude with each other. So I think that’s, for us, I feel super fortunate to be able to be at this intersection at a time where, it is tough, right? Companies are struggling to keep their culture intact in a world in which everything’s shifting so quickly.

Ishani: That’s such a good point that begins in the interview process and it continues in the onboarding process. Then it’s an everyday commitment to reinforcing your culture. I think people do have really good elements of each of those. But it’s rare that you find somebody so committed to all of them.

Jenny: It starts with Anoop.

Anoop: So, you know, so Jenny said it so well it comes from just a deep belief that people are the most foundational element to our success. We truly, believed that for ourselves. I’ll give you an example in a story. So we were looking for, I think the CRO, we had an executive search firm, and they said, ” Anoop you seem to be open to meeting a lot of people. Are you sure you have enough time?” And I said, ” I’m always there when it’s a people question. People are so important.” We have four OKRs now, these are the company goals. Our main goal is our people, culture, execution are our competitive advantage. I truly believe in that. It is not our AI knowledge. It is not we are smarter. It is that as a company, who we bring in, how we think, how we execute, how we collaborate, how we decide to disagree, yet, find commitment, you know, hold each other accountable, be nice.

We want to be the ones to show that nice people can win. Kind people, people with empathy can win. You don’t have to be a jerk to get ahead. So that is just a fundamental belief for us. And that has helped with our retention. That’s helped with our recruitment. That’s helped with the energy and their whole self that people bring to the company every day. And I think that’s a huge part of our success.

Ishani: The recruiting example of the CRO is so interesting because it really does delineate there is a real and important place for tools, but there’s certainly a line where that stops. Where you, Anoop, taking the time, you know, it wouldn’t be a little bit facetious as a talent optimization platform, if you didn’t take the time to bring in your own talent and really make sure that they fit the organization’s culture and the ethos, and they want to be where they are. So certainly, it has, there’s good continuity there with SeekOut’s mission and SeekOut’s product and how you operate.

But also, that there’s a role for the talent optimization platform that you use. And that presumably you use SeekOut, at SeekOut.

Anoop: So, you know, the other side story is. Every exec firm that I talk to, they give me some candidates and sometimes they are diverse, sometimes they’re not diverse. I say, well, let me find you some women candidates, let me find you some, you know, black candidates. They exist — you just don’t know; you need a better tool.

Ishani: It’s very much clear that there are roles, and these tools are augmenting how people do their jobs and in ways that haven’t ever happened before. But that it is an augmentation with learning, with intelligence, and with automation. But there’s still very clear roles for how do you build, for example, a culture like Jenny, right? And how do you maintain that? It also speaks to one of the product focus areas of SeekOut, which is on retention and really retaining your talent and looking internally. Jenny, talk to us a little bit about some of the strategies that you use, whether or not it’s related to SeekOut’s product, to maintain the talent and retain talent.

Jenny: Yeah. And thanks. I think it’s actually one of the reasons why, when I with Anoop, and he cast the vision for what SeekOut was going to be, was what got me so excited. As someone who’s led people teams now for way too many years to admit, I think getting folks in the door, getting them hired, is absolutely critical and important. I think growing, developing, and evolving as teams with folks who are committed and engaged, that is the job, right? That is every day. All day thinking about the people that we already have here. That’s one of the things about the enterprise talent optimization, where we’re going there, it’s going to revolutionize people teams. I mean, it’s like the best way for me after so many years of not having really effective tools on people teams —you know, we’re building a world in which they are going to be so complementary and it’s going to free people teams and leaders up to do what they do best, which is really about developing people.

So, for example, yeah, we’re 150 people. Well, we’re going to be implementing a people success platform. We’re going to be making sure we’re touching base on the things that matter the most to people, which is all about skill development, acquisition, growth. That’s fundamentally why folks will leave, right? Especially in the tech world, because they want to do different things, or they want to be able to stretch and grow. One of the things that’s awesome about startups is you have infinite ability to grow your people in whatever direction they want to, because the opportunity is here. It’s one of the reasons why I stayed at my first tech company for so long — I was able to do and grow and be so many things, and that’s one of the things that we talk to people about in terms of our value prop when we’re interviewing them is, “Hey, we are interested in you for this, but guess what? The world is your oyster at SeekOut and wherever your passion wants to take you, we are going to support that passion.”

Ishani: What you’re saying around giving people, the opportunity to grow is incredibly aligned with SeekOut, with the mission of the company. But also again, the product. It is also very hard to execute on. To say — we have a high-performing software engineer in our machine learning division who wants to go try out product management. Right? What are the tools that you used at SeekOut, and how do you actually execute on that?

Jenny: Well, I think that we are still in our nascent stages. We started last year at 40 people. We’re now at150 people. What I would say is building the capability in leaders to be aware and to be having these conversations and to be free enough to be able to think beyond the roadmap and the things that are getting done today. So, I think you have to hold both things tightly and loosely at the same time, if that makes any sense. And it requires a high level of change management and org development skills. Like we have to build whole-brained leaders who can look at our people with both things in mind. Executing on the deliverables that we have today, but fundamentally making sure you’re having this other conversation and that you’re driving that consistently in a way so that there’s never any dissonance. I think that’s the challenge? Creating too much space between those conversations or even having those conversations at all creates the dissonance. Then that creates the drag and the drifting. So, for me, that’s one of the things that we talk about a lot is who do we have?

Anoop, I would love for you to give your kind of ETO summary, because I think it is so compelling about the tools that we’re going to be able to provide. To your point, Ishani, I don’t have specific tools today. I mean, I can use my SeekOut tool, which is awesome, but we’re also small enough that we kind of can do a lot of this, you know? One-on-one but Anoop, if I would love for you to add onto that.

Anoop: You know, the cost when a great employee leaves is almost two X their salary for the annual salary, because it takes so much for the new person to come in and get up to speed, and meanwhile, the products are delayed and other things that delay whatever function they might have been going. So that’s why it’s so critical. And that’s why people care about it a lot. One of the things I say is that companies are deluged with data. There’s data flowing out of everything, but when it comes to data about their people, companies don’t understand the data is siloed. The data doesn’t exist. They may not have the external data. They may not have what they did before. And there is missing data. You know, your manager doesn’t know, Hey, in a large company like Microsoft or VMware or Salesforce where are the open jobs. What are the matching jobs? What are the skills? What does it look like? So, the data about employees is missing, the data about opportunities is missing, and then how do you take opportunities and data to match them to people? So, we can tell you about career path, if you’re going from a software development to a product manager, we can point you to people who made a different transition. We might be able to point you to people who made that transition, who might be from the same school, might be from the same gender and you don’t have to talk to the hiring manager, you can talk to people below and say, what is the culture of the team? Basically, we bring amazing data from outside. But then we take data from inside the company —this may come from management hierarchies. This may come from Salesforce. This may come from your developer systems and GitHub — and give you the most comprehensive thing. Then we engage with people. We really have two audiences. One of our audiences is the employee. Okay, who in a private secure way are mapping out their career, their growth, their learning journeys, their growth and development journeys. The second is the HR and the business leaders who are saying, we’ve got to deliver. There’s a strategy we want to do. Do we have the right talent? How does my group compare to competitors? How does it grow across the companies and how do we optimize?

So, we are super excited about it in any conversation that we are having, with CHROs, with other leaders, there’s a lot of excitement about what’s possible what SeekOut can do for them.

Ishani: So, SeekOut today is a really amazing example of an intelligent application for 360 talent optimization, not just the external component, but also internally. This speaks so much to both the environment and you’re reacting and being nimble around, how do you create offerings that people need? Without revealing too much, give us a peek into what the future holds for SeekOut.

Anoop: So future wise, Ishani, each of these broad areas that I’m talking about, there is immense depth in that. As we go deeper into it, there is a lot of work that is involved. So, if you look three to five years just executing on even the components that we have talked about and becoming a star We’re thinking you know, I believe this is a new category. HR don’t even realize what is possible in terms of data, the insights they can have, what they can do for their employees. So, there’s always a market and a mind shift that is involved and people are the slowest to change in some sense. So, I think our journey just making it, and if we do it right, and if we are the leaders, this is more than a hundred billion-dollar company, I believe. Okay. So there’s lots of growth and possibility, in this because talent is central to organizations and their success.

Ishani: Anoop and Jenny, we tend to end these podcasts with a lightning round of questions. So, we’ll go quickly through three questions that we ask every company that comes on this podcast. The first for both of you, aside from your own, what startup or company are you most excited about that is an intelligent application?

Anoop: So, for me, I would say, you know, some company like Gong or basically people who give you intelligence about how your salespeople are doing, how can you be better? What those calls are. Do the natural language analysis and all of that. So, it is just a hot topic, so it could be more, but that’s top of mind for me.

So let me just name that.

Jenny: I have an appreciation for Amperity and what they’ve been up to and what they’ve been doing. So that would be mine.

Ishani: Awesome. Both actually are also intelligent app top 40 companies. So, congratulations to Amperity and Gong. Outside of enabling and applying AI and ML to solve real-world challenges, what do you think will be the greatest source of technological innovation and disruption over the next five years?

Anoop: Certainly, you know, machine learning/AI will have a huge impact. But I think it will also be coupled with that it works on lots of data. We are instrumenting everything, on how the washing machine is being used, how your toaster is being used, how you’re driving. So, I think, the data and the machine learning together. But with the caveat of us making sure that it is not biased. Every tool in humanity can be used for good and it can be used for bad. But I think if we use these things intelligently, we can make a lot of good happen.

Jenny: Yeah, I would have to agree. I can’t say it any better than Anoop did. I think that making sure that technology is being inclusive as well. I think that’s a huge area of focus and concern.

Ishani: I couldn’t agree more. Final question. What is the most important lesson? Likely something you wish you did better, perhaps not, that you’ve learned over your startup journey.

Anoop: I will say, throughout my career, I always kind of knew people were important, and culture was important. You know, people would talk about it. But my appreciation and conviction that it is about people and culture as the fundamentals and foundations to success has been a realization. You know, if you asked me this question five years ago, I would not have answered it this way. You kind of take culture for granted, is not granted in the sense that it is already kind of baked for you in a larger organization. I think here, there was the opportunity to say — you get to define it — then it just made so much sense that this is the thing to focus on.

Jenny: That’s awesome, Anoop. I love that. I would say that for me learning that, you can put people at the top of the pyramid, and you can be very successful, is something that makes me incredibly happy that I’m getting the chance to learn and experience.

Ishani: Anoop and Jenny, it’s been so great to talk to you today about SeekOut, but also about people and how important they are in the organization. SeekOut is a great tool that enables you to find, recruit, and hopefully retain the best people that are going to build your organization. Thank you so much for taking the time and it was a great chat.

Anoop: Thank you so much for having us really appreciate the time.

Thank you for listening to this week’s episode of Founded & Funded. Tune in in a couple of weeks for the next episode with UW’s robotics expert Sidd Srinivasa.

 

Madrona Appoints Veteran Talent Executive, Shannon Anderson, Director of Talent

We are very excited to welcome Shannon to the Madrona team today as Director of Talent. The talent and recruiting role is crucial for startups and Shannon will supercharge Madrona’s recruiting efforts to help our companies find the right people to scale their businesses quickly.
Shannon will lead Madrona’s Talent function in three key areas:

  1. Power Madrona’s talent hub. Identify and develop top leadership talent and rising stars that will fuel Madrona portfolio companies, potential new investments, and enhance the Pacific NW startup ecosystem.
  2. Be a strategic HR business partner to portfolio companies, with a strong focus on bringing best-in-class talent acquisition practices to the portfolio.
  3. Be a Talent Advisor inside Madrona, providing a Talent perspective on the firm’s investments and decision-making.

In Shannon, we feel very fortunate to have found a proverbial “unicorn” given her experience in all of these areas. Very few, if any, other people have Shannon’s set of experiences that are so relevant to Madrona. She has been a hands-on recruiter, both in the “go-go” days of Microsoft and in running her own talent firm. She has recruited for leadership, engineering and business roles. She has been a Talent leader inside a VC firm (Ignition), and thus has experience with how a venture firm works and how to engage with portfolio companies. Most recently, at Recruiting Toolbox, Shannon has been training companies “how to fish” and become world-class at talent identification, acquisition and retention. All this is combined with Shannon’s massive network of friends and contacts made during her years contributing to the Seattle technology ecosystem.

We see how the right people can make or break a company – and when you get those people on board it can change growth trajectories – or conversely, can be too much overhead early in the game. Shannon is adept at not only finding people but understanding how companies grow and when certain roles are needed.

As Director of Talent at Madrona, Shannon and Talent Associate, Matt Witt, will partner with Madrona’s portfolio companies to define, develop and refine their talent roadmaps, create compelling employment branding, great candidate experiences and fully develop their recruiting and selection capabilities.

When Shannon approaches training for HR and recruiting teams at startups and mid-size companies, she focuses not only on teaching hiring managers and executives how to find and attract the best talent – but, equally importantly, she teaches methods that enable the interview and selection process to create a great 2-way fit, ensuring happy and productive employees that stay and grow with the company over time. As a recruiter, Shannon did this herself – which helped to create an 80% retention rate for key roles.

“I’ve been immersed in the greater Seattle ecosystem for many years. We are fortunate to have so much talent here – and a lot of new talent coming to the area,” commented Anderson. “My role is to help companies attract and keep the right Talent; that’s what gets me up and excited every day. Madrona has been a crucial component to the startup culture here for a long time, and I’m excited to be on the team and to get involved with our portfolio companies to create even more value and success for the Seattle region.”

Shannon is also a frequent speaker and entertaining blogger on all topics of recruiting, HR, and talent. You can find some of her work on Medium.