It’s often said that great teams build A+ companies. In Ben Horowitz’s book, “The Hard Thing About Hard Things”, he stresses how entrepreneurs need to recruit A players.
Yesterday, I blogged about Riskalyze and their recent funding round. They did a nice round at a higher valuation than my initial investment. There is something I have noticed about all companies that raise money, it becomes easier for them to recruit. People want to be with and back a winner.
In Silicon Valley, I have heard stories where a hot startup gets a publicized round from a name VC and other startups lose all their people overnight because they want to go work at hot startup. That doesn’t happen so much in Chicago.
Chicago teams are more loyal, and are more apt to grind.
When a firm I am invested in raises money, or looks like it’s having a lot of success in the marketplace, word spreads. People talk. All of a sudden, I will get emails wanting an introduction to a particular firm because of what they heard.
Most often at seed stage, it’s like pulling teeth to get really great people in. This is why the CEO has got to be a great salesperson. They not only have to sell customers, and investors on their business. They have to sell potential employees.
I know when I try to create customers for startups I am involved in, it’s significantly easier to do when they have momentum and wins under their belt.
For teams that win, and are transparent about how they are winning, recruiting becomes easier. They have a brand name that says success before the interview process even starts. Inside the firm, the culture changes. Existing employees get excited about what they are doing. Good CEO’s will use that positive energy to sharpen focus. Instead of getting less done as they scale, they get even more done and the virtuous circle rotates even faster.
This isn’t only true of startups. It’s true of any business. If a public company has consistently good earnings reports, they get to choose from a better pool of candidates. People want to work for successful firms and successful people. My guess is that the Chicago Cubs and Cleveland Indians will be getting a lot of resumes. Their internal organizations will improve because of it. When they go into the free agent market, the conversation will be a lot different than most of the other teams. Tonight is Game 6. We have November baseball in Chicago!
Go Cubs! My friends and I have secured a hotel room for Game 7. I hope there is a reason to road trip.