HR STARTUP SPECIAL Hooked to Hiring
Why startup founders spend most of their time
and energy on recruitment
When Steven Paul wanted to start his own company
in California, he had the idea.
But he desperately needed somebody to build his
dream for him. He went to his long time friend, Stephan Gary, who was an
electrical engineer. Paul was sure that only Gary could deliver what he wanted.
Thanks to Paul's skills at motivating people, Gary agreed to do the job for
him. This was the 1970s and they wanted to make computers. Steven Paul Jobs and
Stephan Gary Wozniak went on to father the behemoth we know as Apple.Jobs
hiring Wozniak is perhaps the most celebrated hiring decision ever in Silicon Valley
folklore. If there was a moral to that story, it would be this: if you are a
startup, get your initial hiring spot-on. It's a lesson Indian startup founders
seem to be taking to heart as they obsess about hiring decisions, spending much
time and effort with potential hires before getting them on board.
Founders & former founders
The scene is a food festival in a 5-star hotel
in Gurgaon in the cold month of December 2013. Brijesh Agrawal, the cofounder
and director of IndiaMART.com, was planning to set up a B2B online platform
called Tolexo. He had met more than 125 people to form the core team of six.
While he was satisfying his palate with some delicacies, he bumped into Navneet
Rai of Inkfruit.They spent four and a half hours discussing Agrawal's new idea
and eventually, Agrawal got a cofounder for Tolexo.
Agrawal says he spends almost 40% of his time in
getting the right people for his projects. “Even though you may take a lot of
time in hiring good people, it eventually reduces your time and energy in day
to day operations,“ says Agrawal. He also points out to a fact that the time
available to build a startup has considerably reduced. “When I was setting up
IndiaMART in 1996, I spent four years in building it from scratch. In 2014, a
startup has to be built in six months.“
That is why he hunts down people with a startup
background on their resumes.The cofounders of Tolexo, Navneet Rai and Harsh
Kundra are from Inkfruit and Jabong respectively. Agrawal says they know how to
build something from scratch to a fairly large business.
At Snapdeal, 70% of the senior management are
former entrepreneurs. When asked about his longest hiring process, co-founder
Rohit Bansal talks about a four year long affair, “We have been trying to rope
in a guy five days after starting up and we were trying to convince him all
this while. Eventually he joined us just four months back.“ Today, 50% of
Bansal's time is devoted to hiring. When he was launch ing Snapdeal in 2010
with fellow IITian Kunal Bahl, he says the first six months were spent in
meeting people. For them the concept of job description was not a hard lined
one.
A numbers game
The founderCEOs are glued to the hiring desk
partly because they are forced to do so, going by the way they want to expand
their business and multiply their revenues. Pepperfry, which started with 20
folks in January 2012, has grown to a workforce of 400 folks today. They plan
to increase the count to 750 folks in 2015. In the first year of the company's
operations, founder and CEO Ambareesh Murty would sit in on all interviews of
potential hires. Today, he still ensures he has some interaction with potential
hires who are assistant managers or above. In a week, he sits in about four
interviews at least. “It is crucial to figure out if the candidate will fit
into the culture of the company,“ he says.
Agrawal's firm IndiaMART's workforce has more
than quadrupled in the past ten years from 600 people in January 2005 to 2600
in January 2015. His latest startup Tolexo's strength quadrupled in the span of
just five months from 24 persons in August 2014 to 110 in January 2015. For
startups getting people is as hard as firing people. “We are not very fond of
letting go of people. But it can be an expensive affair to have a bad hire. The
opportunity cost is very high,“ says Bansal of Snapdeal.
Murty believes that there are no bad hires.“All
people are essentially good. They may not just fit into the organization at
that point of time. A person who is very comfortable in an unstructured
environment may be great fit during the early stage of the organisation The
same person may not be the best fit when the organisation matures. On the other
hand, somebody who is very good in a structured environment is a great hire
during the later stages,“ he says.
No HR Please
Pepperfry did not have a human resource function
for the first two years of its existence, as the founding team looked into most
crucial HR operations like on-boarding of employees etc.Today, the company has
a HR head who reports directly into Murty.
At Chumbak, the Bangalore based online designer
and seller of India inspired merchandise, founder and CEO Vivek Prabhakar
follows a unique model of recruitment.Prabhakar goes through almost 2000
resumes a month. He has a `culture test' for the shortlisted candidates. This
test mostly consists of logical reasoning question which analyse the pattern of
the candidate's thinking. Prabhakar says that startups should foster a creative
enviornment and if a candidate doesn't fit into the culture, he rejects them
-however skilled they may be. “If a person passes the culture test and if I
like him after the interview, he is hired.I make it a point to meet each and
everyone of my hires,“ says Prabhakar.
The one question Murty likes asking potential
employees at Pepperfry is, “What do you do outside work?“ “A person with strong
passions outside work is the kind of person I would like to hire.“ Another
quality that Murty looks for in people is “their ability at grabbing land.“
By that, Murty is referring to people who are
eager to take up work beyond their areas of responsibility. Chumbak puts its
recruits to work in different departments in the initial months. “After this,
they come to me and say, this is where I want to work and this is what I
enjoyed the most. If it aligns with our goals, we post them there,“ says
Prabhakar whose firm had raised a has received a second round of funding, last
year from venture capital firm Matrix Partners and Seedfund.
If Prabhakar goes through 300 CVs to find a
designer, he might ultimately recruit one. The company also has a unique
position called the BYP (Bright Young Person), wherein a talented person has
been spotted but if he is not sure on what to do, they will be moulded into
what they are best at. Prabhakar says, “HR really does play a very small role
for us. They mostly do paperwork.“
The multiplier effect
K Ganesh, serial entrepreneur and co-founder of
Big Basket, the online grocery store, believes that the founder -CEO's basic
role is to hire people and raise funds for his startup.“This, if rightly done,
disproportionately increases your chance of success,“ says Ganesh who has
co-founded various startups with his partner and wife Meena Ganesh. When he was
launching Tutorvista (an online tutoring portal) in Bangalore in 2006, he found
it difficult to get a product developer for his firm. It took him three months
of persuasion and convincing to get his first employee -Ravi Kannan, who joined
as the Chief Technology Officer. “He had to relocate to India from US. I
promised him a cab service every weekend to go to his hometown Chennai from
Bangalore. He was also given equity. He went on to recruit the entire tech
team,“ says Ganesh.
Agrawal of Tolexo has a rule of thumb for
recruiting: “I hire the first employee, then both of us hire the third guy and
it becomes the job of three of us to find the fourth person.“
Does a startup need a generalist or a
specialist? Ganesh is of the opinion that “it can't be a generalist. It has to
be a specialist and specific to the startup. Every startup needs three key
pillars to keep it strongtechnology expertise, operational efficiency and
domain knowledge.As a company grows, you will have to find the next level of
teams who can take it forward from what you have built.“
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By Dearton Thomas Hector
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CDET20FEB15
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