Be wary of hiring from large companies if you are a startup

snap

The Wall Street Journal front page story Snap Finance Chief Joins Executive Exodus, Tim Stone to depart Snapchat’s parent company after less than a year; much of bonus left behind reminded me of a lesson I learned decades ago that is worth passing on to founders today. Seems like the rats may be leaving a sinking ship:

The surprise exit comes amid continued executive turnover at Snap. A company spokesman said the head of human resources, Jason Halpert, left the company this week after four years. Snap also lost several high-profile employees last year, including Chief Strategy Officer Imran Khan. Mr. Khan said in September he would be leaving the company.

Analysts have said the turmoil at the top appears to be weighing on the company. “There’s a revolving door going on in the senior management team,” said Brent Thill, an analyst at Jefferies who follows Snap.

Mr. Stone had spent 20 years at Amazon before joining Snap.

Back in the early 1980’s I worked for one of the hottest software companies around, Software Arts, whose founders created the world’s first electronic spreadsheet, VisiCalc. For reasons unknown to me I kept get promoted until I was a vice president responsible for every company function except for software development. As a result of the company’s growth and my position I ended up doing a lot of hiring.

What I found was that there were a lot of executives at big companies who wanted to get in on the personal software revolution and saw a job at Software Arts as their ticket to ride. As I recall, I hired one of these guys and quickly learned that he was literally a fish out of water. Large companies had administrative assistants or AA’s as we called them, for every executive. They handled all of an execs scheduling, correspondence and similar secretarial duties. A lot of these 1980’s execs had never used a PC and many had never even learned how to type. At Software Arts we handled our own correspondence via email and required a bare minimum of secretarial support.

But this wasn’t the worst of it. Their big company culture was rife with politics and bureaucracy. Decisions were made by committee, there was no accountability. To make a long story short, after one very bad experience, I vowed never to hire an executive directly from a large tech company like IBM ever again. However, there’s an interesting twist to this. What I found was there is definitely talent at large companies, but I didn’t want to be the one to send them to reform school to get rid of their bad BigCo habits. However, if they had left a large company, then spent a couple of years at a well respected startup like Intuit they would have left their bad culture and bad habits behind and were then well worth considering for a hire.

While I found that it was company culture that was the major problems with execs coming from large established companies there’s another thing for you founders to watch out for: buy in to your vision.

Analyst Brent Thrill at Jefferies follows Snap and had this to say about Snap’s problems hanging on to its executives: it was unclear whether corporate culture or the vision for the company was behind the executive exodus. It might have been both! But if you do end up recruiting an exec from a big company, and vcs will often insist on adult supervision such as a well seasoned CEO, test that your prospective hire gets your vision.  Don’t explain it to him or her. Let them interview with a number of people at the company. Then when you touch base with them after their round of interviews ask them: So what do you understand our company’s vision to be? The answer, both in words and body language, will tell you all you need to know about whether they buy in to the vision or just have a vision of a rich IPO dancing in their head.

 

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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