Thursday, August 20, 2009

You Don't Get What You Pay For

Michael Luo had a very interesting and timely article in Monday's issue of The New York Times on the 'value' of career coaches.

I feel for the folks who get swindled by charlatans like those described in the article. Nobody can get you a job. Yes, of course there are better and worse ways to go about it, and many folks could use some advice. But paying thousands of dollars to have someone blindly fax your resume to a million companies is one sure pathway to failure. I can guarantee that most HR folks on the receiving end of those faxes put the fax machine over the trash can so they don't have to get up out of their seat.

My advice to job seekers who are on the market is to read Hellman's Law. Follow the instructions carefully.

Monday, August 17, 2009

The Needle in the Haystack, v. 2K9

Recently, I’ve been hearing a lot of people saying “Oh, your job must be a lot easier these days with so many people out of work,” or “Gee, business must be slow – your clients must have lines out the door of prospective candidates.”

Not really.

Why do clients call upon the services of executive recruiters? It’s only when there’s a tough position to fill; otherwise, they’d just do it themselves through their own network. We work together with the client to develop a summary of the position that we will send out to prospective candidates – the “spec.” These are typically very narrowly defined descriptions of the perfect candidate. Again – if it were easy, they wouldn’t be calling us.

These days, there are a lot of people who think that it’s a lot easier to find the right people because so many people are out of work, many through no fault of their own. That last bit is important, and it’s true. There are a LOT of folks who are ‘on the beach’ because the company couldn’t raise its next round, or the division was shut down, or their major customer folded, or, or, or… The point is, these are very skilled, capable managers who happened to be in the wrong place. It’s the first bit that’s the issue. In fact, the situation is quite the opposite.

The reality is that we’re busy, and working harder than ever to service our clients. The problem is that the needle got smaller and the haystack got a lot bigger. There are two forces at work here, coming from opposite ends of the recruiting spectrum. On one hand, clients believe that now that there are so many good folks on the market, they can be extremely picky. The specs are tighter, and the barriers to entry are higher. “If this person isn’t the right candidate,” they believe, “we’ll just move on to the next one in the pipeline.” On the other hand, there really are a lot of folks on the market. That makes sorting through all the noise is a lot more difficult. Again, there are a lot of very highly qualified resumes to sort through. Thus, the ever-important characteristic of “fit” becomes even more central.

At the risk of sounding self-serving, I would say that now, more than ever, the services of a skilled executive search professional are required when seeking to fill critical roles in an organization – and one could easily argue that they’re all critical roles. This is particularly true in emerging industries such as cleantech, where it takes a skilled eye to discern the technical and personal characteristics in candidates that will make them compatible with a new industry.

Thursday, August 6, 2009

State of NE VC Industry

Once again, Xconomy editor Bob Buderi has provided us with some useful fodder for discussion. Yesterday, he posted a poll seeking reader opinion on the overall state of venture investing (or the lack thereof) in New England (don't bother voting, the results have already been tallied).

I was happy that my answers were mostly correct (readers had an average 29% correct rate), but not overly happy about the story the results told. Bob solicited commentary from Michael Greeley of Flybridge (and chairman of the NEVCA), who provided some valuable insights. The stated objective of the poll was to address the long-running debate about the purported difference between venture investing on the west and east coasts. While the questions addressed the state of NE VC investing, they provided less insight into the east/west debate. I’d like to see the data on the same questions directed to west coast VCs. I know it’s an informal survey, but I must confess that I share the popular opinion that Boston VCs are too risk averse, not willing to bet on CEOs who have had a failure (which is a virtual requirement if you’re looking for money from a west coast VC), don’t like early stage investing, etc. My guess is that for every anecdote about this debate, you could find an equally true countervailing story. Thus, I’d really like to see the data (guess I’ll just never get away from my data-driven scientific training).

At the end of the day, though, one really needs to ask if the traditional venture model is still viable, and could it just be that Boston VCs got that a lot sooner than their west coast colleagues. Personally, I don’t get it, in the case of biotech, anyway. (So lemme get this straight – you want me to invest a boatload of money, wait 5 years, invest another boatload of money, wait 5 years, invest another boatload of money, and then wait another 5 years to find out if the science holds up?) On the other hand, that’s why it’s called “venture” investing and not “fully collateralized” investing. Not every investment is going to pan out, and not every pitch opportunity is recognized (take a look at Bessemer’s “Anti-Portfolio” page). Is it time for a different model in biotech? I really like the innovation taking place at firms like Puretech. They take the approach of trying to grow the companies internally, and were the brains behind the unique industry partnership, Enlight Biosciences. I’m just not sure that the traditional model of making early stage investments in a bunch of companies, some of which you know are going to fail, and hoping that one makes it big, is the best way to commercialize promising new technologies. The battlefield is littered with plenty of corpses of companies that simply ran out of money. Nothing wrong with the team or the technology, they just couldn’t raise another round for one of a variety of reasons. Does that make sense? Wouldn’t it be better if we could find a way to mitigate risk a bit more and have a sustainable investment paradigm? I’ve got some ideas, but that will have to wait for another blog entry…