Socrata

Some startups agonize over finding good software engineering talent. Here’s an idea that worked well for us at blist and it might work well for your startup too.

In February we started drawing up sketches and narratives of what blist is and what it would become. To turn these diagrams into a working service, we needed a few really good software engineers. By now hopefully you know one thing that all programmers love is free food! We scheduled what we called an “Inception Mixer” for the early evening of Friday, March 2. Then for the rest of February I networked, recruited and met with as many qualified candidates as I could. I conducted an informal, introductory meeting with each one. In that meeting I painted a little of the vision for blist and told them we’d be hosting an inception party to share more details. It was by invitation only. Good engineers only. We arbitrarily set the limit at 20 guests.

Leading up to the event on March 2, a real frenzy started happening. Software engineers heard through the grapevine that we were a “startup to watch” and they wanted to come, too. I told them the event was by invitation and for qualified engineers only and asked if they could meet me for an informational discussion. That last week leading up to the event I met with another 12 or 14 engineers. One local reporter, two VC’s and one distinguished local entrepreneur all got wind of the event and asked for an invite. Nope. It’s by invitation and only top notch engineers are invited.

We rented out the back room of a pizza restaurant. I told the restaurant folks to keep the pizza and salad coming and the beer flowing. I brought a half dozen bottles of wine from home.

The event was a huge success. We had about 30 engineers show up. Believe it or not I ran through a 179-slide presentation in less than 15 minutes in a style that would make Dick Hardt of Sxip proud. We unveiled our logo, about the only thing we had to show that we existed.

The event worked great in a few ways:

1) An artificial deadline forced those we’d already interviewed to act. We actually hired two engineers before the event, including one at 4:00 p.m. the day of. The enticement was “c’mon, you know there’s going to be some really strong engineers there who are going to get really excited. Don’t you want to be employee #1? Wouldn’t it be great to introduce you to the crowd as the guy with the courage to jump in?”

2) The event fueled the fires of the others to make a declaration. The event ended around 10:00 p.m. and between 10 and 4:00 a.m. I received 6 emails saying “I’m interested. How do I go to the next step?” 30 engineers are smart enough to recognize that a startup can maybe swing hiring a few of them. It created a reverse auction for the few slots.

3) It filled our long term recruiting pipeline. A good 1/2 of the engineers left there excited by our vision, but didn’t have the stomach lining to have an employee # less than 10. A growing company needs good engineers at different stages and it requires very little effort to ping these folks every 6 weeks or so to check in.

The entire night cost us about $300 – way cheaper, way more effective and way more fun than hiring a headhunter. If you’re starting a company and need good software engineers, think about hosting an inception mixer.

Successful startups need good advisors. These folks are seasoned professionals who provide sound advice based on real world experience. What makes a good advisor, how do you find them and how do you get them to join your advisory board?

Think about your own strengths and weaknesses as an entrepreneur. Use your advisory board to fortify areas where you are weak or inexperienced. These areas might include: technology development, data center operations, capitalization, business strategy, accounting & finance, marketing or sales. You probably don’t need to cover all the areas. If you’re marketing a free, consumer Internet service you probably don’t need an advisor with experience in enterprise software sales. For sure you need at least one advisor who has previously been a successful entrepreur.

Finding advisors requires some networking. Ask your attorney, banker, accountant and other entrepreneurs for introductions to potential board advisors. Be direct and tell them what you’re trying to accomplish. Use Linked In to make introductions as well. Active angel investors are good candidates as advisors, too. I’ve found most folks to be fairly receptive and flattered to be considered for an advisory role. Here’s what I look for in potential advisors:

1) Repeatedly demonstrates a propensity to be extremely candid
2) Distinguished and well-respected within his or her domain
3) Track record of multiple successes within his or her domain
4) His or her participation lends credibility with your target audience(s)
5) Has the intelligence to map his prior experiences to your startup’s needs
6) Can add value commensurate with or in excess of the cost of getting the advisor

Point #6 really is the summary point. A lot of advisors don’t add as much value as they cost, in my opinion. You want someone about whom you feel is worth the x number of shares it costs to attract them.

While #6 is the summary point, #1 is the one most neglected but is far more important than #2 through #5. Your business processes, strategies, presentations and messaging will improve dramatically if your advisors are candid enough to offer insightful, constructive criticism. And that’s the whole point of having advisors in the first place. Good ones improve your chance of success.

Landing good advisors takes time and the establishment of mutual respect and trust. When meeting potential advisors, tell them your motives and that you’d like to get to know them over time. They’ll want to do the same – after all, their reputation is diminished if they become an advisor and you turn out to be not such a great entrepreneur. Nurture the relationship over time and when the time is right, ask the individual to become a formal advisor. From there, avoid the second most common mistake – under-utilization of board advisors.

One of the first questions entrepreneurs ask when starting a company is about hiring an attorney. Do I need one? If so, what kind do I need? The answer to every question regarding your startup is “It depends.” Seriously, though, you do need an attorney. What kind of attorney you need depends on how you plan to organize, grow, and as importantly, how you plan to capitalize your company. If you expect the company to remain fairly small and not need external investors, there are many good attorneys who can help you set up an LLC. If you want to be the next Zillow, you’re going to need a great attorney from one of the bigger law firms.

In February I incorporated blist as a Delaware C Corporation. As a small company in Washington, that might seem odd to some entrepreneurs. The reason is simple – if you ever plan to raise capital from a VC, they will feel most comfortable investing in your company if it’s a Delaware C Corp. You could start as an LLC or a Washington Corp. and then convert it later, but why pay the legal costs twice? The added annual cost of being incorporated in Delaware is nominal.

So how do you actually pick an attorney? Here’s the process I used both this time for blist and last time for MessageRite. I asked about a dozen entrepreneurs and angel investors to provide recommendations. Entrepreneurs will typically know only one attorney – their own. Active angel investors will often sit on advisory boards and know their way around the startup ecosystem. They’ll usually recommend a few attorneys they’ve come to know. Next, correlate the responses. Are there any attorneys who show up two or three times? That’s what you are looking for. Make your short list of three or four attorneys and either send them an email yourself or ask your entrepreneur/angels for an introduction. In the email make it clear that you are trying to choose an attorney for your new startup.

On to the interviews. It’s as important to interview an attorney as it is a prospective employee. You are going to be spending a lot of time with this person during formation, the first year, during financings, and eventually when your company is acquired (or goes public). Here’s what I look for in an attorney – someone who:

1) I can trust and in whom I can confide
2) Seems to understand my business
3) Who understands business strategy in general
4) Is connected with the right VCs
5) Has the bandwidth to handle my account
6) Lends credibility to my company
7) Has great references Is respected by his or her peers
9) I like

The list might seem odd. Why isn’t there anything on the list about his or her legal chops? I expect an attorney wouldn’t satisfy 1/2 of these if he/she wasn’t a good attorney to begin with. You might also be surprised by my emphasis on understanding my business and business strategy in general and liking him or her. If you’ve picked the right attorney, (s)he’s going to be one of your most active advisors. You want someone who understands business and particularly business strategy for startups.

If you are in Seattle, here are the local attorneys who were frequently recommended to me: Dave Clarke of Perkins Coie; Laura Puckett at DLA Piper, Craig Sherman of Wilson Sonsini, John Robertson of Heller Ehrman and Alan Smith of Orrick. You can’t go wrong with any of these attorneys. I went with Dave Clarke because he was the best fit for us. That decision has been excellent and I highly recommend Dave. Ben Elowitz of Wetpaint loves Buddy Arnheim, also of Perkins Coie, but based in their Silicon Valley office, not Seattle. Admittedly most of the time I communicate with Dave Clarke via email and phone, but I like being able to visit with him in person. For others like Ben, physical proximity isn’t quite as important.

Select a great attorney. It’s much more important than most first time entrepreneurs think it is.