Saturday, April 19, 2014

Hire Slowly. Hire them Early. Hire from Non-Hotspots. And Hire Only Future Entrepreneurs.

Amazingly detailed interview with David Barrett of Expensify on Mixergy where he talks about:
  • How he narrowed down the target market (of expense reporting) for his firm - "expense reporting is the most humiliating of tasks (for corporate travellers); they hate all it"
  • How Expensify strategically leverages its free service to end users as a "trojan horse" to sell to their companies
  • Why Expensify hires people slowly; mainly directly from campuses; typically from Tier II cities (who aspire to move to Silicon Valley - rather than to hire locally in San Francisco). And people who hope to some day create their own startup. (He likes to decscribe Expensivfy as a "University without Teachers")
  • How PR (getting on TV; Press, etc) is great for hiring. And not of much use for sales.
  • How Expensify decided not to react when a well-funded competititor started to give away for free a service that it charged for 
  • Why he won't give advice to other entrepreneurs and why entrepreneurs should not bother to seek advice
  • Why he does not believe in setting numerical goals. (Too high makes you demoralized; too low makes you take  it easy. Instead, just keep moving forward and improving.)
Extracts (emphasis mine):

On Hiring:

"We don’t poach. Because the people that you poach generally aren’t the people that you would want anyway...It’s really hard finding good people. And so as a result we hire really slowly. ...the best people (in San Francisco) aren’t looking for jobs here...The sort of person we’re looking for is just a really awesome generalist...So people who generally come from kind of humble back grounds, they want to work hard. They’ve heard the story of Silicon Valley....They come with this level of optimism and..enthusiasm.. And so we typically hire...right out of college...Expensify (is) not just a job, not just a startup job, but the next step in the big thing they want to do in the rest of their life.

So when someone comes to Expensify, it’s not just because for a great salary or great compensation and all that stuff which we do, but it’s because I see what you have here. I see the sort of people that you’ve hired and no other company has this. I’ve interviewed all over the place. I can get a job anywhere, but I really want it to be with you. Why? Because I want to be surrounded by the sort of people that you’re hiring. And I want to learn how the techniques and the strategies that you’re using because I want to go out and do that again after you.

...I think that’s why people come to Expensify is because not for just good pay, not just for our perks and things like this and the products and all this. But it’s because this is a stepping’s a university without teachers. It’s people who come here who want to learn, who want to teach people around them. But who want an opportunity to kind of go and do some amazing things in their lives. This is a very hard opportunity to find.

On PR:
Well, actually, I would say press is not effective for acquiring customers. Press (is) very effective for hiring. In fact, I would say if there was any pattern as to where the best candidates came from, it was because they’ve read our blog. It’s because they saw something on the road or some podcast. Maybe they even saw some TV, though that hasn’t happened yet. Because again, the best people out there, they’re not looking at job boards...They just approach the companies that they love and they say, “I know you’re hiring because every great company is hiring. And I know you want to hire me because I’m really great. And so let’s talk.”
On Advice:
"I wouldn’t give advice. I’d say just stop asking. Just start doing what makes sense to you. If you’re an entrepreneur, you’re an entrepreneur because you think you’re smarter than the next guy. So why turn and ask the next guy for advice? It doesn’t make any sense. So just do whatever you think makes sense. You’re probably going to be wrong a lot. But every once in while you’re going to be right. And maybe you’re going to be right about a couple of things that no one else noticed and that’s going to make all the difference."

On Competition:

"One of our competitors...launched with free unlimited scanning. We were pretty concerned... First iteration was this gorgeous design. Beautiful, beautiful app. And unlimited receipts, and furthermore they just paid through nose on customer acquisition....And they raised a bunch of money and they came out with like a good management team....We were really wondering should we just eat this cost in order to compete more effectively...? We decided not to. We were like, “You know what? We just think that’s a bad business model. So we’re just going to stick to our guns and do what makes sense for us.” And I don’t know, maybe they can make it work, maybe they can’t. I have no idea."

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