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The unscalable "service" growth hack, lessons from the struggles of closing engineering candidates, and avoiding a partnerships mistake all startups make.
Welcome to the thirty-second edition of The Baton. A fortnightly newsletter that brings you three, hand-curated pieces of advice drawn from the thoughtful founder-to-founder exchanges and interviews taking place on Relay and the interwebz. So, stay tuned!Â
In this edition, youâll find instructive and inspiring pickings from the brains of ActiveCampaignâs Jason VandeBoom, Kapwingâs Julia Enthoven, and Hugoâs Darren Chait.
#1: Doing things that donât scale even when youâre scaling â ActiveCampaignâs founder and CEO, Jason VandeBoom, illustrates how, in an increasingly product-first world where âservice is frowned upon,â pursuing unscalable efforts can still be an unfair asset. (Source: Traction Conf) Â
Iâd argue that the number one growth hack you probably have thatâs right there already itâs just people themselves. And itâs counter-intuitive because service is frowned upon. Goes against the idea of being product-firstâŠBut it can do so much that others canât or wonât do.
Iâll give you a couple of examples. Earlier on we had a freemium offering of the platform and we had this idea that weâre going to offer strategy sessions, 45 minutes and we were talking internally about how we should gate it to the paying customers, but we chose to do it for everyone.
We conducted thousands of these 45-minute conversations, just talking about helping people grow their business without a sales approach.
It did not result in revenue. So on paper it looked like a failure but it did result in understanding what people are looking to use the platform for, where are their pain points as they grow a business, and helped shape our product roadmap to a degreeâŠ
Today, we have another good example. We have a migrations team thatâs growing that helps move data over, from other platformsâŠ.Theyâll spent 40-80 hrs, sometimes setting things up and moving data.
Now the account that weâre spending 40 hrs on is maybe giving us a $1K a year, so on paper it seems like a terrible idea. Internally a lot of people push for charging for this.
But weâve found that it creates advocates, it gives us an understanding of how people are using other platforms on the ecosystem and itâs quite valuable.
The team itself then identifies the areas when we build tooling should we invest in. So that we can make it more automatic. The nice thing is weâve never replaced people, weâve never had a team thatâs really successful at something and then had to say goodbye. Itâs more that they move on to the next unscalable thing.
Now that may sound scary or unrealistic, but thatâs kind of the point and it allows for greater opportunity of growth.
#2: âWhat Iâve learned from 16 engineers who turned down job offers at our startupâ â Kapwingâs co-founder and CEO, Julia Enthoven, catalogues what theyâve learned from 3 years of closing (and being rejected by) engineering candidates. (Source: Kapwing Blog)
We hire in the Bay Area and have made offers to only 36 out of the thousands of engineering applicants weâve screened. So, we know that by the time weâre making an offer, weâre talking to a candidates with many good options. Hereâs my advice for other founders from 3 years of recruiting engineering candidates:
Set comp brackets, and break them when you want to. Compensation brackets give you confidence that youâre offering a highly competitive package and enable you to pay engineers fairly. However, even when your bands are highly competitive, some candidates will have expectations that are out of band. Founders have to make a decision on when and how willing they are to break their own rules. If you have access to plenty of capital and are blitzscaling, youâll probably just match candidatesâ expectations, even if out of band. We only break our rules in exceptional circumstances when a candidate has 4s (âStrong hiresâ) from every interviewer they talked to. This comp philosophy does affect close rates.
Individual connections make a difference, always. Connecting a candidate with people that actually care about helping that person make the best decision and are honest with them about company culture has often swayed engineers who were on the fence. Itâs harder to nurture these connections during a pandemic, but useful if you can.
Going the extra mile shows candidates that you care and that theyâre special. Of course, this type of high-touch personalized system is hard to scale, but if you can it works.
Talking with founders is a valuable and rare connection. When I do a phone screen, negotiations, closing conversations, and outreach myself, candidates are much more likely to respond and talk. We havenât been able to replicate that with other teammates or contract recruiters easily. As you grow, create opportunities for candidates to talk to the founders directly to close candidates.
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In reality, no one has a 100% close rate. Back in 2017, I myself turned down offers from two early-stage startups (Handshake and Robinhood) before starting Kapwing, so I can confirm that even Unicorn CEOs Garrett Lord and Vlad Tenev deal with rejection. Underneath the bravado of Silicon Valley, there are many entrepreneurs who either struggle to close, and itâs a topic thatâs not talked about enough.
We have many examples of engineers who turned down competing offers to join Kapwing. Most notably, Josh, our first engineer, told me âNo,â but changed his mind a week later. We sensed Joshâs hesitancy and stayed in touch with him after he turned us down, and his work has changed the course of our company. Iâve heard similar stories from other founders who kept in touch with promising candidates and persuaded them over the long haul.
My final words of encouragement for entrepreneurs is not to get emotionally attached to individual candidates. Remember that you have the special thing - a flourishing business - that will live on as long as you keep it going.
Itâs a tough balance to pour your energy into a candidate and have them turn you down, but Silicon Valley is small and youâll hopefully get the opportunity to work with great people again down the road. Like most activities in Startup Land, a spirit of abundance and optimism will make you more successful in the long run.
#3: Getting big-org partnerships right as a small startup â Hugoâs co-founder and COO, Darren Chait, describes a simple frame-of-reference shift that reshaped how they approached partnerships with the likes of Zoom, Slack, and Atlassian. (Source: Value First)
To be honest, we made a lot of mistakes with partnerships. We got it very wrong early on. In the early days, we went out there and tried to build partnerships with as many big tech companies as we could.
The way we did that generally is through integration. Thereâs value for our users and we can build relationships with these companies. And I think what was interesting is that we just went after the biggest brands we couldâŠ
For example, Salesforce, which is one of our most used integrations. Weâre on the Salesforce app exchange, their marketplace. They donât really care, to be frank, because they have tens of thousands of apps.
So when we started building these relationships, what we didnât quite understand at the time was mutual value. We were of the view that weâre smaller than everyone else, thereâs nothing we can do, right? So it was just, âhow can we try and jump on their back and leverage that brand?â
But we didnât think about any value we could offer them and so, in turn, the value they offered us was very limited. And generic. As soon as we realized that there was an opportunity to offer value to these larger brands, you have these mutually beneficial relationship where you can leverage their brand because they have millions of people in their audience and the marketing channels and budgets.
So how do you do that?⊠Well, thereâs always something strategically relevant. Like, we were the first integration in the Zoom marketplace, Zoom wanted to market their marketplace. They needed a great story there.
To do that, we quickly built the integration, we were speaking at Zoomtopia, we were in their press release, we got a ton of co-marketing there because they needed a brand to do itâŠ
Atlassian were building a strong message around Atlassian for all teams. Because a lot of their users were very much IT or software teams, they were really trying to build a brand around, âeveryone in the business uses Atlassian.â
Hugo is a great way to do that. Connecting Hugo to Confluence and JiraâŠThey now have a story where marketers and HR, executives and everyone else can use Atlassian products, having Hugo as an interface for meetings. And so on and so forth.
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So the partnership shift for us was definitely finding brands bigger than yours with the audience and the reach, so itâs valuable, but also looking for those opportunities where you can offer value back to the bigger brand.
Until next time,