The leading thought in Venture Capital industry globally is that ‘Venture Capital is a services buinsess‘. Blume is one of the few venture capital firms in the country that take pride to have built a platform of services (called ‘Constellation Blu‘) around that thought. And, perhaps, the only one globally to have done at our size of the fund.
Back in June 2012, it was apparent to me that Hiring has become the #1 problem for startups in India. Even some of the best firms, who were otherwise able to attract ample funding, were unable to get hire the best people fast enough. This thought gave birth to the Headstart Higher initiative, the first ever speed-dating for startup jobs initiative in India. And the need was established.
After I joined Blume, I figured there’s an immense opportunity to help ex-entrepreneurs find an exciting fit at another startup. I helped portfolio companies hire more than 10 such people between Mar 2014 and Mar 2015. But it was largely an un-scalable manual process. In the second year, we took on the challenge of offering a scalable hiring engine to our portfolio companies.
But I was clueless where to start from!
First came the commitment
In April 2015, I decided to spend 25% of my work time in solving this problem. After procrastinating for many days, I setup three experiments:
- Source talent from usual channels like Linkedin and Hirist, talk to them to filter, give access to this database to all our portfolio companies.
- Work with talent consultants to figure if and how we can work together on a long-term mutually beneficial relationship
- Make a list of all startups in talent acquisition space and hope to create an offering with them
Then comes the learning
Over next 4 months we realized that for our kind of use-case (a venture capital firm, working for benefit of its portfolio), no startup had a ready offering for us, out of the box. Even recruitment consultants (we worked with three of them closely) were able to offer no advantage, beyond a slight pricing benefit, as the process at their end continued to be pretty much the same as if they were talking directly to a startup.
What seemed to be working was the database thing. Of about 200+ profiles we sourced, we filtered it down to about 50. Of these, about 15-20 offers were made and 6-10 candidates joined our portfolio. Assuming a conservative ₹50,000 as value, this was fantastic return for an operational effort of an intern and a few Linkedin job posts (about ₹50,000). Towards the end of Aug 2015, I knew something was working. Here are some of the key things we learned along the way:
- Hiring (or rather ‘Talent Acquisition’) is like sales – the TA manager has to be driven and inspired by numbers.
- Hiring, like Sales, is no rocket science but if you only follow the process things close well. Therefore, the best companies have an expertise in hiring.
- The only consistent way to deliver great ratios is by having contrarian sourcing methods. Like Facebook, Quora and Blogs. For example, our portfolio company WebEngage has a dedicated person only for engaging with talent on social media.
- The best companies who have most success with hiring are the ones where founders are most aggressive about it. For example, both Manish and Rahul from Purplle spend a disproportionate time on Hiring, respond to every such thread fastest and never shy even from flying to Bangalore if they feel the candidate is still unsure.
- Hiring freshers doesn’t work for everyone but it is a comparatively reliable source of talent, only if you can afford to train them for 3 months at least. Zopper, ThreadSol and GreyOrange are companies who have great campus programs.
- To be able to extract the best out of a talent consultant, 70% of the onus lies on the founders and the startup.
Some new opportunities emerge
Around the same time, we got introduced to Alex Peter from Matrix Partners who has proven to be an angel in many ways. Alex has extensive hiring experience in tech sector and is a great human being. He was able to hire for about 70+ top profiles for his portfolio in just 8 months. He shared a lot of experience of working with candidates and his portfolio companies which we started using immediately.
Learning from him, we decided we should have a similar setup to offer to our portfolio companies. The best thing was that he introduced us to Sanam Rawal, who has taken us on a whole new trajectory in this domain!
[This is the first part of a two-part series about our experiments on hiring. The second part is published here]