I remember doing reference calls on the very first executive I tried to hire at Backupify. I was 31 years old, a first time CEO, and had never hired a senior executive before. I had a candidate, and I mined LinkedIn for 3 people that had worked with him before to do reference checks. The reference calls went like this:
Person 1: Yeah he was fine. I’d work with him again. Not much to add.
Person 2: Oh he’s awesome – a great boss. I loved working for him and I’d follow him anywhere. I’d love to work with him again.
Person 3: That asshole? I hate him. I would never work with that !#@!%#! again.
Now, you might think this is a bad sign, but, I think most people that have done a lot of hiring will tell you that it is hard. Even candidates who come with 3 glowing recommendations may not work out, and may not do great work at your company. Sometimes people with mixed references like this just happen to be opinionated and sometimes rub some people the wrong way.
I remember another time when I hired a programmer for our marketing team because he wanted to move into a marketing role. He was terrible at it. After just a few months I fired him. I told him he sucked at this role but, I think he would be great at a developer relations role, and I recommended him to another company I knew with such an opening.
He wrote a really nasty blog post about me, and Backupify, and how terrible the culture was, and how he never should have gone to work there. Then he interviewed at the place I referred him and he got the job. Three weeks after he started, he was in the audience at an event where I was a panelist. He came up afterwards and hugged me, and said this new role was such a good fit.
Hiring is hard. Part of the reason it is hard is that we rely a lot on people’s reputations. A big part of the hiring process at most places is the reference checks, but, I’ve found reference checks to be almost useless. I basically just do them in case someone says the candidate did something highly unethical, but, other than that, I’ve learned that it is difficult to untangle someone’s performance from their situation. So whether or not they did a great job somewhere else may not matter for your company.
Why Backupify Was Successful
Backupify struggled from 2009 – 2011. Our primary product was initially consumer focused, then SMB focused on gmail backup. If you hear people talk about why we ultimately had a 9 figure exit, it was because we hired this or that person, because we finally figured it out or “cracked the code”, or maybe I finally grew into a good CEO and made the right decisions. But you want to know what really happened? The market moved in our favor.
I was sitting at Google’s partner conference in 2012, and almost every announcement or session or presentation was about Gdrive. Google had come to see Dropbox and Box as competition and was going on all-in on Google Drive. I called a management meeting for later that day and walked the team through it all and said we had to change the strategy to focus the product and the marketing on GDrive. Suddenly, customers who were meh about Gmail backup were putting their key documents in the cloud via Gdrive and were very concerned about backing them up. Our revenue curve took off and 2 years later we got acquired.
But the key lesson here was, we didn’t have any great vision. We had some great people, and they did make a difference, but, none of them had some key insight that changed the trajectory of the company. It was a lot of little insights, and blocking and tackling, that all added up to success. The real breakthrough – the reason that we were successful, was out of our control. The real reason was – the market moved in our favor. We were already doing a Google Docs backup, so following this Gdrive movement was easy.
There are a lot of companies like this. It’s not that the team doesn’t matter, it does, but, the real key is what is happening in the market and whether you are well positioned to take advantage of that. Good teams find that spot in the market, if it exists. The Backupify team was great, but the market really made the company.
And that brings me back to hiring, and reputations. Some people are just in the right place at the right time. Some people are awesome, but in bad markets or bad companies. Some people ride the coattails of the awesome people, and get an undeserved reputation.
When I moved to Boston in 2010, I had that experience. I’d meet with someone in the startup scene who would say “oh, you have to meet person X – he’s awesome.” Then before I’d meet person X, someone else would say “that guy? don’t waste your time.” It was hard to figure out who was “good” and who wasn’t. There are very few people that are considered rockstars, across the board, by everyone.
The lesson here, and the reason I’m writing about this is that, when you go to raise money, VCs will talk trash about other VCs. Some of it is true, some of it isn’t, but it’s all contextual, and you probably don’t know the context. When you go to hire executives, you will hear many different things. Some of of it is true, some of it isn’t, but it’s all contextual. You get my point right? Reputation is contextual. Some people have very stable reputations because they have been in very stable contexts.
Sometimes you just have to dig in and take chances on people, employees, executives, and investors. People change and adapt and learn. But some don’t. So, reputations matter, but, be careful. Do your own diligence, and don’t be afraid to take risks on people who are unproven.