HR Bonanza

It is exciting to see so many of our portfolio companies growing, raising capital and hiring talent.

Across industries and roles there has been a spike in the cost of adding this new talent. As I keep hearing that the asking “price” for top talent s skyrocketing I noticed two additional trends.

The first is that the uneven balance across geographies seems to remain. While talent costs have risen in CA, NY/BOS and in Israel, they all still seem to stay relatively priced. Meaning, if the overall cost of talent has risen 30% then it has done so evenly across geographies such that a programmer in Silicon Valley is still proportionately more expensive than their peers in Boston or NY and Israel.

The second trend seems to be the coming-of-age of HR startups. As these companies join the unicorn club I would like to believe that it is due to their commercial success. These new tech driven HR services are delivering value to their customers. The hiring companies and the candidates.

I have yet to see anyone try to link these two trends. But could it be that these new efficiencies in the HR market are being translated to higher salaries?

If so, then this would come as no surprise considering the information-revolution we have been living through over the past 30 years. But there is a potential downside. The divide between the “haves” and “have-nots” could become even fiercer.

Candidates with the right key-words on their profile will be ranked higher. These will most assuredly include top ranked schools, degrees and previous employers. Candidates with better peer reviews and greater social reach will naturally be perceived as better fits rather than giving a chance to someone who has yet to find the right place for her to shine.

I am not minimizing the power of these matching algorithms and I do not have any inside information on how these companies operate. But based on recent revelations about Facebook, it seems clear that there is still significant room for improvement before we can fully rely on algorithms for our hiring. This imperfection may include over-inflated salaries that may be reduced if/when the bull market ends and tech companies need to reshuffle their budgets to carry them further while they refocus on generating revenue with better margins.

In such a situation, it will be the big names that prevail. The smaller companies who pulled talent from the larger players and were forced to match salaries paid there will be in a tight spot. And while equity option grants are supposed to subsidize these differences, the perceived value of these options will be dependent on the state of the market and expected time to realizing their value.

As we enjoy the years of plenty, it probably makes sense to keep an eye towards the future and potential of leaner years. So enjoy the higher salaries but be sure to save for a rainy day.

Focus

This is part of a series of posts capturing my thoughts during the Jewish High Holidays and the new year, as we emerge from the pandemic.

We talk a lot about focus in the start-up world. Founders hear this advice all the time: you need to focus. On product development so you can ship on time. On customer engagement so you can find product-market fit. On sales so you can hit your numbers. All true. And yet, it feels like something is missing…

At the early stages of the company, the most valuable asset is the team. All investors say that they invest in people, but I have come to realize that means different things to each of us. We look for passionate teams who want to make a positive impact on the world. These usually take time.

It typically takes years to transform a startup from a fantasy into a real business. Sure, there are small milestones along the way that help make the startup more real, but the road to reality is long. Be prepared!

Eric Paley on Twitter @epaley, Oct 7, 2021

So we need to consider what “focus” really means in this context. I’ll share a couple of thoughts here as I relearn how they apply to me.

Short-term vs Long-term

Focus is often misconstrued as short-term thinking. That is simply untrue. Long- or Short-term thinking relate to the goals you set for yourself. 30/60/90 goals will be different than annual or legacy type goals. Focus is about taking the steps that will move you closer to those goals. It is the trade-off between what you can do right now to move yourself forward, no matter which goal you are pursuing.

Many times the actual number of options and possible outcomes could lead to decision paralysis. So we just go with the flow. Sticking to our comfort zones and knocking out the easy tasks. We often fool ourselves that we are being productive because the number of items being checked off the list is longer than those remaining, despite knowing the outstanding tasks are more challenging.

In a great blog post, in which he shares his personal story about selling his company to Salesforce, Mark Suster asks the following questions:

How do you process your company’s biggest decisions? How do you live with uncertainty and stay focused?

Mark Suster, Both Sides of the Table, Oct 9, 2013

Mark goes on to share what works for him (music and running) to create that focus. It doesn’t matter what works for you (though some activities are more positive than others) the key is disconnecting from the grind, from being in the weeds, and letting your mind wander. Then when you are ready to refocus, it will be even sharper.

Take the Day Off!

In our pitch-deck, when raising capital from LPs, we state that we take a day off each week and encourage our portfolio founders to do the same. For me this is Sabbath, the 7th day, and is done as part of a greater set of beliefs. But the research around the importance of this practice has been validated many times over.

Being overworked and stressed does not lead to better productivity or superior results. How much has been written about the importance of better work-life balance over the past decade? – Breaks provide a boost to energy, renewed focus and enable greater creativity. Taking a step back, removed from the details, and then reengaging makes a world of difference.

This is true for vacation time as well.

I’ll share a personal example. The other night, in the middle of the week, I decided to watch a movie with my son. He is into cinema and we often discuss some of the classics which my dad forced me to watch with him usually late at night when I had an early start the next day (Thank you Abba!). My son had been home for the Sukkot holiday and happened to have no plans for the evening. It was an opportunity that I decided to be spontaneous about.

We watched the Maltese Falcon. Still a great movie, with powerful acting and terrible stereotypes (and still not as good as Casablanca!). The clearer picture (saw it originally on the ~28″ CRT that we had growing up) actually made it easier to follow the plot and helped appreciate the acting even more.

Besides the quality father-son time and another topic we can discuss next time we have a long car ride, I found that taking the evening off really did make a difference. I had more energy and clear-mindedness the next day which helped me focus. It was extremely productive. I guess I was not practicing what I preach as well as I could have been.

Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.

Ferris Bueller, Ferris Bueller’s Day Off

One of my favorite quotes from one of my favorite movies. Words to live by. Of course, the problem came later in the day when I was tempted to close my laptop a little earlier and head back in front of a screen to see what else I might be able to enjoy. I didn’t. I stayed focused. But I will definitely be looking to add some of that “down” time into my routine so that I can enjoy the benefits.

I suggest that you do too.