CEO
Sequoia Capitals Advice on Avoiding the Death Spiral
Great article on The Force of Good Blog. Sequoia Capital a popular VC firm held a mandatory CEO all hands on meeting where they discussed tips to use in possible economic downturn. I am personally against this hardcore of a position by such a notable and influential VC firm. They are basically promoting profitability, slower growth and survival which in my opinion all seem counter to the core purpose of VC funded company. Sequoia also states quite clearly that this is just the start of a 15-year cycle, which I can’t for the life of me understand why wasn’t recognized last week or even month. The biggest problem I have with this is its suddenness and drasticness which I am willing to bet will soften once its realized that all of this has been blown out of proportion and unfounded. Only time will tell though…
The speakers and some of their key points were:
Mike Moritz, General Partner, Sequoia Capital –
We are in drastic times. Drastic times mean drastic measures must be taken to survive. Forget about getting ahead, we’re talking survive. Get this point into your heads.
For those of you that are not cash-flow positive, get there now. Raising capital is nearly impossible if you’re too far off of cash flow positive.
Eric Upin, Partner, Sequoia Capital –
Make changes, slash expenses, cut deep and keep marching. You can’t be a general if you turn back.
Manage what you can control. You can’t control the economy, but you can control everything else.
Michael Partner, Sequoia Capital -
A “V” shaped recovery is unlikely
Cuts in spending will accelerate in Q4/Q1. Look at eBay-this is just the beginning.
Doug Leone, General Partner, Sequoia Capital -
Do everything possible to get to cash flow positive. Now.
M&A will decrease dramatically and only lean companies, with proven sales models will be acquired.
The topic of the night was Capital Preservation and what companies can do to survive. This is what they were asking from their companies but it will work for everyone.
Company:
- You must cut expenses. Now and deep.
- Your product should reduce expenses and drive revenue
- Honestly assess your solution vs. your competitors.
- Cash is king [have you gotten this message yet?]
- You must get to profitability as soon as possible to weather this
storm and be self-sustaining.
Operations:
- Engineering: Since you already have a product, strongly consider
reducing the number of engineers that you have. - Product: What features are absolutely essential? Choose carefully
and focus. - Marketing: Measure everything and cut what is not working. You don’t
need large Product Marketing, Product Management teams. - Sales & Business Development: What is your return on this
investment? The Valley has gotten fat with Sales people: Big bases, big variables. Cut base salaries on sales people, highly leverage them with upside (increase variable) and make people pay for themselves via increased sales productivity. Don’t add sales people until you’ve achieved your goals with sales productivity. Be disciplined. - Pipeline: Scrub the shit out of it and be honest with yourself.
- Finance: Defer payments, what is essential? Kill cash burn.
Death Spiral:
- The death spiral sucks you in, you’re in it before you know it and then you die.
- Survival of the quickest.
- Cutting deeper is the formula for survival.
- You should have at least one year’s worth of cash on hand.
Tactics:
- Assess your situation. Drop your assumptions, start with a blank
page and start zero-based budgeting. - Adapt quickly
- Make your cuts
- Review all salaries
- Change sales comp
- Bolster your balance sheet-if you can add $5M to your coffers, take
it and save it. - Spend like it’s your last dollar
Post to TechZulu
10 tips to beef up employee referrals and win the war for talent
So you’re the CEO of a company and you need to beef up recruiting. You can always take the easy way out and just pawn it off on recruiting or HR, but in this ultra-competitive landscape that’s unfortunately just not going to net you the best people. In today’s marketplace, where great candidates have options up to their eyeballs and are well-paid and well-retained, leaders need to ensure they are doing everything in their power to make sure their company is attracting all of the top candidates in their marketplace. Because in this marketplace, it’s not the person with the best product or best sales pitch that wins, it’s the team or company with the most talented and unified set of people that will win.
So now that you’ve decided to take on the recruitment challenge head-on, what can you do as a leader to ensure your company is hiring and considering the best? You create a top-down recruiting-centric culture that gets your entire team and organization not only involved with but obsessed with recruiting. That’s right. Turn your entire company into your own personal recruiting army.
Below are 10 sure steps that will do the trick.
Recruiting should be an evident priority from the top down – The CEO needs this mission to be ingrained in everybody’s minds from day 1 that the most important aspect of everybody’s jobs should be recruiting – to serve as the company’s eyes and ears as they conduct they work and live their life day to day. This tone must be set and reflected 360 degrees throughout the organization. It needs to be bred from the CEO to the Executive team to the Managers to the Individual Contributors. And don’t leave out the office support and administrators – they have friends and colleagues too who might be a great new hire for your company. As the CEO, consider creating a recruitment-centered video that discusses your company’s mission, vision and intent to focus on employing the best people in the marketplace. Publish this video on YouTube and send it to all potential candidates. An example of this is wirtten on a blog by Lisa Orrell , she talks about how Deloitte employees use video to send out a recruiting message.
To see an example of what I’m talking about, and to give you some ideas about what you could be doing at your company, simply go to YouTube and type in “Deloitte”. You will see a ton of mini movies created by their employees designed to attract Millennials to their company. GREAT example about how you can get exposure to this generation (creatively) online.
There should be a clear reward system in place to reward referrals and employee recruiting – I’ve seen this be as little as $100 per hire to 10k per hire. Obviously the more you are willing to pay per hire, the more the employee base will be motivated. Although 10k per hire might sound like a lot, it may be found to be reasonable when compared to the considerable dollars paid to recruiters and spent on job boards, career fairs and other paid forms of non-guaranteed avenues. Dr. John Sullivan wrote and article about effective approaches for attracting top talent using your current employees.
If you were to examine the social networks of your entire employee population, it is safe to say that your employees are already in direct contact with a significant portion of the population you as a recruiter are prohibited from reaching out to. Those existing connections represent a significant opportunity to influence targeted talent, one most organizations significantly underutilize. The idea here is not to get your employees to directly source talent you can’t, but rather to leverage their existing connection to influence the targeted talent to ask your employee to refer them.
Setup training sessions that actually teach your team how to more effectively use their own personal network to recruit – This is a great time to involve HR and Recruitment and to offer your team members the opportunity to broaden their skill sets outside of their core set of competencies.
Incorporate social networking into your recruiting plan
- Everybody’s LinkedIn profile should mention that their team is hiring
- Everybody’s Facebook profile should mention they are hiring.
- Encourage team members to post recruiting notes on blogs, discussion boards and other online channels they may already be spending time on anyways.
- Setup a recruiting blog for your company or for your team and give everybody the opportunity to contribute. Yahoo uses their employee blogging to leverage recruiting, as does Microsoft.
Send your team members to conferences and arm them with the tools to recruit – Let them know about the relevant candidates they might find at the conference and have their badges and nametags mention they are hiring (for 1k bonus, they might not wear them. For 10k, I bet they would).
Host recruiting events at your office – Lunch 2.0 is a great program that allows for you to showoff your company, products, environment and team to the neighboring software community.
Have somebody in HR or Recruitment (or a Direct Manager) go through the following exercise with everybody at your company
- Create a list of everybody you know. Studies show that the average person knows somewhere near 250 people. Ideas to spark more names include school, organizations, previous jobs, neighbors, friends, etc. Don’t let anybody get away with a list of fewer than 100 names.
- Send that list an email stating that you currently work for X Company and love it because of Y reason. Let them know that your company is looking for great people to join and to inquire.
Offer additional bonuses for helping to retain the new hires or split the initial bonus into two halves – Offer one upon new hire start and one at the end of year one. Meaning, the person who provided the referral should serve as an informal mentor or big brother/sister to the new hire. Almost showing them the ropes while they get assimilated to their new role. This can become a huge retention measure.
Set up a system to track all of Activity – If you are going to offer a recruiting bonus and ingrain this concept as part of your corporate culture, you’ll need to setup a system to track all of this activity. For a startup or smaller company, a spreadsheet or contact database will do the trick. A mid-sized or larger company will probably want to pick up a more custom solution that will allow you to create a custom and track able employee bonus program.
Make a Big Deal Every time a Hire is Made Using your Program -
- Send out company wide emails praising the employee for the help with the new hire.
- Make a big deal about new hires at company events, meetings and function.
- Put up a webpage that tracks everybody’s employee referral so that everybody knows how well everybody else is doing and how much money can be made by focusing on recruitment.
Now that you are armed with the steps it takes to turn your employee base into your own personal recruitment army, what are you still doing reading this blog. Get to work!! You’ve got some recruiting to do.

A new CEO for Yahoo, of course. Looks like Carol Bartz, the new CEO of Yahoo will be getting a $500,000 bump in her salary. (Cha-Ching) Bartz will be receiving a pay package worth at least $19 Million. $1 Million of that will be her salary, which is $500,000 more than what she made as an executive chairman at Autodesk. The rest will be complied of stocks and an incentive package, providing Yahoo makes a comeback while she is CEO. 

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