We spent a lot of time trying to make LinkedIn grow.  One of the reasons they are at more than 150M users now instead of 50M is because we took growth seriously, forming a dedicated team in 2008 to focus on how new users discover and engage with the site. Growth is important, and most great companies take it seriously.

Traffic

In the last decade and a half of building web sites, our industry has launched a bunch of great properties, but the big challenge has always been how to get people to find them.  Why are they going to end up on your site versus the billions of other pages out there? And despite more than a decade’s worth of effort, we’ve basically only really see five sources of traffic to web properties at scale:

1) Organic

Advantages: It’s like crack. Once you have organic traffic, you always want more. Users come come in and do more when they arrive, because “arrived on purpose” signals intent, and that makes a difference on whether they’ll engage.

Disadvantages: We don’t know how to get it. You can’t take a smart PM and have them grow organic traffic. They don’t know how. Is PR / Don Draper the best we can come up with?

2) Email

Advantages: The good news (and bad news for our inboxes) is that it scales. Here we mean mostly product integrated emails, like eBay’s outbid notice, not marketing emails. As it scales, it often converts back to sites through links. It can be personalized, optimized, etc.

Disadvantages: It’s very transactional, and often hard to turn it into something more.

3) Search

Advantages: People have realized that it’s important to make an effort to get this legitimate source of traffic. And it does scale.

Disadvantages: It’s now an arms race – you need to have millions of pages of content to play the game. Then the question is whether you’re really doing the right thing for that user, or just getting them to your site. Finally, it’s never perfect, never done.

4) Advertising/SEM

Advantages: BD people have found a lot of ways to buy traffic, so there are options – clever ways to find the audience you want, and convert them for a fee. You can also target and optimize. A valid example is paying to gain a critical mass at a certain time, like Zynga has done, to get the viral/social crank turning through other channels.

Disadvantages: It’s cash up front, for an uncertain future value. Also, you can get stuck in a total user value equation, which may be risky. One of the dangers of buying traffic is not realizing that the new users, acquired through those channels, have fundamentally different economics, not based on the original model.

5) Social Feeds

Advantages: If you do it right, you can reach a huge amount of people in a short time. It can  be personalizable. This is the primary viral channel for Instagram, for example.

Disadvantages: It requires the right type of content. “If your users have content that is legitimately interesting to people they know, then they’ll push it out.” And it takes iterations to get it right.

Let’s break this down simply: in order to drive self-distribution / viral user acquisition, you have to have features that let users talk to non-users. There are hundreds of features on LinkedIn, but in 2008, we realized that there were only three that ever led to non-users reaching the site, at scale. And those three feature were where new users came from: organic flows, published public profiles, and invitations through email.

Viral Factors

Viral factors were popularized with the Facebook platform in 2007. Vf= “If I get a user today, how many more users will I get in the next N days?” N changes depending on the business, but adding a time component helps us not lie to ourselves about virality. LinkedIn used 7 days, but it can be legit between a few hours and a month. Really these days, periods are getting shorter – 1 or 3 days, and new user flows and immediate viral conversions are critical.

At under Vf=1, it’s really a multiplier on traffic you’re already getting. But because of the math, small differences in coefficient make a huge difference in growth and economics. It’s a fight worth winning, as we’re all building in a competitive environment, whether directly with other products or indirectly for users’ attention.

Q: Why not model in the lifetime of a user as N?

A: Good question. It might work well for subscriptions etc. But I like simple metrics/rules of thumb that let us quickly get an idea of how things were doing. Sometimes when the math gets more complicated, it crosses a threshold where it just never gets done regularly. Cycle times are very important too.

Q: How does this work for e-commerce?

A: I don’t think many e-commerce companies have adapted to this well. Ironically, one of the problem is that they know what revenue is. It’s been historically cheap to acquire users so they go with traditional methods. So they optimize for that. It often takes 6-8 iterations to get to a decent viral coefficient. So in e-commerce companies, it’s tempting to give up and go with the old methods.

Q When did LI get to mobile,? Do you see it as a feature or channel?

A: When I took over LinkedIn mobile in 2009, it was like a pet project. One engineer had built it, out of passion. Ultimately we had to think through how that would change the company. For a startup, it’s almost a ‘bet the company’ decision. We’ll get to mobile in a minute.

: Measurability: how do you separate viral from other channels?

A: Tracking. Track codes on the invites and watch the steps when they come back, through various methods. And when they come back, you’re not just looking at whether they convert, but also whether they invited others, etc. Sometimes you have to fill in the gaps.

Q: When can you start doing this?

A: I think even at the hundreds of events per day, especially when you’re tracking over time and can smooth it out.

Mobile

Remember, this is all new stuff, and we’re still figuring it out.

There’s really two approaches that people fight about – web vs native. Both are imperfect. The developer community wants HTML5 to win, but we need to ask why native apps are working. When people click on that little icon, it feels like organic traffic, in terms of the intent and willingness to engage. So every PM who launched a native app recently looked like a winner. The problems with native apps is that we spent the last 15 years understanding 4/5 of these channels, yet they don’t work for native apps – they’re highly optimized for mobile web.

Moving forward, the first experience a user has with a new product will be overwhelmingly web. And that’s a critical visit. But by leveraging both web and native apps, you can cut the viral loops even more.

Q: Do you have best practices for this?

A: Instagram is a great example of a very simple design and one loop that worked very well: content-social feeds-download. They also used a content type that people create frequently. At Linkedin we were also looking for things that people did more often. The reason that we still see obnoxious flash pages in products that ask people to download the app at the beginning, is because it works. Some people are sophisticated enough to alter this depending on user behaviour.

Q: We’ve seen a lot of improvement using keywords on Google Play. Have you seen this?

A: People are testing stuff like this in creative ways – ie using Facebook demographic testing on keywords, then using those in App store, etc. But make sure you’re not only getting that download, but also then planting the seeds for that next visit. This is even more important in mobile than web.

Q: Any tips on how to measure where users are coming from?

A: There’s a few, although some are getting shut down. Basic answer is find a unique ID in the wild that map to the user. I see people try to use email, phone, IP (through some other element of the flow). But none are perfect. You have to try, though.  Knowing who your user is has a lot to do with reducing friction and providing a relevant experience. Metrics are important. They’re not that helpful for inspiration, but they can be the most honest critique you get of your theories.

Q: What are some ways to reengage users as a way to grow?

A: I think this is always hard. It’s almost harder than the first experience. Sometimes your features that touch non-users also reengage existing users. Sometimes that can be used.

Adam Nash is an entrepreneurial executive with a passion for product and deep experience with mobile and social platforms.  He joined Greylock Partners in 2011 as an Executive in Residence, where he advises the leadership teams of the firm’s existing consumer technology companies as well as evaluating new investment opportunities. His complete profile can be found here.

Dev is well known within the enterprise sector for his entrepreneurial success at BladeLogic, a company he led as CEO from inception through a successful IPO and eventually a sale to BMC in 2008 for $900M. Following the acquisition, Dev was the President of BMC Software where he led BMC’s $1.4B enterprise service management business with more than 4,000 employees in over 25 countries. Prior to BladeLogic, Dev founded Applica, one of the industry’s earliest cloud computing companies. Applica merged with Breakaway Solutions, which went public in 1999.

Over the last couple of years, Dev has gained considerable board experience as an investor and independent board member at several companies including Bazaarvoice (Nasdaq: BV), AthenaHealth (Nasdaq: ATHN) and AppDynamics (where Greylock is a founding investor). Dev joined the AppDynamics board of directors in 2011. It has been terrific working together on the AppDynamics board and watching Dev in action, as he brings his insights on competitive strategy, recruiting, and go-to-market, to help AppDynamics rapidly scale.

Dev is a passionate believer that great technology married with outstanding go-to-market separates truly great companies from the merely interesting ones. Having founded two companies, Dev has learnt that building great technology is not enough, and that equal effort needs to go into the design, construction and management of the company’s distribution channel. Dev is already actively helping several Greylock companies think through and further refine their go-to-market strategies.

We are particularly excited about Dev joining us now, given the tremendous opportunities in the enterprise sector. Within our enterprise portfolio at Greylock, Imperva recently went public, Palo Alto Networks and Service-Now have filed S-1′s, and Workday has publicly discussed its intention to file. Many companies in our enterprise portfolio are benefiting from strong winds at their backs (driven by new trends in cloud, mobile, big data, management, networking, security, storage), and are growing at a strong clip. Enterprise IT is in the midst of a huge shift, with the incumbent public vendors highly vulnerable to disruption in their future revenue streams and profit pools.

It’s a great time to be an enterprise entrepreneur. We are thrilled to welcome Dev, a world-class partner for entrepreneurs who want to build tomorrow’s leading companies.  Dev can be reached at dev [at] greylock.com, or followed on Twitter at @dittycheria.

Welcome Dev!

Asheem Chandna is a partner at Greylock Partners, where he is focused on helping founders and management teams initiate and build industry-leading companies that deliver new innovative technologies to enterprise buyers. Follow on Twitter, Quora and LinkedIn.

We’re at the early stages of a massive wave of innovation in the payment industry. It’s like when Apple launched the iOS platform for mobile developers. The platform in this case is the payment network. Software developers will add new capabilities to cards by programming the payment network to link online applications to specific payment events. Consumers will be able to effectively “drag and drop” apps to their smart cards in the same way that they add apps to their smart phones today.

We’re big believers at Greylock in the future of “online to offline” commerce, and we’re seeing a ton of innovation in this space. One of our portfolio companies, CardSpring, announced a major partnership with First Data earlier this week. We’ve invested in several other “online to offline” commerce companies including Coupons.com, Groupon,Shopkick, Swipely, TrialPay and Wrapp. And there are many other companies innovating in the space, including startups like Square, and established companies like Google, American Express and Visa.

For all of the attention focused on online commerce, the market opportunity for “online to offline” commerce is way bigger. Online commerce is now a $200 billion industry, but it’s still small compared to offline transactions. Up to 70% of consumer spending is influenced by Web and mobile research, but over 90% of actual transactions are still conducted in the physical world. Several major industries are motivated to see this new app developer ecosystem take flight. Retail marketers know they can advertise more efficiently if they can actually track and close the redemption loop from online browsing to offline buying. Major consumer internet and financial services companies are also highly motivated, as they see a path to greater advertising and promotion-based revenue if they can demonstrate more marketing value through closing the loop. Online budgets that are directed at social ad campaigns will further expand as consumers share experiences connected to their offline card transactions, including reviews and gifting. So what will be the impact of this emerging app platform on the card carrying public?

Expanded memory: If you’re like most people, it’s hard to keep track of all of your paper and plastic. With cloud-connected cards, you can clear out your desk drawer or wallet. Instead of holding on to that Red Lobster gift card, REI loyalty card and printed Groupon deal, you can add these to your card, and receive benefits automatically when you make a purchase. You can also store a digital receipt or warranty on your card rather than keeping these in a filing cabinet in the basement. You’ll be kind of like Bradley Cooper in “Limitless”, without the creepy smile or the terrible side effects.

New spending habits: The ads and offers that you receive today via the Web and mobile are mostly blind to how you’re actually spending your money in the physical world. As these databases are more intelligently connected, the offers you receive will become significantly more relevant and compelling, based on where you spend your actual time and money. Note to payment network innovators: it’s critical that these programs are introduced in a way that protects consumer privacy and retains consumer trust.

Our spending habits tend to be just that, habits. So if you drink coffee at Starbucks three times a week but never try any of their food, you’ll receive an offer to try one of their fruit plates. Or if you buy gas at a Shell Station on your way to work once a week, you’ll be offered a better deal at the Texaco that is right across the street. The discount you receive from a merchant may also vary based on how hard they think your existing habits are to break. Merchants will be able to dynamically manage supply and demand in their local market by testing real-time what types of discounts and offers they need to offer so as to acquire foot traffic. So Supercuts might offer “40% off” if your historical buying patterns are concentrated 5 miles away, and “10% off” if your transactions are centered 5 blocks away.

Validated check-ins and reviews: One potential downside of most consumer review sites is that published opinions are dominated by a small, vocal minority. There’s value in getting a broader sampling of people to share their views. A growing percentage of reviews on sites like Yelp and check-ins on sites like Foursquare will over time be tied to actual transaction activity. When you and your friends buy, you’ll be asked via email or text message if you’d like to check-in or provide a review. As a result, more customers will provide feedback and recommendations, and the information they provide will be better validated, in connection with actual transaction activity. A review or check-in will carry additional weight when it’s been validated.

Quantified self: The “quantified self” is an emerging trend in the digital health space. Early adopters and fitness buffs are wearing devices like Fitbits and Nike FuelBands to track their heart rates, calories burned, quality of sleep and more, so that they can measure and improve their health and performance. The cloud-connected credit card will also deliver a stream of valuable intelligence based on your transaction behavior. Your health data stream alone could include how much of your diet is fast food, how often you actually visited your health club, and how many times you stopped for coffee (aka “your caffeinated self”). Your appified card can also deliver you informed insights on your spending activities across other life categories so that you can optimize decisions and be your best self.

James, Reid, and Ali

James Slavet

Reid Hoffman

                                                   Ali Rosenthal

John Hayes, Co-Founder and Chief Architect of Pure Storage

John Hayes is the Co-Founder and Chief Architect of Pure Storage, a Greylock-backed start-up based in Mountain View, CA. Pure Storage has a simple mission: to enable the widespread adoption of flash in the enterprise data center.

In a nutshell, what is the big idea behind Pure Storage?

Enable efficient deployment of solid-state storage in the datacenter.

What about the future of Pure Storage excites you the most?

Solid-state storage changes the fundamental data structures and IO patterns business software has been built on for decades; purpose building for solid-state storage yields benefits that are unachievable by repurposing software built for spinning disks or hybrid solutions. Within a decade business infrastructures will realize a 10x-100x performance improvement and we aim to be at the center of that change.

Why did you become an entrepreneur?

An entrepreneur is someone who asks for capital instead of asking for permission. I’ve never enjoyed asking for permission, but I’ve also been lucky enough to know people who have offered a great deal of support.

What was the most difficult lesson you have learned as an entrepreneur?

Every once in a while I notice that something isn’t happening. When I think back to previous jobs, I realize that there was some source of initiative making that thing happen… now that’s now my job. The whole cloth of a new company doesn’t seem so intimidating until you realize you’ve been looking at it through a microscope.

What has surprised you about being an entrepreneur?

It’s often thought that an entrepreneur’s goal is to make a great product. In reality it’s to build a great company that makes a great product. It feels strange to plan your own obsolescence, but it’s an amazing practice for pushing everyone in the company beyond the limits of comfort.

What is the best business advice you’ve ever heard?

It’s not quite advice, but Mike Speiser has said that Pure Storage is ‘making the world safe for flash storage.’ This idea can be applied to almost anything and I think every business should strive for the simple characterization that they are making the world safer.

Mark Leslie – it’s the dream of every entrepreneur to be hauled in front of congress on antitrust charges because they so thoroughly destroyed their competitors.

What is your motto?

Certainty is usually just a lack of creativity.

What are you passionate about?

I love engineering, building new products and working with new technologies. Every technology has a secret  language and the key to great engineering is learning that language.

What was your first paying job?

I was an administrative assistant thanks to my mastery of WordPerfect 5.1.

What do you like most about being an entrepreneur?

It’s almost the purest form of meritocracy. How else can you be the least educated, least accomplished person at a company and still be Chief Architect?
What do you like least about being an entrepreneur?

Being uncomfortable with getting attention while at the same time being restless with the status quo, which often means drawing attention in order to enact change. As an entrepreneur I’m well outside of my comfort zone.

If you could change one thing about yourself, what would it be?

I would like to be able to focus on two things at a time.

What do you consider your greatest achievement?

I hope I’m still working on it; achievement is a product of a lifetime, not a single event.

What is the last book you read?

“Packing for Mars” – it’s evidence that if you call someone an astronaut, you can do anything to them including testing the world’s most expensive disposable vehicle.

What advice would you give other entrepreneurs on how to build a great business?

Every great business initially does something so deceptively difficult that the challenges of success go almost unnoticed.

What led you to found a company?

I wanted to build something substantial and difficult. It would take time to build, but it would make a big difference in the world.  I want to create “perfect storage” where “perfect” is always fungible and always fast.

I want the storage problem to go away. Few companies spend as much time on the 99^th percentile of performance.  This focus has driven us to a deep understanding of our medium.  Then, we used that knowledge to create something that doesn’t require users to understand how our product works because it just does.

How did you come up with the idea for Pure Storage?

I have to credit John Colgrove, the senior co-founder with coming up with the idea. I can only be credited with a plausible approach for implementation. When he didn’t panic, it seemed like a good match.

What advice would you give to someone starting a new enterprise? (read: if you could go back in time 2 years and give yourself a piece of advice, what would that be)

It’s hard to tell the difference between a good idea and a merely clever one.  No one ever built a significant business on a clever idea.

Make sure you find founding partners who cover all the gaps.  All the things you don’t know how to do… you should be really impressed by them.  They should be so good at what they do that it seems like magic to you.

What’s the best way to attract talent to a new organization?

Show them the real company: openness, pride, ambition.  Be critical, challenging and purposeful.

What do you like about being at Pure?

The feedback we’ve gotten from the market and customers gives me great confidence that people really need what we are building and the real challenge is to prove why we are the ones to do it.

Entrepreneurs do things that haven’t been done yet. What are you doing at Pure that breaks the mold?

It may come as a surprise, but I had never worked on a storage product before Pure. We work from the user, or application, down not from the hardware up.

What’s the biggest challenge you personally face in pioneering the unknown?

It’s easy to become enamored with the beauty and simplicity of something even if it’s totally unworkable. I don’t mind backtracking on myself; but having a conversation with someone else while proposing rolling back their last few months of work feels terrible.

For technical inspiration, what has been the most effective well?

My past mistakes.

For you, what’s the biggest difference between working in a small start up company and a large established organization?

Large organizations get distracted by the desire to defend the old business.  They can’t invest whole-heartedly in a new direction without considering how it might harm their existing cash flow. At a startup, decisions can be driven in accordance with what’s logical and right for the market.

What principles define Pure’s engineering culture? How do you encourage their exercise?

We are very selective about who we hire and when someone joins our team we inherently trust them. As an example, we share pretty much everything about what’s happening in the company with every employee.

TrialPay’s CEO, Alex Rampell, is a world-class entrepreneur.  He’s been a software entrepreneur even before graduating from Harvard — and also an advisor, investor and board member at world class software companies.  We’re really excited to be working with Alex and the great team he’s built at TrialPay.

Alex has been a thought leader in online-to-offline commerce – he coined the phrase with this post in 2010  – and the evolving payments space.  We agree that there are massive opportunities for the consumer internet (including mobile and data) to transform offline commerce.  Retail is being revolutionized.  In terms we over-use in the valley, we are heading into retail 2.0.  Most importantly Alex has proven himself to be a world class operator building a substantial business at TrialPay.

TrialPay provides a transactional advertising platform.  This enables merchants to generate offers for consumers during the checkout process, for example, to get a better deal on a purchase they were in process of making.  While a seemingly simple idea, because it is executed well, it has the potential to markedly improve the experience for consumers, advertisers, and both online and offline merchants.  For consumers, they can receive significant discounts (and sometimes even free products) for things they were already going to purchase.  For example, as you are checking out at Fandango, you may receive an offer for a free ticket to the movie you are purchasing if you sign up for Netflix.  For global advertisers, they have the opportunity to acquire customers that have proven intent (going thru a check out process) and significant information about their interests.  For online and traditional retailers, with the addition of Visa to the platform, TrialPay can now help their merchant customers not only track online effectiveness, but can also see if they are driving traffic to stores.  It becomes an opportunity by which everyone wins: the consumer gets advantaged purchasing, the merchant makes a sale, and the advertiser engages a new customer.

TrialPay’s progress points to the power of its model.  Over 150 million online shoppers have been exposed to great offers since its launch in 2008.  Transaction volume increased 7x in 2011 while traffic to the platform increased 4x.  TrialPay’s platform now reaches over 70 million monthly active users.  Online and offline global advertisers believe in the vision, as TrialPay counts facebook, the Gap, Fandango, and Trend Micro among its customers.

TrialPay’s transactional advertising platform boosts revenue and converts more customers for online merchants by placing targeted promotions around transactions.  We anticipate seeing a significant new payment category through transactional advertising.

Congratulations to the team and we look forward to working with them as they pursue their very compelling vision.

Reid

Reid Hoffman

We’re big believers at Greylock in the “online-to-offline commerce” opportunity. Consumers often research online and then actually transact offline. While online commerce is significant at almost $200 billion annually, the offline commerce market is still over 10x larger (ie trillions of dollars). We’ve invested in a number of promising companies who are innovating in different facets of online-to-offline commerce including Groupon, Coupons.com, Shopkick, Wrapp, Swipely, TrialPay, and now CardSpring.

CardSpring’s vision is big and exciting. Their technology is super-charging the payment network, by bringing it into the cloud. For developers, CardSpring built a Payment Network Platform that lets them create a wide variety of new apps for credit cards and debit cards. CardSpring isn’t building apps. They’re connecting into the payment network and creating a smart layer to make app development for credit cards simple and secure.

For consumers, CardSpring’s technology will enable you to add apps to your credit cards, in the same way that you add apps to your iPhone today.  So you can click on an offer that you see in an online ad (15 bucks off your next oil change) to add the offer to your credit card. You can easily add a loyalty card (ie Starbucks), gift card (ie Best Buy) or a coupon (ie Groupon) to your credit card, and then the next time you’re in a store and pay with your credit card, you’ll automatically receive the benefit. You could also opt-in to receive a text message reminder based on your credit card purchase to check in, write a review, or receive a digital receipt.

For online publishers and marketers, CardSpring is a vehicle for closing the redemption loop. So a marketer can tie the performance of an online ad campaign directly to the resulting offline transactions. It’s like Google AdWords for online-to-offline commerce, where performance is measured in actual transactions instead of click-throughs.

Congrats to CardSpring on the launch of your Payment Network Platform! We’re excited to be working with you.

James, Reid, and Ali

James Slavet

Reid Hoffman

Ali Rosenthal

The recent explosion of both social and mobile platforms offer an unprecedented opportunity for new companies to revolutionize huge markets for hundreds of millions of people globally. Wrapp brings these social network and mobile platforms together to transform the gift card industry and the social expression of gift cards.

Wrapp has the potential to transform the consumer experience of gifting.  Now, your Facebook wall can be more than a set of text messages; it can be how your friends collaborate on gifts.  Moreover, since sending a gift is as easy as sending a message, we may see a new form of sharing culture grow on the web. Wrapp makes it not only trivial to know when someone you know receives a gift, but also gives you the ability to let them know you care by adding something yourself.

Wrapp also has the potential to transform dynamics for the retail merchants.  Merchants can use gift cards to attract ideally targeted customers into their shops.  They can leverage social networks to identify and socially reward customers to come shop in the real world.  Customer acquisition is 100% performance based and potentially collaborative with the customer’s friends.  Unlike the daily deal space, there is no overhang of liability for providing specific goods and services to pre-sold customers.

When Reid & I met Hjalmar and Andreas on our recent trip to the UK, we were immediately excited about their passion for reinventing the way that we give gifts to our friends and colleagues. Hjalmar and Andreas are both experienced consumer internet entrepreneurs bringing their online expertise to transform the experience and massive market of gifting.

The early results point to the power of the model.  Wrapp launched in Sweden late last year, and was used to send over 250,000 gift cards in December alone.  After just three months in operation, over 90% of all Swedes are targetable by Wrapp campaigns, one percent are already active with the Wrapp mobile application, and Wrapp users are sending approximately two gift cards per week.

We’re extremely excited to help Wrapp bring their innovations to the US market, where gift cards are an over $100B market annually.  Reid Hoffman will be joining Niklas Zennström on the Wrapp board of directors.

Adam and Reid

Adam Nash is an entrepreneurial executive with a passion for product and deep experience with mobile and social platforms.  He joined Greylock Partners in 2011 as an Executive in Residence, where he advises the leadership teams of the firm’s existing consumer technology companies as well as evaluating new investment opportunities. His complete profile can be found here.

Reid Hoffman is Co-Founder and Chairman at LinkedIn and a partner at Greylock Partners. He is a member of the founding team at PayPal and has been an angel investor and adviser to dozens of organizations including Facebook, Zynga, Flickr and Last.FM. Reid is a board observer at Airbnb and Swipely, an advisor to Groupon and a director at Zynga, Mozilla Corp., Shopkick, and Kiva.org. His complete profile can be found here.

The right people are often the difference between success and failure in building companies. For startups, this is doubly true when it comes to executive hires. While co-founders and other early employees might find each other organically, this is rarely the case for executive talent.

For many entrepreneurs, this is the moment of introduction to the unfamiliar world of executive recruitment. Before joining Greylock to help manage executive talent within our network, I spent 14 years in the executive recruitment business. I hope to share a little of what I learned during my career to help entrepreneurs navigate this world.

In coming months, I’ll dive into some of the details of the recruiting process and share some of my favorite stories. Consider this post the Cliff Notes version of what’s to come, covering some, but definitely not all, of the elements of a successful search process.

1)  Think partnership, not outsourcing.

One of the most common mistakes entrepreneurs make is to think that once they’ve hired a search firm, the hard part is over. Unfortunately, executive recruiting is not something that can be outsourced like you might your payroll functions. Instead, you need to be actively involved and plan for it to take a meaningful amount of your time.

Sadly, as with marriages, not all hires work out. The more time you spend on your search, the more likely it is that yours will be one of the successful ones. In fact, I’ve turned down potential clients if it was clear that they didn’t intend to be an intimate part of the process, but were just looking for me to source great people.

2)  Fast-forward two years.

Before you even talk to a recruiter, you need to clearly define the sort of executive you are looking for. Jump forward a year or two, and articulate what a successful hire ought to have accomplished in that time.  Use this to put together a draft version of a position profile.

Early in your search, take the time to see what “Best in Class” looks like. While everyone thinks they can immediately spot first-rate talent, until you see a few in the flesh, you’re operating in the dark. Whether through your investors or your recruiter, meet with someone who is widely considered among the very best in the field. These early, potentially “ungettable” candidates help you calibrate your ideal profile for the job.  Remember, these individuals are not necessarily the bar.  You have to keep in mind your company’s stage and what you want this person to accomplish over the next few years. You’re trying to mitigate the risk of passing on the right person because you didn’t know what to look for.

3)  Don’t plan for lucky; it takes a while.

The day your A Round funding is announced, you’ll probably be swamped with calls from recruiters who want to help you with hiring immediately. Unfortunately, the very best recruiters are typically already engaged in searches and, on average, take 3-4 weeks to free up for a new search unless you get lucky and catch them at the right time. A talented, busy recruiter will typically be running somewhere between three and five concurrent searches.

Once the recruiter you’ve chosen becomes available, expect the process to take between three and six months. This might seem like a lot of time. But when you consider the years you will spend with your hire, and how harmful a bad fit can be, you’ll understand why it’s almost always time well spent.  It is possible to get lucky and have the search take less time, but don’t plan on it.

4)  Find the right person and process.

Every search firm can show you a fancy list of companies and executives they’ve worked with. But you need to know much more. You’re looking for a recruiter who you feel confident in as a representative of your company and who lays out a search process that you feel comfortable with. Ask yourself whether you will want to spend the hours on the phone with them on update calls, or how you’d feel if you were the candidate and they were selling you on the company and position. Do you feel good about the knowledge they demonstrate of what a successful search looks like, and how they walked you through their process?

5)  Listen for the why and the objections.

During your weekly status meetings with the recruiter, remember that you’re paying your search firm not just to come up with a list of names, but to also have a strongly informed opinion. Which candidates do they think are the strongest and best fit? And, of course, why? This will also help them fine-tune the future candidates they recommend.

Push for an added layer of data as well. Ask which candidates turned them down, and the reasons they said no. Understanding objections and preconceptions is very helpful in how you approach future candidates.  Also, you may learn when a candidate turns down a role for business reasons you feel you can overcome, ask the recruiter to arrange a call for you and the candidate to discuss.

6)  Listen for real references.

Once you’ve got a few candidates who you really like, you’ll want to begin checking references. While this can be a notoriously tricky process, there are tips that can help. A key thing to look for is balance.  You want to ask and look for critical comments about the candidate.  This evidences that the reference is being candid and not acting purely as a cheerleader. You’re looking for as rich a portrait of your candidates as you can get, and you need balanced references to achieve this.

As you can see, executive searches are complex beasts.  Like with everything else, the right preparation, focus and execution can yield terrific results. In future posts, I’ll elaborate on each of these, as well as discussing how to handle the offer process (when and how to give an offer), closing the candidate (much more art than science), and effectively on-boarding the candidate to ensure a smooth transition. Happy recruiting!

Jeff Markowitz is the Talent Partner at Greylock Partners

“If you can measure it, you can manage it” is a business saying that goes way back. Maybe it was Henry Ford who said that, or Peter Drucker? Regardless, most managers only measure outputs, not inputs, which is like telling a Little League team to score more runs, rather than actually explaining how to swing a bat and make contact with the ball. Similarly, most companies measure traffic, revenue or earnings, without considering how to improve the company at an atomic level: how to make a meeting better, or an engineer more productive.

Here are five metrics that great teams should measure:

Metric 1: Flow State Percentage

Jobs that require a lot of brainpower—software programming for instance—also demand deep concentration.  You know that feeling when you’re “in the zone,” cranking on something. That is flow.  Unfortunately, most of us are constantly interrupted during the day with meetings, emails, texts, or colleagues who want to talk about stuff.  These interruptions that move us out of “flow state” increase R&D cycle times and costs dramatically. Studies have shown that each time flow state is disrupted it takes fifteen minutes to get back into flow, if you can get back at all.  And programmers who work in the top quartile of proper (ie uninterrupted) work environments are several times more productive than those who don’t.

Ideally programmers and other knowledge workers can spend 30% – 50% of their day in uninterrupted concentration. Most office environments don’t even come close.  To get started, ask your engineers to track for a few days their personal flow state percentages: how many hours each day are they in flow, divided by the number of total hours they’re at the office.  And then brainstorm ways that the team can move this number up. For example, perhaps there’s a little paper sign at each person’s desk that says “Go Away, I’m Cranking.” Or maybe you have a day where no meetings are allowed. Tom Demarco has written insightfully on the topic of flow.

Metric 2: The Anxiety-Boredom Continuum

Years ago, back when I was younger and cooler, I took a salsa class with my wife-to-be where the instructor said something that really stuck with me. He said that his goal was to keep all of his students in the pocket between boredom and anxiety – but closer to anxiety. In other words, we shouldn’t be so overwhelmed that we break down and give up, but we also shouldn’t be coasting either. He kept the rhythm fast enough so that we were challenged, but not so difficult that we lost the steps completely.  And he kept tuning the difficulty level of the class to stretch but not break us.

This same anxiety-to-boredom continuum also applies to managing people. Star performers can get bored easily, and often function best when they’re expected to rise to great challenges. You want expectations to be high, but not completely overwhelming. With this in mind, check in with your employees periodically about where they are on this continuum, while also keeping an eye out for signs of where they stand. If they have low energy, or are showing up late and leaving early, they may be bored. If they’re responding to small setbacks with anger or frustration, or getting sick a lot, they may be pushing too hard.

Metric 3: Meeting Promoter Score

Most meetings suck. And they’re expensive: a one-hour meeting of six software engineers costs $1,000 at least. People who don’t have the authority to buy paperclips are allowed to call meetings every day that cost far more than that. Nobody tracks whether meetings are useful, or how they could get better. And all you have to do is ask.

In the last minute of a meeting, ask the participants to each rate from 1 to 10 how effective the meeting was, with one suggestion for making the meeting better. It can be on a scrap of paper, or a simple web form.  Verne Harnish has some good ideas about running better meetings.

Metric 4: Compound Weekly Learning Rate

My three year old son just asked me what the word “expert” means.  When I answered, he nodded and asked “so am I an expert about superheroes yet?” The best leaders hold on to this relentless curiosity. Joi Ito wrote recently about “neotony”, the retention of childlike attributes in adulthood. This ability to learn is like the compounding interest on an investment: after two or three years, a relentless learner stands head and shoulders above his peers. Jeff Weiner, the CEO of LinkedIn, referred me to Joi’s posting. Jeff is one of the most relentless learners I know, and this quality is an essential element of his success and the success of his teams. So try asking your team this question: how did you get 1% better this week? Did you learn something valuable from our customers, or make a change to our product that drove better results? As your team gets into a learning rhythm, you can review this as a group. 1% per week adds up.

Metric 5: Positive Feedback Ratio

You can learn as much from John Gottman as you can from John Kennedy about being a great communicator.  Gottman, a psychologist, is the author of “Why Marriages Succeed or Fail”.

In his research, he found that marriages that succeed tend to have five times as many positive interactions as negative ones. And when a couple falls below that ratio, their relationship falls down too.

The same is true at the office, where you’re often connected for years in relationships with people who can either become wary of your criticisms or eager to give you their best effort. Catch people doing good things. Never miss a chance to say something nice, even if you feel a little silly. Then when you have feedback on areas to improve, they‘ll really listen.  It may be hard to manage to the 5:1 ratio at the office, but you should be mindful of the balance.

So, there you have it, 5 metrics that will never show up in the best companies’ financial statements or a Wall Street Journal article, but are the kinds of reasons those companies succeed. Tracking these five metrics isn’t glamorous. But it’s something everyone can do. And it really works.

-James Slavet

  James Slavet is a Partner at Greylock Partners

Like all of us at Greylock, Ali has been an operator. During her five years at Facebook, Ali led business and corporate development efforts in core social, growth, international and mobile products.  As one of the first business development executives at Facebook, Ali was a driving force within the company – especially within its mobile team – early in its game changing trajectory; she joined Facebook in 2006 when there were fewer than 5M active users and no mobile users.

From early on, Ali worked on mobile initiatives at Facebook and in 2008, helped form the original mobile team to formalize and grow Facebook’s mobile presence through key strategic distribution and product partnerships.  Ali and the mobile team developed, launched, and distributed Facebook mobile products with over 350 mobile operators, OEMs and developers worldwide.  During this time, facebook’s mobile user base grew from ~100k users to over 250 million active mobile users.

We firmly believe that all successful consumer companies require both strong social and mobile platforms for distribution and monetization. Ali was a leader in both areas for the preeminent social network of our time. I’m really looking forward to learning from Ali’s expertise in mobile and social. I know our portfolio companies will benefit from it as well.

Maybe even more importantly, Ali has developed lasting relationships and respect based on values we hold near and dear – integrity, drive, teamwork, and leadership.

In addition to her achievements in the business world, Ali is also an accomplished athlete.  For two+ years while at Facebook, Ali raced as a CAT 1 pro cyclist for the TIBCO Women’s Professional Cycling Team. She’s run 4 marathons, her fastest (NYC) was under 3:00. And you might ask her about a 5 to 1 ratio of dishing out stitches to enduring them during her four years on the Brown University women’s lacrosse team.
Welcome Ali!

David Sze

David Sze is a partner at Greylock since 2000. His investments include Facebook, LinkedIn, digg, Revision3, Oodle, Seven, WhoSay, and Pandora.  His complete profile can be found at www.linkedin.com/in/davidsze.