S2 E2: Daniel Hoffer, Managing Director at AutoTech Ventures

James Mackey  0:00  

Hello, and welcome to Scale by Design! Today we're joined by Dan Hoffer. Dan, what's up, man? Welcome to the show!

 

Daniel Hoffer  0:06  

Thank you, James. Great to be here!

 

James Mackey  0:08  

Yeah, I'm excited. We're talking about a topic today that's dear to my heart, something that I'm constantly talking about. I'm pumped to get into that but before we jump into it, could you share with our audience your background and what you're up to?

 

Daniel Hoffer  0:23  

Yeah, so I'm in Silicon Valley now, I'm one of three managing directors at Autotech Ventures. Personally, I grew up in Boston and traveled around the world a bit. I have a background as an operator. I worked at some big companies and also started a travel website called CouchSurfing when I was younger. As a former entrepreneur myself, having raised money, I know what it's like to be in the shoes of a founder and to deal with the challenges and the joys of growing a fast-growing startup. 

 

Then I came over to the dark side about 7 years ago and became VC. It was driven by my love of working with founders and helping advise them and sharing some of the lessons that I learned as founder and CEO of CouchSurfing. It's just a lot of fun to work with a growing company. Right now I'm at Autotech Ventures in Menlo Park, California, and we are a sector-focused fund, with about 500 million under management across three funds. I'm one of three Managing Directors there and we focus on all aspects of the ground transportation ecosystem, ranging from deep tech deals like autonomous driving and semiconductors and AI to business model innovations and marketplaces FinTech and SaaS. 

 

I also love marketplaces personally, I started a conference on marketplaces creatively named the Marketplace Conference. I've invested all over the world, my partners say that I'm the adventurous crazy dude, I lead our first investment in Africa into an Egyptian company which subsequently went public on NASDAQ. But most of my investments are closer to home in the US and in Europe as well.

 

James Mackey  2:22  

Yeah, that's really cool. And I was looking at your website looks like you guys invested in Lyft.

 

Daniel Hoffer  2:27  

Yes. My partner, Quinn joined the advisory board of Lyft in 2007 when it was a pre-seed company. Lyft was actually created in his living room. We have a long history of working with Lyft.

 

James Mackey  2:44  

That's really cool! It’s definitely a name that I think everyone's heard of at this point so just wanted to reference that. And so to everybody out there, when Dan and I connected, I think earlier in the week, or last week, we were thinking about different topics, things that could inform VC platform service strategy, as well as for founder/CEOs and how they can think about scaling their orgs. 

 

We determined that discussing hiring strategy would probably be one of the most impactful things that VCs and tech executives and executives alike can look at and take away from this conversation to have significant value and actionable insights that they can implement. I think I would love to just start at maybe a high level. Dan, if you want to start with your high-level strategy, or maybe you want to start with the top mistakes you see companies make. How do you want to start this off?

 

Daniel Hoffer  3:43  

Well, first of all, I just want to note that it's interesting as a VC because VCs come in different shapes and sizes and flavors, and have different styles and so on. If you have a background in investment banking, your world is spreadsheets, and you're really good at it. And all the financial modeling and the scenario analysis and sensitivity and all the strategic thinking, and that's great. But it gives you zero perspective on how to counsel a founder/CEO and how to grow their company from a talent and staffing perspective. 

 

All you can say is well, either you hit your target revenue or margin number or you didn't. Then you know, VCs just kind of yell at the CEO if they didn't make the numbers which frankly, most of them don't most of the time. The nuances of actually growing a startup and knowing how to think about talent and organizational planning are important and something that really helps to be working with operators around the table.

 

James Mackey  4:45  

I really just don't think it's possible unless it's an experienced VC that has really gotten in the weeds with several portfolio companies. Maybe they can pull it off because they've been heavily enough involved in the hiring cycle but quite honestly, if you haven't been in the trenches and actually scaled a company at a minimum, a VC firm needs to hire a Head of Talent that has. If you're in the tech sector, you need to find a Head of Talent that is in startup growth-stage tech, and ideally has worked for one, if not several hyper-growth companies, VC-backed and work with somebody that's actually built talent strategy, not somebody who's just a director that basically does hands-on recruiting. 

 

Somebody who's actually built scalable talent acquisition solutions, and is thinking in terms of scalable channels of hire, and thinking about efficiency and what's going to work and what's not. You really need that in order to guide strategy for your portfolio companies. Opposed to what you're saying, if you're just coming from a background in spreadsheets and doing analysis, that's obviously incredibly valuable. But from a talent strategy perspective, you need somebody who has that hands-on experience, right?

 

Daniel Hoffer  6:02  

And people are so messy, the kinds of things you deal with as a manager of people, it's really impossible to predict. You deal with all sorts of crazy scenarios and people crying, politics and jockeying, and all kinds of things that tend to push you, or at least in my experience, they do.

 

James Mackey  6:27  

Yeah, no, it's a total mess that I think, just to jump into it, for me, it's easiest to think about it in terms of mistakes. My company has partnered with over 150 hyper-growth, VC-backed tech SaaS companies over the past 7 years to help them recruit. So we've noticed a couple of things. There are a few huge mistakes that we see across the board. 

 

One is - if a company is founded by a founder/CEO or co-founders that come from big tech. Let's say that they come from Netflix, and now they're coming into the startup world to recruit talent to scale their teams, one of the biggest mistakes we see those early-stage founders make is thinking that recruiting for their seed or series A company is going to be similar to what it was like to recruit engineers at Netflix. When I say that out loud, it seems obvious that it isn't the same. 

 

But again, we see a lot of founders, CEOs that are not serial entrepreneurs or haven't been in a startup before, and at least an executive position where they're hiring, make that mistake, and they don't understand it's gonna be a lot messier. The ability to attract talent, the burden of proof, the burden of proving the stability or roadmap, or whatever else is on the company, you don't have a brand standing behind you. Is that an issue that you've encountered with early-stage companies? Do you have to do this level setting, expectation setting on really what's going to have to go into hiring?

 

Daniel Hoffer  8:09  

Yeah, I think level setting, there's a lot that goes into the concept of level setting. Let's step back a bit, you asked for one of the mistakes that I see. And one of the mistakes that I see most commonly is around titling. I find that first-time founders are often very eager to give away C-level titles. What happens is, if you're a 5-10-person seed stage company, you want to recruit someone shiny from Google let's say, and so you find an engineer, and you make him Chief Technology Officer. In fact, the Chief Technology Officer is a very different sort of role as an individual contributor engineer. 

 

The other problem is as your company scales, then you now have a CTO in place and so imagine, if you wanted to hire that person's manager from Google. Instead of the engineer, you want to hire the engineering manager, but now you've given away your CTO title and you can't hire above it. You're forced to either fire your CTO, which of course you don't want to do; demote your CTO, which you can do but is going to risk demotivating that person, and then also, depending on the company culture, may send a signal to other folks and inside the team so basically, you kind of backed yourself into a corner early on, from an org chart and titling perspective and that's one of the most common mistakes that I see people make.

 

James Mackey  9:55  

Yeah, honestly I've made that mistake starting my own company. Yeah, I know, it's funny, you're a talent company as well. I think the issue there, the trap that founders fall into when it comes to that too is it's like they see it as a hack. Like - it's okay, we're having a really hard time recruiting talent, as a seed company with less than 500k ARR. How are we going to attract really great people? Maybe if we had the backing of a very well-known VC, that's gonna help, they can refer somebody to us. 

 

Even in that same scenario, it can be very difficult to get somebody to leave a more established company with product market fit even if it is a startup exec, so I think it's just they see it as - Okay, this person is in a manager role, let's give them a VP title. And that kind of stuff happens because they're having trouble. But again, it's as you said, it really can screw up the future. 

 

And quite honestly, the skill set is different, as you mentioned. If you need a VP that's guiding strategy and is going to be building out the framework to achieve the next level of scale, if somebody in a manager role doesn't know how to do that, they're still essentially following marching orders. Or as you mentioned, like an engineer, they're not necessarily the people guiding strategy and building out the playbooks in the process to make it repeatable and scalable and it's just totally a different skill set. 

 

Daniel Hoffer  11:19  

Right. And if you step back a bit just philosophically, there are multiple ways you can pay people. You can pay people in cash, you can pay people in stock or upside, or whatever form it is, you can pay people in the title. And that's where this comes into play. You can pay people in the quality of life, or perks like working remote, free lunches at the office, annual off-sites to the Bahamas, whatever it is. Compensation can take many forms and when you're a seed-stage startup, you don't have that many levers to pull. 

 

One other is the reputation of the company, that's another form of payment. And so when you're a seed stage company, nobody's ever heard of you, and you can't pay in terms of the pedigree of the company. It's not like working for this company will automatically open doors later in your career in the same way that working at Goldman Sachs would or McKinsey or whatever. You can't pay a lot of cash, because you don't have a lot of cash. Potentially, you can pay in equity and upside, you don't really want to work, you don't want to pay in work-life balance, because you want them to be busting their ass. Probably not a lot of perks either. 

 

And so ultimately, what it comes down to is you can pay in stock, and you can pay in title so much. That's why people tend to pay in title so much. And it's totally understandable. I mean, it makes sense, you're doing the best you can with what you got. But it does create some risks down the road.

 

James Mackey  13:08  

Yeah. And I think too, maybe that's one of the contributing factors to hyper-growth companies letting go of leadership every couple of years if they are scaling. Obviously, one of the primary reasons for somebody maybe parting ways with a VP of Sales, for instance, is if that VP specializes in a certain phase of growth and then they're looking for somebody that's later stage, I can certainly understand that philosophy. There are also exceptions, right? People that can scale if they're smart enough to adapt, proactive enough to seek advisors, and to prove that they can handle the next phase of growth. 

 

I think that's one reason and I think too, you're constantly trying to level up the skill set on your team, and it's how do you attract that talent? I do think that sometimes founders, particularly from a technical background, maybe that aren't used to selling have trouble articulating the vision of the future that they believe in. And I think that the better founder/CEOs are at articulating - Hey, this is the future we believe in, this is why we as a founding team are well positioned to thrive in this future, and here is the path forward to make that happen. I think the better that that mission can be articulated the more likely they are going to be able to bring on those executives.

 

Daniel Hoffer  14:33  

Yeah, yeah. If you're the next Steve Jobs and you have a reality distortion field that just makes everybody want to join you then that's fantastic. Of course, there's only one Steve Jobs but that's definitely the kind of salesmanship one has to adopt in these situations.

 

James Mackey  14:52  

Yeah, for sure. And just to keep it moving here on other big mistakes that I see and this at a slightly further stage of scale. Let's say you've built that initial kind of executive team and now those executives are hiring for their own teams. I think one critical thing that is often missed by founding teams, one of the things they're not evaluating with their hiring executives or even directors or managers is they're not looking at those peoples' experience hiring. When you hire a VP or director or manager at an early stage, you need to make sure that they have experience actually building the team from the ground up. 

 

It's not about just guiding strategy, playbooks, repeatability, scalability, in some cases unit economics, all of which are incredibly important. But what's really interesting is when a lot of people talk about professional development and progression into leadership roles, often talent isn't even really mentioned. It's just the technical skill set of whatever the function is, but not getting deep into - Hey, how are we going to attract and hire the best individuals for the team? What I always say is - you could have the best recruiter in the world, whether agency side or in-house. But if you have a hiring team that doesn't know anything about how to hire top talent, you're gonna get crappy results. That's just how it is. That's a huge problem I see with the growth stage, they haven't hired leaders that actually know how to hire.

 

Daniel Hoffer  16:28  

Yeah, and this is the challenge because when you hire a senior executive from a big company, then they know how to hire but they may struggle to operate in the small 5-10 person team environment. So how do you bridge this gap and practice? What's the actionable feedback for founders dealing with some of these dynamics, in my opinion, there are two pieces that I think are most valuable. First of all, I like Head of - roles. Because Head of roles enable you to potentially hire above people, gives you a little more wiggle room, around the final title. 

 

Then also, I encourage people to be upfront with prospective hires, that titles and the org chart generally may be fluid and may evolve in somewhat unpredictable ways. Because I think people get upset at bait-and-switch dynamics, they get hired into one role and then get told that the rug is being pulled out from under them in some fundamental way. It fundamentally changes their calculus, and that leads to resentment and demotivation. 

 

But if you start from the beginning, building a culture of - we're all on this rocket ship together, the ride is gonna be bumpy along the way. But here's what you can expect and just be upfront and say - Look, we're going to change, the company is going to change. One thing that will not change is your stock options. You are firmly aligned with the long-term success of the business. And you may even get a salary boost along the way as we get more financing and as you get more experienced, but other things can change. If you set those expectations up front and build a culture around that, and have some Head of - roles, I think the whole thing can be navigated a little bit more easily.

 

James Mackey  18:33  

Yeah, I think so. I think part of it is that you're just running so fast, you don't even stop to think but you're right, just having that conversation upfront, is so critically important. And I think too, it's setting the expectation and hopefully hiring folks that they are focused on the overall, they understand it's a team sport. And they also are people that are eager to learn. So if you have the head of, I agree with the head of philosophy, by the way, that's one thing that I've recommended in the past, too. I think it's hiring people that understand - Look, it's a team sport, we want to scale the company. 

 

At the end of the day, I want my equity to be worth as much as it can be worth, and if that means bringing in somebody with the right skill set to scale us to the next level, great. You want to sell I think to people too - Look, you want your equity to be worth as much as possible. And 2, in the long run for your career bringing in that true C-level or that experienced VP is going to be a resource for you to learn from so you don't hit a wall in your career and I think.

 

Daniel Hoffer  19:40  

Yeah, if you do it right they will learn from that person. And they will even be on board with reporting to that person because of it, they'll see that.

 

James Mackey  19:50  

The other thing that's kind of messed up about giving people too senior titles is that if you give somebody a VP title that they're not ready for and then they ultimately don't succeed, you have to let them go due to performance. Then they're looking for another job and they're not qualified for any VP jobs, you know what I mean? It's like people are eager to take titles, even if they're not ready for them. I think that's on the candidate's side too. 

If you're listening in and you're a manager level, don't necessarily just jump at the chance of being a VP if you're not ready and you haven't developed the skill set. Because it can give you that temporary lift, but then you have a high turnover, I mean, even if you have the right experience, VP turnover is incredibly high. In the startup world, I know a lot of incredible VPs of revenue, sales, marketing, whatever it might be, that have several stints on their resume of nine months. So if you don't have the experience, it's not likely that it's going to go very well, at the startup stage.

 

Daniel Hoffer  20:53  

You know, one of the questions that VCs ask sometimes,  at least in internal conversations but this applies to CEOs, and this could also apply really to anybody. Do you want to be rich? Or do you want to be king? And frankly, there's really only one right answer here, which is to be rich because that aligns everybody's interests the best. If you're trying to be the boss or at least in terms of the org chart or the title then that's often misaligned with the company's interests over time.

 

James Mackey  21:28  

I agree. And we see this mistake play out in so many different ways, not only on an individual level but on a department basis, whether it's hiring or anything else, it takes different functions working together. At the end of the day, a VP of Talent Acquisition maybe is able to influence but can't control what a VP of Engineering is doing. That's one of the other pieces of advice I give to founders and CEOs as they start to scale and start to hit that series B phase, is that hiring outcomes have to be baked into performance criteria for function heads. So for a VP of engineering, part of how their performance is measured has to be on their ability to hit hiring plans. 

 

That has to be a team sport because if that's all falling on talent acquisition, talent acquisition could be, let's give them the benefit of the doubt, which there a lot of times they're not doing things the right way. But let's say that they are, they're not able to control if a VP of Engineering is missing interviews every week, or isn't willing to be realistic about salary ranges, org development, or role responsibilities. These types of things have to be segmented responsibly company-wide, in order to actually achieve hiring plans. Huge, huge problem I see out there. 

 

Daniel Hoffer  22:44  

Yep, totally agree. 

 

James Mackey  22:46  

Yeah. And I think just getting to the talent side, I see one of the biggest problems growth stage companies hiring heads of talent acquisition, that come from an HR background.

 

Daniel Hoffer  23:03  

Yes. 

 

James Mackey  23:06  

Yes, it's not a performance-based culture. For me, the best talent acquisition orgs are run like revenue orgs. 

 

Daniel Hoffer  23:14  

Yep. 

 

James Mackey  23:16  

So you get people that come from this HR environment and there's just no performance metrics. There's no emphasis on data, they don't understand technology stacks, and they don't understand how to build data and reporting to get insights that actually drive talent strategy. 

 

They're just not technical. I actually believe that a lot of the best talent acquisition leaders come from an agency. They need to have in-house experience, but they need to have been in that role for at least a few years where it's metric driven, it's quota driven because that's how you're going to learn not only the hustle but the data mindset toward optimizing a funnel.

 

Daniel Hoffer  23:54  

Yep, definitely. It's a very different skill set.

 

James Mackey  23:58  

When you're advising portfolio companies, do you guys get into reporting and how they can think about optimizing talent acquisition? Or is it more just high-level - Hey, this is kind of the skill set you should be looking for at this stage. What other kinds of advice are you giving?

 

Daniel Hoffer  24:20  

Yeah, we're an early-stage VC so typically, the companies that we're working with do not have very robust or large talent acquisition departments or even HR departments internally, a lot of them have outsourced HR. Maybe they have one HR person or one in-house recruiter, but a lot of them typically work with external recruiters. And so we will make intros to recruiters that we believe would be a good fit for them but for the most part they're not doing very much in-house.

 

James Mackey  24:56  

Yeah, for sure. I mean, they're still just trying to figure things out obviously. For as long as possible it's good for leaders to keep that overhead down. You don't necessarily want fixed costs and talent acquisition, you need more, I guess, on-demand solutions that you can scale up or down.

 

Daniel Hoffer  25:13  

Yeah. And to your point, the HR function is very different from the recruiting function. The HR function is there, with a lot of fractional HR platforms and service providers out there. Many of them are bundled with fractional CFO and accounting and controller resources so we see a lot of companies work with that kind of ecosystem of offerings. Then recruiting is a separate category.

 

James Mackey  25:39  

For sure. For the HR side, do you have any platforms that you recommend? Do you have any that you typically go to?

 

Daniel Hoffer  25:50  

A lot of our companies use Trinet. There are other CFO companies that offer out here in the Bay area, there's Berkland there's Cruz, I believe all those offer some HR support in addition to finance support.

 

James Mackey  26:13  

Yeah, for sure. My company SecureVision uses Justworks which is a PEO similar to Trinet. I try to remember why we picked Justworks I think we felt it was a little bit more flexible and SMB-focused, for us at least. The main driver behind us doing that was compliance and running payroll in so many different states. We have employees in 15 different states and we couldn't keep up with everything like there's no way for us to understand compliance. 

 

I mean, it's the whole thing, and then different requirements everything from like PTO, compliance is so different. So we just decided enough, we need to be focused on growth, delivery, consistency, figuring out how to scale in a responsible way focused on unit economics and process and whatnot, and make sure we get that right. We can't focus on these personnel issues. The only personnel issues we want to focus on are acquisition and retention. And besides that, it shouldn't be something we're thinking about right now. 

 

Daniel Hoffer  27:25  

Yeah. And every now and then you get the corner case of harassment or bullying or something like that. Those are legal issues so you need to make sure that that's being handled properly or else you're at risk of a lawsuit. It's helpful to have the on-call resource, but you don't need someone full-time for that.

 

James Mackey  27:45  

Oh, for sure. Honestly, I've been in business for 7 years, we basically changed our business model 2 years ago. We used to be a contingent firm, fee-based recruiting and we moved to an embedded recruiting model, which I feel is superior and much better for a lot of reasons. But anyways, two years ago, we started scaling it since then, and obviously, more personnel issues arose. We did have a situation in which there was a potential lawsuit. 

 

We didn't have a PEO in place, we probably did not have all the right things in terms of making sure that if we let somebody go due to performance, we're totally covered. What ended up happening is, as founder/CEO, I get pulled into all this crap dealing with that for a month, working with a bunch of attorneys and all my focus goes there as opposed to going to growth. That's the other risk, obviously, a lawsuit can be devastating. 

 

Daniel Hoffer  28:44  

And maybe you have to testify to your board, why you didn't achieve your milestones for that?

 

James Mackey  28:47  

Exactly. It just screws you because it takes away your focus from the growth and then you have to deal with this stuff. The two things I learned from that experience are 1 - get the PEO. Make sure you're compliant, put the right kind of performance improvement plans in place, the right written correspondence throughout a period of at least a month or two, and give people reasonable times. Then making sure that the separation agreements are exactly what they need to be. 

 

Then also, what I learned is, as early as possible as the CEO, try to get somebody in to operate the business. Somebody who can manage the day-to-day so that you can focus on growth and solving new problems. I don't think that CEOs, founders/CEOs should be doing the consistent nuts and bolts of business operations you want that COO type or the co-founder, or whoever else. Somebody's running the day-to-day and somebody's focused on growth, expansion strategy, talking with customers, that type of thing. That was another lesson learned because if you don't have that person operating the business, then you get dragged down into all the personnel stuff that isn't good actually helped the company grow. 

 

Daniel Hoffer  30:00  

Absolutely, absolutely. 

 

James Mackey  30:00  

Yeah. I actually remember, do you know the company Sendoso?

 

Daniel Hoffer  30:07  

No

 

James Mackey  30:07  

It's a SaaS company, they do gifting as part of your sales funnel if you want to send something.

 

Daniel Hoffer  30:15  

I focus on ground transportation, so little out of touch with gifting haha.

 

James Mackey  30:19  

Yeah. Anyways I think, Chris, the Founder/CEO scaled to 800 people, they're insanely successful. I think one of the things he said is that within his first 10 employees, he hired somebody to operate the business so he could focus on growth. Two of the most successful services companies that have recurring revenue services similar to my own, I guess, different industries but some of our business model in a sense. They both hired operators within their first 10 employees, so some of the most successful hyper-growth companies that I know have taken that path.

 

Daniel Hoffer  30:52  

Yeah. People like that. That's great.

 

James Mackey  30:56  

Yeah, right. That's because back to, how do you actually find and attract those people? And now that I'm thinking about it, all of those leaders were pretty damn good at sales. Very persuasive, very charismatic, likable people.

 

Daniel Hoffer  31:13  

It helps you know, it's funny because I think studies have been done for publicly traded companies that charisma and salesmanship for a public company CEO are not necessarily correlated with stock price performance. But I think at the early stage when you're a startup and just getting off the ground it does help. That's been my experience.

 

James Mackey  31:36  

I think so because I think the engineering leaders typically do have a harder time recruiting and getting that initial leadership team in place, particularly revenue leaders. They're not, they're not speaking the same language. 

 

Daniel Hoffer  31:54  

Yeah, I think engineering leaders can be great at recruiting engineers, and business leaders can be great at recruiting business people. So really, the question is, can you achieve that crossover dynamic, and attract a different profile than yourself? That's where the magic happens. That's where the real strength is.

 

James Mackey  32:12  

Maybe we can get into that a little bit deeper. If you are working with a founder or co-founders that come from an engineering background, what advice do you have for them on how to hire their first VP of sales or marketing? How do you help them figure out who's going to be the right candidate?

 

Daniel Hoffer  32:29  

Yeah, well as an investor, I'm always happy to help interview candidates, and typically, I have a board seat. A good senior business leader will often want to speak with investors or board members. But even if they don't, a technical CEO should feel comfortable asking their investors for help interviewing or closing candidates, whether business candidates or otherwise, it's a reasonable request and something that I'm always happy to do. I would encourage if you do have VC backing, or non-VC, investor backing, and maybe an advisor or board member, someone you can lean on to help, you can discuss with them some of the hiring strategies for those business roles, potentially pull them into the interviews. 

 

Maybe not the first interview, but subsequent interviews or you don't have to be present, you can have them talk offline without you. But ultimately everybody is aligned, your investors are aligned with you in believing in the future of the business, or else they wouldn't have invested so they should be good salespeople on your behalf. Then you can work with them to chart out the best profile for sure.

 

James Mackey  33:54  

For sure. When you're interviewing these sales leaders, what's your interview strategy? I'm sure it depends to some extent, like how the portfolio company has already run the interview so you maybe fill in the gaps. But are there specific things that you look for to evaluate if a revenue leader can actually be the real deal, or if they're just really good at selling themselves?

 

Daniel Hoffer  34:20  

As a VC, I invest in fewer than 1% of the companies that come across my desk and so if I'm investing in a company, that means that I really believe in them. I turned down 99 companies, actually more than 99 it's actually more than 99%. I turned out over 99 companies just to invest in you. If that's the case, then I'm more than happy to go to bat for you and try to get other people as excited as I am about the future of a potential company. 

 

Often it's kind of a sales job on my side and the goal is not just to sell but more to share what got me excited about the opportunity if I can explain to them what got me excited, then they'll probably get excited too. That's how I think about it, expand the potential and the vision, both the CEO's vision and my own vision as an investor. That's, that's an important part of the process.

 

James Mackey  35:28  

I love it. And that's kind of full circle, right? Because at the beginning of the conversation, talking about how the ability to articulate the vision is so incredibly important to recruiting a leadership team. I think that's probably maybe a core takeaway, and again the way that I look at is - Okay, what is the future of the industry? What is the future that the company believes in? Really being able to articulate that point, this is what's going to happen over the next 2-3-5-10 years in our industry, here's the data to back that up. This is our background and what we believe in in terms of providing a solution for that future. This is why this team, this leadership team, the founders, and potentially the investors backing us are well-positioned to thrive in that future. 

 

This is why we're gonna win. I think it sounds simple in a sense because we're not pouring through spreadsheets, or we're not building out a robust process or tech stack in order to make this happen. I think maybe because it's not as technical sometimes people don't understand how really important it is. But I think it's, again, for that initial leadership team, they really have to believe in the future, and those stock options ultimately are not worth anything if they don't believe that the company is actually going to scale and achieve a massive amount of success. 

 

The reality is, it's self-fulfilling to some extent, but not always, however if you can get the best team in place, your product is going to be more likely to be successful. If you had that type of proprietary tech, and obviously, that's going to help you be successful and coordinate the market in some cases, but again the quality of your executive team is going to help you ensure that you can actually deliver on the idea of the product that you're building.

 

Daniel Hoffer  37:34  

Yeah, I think you also need people in the company who all collectively believe in the future of the company. In any company, you need to manage morale and motivation, and belief in the future. In startups especially so because it's so bumpy. For the CEO especially, every day can be a roller coaster, with huge successes and huge failures all within hours of each other. Part of their job is to shield the rest of the company from that degree of volatility because a lot of people can't stomach it but even so they're gonna feel it anyway. Being a CEO is a lonely job because you're always the source of strength to others, but you do need to convey that sense of confidence and optimism, to the best of your ability no matter what.

 

James Mackey  38:35  

For sure. I think that's another great point of why you need somebody operating the business, if you could have that person doing the day-to-day so that when you're dealing with all this crazy shit about trying to close your next big client, or you just churn a client or there's a big performance concern, or something's going on, and your product roadmap or release dates and things are getting all over the place, somebody else is managing the culture, thinking about professional development and career mapping and retention and this type of stuff. 

 

Because you're right, it can be incredible, there can be a lot of volatility and you need to have the headspace to deal with that. You don't want it to impact all the people around you, hopefully, the only one who wants to hear it is the COO or the co-founder. One thing I have noticed too about incredibly successful companies is that there is definitely a culture of drinking the Kool-Aid. 

 

I see that all the time. It's kind of over the top and it seems at least a little bit like BS a lot of the times - We're changing the world or this or that it's like yeah, it's a scheduling app, like okay, what are we talking about here? But at the same time, I think it's important if you can create that type of energy around what you're building. It's definitely essential, people do better work when they're inspired and they're excited to go to work.

 

Daniel Hoffer  40:02  

Yes, totally. For the early days of salesforce.com, you can think about getting excited about working for a new lightweight CRM tool or eliminating all software accounts. It's like vision is good, frankly, grandiose, and also inspiring on the other hand. 

 

James Mackey  40:25  

Yeah, for sure. Well, this is this has been a really insightful conversation. I've enjoyed chatting with you, talking shop. I think there are a lot of takeaways that people can take from this and help to guide their talent strategies, and how they advise their portfolio. And hopefully for startup executives as well as in terms of how they think about hiring their executive team, producing a scalable talent strategy. So I just wanted to say, Dan, thank you! Thank you so much for joining us today.

 

Daniel Hoffer  40:57  

Awesome. Well, these are fun topics and also important ones so thanks for giving me a chance to chat about them. Best best of luck to all the founders out there who are working their butts off to build the next amazing thing.

 

James Mackey  41:11  

Yeah, let's do it. It sounds good. Dan, if people want to connect with you, or Autotech Ventures, what's the best way to engage with you guys?

 

Daniel Hoffer  41:21  

Yes, you can find me on LinkedIn - Daniel Hoffer. Also, the website for Autotech Ventures is autotechvc.com.

 

James Mackey  41:30  

Okay, good stuff. Well, thank you, Dan! And for everybody else tuning in - Thanks for joining us and we'll see you next time. Take care!