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phonejoy.com martin@phonejoy.com @kesslerhk
1
Phonejoy Intro &
Lessons for Hiring & Advisers
July 28, 2014
Founder Institu...
phonejoy.com martin@phonejoy.com @kesslerhk
2
Pearl River Delta
phonejoy.com martin@phonejoy.com @kesslerhk
3
phonejoy.com martin@phonejoy.com @kesslerhk
4
Market Discovery.
phonejoy.com martin@phonejoy.com @kesslerhk
5
Thumbs
Block Screen
Lack of Accuracy
No Tactile Feedback
”
Uncomfortable Hol...
phonejoy.com martin@phonejoy.com @kesslerhk
6
Challenge Accepted!
phonejoy.com martin@phonejoy.com @kesslerhk
7
Making.
phonejoy.com martin@phonejoy.com @kesslerhk
8
Testing the Market Fit.
phonejoy.com martin@phonejoy.com @kesslerhk
9
1
phonejoy.com martin@phonejoy.com @kesslerhk
10
2
PATENTED INVENTION
phonejoy.com martin@phonejoy.com @kesslerhk
11
3
phonejoy.com martin@phonejoy.com @kesslerhk
12
4
Perfect Hold
Unmatched
Precision
Handsfree View
Fast Action
Complete Phys...
phonejoy.com martin@phonejoy.com @kesslerhk
>1,200 SUPPORTERS - US$75,000+ RAISED
13
US$850,000 FUNDING
phonejoy.com martin@phonejoy.com @kesslerhk
I am pretty impressed with this device.
I have a lot of high hopes for this.

...
phonejoy.com martin@phonejoy.com @kesslerhk
15
phonejoy.com martin@phonejoy.com @kesslerhk
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phonejoy.com martin@phonejoy.com @kesslerhk
17
phonejoy.com martin@phonejoy.com @kesslerhk
18
phonejoy.com martin@phonejoy.com @kesslerhk
19
Challenges
Finding Advice
Budgeting /
Cashflow
Product-Market
Fit
Investor R...
phonejoy.com martin@phonejoy.com @kesslerhk
20
Founder Team
Dreamteam
Hustler
Hacker Hipster
phonejoy.com martin@phonejoy.com @kesslerhk
21
Startup Hiring Done Right
phonejoy.com martin@phonejoy.com @kesslerhk
22
Advisors
phonejoy.com martin@phonejoy.com @kesslerhk
23
Adviser Roles by Steve Blank
“The Startup Manual”
phonejoy.com martin@phonejoy.com @kesslerhk
24
Thank you!
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Founder Institute Phonejoy Mentor Presentation on Hiring, Founders and Advisers

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This is my deck from a mentor session at the Funder Institute's Hong Kong chapter from July 28, 2014.

Since my slides are not very descriptive let me elaborate my talking points in this SlideShare's description.

Overview
Slide 2-18: About Phonejoy

Slide 2-8:
Covers the early concept stage (2011), market discovery, the problem, to creation of MVP with friend, colleague and later co-founder Alexander Moroz (Phonejoy Analog, Slide 8, in 2011/2012) to Full Product of the Phonejoy controller in 2013/2014.

Slide 9-12: Product overview
Expandable, patented Bluetooth game controller for smartphones
with its own app on iOS and Android.

Slide 13
Raised successfully some money on Kickstarter and through Angels.

Slide 14
A lot of press coverage.

Slide 15-16
Full production by late 2013, early 2014 with retail presence in stores like HMV (Hong Kong/Singapore) as well as Amazon (US), Newegg (US), eBay, and many more.

Slide 17
Honored by Hong Kong Internet Society as Startup Of The Year 2014. Got to present product to C.Y. Leung.

Slide 18
Lot of internal and external problems. Led to me resigning from company day-to-day business as unable to manage the company in its state.

Slide 19
Wordcloud of some of the challenges we were facing, and why today's topic of hiring and finding co-founders, key employees and advisers matters to every tech startup.

Slide 20
Ideal Founding Team

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Slide 21
Hiring and Retaining Your Employees

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Slide 22
Finding Advisors

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Slide 23
Categorising Advisors and Advice

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  • **Slide 22/23: Advisors**

    Usually those, who cannot contribute full-time to your project, but could still be of help.
    Get them ASAP. We waited too long, and made mistakes in product development but also in management processes that could have been avoided.

    * “Advice is one person’s experience generalised,” one entrepreneur once told me. It can be a terrible thing if it becomes your shortcut to thinking. Understand the processes behind their framework of thinking.

    * Investor = Advisors?
    Always apply a discount to investor advice. They often have their own agenda. They want bigger outcomes and large ideas. Phonejoy’s investors were often too much in their own reality distortion field and didn’t understand our customers. You need to be ready to say No to them. I often did the mistake myself trying to please the ideas of our investors. If you can try to get independent board members, we didn’t and it was bad not having an outsider audit our strategy more often.

    * Don’t get one or two trick ponies on your board and hand them shares, who have nothing to add but on one particular issue.

    * Listen to customers, users, and the market. Advisors, mentors, and investors are not the market for your product. Get your product out into the market and get feedback from real users and customers who you will serve as you grow your business. If they like what you are doing and investors do not, do more of what you are doing. The investors will come around when you are scaling into your market. You are the domain expert on your business. You have spent way more time and energy thinking about your business than someone who takes a 30 minute meeting with you. Mentors/Advisors often have never thought about your idea or product, and then gives you a ton of advice that you are doing everything wrong. Therefore, you have to learn to hear that feedback but not react to it.

    * Establishing a relationship even with an expert is often a two-way street of learning. Out of every meeting I take with another entrepreneur I often learn at least one or two things. Do not cold-email someone and ask them for coffee, without mentioning of what you are doing and why it should matter to that person. Be persistent. Maybe read their blog and tweets, and comment when you can (without looking like a fan boy of course!).

    * Categorise your advice that you get from meetings. I create excel sheets for myself where I categorise the advice I’m getting from meetings. If there is a recurring theme, then I need to pay more attention to it.
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  • Continuation for Slide 21: Employees

    **Install the Right Processes**

    * Introduce a 1on1 feedback mechanism and monthly employee review session. Have progress meetings (some do them daily, some do them weekly, maybe use a service like weekdone.com or idonesthis.com if you have remote members). I didn't have those until it was too late. Many team members may not be comfortable issuing concerns in an open office environment. At the same time without explaining to your hires where they can improve then how can they grow in your company? It takes time, and that's why I didn't do it in the beginning, because I thought I was too busy to deal with my own tasks than spending the time to have these conversations. But in the end they will make your team members more productive and save you tons of time.

    * Have employee welcome lunches & leaving parties. Do company outings. They increase team cohesion and often provide for different channels to learn about ongoing company issues.
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  • **Slide 21 Hiring Employees**

    ***Finding Employees***
    Cast a wide net: As a startup unless you are Twitter or Facebook You cannot expect to post a job offering and have the top applicants come and knock at your door. You must go out and find the talent!

    Channels:
    * Networking (and YOUR team’s own network!)
    * LinkedIn (groups, own scouting with keywords),
    * Hackernews Hiring,
    * Startup Boards: AngelList, JobsDB, startbase.hk, 88gong, Startups Asia Jobs,
    * Your Competition (worth scooping up talent from another startup when they exit)
    * Interns: University Job Boards, jijis.org.hk, Overseas Universities' Job Boards,
    Intern Companies, I've tried it twice, and once it worked for us and once it didn't. Generally speaking I wouldn't recommend it, since you will often get only interns that are looking to brush up their resume.
    * Contractors: Freelance, eLance, PPH, oDesk or online collaborators on GitHub, Dribble, Behance and StackOverflow can also become viable options. For us we had been working with a US based contractor for awhile before deciding that he would join us in Hong Kong. It was a good way to measure his talent upfront.

    Interns: Don't get too many. They are usually quite fresh behind their ears and require a lot of baby sitting. They can become an effective resource after some time, as they are often highly motivated and willing to learn. But you will need someone to take care of them. And usually you should only have one intern per one employee responsible max.

    * Have a Hiring Road Map that you have budgeted for. This will help you understand whether it is the right time to hire someone and whether you can afford. Discount all projected revenue however as it will be unpredictable in the beginning.

    * Don’t hire for scale, hire for your CURRENT needs. We hired a sales manager assuming we would have product for sale in 3 months time. Out of those 3 months became 6 months, and created an extra drain on our cashflow. Also don't hire a senior exec believing that he will help you when your company is at that stage. An early stage startup is not a big sized corporation done small. That executive will often be highly specialised and unable to deal with the multitude of tasks that an early employee in a startup requires.

    * As CEO YOU need to do the hiring. You don't need to be involved too much in the early lead generation process but you need to sit in the interviews and ask the hard questions. One bad hire may hurt up your company culture and will result in lost time and money.

    * You need to know what you want in order to get it. A wrong or poorly worded job description/profile will give you the wrong applicants--- or worse hires!

    * Ideally also have a hiring page on your website that explains your company culture, so that prospects have an idea whether your company is the right fit.

    * Hire for strengths
 (by Ben Horowitz, Hard Things about Hard Things). Everyone has weaknesses but often it is the strength that matters most. An coder applicant may not be the most talkative and presentable, but that often doesn't matter for what you need him most.

    * You want employees who take initiatives, if you spend more time explaining and hand-holding them, than they accomplishing meaningful tasks then you need to let go of them.

    * Call up references, to get a feel about the person.

    * Better to hire slow and setup the right processes and filters for the hiring. Filter resumes > Re-filter with team members (narrow down to 10) -> 10~15min Min Phone interview > Narrow down to 3-5 > Ideally in-office interview with CEO & Co-Founder/Manager who will be responsible for hire > Casual coffee/lunch/dinner with team. This will pay off as it will save you a lot of trouble later. For interns you may not want to go through as many steps and shorten the process.

    * As for outsourcing, it tends to look cheap but often becomes more expensive. I recommend it for non-critical tasks such as marketing activities, VAs, minor engineering tasks that are mostly laborious and can be supervised by your engineering team member. Anything core I do not recommend. You will have to manage it. They often work different time zones. Vendors are generally harder to manage than employees. Code often less scalable later on.
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  • Continuation from description:

    **Slide 20 Ideal Founding Team**

    * Hacker, Hipster, Hustler is usually the bester founder team according to David McClure, 500 Startups

    * This is more difficult to achieve for hardware startups because of different skill sets needed (mechanical engineering, electronic engineering, industrial design, embedded firmware design, software engineers for apps and database backend, marketing, sales, logistics and supply chain management, and of course business & finance). Of course you don't need to immediately have somebody in your team who can do everything. But I think your chances of success increase ten-fold if you can develop the core product with your founder team. Phonejoy had a serious discrepancy here, and we weren't able to complete engineer the product on our own. It took us a lot of outside contracting work for the first app and MVP.

    Outsourcing can be done, but you will likely end up paying more, since you have to pay market rates unless you decided to work with Eastern European or Indian contractors (which bring their own set of management and quality problems with them). Also, a lot of the problems won't be properly communicated by the contracting party since the person is 'just doing their job'. When you do hire later a full-time employee, that person will struggle as the code or product design may have been done in a rudimentary way that has been easy for the contractor to get the job done, but is hard for anyone trying to build and scale that production code or engineering design.

    So why the 3H (Hacker, Hipster, Hustler)?
    The Hacker makes sure the technology and solution works
    Hipster ensures the product serves the user with a great UI/UX
    Hustler keeps a check on the business’ finances, growth, vision and strategy execution.

    We were strong on the Hustler side, but only had rudimentary skillsets in Hipster and Hacker competencies. This made the work on the product development a lot more difficult than it would have been. Post-funding we filled those gaps with employees. However by not making them co-founders and giving them substantial equity, their attitude and responsibility taking was never at the same level as that of Alex and myself. At the same time you have to pay higher salaries, shortening your cashflow runaway.

    Apart from skill set you need to make sure that you can truly work together as a team. A founder team is like a marriage with the startup being your baby. There will be conflicts especially if you follow my advice on getting a diverse team together. However, there needs to be trust and loyalty. I have had it before that one of the founder would back mouth one another behind their back and it was truly disrupting the atmosphere and direction of the startup.

    This doesn’t mean that you should necessarily start a venture with your friends. I’ve seen and heard of friendships being ruined because of business. However, you need to prepare yourself for the fact that you will be spending more time with your founders than with almost anyone else.

    Be prepared that things may not work out. Ideally you agree to a 3-4 years vesting schedule (with a 1 year cliff), so that in case there is founders breakup early on the startup doesn't have to hit the grass.

    Best to find your founders through your network/work/friends. You should definitely get to know them intensively beforehand, ideally even work with them beforehand, before going to bed with them.
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Founder Institute Phonejoy Mentor Presentation on Hiring, Founders and Advisers

  1. 1. phonejoy.com martin@phonejoy.com @kesslerhk 1 Phonejoy Intro & Lessons for Hiring & Advisers July 28, 2014 Founder Institute Hong Kong Martin Kessler, Founder of Phonejoy
  2. 2. phonejoy.com martin@phonejoy.com @kesslerhk 2 Pearl River Delta
  3. 3. phonejoy.com martin@phonejoy.com @kesslerhk 3
  4. 4. phonejoy.com martin@phonejoy.com @kesslerhk 4 Market Discovery.
  5. 5. phonejoy.com martin@phonejoy.com @kesslerhk 5 Thumbs Block Screen Lack of Accuracy No Tactile Feedback ” Uncomfortable Hold 5 TOUCH CONTROLS LIMIT MOBILE GAMING
  6. 6. phonejoy.com martin@phonejoy.com @kesslerhk 6 Challenge Accepted!
  7. 7. phonejoy.com martin@phonejoy.com @kesslerhk 7 Making.
  8. 8. phonejoy.com martin@phonejoy.com @kesslerhk 8 Testing the Market Fit.
  9. 9. phonejoy.com martin@phonejoy.com @kesslerhk 9 1
  10. 10. phonejoy.com martin@phonejoy.com @kesslerhk 10 2 PATENTED INVENTION
  11. 11. phonejoy.com martin@phonejoy.com @kesslerhk 11 3
  12. 12. phonejoy.com martin@phonejoy.com @kesslerhk 12 4 Perfect Hold Unmatched Precision Handsfree View Fast Action Complete Physical Feedback
  13. 13. phonejoy.com martin@phonejoy.com @kesslerhk >1,200 SUPPORTERS - US$75,000+ RAISED 13 US$850,000 FUNDING
  14. 14. phonejoy.com martin@phonejoy.com @kesslerhk I am pretty impressed with this device. I have a lot of high hopes for this. 
 — Adam Najberg. WSJ Editor “ ” Phonejoy offers a slick UI“ ” On my Sony PlayStation Vita, but there just aren’t enough games I’m interested in. And I’d love to do more gaming on my iPhone or Android handsets, but I still long for physical controls despite years of having gotten used to touch. PhoneJoy’s new Play controller is a blend of both those worlds. “ ” — Darrel Etherington, Editor TechCrunch Phonejoy is working on a unique game controller that turns mobile phones into portable game consoles. “ ” 14
  15. 15. phonejoy.com martin@phonejoy.com @kesslerhk 15
  16. 16. phonejoy.com martin@phonejoy.com @kesslerhk 16
  17. 17. phonejoy.com martin@phonejoy.com @kesslerhk 17
  18. 18. phonejoy.com martin@phonejoy.com @kesslerhk 18
  19. 19. phonejoy.com martin@phonejoy.com @kesslerhk 19 Challenges Finding Advice Budgeting / Cashflow Product-Market Fit Investor Relations Fundraising Managing a Consumer Product Supply Chain B2B Sales as a Startup Ideal Founder Team Hiring the Right People Product Development Delays Marketing A Premium Product On A Low Budget
  20. 20. phonejoy.com martin@phonejoy.com @kesslerhk 20 Founder Team Dreamteam Hustler Hacker Hipster
  21. 21. phonejoy.com martin@phonejoy.com @kesslerhk 21 Startup Hiring Done Right
  22. 22. phonejoy.com martin@phonejoy.com @kesslerhk 22 Advisors
  23. 23. phonejoy.com martin@phonejoy.com @kesslerhk 23 Adviser Roles by Steve Blank “The Startup Manual”
  24. 24. phonejoy.com martin@phonejoy.com @kesslerhk 24 Thank you!

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