Hunt for potential, not for experience

Many people make the mistake of just looking at people‘s CV or likedin profile and look for the ones who‘ve done exactly what you need. I like people with experience. They can save you a lot of money because they don‘t need to experiment. But more important than where people have been is where they can go.

Hire for attitude

People who want to join us often bring rare and much sought after technical or marketing experience to the table. But we often failed with people who had the right skill, but the wrong attitude. I‘d rather have someone less experienced who will really find out how something can be done than an expert who tells me why it can‘t be done. At 9flats, we‘re looking for people with that spark in the eye.

Hire the best for all positions

„Hire the best person you can afford“ has been my mantra for a long time. Whenever I deviated and tried to make a shortcut, I invariably failed. Most people understand the concept of getting great people when hiring really „key“ employees like a CTO. But they fall short of the excellence principle in the „non-key“ areas like office management or accounting. The difference a truly great person makes to a simply average person is striking. In all areas.

Ethics

Recently I have met an increasing number of extremely successful people with poor ethics. Some on the investments side, but also some who applied for a job. The minute I spot this, I just switch off. I have lost some great potential this way, but I like to think that I gained in the long run. I won‘t give away all my tests here, but one: someone who offers to bring his coworkers to join us, will be shown the door immediately. This is purely selfish. Anyone who brings their friends to join us with them, will take them to the next shop afterwards.

The weekend test

The most important question I ask myself about every person that works directly with me is the weekend test: Would I like to spend a weekend with her or him. If that thought becomes just too stressful, boring or otherwise unpleasant, I just pass.

Pass on opportunities

I‘ve passed on many great hiring opportunities. And I will never know for sure if I have missed some great people that way. But I do know that with most of the people where it didn‘t work out in the end  there was some hunch in the beginning. Something was not right. Someone was not exactly thrilled by the person. So my most important rule for hiring is: Don’t hire if something feels not right.

By the way, a link to our Entrepreneur Intern Program (unfortunately German only, will be updated)

Open positions with 9flats.com in Berlin or in Hamburg

Many people ask me if I would like to invest in their startup.
Time for some reflections on what to look for in angel investors.

 1. The most important thing you want from angels.

When people talk about angels, they often talk about subjects like
value ad, network, perspective, input and so on.
But in reality, you could get that from mentors as well.
When you pitch angels, of course you tell them how
much you value having them on board,
but in the end, don‘t kid me and don‘t kid yourself:
You want the money to start building your business.
And you don’t want to court them forever, because
your time is better spent in building your business.

So you need money. 

2. The second most important thing.

Every business that I have been involved in has been a roller coaster.
Fantastic ups, threatening downs.
Key people leaving, competitors walking in,
numbers not growing as quickly as you want them to.

You want an Angel to be relaxed.
Someone who has given you their 30k from
their savings account is not relaxed.

The third thing you want

You don’t want much of their time.
Some of the best angels I have are really hard to reach,
will listen only for a limited period of time but help tremendously.
The worst angels are people with time on their hands.
Giving lots of unsolicited suggestions.
At worst: looking for a job in your company.

You want their experience.
You want them to be experienced either as angels or as entrepreneurs.
So they know when not to bother.
More importantly, they should know when and how
to give you the essential messages you would otherwise not listen to.
So they can look at the business with the outside view and give you the two or three hints that you need to go into the right direction.
So they pull some weight with you when they see something coming that you don‘t.
That they do have something to say in the rare cases when you need advice. I have received some great input from the experienced guys.

A word of caution.

Not all angels are angels. Some people are actually sharks.
You will see that in their business terms.

The people who blog or twitter constantly about themselves in the world:
For me, they have not done much. The really good angels I met are often
very restrictive with what they say in public.

The people who boast beforehand about how much they would do for us?
never heard again from them afterwards.

Give back

I like to keep all my angels for the long term:
I have always found that it pays well to keep them informed,
albeit I still don‘t do this enough.

Try not to surprise them; if there is some rough terrain ahead,
I shout early as they are along for the ride.
It is also a good idea to help them make money.

As you may have gathered,
I don‘t consider myself a great angel investor.
In fact I invest very rarely and cautiously.
I do have to earn a living and hence
I‘m not relaxed enough to trust other people with my money.

Der Hamburger Personalberater Dwight Cribb hat schon im  April mal einen sehr guten Blogbeitrag geschrieben. Er schreibt darin, dass er sich dem Burnout näherte, weil er dauernd in eigentlichen Ruhephasen auf Twitter geschielt hatte. Meine Burnout-Phase liegt zwar schon länger hier, die war irgendwann 2007 zwischen der ersten und zweiten Finanzierungsrunde von Qype.

Aber auch mir ist dieses Jahr klar geworden, dass das ständige “Always on” so nicht weiter geht. Das wäre vielleicht nichts besonderes, wenn ich mich nicht auch als einen Derjenigen gesehen hätte, die das Real-Time-Web mit gestalten wollen.

Meine persönlichen Erfahrungen mit der Suchtentwöhnung:

Im Urlaub lief das Jahr wunderbar. Ich habe jeden zweiten Tag das iPad morgens angemacht und ein paar E-Mails beantwortet und ein paar News-Seiten angesehen, ansonsten kein Internet und kein Handy. Zwei Wochen lang. Oh Wunder: Die halbe Stunde morgens war viel effizienter als das dauernde “Ich schau mal kurz rein”.

Blackberry ist  ja das bekannteste Übel. Erst kürzlich hat mir ein Freund gesagt, wie sehr ihn nervt, wenn ich mitten im Gespräch “Nur diese eine Mail” noch beantworte, weil eine Presseanfrage oder ein Investor nicht warten kann. Meine Lösung: Der Blackberry bleibt jetzt bei jedem Gespräch in der Tasche. Da blink nichts und fertig.

Twitter hat ja ganz nett angefangen, als Überbrückung von Wartezeiten in der U-Bahn oder am Flughafen. Aber ehrlich gesagt, nervt mich die Zeit, die ich mit “Noise” gegenüber “Signal” verbringe, nach wie vor. Und der Suchteffekt von Twitter (“Hat jemand geantwortet?”) ist einfach völlig unproduktiv. Meine Lösung: Ich habe die Twitter Apps zwar noch auf dem Blackberry installiert, aber in ein Unterverzeichnis verschoben, und öffne sie nur sehr selten.

Facebook hat mich ja nie so erwischt, es war für mich eher eine Twitter-Extension. Und soo interessant ist es gottseidank nicht, was da läuft. Nett ist für mich anzusehen, wie sich die Avocado-Fan-Seite so entwickelt und was es für Feedback gibt. Aber der Feed meiner Facebook-”Freunde” ist für mich dramatisch weniger spannend, als mich mit meinen wirklichen Freunden zu treffen. Meine Lösung: Facebook gibt es bei mir mobil nicht mehr.

iPad: Hier nerven die roten Status-Meldungen, ich schalte die E-mail Accounts oft ganz ab, wenn ich nur im Web surfen will.

Checkins: Klar, manchmal ist es nett, wenn ich sagen kann: hier bin ich, und meine Buddies sehen das auf Qype, Foursquare und demnächst Facebook. Aber ehrlich gesagt: in letzter Zeit bin ich auch davon nur genervt. Hier gibt es eine ganz einfache Lösung:ich mache es nur noch, wenn ich irgendjemanden in der Nähe treffen will.

Ist das jetzt eine Generationenfrage?

Ich glaube nicht. Philipp Gloeckler, der Gründer von Avocadostore hat im Urlaub auch komplett “abgeschaltet”. Passiert ist nichts. Er verwendet zwei Handys mit einer Karte. Am Wochenende ist nur das einfache alte SonyEricsson an, der Blackberry aus. Philipp ist 26.

Ich habe so was ähnliches auch probiert. Blackberry weg, einfaches Nokia Handy her. Leider bin ich auf meiner ersten Geschäftsreise an der mangelhaften Adressynchronisation und ohne elektronischen Kalender gescheitert. Und leider vermuten immer mehr Gesprächspartner, dass E-mails auch unterwegs gelesen werden, so dass es ohne “mobile E-mail” mittlerweile schwierig wird, Treffen zu organiseren. Da arbeite ich noch dran.

Auf jeden Fall stelle ich fest, dass ich so langsam wieder ruhiger und konzentrierter und somit effizienter werde. Das gilt am Schreibtisch. Und Gespräche werden wieder entspannter. Jetzt heißt es dranbleiben.

There are four excellent companies who dominate how we search, how we shop, how we communicate, and which gadgets we use: Google, Amazon, Apple and Facebook.

The first three of these companies also are among the top 5 of the Fortune Magazine’s 50 most admired companies in 2010 . (Facebook is not in this list and this fact does not so much discredit Facebook as discredit the Fortune list).

But why write about this obvious fact of the Fab Four?

All these companies are product driven. This of course applies to Apple. The product is the hero, not the service around it, or the pricing. At Google, an engineer is much more important than a sales person. Just look at the amazing Zurich facility of Google and compare this to any sales office. If you listen to Mark Zuckerberg of Facebook, he will mostly talk about the product and new features that help Facebooks users to use the site in yet another way. Amazon has lead in meticulous A/B testing of it’s website, to make sure it stays ahead.

The other point I want to talk about is the sheer share of mind of these companies.

“Which startup is hot at the moment?” this question by a friend made me think recently. No offence to my fellow startup entrepreneurs, but it seems to me that at the moment where even a small redesign by Facebook will automatically be more talked about than the most exciting new business idea.

Even the slightest new announcement from Apple, Facebook or Google, – the aptly worded “buzz” as latest example – commands more press interest than a new car model or even the most fantastic new startup. Bloomenergy.com is at least here in Europe virtually unheard of. This share of mind is even more scary than the user numbers, as it makes life harder for new entrants.

The good news: Five years from now, the Fab Four will not be the same companies. Someone will get it wrong, someone else will get it right.

Five years ago, I would have included Ebay in that list, today no more. There is a nice account of how companies historically fail to stay at the top in the Black Swan by Nicholas Taleb. At writing of that book in 2006 , only 74 of the S&P 500 companies of earlier times had survived. But I am willing to bet that even in 5 years from now, at least three out of the four dominating companies will be from the West Coast. Probably the fourth as well, you never know with these Black Swans…

I found over time that many people can not simply tell you what they love best. But when you ask people why they are unhappy in their job, it is rarely because they don’t love what they do, but  more often because they feel they can not do things the way they want, or because the someone as a boss who does not value them and their achievements.

In this context, stumbling upon this very inspirational blog post from Cal Newport, author of a study guide, (thanks, Dave Ambrose for the link) has structured my thinking on career achievement amazingly.

Newport quotes work from Edward Deci who found that

“To be happy, your work must fulfill three universal psychological needs: autonomy,competence, and relatedness.

• Autonomy refers to control over how you fill your time. As Deci puts it, if you have a high degree of autonomy, then “you endorse [your] actions at the highest level of reflection.”
• Competence refers to mastering unambiguously useful things. As the psychologist Robert White opines, in the wonderfully formal speak of the 1950s academic, humans have a “propensity to have an effect on the environment as well as to attain valued outcomes within it.”
• Relatedness refers to a feeling of connection to others. As Deci pithily summarizes: “to love and care, and to be loved and cared for.”

So for students, Newport argues that they should find something the really like and then become excellent at it. This will nearly always enable people to find a work environment where they can achieve a great sense of autonomy, competence and relatedness. Newport:

Your love of a subject will grow with your level of competence and autonomy

This also explains why many CEOs are unhappy in their jobs. Even if they are competent, the often suffer from a lack of autonomy. And if you encounter an entrepreneur who is unhappy, you can check with him whether his level of autonomy is where it should be.

Markus Berger de Leon von Jamba war es, der das Thema Praktikum aufbrachte. Praktikum ist ja spätestens seit der gleichnamigen Generation ein Schimpfwort. Aber Markus hat Recht: Die meisten erfolgreichen Gründer haben zuvor mindestens ein Praktikum im Startup Umfeld absolviert. Denn man kann lange an der Uni über Entrepreneurship lernen, es geht um unternehmerische Praxis. Während ich dankbar bin für die Management-Erfahrung, die ich durch ein paar Jahre im Konzern erworben habe, hätte es mich extrem weiter gebracht, wenn ich früher auch andere Unternehmer kennen gelernt hätte.

Das Angebot: Entrepreneur Internship Program

Wir bauen – wie im letzten Post angerissen – im Moment drei Startups auf. Jedes der Gründerteams (eines gibt es schon) wird schrittweise Personal aufbauen, aber in der ersten Phase geht es immer auch um um Marktforschung, Business Pläne, Geschäftspartner überzeugen, Web Seiten aufbauen, Produkttests, PR. Es wird Wachstum geben, Entscheidungen, Erfolge und Rückschläge. Dazu viel Detailarbeit. Alles, was zum Unternehmerleben dazu gehört. Im Moment können wir Menschen anbieten, in der spannendsten Phase eines Unternehmens dabei zu sein. Als Praktikant.

Standort ist Hamburg – und seit 9flats auch Berlin.

Was muss man als Unternehmer lernen?

Man muss als potentieller Gründer lernen, Risiken einzugehen. Im Wettbewerb zu bestehen, das heißt zu siegen, und das bedeutet auch kämpfen. Die Wachstumsschmerzen von Unternehmen zu erleben, ist was ganz anderes, als darüber zu lesen. Die Spannung zu erleben, ob der Kunde zusagt und die Freude über einen gewonnen Auftrag kann man nicht anders erfahren.  Der potentielle Gründer sollte auch sowas wie Durchhaltevermögen erwerben. Auch das geht besser im Praktikum als beim Lesen einer Biographie von Steve Jobs.

Erfahrungswerte

Wenn ich mich an die vielen Leute erinne, die ich als Praktikanten kennen lernte, gibt es eine auffällige Regel: Diejenigen, die Praktikanten in meiner Konzernzeit waren, gingen später als Angestellte in größere Unternehmen. Auch aus Startup-Praktikanten wurden oft Angestellte im selben Unternehmen. Aber überraschend viele Praktikanten und Mitarbeiter, die ich in den Startups kennen gelernt habe, wurden später irgendwann einmal Unternehmer.

Voraussetzungen:

Wir suchen Praktikanten, die mindestens 6 Monate dabei sein wollen.

Wir suchen Menschen, die was bewegen wollen. Mit Geschäftssinn. Menschen, die entscheiden wollen und können. Offen für Neues, im Team arbeiten, wollen. Sich schnell auf neue Situationen einstellen können.
Durchhaltevermögen haben. Lernen wollen. Begeisterungsfähig sind.

• Studienfächer bevorzugt aus der wirtschaftlichen und technischen Umfeld
• Bachelor Studenten, die maximal noch 1 Jahr bis zum Abschluss haben
• Master-Studenten
• Absolventen, deren Abschluss maximal 2 Jahre zurück liegt

• Hohe Online Affinität
• sehr gute akademische Leistungen
• Unternehmergeist
• hervorragende Englisch-Kenntnisse

Tipps zur Bewerbung bei uns

• Nur bewerben, wenn Ihr die Kriterien oben wirklich erfüllt.
• Nur bewerben, wenn das Praktikum in den nächsten 6 Monaten starten kann.
• Engagement zeigen.
• Nach der Bewerbungsmail erreichbar sein.
• Die Email-Adresse für Bewerbungen ist mein Nachname bei googlemail.

I said that I would only be interested in businesses which make life easier for everyone, make markets more efficient and disrupt the status quo; or help reduce emissions.

So here is the news:

We have identified several business concepts that fit the abovementioned criteria. True to what I said earlier, neither of them will involve dating or gambling. None of the concepts is a clone of something that works somewhere else, so there is considerable risk involved, but also ample opportunity.

For all businesses, we will be looking for entrepreneurs to launch and manage them. They will be able to count on input and advice, and will get enough freedom to run their businesses. And they will get reasonable shares to make them real entrepreneurs. Upspring will provide ideas, know how, infrastructure and seed funding.

So from now on, we will be scouting the market for real founders with

• great business accumen,
• team spirit,
• lot’s of potential
• at least 2, but no more than 5 years of job experience.
• An excellent business education
• and demonstrated entrepreneurial skills.

Locations will be Hamburg and Berlin. Do contact me via xing if you know of someone. If you want to apply, send a CV via Xing.

Quote:

Successful entrepreneurs in the study had a 34 percent chance of succeeding in their next venture-backed firm, compared with 23 percent for those who previously failed and 22 percent for first-timers.

This is not to say that I am about to start a new venture, but it does make me think

What is it that your company does better than anybody else?

In an era with unprecedented low barriers to entry, and where competition is absolutely global, answering this question correctly and then executing on it becomes more important than ever. And it is surprising how easily we are all being drawn away from that.

Take Qype for example: Qype is successful because it only focuses on local reviews. We had to develop a local search for each market, just to make reviewing simple. Qype reviews are easy to find via Google, on your mobile phone. That is what Qype does really well. Whenever we ventured out of this area, for example with local Groups, we found that we just could not focus the same amount of energy into this.

Nearly every great company stands for one thing they do exceptionally well.

• Doodle.ch is a fantastic example of this. It does one thing extremely well and is being used for just this: Agree on something, mostly a convenient time for a meeting.
• Facebook is (and will be) successful in essence, because it will continuosly strive to deliver the best product to connect with your friends. Whatever form this may take. And they have the resources to do so.
• While a BMW is a car like any other, BMW make the experience for people who like driving just better.
• Ryanair is fantastic at lowering their costs for flights. Even to the point that they seem to only buy new planes in an economic downturn.
• Many German Mittelstand companies simply turn out the one product and do that better than everyone else, legions of books have been written about this phenomenon.

You know if a company stands for something if it does one thing really well. And here I find too many startups trying to do too many things at the same time, becoming mediocre in each one.

In the old marketing days, this was called a USP, a unique selling proposition. But today you have to live up to it. And that means focusing all your efforts on this one thing.

I will get bored eventually as I prefer to do things instead of talking about doing things, but for the moment I enjoy the conversation. Most of it, at least. People have been trying to drag me into their ventures and ideas and a surprising number of people, even good friends, have pitched business ideas and concepts that are just not for me.

So, here is what I find interesting:

(1) Businesses that make life easier for everyone
When I started working on  TravelChannel in 1998, I wanted to make it easier to book flights. We build the first engine that could compare flights in two totally different pricing mechanisms – the official IATA tarrifs and the so called grey market in one go, enabling people to find the cheapest flight.
Qype was started from  a similar starting point: If everyone starts telling everyone about their experience in restaurants, butcher shops or dentists, then there will be less bad experiences.

Bigger examples that fit this category. Google, Flickr, Facebook, you name it.

(2) Business that make markets more efficient and disrupt the status quo
The fun being involved in DocMorris, Europe’s largest mail oder pharmacy that delivers prescription drugs and allowes people to save was that it worked against the existing distribution structure with it’s extremely high cost to the public.
Qype also is ideally positioned to challenge existing near-monopolies like the yellow pages in each market to give local businesses more efficient advertising.
Other examples that make markets more efficient: Ebay, of course. But also craigslist, hitflip , nestoria and many others.

(3) Businesses that help us to reduce emissions
Together most other people on this planet, I am convinced that we are in a massive climate crises ,  and that mainly our carbon emissions are at a suicidal level.
I am therefore  – like many other entrepreneurs I know – particularly interested in businesses that help us reduce our carbon emissions. This is where I do most my research at the moment.
So I will try to combine my background – a degree as mechanical engineer -  with my experience in business-to-consumer internet and starting up companies.
Here I am not alone. Look at people like John Doerr, Shai Agassi, the Google guys with google.org – lot’s of inspiring examples.

In summary: Useful, disruptive, saving the environment. These are the discussions I enjoy and the businesses I will get involved in.