We first brainstormed cost challenges that startups face. We named many practical issues, costly either financially or time-wise, including: prototyping, manufacturing, marketing, administering healthcare and payroll, legal costs and intellectual property issues, finding enough people to test products on, finding mentors, office space, and living cost. However, the topics the group was most interested in were less concrete, like attracting and retaining talent and finding the shortest, most efficient path for your business.
The talent cost involves finding, attracting, retaining skilled employees. A favorite concept of the group was that companies should recruit based primarily on values, secondly on abilities, and thirdly on skills.
Recruiting is a problem for large and small companies. Recruiting engineers is particularly difficult because the demand is so high and because engineers who have recently earned degrees may at first seek only CTO positions. Now, the concept that talent would start as an engineer and move eventually move up the ladder is considered less and less.
How can companies attract talent in a competitive market? The group thought a company’s culture plays a large role in both attracting and retaining skilled employees. While small companies cannot offer as secure a job as a large one they have the advantage of innovation, an attractive factor for much younger talent. Large companies like Constant Contact address this issue however, with internal innovation programs. For two days, Constant Contact shuts down the traditional work and get together, somewhat like the unConference, to build something. With uninhibited creativity, they can create a finished result either related or unrelated to Constant Contact’s products. This innovative culture attracts young talent who want a workplace with both innovation and stability. Talent will come and go between less predictable work in startups and more predictable jobs in larger companies, depending on their current life situations, for example balancing family and work.
However, companies should not take the first skilled employee they can find. They must consider how a potential employee fits into the company culture, particularly with start-ups. Start-ups, we discussed, must focus on hiring people they’re comfortable working with—even living with.
We then explored non-traditional ways of finding talent. Co-ops at universities like UMass Lowell and Northeaster require mentorship, but are 'awesome' for both students seeking experience and companies seeking talent. We can even grow our own talent by bringing people up to speed in coding if they don’t have credentials but have the potential and the ability to learn. Programs like LaunchCode and Summer Qamp operate in that way to help draw in new talent. Someone also suggested we tap the over-forty talent; we both can benefit by retraining them for modern technologies. In fact, everyone should learn coding. Then, entrepreneurs can better predict issues and plan out time and costs. That “the dinosaurs are gone, soon the non-engineers will be killed off' elicited a great laugh.
The most important factor in attracting and retaining talent, we agreed, was a value connection, matching their purpose to their company’s. And, the feeling that employees are adding to the company definitely helps keep them there.
We then moved on to discuss how companies can find the most efficient business path, as someone stressed, by going as fast as they can learn, not as fast as they can go. Learning encompasses how fast one can determine that their startup is a failure; someone then raised the question, how do we define failure? Objectively defining failure is challenging but necessary. Using a scientific method, companies can create a list of their falsifyable hypotheses and risky assumptions, then rank them from most to least risky.
Discussing lean company development, we talked about minimum viable products and market research. Starting with what you think is the ultimate product, entrepreneurs in the early stages must think down to simplest thing that people would still pay for. For example, when Zappos began, the founders wondered if people buy shoes without trying them on. To test this, they simply uploaded pictures of shoes at a store and, when people ordered them, they bought the shoes from the store and sent them to the customer. Another example of quick market research from the people in the room was paying people a dollar to discuss with them while waiting at the T or in a line. Such simple market research is a helpful component at a time when too many entrepreneurs are jumping in too soon, asking someone to build their product before refining the concept.