Don't be insecure - hire above you

I'm not stupid, but I'm not a genius. I never will be. I have strengths, but I have weaknesses. I can't see every issue from all angles. There are many people out there who are much better at many things than I am. All this said, I hopefully am good at some things. One thing that I hope I am good at is seeing talent and seizing it. One of the best lessons I learned when I worked at Bain & Co., Inc., was to always, always, always get the best, smartest people to work for you. I came to Bain first as a Summer Associate between my two years of business school and then rejoined for another two and a half years after graduation. I started as a Consultant and worked my way up to Case Team Leader before I decided to move on to venture capital. In these roles at Bain, I would typically have 1-4 "Associate Consultants" (or "ACs") working under me. I never would have gotten a job as an AC....these were (and still are, I am sure) some of the very best and brightest college graduates coming out of the top schools across the country.

Some of these may be green when it comes to real-world business experience...ok, maybe virtually all of them are green...but they are sharp. They work long hours and they are very smart. But like all things in life, intelligence is a spectrum, especially based on needs ... in this case, the spectrum of AC talent included such variables as the ability to (1) to see the big picture quickly; (2) think out of the box (sometimes way out); (3) gain respect from clients two-to-three times your age; (4) know when to talk and when to be quiet; and(5) work smart--quick, fast, to the point -- without "yield loss" -- more Bain vernacular that I've worked hard (up until this point) to try and have leave my vocabulary.

Working at a place like Bain can be stressful: 80 hours/week; several masters (your two clients, your two Managers, your two Partners), each of which feels they own you. In order to succeed, you need to have the best teams working for you and there can be no ego. If I was worried about looking dumb by having ACs who were smarter than me, then I would not have lasted six months. I realized that the best way to succeed (and to cut those work week hours down to a manageable 60) was to always have the best ACs working for me. I "hired" above me. I gave my team clear marching orders, but let them run. I checked in, but was not overbearing. I gave them public credit for a job well done. And in turn, I had loyalty from those that worked with me and hopefully gained a reputation in the office as a person for which the best would want to work. That's my hope at least.

Why the long digression? I believe that hiring above you is critical to success. If you are threatened by bringing in talent, then you will never succeed. In our business, there is no room for insecure entrepreneurs. Yet, it exists. For example, I've seen the President of a company present management applicants to the board, yet they clearly preferred the lesser-talented of the group. Why? Were they scared of hiring the best because they feared they'd compare poorly? That is a big red flag. And it happens. What does the manager think about how the board will view this choice? The Board knows who the best candidate is -- it's obvious. And the President knows it too, and if they recommend against talent, that's a problem. If there is fear, that is a problem. To operate in insecurity is to operate with your eyes half open. The number one rule of managing is to surround yourself with talent. You can not do everything yourself and to think you can is a big problem. We like entrepreneurs to be aware of what they can do and what they cannot do...and to be candid about it. Every entrepreneur will reach a point at which their role will change. The best way to retain an important role is to bring in talent. I've seen a founder who constantly rolled through management. She'd sing the praises of the new team member, then start to whisper that the person didn't see the whole picture, cut off that person's connection to the Board ("don't talk to them if they call you...communication goes through me") and then did nothing but denigrate the person until they could not take it any more, so they left. And what was the problem? The person was actually good at their job! So much so that the founder thought it made her look bad in comparison. But the only thing that made the founder look bad was sacking the CFO. Well , that founder is now in "founderland" -- off to the side and out of the business. But that is not where she needed to be. She was insecure (which made her somewhat of a tyrant) and felt more comfort with a C-level team (or perhaps no team at all), which led to poor decisions....what did she think was going to happen? It does not need to be this way. There are numerous examples in our portfolio where founders are still highly active -- sometimes as the President, sometimes morphing into a more appropriate role over time (sales, business development).

Some entrepreneurs might read this post and be fearful of working with us -- "another VC out to take my company away from me." I hope that is not the case. The point of writing this is about transparency -- part of the ethos of Clear Venture Partners. When we invest in a company, more than anything, we invest in the management in that business. We see talent, we see ideas, we see opportunity. To get a term sheet from us is a sign that we believe in you. Products and markets change...much faster than people do. A business plan presented to me pre-diligence will not reflect what the company looks like two years from now. It never does and we know that. But we need to believe that the people running the company will have the ability to adapt to the curve balls that will come. And the best way to do that: hire above you and surround yourself with the best. That way we all win.