Talent Acquisitions

The NYT published an article yesterday on the wave of startup acquisitions being conducted simply to acquire the talent at the company.  

According to the Times, "companies like Facebook, Google and Zynga are so hungry for the best talent that they are buying start-ups to get their founders and engineers — and then jettisoning their products."

Why this may be a good move:

I know in the case of hotpotato, Facebook had a vision similar to Justin Shaffer's, and they knew that he and his team were the right people to execute on that vision.  HotPotato's product may not have been a perfect fit in its current iteration for the Facebook platform, so they just gave the team the resources and the venue from which to execute on their vision relentlessly.  


Why this might be a disaster:

Each individual at a startup is motivated by different intrinsic rewards of the job - it may be that they enjoy working in tight collaborative teams that iterate quickly.  It may be that they enjoy the problems startups face, and the adventure this represents.   By acquiring startups, companies are assuming that all of these intrinsic motivations will continue to be fulfilled, or at least placated by the money.  The problem is that money doesn't always make up for a reduction in intrinsic motivation for an employee, oftentimes it even has the opposite effect.  (Example: Churn rates for charities/non-profit organizations go up when they decide to pay their volunteers, instead of keeping the work pro-bono.  Once a monetary value is placed on work, people start to evaluate it extrinsically and not intrinsically).

Even for non-talent focused acquisitions, it's important to properly evaluate the motivations for the individuals you're hiring.  I've heard time and again that founders of acquired companies are simply  bidding their time to vest into their options - once those options grant, they're gone.   Properly evaluating the intrinsic motivations of the people you're acquiring may indeed cost Facebook, Zynga, and Google time, but it would ultimately save them a lot of money, both at the time of acquisition, but also in the long term as the team they acquire will stick around longer, and continue to innovate & excute at the same pace. 

Personality Impact on (Start-Up) Team Performance

So we’ve been looking into the “science of rapport” here at Meeteor, and thought we’d share some of our findings.  Everyone knows that personality has to have some form of impact on group effectiveness, but we wanted to dig into it a bit more.   We wanted to know what personality traits mattered, and what impact they had, specifically, on group cohesion and effectiveness.

 As most business school students would know, researchers have concluded that there are five basic personality traits (called the “Big Five”) that are common to *all* humans across cultures.    Those are; Conscientiousness, Agreeableness, Extraversion, Emotional Stability, and Openness to Experience.    

What we were curious about at Meeteor is the degree to which the Big Five can help predict team cohesion and proficiency.  The literature has slightly conflicting results, which we detail below :

Extraversion :   [Conclusion: No Correlation]

Recent findings have concluded that there is no relationship between the average extroversion of a team, and its performance.  Furtheremore, contrary with the notion that highly extroverted members would be complimented by lower extraverted members, the relationship between variability in team extraversion and team performance was also negligible.   

Conscientiousness:  [Conclusion: Positive Correlation]

Studies proved that the elevation of conscientiousness in a team was related to team performance.  Studies also found that variability in conscientiousness was negatives related to team performance, leading us to conclude that the more similar team members are the better their teams performance.  Therefore, it’s best to have a team with a high level of average conscientiousness with little variability between members.

Agreeableness: [Conclusion: Positive Correlation] 

Studies have found that there is a positive correlation between agreeableness and team performance, and that one disagreeable member can indeed disrupt the social harmony of the team.    There’s thus a negative relationship between variability in agreeableness and team performance – the more similar team members are in their agreeableness, the better they will perform. 

Emotional Stability:  [Conclusion: Variability in team may be a factor.  No correlation otherwise.  ]

Overall findings were that there is no relationship between emotional stability and overall team performance.  One study did find that in student teams, specifically, the more similar the group is in emotional stability, the better their performance. 

Openness to Experience:  [Conclusion: No Correlation]

We found no correlation between openness to experience and team performance.    

If you’re networking to build a team, you may want to keep the above personality traits in consideration..... 

Sources : 

Special thanks to Adam Grant  for his help in researching this issue!

Suzanne T. Bell, "Deep Level Composition Variables as Predictors of Team Performance: A Meta-Analysis" (Journal of Applied Psychology, Vol. 92, No3.  2007), pp 595-615.

Miranda Peeters, Harrie Van Tuijl, Christel Rutte, Isabelle Reymen, "Personality and Team Performance: A Meta-Analysis" (European Journal of Personality, May 2006), pp 377-396.

Bruce Barry and Greg Stewart, "Composition, Process and Performance in Self-Managed Groups: The Role of Personality" (Journal of Applied Psychology, vol. 82, No. 1, 1997), pp 62-78.

Murray Barrick, Greg Stewart, Mitchell Neubert, Michael Mount,  "Relating Member Ability and Personality to Work-Team Processes and Team Effectiveness" (Journal of Applied Psychology Vol. 83, No. 3, 1998), pp 377-391.

Breakdown of Ad Revenue Generated / Employee

Found this and thought it was pretty interesting....Craigslist is just so simple, and continues to be so relevant. 

There's something to be said about finding a societal need, and fulfilling it in the most simple (read: less overhead) manner.

Cheers Craigslist!

Mr. Yunnus' Revolution - Microfinance and Its Many Iterations

Mr. Yunnus sure was onto something when he founded the Grameen Bank, the world’s first microfinance institution.  The concept that micro loans could have a significant impact on the well being and growth of a community was truly transformative, and many business models have since sprung from his first initiative.  Although Grameen founded microfinance it was Kiva that digitized the model, bringing peer to peer (P2P) lending to the 21^st century. 

Other business models then built on both Grameen and Kiva’s revolutionary adaptations of microfinance, one of which was peer to peer credit loans.  On such adaptation is Vittana – a peer to peer lending platform focused on providing loans to students in developing countries.   I recently had the chance to have dinner with Mora Mcleon from the Africa America Institute, and she made an astute observation....Microfinance is a fantastic model for providing capital to communities seeking to develop, but in order for those communities to truly rise out of poverty, it is important to increase the level and depth of education.  The Africa America Insitute focuses on doing just that – providing capital to students in Africa seeking a higher education in business. What Vittana has done successfully, is adapted the micro lending model to a part of society that is usually forgotten as we view it as a public good – education.  

I would argue that loans to both micro enterprises AND education is necessary for the alleviation of poverty, and that both models are making great strides to simplifying the way individuals in the developing world can help. 

For those of us who believe that more should be done to tackle problems within our own country before we focus on the developing world, I have good news. LendingClub.com just scored 24.5m last week from Morganthaler, Norwest and Canaan.   This platform seeks to simplify the process through which individuals can loan money to one another, for anything.  We have Mr. Yunnus to thank for this revolution in lending, and I sure hope we carry this momentum forward.  

The Keyboard Is Overrated. There, I Said It.



All this iPad discussion around it being a product focused solely on "consumption" of media has got me thinking....The QWERTY keyboard,  whether it's on an iPad or my laptop, is completely overrated.  I have been typing since the days of Apple IIe (oh Logowriter, how I miss thee) - and I just can't stand keyboards.  Sure, I can type 90 WPM, but that's with some serious focus, and reading pre-written text.   Let's face it, the problem doesn't lie with Apple, but rather with the tools we use to input data - the QWERTY keyboard and mouse were once novel, but their expiration is long overdue. 

Potential Breakthroughs : 

So I did some searching on the web, and unfortunately the days of cybernetics aren't quite here.  We have gotten monkeys to control robotic arms via chips implanted into their brains....which is pretty sweet, but not due for human testing for quite some time...(see more here)    

Conversely, Wash U has completed some interesting research reading brain waves (read: less intrusive), and apparently humans can learn to control video games after a few hours of training.  (see more here)

MIT, inspired from the Minority Report, has come up with a “glove mouse.”  (Didn’t Nintendo come up with that back in the day?  Anyways…)   You can see the glove mouse in action here – I’m not super impressed but it’s getting closer.  WE have to learn to interact with computers, media, and everything we “consume” and “produce” differently, and hopefully these are small steps in the right direction.

Far and away the most impressive technology I have found (if we can call it that), was invented by a company called Swype.   You might have seen their technology on the new Samsung phone commercials – they’ve created a platform where you simply draw a line between letters in a word, and they recognize what word it is that you’re trying to “swype” automatically.   You simply put your finger down on the first letter, and keep drawing a line around the keyboard, going from letter to letter, without lifting your finger until you’re done with the word.  Swype automatically recognizes what word it is that you wanted to type and enters it – apparently it’s pretty easy to get a hang of.   

All of these new technologies are going to have a hard time replacing the keyboard, it’s become part of how everyone learns to interact with the world, even at a young age.  (I was typing on a IIe by the time I was 7….)  The key to any of these new technologies is the adoption of young people – if they make it their defacto method of inputting data, then the world will change accordingly.

Not sure a three year old would be open to brain implants though….we might have to deal with Glove Mouse and Swype for now…

Crowd Sourcing - CrowdFlower.com

, a startup launched by Dolores Labs, just raised a fair amount of money (5mm) through Bessemer and Trinity Ventures.  What I like about CrowdFlower is that they're taking an innovative approach to "Labor as a Service" (LaaS)....instead of trying to source their own group of workers & projects, they've aggregated labor from other LaaS sites (like Amazon Turk).   What I like about this approach is that they've essentially cut out half of the marketing equation for themselves - they can now focus on ensuring that the data provided meets a certain quality, and targeting projects instead.  I always though the effort was a bit large for other LaaS companies - trying to pool together both labor and project demand is expensive and difficult.   
The second impressive component to CrowdFlower is their Quality Assurance and pricing mechanisms.   I strongly believe of all the LaaS services out there, this one has a shot at differentiating itself because it targets one side of the equation, and does it well.

Check them out ! Crowdflower.com 

SimpleGeo Launch Today!

It's no secret that location-based services are hot commodities, but one startup in particular has caught my attention, SimpleGeo.    The service is coming out of Beta tomorrow, and its launch process has just been fascinating to follow.  

What :  SimpleGeo is a location information platform that other businesses can build on top of.  Whether your business needs information on a specific area, or person, they can provide the platform through which to gain access to all of that information.  In essence, they enable you to outsource and cut down on the costs associated with building and integrating location into your platform.

Strategy: They began by targeting the developer community - and they have bout 5,000 partners lined up already!  The strategy seems to have really paid off - they're coming out of beta with a fantastic network of existing users, and probably an amazing amount of feedback as to what is needed by developers, and how to streamline their platform for integration.  

Although the foursquares and gowallas of the world will continue to be interesting, as they're the client facing services (...even though services like Meetro were truly the first onto the scene...), SimpleGeo is unique in that it's a B2B service.

Their pricing also seems to hit the nail on the head - they're letting developers pick and choose what they'll be using, and pay for the services accordingly.  Thus far it seems that it's free for up to a million calls (wow), and then 399 for 2 mm calls, 2499 for 10mm calls, and $9,999 for 30 mm calls.   What's convincing here is that it will probably hook a large amount of startups looking to keep their development costs down, and then scale with them as they grow. 


You can check them out here.


 

Edu-my-cation

Flying back from Palo Alto last week, I sat next to a girl who could not have been a month past 6 years of age.  She started the flight by playing on an iphone - a cartoon type game.  About two hours after we took off, she whipped out a slick 15 inch macbook, and started recording videos of herself for what sounded like her BLOG.  Yes, she was recording a video of herself in her seat, announcing to the world where she was, what she was doing, and how much fun she was having....ie....she was being more productive than I was even at that time.  

So I sat there, reflecting on her fun, while simultaneously thinking of my experiences learning at Wharton.  These reflections, combined with those of a Fast Company article depicting the impact smartphones are likely to have on education has lead me to the following conclusion : 

Educational systems, as we know them, are broken.

1) They're too costly -  The infrastructure in place for education is massive, and an incredible burden to maintain.  I was recently at the Wesleyan board meeting, and what struck me was how massive of a cost maintaining the campus in its current state is!  Universities need massive endowments just to exist, their infrastructure burdens are simply overwhelming.  

2) They don't teach in an efficient manner.  Our marketing class is using a "SABRE" computer based simulation, because studies have demonstrated that "learning by doing" and "teaching others" carry retention rates over 75%, as compared to under 15% for Lectures.....
 

 

With the exception of science labs, it seems that universities have no proper justification of existing.  Lectures & Reading account for the two worst teaching mechanisms when taking retention rates into consideration.

Fast Company has an interesting article describing the impact the technological evolution in smartphones has had and will likely have on education.   Although I agree that app based programs will be provide interesting and innovative ways to engage children in learning, technology alone won't be the solution.

I don’t believe online programs will provide the solution, either.  There is something to be said about engaging with your peers, and learning from them.   Teaching others is the best method of retaining material, for obvious reasons, and it requires the presence of other people seeking to learn the same material.

Philco’s 1.9 Cents :



I’m currently teaching myself Ruby on Rails, and the going is slow but steady.  As I go through the different exercises in the books, I often find myself thinking that I wish I could be reasoning through the different brain teasers with a team of other people looking to learn the same thing.    All of my learning is online based, I follow online tutorials, and even purchased the textbooks in PDF form. 

What’s missing however, is interaction with equivalent peers looking to learn the same material. 

I thus volunteer a hybrid model:

1)   Philco University will have an admissions group that pools together individuals by region, learning interests, and general aptitude.  Philco University then creates “learning teams” of individuals who have scored similarly in their different aptitude tests, looking to learn the same material. 

2) Philco pairs these teams up with available tutors in the area, and provides all of the online material to learn whatever it is that they signaled they wanted to learn.

3)  The tutors will be made available according to each learning team’s schedules (emphasizing flexibility), and up to 3 hours a week.  The teams will then be responsible for turning in individual and group projects, demonstrating their mastery of the material.  This ensures that each individual is learning, and can leverage the interactive benefits of teams and peers at the same time. 

The infrastructure for the courses can be borrowed from existing office spaces in the area, or from other universities.  

The best of all worlds combined.  Something tells me that the 6 year old I sat next to on my plane would love a program like this, where she can tailor her own schedule, learning materials, and be surrounded by like minded and able peers.

Hell, I would.

I leave you with one of my favorite quotes -

Don't let school interfere with your education - Mark Twain

Tata Announces World's Cheapest Water Filter - BoP Strategy

The new buzz word (acronym) I’ve been hearing over and over again is BoP – Base of Pyramid.  According to a World Bank report, there are 1 billion people living on a dollar a day or less. More importantly to the concept, however, there are 3 billion people that live on $5 or less a day.  BoP experts believe that this massive group of people have urgent needs that need to be fulfilled, and they also have some form of income to provide in exchange for the fulfillment of these needs.   I recently had the opportunity to speak with Josh Tetrick, the founder of 33needs.com - and his main argument is that it can be profitable for companies and startups to focus on this segment (the BoP), and is passionately working to convince companies to do so.  You can learn more on his venture at 33needs.com

Seems like the idea is taking hold – Tata launched the world’s cheapest car a few years back, and has now announced the world’s cheapest filter.  894 million people lack access to clean water  - a clear need – and this filter aims to provide families with clean water for 200 days.  The filter is estimated to cost 21 dollars, or approx 10 cents a day for clean water.

Another startup targeting the BoP is D.Light, which sells solar powered lanterns, which also double up as phone chargers.  “One in four people don’t have electricity in the dark” is the lead quote on their website – and if they can create a dependable source of light for cheap enough, this provides a massive market opportunity.

Ultimately I wonder if startups alone will be able to fulfill these needs – there are few if any good distribution systems in third world countries, creating a massive barrier to the selling of these BoP solutions and products.  Nestle  has one of the world’s most expansive and robust product distribution networks in the world – if it were to volunteer its distribution platform to such startups, I think we’d have a winning strategy.  Without the ability to leverage these existing and costly distribution networks, I’m not sure how a startup for profit company could quickly make it to breakeven….

Here's what the filter looks like :

 

FlexVite - Your New Party Planning Tool

Check out flexvite.com - a neat platform designed to maximize attendance to your party.  You select the type of event you're looking to host (party, happy hour get together, going to the movies, coffee, whatever), and then suggest a date/time range that you're thinking of.  You then send the invite to a group of people, and they all vote on the dates and times that work best for them.....once the vote is in, Flexvite automatically notifies everyone on the list what date and time won.    I dig it, I think it's a smart way of getting people together. 

Ideally this platform would sync with a service like Tungle (which I'm also a huge fan of), and automatically tell you what dates worked without having to bug people.  There's a clear need for social calendar syncing, but the problem is that most people don't track their social plans on any one calendar...I wonder if that information will ever make it online.  Maybe Flexvite is the first step towards that, we'll see.