This is a true story of what happened to a friend of mine at a large well-known technology company…

A few years ago, a friend of mine really wanted to work at a particular technology company that he though was producing some really amazing products. He just knew he wanted to work there. (and, for the record, this guy is incredibly talented) He tried to get a job the old fashioned way (sending his resume to HR), but he was getting no luck (this was a few years back when jobs were scarce).

So he used guerilla tactics to further his job quest. He started asking everyone he knew if they knew someone at this particular firm. Soon he had networked with dozens of people from this company.

He also started a blog called “I-Want-to-work-at-CompanyName.com”
The blog became a HUGE hit inside the company. He detailed his quest to work there, his interviews, his process, and more.

Finally, a few months later, he got his dream job at the company. You can imagine how happy he was. He got his dream job at his dream company … and he quickly became one of the most motivated employees there … Working long hours, dedicating himself to the mission of the company, and being a well-known A-player.

He got on a cool project that had a lot of promise. The CEO of the company said this particular project was the most important for the company … And my friend was psyched to be where the action was. The project took a couple of years to complete and was a technical success but did not do as well as expected in the market (it was a modest success). So, after much deliberation, the company decided to kill some of the new developments and fire many of the people from the team.

My friend was on the lay-off list.

You can imagine how distraught he was when the company he poured his soul into just fired him (though at least he got three months severance).

But the story continues … Two weeks later my same friends gets hired back at the same company. Yes, unbelievable. He got hired on a new project in a different part of the company … And he got a big promotion and salary increase.

So after he came back from a paid three-month vacation where he traveled around Asia, he started thinking “why was I laid-off in the first place??” this company somehow turned one of their most dedicated employees into a mercenary — he know longer deeply cares about the company because he realizes the company no longer cares for him.

A case study on how not to treat your employees …

Pics from Founders Brunch IX (FB9) …

Last night the google.de (Germany) domain name expired and it was automatically acquired by an random person. So for a few hours google.de was down and was pointed to a random placeholder web page.

Google managed to fix the problem but was down for many hours. It is comforting to know that even Google (an extremely well-known company) makes mistakes too.

Today Meebo announced it raised its Series B from Draper Fisher Jurvetson. Elaine, Sandy, and Seth deserve a huge round of applause — they have built a very impressive company that has revolutionized messaging.

I’m an angel investor in Meebo and I continued to participate in this latest round because I really believe in the vision and the team. (special thank you to Zaw Thet who introduced me to Seth Sternberg at Meebo in early 2005)

i had lunch with Aaron Emigh today and he reminded me about a fascinating study from the Informatics department at Indiana University (they are doing great work there):

Social Phishing

this is an incredible paper which details a study where they sent a general phishing email to 94 students and 15 of them (or 16%) fell for the attack and entered their login and password in an obviously fake site. 16% is an extremely high number.

but it gets worse.

the research sent the same phishing email to an additional 487 students … but the email had one twist … is was sent from someone they knew (they got the information from mining Facebook). this time 349 people — or a staggering 72% — were victims of the phishing attack.

summation: i highly recommend reading the paper on Social Phishing by Tom Jagatic, Nathaniel Johnson, Markus Jakobsson, and Filippo Menczer … thanks Aaron!

Fabrice Grinda pointed me to a great article in FORTUNE:
Cross-train your brain: The pursuit of excellence need not be single-minded. That serious hobby of yours? It can, believe it or not, make you better in everything you do

essentially — there is a huge advantage to being a mile wide (with a few deep sink-holes too). this gives you the opportunity to spot trends and look for patterns. it might also prolong your life.

Thomas Friedman makes this analogy in foreign policy. while there are a great deal of specialists, the generalists like Friedman who know lots (but is not an expect) about lots of countries (and he also understands technology, trends, economies, politics, environment, financial instruments, and more) can build pathways between random pieces of data that others wouldn’t see. Peter Thiel is a good example of a business person who does that.

Fabrice sums up:

To some extent, this is counter-intuitive – you might expect to perform best by putting 100% of our efforts into a single pursuit. However, recent evidence suggests that is not the case. Your behavior shapes your brain and the benefits of practicing one skill are not limited to that skill alone, they can be transferred, and the more things you know something about the more there is to transfer. As Alvaro Pascual-Leone, professor of neurology at Harvard Medical School says: “If you practice multiple things you actually get better at any one of those things.”

in 2006 in the U.S., total dollars spent on online advertising was about a third of the total dollars spent on marijuana. right now, getting high is outperforming getting rich.

Rapleaf has been really successful in recruiting engineers. And now that we are done with our first round of hiring (and won’t be hiring more until April), I thought I would offer my thoughts on recruiting great people. (and by start-up, I’m talking about companies with under 20 people)

First — never compromise. Never. Always go for the best talent. If you are worried or have a slight doubt, don’t hire them.

Second — where to find great candidates. Read on:

Great people are everywhere. Of the five candidates we hired, two were friends, one we found from Doostang (but was a friend of a friend), one from CrunchBoard (the TechCrunch job board which costs $200 to post), and one from Craigslist. 4 of the five people were engineers and one (from Doostang) was marketing/BD.

Overall, craigslist still was the best job board. We found we had to post multiple times (at $75 a pop) but found it most effective in getting us candidates. You also can get a lot of junk from craigslist. A lot. But it is worth it.

CrunchBoard was great too. LinkedIn is a great tool — and while we did not post on LinkedIn, we did use the site to proactively recruit people. And while we did not hire anyone from LinkedIn, we did make one offer and also found many great candidates who were just not cultural fits.

We found a few great candidates by sneaking into Linux World and posting up flyers in the bathrooms and above the urinal stalls. Vivek Sodera, Rapleaf’s enterprising marketing hire, pulled out all the stops to help us recruit engineers.

Our biggest disappointments were the Ruby Jobs board and Om Media job site. Ruby Jobs got us a few unqualified resumes. The Om Media jobs site yielded a total of zero resumes (though we did get one call from a recruiter). I’ll probably try both of these boards again in the future … the Ruby one is very targeted but might be too national. We were one of the first companies to post of Om Media — so that channel’s failure might be a factor of it being too new. We hope for better results next time.

We did not end up hiring from any recruiters. We found most of the recruiters we worked with did not provide great engineers and one of them had not even heard of Ruby. However, there were a few recruiters that were quite good. Dane Santos and Attilio Armeni were particularly good and we will definitely be using them again.

Don’t be afraid to tell it like it is.

One thing we did well is we had realistic job descriptions. We stated clearly that we work insane hours right now and that we expect new hires to do the same. We never sugar coated what we do and we got people really excited about the role and the goal rather than the perks.

We had a really tough interview process. For the non-engineer position we looked at over 660 resumes, did written interviews with over 100, did phone screens with over 60, and did in-person interviews with over 40.

For engineers we had an even bigger pool.

We had all candidates do a project where they could show us their creativity, dedication, and intelligence.

(note: since I get a lot of emails from people about recruiting, I’ll try to post more about this in the future).

Niall Kennedy emailed me today and gave me a heads up that my blog on Why big high tech companies are losing the talent war was highlighted on reddit by some guy named gizmo.

first, thank you gizmo. i think i got about 5000 page views on the blog from reddit.

second, there were some secondary effects. because i referred to him in the blog post, Niall got over 200 referrals from me to his blog on 11/30 and almost 250 on 12/1.

third, and most interesting, an interesting discussion about the article ensued on reddit.

Aydin Senkut (of Felicis Ventures), one of the more prolific angel investors in Silicon Valley, just launched a new blog. judging by the first three posts, this is one well worth reading:
http://felicis.typepad.com/blog/

Big companies are losing their “A” players and they’re struggling to attract “B” players. In an industry where everything is about people, large tech companies are in trouble because they are losing the talent war. And keep in mind, an “A” player in an organization can usually produce the same results as three “B” players.

Joining a big company is irrational in today’s market

Why would you want to join a big high tech company (Yahoo, Microsoft, eBay, HP, Oracle, or Cisco) when you can join a cool startup? [Disclosure: Auren is NOT a shareholder in any public high-tech company] At a big company you’re stuck with corporate politics, paralysis decision making, and a lack of getting things done. At a small company you’re having fun, pursuing your dream, and actually getting things done.

Job security is about a wash. While start-ups tend to go under, big companies are always doing lay-offs and good people are often getting fired due to corporate politics and purges. Thinking about cash compensation, if you make $130K at a big company, you’ll likely make $110K at a funded start-up – a significant difference ($11K after taxes), but not astronomical. Also let’s not forget the stock compensation which has no comparison.

In today’s hot startup market, it is essentially irrational to join a big company. That means that big companies are only attracting “B” and “C” players or they are attracting irrational A players. And they are losing all those great “A” players they hired in the dog days of 2002 (most of which now have fully vested stock-options).

Essentially, when the economy is good and massive amount of startup activity is happening, the big companies suffer. Just think about it…when you see the Google $1.65 billion acquisition of YouTube, does that make you want to work more for a Google or for a potential YouTube? I venture to guess that you’ll want to go out there and work for startups like POSTroller and Blip.tv [Disclosure: Auren is an investor in POSTroller and is on the advisory board of Blip.tv and both companies are looking to recruit “A” players right now]

Now there are some rational “A” players that are still going to large companies. In order to recruit rockstar engineers, companies like Google significantly increase the pay and offer too many perks to list. And some people have their own reasons to join these tech companies. Niall Kennedy joined Microsoft last April because he wanted to be at the epicenter of the PC user experience. Like a scientist attracted to a university with great resources, Niall was attracted to Microsoft not to make a personal profit but to build true, long-lasting innovations. Unfortunately Niall left four months later when he realized corporate bureaucracy can stifle innovation.

When people like Niall (who make career calculations based on doing something cool rather than on compensation) are leaving big companies, you know these Microsofts and HPs are in serious trouble. Too bad for them.

In fact, the only rational reason that I can think of to work for one of these large tech companies is if you want to work less (or eat free gourmet food). If you are content with working 35-40 hours a week and are not interested in growing your career at this point in your life, then working for a large company is a good short-term decision.

Rapleaf recently hired five people. None of those people were seriously considering working at large firms (and we actually recruited some of them out of large firms) but all of them were considering other startups. Rapleaf was competing for talent with other startups.

Now I know someone that just joined a company a large tech company is going to get mad at me. That person might well be an A Player because there are always personal factors (like you get to work directly with Vint Cerf). However, large tech companies are, on the whole, getting whipped by start-ups in the battle for talent.

The big macro trend in technology is the big sucking sound coming out of the large tech companies. Whooooosh!

One of the core stages of hiring at Rapleaf is reference checking. Depending on the person we are hiring, we require 10-20 references (and we wouldn’t give an offer to someone without at least talking to 8 references). For some people, this might seem a bit extreme but we think it would be crazy to do otherwise.

Reference checking is important for a few reasons. First, it gives you a general sense of the candidate. What is her personality? How does she act in certain stressful situations? Etc. I like to ask a judgment question. Like what would the candidate do in a certain situation? Why?

Second, it gives you a window on how best to manage the candidate if you do hire her. I like to ask how one could get the most out of a candidate and what work environment they strive under most.

Third, the list of references themselves tell you something about the person. Does she give you her current boss (if so, she’s more likely to leave her current job and she has a very open relationship with her boss)? How far back does she reach for her references? Is there a good mix of references.

Fourth — look for how quickly the references get back to you .. And how quickly they call you back. Presumably the candidate is going to first contact the reference and let them know you will be calling … so this is a good indicator of how organized the candidate is. And it is a great indicator of how passionately people feel about a candidate. (I once did a reference check on a candidate who listed a very well-known CEO as a reference. The CEO called me back with one hour — he obviously really liked the candidate.) And I like to later understand how the candidate prepped the reference.

Fifth is to look for consistency. We were reference checking one candidate and his references all consistently said he was amazing but stubborn. This gave us better insights into the questions we asked him in the final interview.

Sixth — find out how the candidate has changed over time. My personal favorite question is asking how the candidate improved over the time the reference has known him. This usually gives an interesting window into the candidate’s personality.

And seventh — references can often predict a candidate’s future. “Where do you see this person in 5 years?” is a good question.

(and, contrary to popular belief, reference checking is especially important with engineers)