Zimmerman, Hippeau, Casalena Talk Avoiding Bad Hires at First Growth

11/6/13Follow @jpruth

Values, principles, and attitude can do a lot to shape a company’s image. For tiny startups, though, it can be easy to skip the process of developing a company culture—and that may hurt them later. A panel at Tuesday’s First Growth Venture Network forum discussed the ways companies, big and small, change when culture comes into play.

New York-based accelerator First Growth is Ed Zimmerman’s brainchild. The organization coaches startups through the help of advisors and experts. Yesterday’s panel included Eric Hippeau, managing director with Lerer Ventures; Anthony Casalena, CEO and founder of Squarespace; Hilary Gosher, managing director with venture capital firm Insight Venture Partners in New York; Scott Lynn, founder of Adknowledge; and Scott Knoll, CEO of Integral Ad Science.

Some companies joke about having a “no assholes” policy, but there is logic behind that. If no one takes charge of creating positive core beliefs at a company, what happens if personality conflicts arise? Moreover, if bad actors who do not gel with the team are not dealt with, trouble can multiply.

When he was not busy running the show, Zimmerman spoke with me about the effect culture has on how startups build their teams. He will also be a speaker at the upcoming Xconomy Hardtech Revolution forum on Dec. 9 at AppNexus.

Tuesday’s discussion took on the touchy subject of dealing with hires who sour life at startups. “In numerous situations, the problem was an individual who lost the respect of the team,” Zimmerman said, “an individual who was behaving badly.” Companies want an image of cohesiveness, he said, but that must be balanced with preserving culture.

Removing a bad seed from the team sounds simple on paper—but taking action can be difficult. “It’s one thing to say it on a panel; it’s really hard to oust a high performer,” Zimmerman said, “especially when you have a startup with three people or eight people.”

Retooling the team at that stage can be destabilizing, he said, though there may be few alternatives to cutting ties with a jerk on staff.

During the panel chat, Gosher said it does not matter that someone has great skills if they poison the team. The disruptive presence must be excised. “Toxic relationships sap your strength,” she said.

Working around the problem person, Hippeau said, is rarely the best option. “In most cases you won’t be able to work with that person,” he said. And putting that person in different roles tends to end with letting them go anyway, he said.

Eric Hippeau of Lerer Ventures.

Eric Hippeau of Lerer Ventures.

No one said the dynamics of a team must be perfect, yet the culture a startup projects can certainly influence its prospects. When deciding whether to invest in a startup, Hippeau said his firm likes to observe the chemistry among founders. “Are they interrupting each other?” he asked. “Are they on the same page? Are their goals well-defined? That’s all part of the culture.”

Being able to recognize a problem in the ranks is crucial—even if it is the CEO. “The moment you think the CEO is not working out is the moment that person has to go,” Hippeau said. Sometimes it can take up to a year, though, to convince other investors and co-founders to support the change at the top. Even then, serious damage may have already been done. “If you don’t want to lose the company, you have to act,” he said.

Meanwhile, letting the world see the strengths of a company’s culture, Hippeau said, can attract the right kind of hires. He suggested showcasing positive aspects of the … Next Page »

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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