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Ducks in a Row: Acqui-hiring

Tuesday, October 23rd, 2012

http://www.flickr.com/photos/akzo/6834998858/Buying startups and shutting down their business in the name of acquiring talent is a hot trend—and one easily destined to fail.

Talent retention in ‘acqui-hiring’ fails most often for the same reason it has always failed—culture.

And before anyone offers the ‘large company culture vs. startup culture’ argument let me point out that Google and Facebook are large companies, not startups.

Retaining acquired talent isn’t a new problem and I addressed it in 2006 from the other side, i.e., a young company wanting to maintain its culture as it acquired smaller companies.

Realistically speaking, I don’t care how cool the culture and perks at Google and Facebook are, there is no way they or similar companies can provide true startup culture, camaraderie, or environment.

But it is amusing (if you don’t own their stock) to watch them try.

In the same vein, why is it so surprising when long-term employees leave?

The media loves to feature stories about turnover at Google, Facebook, Zynga, Groupon, Amazon, even Microsoft and other startup-no-longer companies, while ignoring the same turnover at Cisco, Intel and. IBM

When will they learn?

Those who get a thrill creating something from nothing and building foundations may start losing interest when the scaffolding for higher stories goes up and become totally disinterested when the walls go in.

High salaries, excessive stock options, even powerful positions may hold them, but retention doesn’t always translate to productivity or cultural harmony.

All I can say is caveat emptor and don’t whine if (when) it doesn’t work.

Flickr image credit: AKZOphoto

Entrepreneurs: Role Model Revenue

Thursday, August 9th, 2012

http://www.flickr.com/photos/daijihirata/3293544324/Last Friday we looked at high profile role models—LinkedIn, Facebook, Zynga and Google.

With the exception of LinkedIn, which developed serious products that sell for serious bucks, they all rely on advertising for revenue generation; even Zynga’s virtual products revenue, which has tanked, is earned from its specialized ads on Facebook.

In March we looked at Angie’s List, also a subscription product.

Monetizing humongous user bases isn’t all that easy.

And it’s getting more difficult.

  • Mobile ads are ignored more than 99% of the time.
  • Privacy laws in other countries are far more onerous than in the US.
  • Much like a slowly awakening Goliath, American’s attitude towards privacy is changing.

I’m no kind of expert, but I think founding a successful company based on ad revenue is going to be a much tougher sell as time goes by.

Even mighty Facebook seems to be following LinkedIn by creating products and even offering gambling outside the US.

Founding a company—wonderful.

Creating something that could change the world—fabulous.

Generating non-ad-based revenue—priceless.

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Flickr image credit: dh

If the Shoe Fits: Role Models

Friday, August 3rd, 2012

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mWho is your role model?

When asked, most Internet entrepreneurs talk about building the next Facebook as opposed to the next LinkedIn.

On the surface that’s not surprising.

Facebook has 900 million active users around the world vs. LinkedIn’s 150 million global users.

Mark Zukerberg is a household name unlike LinkedIn founder Reid Hoffman or current CEO Jeff Weiner.

Based on user time on site Facebook, at 6.4 hours a month, kills LinkedIn user’s 18 minutes per month.

Now, take a closer look.

Users add $1.30 revenue to LinkedIn’s coffers for every on-line hour, whereas Facebook generates a whopping 6.2 CENTS for each online hour.

When LinkedIn users started using it for job hunting LinkedIn jumped on the band wagon and created a product called Recruiter that costs as much as $8,200 a year per seat. (Adobe pays for 70 seats—do the math.)

LinkedIn’s top salespeople make as much as $400,000

I can’t find mention of Facebook salespeople.

Facebook’s share price is $29 (IPO price $38; no first day pop), while LinkedIn is $104 (IPO price $45; doubled first day of trading).

Facebook is desperately trying to monetize its users, but there are no products that have emerged as they did for LinkedIn, so all that is left is user data and user actions.

In an effort to boost its advertising revenue Facebook decided to use the names and photos of anyone who clicked a product’s ‘Like’ button to plug that product—referred to as “Sponsored Stories”—and, as usual, did so without notifying users let alone getting permission.

A class-action suite was filed and Facebook lost.

Until now, Facebook users were unaware when and how they were exploited for advertising, and they may not have realized that a click on something as vague as a like button could be used to enrich Facebook, the company.

Facebook settlement update.

And then there is Zynga, whose executives are being investigated for insider trading after selling off 43 million shares a few months before the stock tanked to $3, down 70% from its IPO price.

Zynga executives, including CEO Mark Pincus, CFO David Wehner, COO John Schappert, and general counsel Reginald Davis, as well as many heavy investors, such as Google, Venture Partners, Union Square Ventures, Reid Hoffman and others, all cashed out part of their stock in April, months before the stock cratered on the disappointing earnings report.

Google, under Larry Page’s leadership, is still making excuses for not fixing the privacy complaints in France (Americans have no privacy rights and so can’t complain.)

The French data protection authorities asked Google on Tuesday to examine private information that cars taking pictures for its Street View service collected, after Google acknowledged that it had retained some of the information despite promising to delete it.

You may want to rethink your role models along with your revenue model.

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Flickr image credit: HikingArtist

Expand Your Mind: Stuff You Should Know

Saturday, January 28th, 2012

Today is a varied bag of stuff you should know—or at least know about.

Our first entry shouldn’t come as a surprise. Trust in business leaders is at an all-time low; it still ranks above trust in government leaders—but not by much.

In today’s multi-tasking, wired, always connected, omg-I-might-miss-something world here’s help on training yourself and others to focus.

“Unmentionables” has a whole new meaning and it can damage or even destroy your organization; once again, the problem and the solution are found in your culture.

Now for the fun stuff.

Millions of people base their buying decisions on peer reviews, AKA, the “wisdom of crowds,” but how wise is it when the “wisdom” is for sale?

Heads up! This is a rant. In today’s world of ‘citizen journalists’ I may wince at the misused words, but given our educational system I’m not surprised. However, when I see them in major online media sites such as Vator.tv I get really annoyed, as I did yesterday at this sentence, “Zynga is not loosing steam when it comes to entering 2012 with a whole new lineup of games for its users to get addicted to.’ I’m not referring to the fact that the sentence ends in a preposition, that’s way too common to cause a reaction. But if Zynga does start ‘loosing steam’ I at least hope the water isn’t too polluted.

This final entry should probably be called something like ‘when disparate things converge’. If you happen to have abundant disposable income and require a hospital stay shop around; you may be surprised at what’s available.

Flickr image credit: pedroelcarvalho

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