Today we’re talking to Russell Glass, CEO and co-founder of Bizo, a company that reached $50 million in revenue before it sold to LinkedIn for $175 million. Russell’s got some great insights on what it takes to hire the right people to build a stellar company, and what the process of selling your startup is like.
How & Why Bizo Got its Start
Russell started Bizo six years ago because he was a B2B marketer who saw that the world was changing in terms of how audiences were being targeted.
He liked the concept, but saw that everyone was latching onto the changes for B2C marketing, and he wanted to provide a way for marketers to better target business people.
Russell says they had a great ride and provided a great product. Before they began their discussions with LinkedIn, they had reached over $50 million in revenue and were 150 employees strong.
Time to Sell: The Pros & Cons
Russell said he knew it was time to sell from a number of different factors, and cited two major reasons:
- They’d been working with LinkedIn for a couple of years, and were very impressed with their business, company culture, and the opportunity it provided for Bizo.
- With the value of the sale, they were able to get a great ROI for their shareholders.
Along with those two factors and the timing of the sell, another pro included the ability to accelerate their vision by years by integrating with a platform like LinkedIn.
On the other hand, some of the cons involved the fact that they went from a 150-person, fast-moving company where he got to call all the shots to a 6,000+ person organization where he had to spend a lot of time educating people and where things generally move a lot slower.
Fortunately for them, the culture fit between Bizo and LinkedIn was so great that the pros outweighed the cons and they moved forward with the acquisition.
The Tough Decisions of Selling
One of the toughest decisions for Russell personally was to put his baby (the company he grew from the ground up) into someone else’s hands. He said it was a huge risk and a difficult decision for him to make – he was proud of the fact that Bizo was growing quickly with a very differentiated product in the marketplace.
Another tough decision was to lay some people off.
Bizo had a data component of their business that they had to decide to shut down, so that meant there were a handful of employees who didn’t come over with them when they started working under LinkedIn.
But Russell said that LinkedIn helped them make the layoffs decisions much easier. They wanted to make sure that Bizo was able to properly take care of the people they weren’t taking with them.
How to Handle Layoffs
“My feeling was you do everything you can to make these people whole,” said Russell.
“When you have a great group of people and you have built a culture to be as strong as Bizo has,” he continued, “part of the commitment you’re making to these people is that you’re going to take care of them at every turn. They’re making a bet on you, and to me as an entrepreneur, what I’m promising in return is that I’m always going to do as well as I can for them.”
As a part of the severance packages for the people who were laid off when Bizo merged with LinkedIn, each person got accelerated vesting, and received adequate help to get placed in new opportunities.
In fact, Russell said they took the recruiters at Bizo off from their jobs of actively recruiting new staff and moved them over to helping those who were laid off to find new jobs. Every single person landed a great position where they were more senior than they were before and were earning higher salaries.
What a Company’s Board Thinks About Accelerated Vesting
Since accelerated vesting for employees who haven’t been with the company very long actually means that you dilute the value of other shareholders, it’s typically a thing that most corporate boards wouldn’t look kindly upon.
But Russell said that Bizo was very purposeful in building a board who had very similar values when it came to company culture.
He points out that as an entrepreneur, you have the ability to choose exactly who you do work with and exactly who you don’t work with. It’s something he cites as one of the ultimate advantages of being an entrepreneur.
So since his board shared Bizo’s same values, they were more than okay with accelerated vesting for the world-class employees they’d hired that were getting laid off through no fault of their own.
‘What’s the Most Effective Hiring Question in Your Arsenal?’
Russell says that the resume in and of itself is a little bit broken because it’s all just a bunch of ‘what’ information.
“Why gets to how someone makes decisions,” says Russell, “how they think.”
It’s a question that will tell you more than anything else whether or not a job candidate is a culture fit, how well they execute, and how well they’ll be able to do their job.
And don’t be afraid to ask ‘why?’ about anything – including finding out why they formatted their resume the way they did.
The 2 Things that Bumped Bizo into $50 Million in Revenues
- Focus – Russell said they were very focused on solving very specific problems for B2B marketers. In fact, they made sure they didn’t expand their business or take opportunities down the B2C route so they could grow towards their specific goals more quickly.
- Hiring only the best people – In six years, Bizo interviewed thousands of engineers and only hired 23. Russell says that recruiting and hiring is the most important thing you do, and you need to have a incredible focus on hiring the right people from the beginning
Time Spent on Hiring
Russell is in agreement with the statement that it’s simply a part of the CEO’s job to spend 25% to 33% of their time on hiring.
In fact, in the early days, he says he probably spent 50% of his tim on hiring because he knew he was setting the foundation for the rest of the company’s culture.
But as the company grew and he had an infrastructure around him, it was probably more in the 30% range. Their interviewing process looked like this:
- phone interviews
- 1st round of in-person interviews
- 2nd round of in-person interviews with the executive team
- job offer
In fact, Russell advocates spending so much time on hiring that you even interview people you don’t have an open position for. He says you never know when you’re going to find someone that’s such a good culture fit that making a bet and getting them on board (even without a position open) will be effective for the company.
How to Activate Your Network & Find Better Candidates
Russell says that the best job candidates always come from your personal networks – anyone who comes in off a recommendation of a friend or colleague always has a higher likelihood of success with your company.
When Russell has a particular position he wants to fill, he reaches out to his board members and colleagues and lets them know what’s available. He has coffee and lunch with people, and finds that being invested in an activated network is one of the best ways to find great people and stay informed on what’s going on in the business world around you.
User Acquisition & Keeping things Running in an Economic Crisis
In the early days, when no one had even heard of Bizo, Russell and his team members used their personal networks to get customers who were willing to give them feedback and speak on their behalf as references.
They had a dozen initial clients that made great references, including American Express, Capital One, and Sage.
In the first quarter with their 10-12 clients, they had $300,000 in revenue. But when the market tanked and their clients lost their budgets, Bizo’s revenue tanked as well, to just $30,000 in January 2009.
Fortunately, they’d hired a staff of 15 people with a no-quit attitude who rolled up their sleeves and got down to work.
They could see the leverage they’d had from the $300,000 quarter, and even if some of those key companies weren’t clients anymore, they were still references. By the end of 2009, they’d more than recovered and generated $2.5 million in revenue.
During that tough time when they only made $30,000, they were running on a shoestring budget and were incredibly lucky that they still had a fairly lean team, so they didn’t have huge costs to cover. They had enough cash in the bank to see them through.
A Piece of Advice to His 25-year-old Self
Russell says that when he founded his first startup at age 23, he made every mistake in the book, especially in hiring the wrong people just because there was a need for a certain skill set and not firing fast enough.
“I don’t believe in being quick to make firing decisions unless they’re not a culture fit,” he says. “Maybe equals no. If you have doubts about a person, don’t hire them.”
His Idol and Why
While there’s a lot of successful entrepreneurs in the world, Elon Musk is so transformational from an industry perspective and from a perspective on how the world works and is going to work. And that’s really impressive. He keeps biting off massive challenges and executing them well.
One Productivity Hack
“Keep an empty inbox,” he says.
Though email is an important communication vehicle, it’s also a crutch. He advises people to figure out a methodology that works for them to keep their inbox small so they can become more productive.
His methodology is to respond immediately if something is quick to act on, and if not, delete it immediately or leave it there for later. He keeps things small so he knows exactly what he needs to deal with, and doesn’t let his inbox count grow to the point where he doesn’t know what he hasn’t followed up on yet.
Two Must-Read Books
- Crossing the Chasm by Geoffrey Moore helps you understand how industries grow and are able to be disrupted.
- The Innovator’s Dilemma by Clayton Christensen gives a good understanding of how to create a focused business as an entrepreneur that can disrupt others and disrupt industries.
Russell also just published a book called The Big Data-Driven Business, which is for entrepreneurs who want to understand how to better use data in founding and growing a business.
Resources from this Episode:
- Russell Glass on LinkedIn
- Twitter: @glassruss
- Crossing the Chasm by Geoffrey Moore
- The Innovator’s Dilemma by Clayton Christensen
- The Big Data-Driven Business by Russell Glass
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