Tag Archives: bvp

Advice on choosing an exec search firm

Posted on by

Yesterday BVP’s Head of Talent, Miia Laukkarinen, was asked by one of our portfolio company CEOs for some advice on what factors to consider when choosing a search firm. I liked her response and I thought I would share it. I’ve edited it slightly to remove some company-specific information.

Here are some basic things you should consider when hiring a search firm:

  1. Relevant search experience. Ideally someone who has done similar work either functionally or in the industry space.
  2. Off limits. Ask them what companies they would target, and discuss any companies that YOU like in particular. Ask them if any of those companies are off limits to them (former clients/can’t recruit from)
  3. Fees. Ask them for a contract proposal so you see what they are suggesting for fees, guarantees, etc. Try to negotiate the fees so that they are capped (so you know what you will pay in the end); and how they guarantee their work (I recommend negotiating a free redo if the placed candidate doesn’t work out or leaves within one year)
  4. Who is in the search team? Many big firms have associates who run the search behind the scenes. That is not necessarily a problem, but ask to include the associates on all calls so that you can meet them (at least by phone) and ensure they know how to sell your company. They are the first interaction the candidates get so it’s essential you have a strong associate.
  5. Capacity. Ask how many searches the partner is working on now. I wouldn’t hire someone who is working on more than 5 searches unless they are close to a hire on some of them. Ask them how long those searches have been open: if less than 6 weeks, they are on a very time-consuming mode, which leaves less time for you.
  6. You should like and respect the person you are working with!

For back references, you can see if you know/have a connection to any of his former clients (from his search list) and contact them to get their opinion. If you’d like, I can also introduce you to one of our portfolio company CEOs where he did a similar search last year.

Needless to say, Miia has been a great addition to our team. She’s not only been a great resource to our portfolio company CEOs and exec teams and a strong liaison to the executive search community, but she’s also helped to ensure that super-star executives stay within the BVP family of companies. We realized a few years ago that some of the most talented entrepreneurs in our orbit had worked at numerous BVP-backed companies throughout their careers (serial BVPers). Miia helps us to systematize the process of identifying and maintaining these serial BVP entrepreneur relationships.

The thread of monetization

Posted on by

Last week a startup CEO for a consumer software company asked me when I thought he should start to monetize users. Should he keep the app free, grow to 100 million downloads (his goal), and then introduce paid premium features? Alternatively, should he instead start charging for some features today, at the risk of reducing the level of free adoption. Our conversation caused me to realize that a number of our successful consumer companies have introduced what I’ll call the “thread” of monetization early on in the product. For example, Teamviewer made it clear from the beginning that their software was free for personal use by individuals but that companies were going to be expected to purchase a commercial license. In the early days of the company they focused exclusively on driving consumer adoption of their free product rather than the paid commercial version. In fact they didn’t enforce the paid license at all, relying instead on an honor system for payment for many years. But even though they didn’t pursue monetization, their users, employees, and investors all knew that in the long term the company was going to make money by selling commercial licenses. I think that setting this expectation early on probably helped them to reach 100m downloads faster than they otherwise would have. Users take comfort in knowing that a company has a viable business model, and especially in knowing that the business model is not about selling their usage data or monetizing in other sneaky ways. Introducing the thread of monetization early on seems like it has the potential to build greater trust with users and reduce friction of adoption.