Saturday, February 11, 2012

The hiring funnel - how many do you have to interview?

So, I put up a link to the NYT piece on manufacturing the iPhone in China. Let me expand on how this idea effects business development in Southern Illinois.

At my little company, bSquare Corp of Bellevue, WA (NASDAQ - BSQR), we experienced rapid growth. We were founded in 1994, at the end of that year, we had 3 founders and 2 employees. At the end of 1995, we had 11 total people. At the end of 1996, we had 40. At the end of 1997, we had 160 (or so). When I sold out in 1999/2000, we had about 550 employees. I ran hiring from founding, until into 1998. I put ads in the paper, got faxed resumes, phone screened, and interviewed a whole lot of people.

Here are the stats, as I remember them. In 1997, I phone screened around 1000 people, interviewed 250 in person and hired over 100. Now remember, we are taking about computer people, college educated, and looking to work in a startup (or at least to get a job in the computer industry). I think this was fairly typical, 10 phone screens to 1 hire. Notice, that isn't 10 resumes to 1 hire, I screened over 50% of the resumes too.

If you are starting a company in Southern Illinois, that you intend to make a national brand. Can you do it in software? I would have to say no. Sooner or later, you are going to need a team of programmers. Can you find 100 people, who have resumes worth looking hard at, in order to hire 10? I don't think so.

Let me suggest a different business model, that you build something that will allow you to succeed. For example, iPhone/Android apps for the software focused. You only need 1 or 3 programmers. The complexity is easier, so your need for experienced people is smaller. Once you get rolling, it would be easier to ramp it up.

If you read "The Millionaire Mind/Next Door," they seem to claim there are very few high tech millionaires (on a percentage basis). Financial success can easily come from almost any area. The laser focus of Southern Illinois entrepreneurs on high tech is likely self defeating. Historically, rural areas have been in the high value, specialty manufacturing business. You need a few smart people to develop the company and a lot of motivated people to turn the gears. I suspect, this model is still the right one for Southern Illinois.

In the end, we have yet to see anyone build a team of 10 programmers in Carbondale area. Doesn't mean it can't be done, but if you need to have that many programmers to have a chance, wouldn't you be better off in Silicon Valley?

More about my startup ideas and failings to come.

Of course, your comments are welcome.

1 comment:

Jonathan Bean said...

Welcome back, Peter! I was "just surfing" after grading and grading and (you get the picture). Saw your "Funnel of Hiring" and my tired mind translated it the "Tunnel of Oppression" (also scheduled for this month). But I see it was you - I look forward to your startup ideas.

But, boy, does this sound like deja vu all over again. I never did find out what happened with innovation centers and all the rest here in Cdale. So I'll be reading to at least get your hit counts up, 'ol friend. LOL