Our firm has been lucky enough to have witnessed the evolution of the Canadian technology sector over two decades. We are continually struck at how economic conditions, customer expectations and business models impact not only the types of talent most in demand, but also the most sought after behavioral competencies. SaaS/PaaS companies are now having their turn in the leadership talent pool and in most cases, are finding the pool very shallow. The following points are observations of both our team and the SaaS client executives we regularly work with on how to greatly increase the odds of success when making a strategic hire.
1. Make recruiting a strategic priority to your organization. Realize that recruiting will be one of the key factors, if not THE key factor, to your company’s success. Invest resources, time and the intellectual horsepower of your organization to recruitment. Make recruitment an obsessive part of your culture early on as it’s becomes less natural over time for your team to drop everything in pursuit of a truly company-changing hire.
2. Have a global mindset. Go beyond your network and think global in looking for strategic hires. As SaaS businesses look to scale significantly, it can be challenging to find executives (such as sales leaders) who have scaled SaaS businesses beyond $50m. While there are certainly challenges to relocation, Canada can be a great place to live and a desirable location for many executives, particularly if hiring companies are open to a fixed tenure. A common concern we hear is around the longevity of international hires. We would argue that a strategic hire, who brings unique/new experiences and competencies to your organization, will pay short-term dividends (revenue, margin etc.) along with the long term upside of having built organizational capability. In short, their world-class experience can help build and develop your world-class team.
3. Use your board, investors, and CEO. Your most vested stakeholders also tend to have the most extensive networks. Investors and independent board members and advisors can exponentially expand your reach in the candidate community. Venture Capital and Private Equity firms also have tremendous experience recruiting strategic hires for their portfolio companies. Given how often they assess leadership talent during the course of their investment process, they are often very good at assessing and benchmarking talent — and bringing negotiation skills to the recruitment process.
Quite apart from identifying talent, your CEO can be your best recruiter and best way to land your strategic hire. If you have identified a high value executive, having your CEO make an outreach — even just to have a coffee meeting — can be an effective way to initiate a dialog with a busy executive whom may have otherwise not been responsive.
4. Everyone is in Product. Unlike bricks and mortar, or systems-level product companies, the very essence of a SaaS company is perceived through the product user-experience. Great SaaS companies are not satisfied with delivering a value-proposition. The product must be elegant, unique and continuously improving. This focus means everyone who joins your organization must be product-oriented — regardless of functional focus and expertise. Are the candidates you are attracting profoundly interested and bought-in to your product and compelled to address your customers’ pain? In our experience, candidates that are departmentally rigid and not fascinated by your business plan belong in another industry.
5. Your first 5 strategic hires will be nothing like your next 10 strategic hires. If your company has a strong market opportunity, technology solution and well-connected stakeholders, your early hires will likely already be a combination of connected to, close to, or compelled — by you. Subsequent leadership recruitment will need to be more dedicated, strategic and (unfortunately) expensive as you go further afield, invest in your internal capability or utilize third party firms. In short, reap the return on your entry into the market and prepare for tougher hires ahead.