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Marc Andressen’s latest post on how to hire the best people you’ve ever worked with is long but useful reading for all entrepreneurs. It reminded me to post a hiring process that I recommended to some entrepreneurs recently; I figured I’d paste it from the email as it may be of broader interest:

1. Get resumes prescreened against a profile from a recruiter (or from some referral source you trust like me or friends in the industry or whatever)

2. For resumes you like, do a phone interview of no more than 30 minutes – you’re looking for reasons to say “no” at this point

3. For people that you like on the phone, have one person do an initial interview in person for one hour. Ideal is to aim for end of day, say 4pm or later.If it IS working out, make sure that others are available to meet afterwards if the first interviewer likes them so that you don’t have to bring them back. But If its not working out, be frank about it, and don’t be afraid to cut the interview short rather than wasting your time and theirs. You can just say “thanks, bye” and not waste anyones time.

Make sure that you have a standard set of questions that you ask people interviewing for the same job. I personally prefer “behavioral interviewing”. e.g. focus on behaviors and not just skills. Skills you can test quickly and from resume. But behaviors are things like “Can you tell me about a time when you had to launch a new product – a release 1.0, rather than an upgrade of an existing product”; “We work on short deadlines here – can you tell me about a time when you had a project to do on what you thought was an unrealistically short timeframe”. etc. You frame up a specific behavior that you need and ask them about a time when they faced that same behavior. They often tell you what they WOULD do – make sure you keep them focused on a REAL SITUATION and what they DID do. Then look for behaviors in their answer that would either fit or not fit.

4. If you like ‘em, make an offer almost right away. Its a hot labor market right now, so know what “market comp” is beforehand (we can help with this; so can a contingent recruiting firm”) and the best folks are not on the market for long.

5. Reference check yourself (ie don’t rely on the recruiter), and do it obsessively. Not just the people that they supply you with – look deeper, call people you know at those companies, ask the references for other people that they worked with etc. This is a massive time suck, and you will hate doing it, but it is the single most important thing that you can do.

6. Once you find people you like, sell them hard and from every angle. [Your investors] can help with this, so can partners, other employees etc.

7. Its not likely for top calibre talent that you can bring them on as a contractor first, then transition to full time. Some employees (a small minority) prefer this becasue they are test driving you as much as you’re test driving them, but don’t count on it.

8. If its not working out, don’t let it fester – move quickly to terminate. You’re too small to be able to afford people who are a bad fit and you can’t carry dead weight. And people rarely come around – your first instincts are usually right.

If you forget everything else, make sure you remember #5. Reference check obsessively. People don’t do it anywhere near enough.

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I just spent the last two days at the Internet Retailer conference, and emerged convinced more than ever that we’ve just scratching the tip of the iceberg with ecommerce opportunities. There are still many more $500m+ revenue ecommerce companies to be built, and many of the people building them were at the show.

A lot of attendees were entrepreneurs running businesses doing single to double digit millions in revenues in categories ranging from diapers to skis, from power tools to blinds. While many had built their technology in house, there really isn’t any need to do that anymore. The sheer volume of vendors who can help with everything from the ecommerce platform to the affiliate and search engine marketing, from alternative payment systems to pick, pack and ship, was just remarkable. An entrepreneur willing to do the work to pick a good category and line up vendors could launch a business with very little technological expertise.

To illustrate the depth and range of vendors to whom you can outsource just about anything, two of the more interesting companies I talked to were PAC Worldwide and Arroweye Solutions.

PAC supplies customized and branded mailing/packaging material to ecommerce vendors. For example, they produce the envelopes that your Netflix DVD’s arrive in. Its a great idea for e-tailers focusing on building a brand and an ongoing relationship with their consumers.

Arroweye allows retailers to sell customized giftcards and greeting cards. A customer can not only buy a giftcard for a friend, but can put their own picture on the card, get it inserted into a custom printed greeting card, and get the whole thing mailed, all from inside the browser. Its an incredible boon for the delinquent gifter, and an additional revenue line for retailers.

Excitingly, many of the vendors work on a SaaS/variable cost basis, so an ecommerce merchant can trial with very low risk (both technological and financial) new functionality whether it be customized gift cards, behavioural marketing (NB Lightspeed is an investor in MyBuys), collaborative filtering, or customer reviews. How very “web 2.0″.

Its definitely a good time to be an ecommerce entrepreneur! I’m interested in hearing from merchants who have passed the $10m sales mark, see real sales momentum, and are looking to raise capital to accelerate growth and address large market opportunities, as well as vendors looking to address a common pain point for etailers.

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I’ve posted in the past about the three ways to build an online media company to $50m in revenues. One of the three ways is to focus on a topic with endemic advertisers – because RPMs are higher, you don’t need to be as big to reach the same revenue target.

Friday’s Wall Street Journal had two articles about user generated content websites with endemic advertising potential.

The first was an indepth review of Tripadvisor (subscription required), mostly from a user’s point of view. The key takeaway was that you need to look at the backgrounds of reviewers to know how to weigh how relevant their review will be to you – not exactly breaking news. However, there was an interesting nugget about Tripadvisor‘s financial performance that highlights the power of endemic advertising:

The company’s revenue is still small, at $105 million in 2006, compared with sites like Expedia and Travelocity. However, with profit margins estimated above 50% and a growth rate thought to be over 50% a year, the site offers potential at a time when hotels and airlines are trying to take back online bookings and get consumers to go directly to their sites, says Aaron Kessler, an analyst at Piper Jaffray Companies.

While the WSJ may consider $105m in revenues “still small”, it seems pretty good going to me, especially with 50% profit margins! The company was founded in 2000. Another interesting tidbit in the article is that the company has 173 employees, which underscores the point that even user generated content companies have substantial overhead.

The second article was ‘Design by Committee‘(subscription required) and namechecked HGTV’s Rate My Space and Apartment Therapy as it talked about how users are turning to the web to show off their homes or to ask for advice and feedback about decorating ideas. This is more true of Rate My Space, whereas Apartment Therapy is more of a blog/micro publisher focused on apartment decoration, with occasional posts soliciting user feedback or advice on other users homes. Both sites, while vastly smaller than Tripadvisor, show the potential for endemic advertisers.

Automotive is another category that has similar characteristics, and its no surprise that after leaving TripAdvisor, its co-founder Langley Steinert, founded CarGurus.com

This thesis was part of what drove our excitement about our investment in Flixster, despite the team being second rate. (Just kidding! ;-)). The intersection of highly social media and endemic advertising potential is very powerful. As an aside, and an indicator of how quickly social media apps in areas of user passion can grow, Flixster is now the #1 “recently popular” app on Facebook.

Flixster currently #1 “recently popular” app on Facebook

I’d be interested in hearing from other teams taking a similar approach in the intersection of social media and endemic advertising potential in categories with high advertiser spend.

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I’ve been obsessing over the Facebook platform since it launched last week. As has been extensively covered, its an incredible distribution platform for other companies. The most popular apps in the platform early on were existing companies like iLike

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For those who liked my previous post on how casual immersive worlds are hitting the mainstream in the US, there was a good article in Sunday’s San Francisco Chronicle, found via Ypulse.

My favorite comments was about webkinz

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Allison Randal put up an interesting contrarian post on the O’Reilly Radar blog yesterday where she says:

The trend of moving traditional desktop applications to massively networked, Web 2.0 online applications like Google Docs is well-known. The problem is, a

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As I’ve said in the past, I think that distribution is the most important success factor in the early stages of any new consumer technology. Distribution used to mean getting a carriage deal done with a big portal. These …

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Online video is hot and everyone is scrambling to figure out how to best monetize it. Google just launched their “adsense for video” product, Advertising.com has Instream, and there are a host of startups attacking the problem as

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Simeon Simeonov points to some data from a Comscore survey talking about the effectiveness of advertising in UGC sites vs general media sites by advertising category for the coveted 18-34 year old demographic:

Effectiveness of advertising by category for UGC vs general media sites

It suggests that this demographic is more …

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Well it was a busy week last week, what with WPP agreeing to buy 24/7 and Microsoft agreeing to buy Aquantive. I was on vacation overseas, so didn’t get a chance to post my thoughts on it as it …

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