Entrepreneurs are often driven by passion. They love their industry and customers, and they’re excited to offer an incredible product or service. And while passion can take you a long way, there are more practical concerns that come with running a business. One of those considerations is building and managing a team.
With talent being the major differentiating factor between success and failure, leaving your hiring up to chance is not an option.
Kurt Wilkin is an entrepreneur himself, so he recognized the pain (which many entrepreneurs know all too well) that comes with hiring and growing a team. That’s why he co-founded HireBetter, a different kind of recruiting firm.
The HireBetter team does not use the contingency model often seen in the industry, where a recruiter is paid only if they place someone in a role. Contingency recruiting pits recruiters against each other to find someone for their roles, and it waters down a brand in the market for the best talent.
Instead, HireBetter becomes a true strategic partner, working with entrepreneurs every step of the way to find the best talent and the right fit for the role.
The road to building HireBetter was not always smooth. Kurt admits that their professional services approach to consulting faced lots of headwinds in the industry. Many were hesitant to make a lump-sum payment up-front without the guarantee of success in filling a role.
So Kurt and his team considered ways to build credibility in the recruiting space. Kurt leaned on his existing network and began to get work and referrals from those individuals. The HireBetter team also built relationships with executive coaches and other trusted partners in the B2B space. This opened up new doors for HireBetter to connect with executives looking to grow their teams, who trusted their business coach to give them a solid recommendation for a recruiting firm.
Kurt also shared HireBetter’s process for zeroing in on its best customers. At first, they tried to be everything to everyone. They spoke with any company that needed to fill any role. But they quickly discovered the generalist approach was not effective.
Over time, Kurt discovered that the team did best working with entrepreneurial founders of middle-market growth-focused companies. Not only is this where they found the greatest success, but it’s also where Kurt himself is most passionate about working. He loves helping good people find great talent.
In discussion with the studio audience, Kurt shared lots of tips for entrepreneurs looking to hire better (pun intended).
He shared the secrets of conducting better interviews, how to leverage tests and assessments as a piece of the hiring process, and how to evaluate whether or not your team needs a shake-up. Tune in to hear all of his advice.
Rob Ristagno: Many become entrepreneurs or assume leadership roles because they’re passionate about what they do: their industry, their trade. But as we all know, once you become a leader, you must develop the other softer skills like managing people, and those skills are actually what become more important. But many leaders struggle with hiring, firing, and finding folks with the right skillset who are also a good fit culturally. So if you’ve ever faced these challenges, you won’t want to miss this episode.
Announcer: This is the CEO Campfire Chat, with your host, Rob Ristagno. Taped in front of a live studio audience, join us to hear successful growth stories from middle-market companies just like yours. Sponsored by The Sterling Woods Group.
Rob Ristagno: Welcome to the CEO Campfire Chat, recorded live in front of a studio audience of senior executives. I’m your host, Rob Ristagno, and I have the privilege of introducing you to Kurt Wilkin, the CEO of HireBetter. Kurt founded HireBetter in 2011, and prior to that, founded The Controller Group, which he sold to the large CFO consultancy Tatum.
Rob Ristagno: Kurt also runs Bee Cave Capital, which invests in companies committed to offering products that profitably make a significant impact on the world. Kurt, welcome!
Kurt Wilkin: Hey, Rob, thanks so much for having me. I love the Campfire Chat setup and I love what you’re doing.
Rob Ristagno: All right, yeah, we can’t wait to hear what you have to say. Everyone knows that talent and people are the number one thing that leads to success, and we don’t really know what we’re doing, to be perfectly honest, some of the time, so this is going to be really, really valuable. Of course, the name of your company, HireBetter, gives us a good sense; it kind of says it all, to one extent, but give us the story. Tell us about your mission and what HireBetter does exactly.
Kurt Wilkin: Yeah, I’ll tell you a little bit of background. So, my background is not recruiting. My background is professional services, but I’ve worked with so many entrepreneurs, high-growth, middle-market companies, and I realized that talent is the differentiator to success or a lack thereof, and so after we sold The Controller Group, I was looking around for what to do next, and I realized if people are so important to the success of these enterprises, why is it served by, with all due respect to the good recruiters out there, a pretty crappy recruiting industry? So, I felt like there had to be a better way.
Kurt Wilkin: So, we founded HireBetter, and we’re bringing a professional service approach to the industry, and we’re really bringing it to the entrepreneurial companies who desperately need it.
Rob Ristagno: Got you. Tell us about some of the most common mistakes that we make that we don’t even realize that we’re making.
Kurt Wilkin: Oh man, it’s funny. One of the poll questions you asked before was, what do we think we’re good at? Almost everybody in the studio audience said they’re good at interviewing, and I would challenge that for most entrepreneurs because most entrepreneurs are optimists. We like to see the positives in people. We like to sell the vision of what we’re doing.
Kurt Wilkin: If we really think back about most of our interviews, we’re probably selling our company and our vision, and we’re doing less truly screening and interviewing, and so by the end of the discussion, it’s a great interview, but the reality is you probably don’t know that much about the interviewee.
Rob Ristagno: That’s a really good point. We kind of make it a little too much about us because we’re so excited about it, and we want to sell the candidate as well; there’s a war for talent.
Rob Ristagno: What’s the antidote to this? How do we make sure that we’re not being too optimistic?
Kurt Wilkin: Well, I’ll tell you what I do is I surround myself with people who are really good interviewers. I tell them don’t get anybody to me unless you’re a thousand percent sure that they are a great candidate for the role. I’ll do a culture fit, I’ll get a vibe on personality and culture, and I’ll also sell the vision, but don’t put me in a position where I’m actually trying to screen out potential bad candidates.
Rob Ristagno: Got you. What about for the non-entrepreneurs out there? Are there too many Debbie Downers out there? I mean, are there too many people that give you too many false negatives, and what coaching would you have to them?
Kurt Wilkin: I want to make sure I understand the question, but let me tell you what I think I heard. There are a lot of people who post jobs on job boards, whether it’s LinkedIn or Indeed or you name the job board. People that typically apply to ads are desperate. They’re looking for a job. Maybe not desperate, but they’re looking for a job, so it’s not that hard to sell them on your opportunity. You are there truly to screen them and see if they’re a good fit.
Kurt Wilkin: There are others, and my firm is really good about attracting people who aren’t looking for a job, so we have to tell our clients, you need to also sell a little bit about what you’re doing. So, there’s a fine line there between interviewing and screening and making sure they’re a good fit, with selling the opportunities, selling the company, selling the culture, and you as a hiring manager.
Rob Ristagno: Got you. Tell us a little bit more. It sounds like when you started HireBetter, you were filling a gap in the market. You wanted to do things differently than the recruiting industry at large, and with no disrespect to any other recruiters who may be listening here, tell us what some of those pain points were specifically and how HireBetter gets at them.
Kurt Wilkin: Well, let me start with a brief commercial about the three different types of typical recruiters, or what you would typically see in a recruiting industry. One is an hourly recruiter; so you pay a recruiter by the hour to help you find candidates, and that’s one methodology. The other that you’ve seen the big names… the Korn Ferrys, Russell Reynolds, Egon Zehnder… the big names that are serving the big private equity firms and public companies, those are retained recruiters; so, you would retain them to go find candidates for you, and you would pay them just like you would your attorney or your CPA. You’re going to pay them for the project.
Kurt Wilkin: The third type, which is the most prevalent in the, I’ll call it lower-middle-market, and frankly, even for larger companies, is called contingent recruiting, and contingent means you don’t pay the recruiter unless they provide a candidate that you hire. It sounds great. No risk; I don’t have to pay you unless I find a candidate, but there are so many parts of that part that are broken… that is the true essence of your question, what’s broken in the recruiting industry?
Kurt Wilkin: I wrote all about it in a little e-book we wrote called The Recruiting Industry is Broken, which is funny coming from a recruiter, but it’s really about the contingent model.
Rob Ristagno: Got you.
Kurt Wilkin: So let me pause, and then I’ll tell you more about my thoughts on the contingent model, which is what most entrepreneurial companies are faced with. Okay. Any questions on that so far?
Rob Ristagno: The first type, the just paying someone by the hour, is that more of how if you were to hire someone internally, or what types of companies are doing that first model?
Kurt Wilkin: Yeah, great question. Internal recruiters are paid salary, typically. They would find candidates. You might hire a consultant to source for you hourly, and there are firms that do hourly recruiting. It’s not typical for your true game-changer or executive hires to be done through an hourly agency. It might be more where if you want to hire 20 warehouse workers, or typically, on the lower level, you’d hire an hourly recruiter.
Rob Ristagno: All right. Got you.
Kurt Wilkin: Typically, for the retainers, you would see just at the executive level. We’re somewhat of a unique animal in that all of our recruiting is retained.
Kurt Wilkin: So, the contingent model: first and foremost, by definition, a contingent recruiter is in competition with other recruiters. Again, that sounds great, right? You want the best candidates. But they’re also in competition with you, the client, and I think that’s a broken model, because how am I going to serve you well if I’m in competition with you for talent in the market?
Kurt Wilkin: If you are really good at hiring, and you are very good at the interview process, and you’re just on the top of your game, it could be an interesting model for you to hire one contingent recruiter, because then you’ve got somebody that’s out there doing some sourcing for you, but I’m really against hiring five or eight contingent recruiters, which so many entrepreneurial companies do, because now you’re watering down your brand in the market. You’ve got five or six different recruiters looking for the same candidates. If I’m a truly stud candidate and I get a call from a recruiter, this may be good, but if I get a call from five different recruiters for the same role, all of a sudden, your company looks like it’s got problems.
Rob Ristagno: Got you. Mark, did you have a question?
Mark: Sure. Kurt, I know we jumped onto interviewing since that was identified as a weakness, but other questions weren’t asked that… I think there’s a lot of viewpoint that the predictive value of an interview is actually quite limited versus profiling and testing. So as a recruiter, what’s your perspective there? I know our organization is highly reliant, and we put much more emphasis on the two different tests that we use, and that’s a major screening before we ever decide to interview somebody, so I’d love to hear your perspective on that as a recruiter.
Kurt Wilkin: Sure. Can I ask what the two tests are?
Mark: Kolbe and Caliper.
Kurt Wilkin: Okay. I’m familiar with both of them. There’s a hundred out there, right, and several are very… most of them are very good at parts of it.
Kurt Wilkin: First, I’ll go behind the curtain and tell you that most recruiters hate the tests, especially the ones that you’re really, really passionate about. So if you’re like, “Hey, Kolbe, I need a”… I don’t even know the names of Kolbe… “but I need an architect and a surveyor,” or whatever the two titles they use, and nobody else will do? It’s a challenge for recruiters to work with you, because a firm like mine is going to go out and find people who aren’t looking; we’re going to get them interested; we’re going to spend hours with them trying to interview them and vet them enough to get to you, and if you get to them and say no just based on a test score, most recruiters may not want to work with that; so, just so you know that. That might be why you might have a negative view of the recruiting industry.
Kurt Wilkin: We’re no different, to be honest. If you have a pass/fail based on a score, it’s hard, but if you use that as part of your barometer, and you say, “Look, I want this range”… so instead of a nine only, if I get a seven to 10 range, then I think it’s a good tool. I just don’t like the pass/fails because nothing is perfect, and there are some tests out there… Cultural Index is one that… man, it’s a cult. The people who sell those tests are cultish, and if you don’t pass that profile, you’re not going to make it past.
Kurt Wilkin: That’s a recruiter’s perspective. My perspective, since I don’t come from the recruiting industry, is I think they’re very powerful, and I think they should be part of your game plan. We use Predictive Index as part of our testing. We have a strategic partner that uses another one of the names that escape me offhand.
Audience Member: We use McQuaig.
Mark: Yeah, we work with Criteria Corp. a lot as well, but not currently using it, as a different P-E sponsor. I think we found for our organization that it’s not the pass/fail. You’re right, everything is a spectrum, a continuum; it’s more fit for role, a potential fit for role, and then we find that it really helps us hone in on interviewing.
Mark: We find there’s two kinds of interviews. There’s that resume walk, which has almost no value whatsoever in terms of predictive value, and then there’s really the behavioral interview where you’re kind of drilling in on things that may have piqued your attention coming out of the test. So, we try to use it part of the process, not as the gate, unless there was just something radially alarming and disturbing.
Kurt Wilkin: Mark, I think that’s a great way to use it, both through the interview process, as well as your onboarding, and as well as team dynamics and how your different personalities will fit together, and I think there’s some great tools for that.
Rob Ristagno: I remember a long time ago, I interviewed for a job with Capital One, and I got an offer without a single interview. It was just a series of tests. That was for a mid-level job; this was 20 years ago. It wasn’t for a senior executive role or anything, but I remember it was off-putting as a candidate, because I want to meet the people that I’m going to be working with.
Rob Ristagno: So back to this balance between evaluating and selling… how do we keep that in mind that you want to leave a good impression with the candidate, as well as evaluate them? How do you balance that?
Kurt Wilkin: It’s a great question. We get… just to your point and Mark’s point… we get clients who want to put an online assessment and I don’t want to meet with them until they pass, and in a low employment environment, which we’ve been in Texas for the last 10 years, it’s hard to get the really stud talents to go through that exercise, especially when you get to the executive level.
Kurt Wilkin: Now, you’re a twenty-something-year-old kid looking for perhaps your first job or second job, and even then it was off-putting for you. Imagine being an executive as you are now being asked to take a test before you talk to a human being. You’re not going to attract the best and brightest, in my opinion.
Rob Ristagno: Shifting gears a little bit, I’ve been reading a lot and hearing a lot about the gig economy; so, instead of hiring employees using freelancers, Upwork, all these other platforms, how has that changed the recruiting game, if at all?
Kurt Wilkin: Well, I’m a big fan of it, to be honest, because there’s a lot of companies, especially in the entrepreneurial sector, who can’t afford a $240,000 a year CFO or CMO, but they can afford a part-time or even three-month assignment type of expert, so I’m a big fan of it, especially in today’s virtual environment. You can get some pretty good talent that might not be in your backyard.
Kurt Wilkin: As we were going around the room earlier talking about where we’re each located, there’s not always the best talent at that specific role in your market, but now you can go get it elsewhere.
Rob Ristagno: I want to shift gears now to talk a little bit about HireBetter itself and how you’ve scaled it as a company, but before I make that pivot, other questions from the audience about recruiting in general, the industry in general, hiring practices in general?
Audience Member: I wanted to jump in real quick. I’m the obvious shill on the call. I’ve known Kurt for more than 10 years now. I’ve worked with him and HireBetter, and I can say that as important as it is, everything he’s mentioning so far, I truly enjoy knowing that I don’t really have to pay attention to this stuff, because in the end, they do provide the final candidates.
Audience Member: It’s critical to have this, but I remember I used to have different profile tests we’d put out there, be it Meyers-Briggs or DISC, and when I talked to Kurt’s team, they kind of laughed at me and said, “Do you really want to annoy people you want to eventually hire?” Of course, I said no, and they were like, “Okay, let us do what we do well, and then we’ll tell you who we think is good. If we do a good job, great. If not, don’t worry about it.” There’s something to be said for letting a professional do what they do and then getting the hell out of the way for it.
Jen: I have a quick question.
Rob Ristagno: Go for it, Jen.
Jen: Okay, first of all, in the spirit of full disclosure, I’m the managing director of the Boston office of a niche diversity recruiting company.
Kurt Wilkin: Great.
Jen: So, I’m curious… you talked about you’re applying professional services model to the recruiting industry… by the way, I agree with everything you’ve said. Let’s just be honest, recruiters are the bottom of the barrel, typically, and it can be pretty awful to work with them.
Kurt Wilkin: But there are good ones out there, I just want to make sure that’s clear. There are some very good recruiters out there, including on this call.
Jen: Yeah, thank you! We do consider ourselves… we’re absolute Cadillac in terms of service we provide. We were also mission-based. 90% of our candidates are women, and we also specialize in placing people into flexible roles, because, well, not only are 90% of our candidates women, but most of our candidates are also parents, so flexibility is key. But to someone’s point, they just made about… companies when they’re starting out, they don’t need a full-time CFO. Part-time is right, and there are actually pools of candidates out there that are looking for part-time roles. That’s a flexibility that they are looking for.
Jen: Anyway, back to my question, it’s hard to combat that image that recruiters have, and I’m curious how you have been able to secure clients with this professional services approach to what you do? Anyway, I’ll leave it at that.
Kurt Wilkin: No, it’s a great question, and if I’m being honest, when I say I co-founded HireBetter… I actually bought it, and I’ve evolved it a lot, so we still co-founded it. But when I bought it, I came from a very successful run with a very strong partner at The Controller Group. I saw the challenge, I saw the problem in the industry, and I said, “Hey, Kurt’s got a good reputation. We’re just going to go and we’re going to repeat with hiring like we did with professional services,” and the reality is it doesn’t work like that, and we did have a lot of headwinds with the industry, like you said, Jen.
Kurt Wilkin: How we’ve been able to combat it… most of what we’ve sold over the last 10 years has been some amalgamation of my network and just our reputation, so we get a lot of referral and repeat business. Every time, historically, when we try to hire a salesperson to sell recruiting, they’re either coming from the contingent world or professional services, or some other where they don’t know recruiting; at the end of the day, it hasn’t worked, because it’s not a cold call. We’re asking you to pay $20,000 upfront perhaps for a search, versus you don’t pay us anything until we fill, and so it’s been a hard sell.
Kurt Wilkin: What’s been successful for us has been selling through partners who are trusted advisors of their clients. They recognize the challenge. We sell a lot through executive coaches, and they know how hard it is to find talent. They know us and respect us and trust us, and so it’s been a nice bridge.
Kurt Wilkin: I hope I just didn’t give our answer to everybody out there that’s in the recruiting industry.
Rob Ristagno: It’s all in the execution.
Jen: Yeah. Yeah. No, well, that’s exactly what we do. 90% of our business is through referral.
Kurt Wilkin: Offline, I’d love to learn more about your business and how we can support your mission.
Jen: Yeah, sure thing! I would love that.
Kurt Wilkin: Dave, you had a question?
Rob Ristagno: Dave, do you have a question?
Dave: I did, yeah. I wanted to get your review on one of my pet peeves of the hiring process, and that is counter-offers. I was running a software business out of Utah a few years ago, and it was a very tight labor market and we were recruiting for a couple different roles using some contingent firms. I lost three marketing directors to counter-offers from current employers… boom, boom, boom… and I had it up to here with my recruiting partner, so I’m curious how you deal with that. You’ve been in some tight markets in Austin and elsewhere, I know.
Kurt Wilkin: Let me tell you two things, and the first one I’m going to say, this is going to directionally accurate because I’m not in the details, and as I said, I’m not a good recruiter. What I understand from our recruiting team is that good recruiters will do a very good job of understanding the reason why that person is leaving, and it’s not just for more money, it’s what are the draws? Why are you even considering this new opportunity? By the time you get to the offer stage, all that other baggage has been unpacked and we know where the challenges are, so it’s hopefully a small chance that they’re going to accept the counter. That’s what most good recruiters would do. If someone who’s just hungry for a transaction and brokering a deal, they may not get as deep on that as good recruiters.
Kurt Wilkin: The other part that you didn’t ask that I’ll say… oftentimes, we’ll… if you lose a candidate that’s working for you, they go accept another offer and you counter with them, I think the statistics are 80% of those people leave within a year. So, I usually encourage our entrepreneurial clients not to counter.
Dave: No, I agree with that, unless they are so mission critical, but even then, if you counter, you immediately start working on the succession plan, because they are going to go.
Dave: Look, I mean, I started screening myself a lot… tell me why you’re leaving and all that stuff, but it goes back to maybe not being the best interviewer, but everyone can come up with reasons why they’re leaving, but then when the company throws a bunch more money and options at them, all of a sudden, that evaporates, in my experience, so it’s tough in a tight market.
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Rob Ristagno: What’s your opinion of references, because I always ask for them, and I think it’s a good practice, but people always give me their favorite boss, their best colleagues… they give them some bullet points in advance to make sure that they echo some of the things that they’re trying to get across… but I’m too nervous to not do them. So, are they a sham, or are they good? What’s your thought on that?
Kurt Wilkin: I don’t think they’re a complete sham, because in theory, the person you’re talking to wants to keep their reputation intact. I’ve been amused at a couple of people who put me as a reference and I didn’t provide a good reference, so I think there are people out there.
Kurt Wilkin: My preference is to try to do a back door reference; I don’t know if that’s legal or not, but try to find somebody I know who’s connected to them in some form or fashion. I’ve got a fairly broad enough network where usually I can get to that; in cases where we can’t, my recruiters use their references, but we ask a lot of questions that are hopefully harder to hide, but nobody’s perfect, and especially, as you said, everyone is going to put their best three references.
Kurt Wilkin: There are some methodologies out there that we try also to follow, which is try to find a co-worker that’s not on their list or a boss that’s not on their list, or maybe even a subordinate that’s not on their list.
Rob Ristagno: All right, trust but verify is what I’m hearing you say.
Kurt Wilkin: That’s a great point.
Rob Ristagno: All right. Well, tell us a little more. It sounds like a few times you mentioned you work a lot with entrepreneurs. What makes entrepreneurs your best clients? Why are you such a great fit for them? Tell us a little story. One thing we like to explore here is how people discovered who their best clients were, so tell us a little bit of a story about how you ended up solving for that.
Kurt Wilkin: Sure. Well, we started with a lot of trial and error. We would take anything that would be thrown at us. We’re in Austin, Texas where there’s a lot of technology companies, so we dabbled in even some technology searches, but that’s a whole different animal, so we don’t even do technology, which is… technology roles; we do technology companies.
Kurt Wilkin: Let me tell you where we are now, and then we can back into how we got here. We work with… there’s three keys to who we work with: entrepreneurial companies, mostly are founder-led; typically lower-middle-markets—they’ll call it roughly 10 to two hundred million in revenue; and then the third leg is, they’re growth-minded. We used to say high growth, but in COVID environment, flat is high growth, and so as long as you want to grow… we don’t want lifestyle businesses; we don’t really like family businesses if you’re just coasting.
Kurt Wilkin: The reason why we’re so good at it is because that’s all we do is those entrepreneurial companies. I know I said I wouldn’t do this, Rob, but I’m going to say entrepreneurs, and I’m one myself… we’re a pain in the ass and it’s hard to work with us. Sometimes we’re bad people, but sometimes we’re really good people with a lot of crazy ideas, and we’re moving in different directions, and it’s just hard to work with us.
Kurt Wilkin: So, we’ve just created a niche. I think we’re the only firm that I know of that focuses on entrepreneurial companies.
Rob Ristagno: Often is the case I hear a lot about trial and error and start with AFAB, anything for a buck, and then you just kind of see where those concentric circles… what you’re good at, what people think you’re good at, what you like doing, and what you can actually make a profit on.
Audience Member: We tend to hire people that agree with us, too.
Kurt Wilkin: Exactly.
Audience Member: I mean, that’s the problem.
Kurt Wilkin: People that look like you, act like you, talk like you.
Audience Member: I had a question. You say that you work with entrepreneurs and you say they’re a pain in the booty. Why? Why do you work with that group, then?
Kurt Wilkin: Frankly, it’s where I know my team can make the biggest difference, and it’s a lot more fun. We had some success with The Controller Group. I don’t have to recruit, but I do it because I can make an impact, or we can make an impact on people’s lives, and I would rather work a little harder and try to solve challenges for good people that are entrepreneurs than go schlep resumes at any Fortune 500 companies out there. That’s just not who we are. So, much like Jen has found her niche and is really helping with these diverse candidates, we found our niche by really helping these good people build great companies.
Kurt Wilkin: So, a little of the trial and error. We used to try to be all things to all people, and it’s hard to be good at that. Once we figured out our niche was middle-market, we tried to help in almost any area of the company, and we like the variety. We like operations, and then going to finance, and then going to warehouse workers or restaurant employees, and we realized we can’t be really, really good at all those things, so we focused on just a few core roles in those organizations.
Rob Ristagno: I’ve downloaded a few of your white papers, and you’ve referenced one earlier in the chat here, so you do some thought leadership. Tell us, for professional services companies that are listening, what works with thought leadership and what doesn’t really work, because I’ve seen it both ways?
Kurt Wilkin: Well, I don’t know if I have a real good answer for you. We’re still trying to figure that ourselves, if I’m being honest, Rob. What I think works for me as a consumer, which is how I try to think of my lens for everything, is I want to hear stories; much like you said you want to hear stories on this podcast, I want to hear stories. I want to hear stories of failure. I want to hear the challenges that entrepreneurs go through so they can… I think we’re going to learn better through hearing those challenges.
Kurt Wilkin: Most of my writing has got some good stories in there about examples of the things I’ve seen or things that I’ve experienced. I hope it’s clear so far from just my brief discussion today, I’m not afraid to admit my failures, and so hopefully that makes it more believable because I’m not pumping sunshine.
Kurt Wilkin: What doesn’t work, I don’t think, at least in the entrepreneurial environment… stuffy, know-it-all… you should do this, you have to do this, I’m the smartest person in the room… I don’t think that works, at least not with our audience.
Rob Ristagno: Tell the stories, don’t tell them what they have to do.
Kurt Wilkin: Right.
Rob Ristagno: Let them figure out what to do based on being inspired by the stories.
Kurt Wilkin: Hey, Rob, let me mention one more thing. I didn’t correct you at the time because I thought it would make a good story here. I’m not CEO anymore of HireBetter. I stepped aside back in July. I brought on a partner, Cisco Sacasa, who was my president, and he ran the day-to-day, allowing me to focus on what I’m really good at and bring in, again, people much smarter than me to run the business.
Kurt Wilkin: That was going so well, I decided to promote him, and I didn’t step away, I stepped aside and tried to do more things like this, more thought leadership-type things, and allow him to run the business. We see that with a lot of our clients. I asked earlier, how many of you entrepreneurs… if we’re really honest as entrepreneurs, we have things that we’re gifted at, and if we can do just those things that we’re really good at and lose the ego and bring in someone else to run the company, it’s like beautiful music if it’s done well.
Rob Ristagno: It sounds like it must have been a tough personal decision to do that, and thanks for sharing. It seems to me like you’re glad that you made that decision, but how did you get yourself over the hump there?
Kurt Wilkin: Well, I’m going to say something that I don’t want repeated. With The Controller Group, I was kind of the same role that I’ve got now, kind of the loudmouth, outward-facing guy, and had a really good operating partner, and he’s on the call, Brett Lawson, who is fantastic at all the stuff that needed to be done to run the business.
Kurt Wilkin: After we sold the company, I went and founded HireBetter and he went to do his own thing; we weren’t together anymore. I wasn’t as successful without that strong operating partner, and so I knew that I was better if I had that complementary skillset, and so I had a little bit of a cheat sheet.
Audience Member: Way to go, Brett.
Kurt Wilkin: Don’t say anything nice about him.
Audience Member: So tough to get ego out of the way, because you think… especially when other people are pumping you up, you think that you must be good at it because you’re in that position. I really have to give you kudos.
Kurt Wilkin: It’s real easy to think you’re super smart when your business has been successful, but there’s a boatload of people behind you that really helped you and made you successful.
Rob Ristagno: It’s so true, but what about the other end of the spectrum? We don’t like talking about firing people, but I imagine that there’s FireBetter, as well. What’s some advice that you have for executives listening in? It’s tough, something no one likes doing, but it’s part of the job.
Kurt Wilkin: That’s a great question. I don’t know if you saw what we did a couple of years ago on April 1st, or maybe you’re just using the term, but on April 1st in ’18, we named our company FireBetter and got some fun out of it.
Kurt Wilkin: The reality is, as much as entrepreneurs, in my opinion, as we said earlier, aren’t that strong at interviewing because we like to see the positives in everybody-
Kurt Wilkin: Many of us don’t like to have those challenging conversations, and so we have people on our team that we’ve outgrown; they’re not next-level folks. They were great to get us there, but there is a real need in the market for advice and counsel to fire better.
Rob Ristagno: Yeah, how do you get over that? I imagine you feel loyal to someone who got you there, but you’re right. Times change, businesses change, needs change, skillsets change. How do you coach executives that you know it’s time for XYZ employee to go? I know they got you to where you are, but they’re not going to get you to the next level. What does that coaching conversation sound like?
Kurt Wilkin: Man, that’s a tough one, because it’s like telling somebody their baby is ugly, right? This guy or gal that’s been with you for 10 years and been in the trenches with you, and now they’re your CFO, and they really need to be in an accounting role or whatever. It’s hard, and I would say that it’s hard even for a coach, or a trusted coach, because you put blinders on or you put walls up and you don’t want to listen.
Kurt Wilkin: Usually, when I see it works is when there’s been other changes in the organization that have necessitated a change. So, maybe it’s bringing in a really next-level sales leader that’s night and day better than what you had before, and it opens your mind to what real talent can do. Maybe it’s a transaction, maybe they took on a private equity partner. Maybe COVID happened. There’s lots of things that could be the impetus, but rarely is it with nothing to make it happen.
Kurt Wilkin: I challenge everybody that’s listening and everybody on this call… think about times in your career, especially if you’re an entrepreneur or leader, that you’ve felt like somebody on your team is in the wrong role, they’re not pulling their weight; they no longer are as strong in that role as you had before.
Audience Member: It’s always six months late.
Kurt Wilkin: We steal some of Jim Collins… it might be Verne Harnish… a couple questions that they ask about their people we like to ask our clients, and that is… knowing today what you know about your company and where you’re going, would you enthusiastically rehire Rob for the same role, meaning in the CFO. Maybe Rob is a great administrative assistant, but he’s now the CFO, so would you enthusiastically rehire him? It’s an eye-opening exercise.
Rob Ristagno: Things we need to ask ourselves all the time, and before we started recording, somebody gave the quote that this is the year… it was you, Kurt, wasn’t it? This is the year everything… give us the quote. You can say it better than I would butcher it.
Kurt Wilkin: It’s from my friend Craig Wiley, and he asked early on, he said, “This is a once in a lifetime opportunity, COVID, to reexamine everything.” I’ve really taken that to heart, both with my personal life, which is one reason why I’ve stepped aside at HireBetter, because I felt like it was the right thing to do. I’ve tried to do it with my business. I’ve tried to do it with a lot of things.
Rob Ristagno: I think it’s great advice. Yeah, if everyone could just take a step back and think about breaking that inertia, and not doing things just because it’s always been that way… if not now, then when?
Audience Member: You talked about COVID and you talked about a couple of the changes that have taken place. What do you see as some of the… what we can reflect back on as the benefits that came out of that, besides that review. Have you seen specific examples of things that companies are doing now that everybody should learn from?
Kurt Wilkin: It’s been said many times, so forgive me if I’m repeating, but things like… a lot of industries needed an overhaul. It needed change. We were over retail, we were over commercial real estate, things like that, and those have been just exacerbated, where all of a sudden this change has hit in two months versus 10 years. I think a lot of these changes needed to happen; they just made it happen very quickly.
Kurt Wilkin: I think the technology advancements… the fact that we’re on a call at 3:00 PM Central with people in three different time zones… I don’t think this would have happened a year ago, and I think it’s magical that we’re having this opportunity.
Rob Ristagno: Other questions about hiring and firing and human capital before we hear a little bit more about Bee Cave Capital?
Dave: Kurt, I’m just curious in terms of… it’s December 2020. There is news of a vaccine. Are companies starting to open the spigots and hire more right now?
Kurt Wilkin: Dave, I don’t know what it was, probably two months ago the spigots opened. I think there was a pent-up demand. I think everybody was retrenching and so much that when people started getting confidence… either confidence that we were going to come out of it, or a feeling like I don’t care what’s going on, I’ve got to be successful, I’ve got to do what I can to succeed… that’s when it just seemed like it started opening up.
Kurt Wilkin: There does feel like, especially as we head into ’21 with a vaccine in hand, that the spigot has been opened.
Rob Ristagno: Okay, Bee Cave Capital. Tell us all about it. I’m really curious to hear about it.
Kurt Wilkin: This is a fun one. We make investments in mostly early stage companies. I’m a people person, and so I like to help people and connect people, but I also like to invest in people. So back in 2001 or ’02, Brett, was it… Brett and I were partners at the TCG. We put a little money behind one of our friends who had a need, and that launched Bee Cave Capital, and over the last, whatever, 18 years, we probably invested in, I’m going to say, 75 companies; typically smaller investments to start that have grown as we’ve been more successful.
Kurt Wilkin: We’re typically early angel-type of rounds. We’ve had a fair number of dogs that I’m happy to talk about, but there’s been a couple of wins that make us look super, super smart. It’s one of those things where if I just look at the wins, I’m like, “Wow, why don’t I do this all the time, because we’re so successful?” The reality is, it’s like any investing game; you’re going to lose a lot, too.
Rob Ristagno: How has what you’ve learned at HireBetter helped you be a better investor?
Kurt Wilkin: Let me tell you a little bit about our impact statement, because I really like this one. Our impact statement is: We impact lives by connecting and empowering good people to build great companies. I’ve got so many good stories about that, Rob. I know you said you like stories.
Rob Ristagno: Yeah, let’s hear it.
Kurt Wilkin: Recruiters who are very passionate about what they do… they don’t do it for the money. They do it because they’re truly impacting a life. They’re helping somebody move out of their car into a condominium. They’re helping their candidate move from wherever they were living back closer to their parents in North Carolina, or things like that. We’re really making an impact on those candidates.
Kurt Wilkin: I challenged the team when we were working on that impact statement. They said, “Kurt, we work with great people to build great companies,” and I said, “Well, I want us to think about good-hearted, good-souled people, because life is too short to work with A-holes.” And so, I want to be able to impact those people in a positive way and help them build great companies, not just by connecting them, but helping through our coaching partners, helping them through our talent planning, helping them in different ways.
Kurt Wilkin: That’s how I feel about people, and when I invest in a company, I’m looking at the person. I’m investing in you as a person. Do I believe in you? Do I like you? Do I think you’re credible? Brett is the numbers guy, and Cisco, our numbers guys, and they’re the ones that help us understand if it’s a financially viable opportunity, and even then I might still try to pound my chest and say, “No, they’re a good person, so I’m investing.”
Kurt Wilkin: That’s a little bit about Bee Cave. I’m happy to… answer questions about that. That’s a fun topic.
Audience Member: Tell us about some of those big ones.
Kurt Wilkin: I’ll happily tell you one that just went public about in May or June of this year called Open Lending. They were a decisioning tool in the auto financial services firm, let’s call it. They were founded back in 2000. We’ve been a partner of them, an investor, and they’ve been a client since about 2002, so it’s the longest overnight success story that you can think of. They went public with a very successful offering, and so that was a beautiful win.
Kurt Wilkin: There’s a local company here in Austin called Tecovas Boots, which-
Audience Member: Oh, I like-
Kurt Wilkin: Now that I said Tecovas, it’s going to pop up on your Facebook everywhere and you guys are going to be tired of Tecovas, but they’ve been very successful, and a number of others.
Kurt Wilkin: The name Bee Cave Capital, just to tell you… there’s a main road here in Austin called Bee Cave Avenue or Bee Cave Road that goes east/west. It’s kind of through the hills, and it’s a pretty drive in a kind of high-end area, and I was trying to steal from the Sandhill Road guys out in the Bay Area, so I said, “Hey, why don’t we be the Bee Cave guys?”
Rob Ristagno: There you go. You’ll surpass Sandhill at some point, I think. I hope.
Kurt Wilkin: That’s right. That’s right.
Jen: By the way, that was a much better story than I thought. I thought you initially said the company was Beefcake Capital. I’m like… hmm. There’s got to be a fun story.
Kurt Wilkin: Bee like the bumblebee, cave, and I think there’s a little town… there is a little town, and I’m sure they’ve found where bees live in caves, I guess. I don’t know.
Audience Member: Jennifer, I think that was our second choice, so… tossup.
Rob Ristagno: It was a tossup. They went with Bee.
Rob Ristagno: Excellent, Kurt. This has been super helpful. I learned a lot, and I think everyone in the audience here got a lot of value out of having you on. What can we do to help you out?
Kurt Wilkin: I think just continue to preach positivity and proactiveness. We’re going to come out of this, and it’s really about no excuses; we’ve got to go. Encourage people… there’s a lot of people hurting, but they need encouragement and confidence that we are going to come out of this, and they will come out of it.
Rob Ristagno: Excellent. People listening, if they want to learn more about you or Bee Cave Capital or HireBetter, where can they go?
Kurt Wilkin: Just go to HireBetter.com and they can find out all kinds of good stuff.
Rob Ristagno: All right, Kurt Wilkin, thank you. It was an absolute pleasure, and this has been The CEO Campfire Chat, with your host, Rob Ristagno. To listen to more episodes, sign up for bonus content, or take a two-minute business growth assessment, visit CEOCampfireChat.com. I’ll see you next time around the fire.
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