As we start to get our new company off the ground one of the key pieces of data that we are filling out is the hiring plan. Having been through the startup hiring cycle a few times before, I think we can avoid some of the pitfalls with some good decisioning. In the early days of the company doing things is everyone’s job. Leading is also everyone’s job. There is space for people who do without leading, but very little. In this phase is absolutely no time or space for leader, pontificators, pure strategists, etc. Everyone has to act and live like a owner/founder.

For those who may be wondering, startup hiring goes in phases:

1) Founders and founding employees: Emotionally invested and dedicated believers in the “vision” and are willing to do anything they need to do to get to the vision. I met some of my best friends from these phases at various companies in the most odd circumstances: Marketing guy sleeping on the floor of the data center because the website had to be released at 3am, graphic designer stuck under a heavy desk connecting Cat5 because he moved the furniture himself instead of waiting (or paying) for help.

These people are all classic doers and do not get political about things. Seeing through to the endgame is a good quality to have if you want to be in this category. Many of them avoid working in corporate all together.

2) Well-funded employees: These are the folks who show up after Series A, maybe after an heavy angel round if you are well connected. Usually a good set of startups on the resume, no real winners yet. Specialties abound here: specific channel marketing managers and the first dedicated PR headcount are common front-office roles in this phase. We start seeing some back-end management, the PMO may rear its head. The idea is that there is some money on the table now, and we need to get this train up to speed and put some rigor into the day-to-day. Most of these hires will fit in very well, having been immersed in the startup culture. Some will be corporate expatriates who may have some process affinities (Six Sig, Rapid Results), favorite partners (creative agencies, tech consulting) and expectations (read: skrilla).

3) Grey-hairs: So now that the board has some VCs on it, things are going to get interesting. The founders are going to start being a bit more tense before the meetings and one day they will come back with a really happy look and say something like, “I’ll get to focus on the true innovative vision!” or “I will offload some of the more management oriented duties and really get back into the guts of the company!”. This is the magical point, where money and “the vision” part ways. Sometimes it happens at 50 employees, sometimes at 100, but as soon as the professional money gets in the company account, you are on the suit invasion timeline.

The way to gauge whether the suit is going to work is whether they try to fit in. The ones that do are the ones that will fail. At a very casual, urban media startup, we had a great BD candidate come in and interview with casual clothes. He got hired and went back to his suits…and ties! Amazingly, because he didn’t try to fit in, he got his work done, when he met with the agents and music label execs, they didn’t try to shoot the shit with him, just listened to his pitch and made a decision. His deal throughput was great. At another company the founders hired a CFO from a major international bank. He came in and tried to dress down after getting the lay of the land. His entire dress down wardrobe was 4 Huxtable sweaters. That guy sucked and quit in 3 months.

What is very cool about the Mobile Money Ventures, is that we have all three categories in it from the start. Also, our angel round is Citigroup and SK Telecom. I hope we don’t ever have those sweaters.

UPDATE: I will be at Finovate tomorrow. This looks like a great event and I will post photos and comments.
Jim Bruene of Netbanker fame has organized a much needed event in Finovate 2007. Speed dating for venture capital ala the DEMO conference. I am sorting out my attendance, but I know some other folks from my team who will be there. There also seems to be a dearth of tickets (sold out!).

On October 2nd, 2007, twenty of the most innovative companies in the financial, banking and lending industries will gather in New York to offer a glimpse of the future of mobile, personal and online finance.

The presenters are:

• Andera
• Lending Club
• Billeo Inc
• Metavante
• CheckFree
• mFoundry
• ClairMail
• Mint
• Firethorn
• Monitise
• Digital Insight (an Intuit company)
• Mortgagebot
• Geezeo
• MShift
• Identity Theft 911
• Online Resources
• iPay Technologies
• Prosper Marketplace
• Jwaala
• Yodlee

This is the type of event that we need to see happen frequently in order to support innovation in the financial services space.

Two of my favorite banking blogs have started discussing a topic that I also love to talk about, banks and blogging. Rob Findlay at the Bank Channel has posted regarding research by the Javelin Group indicating that blogging is the answer to the bank-to-consumer communication issue. Ron Shevlin who oversees Marketing ROI build further stating that banks better get into the blogosphere, and figure out how to do it right.

I have written about corporate blogging and specifically that corporations and banks need to get on with it as a matter of message control and participation in a hypergrowth channel for consumer interaction. I would add to it now that this channel is the de facto channel for topics that can be tagged as innovative. Imagine how much easier it would be for us to figure out the whole US mobile banking mess if we had been blogging with interested customers, partners, experts, whoever at the same time that we were discussing strategy, hiring consultants and having kick-offs internally.

From an organizational perspective, the value that interaction with senior management generates, particularly among those who have no traditional avenues to do so, is routinely underestimated. I come across folks at Citi everyday who operate blogs in their free time and would love to do so at work, just for the exposure and the thinksharing. Most blog-related discussions at work inevitably come to the questions of “…what do we get out of this?”. Well, Banks have to turn a corner and believe that honest, open. two-way dialogue is the cornerstone of the new bank. This needs to happen with employees, customer, shareholders, constituents, regulators, competitors, partners…the list goes on. And as for the question of the ROI of blogging, I leave you with Nobel Prize and Oscar winning author George Bernard Shaw’s quote:

“If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”

Just think, instead of paying for four Internet connections in your home (phone, cable, wi-fi, mobile), you could actually have the one that makes the most sense at the time. Google’s proposed bid to make this happen with the upcoming 700 MHz spectrum auction is making waves. The kind of waves that severely rocks the boats of telecom incumbents. It’s clear when they use meaningless, bourgeoisie responses such as “corporate welfare” to describe the FCC’s interest in utilizing Google’s free, neutral and consumer-centric rules that the protected hegemonies that so unceremoniously charged me $1.00 per minute to call home from London last month are about to start breaking.

The facts are pretty indicative that Google is serious:

1) They have the cash and have committed to meeting the minimum $4.6 Billion reserve for the auction.

2) They have been buying dark fiber since the 2005 bust. This fiber is key for the economics of running a mobile telecom service. The signal received by one tower needs to be transported by land-based fiber lines to the destination tower.

3) Mobile apps are all the rage at the GOOG. Every one of their consumer facing successes have been ported to mobile including maps, gmail, blogger, picasa and now YouTube as well.

4) Google has a deal with LG for an integrated Google button (and apps) on “millions” of phones.

Google’s openness requirements for the spectrum, favor a company with diversified revenue streams rather than a retail model that relies on access fees only. This is the source of much twitching and bitching from the telcos. What is interesting is that it is absolutely evident that should AT&T or Verizon win this auction, consumer won’t see a single kilobit of wireless data for some time. Their business models have not been evolving because of a non-competitive environment in the US. The consumer, as a result, has been suffering. Take a look at the mobile web on a normal everyday Verizon phone. The “home deck” will take you back to the 1990s. Why would anyone use such a service when rich, interactive, developed environments invite you on the real Internet. Yet the mobile phone is the device most people carry with them all the time.

I would expect that non-incumbent handset manufacturers would get on the Google bandwagon right quick if they win the spectrum. With little legacy carrier volume to protect, why not roll out the pipeline of devices that cannot be used in the US. Apple will probably make a good partner, after all Eric Schmidt is on their board. And what’s AT&T going to do, drop the iPhone? The second tier of US carriers could see the light and through their hat in the ring. I personally vote for Sprint, since they have shown the ability to deprioritize legacy voice revenue defense in favor of WiMax, a better last mile technology, but an open standard. Throw EBay and the trifecta of commerce, cash and communications (auctions, Paypal and Skype) into the mix and who knows where it can go.

I am wary of Google’s growing dominance and reach in various spaces (I recently saw a proposal for small business services from them). However in this case I am more wary and tired of the telco’s abusive consumer policies and the spoonfed pace of innovation in US wireless. Google and Co. would improve the consumer’s experience and drive new value on an already ubiquitous platform. More power to them.

Every couple of months I find it useful to do a wholesale survey of all emerging technologies and business models in the promotion, selling, and distribution of online porn. I learned in the Internet boom 90s that porn always leads the charge on distribution channels, pricing strategies and product structuring for content.

Good examples of past pornnovations that have made it to the broader markets include freemium pricing where the blue site will ask for a card number just before you see the goods. Freemium is now a common model for content ranging from job postings to childrens’ cartoons. Pornographers also were able to leverage the file-sharing networks to their advantage by overwhelming the networks with legitimate files from content providers and loading them up with advertisements for their sites. This flew in the face of the command and control legal battles that got the RIAA and MPAA skewered in the press. While these distribution strategies blazed trails, the product end of the skin business was busy beating us all to the Long Tail. The mainstreaming of fetish porn is the perfect example of leveraging a zero marginal cost customization platform. The same naked people, same cameras, slightly different activity, slightly different website and (drum roll) higher perceived value. You must admit that these guys are doing something right if kink.com is making the Times with bound up women getting spanked in color. Amazingly while pushing the long tail of porn into the distribution stream, porn has simultaneously become more of an everyday resource by de-sleazing the branding and discretely bringing itself into the home of the average Joe.

Taking their cue from a rich history of innovation and invention, the current crop of skin businesses have grabbed on to the Web’s 2.0 behaviors and capabilities in ways that non-porn companies could learn from. Take a look at how user generated content is being leveraged in porn. By creating a platform for home hobbyists, startups like YuVuTu (very NSFW) have grabbed a piece of the most profitable segment for professional porn production: the amateur segment. Without the costs of paying talent, this segment is a close parallel to the horror films that are being produced on shoestring budgets in the more traditional entertainment space. YuVuTu has taken this concept and blown it to shreds by allowing anyone to post in a YouTube-like environment with tagging and a host of social networking capabilities through blog embeds and user connections. Steve Jacobs, the founder of YuVuTu, feels like he has hit upon a space left open by the legitimate players such as Veoh and YouTube when they decided to eliminate porn from their sites.

The true innovation of YuVuTu (and it’s competitors, PornoTube, Xtube, GooTube) is that they built their services in partnership with the professional content providers who were concerned about piracy. By building in monetized content as well as free, they were able to build their databases of content more quickly and without obstruction from the incumbents. The porn industry has historically stayed profitable by sharing customers and traffic which is anathema to most traditional businesses, content and otherwise. So while the entertainment industry debates the business value of Google’s acquiring YouTube, the guys in the Valley are tangibly driving value. Mr. Jacobs also attests to having learned the lesson of the last generation of X-rated sites and taking the elimination of underage content extremely seriously.

As communication and content platforms evolve, pornography, which is how sex becomes content follows. The fact that smart and strategic business people are driving the industry shows how far the industry has come from the brown bag magazine delivery days. The industry has shown aplomb in handling regulatory issues, customer acquisition strategies as well as network economies. Now that we are more likely to find a Harvard degree hanging on the walls of porn management, I am looking forward to my next survey. Seriously.