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.

There’s been a bit alot of rumbling over the last few weeks regarding Amazon’s introduction of Flexible Payment Services to their already burgeoning set of web services. Not a surprise really, but strategically very key for Amazon to close the loop. Having already blazed trails in affiliate marketing as well as more specific service models such as the S3 modules for web services, Amazon has come in on the final piece of the puzzle of the modern commerce landscape they are shaping.

Obviously this is a basic dis-intermediation threat to banks (again) and merchant service providers, as well as a way to reduce costs on Amazon’s own transaction/interchange expenses. Banks can take heart in that rather than pursuing the Paypal model, Bezos and team have elected to go through the existing credit card networks for larger payments. Google Checkout uses a similar model but Amazon has put a bit more into the model. Look carefully and you uncover an Amazon branded stored value account as the crucial center of the FPS value proposition. Om Malik points out that the FPS strategy is a Trojan Horse designed to take share from Paypal. I would build on that by saying that FPS can start enable the holy grail of payments, the dirty little M-word: micropayments.

The pricing model that Amazon has prescribed for their service is a very interesting first indicator of the differentiation that Amazon FPS can provide to online merchants who are selling non-traditional goods. By differentiating ACH, association and stored value transactions into different pricing buckets, FPS provides access to all the major forms of payments as well as their own ultra-flexible account. The Amazon account is controlled by a truly groundbreaking set of rules that can actually enable new types of selling models. Merchant can charge periodically for usage, split payments to and from different endpoint accounts as well as aggregate micropayments without merchants having to “hold” onto transactions. These are just a few of the types of selling models that can be enabled that may have been cost-prohibitive before using the incumbents system.

The wildcards here are 1) Amazon is by far the most developer friendly in the “Big” web. 2) Amazon has 62 million active consumers with Amazon credentials (with credit cards on file) that can be leveraged by merchants using FPS.

To think, it all started as bookstore.

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.

The recent Vodafone acquisition of Hutch Essar for $11 Billion has been garnering a tremendous amount of press globally. In India, the media has been heralding the size of the price tag as the price of a ticket to the Indian consumer market. In the West, the academic and management consultant skeptics suggest that the Eastern bubble is growing to unmanageable proportions with an impending correction as these valuations give way to margin compression and delayed infrastructure modernization, etc. The M&A bankers are test driving Lamborghinis with gold-plated shifter knobs.

With the emphasis on customer franchise size and lifetime valuation of customers, we are kind of seeing a bubble ala the Internet days, inasmuch as the distorted lifetime value numbers in the current context. Google is the only model that emerged with the lifetime economics even close to its original estimates, because its search became the start point of virtually every web session. However, given mobility’s inevitable centrality to emerging market Internet strategies (see NetCore CEO Rajesh Jain’s comments last October), should we be discounting the future Google + Verizon’s of the emerging global economy?

The question that does come up is how do these companies avoid commoditization and business model decay as it should happen even faster in markets with lower margins than the US and EU. One cans see the need to welcome true customer service providers such as banks and health services to the network in a strategically significant manner. Co-developed, innovative solutions that bring traditional services to a secure, mobile, customer centric platform can feed both heads of the beast, allowing further capitalization of the networks, allowing them to fulfill the dream valuations they have today.