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September 6, 2017

Why Talent Matters

The question is simple: how do we help our extraordinary founders attract ever more extraordinary people to join them on their journey?

Notion has always prioritised relationships with founders and their teams, but now we’re making structured moves towards supporting them in recruiting exceptional people to help them with their entrepreneurial journeys.

By virtue of focussing on the enterprise SaaS space, the primary value is generated by the characteristics of the founders that we invest in, the problem they choose to solve and the people that they surround themselves with. There is a major benefit of our narrow enterprise tech investment focus in that many of the organisational challenges our portfolio face are very similar, and the people who tackle those challenges have an exceptional depth of experience and that puts us in a position to support our companies individually and as a whole on their people and talent challenges.

As Stephen Millard puts it: “much, if not most, of our investment hypothesis is predicated on our belief in the potential of the founding team”.

And as Chris Tottman puts it: “everyone at Notion knows what I like; business models that address an industry defining problem.”

Put these two things together and what you get is a focus on people who are trying to solve a problem at a global scale. Without trying to get too ‘meta’, the challenge then becomes: how do we approach the problem of trying to find the best people to help the businesses in our portfolio with the problem that they’re trying to solve?

The scale of the scaling problem

8,000 This is the number of people that our companies need to recruit in the next five years or – at least – that’s the back-of-the-envelope estimation for the number of people that need to be recruited into our 35+ portfolio businesses in that time. If we include staff churn and the addition of more businesses to the Notion portfolio, this number can only increase.

£50-100m is the estimated cost for recruiting those people. That’s a big number for a problem that can, at least in theory, be solved for free. And the opportunity costs of mistakes is far higher. But more important, and a much bigger number is the value that is created an exceptional talented individual joins one of our companies.

My reasoning for putting those numbers down on paper isn’t for the purpose of scaremongering – not least because the founders in our portfolio have done an incredible job of scaling so far, so we have no reason to fear the future on this front –  but more to highlight the opportunity we have to bring world class people into our businesses and reduce costs by creating a self-sustaining network of exceptional individuals.

It’s safe to say that, in terms of opportunity for value creation and scale, my remit here at Notion is not lacking.

The unquantifiable problems

SaaS is an industry that thrives on data. Whether it’s looking at the CAC to understand how sustainable the business model is, or reviewing the IRR of the portfolio, numbers form the building blocks of much of what Notion – and every VC – does.

Measurement and decision making on readily available data, however, is pretty straightforward now and relatively well served.

When it comes to talent, however, things start to get a little more ‘grey’. Having trained as an engineer, I get a little uncomfortable when I can’t quantify things so a big part of my role here is to put some data behind the DNA of ‘the perfect’ hire. Is there any common educational experience that superstar CTOs have had? Can we classify our highest performing execs into a particular Myers-Briggs class? What are the behavioural traits of our portfolio leaders and can we replicate these within junior teams?

Stephen and Chris did a great job of putting some science behind hiring with their blog post here; the challenge for me is to take this to a deeper level.

If we can start to build a framework around the traits of great leaders by function and also by stage, and the experiences that got them there, we can start to more easily identify them from afar and help coach the next generation of them into reaching their full potential.

There are exceptional people out there who are capable of starting epidemics. All you have to do is find them. – Malcolm Gladwell

Posted by Maddy Cross, Head of Talent at Notion Capital.

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