Today was an exciting day for ProRata (an Atlanta software startup focused on simplifying revenue recognition in QuickBooks) because employee #1 showed up this morning on his first day at ProRata bright-eyed and excited about the opportunity that lies ahead. The first employee is one of the most unique hires for any startup, and the combination of traits needed requires a multi-talented candidate that can adapt to any role quickly.
Employee #1 should be able to do the following:
- Relentless ability to prospect new customers.
- Persistent follow up with leads and prospects.
- Learn to perform a product demo (but the founder(s) should try to do the first 500 demos).
- Ability to implement new customers.
- Manage existing customer accounts.
- Recruit new employees.
- Attend trade shows.
- Discuss product enhancements needed to help achieve product/market fit.
These are just some of the many traits to look for when hiring the 1st employee. In a very early stage startup, both the employee and the employer are taking a risk on each other, but the startup can reduce their risk by looking for candidates that exhibit the above self-starter traits with the ability to take on multiple responsibilities.
What are some other characteristics/traits startups should look for when hiring employees at an early stage?
In March of 2013 we finalized the negotiations related to moving the QGenda headquarters to Buckhead, and now almost 3 years later we are negotiating a major expansion of 12,800 sq ft in the same class-A office building. The expansion which will give us a total of 30,000 sq ft and make us one of the largest tenants in the building. When looking at the economic terms of our lease from 2013 compared to the economic terms of our 2016 major expansion, you will see much less favorable lease terms for us that add up to over half a million in additional expense over the life of the lease.
2013 Lease Terms:
- $22 per sq ft per year in rent.
- First 8 months free rent inside the 5 year term.
- $20 of tenant improvement allowance per sq ft for space buildout.
- Allocated 5 parking spots per 1,000 ft.
- Able to pre-negotiate an expansion into adjacent space at any time in first 2 years of 5 year term with the same economics as the main space.
2016 Lease Terms:
- $31 per sq ft per year in rent.
- 3.5 months free rent.
- $15-$20 of tenant improvement allowance per sq ft for space buildout.
- Allocated 3 parking spots per 1,000 ft.
- Outdoor street level monument signage on the building for QGenda as one of the largest tenants.
- Unable to pre-negotiate any expansion space, but will require a rolling first right of refusal on any future available space with more than 5,000 sq ft.
When we first negotiated our lease, the building was only 60% occupied, and today the building is over 95% occupied with only a handful of spaces available. The high demand for Buckhead office space is a clear indicator that Buckhead has become one of the most desirable locations for a company’s office space.
A personal goal of mine is to be the seed investor & advisor in at least one new startup per year. In 2014 it was TapCue, a healthcare communications platform, and in 2015 it was ProRata, a fintech application to simplify deferred revenue recognition in QuickBooks for subscription based businesses.
Here are a few ideas or areas of interest for a 2016 investment:
- An application focused solely on helping brand new college grads find their 1st career opportunity. At QGenda we physically attend 30+ career affairs per year ranging from as far north as Wisconsin all the way down to Florida, but imagine if we could look at candidates from 300+ schools! Existing similar idea: AfterCollege.com
- An all in one HR application for companies with 1 to 300 employees. This application would offer automated employee on-boarding, payroll, time off tracking, employee benefits administration, employee review tracking, and several other HR specific tasks that need autopilot. Existing similar idea: Namely.com
- Proximity based mobile app to easily provide a financial tip without using physical cash. For example, a valet driver would use the app in tip receiving mode, and the car owner would simply provide a tip by selecting the valet driver from a list of near by tip receivers.
Coming up with the idea for a new startup is the easy part, but finding the right co-founders to embark on the 8-10 year journey is the hard part.
The first day of the new year is a perfect time to reflect on the prior year’s accomplishments and start focusing on goals for the new year. While continuing to remain self funded at QGenda, the 2015 year turned out to be our best ever.
Here is a quick look back at QGenda’s 2015:
- 998 fully qualified product demos performed
- 379 new customers from the 998 demos
- Added $5,009,294 of new customer annual recurring revenue
- Grew from 48 employees to 100 employees
- Low customer churn with 97% customer retention
- Added Time & Attendance and a few other major product enhancements to our core scheduling platform.
The QGenda 2016 look forward:
- Add $10,800,000 of new customer annual recurring revenue
- Have 100,000+ healthcare providers scheduled by QGenda
- Grow from 100 employees to 160 employees
- Expand from 18k to 30k sq ft of office space in Atlanta
- Open a west coast office in the San Francisco Bay Area
- Increase QGenda’s Average Revenue Per Account (ARPA) by offering customers additional products and services to go along with their existing QGenda workforce management platform.
I feel blessed to be part of such an amazing company, and am truly grateful to be surrounded by the best employees and the greatest customers!