Thursday, July 31, 2008

How to hire an idiot

Wow, I remember how idealistic I was when I was about to bring on my first employee! After dealing with bad bosses over my career, after doing a whole lot of thinking about how I was going to be a great boss, and after doing a whole lot of reading about how to hire effective people, I was really looking forward to it. I was going to:

-- Hire people smarter than myself, who get things done!
-- Trust them to do their job, let them do their job and give them enough resources to do it!
-- Pay them WELL and offer great benefits! Work at home! Sure, why not?
-- Give people second chances! Don't throw out resumes because of lack of buzzwords! Or disjointed writing! Or lack of education! It's all about Smart People who Get Things Done, not interviews or resumes or formalities! Have an open mind!

Only problem was, I couldn't quite afford an employee yet. By then I had been working a couple years by myself, earning good profits in the $200K range but it was based on just one or two sales a year, and each sale took 6-12 months to finalize. With so few customers I could easily go a year without sales, I feared, so had to set aside my profits to cover that. And if I were going to hire someone, I'd really want six months or a year's payroll set aside for them as well. I just couldn't afford that yet.

But of course without more employees, I couldn't make more money to pay for them. I was really at full "capacity," spending around six full-time months to land a sale, then the next six months servicing that sale before starting over again. So I knew my first employee would have to be a salesperson, but I just couldn't afford it and couldn't see how I'd be able to at my current rate...


Serendipitously, I was approached a little while later by a former VP of my big competitor, at my industry's main exhibition where I had a small booth. He was a friggin' VP of a $100 million a year company! Well, their former VP, he said. Wow though, I was flattered. I demoed my product to him, explained my company, and his mouth dropped open. He started gushing about how incredible my product was (well, it was, I guess) and asked why the "fuck" wasn't I selling $100 million a year?! I said well, I'm sort of at capacity... and... errrr... I'm more of an engineer, and, uh.... I don't know why. I didn't want to tell him what I feared, that it was just this thing I made on my own, some of the code was crap, and things like that just don't sell for millions.

Then he told me "Shit man, I could sell $10 million of this a year!" His informality in that professional business setting I thought was a little strange, but...

Was it possible somebody could really do that? I sure couldn't, but maybe I was on the wrong path? I wasn't a business expert, so what did I know? He was a friggin VP of business development for a $100 million company! He must know what he's saying, right?

We talked a little more and I couldn't believe when he asked to work for me for free! Well, on commission. But hey, that's money I wouldn't have made anyway. If he brings in a million bucks a year in profit, he's worth 10% of that, certainly!

We settled on 10% and I'd pay for travel and some other expenses. No problem... if he could make the sales he insisted he could, he'd be well worth it. And with very little risk to me for all the work he'd be doing!

Just to make sure I wasn't being bullshitted, I called the competitor to ask about him. They verified that yes, he was a former VP there. Awesome, this guy was for real. And if he was good enough for them, he's good enough for me! We soon signed a deal.

Alarm Bells

I mentioned to my uncle (an experienced big-ticket salesperson) about this new guy I was bringing on board, and he told me to be careful because "guys like that will do anything to make the sale and don't care if they leave you high and dry. I've seen it LOTS."

Whatever, old man! Because I had the deal structured to account for that: he didn't earn commission until payment was received! It simply wasn't in his interest to do just "anything" to make the sale, because if the product wasn't as promised, the customer wouldn't pay and he wouldn't get his commission! Beautiful scheme. And I'd have all pricing authority so he couldn't sell it at a loss, either! Ha ha, nothing could possibly go wrong with this.

So I set off on my promises of being a great boss. I let my new sales guy do his thing, trusted his judgement, didn't ask to be CC'd on things, gave him the resources he needed, just set him loose. $25K in stuff he said we absolutely needed -- slick brochures, sponsor some conference, ads in the trade journal, coffee mugs, pens with our logo -- I readily paid for. I wanted him and us of course to succeed.

And really I was pretty damned honored having someone with his experience -- a friggin VP of a $100 million company -- working for me, and for free! Wow!

Okay though, this one thing didn't make sense: I had told him our cost for a particular solution we were giving an estimate for. I did that so he could figure out his commission, which was based on gross profit. I then got cc'd on a mail where he turned around and told the customer our exact cost, and "that means there's a lot of wiggle room on the price. I'm sure Bill will come down on it."

WTF? Why would a salesperson tell the customer our cost?! I mean, isn't that just common sense? I asked him and he said something about "don't worry, they know we make a profit."

Well that didn't make sense -- that seemed pretty stupid actually -- but this guy was a friggin VP of a $100 million company! I was honored to learn business from him!

Then there was this other strange thing: a customer asked if they could see a demo, so he asked me to approve the travel cost. Just knowing how the sales process works, I told him I didn't like spending money on demos until we were sure they had money and were really ready to buy. So he emailed them (cc'ing me) "Do you have money? Are you ready to buy? We don't give demos unless you are."

Why in the world would you say that to a customer?! But... he was the VP of a $100 million company, after all! He must know these customers extremely well, and maybe it's... maybe some kind of inside joke thing? Just how executives talk to each other?! Wow, I had so much to learn!

Hmmmm, then there was this other thing that didn't make sense either: he sent me a sales forecast, and in the "absolutely certain" column he had $5 million in sales over the next three months alone (!) I mean, holy shit! But wait: that one company on there -- I could have sworn they told me just six months ago they didn't have anything in the budget, but maybe in a couple years? And suddenly now they're ready to buy? Just like that? I asked him and he assured me that yes, they have money now and are definitely buying from us. Definitely! 100% certain.

Awesome! I mean this guy was a friggin VP of a $100 million company!!! There was so much I would get to learn from him!!!! $5 million in sales in three months!!!!11!!!

Hold on. Then he sent me a proposal he had been working on over the past month, for final review and "second set of eyes." I had previously sent him all my boilerplate proposal and price quote templates to show him what's worked for me in the past. I figured he could just fill out with the customer's particulars like I had done over the past couple years, and save a lot of time. But no, he said he was going to write a totally new awesome proposal package guaranteed to win. That's what he used to do as VP of the friggin $100 million company, after all! I told him great, I can't wait to see!

I started reading this thing and my face dropped in horror. It was the writing of a grade schooler. I'm no professional writer either, but... it was absolutely awful. Simplistic writing, full of cliches, full of grammatical errors, and absolutely lacking in any structure. It was just random thoughts strung together, topics bouncing around from idea to idea from one sentence to the next. There was no exposition of the customer's problem and how we were going to solve it, it was just him gushing about how "great" our product is and how "lots" of people like it. It was dizzying to read because there was no logic behind it -- it was along the lines of "This product is great. You will like this product, guaranteed. It has feature A. Feature C is great because it's so easy to use! It has feature B. The other great thing about feature C is tons of people told us they love it. Tons. It has feature D." (New paragraph)... on and on for 15 pages.

Okay, how could a friggin VP of a $100 million company read something like that and think "That's it! Yea!"?

I didn't care whether he was an experienced VP or not, I had to ask him WTF he was thinking, hopefully without offending him (too much). "Ummm, it was... interesting," I carefully offered, "but I'm just curious: did you proofread this at all?"

"Oh sure, I ran it through spell check and had my wife check it out too" he proudly replied.

"Ok, well... uhhhh... hey, didn't you also used to write proposals at [former company]?"

"Yep! Well, not exactly... other people wrote them I guess, but I oversaw it."


"So -- what do you think? Kick ass, huh? I think this is a shoe-in for us! I really do, I can feel it."

Here unfortunately I sort of lost it. $100 million VP or not, that document was shit. No, I'm not a writer either, and no, our customers aren't English teachers, but what the fuck? I can't put my company name behind that! It was shit. I told him that. I asked him what the fuck he was thinking, why would he even set out to write a proposal if he knew he couldn't write -- I mean, why bother? A whole month to do that?!

He apologized. He said he was trying to do well, and he really thought he could write well, but "apparently I can't, and I accept that."


I left to cool down and think about it more. Okay, no problem. So what, the guy can't write. We can use my previous templates and I'd just modify them for each new customer. We're talking about $5 million coming down the pike, after all! I'd write them myself all day for that kind of money! Woo-hoo!!

I stayed up all night rewriting the proposal, and we moved forward.

Well, the three months came and went. No sales. The proposal I wrote? Turns out they had never asked for it and didn't have money but thanked us for sending it. Uhhhh...

And the other $4.5 million in sales we were getting that month? A couple others "suddenly lost their funding." Another "got delayed by other problems but they're buying next month." Another was "I don't know what happened... I'm trying to find out."

But any week now! Any week was going to be the first big order! Just have patience! I mean, this guy was the VP of a $100 million company, after all! Who was I to question him? I was just some programmer who found myself in sales only because I had to.

Six more months went by. Not a single sale. Okay, well, it's a long sales cycle. I always figured I might go a year without a sale, so give the guy a chance. VP of a friggin $100 million company working for me for free! Woo-hoo!!

Still, I got more and more concerned. Something wasn't right. I suggested we start working "together" on sales since we both wanted them, after all, so could he start cc'ing me and we'd brainstorm ideas with each of these prospects? He thought that was a great idea.

So he started cc'ing me. And Oh My God. This guy was awful! Holy shit. His "sales technique" for the first new prospect I sent him consisted of literally begging the customer to buy "because our company is about to go in the shitter." Huh?! WHY WOULD YOU TELL OUR CUSTOMERS THAT?! And use obscenities in that kind of correspondence?! To a CUSTOMER?! I demanded an answer.

"Well, it's true, isn't it? Believe me, I've been in this industry for 30 years and they can handle it. That's just how these people are," he explained.

Okay, friggin $100 million VP or not, I was calling bullshit. My company does not correspond to people like that, that's not how you sell this product to these customers, that's not how people respond positively, that's not how to build a business! Bullshit.

And everything over the past almost 12 months, all the other bullshit started to come together. Really I felt awful, awful at being conned somehow, awful at myself for not checking up on him, for not even interviewing him, for not watching him, for just setting him loose and trusting him without "verifying." Everything he had told me was bullshit, all his forecasts, everything looking back at our correspondence about who had money, who was buying, everything he promised. All bullshit.

I took him out to dinner and we had a heartfelt Scooby-Doo reveal moment (you know, at the end of the show when all the masks would come off and the mystery would be explained):

Aha. Turns out the guy was a High School dropout. Got into drugs, booze, crime, turned his life around and got his GED. Went to work at a utility as a lineman and worked his way up. He had great people skills, remembered everyone's names, and that's really how he made the connections to keep getting promoted. Delegated everything to subordinates. Retired from that near the top and worked as an industry consultant because he knew everyone in the business. Did some work for the competitor. They liked how he knew all the top people at all the top customers, and offered him generous employment. He really wanted to be a VP so they said sure, how about assistant VP of business development. ("Whatever, just set appointments for us," was actually probably more like it).

He got fired within the year, he admitted. He said it was a "personal disagreement" but I wouldn't doubt it was utter incompetence.

And nope, he'd never done sales in his life. His job used to be setting appointments, mingling with customers at conferences, and getting their sales team in the door to make the sale. But he himself didn't do sales. Had no clue what was involved, had no clue what process customers go through to make a purchase, had no clue about techniques like "consultative selling" or who you have to convince in a business or institution to close a sale. No clue. But gosh, he was eager and willing to learn and felt great about this opportunity I was giving him!

Well, at least he was honest. He wasn't trying to deceive me, and he really thought he could do it, he explained. No hard feelings. But I didn't need an entry level salesperson, I needed an experienced salesperson right now. I told him he had to go, and he understood.

Sadly, I could have found out all of that by simply asking him before offering him the deal. I just never did. I mean, he was a friggin' VP of a $100 million company, after all!


Every time I relate this experience, I get a lot of head nods. I guess it's pretty common among business owners and anybody involved in HR, to get employees who just don't turn out as promised. But damn, I didn't think it would happen to me. I mean, I was prepared! I read a lot of books! I knew all about bad employees and how to avoid them! I was smart, dammit!

Well, my company survived. I went back to basics with my old way of selling and soon landed another nice sale. Then my next hire was a salesperson again, but thankfully this time I knew to check up on him before the hire, and knew to have him explain his strategies and techniques in the interview to make sure he knew his stuff. Thankfully, he's turned out to be a really good guy and so far has been doing really well.

And unfortunately what I really learned from this is something I actually already knew from my first year of employment right out of college: business executives are sometimes just full of shit!