Part Two of a Four Part Series: The Four Syndromes of Startup Failure.

In his keynote to several budding entrepreneurs, Eric Benhamou, Chairman of 3Com, former Chairman and CEO of Palm, made some observations about how startups fail.

Numero Deux: Rising to the Recruiting Challenge

Eric observed that startups fail to recruit consistently.  The skills gap is not identified early enough. When it is acknowledged, inadequate thought and planning are put into the hiring decision.  Often Board members are asked to interview candidates at the last minute and are ill-prepared to make a well-informed decision. I think we would all agree that people are a startup’s most valued resource.  So, why does this breakdown occur?

I would argue that recruiting, beyond hiring the CEO, is a big part of what VCs should bring to the table. They are in a great position to maintain a “virtual bench” of talent. A roster of great executives who have succeeded in other portfolio companies, individuals they’ve worked with in the past, candidates from a vast partner network.  More importantly, they provide an objective perspective of what the skill gaps are and have a comparison benchmark across all of their portfolio companies.   Is the CEO a terrific strategist, but horrible manager?  Is he or she a sales assassin, but lacks the vision to identify and create a new market category?

I’m not assigning blame to the VC for this failure syndrome, I view them as the solution.