Episode 13: The Road to Blitzscaling

Transcript
INDRE
Hello! Welcome to the podcast Startup Recruitment Failures, I'm Indre, Founder and CEO of jobRely. We're building a Linkedin automation platform for outbound recruitment and today my guest is Jonas Karklys, Co-Founder at Nord Security. Jonas, could you please introduce yourself and your company?
JONAS
Hi Indre, hi everybody. Nice to be here to talk with you about HR and recruitment. We've been working for a while building Nord Security - one of the greatest cyber security companies here in Lithuania, but scaling globally. So yeah, looking forward.
INDRE
Thank you for your time and participating in this podcast. Jonas, what was the biggest or latest recruitment failure you had?
JONAS
Recruitment is always a special area for me because it's related to people and people are the best part of running a business. It's hard for me to talk about failures because it depends on your general approach, to running a business, and for me, it means learning - we learned a lot during our time building this particular business and hired thousands of people. The funny story perhaps is related to our new initiative opening an office abroad. We always had a dream to be an international company. And always wanted to be in Berlin because it's a very unique city, bringing people from all over the world and cultures from Australia to Brazil and other places. But our pace is always starting doing and learning by doing and we started to hire people over there and we learned that it's a bit tricky because at first, we didn't have a local entity there. We started to employ these guys in the Lithuanian entity and we understood that we can't even pay salaries after the first month. We don't have blue cards because people working there from other countries than European Union are not officially citizens. So it means we have to improve our entity in terms of owning a blue cart which is mandatory so we had to hurry up to open a new entity to transfer all the guys to the new one. And then be precise with the following processes. Secondly, it was tricky when we wanted to open an office because the new entity was without any track record. And in Germany you have to have something at least running for 6 or even more months so we had to find a solution on how to convince the local rental companies to give us the new office so it was a mess at the beginning, but it's our style - to be focused on the result and now we fixed everything and we have a beautiful office in Berlin. More than a hundred people came from all over the world and the first 30 people were not even german. So that's why perhaps Berlin is beautiful.
INDRE
Amazing. I love developing a startup. You can be hustling, right? So you hire people and just then you think what to do, how to pay salaries and it's always possible to manage, to find the solution. Instead of preparing it for a year or longer just start doing something. So yeah, momentum is great.
JONAS
Yeah, exactly. And now we learned a lot and we can advice to our friends or other companies, what to do at the beginning and if we want to open an office in another location that we have at least -2-3 people who could establish that entity and the office itself. Now we are much stronger in terms of this question.
INDRE
I can imagine, but it still requires preparation and did you manage to solve these questions fast? If people are employed I believe you need to pay the salaries as soon as possible. How long did it take for you to align everything?
JONAS
Yeah, our legal advisers told us it's going to be impossible to solve all these issues in one or two months but we convinced everybody to work hard, to be on time with salary payments and so on and we were late only 2 weeks and we paid bonuses for those who waited and they believed in us. So when you want and you have a robust challenge, nothing is an obstacle for you.
INDRE
This is impressive. This is really impressive how to open an office, how to manage to get rent if there is such a rule that you need to have a track record?
JONAS
Yeah, so we convinced local governance that we have a really big company here in Lithuania, a couple of other locations and we are selling our software to almost every country and we can guarantee that we have everything in place and we have stable finances and everything and they not after one conversation, but after a couple of meetings these guys understood that we are serious and then we were successful so we were really happy about that.
INDRE
I can imagine. But I believe there was quite a lot of stress dealing with this and other people depend on that too, right?
JONAS
Absolutely. And we have a really good track record about HR things and dealing with people and empowering them to work and achieve decent goals in their own careers. And when you can't pay salary and you are late two weeks you're really pissed off and you have to hurry up but it's on the other hand a good motivation for everybody and as I mentioned previously it's a really big learning and every department learned a lot, including HR, legal and hiring managers as well. So yeah, it was important for us by all meanings.
INDRE
Would you regret that you weren't prepared? Would you wish making all the processes in order before hiring people or do you think it was a good way to start and this pressure helped you to make everything way faster?
JONAS
I think that combining everything and summarizing what we did I think still we were at least one month faster comparing that more robust way of doing things and planning more for in this case, but we will use that information and those learnings in the future. So I think it saved time for us and no I'm not regretting that at all.
INDRE
Great! I like the attitude here. And when it comes to people, because recruitment is always people, do you have any story when you hired and regretted that you hired that person? I believe so, you said that it's a thousand employees now.
JONAS
Yeah, in our group there are more than 2000 people so we can't calculate how many interviews we had. And it's impossible to be 100% sure when you are hiring because I could say that sometimes it's a bit of a lottery and because some people are capable to sell themselves much better than others, and it would be hard to say that we regret something but sometimes you can face really funny situations when people during the interview seems that they are not interested in your company, in their role. Maybe it seems that they lack some skills or similar stuff and you choose another candidate. But after a while, after six months, for example, you need to scale that particular team and you are getting back to that person; then you hire, you think that "Okay, maybe that person won't deliver like a rock star" but sometimes that person delivers and performs much better than the whole team. So this is nice and sometimes it looks like a bit up scoring that it's hard to choose but this is the way it is sometimes it's really hard.
INDRE
Yeah, I agree, it's impossible to be 100% sure about the hire. I don't know how you could measure and assess to be 100% sure. Were there any situations when you felt maybe no regret but it was very obvious that you missed something in checking or asking the candidate and the hire was a failure? The person was not fitting and the team was not fitting for the person too.
JONAS
Those situations happen quite constantly because when you need to hire a lot of people, sometimes you are in a hurry and you make mistakes but actually, I have a couple of rules when hiring and the first rule is - if you feel that something is wrong, but it's hard to put those things on the paper, don't hire that person. You have to be 100% confident and believe in the future working together. Even though sometimes you also fail but when you hire someone and you feel that probably something is wrong, then always after 6 or 9-12 months you see that it's impossible to work together and that person is not performing at the level you expected. So first, you have to be 100 % sure and to feel that, secondly I always check the background - not always the companies that the person worked in before but the education because we need people with a growth mindset. Because that kind of people are always better and this is the rule if you want to have an outstanding team. Reference is always nice, but it's not like 100% also. The last thing you need to concentrate on but it helps, because especially here in Lithuania it's not a big community. So it's better to emphasize a particular person if he or she is not like delivering at all or the job is not the main function or the main goal you know during the day.
INDRE
And when you mentioned the educational aspect, what about the myth that there could be a great and well-delivering person without any higher education at all? Do you believe in that or are there some cases you had that it's true and it's better to see that the person invested in themselves?
JONAS
For sure, if you look at Bill Gates or Steve Jobs - they are without higher education, because they dropped their universities because they were too smart. But sometimes you can find the brilliant minds without trendy universities or so or even without universities. So that's not a rule that everybody has to have that particular education. So, in that case you have to check the ability to perform on their particular role. Or previous experience doing something or previous jobs. So we have quite nice success stories here in our company and what is more important is to choose the right character, especially for the stage of the business because you can have really smart, educated, and ambitious people, but if you need to launch a startup you can't pick the person who loves documentation and concentrate on the processes. Now you need hustlers. You need someone who can dream about doing something new, create, test and so on. And then after some growth stages you can bring those guys to prepare decent processes and documentation. This is also really important role for me.
INDRE
Yeah, I agree. And what is the culture at Nord Security? What kind of people or personalities are best matching your culture?
JONAS
Nord Security is a big group - our first product and flagman is NordVPN. The largest VPN consumer provider globally. And we have smaller brothers and sisters, like NordPass, or NordLocker or NordLayer so products for ultimate security and productivity of your personal needs and your company needs. So it's password manager, encrypted cloud storage and network security solutions. So these products are different and we have different cultures, so we try to bring different people and different leaders because as I mentioned before for those new products it's really Important to be quick and try to overcome a really tough competition coming from global market because everybody is trying to get enormous investments from venture capital companies. So culture is really different but every day you can meet a spectacular person and professional from a really specific position to the leading manager so you can learn itself new things which is really fantastic and we try not to foster the autonomous culture including accountability that everybody could feel relateness and that every day, every month the level of the competence would grow and we understand we are not going to work all together until the end of life. So it's important - if the person leaves, he or she needs to leave being a bit better than he or she came at your company so It's important to invest and this is our culture. We move fast because we're in a global market. You can't be too stable. So changes are the only constant thing in our culture.
INDRE
Yeah, exactly . This is a great paradox here. Well I worked myself, not at Nord Security, but at a cousin as you said, in a group, related company, at SurfShark. And of course, different team is autonomous and they have maybe a little bit different culture inside. But for me the group was also like a university camp - where you come and you meet awesome people. You need some help - you can go ask, you need some discussion or friend, you can find it. And amazing culture, I admire university life. So for me that was always kind of university, where you have your projects, you have your focus, but you have peers willing to participate and help you achieve those results. It's always very important to find similar personalities, right? And similar attitudes or people with similar approaches to work - have you ever had this situation especially when you mentioned in the beginning that you felt like it's not something is wrong, something is not fitting but you cannot describe it to others and others don't see mismatch and you hire that person and you see that, well, maybe it's not a failure but it's not a perfect match in terms of the cultural fit?
JONAS
Yeah, for sure. But before going there I would like to say that we are super happy that you worked together with us and helped to establish such a great company with such a great team. Best talents and we can see now the result of that beautiful job. It was a nice period working together. Always welcome. Answering your questions, of course, we had and I had some guys that were mismatched, but you can be the only one accountable for that situation because both sides have to be open and honest. After all, you have to understand if you both want to go in that particular direction. And if it's a good match if it's a good base for your culture, tech stack, or whatever. So both sides have to prepare their homework and probably dive deeper and then it's a better chance to work longer, to be a better team to have better team chemistry. Not everyone is doing that so sometimes it's really hard when you invest a lot of time in a relationship in onboarding procedures and everything and people leave soon because they expected something different. But that's the reality and you have to polish your processes to avoid those situations.
INDRE
Yeah, I think it's very well said, it's on both sides. It's not only the employer responsible for hiring or making the decision not to hire. It's 2 people in the room and they agree basically so it's always the employee's responsibility too. But sometimes it's really hard. You don't have the interviews usually lasting an hour or longer. It's not a week living together. It's very difficult to assess everything. So maybe sometimes it's a disappointment because both sides maybe had expectations. So when you see a little bit later that there is not a match. You can go and move on and then find a better place or the better matching candidate.
JONAS
Yeah, exactly. At least you have to learn from that situation and get feedback and try to prepare your routine in a better way for the future and be even more passionate because, if the person just didn't believe in your vision, your mission, or business goals you fail as well. Have to be better then.
INDRE
Yeah, but it's again not for everyone to believe in your mission, because different people have different beliefs, right? It's impossible to convince everyone that this is the best thing you can do here.
JONAS
For sure that's true.
INDRE
And do you see any difference from how it was before Covid and how it is now in terms of building teams?
JONAS
Oh yeah, it's a big challenge I guess for every company. And a lot of misunderstandings, and a lot of miscommunication, and a lot of thoughts. Because nowadays, it's not important to be for everybody in the same room because we work globally and offices in Vilnius or Kaunas or Berlin or other locations or even someone working remotely. So it's a challenge to organize the work routine itself. But if you are orientated into the result and not only into the processes to achieve those results and if everything is planned ahead, it doesn't matter where are you based. But Covid made a big change because people now want to stay more at home. Because sometimes for some particular positions. It's very useful for example to be focused on your task, to write a copy, to prepare the design, to read or analytical work. So that's true, but during the covid and after the Covid we lost a bit at least in my personal opinion, not like team chemistry but the feeling the relatedness perhaps because we didn't have before less like five days together, but I think it's getting better and you have to be, even better as an organization of the work and the leader to bring that team chemistry and their relatedness even in a higher level. Sometimes it costs more but this is what we got after Covid and I believe that at the end of the day we learn a lot about the global community, that we can think more about both parts like employees and employers. We will see where we go but it takes time.
INDRE
Is there a hybrid work model or now people are working remotely or in office? How do you organize everything now?
JONAS
It's a hybrid model. Some guys are coming to the office daily, some are working remotely. And we try to launch cross-functional teams that would be together at least in one city. So it's easier to come together for brainstorming sessions for some meetings and to spend some time together. But it's not always the case. It's really hard to have the whole team in one location. So sometimes you have a team member working in Vilnius other from Kaunas the third one from Berlin and then remote guys from Poland or England or United States. So it's yes, a hybrid model.
INDRE
Are there any rules or is it on people whether to come to office or not?
JONAS
More it's on people and we just recommend to come at least three days per week, because of the general vibe of the company. But it's up to people and the most important thing is always the result you have to deliver and if you are not coming so maybe something is wrong. It's not necessarily the fact that the person is working from another location. But sometimes it is related.
INDRE
Okay. And what was the biggest challenge for you as the head of the team and quite a big team? When during these changes - you work at the office and then people start working remotely, now it's pretty flexible. What are the most challenging things for you to deal with?
JONAS
It's a really good question. As I remember the first quarantine, the first weeks of Covid it was a bit interesting to be so much at home and work focused and it seemed that we became even more productive, but it was just only at the beginning and afterward, the fact that we lost socializing and we stopped dancing as there is one song. So it's really hard but overall it wasn't a big challenge in terms of processes perhaps because we already had the infrastructure. It's really easy to connect with people in Zoom or Google Hangouts, we use slack, we use emails and other networking tools. It's easy to get access to your roadmap or tasks. So it wasn't a big challenge but the part of losing socializing maybe was the biggest challenge I would say.
INDRE
How did this loss of socializing affected people? Was it easy to recover afterward? Did you see that something changed and now the team is different? Something for better or for worse.
JONAS
I think that some people lost the feeling and the relatedness with the company or goals itself or some people changed their way of living and started to change their lifestyle or started to look for new opportunities -that was a bit hard. Because when you don't know the future sometimes you feel like "Why do I need to work if this is happening and there is no future at all?" But we tried to work hard and organize some additional activities. Inviting some professionals from medicine to have some lectures, to speak in front of everybody, and helping to manage their routine.
INDRE
Great! So I think it's very important because it's not only about the work life, it's a lot about the personal life and if companies can take care of their employees, the emotional state of mind it's a huge advantage and I think it's a very good impact and you can even create higher loyalty of people because you care when it's a bad period for everyone. So you are I believe the Co-Founder of one of the biggest and the most global startups in Lithuania which recently became a unicorn. What would be the takeaway? What is the lesson or thing you would like to suggest for other startups, or startup founders who are trying to come to the stage you are at?
JONAS
The ultimate success is combining a lot of different things. But I think one of the most important parts of running a business and trying to achieve something special is you have to have a startup culture, but the mindset of businessmen. And we worked hard establishing our own culture and carrying people, investing in them, trying to grow them, increase their competence, and so on, on the same time you have to run a business so you have to think about revenue streams because it's sometimes not easy, but sometimes it's easier to get a lot of money at the beginning and then be quite not in a rush and think carefully about everything but you have to be in a rush, you have to test a lot. The idea is only 2% of success, 98% of success is execution - so you have to have the best optimization loop and think about revenue streams because when you have revenue you can scale a company, you can bring more capital from other companies if you wish and yeah, so that's probably the most important part and I wish for everybody to care about that part and then fix everything else around it.
INDRE
Great. Thank you Jonas! Thank you so much for your time and for sharing your stories and experiences.
JONAS
Thank you Indre and yeah, always welcome. Nice to be here.
INDRE
And thank you to all the listeners, for more podcasts, please visit http://jobrely.com.
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Episode 13: The Road to Blitzscaling

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