In this episode, I was lucky enough to sit down to talk with Mellie Price. Mellie is a serial entrepreneur and and current Managing Director of Capital Factory, an Austin, Texas-based incubator and co-working space.
During our discussion, we talk about how to build your early-stage team, including what characteristics to look for in potential team members, where to source local talent, and how to narrow down your search to the perfect candidates.
Hope you all enjoy getting to learn from Mellie as much as I did. Enjoy!
Have comments, questions, ideas, or feedback? I want to hear it. Let’s talk at @william_griggs.
Topics Covered In This Episode
- Before we dive in, tell us briefly about your background and what you are up to at Capital Factory
- What impact can a great team have on the success of a company?
- Tell us how good it can be. Tell us about a team that you’ve built including why it was different and what it was able to accomplish.
- Are needs at early-stage companies different than other stage companies?
- Is there a specific set of skills or mindset you look for in people that you are hiring early in the company?
- What types of people don’t fit in well at a startup?
- Any other stage-related things we should be thinking about?
- Now that we know what types of people we are looking for, how do you find these people?
- Should people focus on finding the candidates or having the candidates find them?
- Which results in the best outcome? How do you do either?
- How do you approach people that look like a good fit, but are currently employed?
- How do you approach people you’ve worked with before when you have a non-compete agreement?
- Now that we’ve got the people, how do you get them interested?
- How do you interview?
- Now that we’ve got these great team members, how do you keep them?
Griggs: All right Mellie, thanks for joining us today.
Price: Thank you.
Griggs: Yeah, there are lots of people in our audience today looking to build out their team, whether it’s just one founder, whether its co-founders, they’re looking to build out a team and we need your help. We know you have, specifically I know you have a lot of good experience building teams in your own career, but before we did in to the actual meat of the interview, can you kind of give our audience a brief overview of your background so they know a little bit more about you and they can know that you’re a credible source and they can continue listening to this podcast?
Price: Well, that’s a tall order, given that being on a podcast may be the highlight of my career. I hope that establishes credibility. But I spent the last 20, 25 years in the earliest stages of companies. I’ve done eight start-ups at this point, had a handful of quasi-successful exits and been blessed with a few pretty successful exits and we won’t talk about the ones that didn’t exit.
But definitely have had some experience in the early stages of building teams and companies. Most recently I have been the general partner and managing director over at Capital Factory with Josh Farris, one of the founding mentors there and have sort of grown with it as it’s organically grown and at this point I manage the investment fund and we invest in early stage companies. We’ve gotten about 50 investments in the last year and a half, and so that’s what I do with my free time, I guess.
It’s not really free time, but between that and I’m actually, just last weekend, like I said, I’ll be starting another company and my personal goal with that is to actually build a team and not be the person that runs it, so I’m really excited about that as well.
Griggs: Very cool. 20 plus years of experience, eight start-ups, multiple exits, lots of mentorship it sounds like throughout your career. You sound like a very good person to have on the podcast today to talk about growing a kick ass team. So first, you know, before, as we start to dig in, can we kind of unpack it a little bit and talk about the impact a great team can have on the success of a company?
Price: Yeah, I mean, bottom line is a great team makes for a great company. It’s my personal opinion that a great idea poorly executed is half as good as a mediocre idea exceptionally executed, so at the end of the day, the team that you build makes or breaks a company from my perspective.
Griggs: Yeah, that ties a lot with a guest we had previously, Dean Drake, who was talking about execution, that strategy being the two most important things when it comes to executing a start-up and so, I guess to really have both of those inside of your start-up, you need that awesome team. So we talked a little bit about where, we talked a little bit about your experience.
We talked a little bit about the impact a great team can have so people know you’re credible, they know why they should continuing listening, why they should care. Can you tell us how good it can be? Can you kind of tell us, maybe about a team that you’ve build and why it was different and what you all were able to accomplish?
Price: Sure. You know, I’ve built several teams and every company requires a different team and different stages of the company require a different concentration to the team. The thing that I enjoy the most and that I think that I am best suited for is really, truly the founding team and it’s an easy story to tell for you because my founding team was with me through my first several companies for the most part.
So, you know, when I think about why it was different and what we were able to accomplish in the earliest stages, you have to attract people who are comfortable with uncertainty, people that are comfortable with ambiguity and people that are comfortable not working normal business hours, solving hard problems and my first team, which was, oh, circa 1993 with a company called Monster Bid and, you know, literally at that time we were one of the first bidding companies in the nation.
There certainly weren’t any in Austin and we were doing, our job was to help people understand that this thing called the Internet was coming and that it was doing to affect the business fundamentally and so you have to have a team that can not only generate enthusiasm and support but also build a trust with perspective clients and help them understand that their brand can be trusted, you know, by partnering with you to move you into a whole new market, and so we had a technology team that had to be able to speak the speak to a client and we had a client team that had to have patience and not get frustrated when people didn’t know if it was http://, and those were forward slashes or backward slashes? You know, there was a lot of confusion in the early stages and so I’m really proud of that team.
What we built together actually ended up, you know, transcending many years and many other start-ups. In fact, my last start-up, Front Gate Ticket, my CTO was one of my first employees at Monster Bit so that’s been a blessing for me to carry team members throughout the years and probably one of the more significant aspects of my own personal success so I’m eternally grateful for that, and it’s a testament to the fact that a team can make or break a company.
Griggs: Yeah, that’s very cool. That leads back to what you’re saying. It can make or break the company, and if you get the good team, you can kind of tend to do the impossible. You can have people that are with you through multiple companies. You can build long term friendships and end up making each other more successful than you would be independently.
Price: Yeah, absolutely.
Griggs: All right so let’s start with how you think about early stage teams and let’s assume that the people listening to the podcast, you know, there may be one or two people that they already start to identify some of the roles or some of the functional areas that they need to fill and as they go down the path of trying to fill these roles, you know, is there something that they should be thinking about or are people are people that are good fits for early stage companies different than the types of people that are great fits at later stage or bigger corporations?
Price: Yeah, definitely. You know, I have to say that I think the word “functional role” really is a defining point for me on terms of just by definition the fact that you can define functional roles with a later stage in a company. Early state companies, as I mentioned earlier, you know, folks need to be comfortable with ambiguity and chaos and conflict. There’s a lot of problem solving in the early stages of the company and there’s a lot of problem solving throughout explosive growth if you’re having success as well, and so to me, the fact that, the early stages of the company I generally look for people who are generalists and have a strong ability to cover different areas, because, you know, usually you don’t have a lot of funding, at least in boot strap companies.
There’s not a lot of funding. Everybody just kind of needs to be able to cover the functional areas and then people start to develop expertise or interest in the more functional areas and so I look for that capability in early hires and so it’s an odd combination of generalist with the ability to go deep, but it is rarely truly an expert in my case. I usually hire or contract expertise in the early stages until I know that that expertise is something that can be there full time. So that’s typically what I look for in terms of just skills related to the company. I also look for to me, to be in a high conflict environment and the high stress environment, I look through; look for people that have a relatively high degree of self- awareness.
The ability to navigate conflict, in my experience, is largely related to that. You know, having compassion for other people, understanding how other people react in their stress environments and be able to work within that, so it’s a combination. I had a mentor early on that said, you know, hire on the basis of character and integrity first and skills a distant third, and that has definitely proved well for me.
Griggs: Very cool. Sounds like great advice. So if we’re think through chaos, conflict, ambiguity on certain days, self-awareness, compassion, how do we actually filter out the candidates and how do we test for that or how do we specifically ask questions or look for that type, those types of skills?
Price: Well, two things. Time and time. It’s either time that you’ve known them throughout your life and you have relationships in the network that you can tap into. The other thing is if you don’t have that, then spending time with them. You know, in building a team you have to be willing to take the time to find the right fit and you have to use the other end of the time sword, which is if it’s not working, quickly change it.
So finding the best candidates in my experience has really just been making myself visible and available to the community that I’m looking to hire in and then, you know, asking people who know people and just using the good old fashioned human network.
Griggs: Yeah, so it seems like you said looking through your network, tapping into those, maybe finding specific people that have come from situations where they’ve been successful that you knew were chaotic or conflict prone or, you know, dealt with a lot of uncertainty just because of the stage of company they were in.
You said, you know, in addition to the network, you can leverage people in your personal sphere, so you’ve known them for a long time or I guess, like you were saying, through the interview process, you can get to know them so you can ask the pointed questions, you can give test assignments or you can throw them into the fire and see how they react. Does that sound about right?
Price: You know, I have to push back a little bit. I know many wonderful companies that are all about building culture have a really robust interview and recruiting process. I don’t know if it’s just a function of the fact that I’m a more intuitive leader than I am a process leader and I also don’t know if it’s a function of the fact that I’m an earlier stage leader. I think some of those capabilities come in when you really are searching for functional and you’ve got to test for actual experience and validate claims that people have made. But for me that’s not something I’ve done.
I spend time with people and I make sure that there is a good fit, that’s it’s a right combination of simpatico with each other but also challenged and, you know, that’s a really, when we were talking earlier finding people who are comfortable with chaos and ambiguity, the other edge of that is you can’t find somebody who can’t thrive without chaos and ambiguity. You don’t want somebody who’s addicted to chaos or addicted to drama. And so, you, it really takes time in getting to know somebody that can amp up when they need to amp up and can chill out when they need to chill out, and those are not things, in my experience, that can be tested. There’re nuances of human relationships that you think figure out as you spend time with somebody and so I’m more a fan of working with somebody, maybe working on a project together or giving them an opportunity to contract before coming full time, or something like that has actually proved more beneficial to me than running through personality profiles and things like that.
I find those tools are more functional and once you have an established team and you’re more aware of where you can tweak communication and performance to work better together, then that’s when I find those things are really helpful.
Griggs: Gotcha. So we’ve touched a little bit about what we’re looking for in these early stage employees, excuse me, and we’ve touched a little bit on how we’re finding them. Let’s dig a little bit more on, you know, the process of finding these candidates. Let’s say if they’re not in our immediate network, how should we go about or how do you go about finding these candidates? You talked a little bit about it earlier, but let’s unpack it for the audience.
Price: You know I wish I had a magic bullet for that one. It’s a difficult question for me to answer because at this point in my career, I go to my network and I go to my reputation. I’ve had the pleasure and honor of working with a lot of people and so that does make it easier to build a team. In the absence of that, I would probably go to meet ups and since I like to spend time with people as my primary criteria, I would places and figure out how to spend time with people.
Griggs: Very nice. Very nice. So spend time with people, get to feel them out, but like you also said, long term perspective is you’ve proven yourself, you’ve built up a network here in Austin, being a credible person, an accomplished person, so that’s something people can have a long term perspective on is kind of playing the long game but in the short term, if they need to start adding team members and if they’re new to a community, if they’re new to an industry, they can start with meet ups, it sounds like, or maybe even through, you know, service providers like lawyers and kind of tapping into those networks. Is that, does that sound right?
Price: That sounds good. You know, not trying to toot the Capital Factory’s horn, but I don’t think co-working spaces are also a really great place where, you know, you sort of naturally come together. It’s another sense of community that can, it can be like minded in that just working in the same space, you might find somebody that’s a good fit for a conversation that might know somebody who knows somebody, so I tend less to go to service professionals like investors and lawyers, because quite frankly, they’ll come to you. If somebody’s invested in you and they have somebody that they think is a great candidate, they’ll bring them to you.
But in terms of being proactive and finding your team and getting out in to the community, I think meet ups and co-working spaces are a great place to do that. And another place I like to go, which is sort of, doesn’t seem obvious but attending nonprofit events in your community, for me, has been a great source of finding people that have a natural balance toward community service, as well as the start-up world. It just had been a great place where I’ve been able to find like-minded people who, you know, they’re all about working hard and playing hard but they don’t forget the importance of the rest of life.
So just going and participating in something you’re interested in, whether it’s a trail clean up or, you know, Big Brothers Big Sisters, you know, an animal organization, whatever it is that you’re passionate about, a lot of times you can find people who share that balance and that drive in a completely different environment than the obvious.
Griggs: Yeah, that makes a lot of sense. It seems like with the meet ups, as you’re saying, you could go to functional or industry related meet ups or general start up meets ups to start connecting and finding people, but with the nonprofit it seems like, you know, you’re basically bonding over a common interest or a common, you know, cause that you’re interested in or want to help, so it’s very interesting.
That’s another good piece so, you know, one of the things that you talked about earlier was sitting down and having those conversations with the people, getting to know them. Not that our audience wants to exactly replicate the process that you do for having those conversations, but if you could get them kind of down the path of, I don’t know, maybe someone that’s a little bit more introverted or someone that’s not quite sure how to have those conversations, can you, you know, enlighten us a little bit on what you’re talking about in those conversations and how you’re managing the conversation?
Price: I’m not sure I have a really good answer for that. I’m not, can you reframe the question for me?
Griggs: Yeah, as you go out and have conversations with individuals that you networked with or were referred to to try and see if they’re the right fit inside your company, what are those conversations looking like?
Price: Well, I guess for me they’re organic. You know, you sit down, you say hey, here’s what I’m interested in working on and here are the things I need. You just sort of have an organic conversation. I don’t think you, for me it’s not about managing it. You know, it’s either a win-win or it’s not. I find it’s a lot like my dating life was before I was married. You know, you get together and you talk about, you know, you hang out and you see if you have the skill sets that work together and you get to know each other and it’s either a good fit or it’s not.
Griggs: Got it. Makes a lot of sense. So as you’re approaching these people, you’re thinking they’re a good fit. Is there any concern or thought around, you know, their current employment arrangement or any concerns around approaching people that are currently employed?
Price: Well, you know, if you follow the advice if you hire people on the basis of character and integrity first and skills a distant third, that does have a tendency to take care of itself. You know, if you’ve signed a non-solicitation or non-compete agreement; it’s your responsibility to honor that. But that being said, people change what they need in their lives and if somebody is high character and high integrity, they’re not going to leave another employer in the lurch and they’re not going to have conversations that are, that lack integrity.
So generally I think reasonable people can work out reasonable agreements and if somebody is looking to make a change in their professional life, that’s their choice. So I think, you know, you just stay above the line and let nature take its course.
Griggs: Very interesting. So now that we kind of have the people and we’ve gone through the process having the conversations, we’re trying to vet them, we’re trying to get them interested in what we do, how, are there any specific things or any advice that you can give to early stage founders who are potentially talking with people that are at well established, well-funded start-ups into helping get them interested in joining a smaller, less proven company?
Price: Yeah that’s, you know, I’ve watched that with many start-ups, especially in a competitive environment. You know, several of these questions feel like they’re erred towards like, how do I get somebody who may be on the fence to come work with me or may not know me well enough and again, it goes back to you spend time with them. If, as a leader, you’re unable to inspire somebody to join you or you have to do a song and dance to convince them, in the early stages of the company, I don’t think that’s healthy.
I think in later stages where you’re dealing more with things like is your compensation fair market value relative to other employers. Are your benefits commensurate with other employers, then you’ve sort of got to make sure your baseline is competitive and then it’s got to be about your vision and your ability to articulate where you’re taking the company and at that point, you know, you just have to respect that if somebody can’t see that enough that they have to be an enthusiastic yes, why would you want them on your team? It’s not your job to qualify them.
It’s your, I mean you have to qualify them from a certain perspective, but it’s their job to either get on board and make the leap or not and I would never try to convince somebody that isn’t really clear about that to come join my company.
Griggs: Yeah, so it sounds like it starts with the passion, starts, potentially starting with the vision of where you want go with this, with the company and then how they can play a part in that company. Is that how you feel like and if they feel a connection to the cause or to the problem you’re trying to solve, then you continue to go down the path but you’re obviously not trying to trick them into it or if they’re not interested in it, trying to, you know, coerce them into joining the start up because it wouldn’t be a good fit.
Price: Yeah, I think again the drawing line for me is around early stage of the company versus later. As a leader I think you have to have people who want and are inspired to pursue your vision and/or contribute to pivoting the vision if that’s what needs to happen so I don’t generally try to sell people on the market or the idea because that can change in the early stages of the company and often does change. So it’s really about, you know, do they want to have the life experience of working on the team that they’re on and will that be fulfilling.
When you get to the later stages and you’re dealing with more functional roles and you’re dealing with people who may or may not have an expertise specific to that industry, again it’s down to do they feel the leadership that they’re going to be working with can net net be a win for them.
So I guess to a certain extent I’m agreeing with what you’re saying. In another way I’m saying just the answer is no, don’t try to convince anybody. Just do your thing and share the information and share the inspiration and share the vision and let nature take its course.
Griggs: Got it. That’s really good advice. That’s definitely unique to a certain extent, I mean, you hear some similar advice in terms of sharing the passion, but as far as, you know, pushing too hard, it sounds like you’re saying, you know, let it take its course. Let the person ingest what you’re saying and don’t feel like you have to push them too hard to make a decision or to go one way or the other.
Price: Yeah, I want all enthusiastic yesses on my team.
Griggs: Gotcha, yeah. You don’t want a yes because you were so emphatic on me joining the company. You want a yes because that person wants to be a part of the team, part of the vision and part of the mission.
Price: Yes, exactly.
Griggs: Gosh, really cool. So do you, do you have any specifics, you know, as the company grows a little bit more, do you have any specifics around interviewing? Is it still continuing to be lots of conversations? Do you bring multiple people into it as far as, you know, early stage companies as well into the interview process?
Price: Yes. This is an interesting topic for me because in the last five years I’ve been, I’ve had some unique opportunities that have made me aware of other practices that are out there around cultural and functional testing and around interview processes that are driven more from an HR perspective and I really value them and for the first time in my career, I’ve been open to realizing the value in sort of standardizing that process. That being said, in every company I’ve been in, I try to participate, as a founder and CEO, despite the size of the company, I try to participate in as many interviews as I can, and I know that that’s the first thing that a lot of people say offloads because as a leader, you can be sort of self-selecting.
I do think there’s value in both and if you have the luxury of being able to do both, I think it’s great to set up a selection funnel, but make sure that your selection funnel isn’t filtering out the people that could be great candidates. For me, I have hired and some of my favorite hires over time have been people that probably wouldn’t have made it through a recruiter filter or an HR filter that had strict guidelines, and so it’s a balance.
You want to, as you grow, you can’t be involved in absolutely everything all the time and there’s a micromanagement aspect of it, but at the end of the day, if you’re the founder, it is your company and you have a responsibility to sort of check in on those processes and procedures and make sure that you’re getting what you want. So fits for me are, a lot of times I’ll set up different interview panels, like two or three people can be involved in the early stage of the process and then sometimes I’ll just pop in to interview or add myself to a 15 to 30 minute slot if there’s a candidate that seems to be moving through earlier in the process than usual.
It’s not, it’s a little bit more chaotic than most HR professionals would prefer, but I do think it’s valuable and I think it also helps build the team. I mean, it’s great if you’re, maybe you’re just going to be answering the phones as a call center rep, but the CEO bothered to interview you. You know, that has a big impact on the perception of people as they come into the organization. If you interview to answer the phones and you nowhere in the process met any of the executive staff, how does that leave you feeling when you start working there and maybe you don’t feel like your voice is heard.
So I think number one fit, be as involved in the interview process as you can and then when you get to the point where that’s really not the highest use of your time, make sure that the process that you set up and the people that you put in place to manage it understand how you work and know when to call you in and help you be included, and so that goes back to everything I said about spending time. It becomes difficult to spend time with everybody and there’s no doubt that your founding team is going to be different than your functional roles when you start growing bigger and bigger.
But time, it doesn’t have to be, unless you’re in a position where you have to hire somebody quickly, either to onboard a client or to bring on an expertise, I say slower is better and it’s worth the time that it takes to build the right team.
Griggs: So we’ve talked a little bit about digging into what to look for in early stage hires. We’ve talked about kind of the interview process and how involved the CEO should be and what does it look like at a high level. Should we talk a little bit about maybe how we make sure we keep these people inside the company? Do you think about that much as far as, you know, keeping the company in good shape, keeping morale up as it goes through chaotic and conflicting periods of time in the company’s formation?
Price: Sure. Again for me that is when you hire people on the basis of character and integrity first and skills a distant third and you have authentic relationships with them and you’re transparent and communicative and inspirational as a leader, a lot of those things solve themselves.
You know, people either want to work for you and want to work for your company and you’re either, you know, able to inspire them to do that and that a certain stages, competitive enough to keep the top tier talent or you’re not and I think the question should not be how do you keep them. The question is how do you keep yourself and your company engaged and intriguing enough that they want to stay.
It’s a fine, it might be a mincing of words but there’s an essence in there that is very different and I see a lot of companies that check the boxes and do the right things and it still doesn’t work. You know, they’re paying competitive salaries, they’ve got a cool work environment, they’re solving a great problem and people don’t stay and I think if that’s happening in your company, you have to really stop and look at, you know, how authentic are your relationships? Human nature is to respond to authenticity and it builds trust. It makes people willing to extend themselves through their own fears and through their real fears that come up and if you don’t have that and somebody gets scared and there’s another shiny object, they’re going to leave so self-reflection is how you keep them.
Griggs: Very interesting. So, yeah, that’s, we’ve covered a lot of actionable information and our founders in our audience need to get back to building their companies as soon as possible so what did I miss? Are there any other pieces of information that the founders listening in the audience should know about forming their team or can, or should they go ahead and get back to it?
Price: I don’t think you missed anything. I think it’s a great conversation. I appreciate you sort of picking this topic and everybody has their own way and I think it’s one of those, like all gray areas in life, I don’t think there’s a real right or wrong. It’s what’s right or wrong for you as a founder and a leader.
It’s what’s right or wrong for the company if you’re an employee in the responsible role of recruiting or building teams or being a manager and you know, at the end of the day I think that the best you can do is be the best person you can be, be as authentic as you can, as honest as you can and try to attract that kind of talent and if you have an inkling that somebody you’re talking to, either on the recruiting front doesn’t fit that, don’t waste your time there and then reciprocally, if you make a hire and you realize you’ve made a bad choice, don’t waste time staying on the fence.
Make the decision that you need to be made. Listen to your gut and move on because there’s a lot of really wonderful talent out there in the universe and I think that you find your people and you know when you have your people and it’s not a struggle. It’s an art as much as it is a science.
Griggs: Yeah, that’s a great way to end the interview. Excuse me. If people want to connect with you on line, how can they go about doing that?
Price: They can follow me on the Twitters, Mellie Price, M-E-L-L-I_E Price and find me on LinkedIn and that’s probably the best way.
Griggs: Perfect. I’ll put those links in the show notes. Mellie, thanks for joining us today.
Price: Thanks William. I appreciate it.
Mellie, a 25+ year Austinite, came to Austin to attend the University of Texas and never left. An experienced investor, business manager, fund manager and entrepreneur, Mellie loves building and growing companies that create great investment returns. She was the founder and CEO of Austin’s own Front Gate Tickets – one of the largest privately held ticketing companies in the US/Canada from 2002 to 2012 when it was sold to AEG & C3 (now Live Nation). She is the founder and Managing Partner of Source Spring – an investment group that specializes in early stage technology companies and The Magpie Group which focuses on the real estate market. Mellie also serves as a Managing Director of Capital Factory and is a General Partner to its investment fund.
In addition to her passion for bean counting and keeping the proverbial House in Order, Mellie loves 4 legged critters, cooking, good wine, growing succulents, and spending time with her family. You can connect with her on The Twitters and LinkedIn.
Connect With Mellie