How not to fall victim to your own success
Managers in their fifties should not throw the towel in yet; startups are not just for young people. We are entering a period of fluid relations, headhunter Michal Vajskebr and startup investor Petr Šíma both agree.
Where is the executive search market heading? Are there any new trends, positive or negative, brought about by the pandemic?
MV: There are two types of companies. Those that try to proceed the standard way and rely on the fact that if they are not doing well in one region, then they can focus on another one and expand geographically. This is not entirely easy with today's connectivity. Then there are players who have been pushed by the new rules of the game to get out of their comfort zone and design services they can offer synergistically. In my opinion, we have entered the period of fluid relations, where the boundaries between the candidate, client and cooperating professional often overlap. We see it as a big shift and change from the past.
Headhunters have traditionally focused on corporate clients. What can they offer to startups?
MV: Experience with setting up processes. Startups that thrive and grow quickly often crash and burn due to the lack of rules and formal procedures. They grew too fast, so many are falling victim to their own success. Some think that it will be sufficient to hire a junior HR person to bail them out. Sometimes, it is fun to hear that they are looking for a specialist in three countries who speaks several languages and has experience from various markets and "above all is not very expensive". When I hear this, I chuckle and say that I myself would like find such person. The solution to this may be a senior interim professional hired for a few months, who will define a sustainable structure for the company. Then they can hire a skilled but less senior person full-time to develop the system.
How specifically did your collaboration with DEPO VENTURES begin?
PŠ: In recent years in the Czech Republic, there has been a generational change. Entrepreneurs who founded companies after the revolution are now at the stage when their companies have just been sold, handed over, or they are currently intensively dealing with the transfer of the executive duties to younger managers. At the same time, there is undoubtedly a large group of managers who have already repaid their two or three mortgages, have invested in conservative investment products and are now looking for what to do next.
Are you suggesting they are facing a midlife crisis?
MV: For some, this may be the case. They are often around 50 years old and have climbed to the top of the corporate ladder, tried everything possible and suddenly they may feel that this environment can no longer offer them any further development. They still have the drive, feel that they no longer need to work for money and at the same time are looking for a new impetus to life.
PŠ: It is precisely these people who often become angel investors in America. And it is already happening here as well. The change is clear: while in the past, startups were mainly created by people with previous experience in their own business, today it is increasingly C-level managers.
However, it is said that corporate managers are not very suitable for startups…
MV: I do not think so. There is certainly a large group of managers who are not suitable, but on the other hand, not everyone wants to be in the corporate world until the retirement. For some, the priorities change and they seek a different work-life balance. Others just want to take a breather but do not want to be bored at home all day. Instead, they are trying to find something fulfilling.
PŠ: My pragmatic opinion is that if someone has not been interested in startups yet, they will hardly make a good angel investor.
How can executive search and investor platforms like Depo Ventures complement each other? Do companies of your type usually merge abroad?
PŠ: I have been connecting investors and startupers for more than 5 years, but I have not heard of any similar alliance in the Czech Republic. On the other hand, I see no reason why it should not work and why we should not be the first. Michal's domain is working with experienced managers, to whom he provides support for many years, sometimes decades. They know exactly what their specialisation is, the work they have done and what added value they can bring to startups. Startups, on the other hand, do not lack ideas and energy, but usually do not have formalised procedures and structure, which is key for further development. Another view of the matter is that for an experienced manager, a startup can not only be an opportunity to apply their corporate experience, but also a way to grow their assets.
Investing in startups is considered a risky investment, though. How much property is it reasonable to invest in similar projects?
PŠ: It is said that it is safe to invest up to ten percent of investment capital. It makes sense with fixed assets around $1 million. In America, it is common to become a startup investor before reaching the age of thirty. In our region, there is also a small number of technogeeks who sold their companies early on and then gradually invested in other projects. However, people in their forties or fifties with experience from large companies offer bigger potential.
How did you get into investing in startups? How much capital did you start with and what are your plans for the future?
PŠ: We initially started on the other side, with consulting services for startups and investors. The entrepreneurial energy and spirit gradually grew on me and we became investors. Our first fund´s size was EUR 1.5 million. But rather than a fund, it is now an incubator for angel investors. Our second fund will be a little bigger, but not too much.
Which company in the portfolio is the closest to your heart?
PŠ: It probably wouldn't be fair to name just one. We have fifteen companies in our portfolio. My favourites are probably the first two investments, SmartGuide and Tatum. They have also come the furthest. I believe in the future of Augmented reality, that is why we also have Beem and Augmented Robotics in our portfolio.
Michal, you could be a little more specific. Which one of the Depo Ventures start-ups you find the most interesting? Which one would you be willing to put your own money into?
So far, I have always tried to help companies organise the structure, find the most suitable people for them. I haven't considered buying a share in a start-up yet, to be honest, but mortgage repayments are approaching and it may come the time!