YouSaid · the spoken record

Mike Sliagadze

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27
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2018-03-16
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2018-03-16
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1
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  1. “Ultimately, what Top Hat is trying to do is to bring education, the higher education system into the modern era. What that involves is tearing down the traditional textbook publisher, infrastructure that's been built up and to replace it with a modern peer-to-peer type system. The top head is trying to create, to get into every classroom and to make sure that every student has access to the best materials and the best technology for learning, that ultimately improves everyone's lives.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Sure, yeah, of course. I'm a free market guy. The thing that I would say I would change, I mean, there's a bit of an echo chamber, I guess, in the ecosystem where sometimes, you know, an idea pops up and just gains way too much traction in spite of the fact that maybe the idea is detached from reality. And there's a bit too much of that. It was Sam Altman actually wrote a blog post not too long ago about how in some way is he actually feels more free to discuss certain ideas in China than he feels in the Bay Area of Echo Chamber phenomena. And I've noticed that as well. To some extent, I would say less so in Canada. But whenever I go to the Bay Area, that's something that it kind of always doesn't quite seem right to me.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “My mind goes towards just the irrationality. Sometimes you just get these either a trend or some sort of hype machine and people will get funded for things that really don't make a lot of sense. But even that, I don't know if that's a bad thing. I don't know if you can have a robust market without that kind of irrationality. To some extent, you need to make crazy bets in order for some of them to pay off. So I don't even know if that's something that needs to change.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “The pros, so there's a lot of pros. One, it's cheaper. It's just, you know, you basically you're 30% smarter because of the exchange rate being in Canada, and that actually has a significant impact on your ability to build a sustainable business, and that's helped us. And there's a lot of good individual contributor talent, good engineering talent, good sales talent. The cons is there's probably the number one thing is challenges with financing. There's not as much as robust venture capital community. And biggest challenge, I would say, is lack of executive talent. There are very, very few people in Canada that have scaled businesses past $100 million. And as a result of that, it's challenging to build a business that scales to that degree because nobody else around you has done it before.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “I would say there's a lot of periodic bubbles and market cycles that freak me out. It seems like certainly the crypto mania is concerning. I worried that it's going to get large enough to where it will actually dislocate the global economy, just like the real estate bubble did not too long ago. I worry that there's a bubble in venture financing. It seems like just like many years ago, BO's being done that really on the pace that don't make a lot of sense. So that's something I'm concerned about day to day because when it comes time for top hat to IPO or GoPublic, that's ultimately going to impact my outcome. So I always prefer the market to stay as rational as possible.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Okay, I mean, I'll talk about education. Many people believe education is an investment. I actually don't believe that. I think many people believe that education is an investment that makes you more productive in a sense. And I think beyond some of the very basic stuff that you learn in primary school, I don't actually think that's the case. I actually view education as a consumption, as a luxury good. And what I mean by that is causality that people typically ascribe to society's getting wealthier, that education makes societies more wealthier, is in fact reversed. In fact, what happens is as societies become wealthier, they start to be able to afford to give people four years, five years, eight years to develop and explore and just enjoy life and learn about different ideas and fields, that's a luxury that people become able to afford after they become sufficiently wealthy. And so I think in a lot of ways the government investment and pouring trillions of dollars into education is misplaced as a result because the effect they're trying to get is not the”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Anti fragile by Nice and Talent. It's a very profound book that radically changes the way you think about how to structure both your business and your life to benefit from unpredictability. That's about the best way I can summarize it. But it really, in fact, his book, Fooled by Randomness and Black Swan, and he's got a new one coming out. I read those when I was pretty young and it really changed my life. I mean, it had a profound impact on the way I think about things.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Obsessively measure everything, whereas in engineering, that's difficult, if not impossible. I mean, you basically almost don't have any metrics when it comes to measuring engineering velocity. Whereas in sales, you need to obsessively measure everything from the phone calls to the emails to the conversions at every stage of the funnel. So all of that kind of stuff. I mean, but this is sales 101. This is stuff that anybody who knows anything would probably already know.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “I don't think that there was any particular moment. I think it was just progressive kind of series of mistakes and learnings that happened over a period of years. But I could certainly talk about particular lessons, which to probably anybody that knows anything about sales, these will seem borderline cliche. But when you're hiring sales reps, you need to match the sales cycle and cadence that your business has to the experience of the rep. So if a rep is used to running 12-month sales cycles and closing two deals a year, you shouldn't hire that person to try and run an inside sales transactional type process and vice versa. There are radically different things. When you've got somebody who's a top rep and is clamoring for a promotion to management, more often than not, that's a bad idea. And you need to figure out how to level them up and give them the opportunity for growth within the as an individual contributor. Because usually top reps don't make for good managers and vice versa. Great sales managers are not necessarily the best sales reps. You know, we learned a lot about metrics and having to just”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Figure out a model from scratch because they've generally worked in larger companies where they've had a framework within which to work in. So I would say resist the temptation to hire the gray hair. You need to figure out sales, but the way to do it is to go about it methodically, to talk to people who have run successful sales teams, to get mentors and experience, and then figure it out on your own. I think the founding team needs to have a sales muscle within that core executive team, or else it's unlikely they'll be able to build a thriving business.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, that's interesting. So I'll say there's one mistake that, and this is going to sound paradoxical based on what I've just said, but there's one mistake that almost every young founder makes, engineering founders in particular. Honestly almost 100% of the time is at some point they decide, you know what, we need to start figuring out sales and then they correctly assess, well, I don't know anything about sales. So what I'm going to do is bring in someone with a bit of gray hair and experience under their belt in order to help them figure out sales. And almost 100% of the time, that ends up not working. They end up having to fire that person six months or a year or however long. The reason it doesn't work is there's several reasons. But one is because when you're a very small company without a lot of track record and you can't afford to pay the kind of money that top sales leaders expect to make, you end up almost by definition hiring somebody subpar, somebody who has had the kind of so-so career and is looking to get into the startup game relatively late. And they almost always aren't able to.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “I would say the reason I made many of the mistakes in sales is lack of experience. My background was engineering. And so I had a pretty good intuition about how engineering should work. I had worked on engineering teams through undergrad. And so I was able to build that up reasonably well without too many mishaps, I should say, although certainly some. In sales, I think all of my intuition about how to run a sales team based on how engineering is run was wrong. I mean, it's just you have to operate those types of organizations radically differently. And so I just made basically every mistake in the book. We hired enterprise sales reps to do transactional inside sales. We promoted great sales reps into management. So we didn't know what our sales cycle and what our methodology was. And we did document things. Pretty much every mistake you can imagine, we ended up making. And we certainly paid for it probably we'd be further ahead if I had the experience early on and weren't making those mistakes.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “I mean, it happens a lot. It's super challenging. The way we tend to handle it is you almost give the person the role before you promote them. In other words, you give them the opportunity to show that they're able to do the role before you actually give them the job title. We've certainly made the mistake of promoting people too early, and unfortunately that usually doesn't end well because what tends to happen is you can't demot them because that's politically or whatever from an optics perspective. You can't really do that. And at the same time, they're not leveling up as fast as.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “I think companies need to develop both of those muscles. Internal hiring is essential to show people career progression, to show them that there's a future with the company. And not only that, but sometimes the very best candidates are people that you hire when they're very young. Because generally speaking, when someone is incredibly talented, as soon as they land somewhere, that company is going to try to hold on to them for dear life. And so as a result, people who are experienced paradoxically, as far as the distribution, it's more challenging to find top performers because as I said, the good ones are already locked in somewhere. And so when you hire people that are fresh out of school or quite junior and then give them the opportunity and empower them to level up, that's one of the most effective ways to get really strong top performers in the business. But at the same time, sometimes you don't have the skill set in the organization and you need to level up. And so the ability to hire externally is crucial as well.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Absolutely, because most companies don't measure IQ at all. And that's wrong. I mean, there's a 0.6 correlation between IQ and job performance. And that is, in fact, if you could base your hiring decision on one factor, you could only base it on one factor. IQ is actually that factor. Like it's the most predictive element. Now, of course, 0.6 isn't great. I mean, you need a lot more data to get to a higher level of certainty, but it's incredibly predictable. Good things happen. There's a certain kind of magic that happens when you put a lot of smart people in the same building together. And so there's a sort of a hard to quantify element to that as well. So I would strongly agree with that.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “That's a contrived example, but things like that. So that's the general process for sales instead of a programming test, you do a presentation for account management or tech support. Maybe you'd have them do a written communication type assessment. But generally speaking, that's the structure.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, so it depends on the role, you know, the interview process is slightly different depending on the role. If you're a sales rep, you'll go through one process. If you're an engineer, you'll go through a different process. But as a general rule, you do a basic screen to assess for high-level competencies just to ensure that the person is worth having a conversation with. There will be a cognitive assessment and a work sample. So for an engineer that's an assessment and we would ask them to code something, usually they're in a pair programming experience or a, you know, just an algorithmic type of assessment that they do, followed by a structured interview. We use something called top grading. There's lots of structured interviews that could potentially work, but the top grading format actually works pretty well. And so we use that. And finally, then we do competency focused interviews. And those focused interviews, so for example, if you want somebody who is a team player, you would have an interview that assesses their track record and your past performance that indicates whether or not they are in fact a team player.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Actually, they are very predictive of success in the workplace. Yet, most companies don't bother doing it. Or they do it, but they do it in kind of a backhanded kind of way where they'll do maybe programming assessment, problem solving, which effectively measures the same type of thing, structured interviews. There's a very specific structure process that has the ability to actually predict success in the workplace. And it's essential to have these types of structured interviews to ensure there's consistency and the ability to compare one person to another and so on and so forth. There's a handful of these types of things that are quite effective. And those are the things that we ultimately have implemented. And that, you know, of course, there's been a lot of development and evolution and some innovation on our part in terms of how to run these types of things. But in the end, it really comes down to looking at the research of what actually is proven to work.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “So, yeah, switching gears to hiring. Most companies use their intuition when it comes to hiring. In other words, they do what seems to make sense rather than what the research and the science shows makes sense. There's actually been a huge amount of research that's been done on what, in fact, predicts success in the workplace. And virtually all companies out there completely ignore this research and instead implement the same kind of hiring processes that have been shown repeatedly not to work, that have been shown to have tons of bias and be in favor of hiring basically extroverts that are charismatic rather than people who are actually going to be good at their job. And the science out there is quite clear. There's a handful of things that actually predict success in the workplace. One of those things is a work sample. I mean, that's one of the most predictive things. So you actually have people do a sample of the work that they are going to be doing, whether it's programming, if it's developer, or doing a presentation of their sales rep. That's critical and highly predictive of success in the workplace. Intelligence, cognitive assessment.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “People can say yes, where the incentives and things that are motivating people are oftentimes not what you think they are. Teaching as surprising as it may be is really very low on the total pole of priorities in higher education. In fact, it's not how universities get funded. Universities are not known.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Sure, and I'll even say this. When I speak to entrepreneurs, a lot of folks come to me for advice on starting companies in the educational technology space. One of the first things I ask them is, you know, are you sure you want to go into this market? You're probably going to fail. This is one of the most difficult markets in all likelihood. It's going to be brutal and frustrating for you. You should maybe consider something else. Just because that's the nature of it. So yeah, the question is, what is it the top hat has done that made it somewhat unique? The way that companies typically sell software in higher education are focused on higher education because that's a rat, the way they typically focus on selling software is by going top down to the enterprise. You go to the CIO, the provost of the university, you tell them this amazing software that you've developed and how it's going to help them. And then very quickly you get bogged down into if they even give you the time of day into a multi-year committee style decision making process where a million people can say no but they have”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Market, how do you actually take a great product vision and translate it into a viable economic business? And I would argue that's where top hat, one of the areas that we've been innovative on and that's allowed us to succeed.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “So ultimately it's go to market that encompasses a lot of different things, but it's very, very difficult to take products to market in education technology. So there are tons of companies that have been started that have had amazing products that would have been very impactful and would have had a great outcomes, but they just couldn't get them to market. They couldn't figure out who would pay for it, how they would pay for it. If you want to sell something in higher education, generally speaking, you have to go through a committee process that can take years, sometimes three years for relatively small transaction sizes. And in K-12, you know, high schools, primary schools, it's actually worse. It's even more difficult. You have to go through districts. I mean, it's really a political game there. And so, you know, the kinds of companies that exist there don't focus on products. I mean, products in education, technology are generally terrible because the decision makers aren't the users. And so like much enterprise software, you end up with pretty terrible products. And unfortunately with EdTech entrepreneurs, many of them are idealistic. So that's what they focus on. But what they don't focus on is they go to”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Correct. Most people that have invested in ed tech have lost money in ed tech. And so, yeah, there's good reason to be skeptical. If I was evaluating top hat in the early days, I don't know if I would have invested knowing everything that I know now, just knowing how difficult the market is.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Yes, absolutely. They are 100% correct. It is arguably one of the most difficult markets to succeed in. Over the last 10 years or so, there was a brief period of a resurgence in education technology where a lot of investment went into this space. People naively thinking, wow, you know, it's time for the space to be disrupted, not realizing that the reason that it's been the same for 100 years is the reason that it's difficult to disrupt. And out of the thousands and thousands of companies that have been funded over the last decade or so, only a handful, I would say probably 10 or 15, have really broken out past the, let's say, tens of millions in revenue. Milestone and our track to potentially become public companies, really only a handful have actually been able to achieve that. Top had been one of those. So the track record is just terrible. It's really a brutal, brutal market. The only thing harder is maybe healthcare or other very regulated industries. So they're absolutely”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “All the way from the textbook to the homework to the in class experience from being passive and more didactic to being much more active and engaging, you know, the rest, as they say, has history.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Well, the motivation for starting the company was it was pretty straightforward. It was just based on my experience in undergrad. I studied engineering at the University of Waterloo. And like many students, even today, I found that the course environment just was out of touch with the way that students wanted to learn. So specifically students outside of the classroom had access to a myriad of tools that made the learning process adaptive and engaging to their particular learning style. And when they showed up to the classroom, they found that there was chalkboards and paperbooks and all this stuff that hadn't changed for hundreds of years. And not only that it hadn't changed, but this doesn't work. It's a really terrible way to teach people skills, actually. And I observe that along with everybody else that went through the same amount of educational process. But what did change right around the time that I started Top Hat was that smartphones started to become ubiquitous? Everybody seemed to be getting one. And that presented this opportunity to really transform the educational experience.”

    2018-03-16 · The Twenty Minute VC · 20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat · IDENTIFIED FROM THE TRANSCRIPT · source