NB: This is a guest article by Serge Faguet, co-founder of Ostrovok, a Russian-based hotel-focused online travel agency.
Recruiting, motivating and retaining good people is the number one key success factor in building a technology company, particularly in the online travel industry.
In an OTA, the most critical skills required fall into three broad categories: engineering, marketing and supply acquisition. Engineering is the most important of the three because all other areas of the company are significantly enhanced by great engineers.
Practice: how do you build a great team?
In general, the core practice that we subscribe to is that you should always aim to hire A+ players (superstars).
There are three key reasons for this:
- In a creative, technology-driven job, someone amazing adds 10x more value than someone merely above average. This is more true for engineering and marketing (where output can scale significantly depending on how good the person is), and somewhat less true in sales (where output is determined both by talent, but its scalability is limited by how much time the person has invested).
- Superstars attract other superstars. This is self-evident, but also supported by data. For example, in anonymous team surveys we have done, great people were listed as the #1 factor why people joined our team.
- Superstars attract investors, partners and clients. The reason is that their brand rubs off: the fact that you have great people means that you are a great company and that you can be trusted.
To attract superstars you need to do a number of things:
- Create great work conditions. Google (which was my first and only big-company job and made an impression) does this very well. Gyms, free food, health insurance and other perks create a lot more goodwill and HR brand than they cost. For example, our office is based in a relatively expensive area of Moscow, and it takes a long time of standing in traffic or taking the metro to get here from areas where people live. So we decided to pay our employees the difference in living cost if they move to within 15 minutes walking distance of the office. Many have moved and we noticed a meaningful increase in their productivity – when you get to the office after a 10 minute walk rather than an hour-long commute, you have a lot more energy, and you won’t ever want to leave the company and go back to the commute.
- You need to aggressively poach staff from other companies. Great people don’t tend to be on the market looking for jobs – they are usually happily employed somewhere.
- Everyone must always be recruiting: from the CEO to the junior engineer. Recruiting never, ever stops and great people will always add value.
- You need to pay at the top of the market. As we discussed earlier, these people add a lot more value than the market-average people. Thus it is worth it to pay them more.
Once you have attracted your superstars, you need to manage them in the right way. I highly recommend you watch this
TED Talk by Dan Pink on human motivation. The three key things are:
- Autonomy - Talented people are self-motivated and like to be in control of their own lives. For example, we let our employees come to work and leave whenever they want (as long as results are delivered). Obviously you need to have some overlap with your colleagues and you need to come to meetings on-time, but beyond that we don’t care whether you do the work at 10am on Monday or at 3am on Saturday.
- Mastery - Talented people want to get better at what they do. For example, we have a full-time staffer dedicated to training, and we have training available to all who want to get it, not just those for whom it is immediately relevant. If a hotel salesperson wants to learn Google Analytics, great!
- Purpose - Talented people want to feel that they are a part of something significant and long-term. For example, we don’t see ourselves as copying a Western player in the Russian market.
We are taking the best ideas from the US, EU, China, India and LatAm; adding things relevant for Russians; and building a fundamentally better company. We expect to be competitive on a global basis 5 years from now, and this gets people excited!
Engineering-specific advice
Hiring engineers is essential because everyone else is dependent on them. Hotel acquisition needs a better extranet and CRM. Marketing needs new analytics and automated bidding tools. Call center needs CRM and knowledgebase systems. Content needs new content management systems. Recruiters need better jobs pages on the site.
Our target is for 50% of the company to be writing code, and by end of 2012 we will have more high-quality engineers than some of our global competitors with 10x the total headcount. So what you should do is:
- Focus on hiring (a) superstars with significant success already behind them (b) 19-year old hackers with great potential. The experienced superstars will attract others and teach, but you can’t have a team comprised just of them. The hackers will do the more basic work, learn, grow quickly, and become an extremely loyal part of your culture.
- Load up on engineering recruiters. It is tough to find great engineers, and you will never, ever have enough of them.
Marketing-specific adviceOnline marketing is essential for obvious reasons, and one important factor is that it scales. A single great person can save or waste large amounts of money.
The challenge is that the online marketing ecosystem tends to evolve extremely quickly in emerging markets because you are playing fast-second with technologies already created in the developed world.
The result is that almost no good experienced marketers exist and you have to teach them.
Here is what we found effective:
- Hire young engineers or math/physics wizards from top universities. Teach them and give them a budget + clear performance metrics. To do this, someone on your key management team needs to be an online marketing expert. If none of your key managers is well-versed in this area, you are in trouble.
- Their #1 key success factor needs to be that they are excited about data. These must be people that only believe that the sun rises in the east after experimental observation and statistical analysis (exaggeration, but you get my point). Marketing is not about being creative, marketing is not about aesthetics or awards for beautiful banners. Marketing is about data, and if the ugly banner converts better than the beautiful banner, then it is by definition superior.
Supply sourcing-specific adviceSupply sourcing is essential because supplier infrastructures in emerging markets are relatively undeveloped, and players who help them develop in the right way will have a significant advantage.
The challenge is that the supplier companies (hotels, airlines) in emerging markets are just beginning to transition towards online. These are very conservative organizations, and to work with them it is important to understand how they think.
This is the opposite of marketing in that usually there are plenty of organizations to hire from. So:
- the leaders of your supply team ideally need to be people who did supply sourcing before, who know how suppliers think, and who already have as many of the contacts as possible.
- to back up those leaders, hire top performers from the supplier industries who don’t have the specific experience of sourcing supply, but who understand the suppliers intimately and can learn the rest quickly.
ConclusionAggressively recruiting stars into your team is the #1 factor that contributes to your success. Once they are on-board, manage them lightly and give goals rather than tasks so they can focus on executing relentlessly.
And don’t forget about creating an insanely great culture that people will love working in – this is one of the few sustainable competitive advantages that a player in the online travel sector can have.
NB: This is a guest article by Serge Faguet, co-founder of Ostrovok, a Russian-based hotel-focused online travel agency.
NB2:TLabs Showcase - Ostrovok.
NB3:Image via Shutterstock.