Special Episode: Chalk Talk with Executive Recruiter to the Startups and Stars Max Shapiro and Host Keith Newman

Summary

Episode Summary: Chalk Talk with Executive Recruiter Max Shapiro and Host Keith Newman

Podcast Title: The Look Back: Keith Newman interviews top Entrepreneurs and Influencers on "Their Startup Journey"
Episode Title: Special Episode: Chalk Talk with Executive Recruiter to the Startups and Stars Max Shapiro and Host Keith Newman
Release Date: September 9, 2024
Hosts: Keith Newman, Former Journalist and Startup + GTM Executive
Guest: Max Shapiro, Executive Recruiter at People Connect

---

Introduction

In this special episode of The Look Back, host Keith Newman welcomes Max Shapiro, a seasoned executive recruiter and angel investor with over two decades of experience in Silicon Valley. The discussion delves into Max's expertise in recruiting top-tier talent for startups, his unique approach to executive search, and his involvement in fostering startup growth through events like Pitchforce.

---

People Connect's Unique Approach to Recruiting

Max Shapiro begins by clarifying the distinction between retained and contingency search firms. Unlike retained firms that receive payment regardless of placement success, People Connect operates on a contingency basis, meaning they are compensated only upon successfully placing a candidate. This approach underscores their commitment to delivering results.

Max Shapiro [01:18]: “We are contingency firms. We don't take your money unless we do what we promise.”

With 25 years of experience, People Connect emphasizes the mantra: "You can't build a great company without great people." Their comprehensive recruitment strategy involves:

• Extensive Candidate Sourcing: Utilizing an impressive database of 80,000 candidates and leveraging 135 different job boards and discussion groups.
• Old-Fashioned Headhunting: Going beyond online platforms like LinkedIn and Indeed to identify potential candidates.
• Tailored Searches: Customizing searches to meet the specific needs and cultural fit of each client.

---

Successful Recruitment Example

Max shares a compelling success story illustrating People Connect's effectiveness:

Max Shapiro [02:30]: “We had a client with new technology for heart issues who wanted candidates from the 'fat belt'—states like Kentucky, Georgia, Mississippi, Alabama. We found a VP of Sales based in Atlanta who not only fit the role but also played a pivotal part in the company securing a $20 million Series B funding round.”

This example highlights People Connect's ability to understand nuanced client requirements and deliver candidates who drive substantial business growth.

---

The Needle in a Haystack: Finding the Right Fit

Drawing parallels to his past as an NBA scout, Max emphasizes the challenge of finding the perfect candidate in a competitive market:

Max Shapiro [03:45]: “Back in the late '60s, I scouted for NBA teams, looking for that proverbial needle in the haystack. That's exactly what we're trying to do at People Connect.”

He underscores that effective recruitment is about more than just resumes; it's about uncovering the true potential and fit of each candidate within the team dynamic.

---

Pitchforce: Bridging Startups and Investors

Max discusses Pitchforce, People Connect's weekly pitch events designed to connect early-stage startups with investors. These events have evolved from in-person gatherings in San Francisco and Silicon Valley to virtual Zoom sessions post-COVID, now entering their fifth year.

Max Shapiro [04:50]: “We had a company pitch healthy soda machines and shortly after, an investor from Mexico City signed a $2 million term sheet.”

These events not only provide startups with exposure to potential investors but also offer valuable feedback and coaching to refine their pitches.

---

Fundraising Insights and Pitching Strategies

Max shares critical insights on effective fundraising strategies:

Max Shapiro [07:17]: “The purpose of your pitch is to get another meeting. You have to talk about how the investor is going to make money. What's in it for me as an investor?”

He advises startups to focus their pitches on the investor's perspective, ensuring that the value proposition is clear and compelling. Additionally, Max recommends Donna Griffith's book, "Sticking to My Story," as a valuable resource for improving pitching skills.

Max Shapiro [07:33]: “If someone does spend the money and they don't think they got $25 worth of value, shoot me an email and I'll send you $25.”

---

Common Mistakes CEOs Make in Team Building

Addressing common pitfalls, Max identifies a prevalent mistake among startup CEOs:

Max Shapiro [08:57]: “The most common mistake is saying, 'We don't need to work with an outside recruiter.' You need to engage a professional recruiting firm to access the full talent pool.”

He argues that relying solely on internal networks limits the quality and diversity of potential hires, ultimately hindering the company's growth and fundraising capabilities.

---

Focus on the AI Revolution and Upcoming Events

Highlighting the current trends, Max notes the burgeoning interest in artificial intelligence within the startup ecosystem:

Max Shapiro [10:07]: “The AI space is clearly taking off. We recently hosted an AI-focused pitch event with 27 companies and 80 investors, leading to serious discussions and potential investments.”

Looking ahead, People Connect is preparing another AI-centric Pitchforce event scheduled for October 24 in San Francisco at Reed Smith, aiming to capitalize on the momentum in the AI sector.

---

Conclusion

The episode wraps up with mutual appreciation between Keith and Max, underscoring the vital role of effective recruitment and strategic pitching in the success of startups. Max's passion for helping companies build exceptional teams and securing funding is evident, making him an invaluable resource for entrepreneurs navigating the competitive landscape of Silicon Valley.

Keith Newman [12:02]: “Max, keep it going. Thanks for your time.”

Max Shapiro [12:04]: “Thanks, Keith. It's a pleasure.”

---

Key Takeaways

• Commitment to Success: People Connect operates on a contingency basis, ensuring they are motivated to deliver successful placements.
• Comprehensive Recruitment Strategy: Leveraging extensive databases and multiple job boards to find the right talent.
• Importance of Tailored Pitches: Startups should focus pitches on investors' interests to secure funding.
• Avoiding Common Pitfalls: Engaging professional recruiters is essential for accessing a broader and higher quality talent pool.
• Embracing Current Trends: Focusing on AI and other emerging technologies can open new avenues for investment and growth.

---

This episode offers invaluable insights for startups seeking to build strong teams and secure funding, emphasizing the importance of strategic recruitment and effective pitching in achieving business success.

Transcript

[Max]

Wow.

[Keith]

Another session of Chalk talking with one of my favorite. Max has been with people Connect for, it seems like for a while, let's say a couple decades at least, and probably the Silicon Valley go to Guy. When you're looking to recruit your top team. You're a startup, you're in the Valley, you've been funded, or you're looking for that next stage of funding, and they want to see some exclusive members to join that team. So I brought on Max. And Max, welcome to Chalk Talk.

[Max]

Hey, thanks. Thank you, Keith. It's my pleasure. Happy to be here.

[Keith]

Well, you. I'm almost discrediting you by saying you're a retained search firm because you do so much more and you've been doing so much more. I know you're actively involved as an angel investor, but you also are like the, the teacher for so many startups who are trying to figure out how do I raise money, what does my pitch need to say, what does it need to look like, who do I go to, what events do I go to, and many more things. But for the purpose of Chalk Talk, let's draw up a Playmax. An early stage company comes into your offices and they say, look, I need to hire this CXO or this CRO or, or some key members of my team. What will you sit down and how will you coach them up?

[Max]

Yeah, happy, happy to do that. Just one, one correction. We are not, we're not retained. We are contingency firms. No, no, that's okay.

[Keith]

I meant to ask you the difference so you could clarify that.

[Max]

Be happy to. The retained guys get paid whether or not they make a placement. I'm originally from St. Louis, Missouri. Missouri, as a few people might know, is called the Show Me State. So I don't want to take your money unless we, we do what we promise. So we, we get paid if we're successful. So when someone comes to us, it's. And we've been doing this for 25 years with a very experienced team. And what we say is you can't build a great company without great people. So what we want to do is we want to really find out what the client is looking for, what their pain points are, whether they've been looking to fill this position for a while. I hate it when really early stage companies get a little bit of money and they go to hire two or three people and they talk to an advisor and they have two people and they're going to choose one of them. What we do when we work on a search, we put Together a list of 150 people, which comes from old fashioned headhunting, what recruiters used to have to do before there was this crazy thing called the Internet, right? And then we are going to be on the Internet, not just on LinkedIn or Indeed, but we're going to be on 135 different job boards, discussion groups, and we also have an incredible database of 80,000 candidates. So to get, to get to your point, what we're looking to do is find that, that superstar that's going to fit in the team. And back in the late 60s, early 70s, I was a scout in the NBA. I scouted for the Phoenix Suns. I scouted for the San Diego Rockets, who are now the Houston Rockets. And I was looking for that, you know, proverbial needle in the haystack. And that's what we're trying to do at People Connect. Let me give you an example. We had a client who had some new technology that could help people with heart issues. And the client said, I want you to find. He was a German American guy. And he said, I want you to find me some candidates from the fat belt. And I said, what's the fat belt? And he said, you know, you know, Kentucky, Georgia, Mississippi, Alabama, where people eat too much and they, they need more blood tests and that's what we're selling. And I said, well, okay, all right. I learned something new. I never knew about the fat belt. We found him a vice president of sales, which is what he was looking for. A guy who was based in Atlanta who had the right background and came to work for them as a VP of sales. Several months later, the CEO contacted me and said, we just closed our B round. We got $20 million from B& we couldn't have done it without this VP of sales. So, you know, that's what we love doing, is helping companies find great people that leads, that leads to funding.

[Keith]

It's funny too, people who don't understand it truly is a needle in a haystack in a frothy market, in a crazy market, and in all situations. Because it's more than just the person with the resume, right?

[Max]

Absolutely, absolutely. You've got to really dig down and find out who that person is. My team is very, very good at that. We, you know, in addition to helping early stage companies build great teams and what makes us unique is that we fill any position at any level for any type of candidate anywhere in the US So that's different. Keith, as you know, and as anybody who's, you know, half awake knows Most recruiters just focused in one area. Hey, if you need a CFO, my name is Joe and all we've got is CFOs. If you need software developers, I'm Susie, I can help you. We fill any and all positions. A couple of years ago, a cannabis company in Boulder, Colorado was looking for three people. We had never done any cannabis searches at all. They needed a VP of sales, they needed a CEO and a bookkeeper. So we're talking C suite vp, individual contributor. We filled all three positions. Yeah. And in addition to helping companies build great teams, which we've been doing for 25 years, we also run weekly pitch events called Pitchforce. We used to alternate between San Francisco and Silicon Valley. Once Covid hit the next week we were on Zoom and we've been there now in our fifth year of helping early stage startups build, get the money so they could, they can build great teams. And, and we just, you know, there's no guarantees that if people participate in our Pitchforce, they're going to get funding. But we just had a, in about three months ago, we had a company pitch, very interesting technology to, to bring healthy type soda machines into, in the corporate and there was somebody listening in from Mexico City of D.C. and they just signed a term sheet for $2 million.

[Keith]

I love it.

[Max]

That, that's it.

[Keith]

Like technology, right?

[Max]

Right, right. No. So you know, Keith, as you know, I'm not a kid, I'm 81 years old, I work 60 hours a week. But this doesn't feel like work. Talking to you doesn't feel like work helping.

[Keith]

Tell you what it comes across and for everyone that's listening, man, if you haven't been to a Pitchforce event and you're raising money, you should be smoking some of that Colorado stuff that he helped. The fact is you've got great investors who have domain expertise, are there to either coach you up, give you feedback or write you a check. Which one of those don't help?

[Max]

Yeah, yeah, I, I had one of my friends who's not very knowledgeable about the startup space watch one of my events and he says, how much do you pay those investors to be? I said, I don't pay them anything. They're looking for deals to invest in, they're looking for companies to help. They love, they love being there.

[Keith]

We have, what they're saying is you do a great job of curating your list. So you don't bring a lot of, a lot of fluff. You bring people that are prepared, which is nice too. It's Not Y Combinator. It's, it's, it's unique event. It's really special.

[Max]

Thank you. Thanks very much. Appreciate it.

[Keith]

So keep doing it. Give me another tip. Max is, I'm representing my portfolio of my own 20 or so companies that I'm consulting, mentoring, advising in. They always are looking for people. Why do I come to Max versus, like, you know, those other dozen folks reaching out?

[Max]

Because we're the only recruiting company that I'm aware of that, that only works with early stage tech companies filling every position. So you can come to us and we can help you fill any position. On the fundraising side, I want to, I want to make a couple of points because companies pitch and we give, we give them a template to follow. 4 minutes, pitch and write out 600 words. This is what you should say. Some of them follow it, some of them don't. But so often I hear pitches where it's a technical person and they're in four minutes, they're spending three minutes on the technology, on this solution which investors would get in 15 seconds. And it's so important to keep this in your mind if you are raising money. The purpose of, of your pitch is to get another meeting. And in order to get another meeting, you have to talk about how the investor is going to make money. Wiifm what's in it for me as an investor? And it's hard. It's hard. You've got to prepare, you know, and, and spend the time to prepare. There's a great book written, written by a friend of ours called Sticking to My Story by Donna Griffith that if anybody's looking to improve their ability to give a pitch, I would definitely spend the 25 on Amazon, get that book. Sticking to my story. And if someone does spend the money and they don't think they got 25 worth of value, shoot me an email and I'll send you 25 bucks. I haven't had to do it yet.

[Keith]

She, she and I slipped up on a few meetings ourselves, but she'll be on Chalk talk again soon. And Max, I think you're absolutely right. One final question. What's the most common mistake a CEO makes in terms of bringing on top team?

[Max]

Yeah, the most common mistake is saying, you know, we don't need to work with an outside recruiter. I say you have to. Whether you don't have to work with people, connect, but find somebody who's been in the business for, well, you can't, you can't be a recruiter yourself and you might know a couple people, but that, that you're not looking at the whole universe that any strong recruiting firm is, is looking at. So to think that you can do it yourself in your spare time when you're trying to fundraise, you're trying to run your business, it doesn't make any sense. Sense. It's pound, it's Pennywise and pound foolish.

[Keith]

Yeah, those are great words, Max. I got to say, you know, thinking about, you know, our upcoming discussion, I went through my list of folks I've worked with and I was so fortunate to be able to make an introduction or two that led to somebody getting a job. It's just so fulfilling, isn't it? I mean, you get to experience that on a regular basis. Find somebody a job is one thing, and then you find somebody a great career is a whole other.

[Max]

Yeah, for sure. No, I love it. That's, you know, that's why I work so hard. It's, it's exciting and to be right here in the heart of all the action, Silicon Valley, with everything that has gone on and is now going on in the AI space. You know, we, we do our events, you know, on Zoom, but as you know, a couple of weeks ago, and you were, you were there, we had an AI event and we had 100 people there. We had 27 companies pitching to 80 investors, both in the room and on Zoom, and it was just a huge success. The AI space is clearly, you know, taking off, as everybody knows.

[Keith]

I have to mention that myself because, Max, what a difference too. Now listen, there are trade offs, there's value to being virtual, surely, but being in person to me felt like 10x in terms. I'm trying to present to you my idea and then you have time to sidebar with me one on one, and then we go to the corner and, and go to the next two or three meetings and just short, short cut the whole discussion. Now some of those conversations aren't moving forward, but a couple of them are.

[Max]

Yes. Yeah, and, and we just, it's Wednesday, will be two weeks. And I've talked to several of the entrepreneurs and they're in serious discussions with investors today. So that, that feels great. And we're, we're doing another one. October 24, another AI pitch, Pitchforce and, and conference in San Francisco at Reed Smith. They're, they're lost.

[Keith]

It's a topic. What's the focus there?

[Max]

It's going to be just the same as it was the one, two, two weeks, two weeks ago. It's all, it's all AI. We're going to have expert panels. We're going to have 20 or 30 companies pitching to many, many investors.

[Keith]

All right, I want to see a couple of my friends on the. On the pitch lineup because it is a great event. Kudos to you, Max, for putting it on, and thanks for sharing a little bit of your insights here with Chalk Talk.

[Max]

I loved it. Thanks, Keith. Love your enthusiasm and your dedication to this man.

[Keith]

You're a great. You're. I can't. 60 hours a week.

[Max]

Come on, seriously. My wife says, stop already. You're killing yourself. I said I love it. I'm working on a plan to cut down to 20 hours a week and, you know, and bring somebody else on to. To assist my. But it's this. You know, I get my juices flowing from this.

[Keith]

All right, well, keep it going. Thanks for your time.

[Max]

Thanks, Keith. It's a pleasure. Let me. Let me know when you got something that I can see. We'll put it on LinkedIn and shoot it out also. Thank you so much.