Unicorns don’t exist with Teddy Dimitrova

Thomas Kohler:
Today’s guest, Teddy Dimitrova, the author of the book Unicorn don’t exists.

What are the most patterns you see in terms of problems you face when companies start scaling?

Teddy Dimitrova:
Let me think. So, I think that you already mentioned the first pattern with actually managers that are becoming managers because of personal preferences, recommendations, or even someone started as an intern five years ago, and now because they’ve been with us for five years, we give them a management function without us making sure that they’re trained into it. So that’s a challenging pattern. I would say also the two different poles of going really rigid on quality. So really going into, we need to hire 2300 people, but they have to be the a players out there with the unicorns, with the sheep, with the five legs and so on, or going into the exact opposite of mass hiring and just hiring on gut feeling, what the hiring manager feels like. It’s right. We do that panic hiring. I think that this is probably the biggest pattern that I see in every single company. So when I say panic hiring, I mean reactive rather than proactive recruitment.

Thomas Kohler:
So there is a problem somewhere, and then you solve it for an open role and it needs to be filled now. And you throw it into the capacity, even if you don’t know if it’s even doable and if the role is maybe not, probably scoped out something like this.

Teddy Dimitrova:
Yeah, exactly. And then what happens is that because the investors are pushing us to hire, to grow as soon as possible, to burn that money that came in into the company, we end up hiring with basically. Yeah. A mask in front of our eyes, like shooting in the dark. You end up scaling the company from, let’s say 70 people to hundred in one and a half years. But then you find out that the company is not running properly, it’s not efficient, you’re losing money instead of making money. People don’t even know what they’re doing. And then what happens is that we’re scaling down, so layoffs are happening, and then you figure out that you can actually do the same job with half of the people that you’ve hired.

Thomas Kohler:
That’s true. And I think that’s also part of venture capital. You place bets and work in parallel. Right. And that’s actually the beauty of it, because you have speed and a bit of confidence to just get going and do things. I think just a lot of companies are not able maybe to communicate this in a proper way and act in a way that they behave adjusted to the situation and also are aware of what’s coming maybe later on, because usually what you could also see on LinkedIn, when companies scale for one, two, three years, double, even, triple or so on, at some point there’s usually a plateau coming where there are layoffs, and maybe it’s not happening in the overall company, that there is some kind of consolidation and you let people go again. But let’s say you scale up the product and tech team and then suddenly at some point you see, okay, we overdid it. And then you adjust and just focus on the one two things that are really working, and the rest you maybe distribute somewhere else in the organization or let go, but in parallel, you already add people somewhere else, and then the same thing is happening all over again. Sometimes in parallel, sometimes a bit later, but it’s happening continuously. And today we did the podcast around that, talking about what founders or companies, when they don’t have any setup, in terms of a recruiter, in terms of tools, methodologies, systems, the infrastructure to scale, maybe from 30, 50, 70 to plus hundred people. What are the common patterns in terms of mistakes, problems, why and how to solve them and fix them.

Teddy, great to see you again. I remember we were in the VR developers tech recruiting conference and suddenly we stood next to each other, talking to each other. And then I was really excited about your book, unicorns don’t exist and this made me curious. You gave me the book, I read over it, and now we are here doing a podcast about it. Really looking forward to that. Maybe we can start with a bit of more context about yourself.

Teddy Dimitrova:
Sure. Well, first of all, thanks for inviting me. I’m looking back with a smile to we are developers. I think your talk over there was very inspiring. I’m actually already implementing some of the stuff that you shared with us and at the same time I think we had a lot of interesting chats. So yeah, it’s very nice to see you again. Yeah, a little bit about myself. For the people that don’t know me, I’m originally bulgarian, but I live in the Netherlands.

Basically my whole grown up life, I came here to study and then basically I stayed, built up a life here, ended up marrying a dutch guy. So kind of now I’m half Dutch. I suppose after all these years I’ve been in recruitment for a decade now, mostly tech recruitment, very specialized in startups and scale ups. This is something that always has given me a lot of energy because I really am a builder. I really like to solve problems thinking out of the box and how bigger the problem, the more excited I get. So after I would say seven, eight years working as a freelancer, seeing probably more than 40 different startups and scale ups across the globe, I thought, okay, I really want to put all of my thoughts and ideas on paper and share it with the world. I saw a very common problem when we as recruiters often come in, let’s say in a scale up, the founders say, oh, I’m hiring you because we need to scale, we need to hire 100 people. So can you start tomorrow? And ideally we already want to hire people immediately, but then we come in and we see there is no infrastructure, there is no process, there are no scorecards, the stakeholders are biased.

So we actually spend our first half a year to a year to implement atss and processes and to train our stakeholders while we’re expected actually to hit the ground running. So with putting all my experiences and thoughts and ideas in a book, I’m actually hoping to kind of help the recruiters out there to avoid this. So I’m hoping that founders who read this book would think like, okay, that’s actually very useful for me to implement all those little things. So then when actually the recruiters come in, they can do their job. Yeah, that’s, that’s it in a nutshell, I would say about.

Thomas Kohler:
What’s the scale up for you?

Teddy Dimitrova:
I would say in, in my experience. So the type of scale ups that I’ve worked with is somewhere up until 500 to 600 employees.

Thomas Kohler:
Okay, so there is a lot of things happening right from, so I think to reach that stage you really need significant traction somewhere from the story that investors believe, from the prototypes you built or from the revenue you make. And in order to get there, there needs to be something already established. And from my, I would say not definition but experience, I would categorize scale ups more when they first time, as you said, maybe double from 100 to more than 150, 200, 250. When this sort of stage is reached, then you just don’t have just one organization. You suddenly need to build several organizations, mostly in parallel or launch several complexities like new products, new markets in parallel by doing something. And that’s getting complicated. And then usually also the founders, they are maybe not so involved anymore in everything and then suddenly you have managers that need to make things happen. And every manager has different level of experience, different style, different attitude.

The first managers that are hired into that stages are maybe just hired from recommendation or personal preference from founders that they think, oh, I am confident in they do things like me. And then suddenly you have a very fragmented leadership team. The first time you build it, usually if it’s done by first time founders, usually, and then the chaos is happening. Right. What are the most, most patterns you see in terms of problems you face when companies start scaling?

Teddy Dimitrova:
Let me think. So, I think that you already mentioned the first pattern with actually managers that are becoming managers because of personal preferences, recommendations or even someone started as an intern five years ago and now because they’ve been with us for five years, we give them a management function without us making sure that they’re trained into it. So that’s a challenging pattern. I would say also the two different poles of going really rigid on quality. So really going into we need to hire 2300 people, but they have to be the a players out there with the unicorns, with the sheep, with the five legs and so on, or going into the exact opposite of mass hiring and just hiring on. Good feeling, what the hiring manager feels like. It’s right. We do that.

Thomas Kohler:
In case you like my show, please subscribe. I would really appreciate it.

Teddy Dimitrova:
Panic hiring. I think that this is probably the biggest pattern that I see in every single company. So when I say panic hiring, I mean reactive rather than proactive recruitment.

Thomas Kohler:
So there is a problem somewhere and then you solve it for an open role and it needs to be filled now. And you throw it into the capacity even if you don’t know if it’s even doable and if the role is maybe not, probably scoped out something like this.

Teddy Dimitrova:
Yeah, exactly. And then what happens is that because the investors are pushing us to hire, to grow as soon as possible, to burn that money that came in into the company, we end up hiring with basically, yeah, a mask in front of our eyes, like shooting in the dark. You end up scaling the company from, let’s say 70 people to 100 in one and a half years. But then you find out that the company is not running properly, it’s not efficient, you’re losing money instead of making money. People don’t even know what they’re doing. And then what happens is that we’re scaling down, so layoffs are happening and then that you can actually do the same job with half of the people that you’ve hired.

Thomas Kohler:
That’s true. And I think that’s also part of venture capital, you place bets and work in parallel. Right. And that’s actually the beauty of it, because you have speed and a bit of confidence to just get going and do things. I think just a lot of companies are not able maybe to communicate this in a proper way. And I act in a way that they behave adjusted to the situation and also are aware of what’s coming maybe later on. Because usually what you could also see on LinkedIn, when companies scale for one, two, three years, double, even, triple or so on, at some point there is usually a plateau coming where there are layoffs, and maybe it’s not happening in the overall company, that there is some kind of consolidation and you let people go again. But let’s say you scale up the product and tech team and then suddenly at some point you see, okay, we overdid it.

And then you adjust and just focus on the one, two things that are really working and the rest you maybe distribute somewhere else in the organization or let go, but in parallel, you already add people somewhere else, and then the same thing is happening all over again. Sometimes in parallel, sometimes a bit later, but it’s happening continuously. And I think this is, this is the beauty, but also the act of scaling and being able to adjust to that. And you wrote your book around how to deal with that situations, I guess, right?

Teddy Dimitrova:
Or actually, and again, this is more of a reactive than proactive attitude. So if you want to deal with those situations, you’re already too late. So actually be proactive. So the book is much more focused on really early stages, startups, you know, when the founders don’t even have a recruiter yet, or don’t have even money to hire a recruiter. And I’m helping them hire the first 30, 40 people without the help of a recruiter, but in the proper way, because we all know that if you don’t have the right people on board in the early stages, then it’s like a domino effect further in your company. And that happens very often. Again with the recommendations. I’m going to hire my wife to be head of HR, despite of the fact that she has never done HR in her life.

Or I’m going to hire my neighbor to be a CFO because he did some, I don’t know, mathematics or something in high school. And then this goes down in the future in a very negative way. So, because hiring, hiring in startups often happens also, again, based on good feelings, often founders hire for the unknown. They’ve never hired a person like this before. They even don’t know what that person does. They make mistakes. They don’t make sure that they know exactly what they’re looking for. What are the qualities of this person? Hard skills, soft skills, motivation and stuff like that. And then it spirals down in the future.

Thomas Kohler:
How would you start? Founder of 30 people now grows maybe to 50, 60. No recruiting setup there. Maybe one co founder. The hires that have been made mainly through personal references, their network, and maybe a bit of LinkedIn sourcing through their own profile at night.

Teddy Dimitrova:
Yeah, yeah. What I do usually with my clients that are on this stage is we sit down with the founding team. Maybe they already have management team as well. And we go down to the basics, really to the core of the company, which is the culture, if we manage to define very well what the culture of the company is. So what are the cultural values? What is the type of organization that they want to become? Also in the future, we can dissect this into skills and attitude of the people that we want to hire. Then we translate that into the profiles of the candidates. We build scorecards around it, and we make sure that every single person that is being interviewed is evaluated not only based on can you recruit or can you code in no G’s, but actually into do you fit culturally in our organization? And what do you add to it? Because this is also one of the challenges that companies startups very often do, is that they hire only on cultural fit, and then they create this box of like minded people, which actually stops innovation.

Thomas Kohler:
Yeah, it becomes a long term problem. Short term, you’re faster with, with that approach. Because it’s easy.

Teddy Dimitrova:
Yeah. Because everybody thinks in the same direction that they agree with each other. So, yeah, let’s go. We’re fast, but in the long term, it’s actually really bad.

Thomas Kohler:
And then second thing, what, what’s, what’s next? What do you do next?

Teddy Dimitrova:
So we have the cultural values, we have our scorecards, and then we need to have a process. So this is what I’ve seen a lot. Coffee chats are being seen as a proper interview. We’re not going to interview this person actually at all, because they worked with the CTO. So we believe it. It’s got to be fine establishing one process across the whole company. So we’re not gonna mix around, maybe here, add another person to the process and so on. One process, let’s say four or five stages, and every single person that is involved into interviewing in that process is briefed, knows what we’re looking for, asking maybe even the same questions, but really making sure that we evaluate all the candidates in the same way so we can make informed decision. And filling in the scorecards is going to help us make that wrong decision.

Thomas Kohler:
With communication, right? If you know what’s going on, what’s happening. And that also, I think after an interview, you need to process the information and structure in a certain way. Sometimes I write scorecards or I see screenshots in our team when we just do some, let’s say, fun stuff. Sending around what some people send in scorecards is really funny. And everybody thinks, okay, how can you evaluate based on that? And of course, maybe the hiring managers, they don’t even think like that, but they’re feeling it hard or drowning to formulate what they think, what their judgment is. And how can you then make sure to ensure a high quality standard at scale, right. It’s not possible.

And I think this is just what companies and people involved in hiring need to understand. And I’m also a fan of making it as admin light as possible. But there needs to be a minimum level of commitment, of cohesiveness that you can iterate on that and can get the best learnings out of it and really implement them back into the process and back into the decision making. And I think that’s a really smart approach, what you said there. And I think also you don’t need to be right 100%. You don’t need to be very extreme in following that process, but there needs to be a space, and I would say 60% to 80% should adjust to that. And I would say the overall understanding about why this process or why a certain process and the basic fundamentals are necessary. Like there is certain briefing, there is a certain expectation to the role.

There is a certain cohesiveness and alignment in the process. There is a certain training on what everybody is doing, and everybody also understands why and what others are doing and then defining on how to make decisions and how to communicate your decisions. Right. This is really, then you’re maybe already top 1% in terms of hiring at that stage.

Teddy Dimitrova:
Absolutely.

Thomas Kohler:
If you do that, and it’s simple, you can set that up in a few weeks.

Teddy Dimitrova:
100%. And I think that the reason why it’s not happening is because when I speak with early stages founders, especially in the process of writing the book, I had probably around 20 founders that were reading and then just giving me feedback. Most of them would say, you know what, if I would see your book in the store, I wouldn’t buy it. And I would say, like, okay, why tell me? And they’re like, because first of all, I don’t have time to read a book. Second of all, it’s on recruitment. Yeah, okay, I have to hire a couple of people, but you’re actually asking me to implement systems to make processes. We’re doing just fine the way how we are. You know, this is not my focus. My focus is improving my product, making sure that we get that finance in.

So it’s great that you have all of those things, but I can also just maybe hire an agency. If I need a person, I can’t find them and then pay them that money. So it was a very big wake up moment for me, especially towards the end of writing the book, of realizing that despite of the fact that the problem is founders don’t have the tools to hire the people, and despite of the fact that I give them the tools also for free, literally, because I’m mostly giving the book away rather than selling it, they still don’t even read it or use it. Um, although they’re saying, I do realize that people are the most important thing in my organization, it’s gonna either help me or, or break me if I don’t hire the right people.

Thomas Kohler:
Yeah, I understand. And I think it’s just really at that stage, when you’re building a company, I also understand, right, that you really need to prioritize. And how do you then make sure that you can help the communities and the startup ecosystem to implement certain processes in a certain way and certain ways of doing it? Because I think what you’re right there, like setting up the infrastructure, it’s really important. Right. But also, what is the infrastructure defining your value proposition? This can be similar to an investor pitch, how you pitch a company to candidates. Right. For example, what do you think should be done as a basic setup? The startup package?

Teddy Dimitrova:
Yeah, definitely an ATS, because it’s just like, you cannot be a fisherman without your tools, right? So you do need an ATS, and especially if you want to be GDPR compliant and everything, it’s absolute must have.

Thomas Kohler:
What would you recommend most as an ATS?

Teddy Dimitrova:
So especially for startups? I would say recruitee. That has been my go to ATS for startups for quite some years. As every software, it’s not perfect, but it’s so easy to implement. And if you have zero idea about how to do it, it’s super intuitive. And I’m also mentioning I literally have a step by step implementation in the book as well. So ATS career page, how are you going to hire people if they can’t read your job?

Thomas Kohler:
This can also come through the ATS, right?

Teddy Dimitrova:
Exactly. So that’s the nice thing about recruitee, because they have a drag and drop career base, so you’re not even having to pay extra for an engineer to build one for you. And then, yeah, the question is, are you gonna source? Do you need LinkedIn? A lot changed in LinkedIn in the past year, so it’s much more restricted and limited. We cannot hack it as much we could back in the days without paying for it. But yeah, I would say that’s a useful thing.

Thomas Kohler:
In case you have any feedback or anything you want to share with me, please send me an email on thomas@pplwise.com or hit me up on LinkedIn. And in case you really enjoy the show, please subscribe. I would really appreciate it.

Teddy Dimitrova:
And then there are a whole bunch of other tools that you might want to use to save time, like Metaview, for example, to record things during interviews. So I would say this, and obviously the process, the recruitment process in your school cards. But this is, I do see that as part of your ATS, because you cannot set up your ats if you don’t have a process. And your scorecards are also a vital part of it.

Thomas Kohler:
And what is then your role? When you work with founders, what do you do? Do you also work for them or do you just act as a sparing partner, or do you also hire candidates? Do you feel roles? What do you do?

Teddy Dimitrova:
It really depends of the client. Most of the times in the past I would have been hired to take them out of the fire. So literally hire a couple of people and then I would always end up fixing actually the whole infrastructure and also coaching the founders. Nowadays I would say I have three different types of services. So I’m coaching early stages founders. I’m doing this pro bono and it’s very much focused on sustainability. So there is an organization called Tech two Impact, and they are helping startups across the globe that are very much focused on sustainability. I’m helping founders in there to actually make steps into their people practices, not only recruitment, but also in general people and culture.

I work with startups to help them really set up their recruitment infrastructure. So again, the ATS, the process and stuff like that. And I also do sometimes hands on recruitment. If it’s a cool startup that I really believe in and I have some free time, I do still like to be hands on.

Thomas Kohler:
And what do you enjoy most, what type of challenges?

Teddy Dimitrova:
Oh, so I like when there is a mix of challenges. So if I don’t like to have for example, one contract, a full time contract where for six months I’m going to source and recruit only because this is not giving me the spark. I like to have a complex situation where we need to get our stakeholders to the next level, maybe fix the parts of the infrastructure, hire a couple of key players and so on.

Thomas Kohler:
Cool. And do you also do this remotely or you are going on site to clients and various customer base is more Amsterdam or Europe or where are you mostly contributing? Yeah, really?

Teddy Dimitrova:
Yeah. So I had, last year I had a client in Abu Dhabi that was super cool, with some remote offices around the world. I’ve worked half a year for a client in Zurich where I was flying in every Monday morning and spending two, three days in Zurich. I had a client in Berlin for half a year where I was flying back and forth there as well. And I used to have a client in Brazil. So I’ve been all over the place and it’s amazing to really see how different cultures work and how you have to handle stakeholders, especially from different companies.

Thomas Kohler:
How is it to work in Switzerland?

Teddy Dimitrova:
It was such an incredible eye opener about the culture there of how people communicate and, you know, like, dutch people are well known for being direct. Right. I’m eastern european, so if dutch people are direct, eastern Europeans are ten times director, and then ending up in Switzerland where people are, yeah, you know, neutral and extremely polite, and then they wouldn’t give you any feedback and they would just agree with you. While they’re not agreeing. It was very challenging for me in the, the first one or two months to adapt, to actually understand what is the right way to bring things on the table. You know, I do pride myself. This is probably one of the reasons why a lot of companies hire me is because I’m, you know, what you see is what you get. I’m a powerhouse.

I come in, I see what the problems are, I fix them, and I go away. And because of the limited time, it’s not always very elegant. Yeah, if I have more time, I would do it more elegant. But in Switzerland, I had to be, in very limited time, extremely elegant with really the white gloves on and, yeah, I loved it so much because I haven’t been that challenged for a very long time.

Thomas Kohler:
I can imagine. I can imagine. And why did you start being a freelancer and writing the book?

Teddy Dimitrova:
So to give you a little bit more of the insight, I grew up in a very regular, I would say, mid layer family. My parents worked for their whole lives at the same company, no growth ambitions or anything. And we didn’t have any entrepreneurs as well in the inner circle of my family. So it’s never been my idea to be entrepreneurial in the sense of opening my own company or doing freelance jobs. I’ve always said I’m very happy to work for boss, and then I’ve worked for a couple of years and at some point I felt I kind of seen it all, which is very funny if you have like three years of experience and you suddenly think you’ve seen it all in recruitment. But okay, I was young. I had a little bit less self reflection than I have nowadays. I started applying for jobs because I felt like I’ve done what needed to be done in my previous job and I would get rejected from most of the startups because they felt I’m overqualified.

And at the scale ups where I would apply for more of a team lead position, they felt like I didn’t have enough experience on paper for that. So I was in the middle. I couldn’t find a job just because I was either overqualified or underqualified. And at that time, the market was absolutely fantastic for freelancers. I had a lot of friends that were freelancing, and I said, listen, with your experience and the way how you work, you can bring so much to a company. Just start freelancing. And the moment I had a thought about it and I told a couple of people within one week I had a project. So it just went so fast, I didn’t have time to think about it. And it went on for seven years so far.

Thomas Kohler:
So you enjoy it?

Teddy Dimitrova:
I love it. I love it.

Thomas Kohler:
What is the biggest benefit of being a freelancer in recruitment?

Teddy Dimitrova:
The learning curve. I think that for me, coming into new companies and having to very quickly get up and running and figuring out what their challenges are and how can I solve them? Because despite of the fact that we always have similar challenges in recruitment, no size fits all. That’s something that pushes you to be quick on your feet, to quickly learn, and also develop yourself in a way how you can be even more efficient in your problem solving.

Thomas Kohler:
Totally agree, Teddy. We are coming to the end. Thank you so much. Unicorns don’t exist. Buy the book, look at it. Teddy Dimitrova, thank you for having time to do this with me, and it was great meeting you.

Teddy Dimitrova:
Thank you for the invite, and it was great chatting with you again.