Historically startups and early stage companies tend to begin hiring sooner than the bigger public companies as economic times improve.  They have more flexibility and can commit to headcount without the market pressures that publicly traded companies feel.  Could this be a sign of better things to come?  We don’t know, but it was at least a refreshing observation.  We’ll keep you posted on any other positive signs and check in next month to determine if this was an anomoly or the beginning of a trend.

www.ozmodevices.com

Founded: December 2004
Employees: 25
Office Locations: headquarters in Palo Alto, CA with a software development center in the UK
Funding: $12.55M Series A
Investors: Granite Ventures, Intel Capital, Tallwood Venture Capital

Overview
Ozmo Devices is the leader in Wi-Fi PAN (Personal Area Networks) for peripherals. Wi-Fi is ubiquitous in today’s notebook computers, and recent advances in 802.11 technology are accelerating broad adoption of Wi-Fi in a myriad of mobile and consumer electronics devices. Ozmo Devices extends the functionality of Wi-Fi-enabled platforms to seamlessly communicate with low-power wireless peripherals such as mice and headsets. Ozmo Devices’ Wi-Fi PAN solution enables peripheral manufacturers to deliver wireless products with the superior performance, flexibility, and convenience consumers want and need.

Users / Target Market
Applications for Ozmo Devices’ low-power Wi-Fi PAN solution include wireless peripheral connectivity for personal computers and communication devices, portable audio and video players, gaming consoles, and home entertainment systems.

Revenue Model
Fabless semiconductor company

Company Culture
Exciting start-up culture managed by wireless and semiconductor veterans.

Hot Positions
Applications Engineer. Details can be found at http://www.ozmodevices.com/jobs_01.php

An interview with Ramit Sethi, Co-founder and VP Community Marketing

Overview
Founded: 2005
Location: San Mateo, CA (branch office Nashua, NH)
Current Employees: 11
VC: Mohr, Davidow Ventures, a VentureLoop client
Money Raised: $2.1 million

Give us a basic background on PBWiki.
PBWiki’s
goal is to lead the world’s collaboration market. The name "PBwiki"
comes from the idea that making a PBwiki is as easy as making a peanut
butter sandwich.  The product was initially programmed by David Weekly,
the PBwiki CEO, at a SuperHappyDevHouse event in less than 24 hours.
Within 48 hours of launching PBwiki, we had over 1,000 wikis. Now we’re
currently hosting over 400,000 business and education communities,
which is more than any other wiki site.

Why would someone use your website, and what is the cost?
Project
management for business and classrooms for educators are our biggest
applications right now.  A company can quickly set up a wiki that
allows them to post updates, share documents, create calendars, and
control user access.  The basic application is free, and we have
affordable subscriptions for more robust and customizable features.
The reason so many companies utilize our wiki is the easy and rapid
deployment of a simple, secure collaboration website.  You don’t have
to wait for your overworked IT department. And we build the software to
be used, not to be shoved down the throat of poor end users. We use our
own product for all of our internal collaboration.

Is this product mainly for startups, or does it have the horsepower to meet the needs of larger companies too?
That’s
a good question.  We never intended to serve only Silicon Valley. In
fact, when we look at our usage data, we have more customers from the
Midwest and East coast than the West coast. And one-third of Fortune
500 companies use PBwiki for internal collaboration. Many of these
larger companies find products like Microsoft Sharepoint too
complicated and inflexible.  They just want something that works. Some
of those typical use cases include intranets, extranets, and document
repositories. 

You mentioned a subscription version of the product.  Is that your main or only revenue model?
We’re
currently doing very well utilizing a subscription model to compliment
the free version of our product.  We actually set new revenue records
most months.  We’re of course open to other revenue models in the
future. But subscriptions are working well.

What is it like to work for PBWiki?
The
culture is very informal. You can tell that from our name and logo down
to the emails we send. (Try it! Send us an email if you’re interested
in working here.) Everyone here is hungry and wants to make big changes
right now.  It’s pretty amazing to realize how many people PBwiki
touches. We get hundreds of emails from users around the world telling
us how they use PBwiki and how they wish we’d just help them do this
ooooone other thing.

In terms of our work life, we have the
typical free lunches and
massages.  But the real fun is that you can make big, ambitious changes
and get them in front of millions
of users the very same week.  We’re a SAAS company so we deploy often,
and changes affect lots of users. To put things in perspective, last
week our blog (http://blog.pbwiki.com) has photos of a recent
spicy-food-eating contest we had in the office.

What is your hottest job opening right now?
We’re hiring in engineering, sales and support, but a web engineer would probably be our most critical need at the moment.

Web engineer

What makes us tick? We love building useful tools
for the web. We develop new features on Monday, and deploy it to hundreds of
thousands of real users by Friday. What makes you tick? We want you to be energetic,
full of ideas, know what a wiki is, and enjoy working with a small team of
brilliant people. You should thoroughly understand web technologies. You know
how to prototype things and quickly make them real with XHTML, Javascript/AJAX,
CSS, and/or PHP.

Click here to view job and apply

Click here to view all PBwiki jobs

We have jumped headlong into 2008, and already the economists, pundits and media are throwing around the “R” word.  Many retailers had disappointing results for the holidays, a significant interest rate cut is being mentioned, and American Express saw a decline in purchasing by consumers.  Are we in for a recession?  And if so, what is the startup market looking like if things weaken in the broader economy?

First and foremost, we are not currently in a recession.  I have heard or read more than one news report stating that “we might already be in a recession.”  A recession is generally defined as at least two consecutive quarters of a decline in GDP.  While this definition is not universal, a real decline in GDP is necessary before most notable economists will declare a recession has occurred.  The U.S. GDP growth has slowed, but we have had zero quarters of negative GDP since 2001and are not projecting negative GDP numbers in the immediate future.

No one knows with certainty what will happen with the economy, but there certainly are some risk factors surfacing.  So let’s consider how the startup market looks outside of the broader market.

Venture firms have been raising and investing money at solid rates for the past 2-3 years.  The NVCA is projecting that venture investment levels for 2008 will be in the $27 billion range, which is on par with 2007.  Venture firms have also been raising money at a steady pace with $34.7 billion raised for investment in 2007.

Fundraising by Venture Funds, 2002-2007*                              
Venture Capital   
Year/Quarter    Number of Funds    Venture Capital ($M)   
2002                        179            3,936.9   
2003                        152           10,606.1   
2004                        208           19,057.6   
2005                        228           28,282.6   
2006                        229           31,698.1   
2007                        235           34,675.9   
4Q'05                        83            9,276.2   
1Q'06                        75            6,544.5   
2Q'06                        77           14,185.5   
3Q'06                        67            5,375.3   
4Q'06                        65            5,592.8   
1Q'07                        80            5,754.2   
2Q'07                        85            9,141.8   
3Q'07                        77            8,763.7   
4Q'07                        63           11,016.2

    Source: Thomson Financial & National Venture Capital Association

    *These figures take into account the subtractive effect of downsized funds

So what does all of this mean for the venture-backed job market?  One might surmise that from the level of fund raising and investing within the industry that job creation should be very high.  But we also had record fund raising and investing within the industry before the bubble eventually burst in the dawn of the Internet era.  It can be difficult to predict how the investing and fund raising trends will impact overall job creation in the venture-backed economy.

Beginning in 2004, I became more optimistic about job creation in the venture-backed startup community.  Firms raised $19 billion in funds compared to only $3.9 billion in 2002.  Venture capital firms generally have funds with a life span of 7-10 years.  The terms of those funds generally require them to invest money into companies over that life span rather than keep it on the sidelines in interest bearing accounts.  I could tell from the money raised in 2004 that by 2006 we would start seeing a lot more money plowed into the startup community, which meant more job creation.  VentureLoop benefited greatly from this trend, as we more than doubled the number of venture capital clients we work with from the middle of 2006 through the end of 2007.

As you can see from the previous chart, fund raising in the VC community has been quite healthy for the past several quarters.  Strong liquidity in the market has brought investment dollars back into the startup community, as the prospect of getting real returns on investment has blossomed.  As the stock market wanes, these liquidity options will also diminish.  That should then create a trend of less money raised by venture firms, slowed investment, and even returning capital to limited partners by some firms who would rather not invest than invest in companies that will not give them the returns they want.

Another trend I like to follow is the actual percentage of new investment dollars allocated to seed stage companies and the percentage of first round investing allocated to seed stage.  Using figures from the MoneyTree Report  distributed by PricewaterhouseCoopers, one can analyze not just how much money is being invested but also in what stages it is being invested.  The reason I like to follow this trend is that the percentages help tell how much venture money is going into brand new ventures to create new jobs and how much might be going into later stage investments to sustain an existing company before it reaches stability.  During the Internet era decline, you may have noticed a lot fewer Series A investments announced and far more Series C, D, and E investments.  While money was still being invested, it was often to sustain existing companies rather than build new ones that require hiring an entire team.

From the figures noted, the money invested in Seed Stage companies for 2007 is still healthy but could be declining.  It will be interesting to see the full numbers for 2007 once they are released.  My overall assessment for 2008 is that the startup job market will continue to grow at a good pace, but potentially not quite as strong as 2007.  If the broader economy does not fair well through 2008, then we could see further trending away from the earlier stages of investing by the venture capital community into sustaining existing companies with lower risk.  That in turn may impact overall job growth in the sector, but I do not see a near-term contraction in the startup job market.  There is too much money that needs to be invested that was raised in the past three years, and the exit opportunities for venture firms (liquidity) would have to suffer for a few quarters before we will see an impact on hiring.

Several years ago, when I first entered the recruiting industry, I
interviewed a candidate from a large CPA firm who began sweating five
minutes into the interview.  I noticed beads of sweat slowly dripping
from the top of his head and rolling down his forehead and face.  He
didn’t wipe away the sweat and didn’t say anything about it.  I could
hardly focus on the interview as this poor gentleman seemed to have
sprung a slow leak in my office.

As a novice recruiter, I had no idea what to do.  Should I say something?  Is it even legal for me to say something?  So I just finished the interview and never mentioned the sweating issue to the candidate, nor did he wipe his face or mention it either.  Fortunately, the candidate also interviewed with a more experienced recruiter in my office two days later.  When the individual began sweating again, my colleague stopped the interview and offered some great counsel to this candidate.

First, she asked him if he knew that he was beginning to sweat.  The candidate acknowledged that he got nervous during interviews, felt his head heat up like Vesuvius, and sweat would begin a slow march down his head.  He was too embarrassed about the issue to say or do anything about it during interviews.  The recruiter then told him that he would be much better off getting this issue on the table before even starting an interview.  She said to tell the interviewer in a confident but light-hearted manner that he sometimes gets flush during interviews and might pad his brow with a handkerchief during the discussion.

The interesting thing is that once the candidate began taking that advice, he had less of a problem with sweating.  Much of the issue stemmed from the anxiety he felt over the probability that he was going to start sweating and not be able to control it.  As soon as he put the issue on the table, the anxiety subsided.

If something about you or your work history could be overly distracting during an interview, then be up front about it with the interviewer so that they don’t focus on that issue and forget everything else about you.  It could be a biological issue like sweating, or it might be the fact that you were fired from your last job.  Be open and honest in a professional manner, and you will diffuse the distraction and be able to focus on the interview.   Otherwise, you risk spending an hour with an interviewer and have them only be able remember one thing when you’re done: sweat.