A Hiring Process to Create the Best Ecommerce Marketing Team - with Brad Pedersen

Raphael Paulin-Daigle:

Today, on episode number 14, get ready. Brad Pedersen is a serial entrepreneur who has built companies with revenues ranging from seven to nine figures and with up to 130 employees. Recently, he co-founded a direct to consumer E-commerce company called Pela Case, which has grown 4,000% since its inception two years ago. In this episode, he'll share how one of Pela's growth weapons is the hiring process, so he'll share that process in detail and will tell us how to assemble incredible growth teams. All right, Brad, welcome to the show. Thanks for being here.

Brad Pedersen:

It's great to be here, Raph, really excited about our time together.

Raphael Paulin-Daigle:

Awesome. Well, this podcast is all about going deep and really understanding the key growth through strategy, so our listeners can really get the most value right away and apply it to their business. So you've had an incredible path to growth. You've built a lot of startups ranging from seven figures to nine figures, 130 employees plus, and now, you're the owner of Open Mind Developments, which owns the Pela Case brand, which we're going to focus on today. Tell me a bit more about the phenomenal growth that you've had. What are some of the nice metrics that you can share with us?

Brad Pedersen:

Yeah. Well, I'm one of the co-founders of the company and I have two other partners and each of us sort of focus on areas of expertise. I'm going to speak on mine, which is really focused on operational excellence, finding the right teams, and then also ensuring that we have the right financial systems in place to run the enterprise. Growth is an exciting thing but I would also tell people that it's 'terri-citing' So in other words, it's terrifying and exciting. Every entrepreneur wants to strive to have growth, but there's a double edged sword with growth. And the sad reality for most entrepreneurs is that they often bite off more than they can chew. And there's this old adage that most entrepreneurs choke from biting off more than they can handle versus starving from lack of opportunity.

So the three things that we're constantly looking at in a growth company that have to be reinvented are their people, their systems, and their processes, which are going to be constantly breaking as long as you're breaking the company. As long as you're growing the company. So my area of focus has been really how do we ensure that we have those three things constantly scaling with the business? And I'm a firm believer that if you have the right people, that both money and systems can be managed as a part of your growth.

Raphael Paulin-Daigle:

Totally. And you've done that quite successfully because if we look at the metrics, Pela has grown 4,000% since its inception, which was how many years ago?

Brad Pedersen:

Yeah, the company was actually five years ago founded, but really we didn't launch in a meaningful way until two years ago. So we will be two full years at the end of December.

Raphael Paulin-Daigle:

So amazing growth and that really comes from, like you said, your systems and the way you've been hiring. And I'm a bit familiar with your hiring process, but I think that's where our listeners that are building their companies, they have to assemble their marketing teams together, they have to assemble their teams and they can learn a lot from you. So let's say we look at building a team. Where do you start? What is the first step in your process to building an exceptional team?

Brad Pedersen:

I'd say you have to go back to the very basics, and some of the stuff is going to sound, "Oh, no, here we go again. He's going to talk about culture." You're right. I am going to tell them about culture because that's the foundational piece for any business - ensuring that you have the right starting point. A culture isn't something you make. It's the people you attract. And the only difference between a million dollar enterprise and a billion dollar enterprise is the people that make it up, because we are in a human-human business. Whatever business you're in. So the very first thing is what is my vision and purpose of the company? What is it that I believe is unique to us that we can go and solve? What is it we're going to do?

How are we going to act in that case? And then finally, what are the governing values of how we're going to behave? And when we get clear on those things upfront, then it becomes a lot more obvious about the type of people we want attract to our enterprise. We create a filter by which every candidate that we look at we can analyze saying, "Do they fit? Will they be able to help us advance our vision initiative? Do they live by our core values and vice versa?" By marketing those things, you're attracting people like you. You're finding people who want to be a part of your cause. So I know it sounds basic, I know it sounds boring, but unless you get that part right, Peter Drucker had a statement that said that culture eats strategy for breakfast. You can have the best strategies in the world, but without the right culture and the right people to help you employ it, it doesn't matter.

Raphael Paulin-Daigle:

I love that you're saying that and that's exactly why I asked the question, because like someone we know, Dev Basu, who says, a lot of companies grow by default or having a lot of success, they get lucky, they grow by default and then they just hire people without really thinking of what needs to be in place before hiring. So people are going to start with the skills, what they need, right? They need a marketing person. This is what they need. But they don't think about really defining that culture and mission beforehand. And based on what you're saying, it sounds like that's where stuff starts breaking.

Brad Pedersen:

Yeah, I think it's misguided. It's easy to create an org chart. It's hard to empower a high performance team. So I've had seven different startups that I've been a part of, and I've crashed and burned a couple. So I've learned from the wisdom of my wounds that there's certain things that if you don't do right, you'll pay the price ultimately. And whenever I've founded a business on a strategy, on a unique position in the market, even if I had initial success, because one of those companies was on the Growth 500 list, it was I think ranked as high as number 11, four years running. It was absolutely a rocket ship and yet it crashed and burned. So it's because we are chasing a strategy instead of starting with a premise, here is what is unique to us that we think we can go make our dent in the universe with.

So that calling is the most important piece to spend the time on right up front. And what I've always said is that a company is made up of kind of four components. The first is a founder with a great idea. And when I say a founder, I want to premise that it's a great founder. The second is having a strategy. So what is your USP? What is the problem you're solving? How are you going to be unique to the market? The third is building a team around it. And the fourth piece is timing. Just being with the right idea in the market at the right time. And while all those first two variables are kind of have a one times impact on the potential growth of the company, the team and the timing are exponential.

If you get the right team at the right time, those can make all the difference. I think you know Jim Collins when he did his works around Good to Great, Built to Last, even his most recent stuff, Turning the Flywheel. He talks about that two comparative companies that started at the exact same time, who have the same lock, if you will, in the marketplace in terms of timing. One gets 10X results over the other. What's the differentiator? It comes down to two things. The vision, mission of that company and the team that they were able to employ around it. And that's all I fundamentally believe, every CEO's greatest role and the thing that he or she is most vehemently going to protect is what is that vision, mission and who are the people I need to go find to actually make it happen?

Raphael Paulin-Daigle:

Awesome. Now let's say we break it down step by step, right? So obviously it all starts with the culture and mission. It's a great idea. But now when people listening to this need to hire, they'll need to put that job ad out there. How did they start filtering for that? How do you communicate and attract the people that are going to be attracted to your culture and mission and weed out the bad apples from using your applications?

Brad Pedersen:

Right. Well, I can tell you my mistake in the beginning is that I thought hiring was something I had to do, instead of something I needed to do, something that was an important part of the growth of the business. So no different than how you would be marketing for a potential customer, you should be doing the same kind of marketing copy in terms of appealing to your potential hires. If you take a look, if I was to go on any of the job boards right now, and I'd look at most of the postings, it would be just a myriad of blah, blah, blah, boring, boring, boring. I don't care. I don't care.

Raphael Paulin-Daigle:

Right.

Brad Pedersen:

Once in a while you'll see somebody who's very creative and they describe their position with pizazz and they say things that are culturally relevant from their values that would appeal to a potential candidate. So we've really taken the approach that number one, we want to create a marketing machine that markets to people that we know will be rock stars if they come on board a team. So we create videos and write our copy. Like I think I just wrote a job description this morning, and it was like a marketing rockstar. It was very colourful and friendly and inviting to ensure that people that are a part of our tribe who would share some of the values would be interested in actually applying for that position. Plus they watch the video, they see what we've done as a company and what we're doing to make impact in the world, and the type of people that we get a chance to hang out with and all the good things that would be a part of them if they were to come and join our team.

We take the whole idea of hiring from being something we have to do to something that we get to do, and we get to do it with excellence, meaning that we're going to add our marketing pizazz into it, to ensure we attract the right people. And then I'll tell you is that the worst place in the world to try and find candidates is on the job boards because quite frankly, if they're really, really good people, they're probably employed. And my belief is that everybody, every single person out there you can hire, at some point in their life, they are available for you to hire and it comes down to your ability to inspire them. And we as leaders and entrepreneurs in businesses, we get hung up in that, "Well, they're out of our league or there's too much money." Or whatever.

You know that money actually is number five on people's reasons for why they would come and work with you. The number one reason they'll come is for association with like-minded people. Number two is the ability to grow, the ability to advance himself. Number three, challenge. Number four, association. Number five is money. So the idea that we get focused on, "Oh, we got to get this big check in front of them." I've been able to hire some unbelievable people who actually came to work for us for less because they felt compelled around the cause and mission and vision, which is why I said that's the most important piece that you get that up front and they're willing to actually come and take a pay cut temporarily knowing that if they perform, they will have the opportunity to participate in the long run.

Raphael Paulin-Daigle:

Love it. I think the biggest lesson from what you're saying here is at the end of the day, you don't want to approach your job posting like job postings, right? It's about approaching it like you're building a landing page to sell your product, because you're not offering a job. You're selling an opportunity, and if you know how to write copy on your product pages and landing pages to attract the right buyer, why not do the same thing to attract the right candidates for your job ads?

Brad Pedersen:

100% and again, if you can get it right around your values and around your culture, then you're going to be hiring patriots. If you're focused on money, then you're going to hire mercenaries. Patriots win wars, mercenaries win battles. You want people that are going to win the war with you.

Raphael Paulin-Daigle:

I love it. Now the job ad is live, applications are rolling in, what is the next step in your process to really filter out people?

Brad Pedersen:

Yeah, we call it separating the dynamos from the decoys. I just want to step back and say that your number one most valuable resource for finding quality people is referrals. So, no different than the best quality customers to you tend to be referral customers. The exact same methodology should apply to your hires. So you should be reaching into your network of people that you feel are like-minded, share similar values and that you respect and say, "Hey, we are looking for this particular post." Posting something up on a job board. Yeah, you do it, but I would tell you for us it's like throwing a fish hook and a bobber in the street. You might catch something but likely it's just going to sit there and do nothing in terms of getting quality. So that being said, fill your funnel up with potential candidates. And we have something called The Rule of Three, which means for every single job posting in the company, we have a minimum of three possible candidates.

We interview them a minimum of three times, and we will make sure that it's done by three different people in the company and there'll be a minimum of three reference checks. So it's just a very simple way for us to kind of move people through a flow. We just recently actually added an initial step to the process. So let's say you've got your posting up there, you've got some candidates from referrals, some folks that came from referrals to your team. And by the way, if you have people in your team, incentivize them to refer people to you, because if they're performers on your team, they probably know other performers. So on our team we pay people 1000 bucks. If they refer somebody that we hire, and they're there for 90 days, we pay that person 1000 bucks, because quite frankly it's cheaper than hiring an outsider.

Raphael Paulin-Daigle:

Totally.

Brad Pedersen:

So once we've got the people into that funnel, the very first step that we've just added is we get them to record a three minute video and send it to us to tell us why they would be a rock star in this particular role. We're looking for them to do two things, sell us. And number two is actually make sure that they fit within the three minutes. That they listen. It's amazing how many people will say, "I need you to tell me in three minutes or less why you'd be a rock star," and you get a video that's five minutes long. If they can't take the instructions on how to make a video, then they've pretty much pre-selected themselves as not being an ideal candidate for you.

Raphael Paulin-Daigle:

Totally. And imagine if you're a hiring a salesperson, or a customer service person or even someone in marketing, just the language they use, you'll be able to understand are they trying to sell me on the benefits, on the vision of what I can deliver as an employee. Or are they trying to sell on just random features, right? So you can see how they think and value the whole process, and actually kind of understand their skill set as well.

Brad Pedersen:

Yeah, we want to give as many opportunities for people to self select in or out, just based on how they act. And that's part of the reason why you want to have multiple interviews too, because there are people that are professional interviewers, who are decoys and you will make sure your system does everything to flush them out. So there you go, the reason we're adding that step in is because our first step used to be a screening call, which was 20, 30 minutes long. And there'd be sometimes I'd get on a call and within five minutes I knew this person wasn't the person and didn't want to spend any more time.

So we said, "Let's just add this three minute video that gives us an opportunity to get a sense of who they are, sell themselves. That will save us potentially the 20 to 30 minutes." Because the most valuable thing you have is your time and you want to make sure you protect that. So screening video. Number two is do a screening call, which is 20, 30 minutes. It's long. We asked five or six different questions that are just kind of very top level. We want them to really be selling us in terms of why they would be a good fit for our role. We then go for a third interview, which is the main interview. And this is done by the way, by a different team member than who did the screening call. And it's a 60 to 90 minutes interview with an intense list of questions that are just again to get to know them better in person.

Then we have a fit interview after that, which again is a different group of team members. And by the way, when I say team members, I always ensure that they're team members who are living out our values and who are kind of part of your core team. And then we have a final interview, which is only held by one of our leadership team. So that would be myself, the other two founders and or any of our senior leadership team. So you can see we actually do more than three interviews to get to that process. And we're so committed to it because quite frankly we've found that there's been people who have gotten through maybe two, maybe even three of those interviews., and then just for whatever reason there was something that I missed. And just having that rigor and routine is going to help you get the right candidates.

And we have this... I think I was telling you, we've got this belief system that entrepreneurs are optimists, and we fundamentally see everybody's potential, but the challenge is unless they see it, it's no good. So we have defaulted to where everybody is guilty until they prove worthy. In other words, it's opposite of the every body's innocent until proven guilty. We actually want people to prove to us that they're worthy to be on the team and if there's anything we see or hear or there's a slip up during the interview that would have us question, it automatically is enough.

Raphael Paulin-Daigle:

Such a great way to approach it. Now, let's say you would be building a pretty technical marketing team, at what point do you test their skills, right? Because they could be making stuff up throughout the interview. There's no way to really validate what they're capable of. So do you do test projects? How do you approach this?

Brad Pedersen:

Two things, I think that's where the referencing really is important. I wouldn't use the references they give you. I would find out which companies they worked at and try and speak to colleagues that worked with them or colleagues they worked for. So you get the references, and you may call those, but call over and above that. So that's number one to just trust, but verify as Reagan would say. But beyond that, you wouldn't buy a car without taking it for a test drive. Why would you hire a longterm team member unless you had a chance to test out what they're capable of? By default, we all get a test drive in the first 90 days. And we're big believers in what we call the Genesis rule. And the idea is that according to the book of Genesis, God created the earth in six days. He could have taken 6,000 days, 6 million days, 6 billion days, but quite frankly, he gave himself six days. And that's a lot of work to get done in a short period of time. So when people get started, we have very specific tasks with specific timelines that we want to load them up and ensure that they're actually delivering their KPIs. And part of the problem that I've had in the past is that we have these very sort of lofty, like I oversee the marketing budgets, ensure that the sales team has their assets and yada, yada, yada. Because there were no specifics, but one of the things that we changed is that when we create the job description, we actually have a mission for that role with three specific deliverables that are smart.

Specific, measurable, achievable, relevant, and have a time frame associated with them. We measure that to ensure that they're tracking within the first 90 days. And if they're not, we either put them on a performance improvement plan, a PIP, or we push them out. And better yet, if you have the opportunity to do it, what I would suggest is that you actually contract them. There's no reason why you can't contract something before hiring them, "Hey, here's a project. We need this done. If we can get through this and we're happy with results and we'll know we're a fit, then we can advance this into a full term employment thing." But I think you want to be cautiously optimistic about the hires once we get to that point. But I'm all for taking things to a contract level before a full time hire.

Raphael Paulin-Daigle:

Awesome. So much value. We're almost out of time, so I really want to know now outside of forgetting to define culture and mission or not checking references. What are some of the biggest mistakes you see founders make when it comes to hiring for high-speed growth?

Brad Pedersen:

Well, I think the biggest mistake is that people just hire, put warm bodies in place, particularly so deceptively appealing to just say, "I need bodies. There's so much work. I need people." And so they don't take the time to go through the process, because this process is long. It's arduous, but it's a much smaller price to pay than the price of hiring a bunch of bozos around you that drag your company down. I heard somebody say that the day that if you have a hole to fill, and you put an ass in it what do you get? It's the principle that most entrepreneurs follow. If they're experiencing high growth, "I need to go hire a bunch of people." And they usually break down the rigor of the processes. Don't despise the process. Follow it is.

Again as an entrepreneur, the two most important things, setting the mission, vision for the company and then hiring and empowering the team that needs to make it happen. And that last piece - actually empowering is another trip up. I see a lot of people that like one and done hiring. They hire them, they put them in a spot and then they never properly onboard them, they never get them involved with the company. So really look at it as you're putting people through a education about who you are as a company, how you work, make sure you take the time to empower them, because if you do, you will get the rewards in spades. I'm the biggest believer that every person that you hire who is adding value to the company is free. You can't pay them enough because the value they create is so much greater than what you'd ever pay them and that's why we only focus on A-players.

Raphael Paulin-Daigle:

So awesome. So much gold. I think from those 20 something minutes, people listening to this will get so much to just go ahead and implement it in their hiring process, right? And starting with the culture, the mission, right? People first have to start focusing on defining their culture, their mission, write job ads like you would be writing landing pages for your products, then screen candidates. Ask them to get involved, like doing video applications, right? To really screen who cares about your company and who frankly just doesn't. And then really screen for culture and make sure you've got a lot of filters in the hiring process to remove all the decoys, and those that are just really good at interviewing but may actually be a terrible fit down the line.

I think that summarizes it quite well. I think one more thing, people have to be really careful of. You just mentioned it and I think I can never repeat it enough because I see it all the time when we work with E-commerce companies. People love adding bodies to their offices and then it just really not necessary and the churn gets really crazy. So super key. Brad, thank you so much for sharing. Is there anything else that you'd like to add to this?

Brad Pedersen:

You know what? In life, you're going to pay one of two prices. The price of discipline, or the price of regret. If you're disciplined to follow your processes in these things we talked about today, it'll make all the difference in your enterprise as you scale it.

Raphael Paulin-Daigle:

Awesome. Brad, thank you so much. If people want to learn more about you or the company, where should they go?

Brad Pedersen:

Well, they can go to pela.earth and that's spelled Papa, echo, Lima, alpha dot earth. And I know that's an odd domain, but that's because we're committed to eliminating a billion pounds of plastic from the waste room every year. I recommend starting there and from there they can get to know our team, our founders and learn about the vision of the company.

Raphael Paulin-Daigle:

Sweet, amazing company, incredible mission, and pretty spectacular growth. Thank you so much Brad, for being on the podcast. Talk to you soon.

Brad Pedersen:

Thanks Raph.

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