Kano - Hiring and Sustaining Talent

Whether You Start With an Idea or Start With a Team, Team Is Essential





Fast facts:

Headquartered in London, U.K.
One of Kickstarter's most successful crowdfunding campaigns (source)
Raised a total of $45.5M in funding over nine funding rounds between 2013 and 2020 (source)
Table of content

How It All Began

Yonatan Raz-Fridman is a team player. He played on competitive sports teams from the age of five until he graduated from high school, mostly favoring basketball. Even 20 years later, he can still recall a hallmark quote from his first basketball coach: ‘Stars only exist in the sky, there are no stars on a team.’ At eight years old, the notion of a team was already deeply ingrained in Yonatan’s identity. 

After high school, he went on to the Israeli army, where he was a team leader in a unit inside of the Ministry of Defense. There, he learned firsthand what it meant to be responsible for other people, as he oversaw a team of three to five soldiers at any given time in an operations room. He admits to struggling with delegation, remembering how painful it was for him to not do the tasks himself; instead, he had to make sure the unit did a great job through the collective effort of the other soldiers. This lesson, gained during a series of high-pressure situations, would pay off years later when he led his team in the Zell Entrepreneurship Program, and then again in his first company, Kano

Yonatan humbly admits that he wasn’t ready to start his own company right out of school. Despite his passion for entrepreneurship, he wanted to gain real-world business experience first.14 He yearned for a mentor, and thus joined Keter Plastic Group as the executive assistant to the President.15 

“It was a transformative experience for me. I learned about big business, how to manage globally distributed teams, and how to design, manufacture, and commercialize new products at the speed of light,” said Yonatan. His mentor proved to be a role model and close friend to Yontan, later even investing in his companies.16

During this time, Yonatan also launched the Zell Alumni Network. He had the blessing and support of the program, but had to build the foundation from scratch. He started by pulling together “Zellots” (Zell alumni) who were doing their own initiatives for the alumni community, and went from there. For Yonatan, it was a great way to meet people and begin to grow his network. He made it a point to meet a few Zell alums each week for coffee before work. But that was just the start; he used the basis of this network to grow beyond the Zell alumni community.

At just shy of 30, Yonatan was ready to strike out on his own and moved to London to start a company. As part of his network building, he had been introduced to Saul Klein a few months prior. Over the coming months, he and Saul would exchange ideas through email about building a new type of computer company.17 Yonatan met Saul in London in November 2012 to continue brainstorming. Saul brought his cousin, Alex Klein, believing there could be synergy between him and Yonatan. 12 hours later, the vision for Kano was born.

These three co-founders began building a technology company that provided a variety of do-it- yourself hardware building kits to teach kids and adults alike about computers and coding. Their union was a hurried decision to say the least, but with starry eyes and a hunger to prove themselves, they hit the ground running.

The First Hire is the Deepest

It all moved rather quickly. As Yonatan remembers it, he, Saul, and Alex whipped up a prototype that was held together by not much more than bubblegum and shoelaces. None of them had a background in engineering, including any experience building a technology product on their own, let alone knowledge of how to code... so they hacked it. They pulled the prototype together from existing components, and used it as a way to demonstrate their vision and test the concept with people. In doing so, they realized they needed a technical co-founder to provide the knowledge base that they so desperately lacked as they moved forward with Kano

That plan backfired. After several months and even offering 20 percent of Kano’s equity, they didn’t find the right person for the role. Either they didn’t feel the synergy between the interested applicants, or they diligently pursued talent that ultimately showed a lack of interest. This naturally slowed down their progress because without an engineer to create the technical product, there was no Kano

Yonatan and his co-founders decided to take the role down a notch and instead just look for a great first engineer. Yonatan also changed his approach to finding talent, spending days and days on LinkedIn connecting to people through inspiring messages about Kano and his engineering needs, a methodology he still uses today when seeking out new talent. “I find incredibly talented people through companies that I like or through blogs and articles. I literally read articles and mark the names of people and I go to LinkedIn and connect to them,” said Yonatan. “I always send them a nice message, which needs to be inspiring because I'm not a professional recruiter. I'm just a founder who is looking to build a team.” 

This is how Alejandro Simon came into the picture. In 2013, Alejandro was a software engineer on the Playstation team in London. Yonatan’s LinkedIn message sparked Alejandro’s interest, and they met up soon after for a meeting. This was followed by a beer, and then ended with Ramen soup and Alejandro taking the role as Chief Engineer at Kano. He was Kano’s first hire and brought the company back into high-speed production mode.

Empower Others and Trust the Process

Alejandro built Kano’s operating system, which was essential to creating their first working product, a real computer kit. He also worked closely with Yonatan to build out the software team, providing guidance as to the roles and skills needed to continue growing the product suite. He started by scoping out the product roadmap, and then worked backwards to understand the type of talent Kano would need in order to reach its goals. 

“I had to empower Alejandro as a team manager to make sure that he was confident about what he needed on his team,” said Yonatan. Still, he didn’t take a laundry list of skills and roles from Alejandro and jump straight into hiring. Yonatan pushed back, looking to understand why Alejandro needed each role he was requesting, and what each role was meant to accomplish. By investing in the details, Yonatan was better able to seek out the right person for each role, while also keeping the headcount lean.

When Yonatan would interview each candidate, he focused primarily on their mentality and cultural fit, and less on their skillset. Sure, they filtered out candidates who didn't meet the general experience and knowledge base level, but testing the quality of their technical capabilities came later. It was important to Yonatan that each individual already loved the job they were doing at the time. By targeting individuals like this, and giving them the opportunity to accomplish something even better or more unique, it would mean that they were truly interested in the company and were fulfilling the project needs. “Not to say that people who are not happy with their job are not joining you for the right reasons, but I always found it to be a really attractive challenge to specifically target people who are having a really great time in their current job. Then, you show them a piece of the future that they really want to be a part of and ask them to help you build it,” he said. The technical capacity was second to their passion and dedication to Kano, providing a positive and driven culture within the company.

Yonatan takes the concept of empowering his employees a step further. It isn’t just about allowing team members to make hiring decisions or lead sprint cycles; for Yonatan, it’s also about giving employees the tools to learn. Alejandro was Kano’s Chief Engineer, with 10 years of programming experience and five years of experience managing engineering teams. Nevertheless, he knew there was still lots of room to grow. To provide guidance and support, Yonatan brought in a mentor who he compensated in stock options. Yonatan met him through one of Kano’s investors, and he came from years of engineering in Silicon Valley where at the time he served as the CTO of a well-funded startup based in London.19 His primary goal was to help Alejandro grow as a technical lead. Yonatan would also frequently check in with the mentor to review Alejandro's progress and identify any blind spots in both his skillset and the way in which the Kano software team was managing. “In a way, I didn't only follow my intuition to empower Alejandro and trust him, but I also complemented what Alejandro needed from an executive functionality perspective, and made sure that I connected with the mentor and kept a close tab on Alejandro's growth,” said Yonatan. 

The Right Time to Let Go

Hiring mistakes happen, but dwelling on and not acting on them just makes the mistakes bigger according to Yonatan. Sometimes, expectations don’t meet reality, and that can range from a new employee not able to meet the fast-paced environment of a startup to not having the skill set that was anticipated during the interview process. Yonatan has a golden rule of determining such a mistake – he claims that a person will know within the first 30 days if a new hire is not a fit, at which point they have to be let go of immediately. It sounds dramatic, given that a new employee likely just left a job or other opportunities to take the role, and one month can seem rather hasty, but Yonatan makes the point that by not doing so, the person suffering the most is actually the new hire. According to his logic, great talent is always looking to grow and learn, and if they are not able to succeed, and as a company leader you can see it from the get-go, they’re ultimately not going to be happy and will start dragging their feet. “You’re doing them a favor by letting them go if you feel they’re not the right fit,” said Yonatan. It was a hard lesson learned from Kano that Yonatan has practiced ruthlessly throughout his later ventures until today.

He remembers someone he had hired for Kano’s marketing team, who from day one had made it clear that she was not right for the role. Yonatan and his co-founders kept her at Kano for about a year with the hopes that she would improve. He admits to having been mesmerized by the company she came from, which was a very successful interactive entertainment company at the time. It seemed impossible to Yonatan that she could fail, and yet she did. This was the second difficult but valuable lesson Yonatan learned about hiring expectations. “As a first-time founder, it's very easy to get seduced by where people come from,” said Yonatan. “But even if they come from great companies they can be a completely bad hire for your specific company.” For Yonatan, being considerate is not waiting around from misplaced guilt about making the wrong hiring decision. In situations like these, as he sees it, it’s best to cut losses and move on, for both the company and the new hire.

Holding on to Talent

When it comes to startups, sustaining talent is a critical challenge. Yonatan felt it at Kano as the company began to grow. The one thing that is really different between a startup and a developed company is that a startup is not for everyone, and the stages of a startup feel different from a talent perspective. Yonatan recalls feeling the struggle of holding on to his first employees, whose happiness he saw dwindle as the company scaled to 50 employees. The corporate mentality began to creep up, along with numerous processes. This growth transition tends to lose the startup early birds that enjoyed the intimacy of a small team and the opportunity to wear multiple hats. “My biggest lesson about talent so far has been that people don't leave companies because of companies, they leave because of people,” said Yonatan. What that means is that ultimately every person on a team has a manager who more often than not is their entire world. That manager works closely with them, promotes them, and inspires them.

As Yonatan sees it, as a CEO, his main job is to make sure that the managers in his company are excited about their position, capable of fulfilling their responsibilities, and constantly evolving. Otherwise, it’s a trickle-down effect, causing unhappiness for the team members they manage. With that said, whenever Yonatan hires a manager or promotes from within the business, he makes it a priority to work closely with them so that they can grow as team leaders.

Higher Learning, Higher Management

Like most things in life, bringing on seasoned executives to help founders in a growing startup is all about timing. In this case, the "when” is a by-product of the “what”: Yonatan explains that you need to know what you need as a CEO in order to succeed, whether that's identifying missing skills, methodologies, or characteristics. As a CEO moves from one stage of a company to the next, those needs can, and likely will, change. In order to lead a company forward, Yonatan needed a strong support network throughout his journey with Kano, something he only recognized in hindsight. While he had mentors and advisors, he didn’t have an executive coach, someone who could really help him build his functional skills as a CEO. He operated based on intuition, which sometimes was right and other times not so much. The key takeaway from his gut-inspired methodology at Kano was to instead do self-evaluation at every stage of the company and define how the upper management needs to look in order for the company to be successful. Yonatan has performed this practice with his two ventures that followed Kano, and his teams and company cultures have been all the better for it.

“Today, I spend an extraordinary amount of time not only laying the foundations for building the right team in order to help me be a successful CEO, but also thinking about what is going to happen in the next stage, in 12 and 24 months from now,” said Yonatan. He emphasizes the need for such conversations to start early, and to begin by identifying one’s own strengths and weaknesses as an operator. Once Yonatan acknowledges the areas in which he’s weak as a manager in a given stage of a company he then makes sure to find people that can fill the gap of those weaknesses, so that the business can flourish seamlessly. “I think I'm much clearer about who I am as an entrepreneur and as a leader. I know now what I'm great at and what I'm not, and that helps me build the right team. It helps be much more effective with the people I hire,” said Yonatan. A CEO can’t do it all, but the collective effort of a strong team built with intention can.

Discussion Questions

  1. Why didn’t Kano find a technical co-founder early on, and what ended up being the solution?
  2. Why didn’t Yonatan found a startup right out of school? What did he decide to do instead, and what were the pros and cons of his decision?
  3. Why did Yonatan bring in a mentor and how did he compensate him? What might have been some of the advantages and disadvantages
    of this strategy vis-a-vis Alejandro?
  4. What is Yonatan’s unique philosophy regarding how to handle new hires who clearly are not a fit? Do you agree or disagree with this strategy and why?
  5. Was Yonatan’s “gut-inspired” methodology right or wrong? How and why has Yonatan since adapted his strategy?