Prologue
Let me start by saying that I’m lucky to be working with the most talented, dedicated and capable team of co-founders on the planet on ideas that we believe can have real impact on the world we live in. We are taking startup ideas and turning them into functional products in just a few months time. It’s an amazing experience and I absolutely love it.
Fundraising
Recently we decided to bring one of our new startup ideas for funding. We applied and communicated with a dozen of angel investors and VC firms, amongst them HackFWD.
HackFWD indeed seems to be a very nice company and their concept presentation is really pushing the right buttons inside entrepreneurs brains. However we experienced something different and frankly unexpected, therefore I’m sharing these experiences in order to alert HackFWD geeks to potential problems with their process and for other entrepreneurs to be aware of some difficulties they might face when applying.
Nothing in this post is deemed to be offensive, we love and support HackFWD and people working there.
Referrers
As HackFWD states in their website “You can’t apply to HackFwd directly. Instead, you have to go through a referrer”. Ideally, a referrer will be the first person to give you direct feedback, help you improve your pitch and finally validate the value proposition using HackFWD’s own business model validation tool called Phase 2 Generator (it’s a bit broken, but does the job).
We already knew a few of HackFWD referrers in person, therefore application process was easy. After initial contact with the referrer our idea was greeted with enthusiasm, but during the next 40+ days we heard very little from him. One morning, we received an automated message that our idea was finally submitted by the referrer to HackFWD and that they will get back to us. Up to this point we have received zero feedback about the idea, value proposition, business plan or the team…
While referrer concept is great in theory, much of referrer’s work is a sidekick to their primary occupation. As a result, startups are often left out in the dark, burning whatever bootstrap funds they have left and expecting any kind of answer – validation, commentary or even rejection of their idea. In many cases startups pause negotiations or devise multiple business plans to adjust to specific funding cases (such as HackFWD’s 27%+3%), therefore the sooner the startup is processed by referrer – the better.
While most venture capital firms will not care about responsible business practices, those who do will gain extra credit and admiration from entrepreneurs, even in case of outright rejection. Giving feedback is also an absolute must, as it allows entrepreneurs to go back to the drawing board and improve their idea before submitting it for final funding consideration.
Validation
A few days after the automated message, we got contacted by HackFWD’s equivalent of an HR person. Our team was presented with individual Codility tests (3 each), which would have to prove our ability to:
- understand a complex problem and convert it into code that runs
- cover the whole scope of the problem
- have a solution that scales across the scope of the problem
To those unfamiliar with Codility, it’s a UK registered startup (wszyscy wiemy, dlaczego) that has been around 2009, which tries to help recruiters to pick the best of programming talent out there by exposing candidates to a series of assessment tests of varying complexity. They also provide hosted expiring certificates for solving more complex problems. You would probably be familiar with the type of tests Codility uses if you are a fan of sites like Algorithmist and UVa Online Judge.
We have completed the test cases without too much deliberation and submitted our test results. After a couple of minutes I got back my score 158.75. While it was not bad for a first try, it became obvious that the emphasis of those tests is not on speed and that Codility editor was not reflecting some of the complexity or special rules that were evaluated during the scoring process. Getting a perfect 100% score requires guessing what the extent of hidden tests will be, or iterating over the test multiple times. Oh well, I thought, next time…
The Showdown
It appears however that there will be no next time, as HackFWD rejected our application because of insufficient Codility score. This got our whole team really upset, not only because we got rejected but also because the whole screening process worked against itself.
As Greg Jakacki, one of the founders of Codility, kindly explains in this HackFWD presentation video, you have to make sure that the people you hire “are smart and get things done”. We did not get a chance to prove any of that, as a team. Tasks presented to us were small functions, with added artificial complexity to create a fake sense of scale. We did not solve a business problem, we did not create a new product, we did not generate a new idea… We would rather be spending this time to code our product!
Interestingly Mr. Jakacki also notes that “friends should not be screened by Codility”, which seems to work against the Referrer-to-startup concept – the referrer who held your hand and pitched your idea to HackFWD is now in a kind-of weird situation…
I strongly believe that picking developer talent based on puzzles, API quizzes, math riddles, or other parlor tricks is a REALLY bad idea. Picking your future business partners using the same tools is much worse. It sends all the wrong signals.
As a person who hired and worked with close to a hundred developers myself I know that logic, versatility, creativity and ability to learn wins over any math-nerd skills.
If seed funds start using Codility as their main filter to reject their future business partners, it means that “smart money” no longer does their homework and trusts an automated assessment system to do the job. Over reliance on a single technical indicator can be blinding. Most of the times the problems evaluated during assessment will be irrelevant to the startups that those teams will be building and I doubt that investors will be happy about the outcome in the long term.
Investors, VC and angel funds need to radically improve their human-to-human interaction skills – promptly answer your emails (even if it’s a no), care to do some research about the people who are writing to you, invest at least some of your time in getting to know the idea. It will not make you any wealthier, but it will surely make you look good in the eyes of those future entrepreneurs.
We still love HackFWD and we wish best of luck to them, but we also think there’s lots of room for improvement as their business scales. Here’s hope that our post will not go unnoticed.
What do you think?
Feel free to post your questions in the comment section below, or tweet @pauliusuza
- Do you approve of HackFWD’s use of Codility?
- What was your experience with HackFWD or similar fund?
- How would you select talent?
I’ll finish by echoing HackFWD’s own words “Learn By Doing”.
