YEOSU, South Jeolla Province -- For a startup to grow, entrepreneurs should learn how to hire decent staff and fire bad apples, said Han Kim, managing director of Silicon Valley-based venture capital firm Altos Ventures on Friday.
“When we decide to engage in a follow-up funding round for our portfolio startups, the most critical factor is the entrepreneur’s capability to bring in more talent, along with the courage to sack employees or board members who are unfit for our goals,” Kim said at the Startup Ecosystem Conference held in Yeosu from Thursday through Friday. The conference was co-hosted by Naver-backed nonprofit organization Startup Alliance.
Altos Ventures Managing Director Han Kim speaks during the Startup Ecosystem Conference in Yeosu, South Jeolla Province, Friday. (Startup Alliance)
The startup investment guru stressed the need for bold decisions in human resource management when a startup loses steam or reaches a crossroad.
“Entrepreneurs in our portfolio startups discuss with us when they get stuck with their unproductive employees,” he said. “I know it is a tough decision, especially when they have to give a pink slip to someone with a personal bond.”
That’s why, he added, Altos doesn’t recommend entrepreneurs to share stake with co-founders.
Another piece of advice he offered was to go the extra mile to help keep turnover down.
Kim Bong-jin, head of Seoul-based food delivery unicorn Woowa Brothers, for example, gives handwritten letters and tokens of gratitude to the family members of new employees.
This has contributed to keeping the turnover rate lower than the average of other startups, according to the veteran investor.
He also shared other rules, such as how to make bigger bets, stay honest and love the process, as well as not to run out of money.
Kim has a track record of handpicking unicorns from their early stage of development. They include e-commerce platform Coupang, food delivery platform Woowa Brothers, online game PlayerUnknown’s Battlegrounds developer Krafton Game Union and money transfer app operator Viva Republica.
Altos’ portfolio ranges from South Korea to the US, Indonesia and Mexico. Of some 80 portfolio firms, 50 are Korean. Approximately 15 percent of them generate over 100 billion won ($86 million) in annual revenue.
By Son Ji-hyoung (firstname.lastname@example.org