Have you ever heard of the company Riskalyze? It's a popular tool financial professionals use to assign risk scores to their clients to guide their investment strategy.
Just a few years ago, Riskalyze was on the ropes. Their initial launch strategy wasn't working out like they had hoped. So they pivoted. Instead of targeting people with small investment accounts, and the big brokerages themselves, they started targeting financial professionals.
That's when Riskalyze really took off. In fact, the business exploded so fast that they went from three employees in 2011 to more than 100 employees just five years later. Most of that growth happened between 2013 and 2016 after they changed their strategy.
I recently sat down with Aaron Klein, the CEO and co-founder of Riskalyze, to talk about some of the lessons he learned while his company's headcount grew.
Lesson 1: Live by your company's core values
One of Riskalyze's core values is open and direct communication to solve problems quickly. Mr. Klein says Riskalyze is a “high feedback culture.” He says:
“If we hired you out of a company that had a blame-based culture, you're going to struggle coming to a high feedback culture because for the first few months you're going to sit there thinking that everybody doesn't like you. But if you're doing important work at Riskalyze, you're getting feedback all the time. We're a high feedback culture. And we use very open and direct communication.”
Mr. Klein is also quick to point out that many companies have core values, but very few of them actually live out those core values on a daily basis.
So while it's important to have core values, it's even more important to be intentional about living by them and making sure your employees are living by them also.
Lesson 2: Hire people for their strengths, not their lack of weaknesses
What kind of strengths do you really need to push your business forward? Look for people who have those strengths, but don't disqualify them for a perceived weakness in an area that doesn't matter.
For example, Mr. Klein shares the story of how venture capitalists Marc Andreessen and Ben Horowitz needed to fill a position. Mr. Horowitz really wanted to hire one particular guy, but Mr. Andreessen didn't. Mr. Andreessen pointed out that the candidate hadn't gone to a top tier school. Mr. Horowitz replied that if the candidate had, he'd already be the CEO of IBM.
So they hired the guy.
Mr. Horowitz was focused on the candidate's strengths and how well they matched up with the role they were trying to fill. Mr. Andreessen was focused on the things that made the candidate look better, but had no bearing on his ability to perform his job function.
Lesson 3: Pay your employees a fair market-based rate
Mr. Klein says his company will never match a competing offer that one of his employees gets from another company. But here is something he does do: He makes sure all his employees receive a fair market-based rate based on three things:
• The job the employee is in
• The skill set he or she brings to that job
• The company's budget for that job
Mr. Klein and his company use these three criteria to determine a market level rate Riskalyze can pay for each job, and they sync that up for every employee once a year on Dec. 1.
So why does Riskalyze have these two policies in place? Mr. Klein says it's because he wants all his employees to know that they don't have to engage in political behavior to receive fair compensation.
If your business is already growing or you want to grow it bigger and faster, then study these three lessons and apply them to your business. Regardless of whether you have two employees or more than 10, the lessons Mr. Klein has learned and shared are extremely valuable.
Click here to listen to the entire podcast so you can pick up a few extra lessons for hiring the right people and growing your company fast.
Brad Johnson is vice president of adviser development at Advisors Excel. Follow him on Twitter @Brad_Johnson.
