I'm in the midst of assembling the founding team for a new startup, and seeking a head of Engineering. I've attached details below.  I welcome suggestions!

Seeking Head of Engineering for AlphaCub, Internet Finance Startup, NY

We are seeking a Head of Engineering for the founding team of an internet finance startup, based in New York and soon Asia. This is your chance to get in on the ground floor, shape a new company's technology and culture from scratch, and create a significant company.

Our first product is DealSignals.com, an automated research and analysis engine focused on private companies, and specializing in working with private equity funds. Our technology is somewhat parallel to that developed by such firms as Alacra, Bloomberg, Capital IQ, Connotate, FirstRain, InfoNgen, SkyGrid, and ThomsonReuters; we particularly value experience from these and similar companies. We are also comparable to traditional investment banks. For more on our service and background, please see http://www.AlphaCub.com . The startup is led by David Teten, a serial entrepreneur.

YOUR RESPONSIBILITIES

+ For each segment of our software platform, make buy/build/tweak decision.

+ Manage full product lifecycle including infrastructure, development, design, scalability and security.

+ Recruit and manage additional team members.

+ Research strengths and weaknesses of different data vendors we are considering.

+ Build hooks into APIs of major online networks (LinkedIn, Facebook, etc.)

+ Design and implement logic and scoring algorithms.

REQUIRED EXPERIENCE

+ Over 2 years management and 5 years development experience.

+ Proven success in large scale, high transaction systems engineering.

+ Use of formal and agile development methodologies

+ Built complex, integrated, sanitized, normalized databases based on many messy data sources (linear, non-linear).

+ Passion about our startup's vision.

+ Highly motivated self-starter who has a track record of continuous self-improvement, high achievement, and aggressiveness.

+ Strong analytical and math skills. High attention to detail.

+ Have managed development teams over time, with hiring and firing responsibilities.

+ Familiar with machine learning, natural language processing (NLP), screen-scraping technologies, semantic web, and/or agent-based systems.

We also value:

+ Experience in social networks, online dating, and/or finance industry, particularly investment banking and private equity.

+ Built consumer-oriented web applications.

+ Belief in the Edward Tufte school of communication.

+ Strong writing experience. Value a high GPA in writing-dependent courses.

+ Strong verbal communication/sales skills. Experience in debate, public speaking, and acting is pertinent.

+ Familiarity with startup environment and networks with local business/ government related organizations

+ Fluency in languages other than English.

COMPENSATION

+ Primarily equity initially. We are currently self-funded and expect to raise outside capital in late 2010/early 2011.

HOW TO APPLY

Please include with your detailed resume:

+ Link to your LinkedIn profile (or other online identity).

+ Availability.

+ Writing sample

Please send resume and cover letter to Careers(@)Teten.com with "Head of Engineering" in the subject line. We prefer that you save your resume in Microsoft Word format with the name "Last Name-First Name-Year.doc", e.g., "Hayward-Tony-2010.doc".

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I'm excited to report that we've started to release the results from our first-ever study on best practices in private equity and venture capital deal origination.  My coauthor Chris Farmer (formerly Vice President, Bessemer Venture Partners) and I published a summary in the current issue of Harvard Business Review. 

Evalueserve, a global research firm and the acquirer of my former company (Circle of Experts), provided supporting research and analytics in the initial phases of this study. We also thank Yujin Chung and Neha Kumar (Wharton 2010), research associates who provided invaluable support, and interns Corentin Roux dit Buisson, Dan Clark, Nitin Gupta, and Nikhil Iyer .

A highlight from the HBR article:

We've found that late-stage tech investors with geographically diverse portfolios are consistently among the best performers and have continued to attract large limited partner commitments, even during the challenging period since 2007. Almost all such players have been able to raise at least as much cash as they could previously. By contrast, the funds with traditional origination programs, focused on local networks, have had difficulty; most haven't raised new capital since late 2005.

Read the whole thing.

For more data from the study, see the slides below:

Download this presentation.

Download this presentation.

One of the major themes of the evolution of the private equity industry for the past decade has been the growth of internal groups focused on enhancing the value of portfolio companies. Twenty years ago, the great majority of the people working in private equity came out of investment banking, i.e., a deal background. Today, it is far more common for a private equity fund to employ people with an operational/consulting skill set, e.g., Bob Nardelli at Cerberus. I predict we'll see the same phenomenon among venture capital funds. The latest example: Union Square Ventures announced that they are hiring for a newly created position as General Manager of the Union Square Ventures Network.

Within private equity, these groups are often called "portfolio operations", sometimes "portfolio resources groups", or what Riverside Company calls its Toolkit. At larger funds, "operations" may be distinguished from governance, talent selection, pre-investment involvement, or even strategy, partly because "operations" is a term that management may infer to mean backseat driving.

By definition, these groups focus on improving the operations of the existing portfolio, not on diligencing potential deals or on deal structuring. Just a few of the many major private equity funds that have well-developed private equity operations groups: 3i (Business Leaders Network); Cerberus; Irving Place Capital; Bain Capital; TPG; General Atlantic; and Welsh, Carson, Anderson & Stowe.

A Bain study found that "as much as 80% of private equity returns [going forward] will come from real performance improvement, rather than [ ] financial structuring." According to a 2006 KPMG study of 100 private equity exits (below), 48% of the value-add during private equity ownership came through organic revenue growth, as opposed to capital structure changes and multiple arbitrage.

Source of Gains in Private Equity-Backed Companies

I see six major reasons why limited partners now expect that private equity funds will have a formal operating strategy, minimally an operating partner and/or a formal portfolio resources group. I should mention my thinking throughout this blog post and especially in the list of factors below is shaped by a number of presentations I've seen by Jon Weber, who has run portfolio resources groups at three major private equity funds.

1) Global economic crisis. Particularly in 2008-09, most portfolio companies required operating changes to survive. In most cases, the existing management teams were hired for their ability to grow revenues, not their ability to restructure. The funds had to supplement and/or replace the existing teams.

2) Commoditization of financial engineering. The classic question Michael Jensen asked is: if leveraging is so wonderful, why don't companies do it themselves instead of waiting for an LBO fund to buy them out? Since Jensen first began researching this area, larger companies increasingly chose to lever themselves, and there has been a massive boom in the private equity industry---thousands of funds all of whom can offer leverage. It has become much harder for a private equity fund to make high returns simply by borrowing some money and taking advantage of the interest tax shield.

3) Investors seek differentiation. Building a formal portfolio resources group has been a way that private equity investors can differentiate themselves and ease the capital-raising process.

4) Maturing private equity industry. According to the Parthenon Group, the larger size and greater complexity of funds has led to greater role specialization. As one investor said to me, "We've moved from the 'great man' to the 'great team' model."

5) Risk mitigation. The deal team tends to have a strong incentive to do a deal, and then move on to the next deal. An operational perspective adds a counter-balance to the deal team.

6) Strategy driven. Certain strategies -- deep value investing, turnarounds, mid-market focus, and industry-specialized funds -- require a hands-on approach.

I remember speaking at a Capital Roundtable Private Equity Portfolio Operations conference back in June 2008, and I was struck at the number of attendees who commented publicly on how they felt like "second-class citizens" at their funds, both in status and in compensation. However, when I spoke at the IIR PE Ops conference in October 2009, in the midst of cleanup from the economic crisis, the mood of the operating professionals was much more buoyant (despite the challenges they faced in their portfolio.) On a relative basis, they knew that their professional contribution had become much more apparent at their firms.

We have not yet seen a similar boom in portfolio resources teams in the venture capital industry, but it's coming. I recently had a conversation with Chris Farmer about this, which sharpened my thinking considerably (he is the coauthor of my forthcoming study on "Best Practices in PE/VC Deal Origination"). According to the NVCA and PWC Moneytree, the average VC round has doubled in the last 12 years with the growth of the industry (from $4m to $8m). At the same time, the cost of starting a company and proving concept with a new product has declined dramatically in many sectors.

Some such as Marc Andreessen argue that costs have dropped as much as 100x over the last couple of decades since the current venture capital model was created. As a result, many innovative venture capitalists and entrepreneurs are creating new fund models from Andreessen-Horowitz to Betaworks to Founders Collective and Floodgate. Fred Wilson wrote, "The venture capital asset class does not scale . . . . I think 'back to the future' is the answer to most of the venture capital asset class problems. Less capital in the asset class, smaller fund sizes, smaller partnerships, smaller deals, and smaller exits. The math works as long as you don't put too many zeros on the end of the numbers you are working with."

A corollary of Fred's point is that the small number of portfolio companies which do hit hypergrowth need more support. Chris and I think that one logical new model is: seed a large number of companies with quite modest amounts of capital. Then, double down with follow-on rounds on those concepts that do take off. For those companies that experience rapid growth, it makes sense for a fund to bring extra support, since those companies can't hire good people fast enough to do everything they need to do. In addition, a portfolio resources group can share learnings across the portfolio. This is much easier in venture than in private equity, because VC funds are much more likely to specialize in tightly defined industries. In addition, the portfolio companies are smaller and so it's easier for a VC to shape their growth according to the fund's beliefs in best practices.

In the case of companies that do not reach hyper growth, the companies will have raised modest amounts of capital and can be sold for much smaller amounts while still resulting in a win for entrepreneur and VC alike. Of course, failing to provide a follow-on investment is a signal that can hurt the company, but that has always been a part of the business and we are confident that models will evolve to minimize the negative effects.

Here are some models of VCs Chris and I identified which are building out portfolio resources groups:

- Andreesen Horowitz has said very explicitly that their model is to be able to invest at a wide range of capital levels in the 10-20 companies per year which have true potential to scale. They have built out a small value augmentation group: Ronny Conway (point person on business development for the portfolio) and several recruiters (1 for college-level talent, and 1 for experienced talent).

- Insight has the "Insight Onsite team" which is particularly focused on sales, SEO, and SEM.

- Accel has a Venture Development group and firms like Oak Investment Partners and Bessemer have Operating Partners to lend added support to companies. Charles River Ventures had a similar approach during the bubble.

- Bessemer also has a Designer in residence (showing the increasing importance of design for internet companies, e.g., Mint.com).

- Highland Capital Partners, Union Square, and numerous others have "Thought Summits" with noteable guest speakers. These events usually are organized by portfolio functional role, e.g., a portfolio CTO summit, portfolio CEO summit, etc.

- As I mentioned above, Union Square Ventures announced that they are hiring a General Manager of their portfolio.

- There has been a boom in accelerators: Boostphase (Atlanta, GA); Bootup Labs (Vancouver, BC); Capitalfactory.com (Austin, TX); Charles River Ventures QuickStart (Boston, MA); DreamIT Ventures (Philadelphia, PA); Iaccelerator.org (Bangalore, India); Launchboxdigital.com (Washington, DC); Nextstart.org (Greenville, SC); seedcamp (London, UK); Shotputventures.com (Atlanta, GA); SeedStart (New York); Summer @ Highland (Lexington, MA and Menlo Park, CA); Techstars.org (Boston (MA), Boulder, CO, and Seattle, WA; The Difference Engine(Sunderland, UK); Y Combinator (Mountain View, CA); and Y Europe (Vienna, Austria). For more information on how to build a replica of Y Combinator, read Jed Christiansen. For a comparative listing and more background, see Readwriteweb and Dan Veltri. TechStars recently released very positive data on the success of their incubated companies.

This approach differs from the incubator and acceletor trend (e.g., cmgi, antFactory) of a decade ago. That model was often criticized for selection bias: the less-competent entrepreneurs found the incubators more attractive. In addition, too much of the core competency of the company was driven by the incubator instead of in the company itself, creating ambiguity in attribution of value between the two entities. The new model looks more like the VC as consigliere instead of a bacteria splitting off new progeny.

I've had a front-row seat to this phenomenon, since I've done a lot of work in the past with portfolio resources groups at some of the major private equity funds. I've presented in the past on "Finding New Deals and Improving Portfolio Company Valuations by Working with Operating Executives," which covers some of the structural options private equity funds have in working with their portfolio.

I've been very excited to see the boom in the New York startup community in the last 2 years, driven in large part by the shrinkage in the NY industries that traditionally lured some of the most entrepreneurial and aggressive personalities (finance, consulting, etc.) Michael Karnjanaprakorn posted a detailed list of resources and players in the local community.

One category of resources I wanted to add to Mike's list are educational programs for entrepreneurs. I'm faculty in a number of these organizations, particularly the Founder Institute. I was a Mentor in the Winter 2009 New York semester, and will be faculty for the inaugural program in Singapore, in late April 2010.

Next Thursday night, March 25, the participants in the current Founder Institute program will be presenting to some angel/VC investors downtown. If you would like to join the audience, please contact me and I'll forward your request to the lead organizer for New York's Founder Institute, Craig Kanarick.

I'm excluding here some of the many organizations that run conferences/events geared to entrepreneurs in New York, such as Bootstrapper Summit; Bootup; DigitalMediaEvents; Entrepreneurs Roundtable; Feedback Forum; Fashion 2.0; The Founders Club; Founders Roundtable / Pluggedin NYC; Gaming 2.0; Girls in Tech; IxDA; Microsoft Startup Zone; MIT Enterprise Forum of NY; New York Entrepreneur Week; NextNY, New York Technology Council; New Work City; NYVideo; NY Tech Meetup; NY Video; Private Equity Forums; Semantic Web Meetup; Silicon Alley Insider; Startup at Work; Summit Series; Talk NYC; TechAviv NY; The Hatchery; Ultra Light Startups; youngStartup Ventures; NYC Economic Development Corp.; and Y+30. I think these programs are very worthwhile; I excluded them because they don't offer a formal training and faculty.

We've drafted profiles below of the major selective educational programs in NY for entrepreneurs. Please advise if you know of any that I'm missing.

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FastTrac

Organizational Sponsor: Levin Institute

Location: New York

Faculty: academics and entrepreneurs

Duration: 7-day intensive boot camp (2 full days a week over 4 weeks)

Cost: These programs are currently offered at no charge to qualified applicants, through funding from the NYC Department of Small Business Services, and with support from the Kauffman Foundation.

Selectivity Ratio: NA

Info: The FastTrac program has trained over 700 individuals to launch new businesses (through its NewVenture program) or to grow existing businesses (through GrowthVenture).  SBS surveys indicate that over a third of the brand new businesses have recorded sales since completing New Venture, and half of the GrowthVenture firms have indeed grown their businesses.

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First Growth Venture Network

Organizational Sponsor: First Growth's executive committee/founding growers includes venture capital firms - Bain Capital Ventures, Battery Ventures, Charles River Ventures, First Round Capital, Flybridge Capital Partners, Highland Capital Partners, North Bridge Venture Capital, OpenView Venture Partners, Valhalla Partners and Venrock; angel investors Grape ArborVC and AngelVineVC; the Tech Group at Lowenstein Sandler, and the tech investment banking firm GCA Savvian.

Location: New York

Faculty: entrepreneurs, tech executives, VCs, professional advisors

Duration: seven half day sessions over two "semesters"

Cost: $0

Selectivity Ratio: Most recently accepted about 15 out of 60+ applicants.

Summary: "First Growth is a program for high potential, seed and early stage start-up tech entrepreneurs in and around New York City. First Growth takes high potential entrepreneurs and accelerates their "first growth" by (1) connecting them with venture capitalists, angel investors, successful entrepreneurs and advisors, all of whom have spent years in and around technology start-ups; (2) connecting each start-up with a First Growth Advisor Team of 3 or 4 successful network members who will serve as mentors to the team; (3) providing regular opportunities for substantive information and networking with the broader First Growth community; and (4) providing a peer group of other high potential tech leadership teams in the First Growth program."

9 of the first 15 companies have already received seed funding, which is a very high ratio.  One company recently announced that it was acquired in a successful exit.  Two advisors (successful serial entrepreneurs) also received funding from First Growth connections.

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Founder Institute

Organizational Sponsor: TheFunded.

Locations: NY, Denver, San Diego/Orange County, Singapore/Asia Pacific, Paris, LA, Bay Area, Seattle Area, Greater DC, others to come later

Faculty: serial entrepreneurs

Duration: three months

Cost: In US, $600 per program + an application cost of $50. In addition, The Institute takes a small percentage (3.5%) of warrants in a company that is formed by a Founder during the program, priced at the value the company receives in its first outside round of financing. 

Selectivity Ratio: Accept under 40% of applicants. Approximately 45% of the enrolled Founders graduate. In New York, approximately 30% will graduate.

Summary: "The Founder Institute is a four month training program for both new and seasoned entrepreneurs. The Institute prepares founders to lead the next generation of world-class technology companies across a wide range of industries, from the biotech to the internet. Weekly company-building sessions are guided by experienced CEOs, and they are held in the evening to allow participants to keep their day job or develop their companies during business hours. All of the program stakeholders, from the participating founders to the experienced CEO Mentors, share in the upside generated by the companies formed during the program. Participants also enjoy free services from three dozen Institute Partners, fundraising opportunities at fair market value, and a teamwork-oriented environment to build a company."

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Mentor Capital Foundation

Organizational Sponsor: Reitler Kailas & Rosenblatt

Location: New York

Faculty: Primarily service providers. Steven and Bill Harding of Financial Summit Ventures are the "guiding spirits".

Duration: ten three-hour sessions, over 10 weeks

Cost: $500

Selectivity Ratio: Accept all or almost all applicants. Currently 15 companies are participating.

Info: "Mentor Capital Foundation is a newly formed non-profit entity involved in various philanthropic activities and early stage technology investments." They lead a series of seminars structured for technology companies seeking the knowledge and leadership needed to secure venture capital.

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JumpStart NYC

Organizational Sponsor: Levin Institute

Location: New York

Faculty: academics and entrepreneurs

Duration: 3 months

Cost: $0

Selectivity Ratio: NA

Info: "A proven, three-month educational program to help individuals leaving jobs in the financial services sector to apply their knowledge, skills, and abilities in opportunities beyond financial services.  One of Mayor Bloomberg's initiatives to boost the New York City economy, JumpStart NYC was pilot tested in Spring 2009, delivering a program that helped participants develop new skills, explore project opportunities in New York's entrepreneurial firms, and in many cases create new career paths and opportunities." The program targets primarily people interested in joining startups/technology companies, as opposed to founders themselves. Disclosure: I was faculty for the launch program of JumpStart NYC.

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SeedStart

Organizational Sponsor: NYCSeed

Location: New York

Faculty: VCs and entrepreneurs

Duration: 8 weeks

Cost: includes funding

Selectivity Ratio: NA.  Currently applications are closed for 2010.

Info: An incubator program, providing up to 10 startups $20,000 plus mentoring and guidance for any worthy entrepreneurial idea. SeedStart is a joint effort among Contour Venture Partners, IA Ventures, NYC Seed, RRE Ventures and Polaris Venture Partners, and also includes Fish & Richardson, Manatt, Phelps & Phillips and Silicon Valley Bank.

SeedStart is clearly inspired in part by similar seed fund incubator programs such as Boostphase (Atlanta, GA); Bootup Labs (Vancouver, BC); Capitalfactory.com (Austin, TX); Charles River Ventures QuickStart (Boston, MA); DreamIT Ventures (Philadelphia, PA); Iaccelerator.org (Bangalore, India); Launchboxdigital.com (Washington, DC); Nextstart.org (Greenville, SC); seedcamp (London, UK); Shotputventures.com (Atlanta, GA); Summer @ Highland (Lexington, MA and Menlo Park, CA); Techstars.org (Boston (MA), Boulder, CO, and Seattle, WA; The Difference Engine (Sunderland, UK); Y Combinator (Mountain View, CA); and Y Europe (Vienna, Austria). For more information on how to build a replica of Y Combinator, read Jed Christiansen. For a comparative listing and more background, see Readwriteweb and Dan Veltri. TechStars recently released very positive data on the success of their incubated companies.

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I'm excluding here some of the traditional incubators that typically offer a physical plant but not formal training. For a list, see the Business Incubator Association of New York State, Inc., and particularly NYU-Poly's incubators. 

(Thanks to Nikhil Iyer for his help researching this post.)

I attended tonight's Social Recruiting Meetup, and heard a talk by venture capitalist Fred Wilson on "Recruiting with Social Media" .  This was a highly condensed version of his presentation at the Social Recruiting Summit (video available on that site). 

My brief notes:

Social web has vastly connected the number of people you can connect with every day. 

I got into VC in the mid 80s.

At the time we would seek out investments by going to conferences, walking halls, collecting business cards, and then work the phones.  We would talk to a dozen people a day.

Then with email we could talk to 10x as many people.

Then with social media we can talk to another 10x as many people.  My blog AVC.com reaches thousands of people every day. 

One of our regular portfolio questions: how do we hire great engineers?   This presentation summarizes my answer.

I tell recruiters to go to Meetup.com, e.g., the PHP Meetup. 

One of the event attendees runs Jibe (spelling), a new service that shows you jobs with which you have a social connection. 

StackOverflow is a great place to get quality engineers, and evaluate their reputation. 

Q: Do you use social media for sourcing deals?

A: One of my best leads are the comments on my blog posts.  I have a rule: when I hear about a company 2x I write it down.  When I hear about it 3x, I write the CEO.  We use social media for due diligence.  We contact influencers to get their opinions. 

Q: How do you recommend introductions to people?

A: I believe in the 'double opt-in intro'.  I ask both parties if they want to be introduced.  I do this because that's how I want other people to introduce me, because i get introduced to too many people to whom I don't want to be introduced. 

Teten: How should traditional high-end recruiters respond to social media taking away their competitive advantage of a candidate database?

A: i've come to believe that the cultural fit of the candidate within the small company is critical, so we prefer to recruit via the social web.  We go to the recruiters only after trying our own network. 

Q: What large companies are using social media well?

A: I cant point to any.  Maybe it just doesn't scale.

Q: How do you get more followers?

A: You put value out , you get value back.

Q: What do you think of recruiting internationally on social media?

A: It should work.  I read Russians are greatest users of social media in the world?

Q: Are there tools like Radian6 or a Visible that you think are helpful for assessing sentiment?

A: I dont use any of those sophisticated tools, but I'm sure they're very valuable. 

Q: Talk about how you use LinkedIn.

A: We use it heavily, but not the way LinkedIn would like.  We've never been a paying customer.  We'll use it to find a certain profile.  We don't ask for a reference list.  We just connect with people on LinkedIn and look for the shared connections. 

Q: Do you do searches for a portfolio company?

A: We don't drive searches; the company does.  We recommend company hire an in-house recruiter when they get to 20-25 employees.  We're a member of the hiring team. 

Over the last year, I periodically would hear from clients and friends at some of the large investment banks that they could not view Teten.com. Given the amount of "adult" content on this site is zero, I was surprised and annoyed by this. The site is not a very good marketing tool if potential clients can't see it.

After further investigation, I found out that some corporate firewalls were blocking the site, presumably because they had misclassified Teten.com as a site that employees were using to search for new jobs.

Getting our site whitelisted took much more time than I would have liked, and we're not done yet.  My colleague Taimur Hassan prepared a a list of the major web security and corporate firewall providers, and links to check your website’s status. More details here.

Great LinkedIn invitations? Are they really that big a deal? Sure, canned messages are lame, but inviting someone to connect via LinkedIn (or any other social networking site) is just a simple matter of record-keeping. What's wrong with just, "Hey, let's connect?"

That's one way to look at it. But consider this: every communication you have with someone in your network is an opportunity to move that relationship forward, to make it stronger. It's not that there's anything "wrong" with treating a LinkedIn invitation as a simple mechanical action, but it's a missed opportunity. A few extra seconds can transform it into a relationship-building activity.

There's another reason your LinkedIn invitations matter: if too many (five or so, best guess - LinkedIn doesn't publish the actual number) of your invitations are rejected ("I don't know the sender") by the recipient, your account may be temporarily suspended and you will lose the ability to invite people to connect without their email address.

One way to ensure having your LinkedIn invitations accepted is to email the person before sending them a LinkedIn invitation and ask them if they'd like to connect on LinkedIn. That's not always possible, i.e., old friends/colleagues/classmates who you've lost touch with. I also don't think I'd email somebody solely for that purpose. But if you're having an email dialog with someone already, slipping it into one of your messages is a good way to grease the skids for an invitation.

Let's look at the "stand-alone" invitation in three scenarios: 1) someone you know well, who you are confident will accept the invitation, 2) an acquaintance or colleague that may not immediately recognize your name, and 3) someone you don't know personally, but are interested in connecting with.

The basic format is the same in all cases:

1. Establish context. This is the main thing that will vary between the different scenarios. More below.
2. Invite them to connect, in your own words.
3. Suggest a next action. Coffee. A phone call. Sending them a link. Making an introduction. If you're particularly interested in developing this relationship, make a commitment and then keep it. Otherwise, you can put the ball in their court.

(more...)

Yup, the economic news for the new year isn't what any of us had hoped. U.S. unemployment held at just under 10%, but only because 661,000 workers have "removed themselves from the workforce", a euphemism meaning they've given up looking for a job because they believe none are available. The picture's not particularly brighter in the rest of the world either.

This hits close to home. Odds are good that you personally know at least 10-20 people who are currently unemployed, or as is increasingly common, under-employed, i.e., they have some part-time work, freelance work, or a full-time position at significantly lower pay than they're accustomed to.

Sue Connelly wants to do something about that. As founder of KIT List, "an email job posting service where employers and recruiters advertise permanent or consulting job opportunities to over 58,000 high-quality professionals," she knows that the jobs are there - she sees them come across the list every day.

So what's her big idea? Simple, really - a "pay it forward wave", this week - a concentrated effort to be proactive about getting our friends back to work. Here are some suggestions she has for simple ways to help:

• Forward a job lead
• Write a LinkedIn recommendation
• Review a friend's resume and give objective feedback
• Set a time to meet for coffee or a drink (heck, we all need one these days!). In-person meetings are important, it buoys spirits and sparks ideas and energy - plus it's fun!
• Make some calls on a friend's behalf
• Pass on a link to a good job site or a great article on job search
• Make an introduction to a friend in a company he/she is interested in
• Reach out to a colleague who has been laid off from your company to see how he/she is doing and offer to make connections for him/her
• Become a "Job Buddy" - commit to meet on a regular basis to set goals and provide gentle accountability (if you are both looking for jobs, there's a double benefit)
• Offer to do some role playing for a job interview
• Tell (and write down!) four strengths/qualities you see in your friend
• Review or help write a strong cover letter
• Invite a friend to connect to you on LinkedIn with the purpose of giving them access to your network so he/she can see if you have contacts in companies on their wish list
• Help with career ideas, brainstorm on other ways to use their skills, suggest good companies to target, how to transition into a new industry

And, of course, you can share about this on email lists, Facebook, Twitter, blogs, etc.

If we each just did 1-2 of these things every day, we may not end unemployment completely, but we might at least help the people we know and care about get back to work sooner rather than later.

Image credit: Photomish Dan

I know there's a lot of hype, mystery and legend around getting on the front page of Digg. Personally, I joined Digg back in 2005, used it somewhat, and then kind of abandoned it. I stop by occasionally, Digg something as a favor to a friend every once in a while, etc. I have a couple of clients that use it heavily, even though I don't personally. They are, however, media and/or B2C focused.

I have a B2B client, though, who's asking me about Digg, and I'm wondering if anyone's actually using it for B2B. To research this on my end, I just downloaded my 864 LinkedIn contacts to a CSV file and uploaded that to Digg. Out of those 864 business contacts:

1. 83 (less than 10%) are Digg users.
2. Only 12 (1.4%) have been active recently (looks like the past 90 days), according to Digg

Mind you, my network has a disproportionately high percentage of social media professionals, too. Heck, even Pete Cashmore (Mashable) is "Not active recently":

Maybe he's outsourcing it. Heck, maybe everybody's outsourcing it. Does kind of make you wonder, doesn't it? Who's actually Digging? And why is it still such a big deal?

More research required, but let me know what you think.

It's year-end, and that means it's time for the annual flood of top 10 lists. Imagine my surprise (and delight) when I saw that The Virtual Handshake had made honorable mention (just outside the top 10 - looks like about #16 if he listed them in order) on Chris Tomkins' Best Social Media Books of 2009. Chris' methodology was simple:

Since many of us (yes, I know you are out there) are still looking for the best book on social media.as well as those last minute gift ideas, I wanted to publish the results of a study that I held via my friends and social media connections on Linkedin and Facebook.  I polled over 5,000 people and simply asked "What's the best book on social media out there."

Now here's what I found both fascinating and, frankly, a bit pride-inducing: every other title on the list came out in 2008-2009. The Virtual Handshake came out in 2005!

When we wrote it, we very deliberately set out to write a book that would be timeless, not something with a 2-year shelf life. Considering how rapidly the social media space is changing, that's a significant challenge.

Consider this. when we finished the manuscript, the term "social media" didn't exist. "Web 2.0" was just barely coming into use at the time the book came out. We called the activity "online networking" and the technology "social software". Twitter didn't exist. Facebook had just opened to the general public, much to the chagrin of its college-student membership. LinkedIn had about 3 million members (it now has over 50 million).

And yet, almost five years later, The Virtual Handshake is still considered by some to be one of the best books on social media. While we don't even mention Twitter and Facebook is only mentioned once, it's as timely and relevant now as it was in 2005 - perhaps even more so.

Why?

Because we focused on the human element, not the technology. Trends come and go, and technology just keeps coming and coming and coming. But the core elements of human relationships and interpersonal communication remain largely unchanged. The ways in which you build strong relationships online aren't really much different from how you do so in person. Twitter etiquette in 2010 hasn't changed significantly from Usenet netiquette in 1990. Ben Franklin's advice on recommendations is as timely now as it was when he wrote it in 1777.

So if you're into social media and you haven't yet read The Virtual Handshake, I invite you to do so.for free. You can read it online or download it for free, and you can even get the paperback for free, thanks to our long-time sponsor, Landslide. And, of course, you can still order it at Amazon and other online bookstores.

And whether you've just read it or had it for a while, we'd always love to hear from you about how you've applied what you've learned from it in your business. The hundreds of such messages we've received over the years have perhaps been our greatest satisfaction. We wrote this book to make a difference in people's lives, and it's always nice to hear when we've succeeded at that. Feel free to leave a comment below or send us an email and tell us your virtual handshake experience.