Hire for your core. Partner for the rest.

By Dave Berkus, Chairman Emeritus, Tech Coast Angels

A trend for businesses large and small

There is a major trend shaping up that is worldwide, already identified by hundreds of thousands of startup and small business CEO’s.  By carefully recognizing and focusing upon the very core of the business, these CEO’s are allocating their scarce cash resources to hire the best talent they can find to support that core business, and then reaching out to partners, independent contractors, and other small businesses to provide all other functions.

What is your core competency?

There is much to reinforce in such behavior.  By definition, your core is your intellectual property foundation, the thing that makes your business most valuable to customers, investors and perhaps someday to potential buyers of the business.  Every business has an intellectual foundation where the CEO’s knowledge and vision create a barrier to entry that deflects some or much of the potential competition.

Patents, branding, marketing and more

In the patent world, we protect this intellectual core with what we call a “patent thicket,” aptly describing the attempt to surround the core patent with other patents that defend the core and further prevent competitors from attacking the central component of the business.

Sometimes we protect our core with effective branding and marketing.  Or we do so with brilliant research and development, highly trained sales forces, large advertising campaigns, or secret processes.

Using your scarce capital and other resources

Using this focused approach to hiring, companies can stretch their limited capital further, assure better protection of corporate secrets, and make use of the core skills of partners that are attractive and beyond the reach of a small company’s abilities.  In this new environment of cheap communication worldwide, it is only reasonable to leverage these advantages through partnering with those whose core complements yours.