“What you’ve built with Quantico is great, but ultimately it will fail. Your clients will poach your staff and you’ve got no way of stopping them.”
An angel investor said this to me back in 2019.
And you know what? It terrified me.
It’s scary because it’s true. Our people ARE Quantico. We’re nothing without them. Not only that but we also spend a small fortune finding and training each one of them. Our partners are desperate to hire them, and there’s nothing we can do.
I immediately ran back to the office and did the only thing I could think of: I wedged a fat penalty clause in our partner contracts.
“If you hire our employees or contractors you agree to pay us £100,000.” Phew, problem solved right?
Yeah of course not.
This is the story of how I realised I was making yet another mistake, and how we’re fixing it.
The thing about penalty clauses - like our £100k non-poaching penalty clause - is nobody ever pays them.
At best it’s a scare tactic, and at worst it’s just an unenforceable waste of paper.
Startups told me they were hiring my team member whether I liked it or not. The individuals looked at me with a mixture of confusion and pity when I asked them to stay.
Ultimately the investor was right on one point - I can’t stop my team moving on.
But what I was too stupid to realise with the investor is: I want our team to quit!
Bear with me here…
It all comes back to our purpose, what we are here to do.
At Quantico our mission is to get accountants doing work they love. That means variety, impact and progression. But probably more than anything else it means getting out of big firms and corporates, and into startups.
We do this by taking the very best people we can find (a lot of them from big accounting practices) and put them through an intense progression pathway. They’ll be working with 5 or more startups in the same week, learning about new tools, systems and processes, and building out finance functions from scratch.
In 18-24 months we’ve got a hardened FinOps Lead ready to take on any challenge - an unbelievable asset to any startup.
To do all of that and then stand in the way of their dream job made no sense at all. So we got rid of the non-poaching penalty clause.
Step one: complete.
We are doing this for our team… but let’s not forget. This is a freaking awesome deal for the startups they go to work for.
Imagine the perfect hire. You’d know them already, they’d fit perfectly into the team, they’d already get you business, and they’d need zero hand-holding. They’d be from Quantico.
This is exactly what our partners get when they hire from us!
Of course, there is a cost to bring anyone into your team (finding them, recruiting, onboarding and training them). But with Quantico, you get to try before you buy!
Step two is to structure the fee so that it is a fair, and transparent, reflection of the cost.
Let’s break down those two costs a little more.
First, you have costs related to the team member.
Secondly, you have the partner - CAC (customer acquisition costs). These relate to the marketing, sales cycle and KYC costs to bring a partner onboard.
Finally, we also seek to put on a small profit margin to make a contribution our overheads. We kept this super low at 20%.
It’s tempting to stop there, but we can get these fees lower still ;)
As we work with a partner, our transparent pricing means we already start to recoup some of these costs. Every day bought includes a contribution towards learning and progression for example. So, the longer we work with each partner, the less we have to charge.
Dreamy!
And, the longer that we can commit to continue to work with a partner, the less we have to charge to cover the costs of replacing that partner.
Our answer: a reducing cost based on the precise number of days worked and those committed going forward. Until eventually you can have our team for free!
I’d like to think that investor will read this, shake his head and think I’m mad.
That’s how I’ll know it’s the right decision.
We’ve got to strive for a new way of doing business that doesn’t just pay lip-service to flexibility and transparency.
Flexibility isn’t dogs in the office and beers on the roof (but we do these). Flexibility is having a career that works around your other commitments, one that gives you variety of experience and one that actually facilitates you moving on to your next role (even if it hurts the business to do so).
Transparency isn’t just publishing a team handbook (we do this too) it’s being open and honest about fees, costs and how you make money. It’s building a culture where the most junior person in the organisation can have a conversation with the CEO and bring about real change.
What do you think?
I’ve put our money where our mouth is. Have I gone far enough?.
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