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The quality and efficiency of an employee mainly depend on their professional qualifications, but the modern human resources theory refers to this only through a partial term, namely "hard skills". In terms of evaluations and professional management, these “hard skills” are supplemented by a range of different qualities defined as "soft skills", such as the motivation that an individual demonstrates or chooses to develop.

Hard Skills: Easy to identify, necessary, but not enough

The term "hard skills" applies especially to fundamental professional knowledge, skills, and abilities, but not only. For example, if a programmer has to write code in Java, he will obviously have to know the programming language. In the field of hard skills, however, complementary skills such as foreign languages ​​or driving licenses also come into play. If the job description is not IT-related, the computer skills - quasi-generalized today - are also in the same complementary category. Upon hiring, hard skills can be easily tested or proven. Basically, all the skills in this category can be certified through a diploma or a certificate of qualification. These skills are the basis for the future work of the employee, but in the vast majority of cases, they are not enough to ensure good performance at the workplace.

Soft Skills: harder to test, especially required for higher positions

These are somewhat social qualities, relating especially to people-interacting abilities. Soft skills include teamwork skills, communication skills, leadership qualities, and the ability to solve problems as they come. From simple politeness to a nonconflictual attitude, a whole range of attributes can be added here, including good time management or the desire to conform to strict professional ethics. If hard skills are easy to identify, in the case of soft skills, the stereotype enumerations present in CVs are never enough proof of their existence. They can somehow be felt when hiring, during their interview or, possibly, through psychological tests set up by human resources specialists. As they mostly focus on human interaction, soft skills are increasingly needed as the position of the employee in the hierarchy is higher, but the situation differs from one job description to another. If the programmer we had as an example earlier does not necessarily need soft skills when writing code, a sales or marketing specialist will interact with the top management and thus cannot work without them.

Motivation: differs from case to case

Motivation is a problem that concerned psychologists way before Maslow's Human Pyramid of Needs. There are many hypotheses and models that relate to this theory. I will just state that a first classification refers to financial and extra-financial motivations. The former refers to material compensation and are accepted unanimously. However, since the beginning of the 20th century, it has become clear that there is no direct link between payment and the efficiency of a person. 100 years ago, however, besides the famous $5-a-day salary, Henry Ford offered land lots, kindergartens for their children and, in the case of immigrants, English courses to help them integrate into the mass production processes. Today, large companies provide health insurance, relaxation areas, various educational classes, physical activity facilities. All of these include career plans and contract terms that offer job security and much more. Perhaps, the first thing to remember is that motivation differs greatly from one employee to another. Effective management should be as flexible as possible, in accordance with the needs and incentives of employees, beyond the standard packages.

The Employer’s Perspective

From what we described above it seems that that the employer will consider the three components as we’ve structured them. Hard skills are easy to identify and absolutely necessary to ensure performance in a particular position, so these are the first ones that will be tested. Soft skills can be identified to a certain extent in the midst of the employment process, but initial perceptions can be confirmed or denied later on. What’s more important is sustaining them at the workplace, often as a necessity for promotion on a higher hierarchy level. As final words, motivation has qualitative rather than quantitative aspects. Employers should be less concerned about the answer to the question "how motivated is an employee?", but rather show concern towards the type of motivation that employees are most responsive to. Schematically speaking, if hard skills are mainly the employee's concern, soft skills relate to a process that takes place between the employee and the company, and in the case of motivation, it should meet the needs of the employee. Only by paying attention to all the three components, the employer and the employee can have a mutually satisfactory and productive relationship.

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It seems that we read a story about some new, exciting startup every single day. And many of those entities that shape the way we live our lives (Amazon, Uber, Facebook) started out in garages, dorm rooms, or studio apartments as dreams. And for the dream to become reality, sometimes all it takes is someone believing in you. I have had people believe in me, so now I want to pay that forward. And I do so by giving brilliant entrepreneurs the funding they need to make those dreams come true. However, this can be a gruesome process. As an investor, I will, at any given time, receive multiple funding requests, far more than the number of businesses that I realistically can (and want to) get involved with. It's a great position to be in when you can pick and choose from a myriad of exciting startups, but it does also entail some work on my part. Before I decide to dive in (and back that dive with a significant amount of cash), here are some steps I take to screen my potential new partners.

1. The opportunity assessment - addressing these four points:

1. The idea - What is its unique selling point (the famous “USP” you will have undoubtedly heard about before)? And what are the larger market/industry/social issues the business addresses and solves? Is it scalable or, on the contrary, does it target a finite market? A brilliant, new idea, filling an empty space in an industry has far greater potential to be funded than one that is replicating older ideas. But I won't discount the latter if their approach is novel and the market can take more players.
2. Team experience - the entrepreneur’s/team’s track record - The background and knowledge that they have or can acquire in the chosen business sector. If someone is just entering a new market, I want to see what their approach is for understanding it and how they go about understanding the subtleties that we find in every single industry. You don't have to know everything, but I do want to see that you're striving to learn.
3. Alignment with our goals - How investing in the business factors into our greater and overall development strategy. While I would love to always venture into new sectors, I have to consider my company's greater goals before I get too excited about an idea. But I have been known to try new things now and again, so do send your pitch over. I'll have a look.
4. Timeline for the Return of Investment - While everyone knows that a startup will take time to become profitable, I do want to see them laying out a realistic timeline for when that may happen. However much one likes supporting entrepreneurship, we are all in business to make money.

2. SWOT Analysis

The famous chapter in every project management or leadership book. When looking at the “Strengths, Weaknesses, Opportunities, and Threats” facing a business, you can get a snapshot of how it fits within current and future developments in its market.

3. Financial Projections

This can be a tough one, especially in the beginning, when they are not really making money, but I want to see how they approach their projections and how realistic they are about them. Here, I look at the following things:

• DCF (Discounted Cash Flows): Calculating a projected future cash flow based on the current one. Obviously, this only works if a business already has some money coming in.
• Multiples: These are used to calculate a company's valuation and they are usually applied to EBITDA. In the case of a startup that has just launched, it will be done based on those used by similar companies that already exist in the market. If there aren't such companies, then it will be an exercise in imagination based on business skills to value the new company.
• Yield: The return, as a percentage, that an investor can receive on their investment after a certain period. Another indicator to consider here is the Value at Risk, which quantifies the investment's risk level.
• TAM (Total Available Market): Essentially, the total potential audience for the company's products. The bigger, the better (but an investor will also understand that a niche business will have a different audience to a mass-market one)

4. Due Diligence

Here is where I get to know the business up, close, and personal, through a series of financial and legal (and HR) audits. What this step usually does it verify the information and conclusions drawn at earlier stages, as well as flag any other problems we were unable to see before.

5. The gut feeling

This is the last step before "putting a ring on it". After analysing all the available data, I make a decision based on my experience and my general feeling about the business. While each investor may have their own set of rules, these guidelines can help you perk up your pitch when getting ready to approach someone. It can also help you address some tough questions about your own idea and plans, and allow you to adjust in advance before you are in the room with someone that can make the difference between your company become the next unicorn or it dying in the massive bin of "never was" ideas. And by putting yourself through the wringer first, you will be that much more prepared for the third degree you are likely to get from pitching. Trust me, those questions will (and should) be hard!

Still feeling nervous about starting your own business? Here are general things you should (or already do) know about the startup scene: 1. The development cycle of a Minimum Viable Product (MVP – in simpler words, something close to a prototype) may take up to three years. You should add a few more years for the transition to a cyclical business model - and that should tell you why some companies are called startups even 10 years after launch. 2. There is a wide range of accelerators and out there, and they offer brilliant solutions to your startup needs. If your startup is based in Romania, you can find a relevant list (including other information on startup phases etc) on romanianstartups.com. An alternative is the governmental program startup-nation.ro, which offers financing of up to RON 200,000. 3. While you’re still small, access to capital may prove difficult. Be ready to reach out to smaller investors first, and work your way up the ladder as you grow. 4. You've failed in a startup before? You’re not alone. According to Forbes, 90% of startups end in failure. But think about it this way: Thomas Edison made 1,000 unsuccessful attempts at building a lightbulb. When asked about his failures, he said: “I have not failed 1,000 times. I have successfully discovered 1,000 ways to NOT make a light bulb.” Words to live by. 5. Why should you invest in marketing, when you have as little resources as you do? Here’s the thing: while you may think you can get the same results by doing it yourself, I can promise you, you won’t. You will waste a lot of money learning something someone can do faster, cheaper, and likely better than you. 6. “I have 10 years of experience in corporations. I can always start work as an entrepreneur.” Yes, but do not forget what human resources specialists say: the qualities of the business innovators are mostly different from the ones of a successful manager in a big company. The latter has to be conservative and precise considering the hierarchy of the company itself, whereas the former needs vision, leadership, and the ability to take risks. Thoroughly knowing a market is, in principle, the main asset of a founder. However, to this, you should add the qualities of an entrepreneur. 7. Do you think that a startup is a solitary battle that you will have to fight for a long time? This is not at all the case. Go out there. Network. Find partners. Find mentors. Bring in a co-founder that lives and breathes your idea. And, if you do bring in an investor, make sure they also pledge some of their time and experience, on top of their money. At the end of the day, they will profit from your success too!

I am a Romanian businessman, but I consider myself lucky for being born in a time when business became borderless. In other words, I’ve been interacting with non-Romanian partners for almost 10 years. So, since this text is in English, you are surely interested in a short list of my foreign partners’ perceptions of Romania. Warning: most positive things have a downside.

Work hard, play hard

Yes, we, Romanians, are known for that. We get enthusiastic quickly and react well to uncommon tasks, stimulated by the novelty of what we have to do. Also, overtime is less expensive in Romania than elsewhere for various reasons. Every foreigner I know was happy with the fact that we are connected 24/7 and most of us do react well to business messages sent at unusual hours, especially having in mind time zones. However: Things can become hectic at this pace. If somebody spent 16 hours at the office the day before, you can hardly expect them to deliver something good the next day. Somehow, in this part of the World, we have to protect ourselves from work excess in order to be able to obtain better long-term results.

Good English language knowledge

You can order a beer in English almost anywhere in a big city. You can even bet on a certain degree of command of English from middle-aged taxi drivers. There are even things that Romanians can hardly name in their native language, such as computer menus or marketing lingo. Romanian itself got invaded by English after the fall of communism, in domains that simply lacked the vocabulary. Most of them are related to business or technology. However: There are people who have studied English and there are people who learned it by ear. You may face some misunderstandings ranging from funny to problematic. You also may be surprised of how little English legalese a technical person understands and the opposite — what a lawyer can make of a marketing report. My advice: if you’re in search of really strong abilities, look for English certificates rather than self-assessment in resumes.

Bureaucracy

One could hardly say anything good about Romania in this respect. In my view, you can never be cautious enough about it. Have you heard about the rule that you’ve got to get the agreement of your closest neighbors when setting up even the smallest, quietest business in an apartment? An American friend of mine asked a bureaucrat about the meaning of it and the bureaucrat frowned: ‘There have been cases when we’ve had dozens of companies registered in the same apartment, which is totally fishy.’ The American was bemused: ‘This is precisely what I pay for in New York and it’s totally legal. A box located at a physical address, together with hundreds of other businesses, just in case. It’s 50 dollars per year and it’s the only address I need in the US!’

Responsiveness and punctuality

A big part of Romania, at least the one you’ll be interacting with mostly, is somehow prone to progress. I'm not bragging with my conationals -  it’s the observation of an Italian partner. It comes down to the will to overcome ourselves and catch up with what is sometimes still called here ‘The West’ or ‘The Civilized World’. This is causing the enthusiasm and ability to work hard I’ve already mentioned and, obviously, punctuality. You can use it all to your own and your local partners’ advantage. However: Have you ever heard anybody saying in Romanian ‘Imediat!’? It is an answer to a request and it literally means ‘Immediately’ or ‘Right away, Sir’. Some other cultures have it, but in Romania it’s some kind of automated answer, it hardly means anything. To a Swiss gentleman that I know, it means: ‘Gimme 15 minutes’, or simply: ‘F… off!’ The Swiss gentleman owns an Omega and I suppose he knows a thing or two about time.

Fun

Yes, Bucharest - as well as other big cities in Romania, such as Cluj or Iași — is lots of fun. You might have heard of the Old Centre, which is something similar to Campo de’ Fiori in Rome or the Jewish Quarter in Budapest. It's right in the center, full of pubs and clubs. The kind of area that travel guides call, in lack of a better word, ‘vibrant’. However: During weekends, the Old Centre gets stormed by low-cost city break cheap beer addicts and they sometimes don’t even book a hostel room. Music is loud, fine cuisine is scarce and yes, everything is cheaper than in London, but significantly more expensive than in other parts of Bucharest. My advice: look for an Arabian restaurant. You might have nice surprises, because they are run by Palestinian or Lebanese folks that came to Romania in the eighties, in communist student exchanges. Many of them have remained here, got into the food business and they’re really good at it.

Hospitality. Conclusion

All in all, I do love Bucharest a lot, in spite of what I’ve said. But a foreigner’s experience here depends strongly on their local contacts. As most other peoples, Romanians are very appreciative of their own hospitality. In general, it’s true, we are very welcoming, because until 30 years ago we were isolated and we had to report contacts to foreigners to the communist Police. To younger people in big cities, strangers are less appealing. So, in the end, finding compatible partners is a good idea in terms of personal comfort. As it always is for business, isn’t it?

In entrepreneurs' and investors' lingo, the meaning of the term startup is pretty clear. However, after several years of business in this field, I've noticed the necessity of some clarifications, both for experienced businessmen and young people who tackle business for the first time. (more…)