Hiring

In the last generation, Instagram, WhatsApp, Minecraft, and Bitcoin all got to billion-dollar valuations with very small teams. Those were all founded in 2009/2010. We haven’t even begun to stretch the limits of capital efficiency.

What I prefer is a tiny team of well-rounded athletes, employees who are smart, hard working, and work well together. Then there are no politics because everybody was selected for alignment.

Finding up-and-coming people is a very important component of hiring. Technology executive and investor Keith Rabois has a good saying: “Hire geniuses no one knows yet.” My version is: “Hire people who are hungry and can teach us something.”

Hiring “hungry” people usually means finding people at the beginning of their careers. One thing I’m wired for, which isn’t common, is I’m almost anti-credential. I understand the value of credentials, but I’m actually most excited when I see a smart person who does not have credentials already, because that’s a good value. I can hire them, I can pay them reasonably well, and I can help them level up. I can give them the biggest opportunities they’ve had in their lives.

I have recruited people in the middle of nowhere living with their parents in Canada, Malaysia, and Poland. I saw that they coded well or wrote well or both. I didn’t care about anything else. They were smart people. They could outcode and outwork lots of folks with degrees from Harvard or Stanford.

I’m not saying people at Harvard or Stanford are dumb. I’m not saying anything like that. But from a price-performance standpoint, you want geniuses no one knows yet. When you give somebody the biggest opportunity they’ve ever had, they’re hungry.

Then there’s the other bit, ”and can teach us something.” I look for people who can communicate their knowledge effectively. Can I learn something from their writing? Writing is important in remote work because you engage with people through writing. Did they write their blog posts like mystery novels where you have to read for a while before figuring out what they’re saying, or did they put the headlines first?

There’s a difference between casual conversation versus writing something for instructions. To be effective, pull key information to the beginning and communicate it in the headline. Then you should communicate it again in the subtitle, communicate it again in a slightly different way in the opening sentence, and expand on it in the opening paragraph.

That’s how you should write internal memos. That’s how you should write Slacks. State the most important thing first. I look for folks who can do that and who are underpriced relative to their potential.

We all want to make people wealthier. When we share in risk, we share in reward.

This is the most challenging thing to do as an entrepreneur, but it’s also absolutely necessary: hire people who are better than you.

Why is it necessary? If you think someone is doing a job worse than you could do it, you will constantly think, “If only I had time, I could get in there and fix this.” If there are high stakes for customers and you have the power to fix it, you feel dragged in that direction. If you hire people who cannot do the job better than you can, you will always feel you should do their jobs instead of focusing on yours.

But, if people are better than you in a skill, why would they want to work for you or work for your company? My answer requires thinking of each skill as a vector.

Let’s say you’re getting into robotics. You may not know robotics, so you need to find somebody who will do the job better than you could if you were doing it. You may be worse at robotics, but you’re better at mathematics or programming or something like that. Then you go to that person as a peer.

You say, “Look, you’re a disciplinary expert in robotics. I’m not a ten or a nine like you are, but I have self-studied and I’ve gotten my way to a six. I can tell you what degrees of freedom are. I can tell you how manipulators work and the basic sensors and actuators. I know some of the problems in your field. I’ve done my homework.”

People who are skilled in areas are actually pretty impressed if someone puts in the work to at least learn the basic vocabulary of their spaces. Let’s say you’re an engineer working with people who are self-taught. Maybe their code isn’t well-structured, but they’ve managed to scrape some data to get an analysis together and make some graphs and charts. You’re always going to think, Okay, these people are resourceful. I respect that.

When you and your team have strengths in different areas, there is an ongoing trade of knowledge. This is how I like to recruit. I look for people I can learn from and, hopefully, whom I can teach something. Then we both level up our skills. Then there’s a mutual, positive-sum exchange over the course of the relationship.

Speaking of the course of the relationship, LinkedIn founder Reid Hoffman’s concept of the initial employer-employee compact as a “tour of duty” is useful because a company is not a family. A family is about unconditional love. That’s not how a company is. A good company works on conditional love—you have to deliver.

On the other hand, a company shouldn’t be completely mercenary. Everybody has bad days. Everybody has a bad week at times, or sometimes even a bad month or more. These are our fellow co-workers, and we have mercy for their challenges, even if the customer doesn’t. The customer doesn’t care whether someone had a bad day at Coca-Cola’s bottling plant. They just think, Why is this bottle all crushed? I’m going to buy Pepsi.

The customer isn’t acting out of malice. It’s just that the interface they’re seeing is not human. They see a crushed bottle. There’s a failure somewhere in the supply chain. So they just shrug and pick the other thing, right?

The customer is genuinely merciless. You have to somehow buffer that for employees inside the company. I think the intermediate is this concept of the tour of duty: a pre-arranged, clear set of expectations about deliverables, timeline, and departure.