Favorite questions and quotes from the conversation.
How do you think about finding good talent?
You need to find people that are undiscovered, that the rest of the world doesn't know about, because fundamentally if somebody has a lot of data points on their resume that suggests they۪'re amazing people, organizations like Google, Facebook, Netflix, Amazon are gonna try to attract them and they're gonna pay more money than a startup can ever afford.
How do startups attract great people?
The selling point is the opportunity, opportunity to grow, the opportunity to challenge, to run something yourself, the missionary zeal of the organization, the degree of flexibility, and the number of people that can kind of tell you no, you know, is pretty small in a startup versus in a large organization there are 10-15 people that can easily veto your projects and ideas, so I think that's part of the selling point.
What kind of people do you want to attract?
Some people like to learn to swim by being thrown in the water and kinda drowning a bit and there are other people who need a lot of instruction. Basically you want the people that, kinda enjoy learning to swim by being thrown in the water and that's one of the filters. You ultimately need people who are tenacious; the tenacity to go over the wall, under the wall, through a wall, making friends with a wall, figuring out why the wall doesn't matter and that's the core skill that most startups need Intellectual horsepower -- most companies are solving problems that other people haven't solved or can't solve or don't think they can solve and sometimes that comes from pure insight married with tenacity and not giving up.
Do you hire for aptitude vs. experience?
So, generally I believe in the people with aptitude not experience. For example, at Square we intentionally hired almost nobody with any payments background or any financial services background, there was I think between 3-5 people in the organization that did out of an organization that now has thousands. At PayPal, I think the only person who knew anything about payments as far as I can remember is our general council, that's actually a good point. There are some roles where experience is valuable so when you're in the risk reduction sort of phase or the risk reduction role, like a general council or a CFO sometimes, you're looking for someone with experience. But if you're trying to create something from scratch the experience is sort of a handicap.
How do you get better at hiring?
I think developing a skill and noticing who in your organization has predictive value is a really important thing. Amazon has this concept called "bar raisers" which are people who have historically proven to be very proficient in evaluating candidates and they have to approve, basically, all offers and they can reject an offer, sort of, by themselves. I think that what you should do is on every hire you're kinda retrieving data of how accurate are you. You look mostly at the anomalies either the great hires or the mistakes and figure out what are the characteristics the common denominators are in those cases and try to either edit those out or refine them in the future or find more of the stars. I think that's a process it can take years to get better and better at because it depends on how many people and the velocity of hiring.
How do you develop talent?
The first thing you look for is who shows signs of promise that are extraordinary and there are ways to pick up on that. One way is who do people in the company go to talk to when they don't have to. You can watch like whose desk becomes popular and you see a distillation of people approaching somebody, particularly if they don't report to that person it's probably because they find that person to be insightful, and helpful and that's a great sign. The second thing you want to do, and David Sacks taught me this in the beginning, is constantly expand the scope of responsibility for every single employee, and everybody will break at some point but you want to keep pushing the envelop until they can't handle that level of responsibility successfully anymore.
Do you focus on the stars or improving the whole pool?
Figure out where the high leverage activity is and if you believe that you have people who have 10x value creation, improving their abilities has magnificent effects versus trying to fix people that aren't ever gonna create 10x value. So the best thing you can do is double down on your stars even though it's kind of counterintuitive because there's a lot of management drag that goes into helping the people that are suffering and struggling -- your job is really to create impact, impact for your organization measured in terms of whatever KPIs the organization settles on. And the best way to do that is to make the top 10 or 20% more effective and then move more people overtime towards the top of the bell curve.
How do you give good feedback?
I think the frequency of feedback matters and the timing of it matters. People tend to procrastinate it, tend to defer almost like writing an essay in college because it takes a lot of work to do well and the news isn't always pleasant and therefore you tend to hope it kinds goes away but it almost never does. Very few times when you want to give someone constructive feedback, does the problem every remedy itself? Does the person ever learn how to do something the way you want it done in the first place? Does he sort of respond to it? The best way to do it is to tie to whenever the object of the feedback is most relevant. So when someone has a presentation, for example, or makes an argument about a certain initiative, it's better to tie that feedback to that specific problem because then you can help their brain adjust to "Oh, I can see how I could have done this better or why it would matter," versus a generic statement 3 months later.