On building teams.
I’ve been in a reflective mood this week, thinking back on my career so far.
I’ve founded and run three Silicon Valley companies and, like most entrepreneurs, I’ve had some successes and some failures. But when I look back, the successes have always been because of the team I had assembled.
Honestly, I think that success in business really just distills down to just that: build great teams.
And yet there is mythology in StartupLand that entrepreneurial success has to do with having the brilliant startup idea. Everyone is looking for that big visionary idea for a startup, the disruptive idea, the billion dollar idea. But if you look at Silicon Valley history, it’s actually very difficult to find examples where it was the idea that carried the day. The Twitter team’s original idea was a podcasting app called Odeo. Instagram’s original idea was a mobile checkin app called Burbn. YouTube’s original idea was video dating. Uber’s original pitch deck was for a fleet of company-owned cars called UberCab.
In all of those examples, the original idea totally failed. But the team still turned the company into a billion dollar success.
My own most recent company was an example: the original idea failed miserably and yet we went on to great success, growing the enterprise year-over-year into a thriving global business with five offices around the world.
We hit it out of the ballpark because we had a great team. Great teams figure out a way to win.
“At the end of the day, you bet on people not on strategies.” — Lawrence Bossidy
There is also mythology in StartupLand that a good founder needs to be a technical genius. But there are surprisingly few examples of “technology genius” being the defining characteristic of a successful startup CEO. Steve Jobs didn’t have a college degree, let alone any engineering experience. Peter Thiel was a philosophy major. Ben Silbermann of Pinterest was a political science major. Stewart Butterfield of Slack was a philosophy major. Marc Benioff of Salesforce has no engineering degree; he started as a customer service rep at Oracle.
But they were all great at building teams.
The ability to build high-achieving teams is what matters, and I think that’s been my super power throughout my own career. I’m average with spreadsheets, I’m mediocre at sales, I know just enough about technology to be dangerous, but I’ve been great at building high-achieving teams.
I wish I could share with you some secret tip about how to do it, but I think it’s more art than science, and every founder has their own style.
I do think that hiring is the one thing that a startup CEO should never delegate to others. I’ve heard it said that the CEO needs to personally hire the first 100 employees at a company, and I think that’s probably about right. A CEO who delegates the hiring process to others too soon has been the death of many companies.
Another thing that has killed a few companies is a CEO who thinks that the solution to every problem is hiring more people. As Ben Horowitz says, “sometimes an organization doesn’t need more people; it just needs better clarity.” It’s the CEO’s job to recognize the difference.
One of my personal rules has always been to only hire A players, no matter how long it takes to find them. That philosophy ends up being a burden on your time, because you have to kiss a lot of frogs, but being very selective about hiring sends a powerful message to the rest of the team about your standards and values. And remember that as your organization grows, A-players will hire other A-players, whereas B-players will hire C-players.
It’s a slippery slope and I recently watched it happen right in front of me.
“B players hire C players and pretty soon C players are hiring D players. It doesn’t take long to get to Z players. The trickle-down effect causes bozo explosions in companies”. -Steve Jobs
Never let B players get into a hiring position. It’s a mistake I hope I never make again.
Team is the one place where 1+1 never equals 2. A great hire adds more than their incremental value. A bad hire subtracts from the rest of the team. Get your team math right by hiring slow and firing fast.
“At most companies, people spend 2% of their time recruiting and 75% managing their recruiting mistakes”. -Richard Fairbanks, CEO of Capital One
We live in a data-driven world today, and it’s seductive to think that software can help you to hire great employees. “Applicant Tracking Systems” (ATS) now have bots that scan incoming resumes and score the candidates for you. I hate that shit. The most important things to know about a person are not on their resume. Relying on such systems for hiring is lazy and misguided. It’s just not how great teams are built.
Google did a study a few years ago, trying to figure out the characteristics of high-performing teams so that they could automate the selection of individuals for their teams. They were hoping for a nice recipe like “A good team has one senior engineer with >8 years coding experience, plus one recent CS graduate with a GPA >3.8, plus one PM who was a liberal arts major”. Or something like that. What they found was completely different —what they found was that the things that made for high-performing teams were common vocabulary, strong communication skills, cultural fit, and mission clarity from management.
Do you think that ATS software is going to deliver that to you? I don’t think so.
Also, never let the financial guy run HR. It’s the kiss of death for the culture of any organization. What emerges is a spreadsheet-centric approach to evaluating people, a “competency matrix”. That’s is a bit like thinking that a paint-by-numbers kit will help you create great art. As Ben Horowitz says, “hiring based on checking boxes or looking for weaknesses is a guaranteed way to create a low-performing organization”.
Every. Single. Time.
Here’s the problem: You want to hire someone who will add value to your JavaScript team. But that gets expressed in a job post as “Must have 5 years experience with JavaScript”. Those two things are not necessarily the same. A good CEO knows the difference, but the crappy guy you put in charge of hiring doesn’t.
So remember that great leaders hire based on their gut and choose people based on their future potential. Leadership is about making others better.
Choose people you would like to have by your side in trench warfare. Choose smart over well-educated. Choose values over GPA. Hire people who ask good questions. Hire someone who tells you how much she doesn’t know — that person knows a lot.
Hire people who are just such solid humans that you would crawl over broken glass to get them whatever they need.
That’s who you want on your team.
This article was merged into my new book, The Launch Path, now available on Amazon.
