Keith Rabois: preference

Transcript context

…Well, let's start with first principles. The most important lesson I learned when I was working at Square from my board was Vinod Khosla was on my board, and he said, "The team you build is the company you build." And that adage is the most important thing when you're creating a startup. People get distracted with the market, with customers, with a product, with technology. Ultimately, it's the team. If you have the right people, everything else will be easy and you have the wrong people, everything else is going to be difficult. So, Vinod distilled it, but I actually learned this back on my PayPal days. So in the early 2000s, why was PayPal so successful? Why were there subsequent generations of successful, interesting companies for 25 years now? It's because Peter Thiel and Max Levchin marshaled an incredible density of talent. So it allowed PayPal to succeed where possibly we wouldn't have. And these people went on with interesting ideas, ambition, and talent to build epic companies in all kinds of verticals. So from day one, day one of my technical career, technology career, I've always been focused on the importance of critical density talent, how do you identify, retain, and promote people with that talent? Back in the PayPal days, when I first started my career in technology, I actually truthfully was not very good at this. Fortunately, Peter and Max were. So Max basically hired all the technical talent in the organization. Peter pretty much hired everybody else. They used their network primarily. So it was very difficult to get a job at PayPal, unless you had a first degree or second degree connection to the engineering team or to Peter through Stanford. Which is a different type of recruiting model. It works really well if you have a strong network. I wouldn't recommend it for everybody, but if you have a network that has unique talent, there's no substitute. Interviews are not a great substitute regardless of how strong you are at interviewing. But when I started my career, I was mediocre at let's say hiring people, probably 50/50. Some good people, some mediocre people. That doesn't allow you to scale a team with an unfair advantage. But what I learned to do is steal people from other people's organizations within PayPal very successfully. So I got feedback from David Sachs, who was the COO at the time that I wasn't going to get promoted again until I could demonstrate leverage, leadership leverage, which he had an equation for of one plus one has to equal three or more. So for every incremental person you hire, you have to show that you produce disproportionate returns, non-linear returns. And because I wasn't hiring that well, I wasn't really succeeding at that leverage. So when I went around, took the feedback into account, I said, "Okay, I really want to get promoted. What do I do?" And because I wasn't hiring that well, I wasn't really succeeding at that leverage. So when I went around, took the feedback into account, I said, "Okay, I really want to get promoted. What do I do?" So I found people within the organization that I felt had talent that were not being leveraged to the highest potential inhibition, and I recruited them to my team. And that was very successful. And then I did get promoted actually fairly quickly because these people actually left to speed. They were able to run really fast and we produced a lot of really important results for the company. The lesson though that I took away was, well, that's great because what it showed to me is I actually could identify talent. I just couldn't identify strangers with talent. So people that were in the building that I have lunch with or dinner with or go for a runaround the PayPal campus with, I was accurate at diagnosing their abilities. I just couldn't do it in a 20-minute, 30-minute, 45-minute interview. So the first thing is just double down on people I know. That doesn't scale perfectly, but learn to be excellent at, if I had context, assessing people's abilities, superpowers and weaknesses. Then over the next X years, tried to identify a different technique for identifying, assessing random people. Because ultimately if you're going to build an organization, ultimately if you're going to be a VC, you can't just invest in people that you already know. So that took some years and required some training. Anyway, I think you can teach some of this to a founder, but one advantage a founder has that's going to thrive is if a founder shows the ability early in his or her career to assess talent ruthlessly and accurately, here's how you can go very far with no other abilities whatsoever. Hiring is like a muscle. You need to exercise it. You need to try, learn what worked, what didn't, what could you have known, what did you miss, why, and riff on that and try to get better at it. There are tactics you can learn. I think the tactics work pretty well within the middle of a bell curve distribution of moving yourself 10, 20 degrees within that bell curve. I don't think the tactics can really teach you how to identify, call it top 10 basis points, top 50 basis points of talent. There you have to deviate from the norm. And I think that's actually true of most lessons in life. If you're going to be extraordinary in any skill, you can't follow a playbook. Otherwise, by definition, lots of other people would be the top 10 basis points, but you can get a lot better by learning techniques. So for example, let's share a couple. One thing I think you can learn to do is be excellent at references. It doesn't work for hiring people right out of college or something because the reference context is going to be a little off, but I think without getting better at interviewing and assessing, if you just learn to extract the right information from ruthless referencing. So for example, ruthless referencing to me means Tony at DoorDash does 20 references on every single senior hire, 20. Wow.…

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