Lenny Rachitsky: evaluation

Transcript context

…Yeah. And this is a concept I got to recognize my very first as an intern actually in 1998 at a company called Trilogy, which is somewhat of an infamous company around recruiting and it's kind of where I learned to trade. My very first manager, Jeff Daniel, we did this campus tour around the country talking to CS students. And that's where I first heard the term and he coined that term. So I had to acknowledge that. But I think what the funnel did forever, almost forever, as you think about the recruiting history, companies think about recruiting like a funnel, maybe akin to a sales funnel where they think about different stages, pass through rates and things like that. And when you think about how most companies have recruited over these last several decades, it's really been candidates come from three buckets. They apply, they are activated or sourced or they're referred. But if you think about for a lot of companies who think about talent density, typically referrals and sourcing or activation of passive talent is really the focus. And when you even narrow further on this source talent, this is how most companies think about it. I am going to reach out to 100 people. 20 people will reply just for round numbers. So 20% of those will reply. By definition, that is not the top 20%. That is just the 20 people who you caught on a bad day for them. Good day for you, bad day for them. And so you're starting with a suboptimal set. You're not starting with the top 20% even if that's what. And then the way we all recruit is we kind of weed people out at each stage and we hire the remainder. So this remainder hiring is the output of the funnel of doom. And when you say that out loud, you're like, that's kind of messed up. If I think about building a talent-dense company over time, is that really the best approach? Or does that kind of get me just above average over time, assuming I have really good interview process and hygiene and all these things? You kind of regress to the mean over time as you get to volume. And so we just think about this in a different way is what if you had confidence upfront of who the top 20% was, and then you use your assessment process to validate that thesis of who those are? That seems like a better... So there's this funnel doom, but there's within a funnel doom, there's this pillar of excellence. What if you started with the pillar of excellence and went from there versus having this wide funnel? Because imagine how expensive that is to do remainder based hiring and you hire the person who drops to the bottom. I love this, especially hearing this. This is how hiring has been forever. And just hear you describe it, it's clear this is not optimal. Why hasn't this changed ever? There is something detrimental about comparing it to a sales funnel. Because in a sales funnel, as a salesperson, you're typically selling a widget, a piece of software, an item. Those things are relatively static and rational. In recruiting, you have an irrational unit of a hiring manager and recruiter, and then another rational unit of a candidate. And so to believe that things are transactional and linear and passed through in the same ways I think is a bit of a fallacy. But sales has been around for hundreds of years, a long time. Recruiting as a craft or this is like 50 years, 40 years. So we're behind on it, but as humans, we often try to relate a problem to another problem that we know. And so I think this connectedness to sales has been somewhat detrimental to companies as they think about doing this in a more strategic way.…

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