How to hire A+ talent

Back in the arena

It’s no secret that I recently started a new company, Passes. We just entered our second month and have a headcount of 8 full-time, killer employees. As we near the end of our first round of hires, I want to reflect on my recruiting process. Having an audience of nearly 100k followers across social media definitely makes advertising open roles easier, but I stick to a few guiding principles that have allowed me to hire great talent throughout my career, including the first engineers, designers, marketers, and ops at Scale.

This sh*t is hard

Scaling your team to its first 10 people is, without a doubt, the most impactful factor on your company’s chance of success. Hiring well is difficult, particularly in an era that glorifies startups (see The Dropout, WeCrashed, and Super Pumped all released within a month of each other) and pushes talented/ambitious people to launch their own companies rather than join founding teams. Many of these companies are launched without any real conversation about the emotional, physical, and opportunity costs associated with being a founder.

The US’s cult of entrepreneurship overlooks how joining an early startup can be just as advantageous, if not more, to career growth as starting one.

CEOs, like all managers, have to delegate in order to be effective. Studies into your "span of control" (how many employees directly report to you) have found the optimal number to be ~7 direct reports. This often means that a CEO should expect to stop directly managing their whole team within their first round of hiring. That is why it is critical to only hire A+ operators & engineers for as long as you can: eventually, an A+ will hire an A-, and so on. The best companies build systems to slow this inevitable drift in recruit quality for as long as possible.

Market meltdowns or black swan events that trigger mass layoffs are never good. But they can create unexpected pools of talent looking for their next project. Passes is lucky to have a long runway and be able to compensate our talent well.

If your plans recently changed and you’re now looking for work, particularly as a frontend/backend/fullstack engineer, please apply at passes.com.

Seizing the Moment

CEOs have two main jobs: hiring & fundraising. I happen to be naturally energized by those two responsibilities (along with product design!) and am quite effective at them. But I know that I’m not great at everything else.

When I decided to start Passes, I wrote down my biggest weaknesses. I’m unorganized. I can explain my high-level thoughts clearly, but sometimes skip over the details and leave people confused. I lose track of things. I have one of the most extreme biases to action I’ve ever encountered.

For a company to succeed, a ship has to be run tight. So I needed to surround myself with people who compensated for these weaknesses. Luckily, one of my best assets is my network, spanning my days at Carnegie Mellon to my part-time job as a niche lemur-technopunk Twitter influencer.

I called one of my best friends of eight years. She is one of the most organized people I know. She’s a Swiss Army Knife: a double major in Math and CS from Carnegie Mellon, four years as a data scientist at Microsoft, the lead ML engineer and data scientist at Pallet, and fluent in half a dozen (spoken) languages. She’s built organizations from scratch, with a track of record of resonant leadership. I trust her values and her competence.

I didn’t think closing her would be difficult, but I wanted employee #1 to feel ownership. I made a compelling cash offer and was very equity generous. But even more, I was upfront about my vulnerabilities and motivations in being a founder again. Building in public and being successful naturally draw critics, so I wanted to be transparent in why I thought we would win and what would be the reasons we could lose. She said yes.

Next, I wanted to reinforce my own expertise as a design-engineer. I knew I’d still help out on the design side, but my engineering is frankly not nearly as good as it used to be. A founder I had previously funded had a break up with his cofounder. During an accelerator, I had had weekly one-on-ones with his team and knew how quick he was with both full-stack engineering and design. I snatched him up. Keep tabs on talented people. Know what they’re working on & when they’re open to something new.

My next hire, Chief of Staff, happened by accident. Talented people tend to have talented friends. An ex-Scale employee introduced me to a former founder from MIT (CS + bioengineering) who had an offer from Scale— and they were trying hard to close him. I moved fast. We spent the majority of a weekend on the phone and Zoom to get a sense of each other’s approach to work, sense of product, and mission alignment. Speed is critical in both product and hiring, especially when a candidate is actively evaluating multiple opportunities. Always make yourself available and run a quick process.

With these three hires in place, the rest came faster. Network effects compound. Excitement has snowballing effects. A 10x engineer and classmate from Carnegie Mellon understood our potential and joined as our Engineering Manager after 5 years at Affirm. A lead PM at Gemini that I’ve known for 4 years came next. Then a Staff engineer from Netflix, Uber, Stripe, and Coinbase came from the Miami Twitter scene.

A common refrain with each new hire: “This is a team that wins.”

Your early team also become your friends. Be ready to show how much you care. I’ve organized hiring dinners on 3 hours of sleep. I’ve rush-ordered Pokémon gifts for candidates. I’ve flown across the country to celebrate a candidate signing with them in person to impress upon them their value in my mind. You should sweat the details of this process.

And after, care about their growth.

Now, Passes is a team of 7 people. And we’re seeking 2 more for our founding team. We’d love to have you join us.

- #LFGuo

Final thoughts

When building your founding team:

• Move quickly.
  • Startups can beat large incumbents because they aren’t bogged down by the same red tape.
• Be available at all times.
• Leverage your personal networks. Strong networks make strong companies.
  • Invest in your candidates so they become emotionally invested in your process.
  • Spend time with them to move beyond surface level small talk.
  • Find out what makes them tick. Integrate this into the courting process, via small gifts, a meal, or activity they mentioned liking.
  • If they smile and/or laugh during the interview process, you’re on the right track.
  • Help them see your team as their friends in social settings. Mention company off-sites or hobbies of individual team members that may resonate with the candidate.
• Frame the opportunity in terms of a candidate’s primary motivators, like intellectual curiosity, company mission, being challenged by smart coworkers, cash, or equity.
  • Steve Jobs famously convinced John Sculley to leave Pepsi for Apple with “Do you want to sell sugar water for the rest of your life or come with me and change the world?"
  • A positive impression or gut reaction towards your team can frequently convince candidates to choose you over other companies that may offer higher compensation, demo a better product, or have better traction.
• Fundraising from a blue chip lead investor and respected/famous angels can be a good hiring mechanism.
  • Don’t expect much attention from your investors.
  • Leverage their brand (and their faith in your company) as a positive signal to candidates.
• The best hires can take months of courting. A good CEO is always hiring.
• On average, expect a 4-week hiring process per identified candidate:
  • 1 week courting. Get them excited.
  • 2 weeks interviewing. Evaluate them for competence & cultural fit.
  • 1 week closing. Get them excited.
• Build a personal brand and a company brand. Make a reputation for something that people positively talk about.
  • Passes hosts biweekly poker nights when we’re hiring. We’ve sourced a number of candidates and potential business partners from these events.
  • Choose activities that are fun and more memorable than dinner, like poker or karaoke.
• Lean on employee networks
  • If you hire an IMO gold medalist, have her introduce her friends.
  • We’re heavy on Carnegie Mellon + MIT candidates because of our early hires.
  • Don’t settle when evaluating candidate competence.
  • Design robust technical and/or project interviews based on their job
  • Evaluate for grit/passion/ambition
    • Are they building side projects?
    • What are they teaching themselves?
    • Have they dedicated themselves to something that failed? Was it still worth it?