The key to success is People. Great people make great companies. It takes awesome people to conceive, execute and evolve great ideas. A stellar team should be the top priority in any company.
VC’s don’t back ideas - they back people
Most of today’s successful companies are not what they were originally conceived to be. After many of cycles of validated learning and countless pivots, they became famous for doing something that is a distant derivative of their founders’ initial ideas. Facebook started as Facemash (equivalent of HotOrNot); Twitter started as a podcasting platform; Instagram was originally a geolocation check-in game (like Foursquare); YouTube started as a video dating site! In all these companies it was the skill of management to pivot and evolve that ultimately led to success.
This is why it is important for tech investors to look in the eyes of a company’s founders and management, and to see in them someone who can not only conceive a great idea, but who can nurture and evolve it to success. Giving birth to a child is one thing, being a great parent is something entirely different.
To hire a truly quality team is a constant struggle, which is made more salient in the paradigm of a startup - where each individual position accounts for a large percentage of overall productivity and workforce (if just one team member is weak in a team of three – that team is 33% weak!)
The recruitment process
You post on job sites, tap into your network, perhaps you even engage recruiters (oh you a rich, well-funded, start-up huh?). You are flooded with hundreds of applicants - many of whom have not even read the job description and aren’t qualified, they just applied because they are trigger-happy - clicking on all the “apply” buttons on the job site.
You sort through these applications and make a new, smaller, pile of CV’s of candidates who look good on paper. You follow up with emails with clarifications and simple questions to dig a little deeper. Provided they don’t completely screw up their email response by insulting your beloved pet goldfish or having "Heil Hitler" as their email signature - they get the interview.
The interview… Here is where things get tricky. I’m a nice guy and my approach to interviews has always been to just get to know a candidate on a personal level: Have a coffee, speak to them about themselves as a person, their life, past work experience and a few questions about the role and their fit for it. What I found is that every single candidate, almost without exception, was perfectly nice, all were charming, positive and polite:
“Yes I’m hard working, diligent and never miss a deadline.”
“My biggest weakness is that I am a perfectionist who is just obsessed with excellence in a timely manner! Oh, and I hate taking holidays!”
And then you are faced with a dilemma: you have 10 perfectly nice candidates. So who do you hire?
No more Mr. Nice guy
The problem with the “nice guy” method is that you aren’t able to differentiate the candidate pool enough to unearth the truly exceptional candidates.
When I was in high school, the highest grade at A-level was an A. In recent years so many students were getting this top grade that the government has had to introduce a higher A* grade to differentiate the truly bright kids. This was done for a simple reason: Employers and Universities need to know which candidates are good and which candidates are exceptional. If all that exists is the A grade, and the good and exceptional are all grouped into this one segment, then the two groups become indistinguishable from each other.
“Nice” job interviews are analogous to the A grade: given a good screening process at the CV stage, most non-psycho candidates will just about “pass”. In a binary world of “hire/don’t hire” just smiling at a kind interviewer and answering the simple “nice” questions politely gets you the A grade.
The skill of the interviewer is to dig deeper. The employer is trying to identify the diamonds - the A* candidates. And the only way to let these diamonds shine is to ask tougher questions. The interviewer must challenge candidates, raise the bar and the pressure: the weaker candidates will crumble, but the truly stellar will thrive and pass with flying colours. They just need the chance to shine, to differentiate themselves from the pack. Tough interviews is the thing that helps segment the candidate pool and differentiate the good from the great.
A**holes in Investment Banking
When I applied for investment banking roles in my past life in finance, I had to endure some very tough interviews – maths tests, hardball tactics, team exercises, brain teasers (“Please tell me the UK annual market size for men’s neck-ties in pounds sterling?” No Google. Anyone?) and sometimes (often) the interviewer was an arrogant a**hole with attitude… I never got why they had to make interviews such a tough process, why not just be nice? It is only now, many years later, when I have my own company and have to do my own recruitment, that I finally understand that interviews are meant to be “tough”. Because the purpose of an interview is to unearth the strongest candidate, and if the interview is “easy” – then it’s not serving its purpose. That’s just “having a coffee”.
If you want the A* candidates, you have to be an A**hole - (the A* is even in the word!)
The wise words of Erlich Bachmann (If you don't watch Silicon Valley, and you are reading this blog, then I suggest you watch it):
F*ck you guys! Just kidding :)