Deciding who to hire

“The people you don’t hire matter more than people you do hire.”

Peter ThielFounders Fund

Types of selection hits and misses

	Hired	Not hired
Good candidate	True positive	False negative
Bad candidate	False positive	True negative

If all your hires work out, it might indicate you’re not taking enough risks.

Hire for strengths, not lack of weaknesses

Base hiring decisions on the maximum level of skill that the candidate shows (across the skill areas you care about), not the average level or minimum level.

Are they exceptional at the important things we want done? Better to have that along with some weaknesses than to hire the “least offensive” candidate.

What’s the advantage of hiring like this?

• If they’re amazing at something, they can probably be amazing at other things.
• You can hire complementary skills: you’re assembling a team, not just a group of individuals.

“If we were in the business of buying cars, we’d buy trucks and Teslas, never a Prius.”

Henry WardCarta

Common mistakes when deciding

• Hiring “good enough”: You’re always better off not making a desperation hire.
• Hiring the skilled mercenary: Startups are built by missionaries.
• Over-valuing experience: Hunger and potential trump experience.
• Believing they’ll change trajectory: Past performance is indicative of future performance.
• Hiring the best interviewer: You want doers, not tellers.
• Hiring chronically negative people: They spread a self-fulfilling prophecy.
• Hiring people who suck at life: The type of people who have chronic “life problems” tend to make their problems your problems.

The allure of “good enough”

The most pernicious mistake is to hire someone who is “good enough”. They’re not bad, but they’re not great. At least when you make an obviously bad hire you’ll end up firing them eventually, but “good enough” people tend to stick around.

It may not seem that way at the time, but you’re always better off not making a desperation hire. Lowering the hiring bar leads to chaos, slowdown and doubt. For leadership roles it might also mean settling on the 10 mediocre hires they’ll end up making.

So why do founders settle for “good enough” candidates?

1. You get tired and desperation takes over. It’s remarkably easy to switch from “we need someone excellent” to “we just need someone good enough”.
2. You know they’re not great, but your team “needs” it. You’re worried the team will break if you don’t make the everything-is-burning-without-this-person hire right now.
3. When the team is super invested in a candidate. After grinding for weeks, they tell you they’ve found someone amazing. When you finally meet this candidate you realise they’re not an A player, but you don’t have the heart to send your team back to the drawing board.

Passing over a 10Xer

The worst hiring mistake is passing over a 10Xer. It’s also the hardest to learn from, because you usually don’t realise when it’s happened.

Both Facebook and Twitter rejected Brian Acton in 2009. Years later, Facebook ended up spending $19B to correct that mistake by acquiring WhatsApp.

Good risks to take

When you’re building a team, you’ll have to be willing to take some calculated risks to land the best talent. Here are some examples of good risks:

• Super smart, but no industry experience. Don’t over-index on industry. A players will get up to speed in 30–90 days.
• Non-traditional education. Who cares if they didn’t finish high school or dropped out of college? Hunger is worth more than a diploma.
• This is their big break, and they know it. When someone’s got massive potential and they’re oozing drive, don’t be afraid to take a chance.
• Someone great tells you they’re great. The best folks you know, know the gems. Even if you can’t quite see it yourself at first blush.
• They don’t have a perfect background but show up super prepared. They look bad on paper but completely crush it in the hiring process.

How to decide whether to make a hire or not

1. Agree upfront who is going to decide. Before interviewing anyone, decide who is going to be part of the decision and what role they’ll play. Will there be a single decision maker or will it be consensus? Does the team get a veto?
2. Write up notes after each interview. Interviewers should write notes after every interview, including a clear YES/NO on whether to proceed with the candidate. Don’t discuss the interview before everyone has completed their notes.
3. Debrief and decide. The hiring team gets together and discusses the feedback from the interview process. A good debrief involves strong opinions, healthy debate, identifying risks and discussing strengths. At the end, the decision maker(s) decide.

Who should decide?

Broadly speaking there are two schools of thought:

You can augment individual accountability by giving the team a founder’s veto. That way you don’t need them to actively agree with a hiring decision, but they can block a hire they feel strongly about. When done well, this approach gives your team a deep sense of ownership in the company.

Forming a judgement

We can think of fit along three pillars:

• Can they do the job?
• Do they want to do the job?
• Do we want them to do the job with us?

A lack in any pillar leads to a mismatch and you shouldn’t make those hires. Said another way: when there’s any doubt, there’s no doubt.

What about taking bets on candidates? You bet on a candidate because you see massive potential despite their imperfections. Doubts are red flags that linger in your mind. Bets are driven by conviction, doubts are driven by caution.

Can they do the job?

This is where all the work creating a job scorecard and a robust hiring process pays off.

Go through each competency and evaluate the candidate. Our worst biases occur during the interview process when trying to make a global decision about candidates. There’s less bias when considering a single competency.

After the competencies, tackle the outcomes and critical incidents. This is when reality hits: do you genuinely believe they can deliver? You’ll also often uncover holes in your scorecard you hadn’t seen before when you do this.

Do they want to do the job?

This pillar is about determining if joining your startup is a good decision for them, considering everything you know about them. It’s as important for you to believe this as it is for them, because you still need to do a lot of selling.

You should consider things like:

• Are they genuinely excited about the role?
• Do their friends and family back the move?
• Does this job fit their career path?
• Can they commit the time and energy needed?
• Does it make financial sense for them?

Do we want them to do the job with us?

This is usually the toughest call. Jeff Bezos’s 1998 letter to Amazon shareholders offers three key questions to start with:

1. Will you admire this person? If you think about the people you’ve admired in your life, they are probably people you’ve been able to learn from or take an example from. Try hard to work only with people you admire.
2. Will this person raise the average level of effectiveness of the group they’re entering? We want to fight entropy. The bar has to continuously go up. In 5 years from now, each of us should look around and say, “The standards are so high now—boy, I’m glad I got in when I did!”
3. Along what dimension might this person be a superstar? Many people have unique skills, interests, and perspectives that enrich the work environment for all of us. It’s often something that’s not even related to their jobs.

When should I trust my gut?

If you have sustained doubt, there’s no doubt. At the same time, if you’re thoroughly excited about someone (a hire, an investment), chances are someone else is too, so lock it down as soon as you’re close to conviction, lest you miss your opportunity.

Should you give feedback to rejected candidates?

Companies rarely give feedback after interviews. They typically reject candidates with a generic message assuring them that it was a pleasure to talk with them but they’re not a fit just now. While this sucks for candidates, there are good reasons holding companies back from giving honest feedback:

• Giving feedback is an enormous amount of work: Your team has a lot of other demands on their time and doesn’t want to spend time writing feedback.
• There’s legal risk if you say the wrong thing: Even if your process isn’t biased, if you send feedback that creates the perception you’re biased, that’s enough for a costly lawsuit.
• Candidates often don’t appreciate the feedback: No one enjoys getting rejected. Getting rejected in more detail is not significantly better.

Feedback hurts more than it helps unless you go to a lot of effort.