The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:33:26 · Luca Ferrari
[00:33:26] S0: I think I'm very self critical to to a point where maybe it's unhealthy. I wouldn't recommend that necessarily to others. I don't think it's part of my character to give up. Now, at least in the situations I've been so far because there's always something harder and maybe there is a point where you break down. But I don't think I can claim to have to have gone through, you know, the truly difficult things in life that some people have to go through. My my challenges have been business related, which I find are, frankly, luxury problems to have. You know, I've been in the situation where I was complaining to particularly to other people in similar roles. But in hindsight, I think it's irritating that people like you and I complain about these sort of things because we really are privileged. I mean, come on. We we were born and raised in somewhat affluent countries and and clearly had a chance to try our hand at things that are certainly not not terrible. I mean, it's a privilege to be able to do what... At least what I do. I I think you probably feel the same way about what you do. So maybe we should just probably just take a step back and have a laugh, you know, the real problems in life are not these ones.
00:34:26 · Harry Stebbings, Luca Ferrari
[00:34:26] S1: Absolutely not. The life of a venture capitalist is brutal, Luca. We we are positively suppressed as a as a class of people. No. I I completely I completely agree with you. My grandfather, I found out, earned like £7 an hour shoveling gravel on a golf course at 82. And I was like, you know what? A little bit of perspective is important. I I wanna touch on... [00:34:48] S0: And and there's worse than that. I mean, that's the thing. That's not even as as bad [00:34:52] S1: as it gets, you know, so... I I do wanna touch on the people around you because so many people told me about the talent density that you built. And you mentioned before to me about talent and motivation density. It's quite a specific use of words, actually. It's not like, oh, we have great people. What did you mean by talent and motivation density?
00:34:52 · Harry Stebbings, Luca Ferrari
[00:34:52] S1: as it gets, you know, so... I I do wanna touch on the people around you because so many people told me about the talent density that you built. And you mentioned before to me about talent and motivation density. It's quite a specific use of words, actually. It's not like, oh, we have great people. What did you mean by talent and motivation density? [00:35:11] S0: Yeah. I I think so. We we built a framework internally to describe exactly these sort things. But the short of it is that three important components are talent, which is how good you can be. Then there is experience, which is cumulative exposure to relevant experiences, which will help you, based on your talent, unlock your potential. And then there's motivation, which is kind of a multiplier factor going from zero, let's say, to one, where based on how much you care to be great in that particular context, you'll do better or worse within the range determined by your talent and and experience. It's a trade off. When you hire people, you can say, I wanna hire for experience, talent, motivation. You can, but you're gonna do worse at any one of these than if you focus on just one or two. In our case, we chose to focus on talent and motivation. Almost entirely disregarding experience. Experience, we can provide Talent, we can't. Motivation, we can we can try to create the conditions for it, but you don't change what what someone wants and cares about. And and this is the way in the long term we have the best team we can.
00:35:11 · Luca Ferrari, Harry Stebbings
[00:35:11] S0: Yeah. I I think so. We we built a framework internally to describe exactly these sort things. But the short of it is that three important components are talent, which is how good you can be. Then there is experience, which is cumulative exposure to relevant experiences, which will help you, based on your talent, unlock your potential. And then there's motivation, which is kind of a multiplier factor going from zero, let's say, to one, where based on how much you care to be great in that particular context, you'll do better or worse within the range determined by your talent and and experience. It's a trade off. When you hire people, you can say, I wanna hire for experience, talent, motivation. You can, but you're gonna do worse at any one of these than if you focus on just one or two. In our case, we chose to focus on talent and motivation. Almost entirely disregarding experience. Experience, we can provide Talent, we can't. Motivation, we can we can try to create the conditions for it, but you don't change what what someone wants and cares about. And and this is the way in the long term we have the best team we can. [00:36:10] S1: Let's just unpack this. Like, talent, what does that mean, and how do you test for it? Is it raw skills, and how do you test
00:36:10 · Harry Stebbings, Luca Ferrari
[00:36:10] S1: Let's just unpack this. Like, talent, what does that mean, and how do you test for it? Is it raw skills, and how do you test [00:36:16] S0: for them? We try to test people as much as possible, practically and measurably. We have come to be wary of interviews, at least the more traditional and structured interview where interviewer will just ask a bunch of questions and then tell you how they feel about the candidate. We felt... We we discovered that is not a good predictor. And so we try to have practical tests or at least tests to simulate, or require the underlying abilities that the actual job, will require. And we try to go more toward general problem solving abilities than as I said before, acquired knowledge. So we're fine to have someone who doesn't know the things as yet, as long as they show us that they have the work ethic, the ability to learn, the right teamwork and mentality to then be great at our company. [00:37:02] S1: So that's talent. Motivation? How do you test motivation?
00:37:02 · Harry Stebbings, Luca Ferrari
[00:37:02] S1: So that's talent. Motivation? How do you test motivation? [00:37:06] S0: You need to try to understand what triggers the person in a good way. What are the factors which when present drive the person to really give their best. With recruiting, like, the goal is not to be perfect. It's just to be less bad. And so, it's not that we are great and all of a sudden can predict what gets people to to be as motivated as possible. We just aim to be a little bit better than most companies and a little bit better than we were yesterday. And I think we have improved substantially, but it's still wildly inaccurate, our prediction, but better. That's worth something. What have been the biggest mistakes you've made in talent identification and hiring? Too many to count, but I would say, broadly speaking, the biggest one was to assign too much weight to experience. In that trade off I mentioned earlier, ultimately, if you assign a lot of value to experience, you get someone who's more valuable immediately or early on. But then because you've you've had to trade talent and motivation potential off for more experience, you'll have a lower level of contribution in the long run. And we saw that quite clearly that I think we did that a little bit too much. [00:38:12] S1: In terms of density, how important is it for you that people are together, There's a physical colocation.