The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:28:56 · Alan Chang, Harry Stebbings
[00:28:56] S0: Yeah. I think first define the skill sets you you need. Right? So for example, for a software engineer, it could be coding skills, system design, problem solving, and as well as culture fit. So we basically find, okay, who is the best coder in the company? Who is the best assistant design? And then we assign those people to assess those skills individually. And then at the end of the process, they kinda gets a grade, right, for every single step. If they're above a certain threshold, then we offer. And that's also how we decide on how much we offer, right? So as a company, we don't actually use any comp bands. We simply look at the grades, and the higher the grade, the higher bid. Because ultimately, we're buying skills. [00:29:37] S2: Wow. So sorry. This is really interesting. So you will essentially say, okay. We are looking for a software engineer, and we need... I don't know. You choose your language, whatever we're going for. We need x language, and then you will rank rank them out of 10 on that one core core skill, and then you will assign them a salary as a result
00:29:37 · Harry Stebbings, Alan Chang
[00:29:37] S2: Wow. So sorry. This is really interesting. So you will essentially say, okay. We are looking for a software engineer, and we need... I don't know. You choose your language, whatever we're going for. We need x language, and then you will rank rank them out of 10 on that one core core skill, and then you will assign them a salary as a result [00:29:51] S0: of that. Actually, we don't even look at language. So although our whole back end is in Python, we will hire any back end developer even if they know nothing about Python. So it's a coding challenge in the language of their choice. It's system design, which is about how you architect the whole system. Problem solving, which is have they successfully solved the problem in the past, whatever that is, as well as culture fit. Right? And basically, if they get, let's say, straight As in every single one, we bid a very, very high offer. [00:30:19] S2: Okay. They are a seven out of 10. Should you just not hire them? Like, should it not be like an all in, we should give them the top whack or don't hire them at all? [00:30:29] S0: Yeah. So our our threshold is we will hire anything above a b. If you get straight b's, you'll still get an offer, but the offer will be much lower. And it could be below what you're making today. If you have a better offer elsewhere, like, good luck to you. [00:30:43] S2: Why would you do that? That feels like to me, like, in venture, we'd say that's like a nah deal. Like
00:30:43 · Harry Stebbings, Alan Chang
[00:30:43] S2: Why would you do that? That feels like to me, like, in venture, we'd say that's like a nah deal. Like [00:30:49] S0: Well, ultimately, like, be clear, b is still pretty good. A is, like, exceptional. So b is, like, this is where we've... Where the bar is. Right? And I would say, like, that you can still be a very solid performer if you're if you're a b. The difference between the straight b candidate and straight a candidate is simply compensation. And for straight a candidates, we have made offers that are, you know, much higher than what they make today. And even if we know that, that's okay because we wanna make sure we're a no brainer for you such that you will never think about leaving. [00:31:17] S2: How fast do you know when someone's not very good? [00:31:21] S0: A month, two months. [00:31:22] S2: Do you pull the cord that quick? [00:31:24] S0: We always give them a verbal warning first. [00:31:27] S2: When you give a pip, does it ever actually get better? [00:31:30] S0: Well, we don't really have formal pips. I don't believe in pips. [00:31:33] S2: Why? [00:31:34] S0: I think it's a waste of time. Like, just give them a warning because most people we hire, they're already self aware, right, of where they fall short. Even before we have the verbal warning, they kinda know they're falling short already. And, yeah, basically, the the formal warning is simply, look, we're giving you one more chance. If you don't improve, you're out. [00:31:51] S2: When you look back, when you made a mishire, what did you not see that you should have seen?
00:31:51 · Harry Stebbings, Alan Chang
[00:31:51] S2: When you look back, when you made a mishire, what did you not see that you should have seen? [00:31:57] S0: I used to overvalue IQ. Didn't put enough waiting on deeply caring. [00:32:03] S2: Can you explain that? [00:32:04] S0: Yeah. So what you wanna do is hire someone who really deeply cares about the company and about the mission, right? Someone who would stay up late to fix this bug or stay over the weekend to get this new feature shipped. Even if you hire someone very, very intelligent, but they just don't care, it's also not gonna work out. [00:32:24] S2: Is that not a game of luck in some ways? When you hire someone, you've never met them before. They're young. You have very little data on them. You don't actually know if they're gonna give it to you all and work through Christmas to get that deal done, to get that project off the line. Is it not a game of luck?
00:32:24 · Harry Stebbings, Alan Chang
[00:32:24] S2: Is that not a game of luck in some ways? When you hire someone, you've never met them before. They're young. You have very little data on them. You don't actually know if they're gonna give it to you all and work through Christmas to get that deal done, to get that project off the line. Is it not a game of luck? [00:32:41] S0: It's certainly not a game of luck. There are there are questions you can ask. So I usually pitch them pitch them other companies telling, okay. We wanna be a number one company, blah blah blah. Right? I I explain to them, look, you have many, many choices. Right? You're obviously very, very talented engineer. You have many choices. You can work at any start up you want, any tech company you want. Are you really sure this is what you wanna do? Right? It's gonna be very tough. There'll be tough times. You know, you have to constantly bounce between shipping new features, fixing bugs, improving scalability of the platform. Like, why do you wanna do this yourself? Like, why, are you sure you wanna do this? And if they say, oh, I'm not sure. Depends on the pay, blah blah blah, that means they're not up for it. That they lean in and they tell you, okay. I've been so bored at my corporate job. This is something I've been looking for, you know, for a very long time. Like, I'm in. Then you know. Right? Now, obviously, they can lie. Right? But most... I'll say, from my experience, they don't.
00:32:41 · Alan Chang, Harry Stebbings
[00:32:41] S0: It's certainly not a game of luck. There are there are questions you can ask. So I usually pitch them pitch them other companies telling, okay. We wanna be a number one company, blah blah blah. Right? I I explain to them, look, you have many, many choices. Right? You're obviously very, very talented engineer. You have many choices. You can work at any start up you want, any tech company you want. Are you really sure this is what you wanna do? Right? It's gonna be very tough. There'll be tough times. You know, you have to constantly bounce between shipping new features, fixing bugs, improving scalability of the platform. Like, why do you wanna do this yourself? Like, why, are you sure you wanna do this? And if they say, oh, I'm not sure. Depends on the pay, blah blah blah, that means they're not up for it. That they lean in and they tell you, okay. I've been so bored at my corporate job. This is something I've been looking for, you know, for a very long time. Like, I'm in. Then you know. Right? Now, obviously, they can lie. Right? But most... I'll say, from my experience, they don't. [00:33:34] S2: Any big red flags around people and their title expectations? I wanna come in, but I wanna be ahead of product. Is that okay? Or is it a, no, no, no, in and earn the right. Any lessons around title and how they feel about title? [00:33:48] S0: Yeah. We've never given a head of position to anyone we've hired. We've only given to it based based on performance.