The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
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.
00:33:48 · Alan Chang, Harry Stebbings
[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. [00:33:55] S2: In in terms of internal promotion? Yes. Anyone salary, where it's like, hey, listen, I'm being paid x at my current job. I need that to make this worth my time. [00:34:05] S0: Actually, for us, their expectations don't really matter. It's about their performance. Either interview performance or performance in the company. And we will pay you top of market if you perform very well. [00:34:16] S2: What non obvious behavior do you not tolerate even if they're really high performers? [00:34:21] S0: So I remember back was when I was at Revolut. I was explaining to Nick... I I I actually forgot what what what it was, but, you know, I failed at something. And I was ex... Trying to explain to him why I failed. Then Nick sent me this article. Alright. It was about jobs, explaining the difference between a a janitor and a VP. So the story goes, if the janitor fails to collect the trash because the locks in the office was changed, jobs will say, Okay, that's irritating, but that's acceptable because you're the janitor. Somewhere between a janitor and a VP, reasons stop mattering. So every single time when one of the leaders at Fuse explains to me why they failed and they couldn't couldn't hit a certain goal, I sent them this article.
00:34:21 · Alan Chang, Harry Stebbings
[00:34:21] S0: So I remember back was when I was at Revolut. I was explaining to Nick... I I I actually forgot what what what it was, but, you know, I failed at something. And I was ex... Trying to explain to him why I failed. Then Nick sent me this article. Alright. It was about jobs, explaining the difference between a a janitor and a VP. So the story goes, if the janitor fails to collect the trash because the locks in the office was changed, jobs will say, Okay, that's irritating, but that's acceptable because you're the janitor. Somewhere between a janitor and a VP, reasons stop mattering. So every single time when one of the leaders at Fuse explains to me why they failed and they couldn't couldn't hit a certain goal, I sent them this article. [00:35:01] S2: So can you just help me understand what the takeaway from that is? It's like, you know what? It doesn't fucking matter why you failed. The point is you failed in the expansion. Correct. What do you take from that? Like, excuses don't matter? [00:35:12] S0: Excuses don't matter. If you're a leader of an area in the company, excuses don't matter. If you succeed, you get all the praise. If you fail, you get all the blame. And it does not matter why you failed. [00:35:22] S2: Do worry that you're ever too harsh on people? I get told I am. I don't care about your excuses. I care about outcomes. And people say that I'm too harsh. I'm too direct. Do you worry? [00:35:32] S0: I don't care what they think.