Lenny's Podcast: Product | Career | Growth
00:20:47 · Keith Rabois
[00:20:47] S0: I talked to my YC lecturer in 2014 about how to operate. They can be as simple as the now somewhat famous in technology smoothie test, which is, we used to have engineers work pretty hard at Square and pretty late. And I always wanted them to have food so they wouldn't be famished, they wouldn't be distracted. And I didn't really want them to eat junk food because I actually think junk food's bad for you, bad for your brain, et cetera. So settled on delivery and really wanted to provide a 9:00 PM cold smoothies. And we had, at that time, a pretty substantial team at Square, office team, EAs, this was not a lean, mean organization. And so I tried through the office team EAs and nothing ... We never got healthy, delicious, and cold smoothies delivered at 9:00 PM. Just kept that one. I was getting frustrating because if the smoothies aren't cold, then no one's going to eat them. If they don't arrive at 9:00, then no one can really bank on their refreshments. Everything went wrong. And then I had this intern named Taylor Francis, and I was explaining just my frustration. It was his second day at work. And he's like, "I'll solve it." And I was like, "Okay, kid, good luck with that." I was like, "Sure, keep trying." Anyway, day goes by, 9 o'clock arrives. And lo and behold, smoothies show up at 9:00 PM, delivered on the standing desk table where the engineers would congregate. I sample them, they're cold, they taste great. And I'm like, "Oh my God, I found a barrel." And I later gave him almost everything to do.
00:22:37 · Lenny Rachitsky
[00:22:37] S1: I want to go back to actually the first question. You shared some amazing advice for how to identify great talent, but I'm still curious, when you find that barrel, for example, when everyone's throwing money at them, there's all these amazing teams to join. What are some things that companies do to attract and convince them to join their team?
00:22:56 · Keith Rabois
[00:22:56] S0: The standard of stuff is still true. Mission, selling the vision to mission is indispensable. Most people who have proven talent anyway, at least in the current world, are going to attract offers from multiple opportunities. And so you've got to convince them that your opportunity is very special. I think one way to do that that's a little bit more nuanced is convince them that their particular skill overlaps with the critical blockers to the current company, meaning they're betting on themselves. So for example, if they are superb at, let's say marketing, if the biggest blocker of the company in the company's current success is not technology, not the product, but we believe it's marketing, it's really easy to go to a world-class marketing person and say, "Not only is this great company building something really cool and interesting that you'll be proud of, but your particular ability is very unique and differentiated and you can solve this." This is actually how I wound up at Square. Back in 2010, I was actually, I'd just been acquihired into Google and was planning on being a VC actually next after I was investing whenever Google is going to compensate us. And then the investors in Square called me up and they said, "Hey, we've been looking for almost a year now for someone who knows something about financial services yet is still an entrepreneurial." And they're like, "Hey, there's only three of these." At the time, 2010, it was like, "There's only really two or three of you in the world, so would you be interested?" And I said, "Well, maybe." But that was the argument to me that made me leave Google early after two weeks and infuriate everybody. And bypass Venture for another three years, which had been my plan, was because they made the argument that, hey, I was one of three people in the world that could actually do this job.
00:24:51 · Lenny Rachitsky, Keith Rabois
[00:24:51] S1: So look, there's a, I don't know if it's ego, but it's also just impact. [00:24:55] S0: Yep. Well, exactly. Impact, you have talent, you want to use them and you want to feel that you're challenged every day and that what you're doing really, really matters. So I think that can be extremely helpful. My more important arc in this is I think you have to build a company on undiscovered talent. I don't think you really want to compete for the people that everybody else wants. And I learned this at PayPal. Peter taught me this literally the first week of my job at PayPal, that the way to build a company, we were jogging around the Stanford campuses, you've got to find these undiscovered talent. That's the only way to scale an organization against these large encumbers with infinite money, et cetera. And I've been on that crusade for 25 years. For those who are interested, you can link to it. I gave a speech at Ramp, how to hire, the talks in detail. I also recommend Eric, CEO of Ramp's speech, which is fairly similar. Both videos are online. [00:25:49] S1: That's such interesting advice and it makes so much sense. You're not going to be able to afford the people that have done the thing at top companies. And also they're just probably not the people to join at early start, right?
00:25:49 · Lenny Rachitsky, Keith Rabois
[00:25:49] S1: That's such interesting advice and it makes so much sense. You're not going to be able to afford the people that have done the thing at top companies. And also they're just probably not the people to join at early start, right? [00:25:58] S0: Well, they're also not maybe the people you want, so there's adverse election, but it's like a salary cap. Most sports these days have salary caps. And when you're a startup, not only do you have a salary cap, you probably have one 10th the salary cap of the people you're competing with. So you've got to figure out how to leverage less assets to more success. [00:26:19] S1: What's just one tip when you're looking for undiscovered talent that's a sign of, okay, this person is really special? I know you have a lot to talk about here, but just what's one tip?
00:26:19 · Lenny Rachitsky, Keith Rabois
[00:26:19] S1: What's just one tip when you're looking for undiscovered talent that's a sign of, okay, this person is really special? I know you have a lot to talk about here, but just what's one tip? [00:26:27] S0: I think it's basically isolating why other people aren't going to process them correctly. Most recruiting at large organizations becomes a homogenous function. And so if you understand why this person is going to get thrown into this black box thing and not get processed accurately, it's pretty easy. So I always think about, let's say this person was interviewing at Meta or Google or Block these days or Coinbase, what are they going to miss and then why? And then that leads to, oh, perfect. So sometimes it's just lack of information. Sometimes it's controversial to say this, but one of the reasons why the net impact of my higher undiscovered talent is you wind up skewing younger. It's not because you need young people, it's that younger people have, by definition, less data. It's like we use credit scoring, FICA scores. It's the same thing for employment. By the time you're over 30-some odd things, there's so many data points about you that this black box machine is usually going to process you like many other people. If there's no data points, it's very hard for a black box machine that does homogenous evaluation to evaluate you. So there is alpha, so to speak, by definition for people who have no data points. [00:27:47] S1: It's interesting how this is the same skill as being an investor, picking startups to invest in. [00:27:51] S0: Yeah, absolutely.