Lenny's Podcast: Product | Career | Growth
00:06:45 · Keith Rabois
So I got feedback from David Sacks, who was the COO at the time that I wasn't going to get promoted again until I could demonstrate leverage, leadership leverage, which he had an equation for of one plus one has to equal three or more. So for every incremental person you hire, you have to show that you produce disproportionate returns, non-linear returns. And because I wasn't hiring that well, I wasn't really succeeding at that leverage. So when I went around, took the feedback into account, I said, "Okay, I really want to get promoted. What do I do?" So I found people within the organization that I felt had talent that were not being leveraged to the highest potential inhibition, and I recruited them to my team. And that was very successful. And then I did get promoted actually fairly quickly because these people actually left to speed. They were able to run really fast and we produced a lot of really important results for the company. The lesson though that I took away was, well, that's great because what it showed to me is I actually could identify talent. I just couldn't identify strangers with talent. So people that were in the building that I have lunch with or dinner with or go for a runaround the PayPal campus with, I was accurate at diagnosing their abilities. I just couldn't do it in a 20-minute, 30-minute, 45-minute interview. So the first thing is just double down on people I know. That doesn't scale perfectly, but learn to be excellent at, if I had context, assessing people's abilities, superpowers and weaknesses. Then over the next X years, tried to identify a different technique for identifying, assessing random people. Because ultimately if you're going to build an organization, ultimately if you're going to be a VC, you can't just invest in people that you already know. So that took some years and required some training. Anyway, I think you can teach some of this to a founder, but one advantage a founder has that's going to thrive is if a founder shows the ability early in his or her career to assess talent ruthlessly and accurately, here's how you can go very far with no other abilities whatsoever. Hiring is like a muscle. You need to exercise it. You need to try, learn what worked, what didn't, what could you have known, what did you miss, why, and riff on that and try to get better at it. There are tactics you can learn.
00:09:57 · Keith Rabois, Lenny Rachitsky
I think the tactics work pretty well within the middle of a bell curve distribution of moving yourself 10, 20 degrees within that bell curve. I don't think the tactics can really teach you how to identify, call it top 10 basis points, top 50 basis points of talent. There you have to deviate from the norm. And I think that's actually true of most lessons in life. If you're going to be extraordinary in any skill, you can't follow a playbook. Otherwise, by definition, lots of other people would be the top 10 basis points, but you can get a lot better by learning techniques. So for example, let's share a couple. One thing I think you can learn to do is be excellent at references. It doesn't work for hiring people right out of college or something because the reference context is going to be a little off, but I think without getting better at interviewing and assessing, if you just learn to extract the right information from ruthless referencing. So for example, ruthless referencing to me means Tony at DoorDash does 20 references on every single senior hire, 20. [00:11:24] S1: Wow.
00:11:25 · Keith Rabois
[00:11:25] S0: I bet you he's pretty good and that he's been pretty accurate too. So I think you can learn that. That's a skill that's teachable, that being absolutely incredibly dedicated to your craft, you can just get better at. Back in the day, there's an investor at Greylock who's on my board at LinkedIn, David Sze, very successful investor, notable for both LinkedIn and Facebook investments. He used to teach at Greylock, you couldn't stop referencing a founder until you hit a negative reference. So you would know you had exhausted the reference when you finally hit a negative reference. And so I think there are tactics there in muscle building. How do you get the right information from the right people? How do you frame the questions, et cetera? That will lead you in the right direction. Now, you have to be careful, let's say, I'll give you an example where this can go wrong. I've been a longtime investor from the seed round of a company called Faire, founded by two of my colleagues at Square, Max Rhodes and Jeff Kolovson worked for me at Square and then the two other co-founders also worked at Square. When people were reference checking Max, often most VCs asked the wrong question, which was, "Was Max a good employee?" The answer to that is very mixed. And so some venture capitalists, including some very good ones, were nervous about investing in Faire. If they frame the question slightly differently, which is, "Is Max capable of being a world-class entrepreneur?" the answer was yes. So again, it's a tactic you have to understand, what exactly am I trying to extract? Same person, wrong question, wrong result. And many people passed on Faire and they regret it. And these are actually quite talented investors. They just didn't frame the question correctly when they were calling someone like Jack Dorsey up for the reference.
00:13:17 · Lenny Rachitsky, Keith Rabois
[00:13:17] S1: Any other questions you find really helpful in extracting the right information? [00:13:20] S0: When I interview candidates for senior people in leadership positions, I always ask them, look at whatever company they're at and say, "If you were CEO, what would you have done differently?" And you get a feel for their strategic mindset of can they drive value creation? Because almost by definition, they've come from a company that's had some traction success, so can they edit? So in your case, I would've asked you, "If you were CEO of Airbnb, what would you have done differently?" And you learn a lot from that question. On references specifically, I think a general arc that's pretty good is asking the person, what would lead to this person being most successful? And if something were not to work out, what would be the primary root cause that you can identify if something going wrong? I think generally probing on those two arcs leads to a lot of insight. [00:14:10] S1: And that first question is for the candidate or is that in the reference? [00:14:14] S0: Yeah, for the candidate. That's for the candidate specifically. [00:14:16] S1: Got it.
00:14:16 · Lenny Rachitsky, Keith Rabois
[00:14:16] S1: Got it. [00:14:16] S0: Because I don't want them to criticize Airbnb. I don't think that's that productive, but you can tell how much of the current business model have they absorbed, how much do they understand trade-offs. And then can they create an unfair advantage? Because they have insights into afterburners. And then I have a follow-up question, which is usually gold, which is, let's say I asked you this question about Airbnb and you give me this great answer. I'm like, "Well, why weren't you able to persuade Brian to do it?" [00:14:43] S1: So you made this interesting point that there's tactics that can help you get better at finding and identifying talent. A lot of this is just the feedback loop of doing it a bunch, it sounds like. I find the feedback loop is so, it's hard to actually ... Most people interview, hire, and then don't really learn much from how it ends up going. There's this gut thing that happens, but they're not really thinking about it. Do you have any advice for just how to make the most out of the lesson of seeing how something went? [00:15:09] S0: So I've read some research on the topic. And if you ask yourself 30 days after any hire, "Would you make the same decision?" That 30-day loop is pretty useful and it basically it's as accurate as measuring in a year or two years out. So you get a pretty tight feedback loop and you can ask the entire hiring team. So I think that is just a technique that every company should use.
00:15:09 · Keith Rabois, Lenny Rachitsky
[00:15:09] S0: So I've read some research on the topic. And if you ask yourself 30 days after any hire, "Would you make the same decision?" That 30-day loop is pretty useful and it basically it's as accurate as measuring in a year or two years out. So you get a pretty tight feedback loop and you can ask the entire hiring team. So I think that is just a technique that every company should use. [00:15:32] S1: I want to talk about this framework that you have, barrels and ammunition, because this is really mind-expanding and helping people understand who to even hire.