Long Strange Trip: CEO to CEO with Brian Halligan
00:08:52 · Luca Ferrari
[00:08:52] S0: Yeah. So we basically believe that if you have a strategy that works, or can work, that almost all that matters is the talent you, you deployed toward the execution of that strategy and the culture, meaning like the rules of the game, how people interact with with one another, what they choose to do and how. And all that, those are the areas we have obsessed over pretty much since the beginning. You're right. I mean, start with nothing. And so that's what founders or early team members need to do well, that's basically punching above their weight. I remember early on spending at least 50% of my time, probably more for at least the first two, three years on recruiting among other talent related things. I and a couple others managed to find the list of the best graduates or some in that at the time we hired pretty much only in Italy now we're international, but some of the best Italian universities, we managed to find the lists of graduates and we tracked them down. I remember calling hundreds of them, probably harassing a few until they accepted to join us. And later, later, we built a pretty substantial talent team these days, have scientists, researchers, and we treat the selection of talent within our pipeline, probably not in similarly to how a quantitative trader would picking stocks. We look for all signals and then test signals against future performance to determine whether they're predictive or what combinations of signals are and keep iterating. It's a very rigorous and sophisticated system. At this point, we assess hundreds of signals in each in each application. So that you know, that helps you select potentially dramatically better given the same level of employer brand and ability to attract applications. And, you know, half the game is also attracting very good applications. Because if you if only geniuses, you know, apply it, and it's easier to, to build a good team.
00:10:58 · Luca Ferrari
And so there, I think we have a kind of a kind of an unfair advantage with our model, we found that a lot of engineers, designers, product managers absolutely love the idea of being able to work at a company where they can say spend nine months helping rebuild, say Vimeo's video infrastructure, and then six months rethinking advertising on AOL and then maybe a year building a platform technology, all with the same employer, broadly speaking with the same colleagues with the same culture, the track record they're building does not get diluted. As you when you change employer, obviously, a lot of that is lost, you have to reestablish credibility. And so that's very powerful point of attraction. And the other one is because we've been so systematic and uncompromising on having extremely high levels of talent density, pretty much from the beginning, of course, compatibly with our appeal to candidates at each point in time. Once that's in place, it's a powerful means of retaining excellent performance and attractive more of those because, you know, when people find that they love their colleagues, they never leave. Have essentially zero regrettable churn. We had point 6% regrettable churn of Spooners to members of our core team last year. And, you know, trust me, they get, there are poaching attempts from big tech all the time. So it's not for a lack of opportunities. And equally, these people will tell their, you know, former fellow students or whatever, Oh, it's amazing here, you should apply. So it makes your life easier, but it's very difficult to get to a very high level of talent density late in a company's history. You need to establish it from the beginning and just be completely obsessed with it and never giving up even when it means hiring way fewer people than you'd like to for prolonged periods of time parting ways with people who are being helpful just because you think you have better people. It's quite painful both because you know we are nobody is a sociopath here and as in most companies you don't like to to to to to to tell someone who's a perfectly good contributor that they should look for for another job. And also you're losing on good capacity in the short term to look for amazing capacity down the line. Those are difficult things to do. If you do them consistently, I think you develop a very powerful flywheel.
00:13:33 · Brian Halligan
[00:13:33] S1: It sounds like kind of a data science type team that is looking at all the inbound and is looking for signals. What are the signals that are most strongly correlated with success? The R squared is high. And then once you get beyond that, I assume there's a human interview. What are the questions that tease out what you're looking for that maybe aren't obvious?
00:13:54 · Luca Ferrari
[00:13:54] S0: Yeah, so we are fairly, fairly secretive about the details. I guess you get a similar answer from my quantitative trader. Again, that was my my metaphor earlier. But now I can share some some of this. There are some obvious signals in people's applications, you know, the their GPA, for example, it's not super strong, but it's helpful. The university graduated from, I think people will be surprised by how poorly graduating from Harvard or Stanford predicts performance. Like people think, Oh, you must be a genius. No, actually, yeah, you're probably a little bit stronger people graduating in other universities, but not so much stronger. Often we find that people tend to lose some of that potential raw talent edge by being a bit more entitled and thinking too highly of themselves. But it's still predictive. I mean, all else being equal, someone from Harvard will do a little bit better than someone from a less well known university. So some of those are probably somewhat obvious. There are many that are not. One I can share is relatively predictable. I was surprised when this came up. We found that if someone is politically active as a teenager, but ceases to be in their early 20s, that tends to correlate highly with someone's drive and entrepreneurial mindset. And the way we have explained it is, at least at Bending Spoons are highly valued qualities, the way we've explained it is that if you are 17 years old and school is not enough, you feel like you need to do more, shows agency, that shows productivity, that shows a level of not settling for the status quo that's generally healthy. But if you still do that when you're 25, 26, 30, it means it's probably a life mission, which is perfectly fine, but likely incompatible with your job, your career being, you know, a top priority. Your job is probably probably takes a back seat to your political aspirations.
00:16:06 · Brian Halligan
[00:16:06] S1: How do you find that signal? Do you ask them that question in an interview? Do you look through their old Instagram? Like how does that signal even arise in the process?
00:16:15 · Luca Ferrari
[00:16:15] S0: Thankfully, people think they need to include leadership experiences in their CVs because that gets you a job at a consulting company or something. So most people we find would include something significant in that area if they did it. But in any case, we do ask later in the process, whether it's an interview or written assessments, questions that would very clearly lend themselves to people sharing this sort of thing. With this, I'll get to the other thing you can do, which is you shouldn't be passive in accepting whatever signals are present in someone's application. You can be very proactive. We find that a lot of the best signals in our case come from the practical tests, the things we do or ask candidates to go through. And so you can elicit signals that way. Interviews are of all the typical elements in a selection process, at least in our experience, they are the worst predictors, but you can make them decent if you give interviewer interviewers extremely precise questions they need to ask, and you tell them to ask them exactly in the same way. And then you you make sure that the answers are recorded and assessed separately. So you what's completely useless pretty much is having someone talk to someone else with essentially no guidelines or just a high level agenda. And then tell you I like the guy I didn't like the guy that noise pretty much. So if you structure a lot and you try to separate the actual conducting of the interview from the evaluation of the responses, then it can be somewhat predictive.