Hiring lessons – Part 1

I’ve made a ton of mistakes in hiring people and wanted to write down the lessons I’ve learnt till now.  I’m not sure how many parts this post would have, here’s the first one anyway.

Speed vs hire
Why does a company having 5x more programmers than you, move slowly or at the same pace as you? Apart from the overhead to manage more people, it’s the failure to maintain a high hiring bar that’s causing the slowness. I made this mistake. It’s a very rationale thing for anyone to ensure that the hiring bar is kept high. But why do we slip? or more precisely, why did I slip? Some of the reasons below may resonate with you. Let’s call the bad hire, Joe.

Insecurity
I had an insecure feeling that if I didn’t replace the programmer who quit, immediately, my product would slow down, it’d affect customers, revenue would go down and so on. It’s bad to hire (or even interview) anyone with that sort of a mindset. It makes you twist facts, rearrange some of the evaluation parameters just to make that hire and feel “secure”. Ironically, all the things I feared started to happen, before I asked Joe to leave.

Size
The most dumbest way to evaluate a company is to base it on it’s size [1] and more often than not that seems to be the metric everyone is bothered about. The first question anyone (friends/investors/press) you meet asks is “How big are you now?” This made me feel weak as a founder since I thought I wasn’t “growing”. Thankfully I didn’t make any hires based on this but I did have those moments.

Betting
Someone with a really impressive profile  is interested in your company but doesn’t completely convince you. What do you do? I made a mistake of hiring Joe thinking he’ll eventually contribute because he has a strong profile. That never happened. The “eventual” in a startup is a few weeks or maybe even days.

Goal
One bad goal that you can set for the company is determining how many people you want to hire in the next x months. How many times have you heard a statement similar to this “We’d like to double our team by next quarter“. That’s a sure sign of lowering the bar at some stage in order to meet the goal. 

All of the reasons directly relate to desperation to hire someone to grow the company. It’s okay to wait for 3 months with a slow growth and then hire someone who’ll make the growth exponential to match the goal at the end of the year, than hiring when you’re not completely sure of.

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Notes
[1] Instagram was worth $1B when they were just a 12 people team.

Advisor’s probability

 

Advisors help a company fasten it’s growth. You ask advice on a burning issue in your startup (there are usually more than one) and if you’ve good advisors, you come back enlightened. Some companies setup exclusive advisory boards. Incubators/accelerators and VC’s also are advisors.

Probability
What I realized recently which might sound obvious looking back, is every advisor only gives you a probability of their advice working well. And that probability is based on the environment they are in, the startups they watch, the founders they interact with and the company they have previously built.

This means, PG’s advice would hold a strong bias based on how YC startups grew and Vinod Khosla’s would be inclined to how he built Sun. It’s very likely that some of their advice won’t work for you but their stature might make it seem that it’s 100% the way to go.

When your advisor says “Do this”, it actually means, you stand 80% chance of doing well by “doing this”.

Fail
The surest way to fail is to follow every advice from your advisors. Empirically speaking, there was nothing new created by doing something that people have already done (falling into the 80% bracket all the time). Every company is unique in it’s own way. For eg: the slow product movement might work for Dave Morin but not for you.

The way to succeed would be then, to find the right permutation of choosing which ones to follow and which one to not.  While I’m starting to figure out how to choose the permutation, here are some of the things that has helped me.

Data
A lot of decisions are based on gut by default. While it might be good in early stages of startup, this is unhealthy as you grow when you have substantial data. Always dig deep to see if you’ve enough data to see if you can take a decision. Surprisingly, data reveals a lot of things you didn’t know.

Co-founder
The simplest way to resolve the conflict in your mind is to ask your co-founder what to do (this is one HUGE plus of having a co-founder apart from many other reasons). She’ll have the same amount of data as you have and is usually as absorbed in the startup as you are. [1]

Background
I’ve started asking my advisors/investors on why they think what they think. This has become so much useful in helping me make the decision. You can see if you can map to the situation or not.

Advisors/investors can be insanely useful and accelerate the growth of a company. It all depends on how the entrepreneur drives the discussions and the relationship.

Notes
[1] However, most likely both of you are confused on which path to move forward.

Startup idea’s worth

How do you judge whether it’s worthy enough to pursue a startup idea? Talk to a hundred potential users. If an overwhelming majority of users say  something similar to ‘It’s almost impossible to get this done but will be absolutely incredible if it exists‘, quit your job and start working on it.

Immigration

Enough has been said about the war for talent in the valley. It’s definitely hard to hire good engineers and it’s just ending up in a zero sum game where Google tries to poach from Facebook, Facebook from Twitter, Twitter from … and so on. And then there are a few engineers in these companies who’d like to work for a startup mostly because they’d want to do one in the near future. In fact, someone built a site for that.

It’s getting increasingly easy for good hackers to start companies. Startups are becoming almost risk-free because even if you fail, a team of good developers might be worth  $1M * no. of hackers, going by the recent acqui-hires.

Background
I’m one of the founders of Interviewstreet and we conduct programming contests to match programmers with companies. [1] Over the last year we conducted a lof of contests and what surprised us most was, out of the 40-50 developers who were hired through us, 85% were international candidates. The companies which hired weren’t large enterprises but really good tech companies like Quora, PocketGems, Evernote, RocketFuel, etc. They got some of the best hackers to work for them.

Sweet spot
There’s a cap on the number of H-1b’s that can be issued, primarily because the US govt. fears that immigrants are going to eat away local jobs. This is SO wrong. Increasing the cap will make the world much better or at least the US economy. Here’s why:

Talented hackers are everywhere and since it’s so easy to know about different technologies, the geographical limitations don’t come into play.[2] The odds of finding a good hacker in India might just be about the same as finding one here. And talented hackers want to move to the valley because they love building things and valley is the epicenter of it.[3] They’d love to get plugged into the ecosystem, work for a great startup and eventually build something on their own. This almost sounds like a biopic of  some of my friends who’re doing fantastic right now creating more jobs. I personally know people who’ve rejected offers from Google & Amazon in India to work for lesser-known startups in the valley because it’s worth in the long term. This is a sweet spot for both the companies to get great talent and hackers to work on the path breaking companies.

We conducted a contest for all the IIT’s in India. The top rankers are going to join Facebook this fall. Increasing the cap will only help creating more companies or greater value in a much faster pace. It’s sad that the H-1b cap for this year is already full and if you make an offer to someone right now, she can join only in Oct 2013. It’ll be fantastic if the immigration policies and rules can be relaxed or more favorable. It’s only going to create a much better place.

Notes
[1] Lets not debate whether ACM style programming contests are the right way to judge a programmer. There needs to be some starting point and this seems to work best at least for programmers from 0-2 years of experience.
[2] It’s not true for designers. I don’t know why, but the odds of finding a good one here is much higher than India.
[3] Why can’t hackers build stuff wherever they are? or why is Silicon valley a better place?

a. Access to investors (money) is higher. Web startups aren’t cheap to build, servers are. To hire one developer + a designer, you’ll need to spend at least $200k/year.
b. There are no technology limitations here. For eg: you can assume a large number of people have iPhones and a good majority are always connected to internet. This leads to identifying a lot of interesting ideas to work on.

Shameless plug
We’re conducting a series of monthly programming contests starting October to hire the best international candidates before the larger companies take them on board. If your company is interested to participate, e-mail me: vivek [at] interviewstreet

 

Right

We’ve done a bunch of mistakes while building the company but there are certain things that we did right which I’ll blindfoldly recommend every startup to do because it has clearly worked for us 100%.

[1] Get a sincere office manager. At first it might seem like very little work for a full-time role. But an office manager position is like buying insurance. Only when the need arises, the true value is felt. If you’re running a company that has > 5 employees with 50+ customers, I bet you’ll feel the need at least twice or thrice a week.

[2] Buy a big TT table with good racquets. Working in a startup is very tiring that you definitely need a 30-min break in between to refresh yourself.

[3] Get a powerful laptop to all the engineers that can comfortably run a VM, chrome with 10 tabs and a music player. Buy matrox and ensure the development environment is really powerful. It increases productivity by a huge factor.

[4] Plan one day in a week to go out with the entire team – can be movie or lunch or anything that’s fun. Pick a slightly less busy day and get out.

[5] Get a cook who can provide at least two good meals a day. It’s okay if the cook costs 1.5x for a superior quality food, especially breakfast.

[6] Have a daily scrum for 20 mins on a time that’s convenient for everyone. Not only does it ensure everyone’s on the same page but also makes you work on something concrete. You know you’re being less productive when the scrum updates are very boring and generic. Fix the problem.

[7] If you’re a first time founder, get an advisor who will actually spend time with you and not just for name dropping. The advisor should be someone who has built a big company from scratch. And it is very very hard to find someone with those credentials. We were lucky! Mark is such an amazing advisor to us and we meet every week for 1.5 hours discussing the most critical issues that has to be fixed and how to build a great company.

 

Dumb

#2: Advice people didn’t tell me.

What’s worse than a failed start is failing after/when you’ve got enough traction. On day-1 of your startup, nothing really matters other than getting the company off the ground. The entire focus is on how to build something that users want. If you persist long enough, somewhere on the way, you will encounter fame, money, etc. Don’t let that bother you, just keep going like how you were on day-1.

It’s rarely a conscious trap [1]  and a lot of times the subconscious can make you think you’re smart. Now, you’ve to guard the newly achieved smartness which makes you act less dumb on certain occasions, unlike day-1 when nothing was at stake. The occasions can be pinging your advisors for help, believing that something will/won’t work, etc. Remember…

If you’re being called obsessive to get something done, it’s okay.
If you’re being called dumb, it’s okay.
If you’re being called <fill-anything-here>, it’s okay.

The irony is, nothing matters if the company wins and it anyway doesn’t matter if the company loses.  So, it’s okay to continue being dumb and do things that’ll increase the odds of success.

Notes
[1] If it’s a conscious trap, god help you.

Employee happiness

#1: Advices people didn’t tell me

I wanted to write a series of posts on my learnings in startups tagged as ‘notes’. So here’s the first one. Hope to write more.

A major criteria or a deciding factor for employee happiness is the people he/she is working with. High pay, bonuses, equity, benefits, etc are all just fuel to the car. The people in it should be great to actually enjoy the ride. Your employee will stay if she enjoys working with the people around.

Hiring takes time and should be a daily process. It’s okay to delay product deadlines to hire the right person. It is impossible to write a generic rule of hiring and who’s the right fit varies for each company depending on their ambitions and the founders attitude.

The way we hire is based on two things:
a. If she had to do a startup, will I invest? assuming I’ve a lot of money.
b. Will she make me look dumb on a lot of occasions?

If the answer to both of them is a clear yes and I get a clean yes from everyone else, we make an offer. This has worked reasonably well for us. But like everything else, we’re iterating. The moment you start trying different ways to retain an employee, that’s a bad sign. Somewhere you’ve made a mistake. Fix it right now.

Quoting Zuck, ‘If you’re a CEO and not fatigued recruiting, you’re not doing it enough‘.

Point

If you notice, there is one point in a startup journey after which the growth skyrockets and you start to define/influence the market in a big way.

Many of the successful startups started very differently (sometimes radically different) than what they’re doing now.  Youtube started as a dating site, Instagram originally started as Burbn, an HTML-5 mobile check in app which didn’t go anywhere for about a year. Guess how many users Pinterest had in the first year?  Just 10k.

One takeaway from the above examples and a lot of successful startups in general is, the founders were persistent enough to keep trying new things till the inflexion point was reached, because it’s so hard to figure out and build what users want. The cost of building on the internet is getting cheaper and technology startups have an unfair advantage over other businesses to reach that point faster.

Probably  ”success” of a tech startup comes down to –  Can you iterate fast based on user feedback and stay determined long enough to reach that point? If you surround yourself with people (co-founder, team, investors) who are at least as motivated as you are and flexible at every stage, it doesn’t seem too hard.

Founders DNA

The culture of a startup is  greatly determined by the founders. Most likely the DNA of the startup will be THAT striking attribute of the founders.

Jack Dorsey is an extreme workaholic and it definitely wades into the culture of the Square. You’ve to be a real hard worker else it’s going to be tough to adjust.

Zuckerberg was a hacker and that’s a core quality around which Facebook is being built.

Larry & Sergey were PhD CS majors from Stanford. That’s why it’s super hard to get into Google if you don’t have a CS degree (and a top ranker) from a major university. I think it subconsciously forms the culture of the company. And you can list many more examples.

Before you jump into a startup, it’s best to know the attitude of the founders. One striking quality that comes to mind when you say the founders name will most likely be the DNA of the company. If you’re not able to place a single prominent adjective against the founders names, the ride will be rougher.

Chase

Q. When do you know if you’re really passionate about what you’re building?

When you can go to the extent of even working for free for a company that’s already doing it. Sure, you can start off on your own, but the excitement of starting up with people you know will supersede the idea itself, especially for first time entrepreneurs.

Work hard, sleepless nights, highs & lows, blah..blah.. have all been there but there is something different this time around – a chase to get to that point which I can see so clearly even at such a large distance. I’ve always loved working for Interviewstreet but the last couple of weeks have been something special.

The closest analogy I can think of is a comparison between arranged and loved marriages. While I don’t have any experience in either of them, I guess I’ve been living my startup life like an arranged marriage guy – the scenario where you like the idea of marriage (startup), more than the girl you were introduced to (idea) before marrying. It’s akin to the way startups are born in the valley. A lot of successful companies have been built this way.

But for the very first time, I’m completely kicked about building this than the thought of building a massive company even though that’s the state you might want to reach. It’s definitely like love where you are in chase of the girl than the idea of marriage itself even though you want to get there.

I’ve always been in a sprint mode – wake up, iron out bugs, ship a feature and iterate. I’ve been trapped in a myopic view. For the first time, I zoomed out to see the bigger picture and wasn’t that fascinating! It changed my outlook. I’m focused so much on the product including the tiniest details of it.  I can see the goal which enables me to take bolder decisions that’ll have a higher impact on the company, defying a lot of norms, just to get there.

I don’t care if I don’t become rich or the company isn’t worth a billion dollars or whether I work as an employee/founder, etc. (which used to run in my mind). All I want now is to just see it grow.

It’s a very ambitious hard goal that I’m chasing but it’ll be one of the most valuable thing EVER created on the web if done well. Imagine if I were to say that you’ll be able to control the pace at which the world will advance if we built this. That’s the sort of potential this product has. It’s a superset of what we are currently on.

It’s okay to try and fail climbing a Mount Everest than be happy climbing a 500ft hill. And I’m up for the long journey and hopefully will reach the top. Stay on for the launch. And if you’re interested in joining a great team in the expedition, let me know [vivek AT interviewstreet] or you can drop by at our office.