Lecture 11 - Hiring and Culture, Part 2 (Patrick and John Collison, Ben Silbermann)

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Part two of Culture and Team, and we have Ben Silverman, the founder of Pinterest, and John and Patrick Collison, the founders of Stripe. Founders that have obviously sort of, some of the best in the world at thinking about culture and how they build teams. So, there's three areas that we're gonna cover today. One will just be sort of general thoughts on culture as a follow up to the last lecture. And then we're really gonna dig into what happens at the founding of these companies. And building out the early team. And then how that changes and evolves as these guys have scaled their companies up to 100 plus. I don't even know how many people you have now, but quite a lot. Very large organizations and how you adapt these principles of culture. But to start off I just wanna ask a very open-ended question which is, what are the core pieces of culture that you found to be most important in building out your companies? >> So what are the most important parts? >> It's on. >> Oh, it's on. Yeah I mean I think for us, like we think about on a few dimensions. One is like who do we hire, and what do those people value? Two is what do we do every day, like why do we do it? Three is what do we choose to communicate? And then I think the fourth is what we choose to celebrate. I guess the converse of that is like what you choose to punish. But in general I think running a company based on what you celebrate, is more exciting than what you punish. But I think those four things kind of make up the bulk of it for us. >> We've placed a large emphasis on, as Stripe has grown and probably more than other companies is, transparency internally. And I think it's been something that's been really valuable for Stripe, and also a little bit misunderstood. All the things people talk about like hiring really great people, or giving them a huge amount of leverage. Transparency for us plays into that. We think that, if you are aligned at a high level about what Stripe is doing, if everyone really believes in the mission, and then if everyone has really good access to information, and kind of has a good picture of the current state of Stripe. Then that gets you a huge amount of the way there in terms of working productively together. And it kind of forgives a lot of the other things that tend to break as you, as you grow a start-up. As we've grown, we started off two people. We're now over 170 people. We've put a lot of thought into the tooling that goes around transparency, because at 170 people, there is so much information being produced, that you can't just consume it all as a fire hose. And so how we use slack, how we use email, things like that. We can go into it more later. But I think that's one of the core things that's helped us work well. >> I think culture to some degree is basically kind of the resolution to a bandwidth problem. In the sense that, maybe when you start out working on something, you're sort of coding all the time, but you can't code all the things that you think the product might need, or the company might need, or whatever, and you so you decide to work with more coders, right? And so the organization gets larger. And maybe, in some idealized world, I don't think this actually true, but kind of ideally you could be involved in every single decision, and every single sort of moment of the company, and everything that happens, but obviously you can't, or maybe you can if two people. But you certainly can't at even like five or ten kind of that point comes very quickly, then by the time you're 50 it's completely hopeless. And so culture is kind of how you kind of, what the strands are that you sort of want to have, the invariance that you want to kind of maintain, as you can get specifically involved in sort of fewer and fewer decisions over time. And I think when you think about it that way it, maybe its kind of importance becomes sort of self evident, right? Because again, like the fraction of things you can be involved in directly is diminishing, I mean, almost exponentially, sort of assuming your head count growth sort of is on a curve that looks like one of the great companies. And yeah that's super important. And again, it manifests itself in a bunch of different ways. Like for example, in hiring, I think a large part of the reason why maybe the first ten people you hire, what kind of goes to ship, decisions are so important is because you're not just hiring those first ten people. You're actually kind of hiring 100 people. Because you should think of kind of each one of those people as bringing along sort of another ten people with them, and sort of figuring out exactly what 90 people, you would like those first ten people to bring along is obviously gonna be quite consequential for your company. But really briefly I think it's largely about sort of abstraction. >> So one thing that a lot of speakers in this class have touched on is how hiring those first ten employees, if you don't get that right, the company basically will never recover but no one has talked about how to do that so. What have the three of you looked for when you've hired these initial employees, to get the culture of the company right? How, how have you found them, and what have you looked for? >> Sure. So, I guess this answer is different for every company and I'll say for us it was very inductive. So I literally looked for people that I wanted to work with and that I thought were talented. I think, I've read all these books about culture, because when I don't know how to do something, I first go read things and everyone has all these frameworks. And I think one bit, big misconception that someone said once is that people think culture is like architecture when it's a lot more like gardening. You know, you plant some seeds and then you pull out weeds that aren't working, and they sort of expand. So, when we first hired people we hired people that were like ourselves. I often looked at like three or four different things that I really valued in people. You know, I looked for people that worked hard and seemed high integrity and low ego. I looked for people that were creative, and I usually meant that they were really curious. They had all these different interests. Some of our first employees are probably some of the quirkiest people I've ever met. They were engineers but they also have all these crazy hobbies. Like one guy made his own board game with this elaborate set of rules. Another guy was really into magic tricks. And he had coded not only like this magic trick on the iPhone, but he had shot the production video with a preview. And I think that, that quirkiness has actually been a little bit of a calling card. And we find that really creative, quirky people that are excited about many disciplines, and are extraordinary at one tend to build really great products. They tend to be great at collaborating. Then the last thing is, we really look for people that wanted to, they just wanted to build something great, and they weren't arrogant about it, but they just felt like, it'd be really cool to take a risk and build something bigger than themselves. And that, in the beginning, is very, very easy to select for if you're in our situation. We had this horrible office, like, nobody got paid. So there was no external reason, other than being excited about building something to join. In fact, there was every reason not to. And that's something, looking back, I really, really value, because we always knew people were joining for the purest reasons, and in fact, were willing to forgo other great job opportunities, market salary, a clean office, good equipment just for the chance to work. So, to this day I think a lot of those traits have been seeded and are embedded in the folks that we look at now. >> Yeah the first ten hires are really hard because you're making these first ten hires at a point where no one's heard of this company, no one really wants to work for it. You're just these, like two weird people working on this weird idea. >> And like their friends are telling them not to join. For our second employee, I think he'd accepted the offer or he was just about to, and his best friends took him out the night before, and it was like a full on assault for, why you should not join this company, why this is ruining your life basically. And so anyway the guy subsequently continued to join. And actually one of those friends also now works at Stripe. But this is what you're up against. >> Yeah. And I mean it's also hard because no batch of ten people will have as great an influence on the company as those first ten people. I think everyone's impression of recruiting is, you open LinkedIn. It's sort of like ordering off the dollar menu. It's, I want that one, that one, and that one. And, and now you have some hires. Whereas at least for us, it was very much over a very long time period, talking people we knew or friends of friends into joining. We didn't have huge networks, Pat and I were both in college at the time. So there were no people that we'd really worked with to draw on, and so a lot of those early Stripes were people we had heard of, friends of friends, and the other interesting thing they all had in common is that they were all early in their career, or undervalued in some way. Cuz when you think about it, if someone is a known spectacular quantity, then they're probably working in a job and very happy with that. And so we have to try and find people who were, in the case of our designer that we hired, he was 18 and in high school and in Sweden at the time. In the case of our, our CTO, he was in college at the time. You know, a lot of these people, they were early on in their careers and the only way we could, you can relax when constrained. You can relax the fact that they're talented or relax that it's apparent that they're talented, and we, not consciously, but we relaxed the latter. >> Yeah, I think finding kind of people who are, or just think like a value investor. You're looking for the human capital that's significantly devalued by the market, you know? You probably shouldn't look to hire your brilliant friends at Facebook and Google or whatever, because they're already discovered. You know, if they're wanting to join that's great, but they're probably harder to convince. John and I spent a little a while yesterday afternoon sort of trying to figure out in retrospect, what kind of traits our first ten or so people had in common that we thought were significant. And you know, in general sort of in speaking about culture, I sort of want to caveat everything we say with, I that sort of advice is very limited experience, widely over extrapolated. And I think there's a lot of truth to that. But for our particular first ten people, the things we sort of figured out that seemed to be important were they were also very genuine and straight. I think that actually matters quite a lot in that sort of they're people that sort of that others want to work with, that they're people that others trust. They sort of have an intellectual honesty in how they approach problems and, and so forth. They were people who really liked getting things finished. There's a lot of people who are really excited about tons of things. Only a subset of those are actually excited about like completing things. You know, there's a lot of talk about, for example hiring people off their GitHub resumes, whatever, actually think that doesn't quite ring, kind of correct to me. In the sense that place is a large premium on sort of lots of different things. I think it's actually a priori, sort of much more interesting to work with someone who has spent two years really investing in going deep in a particular area. And then the third trait they all seem to have in common is they just sort of cared a great deal. Like, it was offensive to them when something was just a little bit off. And kind of again, in hindsight, there are all these like crazy things we used to do that I mean, do in fact seem crazy like we probably shouldn't have done them, but everyone was always like well, was borderline insane in sort of how much they cared about tiny details. Like we used to, like every single API request that ever generated an error went to all of our inboxes and phoned all of us. Because it seems terrible to ever have an error that didn't go and get a resolution from the user standpoint. Or we used to like copy everyone else on every outgoing email. And we'd like point out slight grammar or spelling mistakes to each other, because it's terrible to ever send an email with a spelling mistake. So anyway those were the three traits come from that area. A genuine, caring a great deal. And, so what was my second one? >> The other one. >> Yeah so. Sorry yes completing things like list of three items. >> Yeah, I'm only gonna say I just don't think there's any wrong place to find people, so when I look back at our first few folks that we hired. They came from all over the place. Like I put up ads on Craigslist. I went to random tech talks. You know, we met people at, we used to throw weekly barbeques at the office. It was like bring your own food and drinks. And then we would just talk to folks. I think every time I ever went and got coffee in Palo Alto. Like one of you guys was recruiting at Coopa because their office was like strategically situated next to the best coffee shop. But I think that the really good people generally, they're generally doing something else, and so you have to go seek them out, rather than expecting that they're gonna seek you out. Triple so, when no one's ever heard of or is using the product that you're working on. >> Yeah it's probably really important to have a great elevator pitch. Not even for investors, but just because everyone you run into right now is maybe six months, a year down the road, a potential recruit. And so, the right time to have gotten them excited about your company, the right time for them to have started following us, and be thinking about it if they think about what they're going to do next, is as soon as you can start. It's gonna take a very long time to recruit people so to being able to consistently get people excited about what you're doing will pay back dividends later. >> Maybe this is a little tangential but John and I were also chatting yesterday afternoon sort of like a bunch of our friends have sort of started companies right out of school. We were sort of thinking about, what seems to go wrong in those companies. And I think something, that may be the most common failure mode. Since we said of doing something kind of overly niche, or overly sort of specific and banded. I think maybe it comes from sort of like there's a major shift in time horizon. As you go from classes to building a start-up. Right? A class kind of plays out in a quarter or a semester or whatever. Whereas a start-up is like a five or ten year thing. And I think this is really problematic because it's actually quite hard to hire people for niche things, in that if you tell somebody, look we're going to build a rocket that goes to Mars. Like I mean that sounds almost impossible, but also sounds fucking awesome. Right? And so it's actually pretty easy to convince people to work on it. Of course, if it's well, you know, we're going to build this, I don't wanna single out any particular idea, because probably sound like I'm picking some actual start up that's doing it. But you know, if you pick something pretty narrow, something that maybe kind of inductively comes out of the kinds of problems you solve as part of a class project, that's actually a much harder effort. >> One specific question that has come up a lot is, how as a relatively inexperienced founder do you identify who the really great people are? So, you know, you meet people at these barbecues or for your friends or whatever, and maybe you've worked with them a little bit. But what specifically did, did you guys do in your processes to identify like, you know, what this person's going to be really great? Or when did you really get it wrong? But what have you learned about how to identify raw talent if you can't just say, well they worked at Google or Facebook, they must be good? >> Well, I mean, you'll never like 100% know obviously until you work with folks. Which is why the flip side of it is, you know, if someone you hired just wasn't a good fit, you owe it to the company and to them, to tell them how they can improve, and if they're not working out to fire them. But I think that the generally, the question of talent falls into two big buckets. Like, one is you have some sense of what makes them good at their job, and there are some areas where you have taste in that area, and there's some where you don't. And the ones where you don't are actually much more difficult. So what we would do is, is we would do a few things. Like first, before talking to anyone we try to get a sense for like what is really world class in that discipline mean. And this becomes very important later, when you're hiring things like Head of Finance and you don't anything about finance. Except what was contained in like a library book you got about like an introduction to finance, or head of marketing. So, I always made it a habit of, like, talking to people that I knew de facto were world class and then asking them, specifically, what are the key traits or characteristics that you look for? What are the questions that you ask, and how do you find them? And if you're looking for the next person that's as good as you, like, where are, where is that person working right now, and, like, what's, what's her phone number? I think that, like, learning what good and bad is during the interview process, is extremely expensive. It's an expensive use of your time, and it's an expensive use of everyone else's time, so precalibration of that really matters. And then, once you have someone in, sort of, the interview process, you'll build the process over time, to both screen quality. And so at Pinterest, you know, we have an evolving set of standard questions that we're always rotating through, and we're always measuring, are these good indicators or bad indicators of quality? But the other thing that the questions are meant to do, is they're supposed to give a sense for, is this the right place for that person to come and work? And this to the point you guys made about being very transparent about what's gonna be easy or hard. Really great people wanna do things that are hard, they wanna solve tough problems. And so, there was a certain brilliance in Google setting out these interview questions that were thought to be really difficult. Because then people who like solving really difficult problems, they come out and seek those. I think it's really important, even as companies get bigger, that you don't whitewash the risks. I heard that PayPal, you'd go in and after interviewing with like Peter Thiel and Max Levchin, then they would say by the way like Visa and MasterCard wanna kill us, and we might be doing something that's illegal. But if you succeed, you'll redefine payments. Or when they were recruiting for iPhone, they didn't even tell people what they were doing. They were like you won't see your families for three years, but when you're done, your kid's kids will remember what you built. And I think that's a really good thing in recruiting as well that you're very transparent about why you think it's an amazing opportunity, but you lay out in gory detail why it's gonna be hard. And then the right people select in, or they select out of that opportunity. >> Evidence suggest it's worth a lot of people to see their kids, though. I feel like one thing you have to do as you try to identify talent is have the confidence to interview for, in a way that works for you. I think you know, if you're, say you're not, the world's best engineer and you're trying to interview engineering candidates. I think it's tempting to try to color code what everyone else does. And you know, get them to call it on white board. And do other engineering, interviewee things. You know in the case of Stripe, hiring our first engineer. We flew the guy out, and we spent a weekend coding with him, and you know looked over his shoulder and kind of, it was the only way we could really tell and get ourselves confident that, that person was good. And I think you can actually extend that to other roles, where again you're not an expert, and that you know I'm no business development guru. But when we interview people for business development roles, we'll ask them to do a project, you know? Where they talk about how they would improve an existing partnership that Stripe has. Or which new partnerships they would go out and do. And again, you know, even though it's not my domain area, I am actually confident enough that I can judge those pretty well. And I think people often have this imposter syndrome when it comes to interviewing for roles. Yeah. I think a pretty specific, just kind of just tactical thing, and to do for again the first 10 people, is to work with them as much as you can before committing to hiring them. I mean, once you reach a certain scale it's kind of impractical, because it's a huge time commitment on their side. And ultimately I mean it just would be unskilled, would be expensive from your side. But it's really worth it to get the first ten people right. And so, for a majority, maybe in all of the first ten people, we worked with them in some capacity. Usually for a week in advance, and it's pretty hard to fake it for a week. It tends to be pretty clear, quite quickly. And another thing I thought of you know, to the question of sort of how do you know like who is great or who is good enough or whatever. And people always talk about this notion of the ten x person, that whatever that skill set is. I don't really know what ten x means, I think maybe the slightly more kind of helpful or like intuitive version of that is, is this person probably, the best out of all of their friends at what they do. And so you know, it's a little bit sensitive to you know, how well they chose friends, how many they have. But for me at least, I find that kind of a more helpful way to think about it, like is this the best engineer this engineer knows. And the other thing I think that's actually probably just worth mentioning in all of those kind of first ten people, or even more generally on the culture and hiring topic. I think everyone sort of doesn't realize until they go through it themselves how it important it is, in large part because the, like in life and the media and everything, people focus way too much on founders. And they're like, here we are. And so kind of, we're re-enforcing the sort of structural narrative that like, stripe is about John and Patrick. And Pinterest is about Ben and so forth. Whereas, I mean, obviously, sort of the vast majority of what our companies do like 99.9% is being down by people who are not us. Right? And I think, I mean, that's kind of, it's obvious when you say it, but it's at a very much, not just the macro narrative and you know, companies are abstract. So you kind of need to associate them with people. But I think it's worth bearing in mind that like for, you know, Apple, you know everything was you know, Steve Jobs was a like tiny, tiny detail at the end, right, or Google was that way, and so forth. >> So don't screw it up, is that what you're saying? >> Something like that. >> I think, you know, one other thing I'll mention is that I think referencing people is really important, and referencing people is just what it sounds like. You're basically asking people who have real, material working experience, for their honest opinion. And we do that really aggressively, and what we're trying to figure out is what's this person like to work with? We're not trying to validate like whether they told the truth on their resume, cuz we assume that they're telling the truth. So, very standard questions that I'll ask somebody who's in an interview, I might say, hey, we both know Jonathan in common. I'm gonna talk to him, you know, in a couple weeks, cause we're both social friends. Like if I asked him, what you're the best at, or what you would be most proud of, or what you were kind of working to improve. What would he or she say? Because it sort of tests the level of self awareness, and creates a bit of social accountability. And then I'll try to ask something that makes the question which is typically very soft feel a little bit more quantitative, and then calibrate that over time. So you know, in evaluating this person or this dimension, do you think this is the top 1% of people you've ever worked with? The top 5% and the top 10%? And it forces a scarcity that gives a materially different reference, then if you just say hey, like what's the best thing about John? He told me you know, he's good at these things. Can you validate? And you're like yeah, sure, Cuz they don't gain anything. So I think that's just a tool that people should take seriously. >> Yeah. >> Yeah, and referencing isn't obviously easy to begin with, but it does actually prove really useful over time. And you just have to, people I think especially for named references, people really want to be nice. So you have to do things like create an artificial scarcity by saying you know, where would you rank this person amongst the people you worked within this role? Or, you know, you just splitz out on the enchant of how to reference, but usually I aim to spend, you know, 15 minutes on the phone with that person. Not just let them say, yeah this person is awesome, and then hang up. >> That's also a tremendous source of new recruits. >> Yeah. >> Those references are also a tremendous source of new recruits. What have each of you learned about, once you hire these first people and they joined? What have you done to make them effective quickly? To get them sort of, you know, to the right cultural place, you know? Cuz sort of hiring is usually very difficult, but then not as difficult as making them happy and effective. So what do you do with these early employees to accomplish that? >> Well, ways that it's changed when we've gone from really small to bigger. When we first started, we were generally hiring because we needed that person, like, a long time ago. And so their whole on-boarding was like, here's your computer, we already set up your environment, don't worry about it, this is the problem that we have to solve together. And then because of the nature of the start ups, we were all in this, like, tiny, two bedroom apartment. All of the other things, like building personal relationships, spending time together, getting to know one another, it just all happened. Kind of automatically like, you didn't have to do anything. The one thing that I would add to that is, though, we would always try to remind people of like, where we wanted to go some day. Cuz it's really easy when you first join to drop somebody into a problem, and then they think the whole world is like this little problem in front of them. We'd always say, you know, hey, some day we wanna do for Discovery what Google did for search. This is our plan for trying to get that done. Now as the company, grows I think that process has to get a little bit more formalized. And so we spend a lot of time thinking, and honestly trying to constantly refine what is that person's experience look like from the day they came in, to their very first interview, through 30 days after they joined. Like do they have somebody whose name they know? Do they know who their manager is? Have they sat down with people on their team? Do they know what the general architecture of the company is, and what the top priorities are? And we have a program and it's a week long, and then there are some function specific programs that go in deeper. And that's something that's always been refined. And the alpha metrics that we look on that, it's when we ask people like what did you think afterwards and then 30 days afterwards. And then we also ask their peers and their manager, like hey, is this person kind of up to speed? Do you feel like we've done a good job making them productive? And if we haven't, that's a key A, that, that team shouldn't be hiring anymore people, because they're not doing a good job bringing in new people. And B, that we need to retool that. And so I think those things are important. I just wouldn't discount just how important it is to get to know the person as a person. Like what are their aspirations? What's their working style? How do they like to be recognized? Do they really prefer being in total silence? Are they a morning person or night person? Like knowing those things I think, it just demonstrates that you care about them individually as well as collectively, like what you goals are. >> I think there are two things that are important at any stage through the implementation of a change. The first is to get them up and running, doing real work quickly. Because that's only when you can find the problems, that's how progress is measured, is how much real work they're doing. And so, you know, when we have engineers start, we'll try to get them committing on the first day. When we have people you know, people in business roles start, we will have them in real meetings on the first day, on what they're meant to be working on. But I think sometimes there's a tendency to be tentative, and help ease people in. We're much more of the push people off the cliff school. And then I think the second, is to try and start quickly giving people feedback, and especially feedback on how to adapt to the culture. Because when you think about it, like, you know, if you have built a strong culture as, you know, all the companies up here are trying to, then it's going to take some adapting for the person. It's not going to be necessarily easy, you know? One thing we have at Stripe, is just the culture was a lot more written. And so, you know? You have people who are right next to each other each with headphones on, and just like IM'ing away to each other. And for you know, a lot of people coming in who hadn't worked in an environment like that, it's, it's sort of hard. >> In normal places. >> Exactly. Yeah. And so, everything from kind of high level how you're doing at your job, to kind of minor cultural pointers. The more feedback you can give them, the better they'll do. And it's unnatural. Right? Because it's unnatural to be constantly telling people that they're doing a good or bad job. You don't do that, hopefully, in your normal life, you're more restrained. But when you have employees, that's kind of what you owe them for them to do well. >> So I think this is sort of a good transition too, as your companies have scaled. What are the biggest changes you've had to make to your hiring processes? And also how you sort of manage and run the team, as you've gone from, you know, two to 10 to 100 to 1000 employees? >> There a lot of changes. I mean, I think one thing that we try to do on the team side is, the goal is to make the teams feel as autonomous and nimble as possible within the constraints of having a large organization. And that means over time, that we're always trying to make it feel like a start-up of of many start-ups, rather than this monolithic organization with a set of foreign processes that cut horizontally through it. And it's easier said than done. I think that, like we're not all the way there. But one of our goals is that each team has, they control the resources that they need to get things done, they know what the most important thing is, and how it's measured. And in that way, then the management problem becomes somewhat tractable, otherwise it feels completely impossible if you can't decompose it into autonomous units. Like you just look at it, and you're like, oh my gosh, communication complexity is increasing geometrically. Management complexity, like it's never gonna work, and so you have to sort of create these abstracted units, or that's at least what we're gonna try to do. And at Pinterest in particular, the real challenge of creating those abstracted units is. We want to actually have units that encompass a super-strong designer, a super-strong leader in engineering, often a writer, often sometimes like a community manager. We want them all to be self-contained. And so that makes the problem really hard, but that's kind of core to our philosophy of how we build products. We try to put people together that have all of these different disciplines. They're curious about lots of things. And then we anchor them on a single project and then we try to remove barriers to let them go fast. When we find new barriers, we sit down and we think, how do we speed that up? I think hiring is a little bit different. And I think the biggest change and the biggest asset that you get as you get more people is referrals become like more and more and more and more the life blood depending on the network of all the people that you bring in. So one of the really lucky, and in hindsight, great decisions that we made, was actually the 14th or 15th person that we hired was a professional recruiter and she had worked at start-ups. She had worked at big companies like Apple. But she knew where that pipeline breaks down, knew the early indicators, and taught everyone not just how to screen for talent, but how scalably to identify the people that are gonna be culturally, really good for the company. And I think looking back on that, it's something that I personally really value. >> You know, there's just a huge amount of stuff here, right? In that I guess, this is all under kinda the rubric of managing growth. And either your company fails very quickly or all of your problems become in some way about managing growth. One thing that I think tends to take people by surprise, and certainly took me by surprise, is kind of how quickly just like the time horizon has changed. In that, in your first month you're largely thinking about things maybe one month ahead, right? In that, maybe that's kind of what your development road map is oriented around, even in terms of who you're working with. Maybe it's like, informal relationships where they haven't fully committed to remain full time or whatever, right? And then, the more time goes by, I think that kind of has a reciprocal, or corresponding increase in the time horizons. After one year, you're kind of thinking one year ahead. After four years, you're thinking four years ahead. But that increases very quickly, right? And so after you know, it's after one month, it's again, super short term. And then just 11 months later you should now actually be thinking and planning a year ahead, and thinking about human structures on that time horizon. Thinking about the stuff Ben talked about, like where you want to be going long term and things like that. I think that also plays into your hiring and the kinds of people you hire, right? In that in the really early days you kind of have to hire people who will be productive, essentially immediately. You don't have the luxury of hiring people who are really promising, but they're not quite gonna be up to speed for another year or two. They have to be able to contribute immediately. But after two or three years, now it starts to get much more reasonable to make those investments and in fact, if you're not making those investments, you're probably being much too short term. And so I think that's really important. And a lot of it also just comes from all these problems in some sense are easy, like how do you build good social bonds between people? I mean, we all do it every day, right? It's kind of, how do you make it systematic and effective at scale? It's always a very severely imperfect approximation of what you would ideally do if you were small, and what hacks can you pull to make it work as well as you possibly can at a larger scale. Like a rapidly growing company, say growing headcount here, two or three x a year, it is a very unnatural thing. And so it's, what's the least bad way of sort of managing that period of growth? Human organizations aren't designed for it and I think it's worth being quite systematic about thinking about ways to do that. But realizing that you probably can't do much better than adequation. You know, for Stripe, it's things like we have three meals every day at sort of long tables where everyone can sit together, right? And if you think of net, how much more total human interaction happens as a result of having these kind of randomly mixed meals, it's vast, right? And it's kind of a whole list of things like that. But, I think that's kind of the general framework. >> One thing I'm really curious about you guys value transparency. How have you scaled it over time? I know we think about figuring it out all the time, just curious. >> So you know, start-ups, I can't remember who it was, defined it as a, start-up is an organization that's not yet stuck with all of these principle agent problems. That at most large companies, what is locally optimal for you is very frequently not what is globally optimal for the company. And so there are, as a consequence of that, probably a lot of ways in which a start-up can work differently to a big company. At a big company, a lot of the things that are good for you, well, you couldn't do them in a completely transparent environment, right? Because people would think less of you or you're doing things you're not supposed to. But because everyone is kind of sailing in the, or rowing in the same direction at a start-up, you can actually just make all of the information transparent. And so, I guess I mentioned earlier, Stripe used to BCC every other person at Stripe on basically every single outgoing email unless you opted out of it, because we thought that would be much more efficient. You wouldn't need to have as many meetings, if you just kind of keep abreast of what's happening. And over time we've sort of built an increasingly intricate framework of mailing lists and we now have a program for generating Gmail filters. And for like a pretty rocky patch where 50 people or so, to Ben's point of like, asking people how they're getting on after the first couple of days. They're reported terribly because like they couldn't even find all the emails that people were sending to them and they were missing things and everything. >> Gmail broke at one stage. >> Oh, right, at one point Gmail broke because we were just like sending too much email. It is hard to scale, because I mean, you might contact somebody outside of the company with like some great idea, and maybe the person sitting across the way from you thinks that's like the stupidest idea they've ever heard, right? And you're kind of subject to the scrutiny of the entire organization, to some degree, with all of your communication. Like kind of the challenging side of it. Then the good side is people are much more informed about what's happening. I guess I don't feel that I can give much stronger endorsement of it than it has worked so far. >> That's a pretty good endorsement. >> Yeah, I'm actually really curious how or whether it'll work when we're 5,000 people or something like that. If we're ever at that scale. >> I think the two things that have helped us scale it are one, changing the tools and two, developing the culture around it. And so on the tools front, you know, used to be the case, or the infrastructure, it used to be the case that you could keep abreast by what's happening in the company by reading all the email. Now we have weekly all-hands sometimes on the deck, and we actually have to put all this work into developing a deck to, to communicate to people what's going on in the company, since there's so much more. And the second is on the cultural side, so much information being available internally, you have to develop cultural norms around how it's treated. Obvious things like the fact that a lot of it's confidential to Stripe. But even less obvious things like when emailing someone or talking in Slack or IRESE, when that is viewed by now 170 people, it's pretty easy to get stage fright. And it's, it's pretty easy for what you thought was a reasonable proposal, you get this drive-by criticism. And you're now less likely to share in the future. And so, we've had to create norms around when it's reasonable to jump into discussions and how that interaction works. Because people are on the stage so much more. >> I'm pretty sure it's not good, but, not to put her on the spot but Emily interned at Stripe this summer. I'm curious, like, as an intern, what you thought of it? >> I think, overall, it's great. I think, like, my first week, I spent most of the time reading Hackpad and getting caught up on what the company was doing. It can often be quite distracting, from your own work, as there are oftentimes other parts of the company you're really interested in. >> Hackpad, by the way, is like Google Docs, but with a news feed and that way you can just like see all the documents. >> Yeah, and you're encouraged to make everything public, everything you work on. But overall, it gets you spun up really quickly. And we also have things called spin ups where every single leader of a team at the company, whether it's sys or it's product gives like a 30 minute talk on what their team is currently doing and how you can contribute, if you're interested. >> Do you think email transparency was net good? >> Yes I remember having a hard time understanding what I should and should not subscribe too. And the first week having 2,000 emails in my inbox and then by the end there are three of four teams you actually want that information coming in from. >> All right, audience questions. Yes. >> So this question for Patrick and John. Is it your experience that your early hires begin to grow and evolve into leadership roles as the company scales? And a question for Ben, how is the difference, what difference is today? How is a difference in your initial bid run of the product and the audience would be? >> All right, we'll go first on. The people, actually all three of you are welcome to answer this, have the people that you hired early been able to grow into leadership roles? >> In the Stripes case, yes, in that quite a number of the first ten people are in leadership roles now. I think that's one thing that organizations, again it's an unnatural skill that they have to get good at, is realizing that people don't necessarily come out of the womb being good at managing or being good at leadership and being able to develop that in people, and being able to help people progress as they spend a number of years at the company. It's a lot of work at a time when everyone is running around with their hair on fire, but it's also damaging if the company can't develop that skill. >> Yeah, I think for us the answer is some yes and some no. I think one of the big benefits of working at a start-up is that you can be handed a challenge that no one else would be crazy enough to give you the opportunity to take on. And that could managing people. It could be taking on a project. But the implicit contract with that is that if your going to ask somebody to take a really big risk on that, it shouldn't be like one-way through the door and if you don't succeed, otherwise it creates fright to give it a shot. So we have some folks that are managing large teams that started as individual programmers, where they were engineering and they said hey, I would love to try. I'd love to try leading a project and then leading a group and then taking responsibility for management, taking a group. And we've had other folks that tried it and they were like, I'm really glad I tried it because I never wanna do that again. We try to make sure that, for those people, like you can have just as much impact at a company through your individual contributions as an engineer or designer. You don't have to manage. But it's really hard to predict until you give people a shot. And so my strong preference is that you give as many people a shot as possible, in the few areas where you really feel like there's too much learning curve relative to the business objective you're trying to achieve. That's when you look for somebody who might be able to walk in and really execute well in that job. Are you going to answer the other question? >> Oh, so the question was how has the vision changed since we initially started? >> Yes, >> Sure, well I think on the vision, when we first started, I think we started hiring very inductively. We were like, oh, we're gonna build this really cool tool. People are gonna enjoy it. I love collecting things. Maybe other people like collecting things. And what we didn't expect, that kind of revealed itself early on, was that looking at other people's collections turns out to be this really amazing way to discover things that you didn't know you were looking for. It becomes kind of a solution to a problem that a lot of other technologies don't have. And so, over the last couple years especially, we've poured enormous kind of technical and design resources into building out recommendations products, search products, feed products. Leveraging the unique data that we have which are these pins that were all hand-picked by someone and hand-categorized. And then on the audience side, the first big surprise was truthfully when we first started, we didn't really know if anyone would use it. And we were just happy that anybody that wasn't related to us and obligated by familial relationship would use it. And so one of the biggest surprises has been how many people and how diverse those groups of people have been. I think that's been one of the things that's really exciting. And, the funny thing is, that is often like the company goes farther along, your aspirations therefore get bigger. So there's this gap that always exists, I tell my team, between where we are and where I think we should be, and even though objectively, we're much farther along, I feel like the gap has widened even farther. But I think that's a really common trait among people who found companies. >> Yes? >> You said that like, while selling a vision of the company you had to describe and go into detail that how hard it is going to be. And like they won't see their families for three years but then they will also get a thing that their grandchildren can be proud of. But how do you really know? Both of you know that the second part is not guaranteed but the first part, if they're not gonna see their family for the next year, it's gonna be a different show. So like, how can you be authentic by selling that vision of the company or is it about giving high returns for the high risk they are taking when the number of equity that already >> Great question. So the question is, most start-ups are not the iPhone. You can't guarantee that people's grandchildren are gonna remember this because most start-ups fail. How do you convince people to sort of make sacrifices to join a start-up? >> I think, part of the way in which it resonates with people is because it's not guaranteed, right? If it were guaranteed then it'd be boring. And so it's that there is the prospect of affecting this outcome, but nothing more than that potential. To the not seeing their families or kids, start-ups often do involve longer hours in the beginning, but I think, well. I, I think that that particular story is probably somewhat overstated. I guess, it was, I think Scott Forestall was trying to recruit these people. But I mean, even though startups, especially in the earlier days, tend to involve somewhat longer working hours. I think it was kind of this tendency to, to exaggerate it. And sort of, I mean it's like the startup version of fishing. Like, every startup thinks they worked even more insane hours than, you know, the next one back in the early days. Like, we literally never sleep or slept rather, for two years. So I don't know. I think that realistically for most people, it's not that big a sacrifice, right? You're, maybe on average, being really realistic about it, you'll work two hours more on average per day. It's certainly a sacrifice, but it is not forgoing all you know, pleasure and enjoyment for the next half decade. >> Yeah, I mean, I think even the iPhone wasn't the iPhone before it got done, right? I mean, no smart person you're hiring is under the illusion that you have a crystal ball into the future that only you have, and that joining is a guaranteed thing. And in fact, if you're telling him that and they select in, you probably shouldn't hire them. Because they, they didn't pass like a basic intelligence test about uncertainty in the future. But I, but I think it's fair to say, like you know, what's exciting and where you think you can go, and where it's going to be hard and chart your best plan. And then tell them why their role in it can be instrumental, because it is. You know I really liked what you said. You know, if you tell people like hey we're gonna go to Mars, it attracts the best people and then you're incrementally closer to getting to Mars. And they know that going in. What I would discourage doing is just whitewashing all of that. And if people kind of are joining because they want sort of oh, I want all this certainty and guarantee of working at Google, plus like the perk of working in a small start up and more email, and transparency. Like that's, that's a really, really negative sign. And for example, when I interview people they'll often say oh, I'm really passionate at what you're doing, and then I'm like well, what else are you interviewing? And then they'll just list seven companies that have nothing to do with each other except they're sort of at the same stage we're at. They're like, you know, I love the problem of discovery, so I'm interviewing at Stripe, Dropbox, Airbnb, Uber. Now I'm also putting into my resumé into Google X, into that part of the division. And that's a sign that they're probably not being authentic with which they care about. >> Yeah. >> And those folks often, when things get really hard, they won't stick it out and work through it. Because they were really signing up for an experience, not for achieving a goal. >> I think the other thing that motivates people a great deal, in addition to the prospect of sort of them you know, affecting some outcome is just sort of the personal development angle. And that a start up, just because it's much, kind of more lightly staffed. It's much less forgiving, right? In that, like, even if you're the best person in the world, if you're not going to. Well, whether or not you're the best or the worst person in the world, you're probably not going to significantly alter Google's trajectory, right? Whereas if you sort of, really wanted to benchmark yourself, and see how much a contribution and an impact you can make. And I think that prospect is quite compelling to a lot of the best people, then a start up is a much better place to, to go test that. >> All right. >> Last question, who'd you want? Last question. So this question is for Ben, but you guys can all answer it. But how has your user base effected your hiring strategies? So Pinterest is a site that's used like 80% by women, so how did that effect your initial hiring decisions? >> How has your user base effected your hiring strategy? >> Yes, so, You know, conventional wisdom is like you only hire people that religiously use your product every single day. And that probably works really well if you're making an API, probably amazing. For us, we screen for people that are ambitious and excited about the vision of cracking discovery online. And they have to know exactly how our service works and have to have used it. But they may not be a lifelong user. And that, for us it's this great opportunity because we can be like, what is the barrier that's preventing you from using it? Come join, remove that barrier, and help us get closer to that vision. I don't know, there's a lot of, if you read any sort of book, there's all this startup wisdom that sounds like really reasonable. But it's only useful if it works in your particular circumstance. And so for us, we've had to sort of broaden the lens a little bit in looking broadly about people that are ambitious about the mission. That care about the product and our approach to building products, even if from day one, they weren't our earliest users. >> The one thing I'll just tack on to that is that when we talked about the fact that, you know, it's really hard to hire for those early employees. And you know, you have people who have other good options. You're very much at the ugly duckling stage. Finding people who are passionate about your product can be a great way to find people. Because there you kind of have an unnatural advantage over other companies. And so I know, for sure, in Stripe's case, we definitely, we hired I think it was four Stripe users in the very early days. And you know, those were people who, who we probably couldn't have gotten otherwise. I'm sure it was the same in Pinterest's case, where you'll get all this benefit of working at Pinterest and hey, it's Pinterest. And you get to work where you pin. Yeah. >> Thank you guys very much for coming in today. >> Thank you.
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Channel: How to Start a Startup
Views: 100,884
Rating: 4.780488 out of 5
Keywords: startup, class, sam altman, CS183B, Y Combinator, Startup Company (Website Category), pinterest, stripe, ben silbermann, patrick collison, john collison
Id: H8Dl8rZ6qwE
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Length: 50min 37sec (3037 seconds)
Published: Tue Oct 28 2014
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