Key Moments
Keith Rabois - How to Hire
Key Moments
Hiring is the single most important company-building skill, yet no books offer actionable advice; focus on undiscovered talent over proven individuals and assess for 'weirdness' and ego to build a winning team.
Key Insights
There is a surprising lack of actionable advice in books on how to hire for startups, forcing founders to derive custom strategies.
Startups should prioritize hiring 'undiscovered talent' – individuals who are ambitious and talented but not yet widely recognized, as proven individuals are too expensive.
Assessing talent requires moving beyond traditional metrics; focus on 'barrels' – people with potential who may be 'weird' or have a 'screw loose' – and look for traits that predict success, not just current skills.
External hires carry significant risk, and companies should default to internal promotions, only hiring externally when an employee's growth cannot keep pace with the company's rapid expansion.
Recruiters can be helpful for establishing tempo and discipline, ensuring consistent inputs, but are rarely the key to unlocking exceptional talent.
When assessing candidates, focus on their motivations and whether they possess an 'unfair advantage' or 'superpower' to solve a specific business problem.
The paramount importance of team building
The core thesis of building a successful company, as emphasized by Keith Rabois, is that the team you build directly determines the company you build. This sentiment, echoed by figures like Vinod Khosla and Stripe's philosophy that 'every problem is a people problem,' suggests that all other aspects—products, markets, design—are secondary. If you can assemble the right people, challenges become surmountable; with the wrong people, success is nearly impossible. Despite this widely acknowledged importance, Rabois points out a significant gap: there are virtually no books or readily available resources that offer practical, actionable advice for founders on how to effectively hire and recruit for startups. This void necessitates a deep dive into contrarian and proven strategies for identifying, assessing, and securing top talent.
Debunking the myth of proven talent
A central, contrarian idea is the imperative to avoid hiring 'obvious' or 'proven' individuals. By the time someone is 30, their abilities are generally well-assessed and known, making them highly sought after by large, well-funded companies like Google or Meta. Startups, with their limited resources, cannot compete with the compensation these giants can offer. More importantly, individuals motivated solely by high compensation may not be the right builders for a startup. Instead, the focus should be on 'undiscovered talent'—ambitious, capable individuals who have not yet reached their peak recognition. This is akin to the 1980 U.S. Olympic hockey team's strategy, which leveraged the unique traits of less-experienced players against seasoned professionals. The key is finding people who have raw talent and potential, not just a track record that makes them an easy pick for established corporations.
Strategies for attracting top talent
Attracting talent to a nascent startup requires a multi-pronged approach. Relying solely on one's immediate network of friends and colleagues can be precarious, though it can work if one is ruthlessly disciplined in evaluation. A more robust strategy involves encouraging every new team member to list their most impressive contacts on day one, then proactively reaching out to them. 'Gene pool engineering'—identifying companies with concentrated talent in your desired skill areas and then surfing LinkedIn for profiles at those companies—is another effective, though more scalable, method. Creating a compelling 'trailer' for your startup, much like a movie trailer, is crucial to entice ambitious individuals to inquire. Even social media, while initially challenging to leverage for recruitment, can become effective over time as an audience is built. Announcing financing rounds should be primarily viewed as a recruitment tool, as it adds credibility and makes the startup seem more tangible for potential hires and their families.
The art of assessing 'barrels' and 'weirdness'
Assessing talent, especially for those without obvious credentials, is where the real difficulty and art lie. Rabois admits to being initially poor at hiring, with a 50-50 success rate. His breakthrough came when he realized he was better at assessing people already within the organization. CEOs must own this assessment process; delegating it is a mistake, as the ability to assess strangers differs from excelling in a craft. The focus should shift from 'ammunition' (people who reliably execute) to 'barrels'—individuals who are unique, perhaps unconventional ('a screw loose'), but possess immense potential. These 'weird' individuals often correlate with the highest value creation. Hiring interns early on is also a strategic move; the best interns can develop into future founders or key employees. Furthermore, it's crucial to differentiate between hiring for 'value creation' (where experience can be a hindrance) and 'value protection' (where experience is vital, such as for general counsel or CFOs).
Developing taste and hiring 'killers'
To develop 'taste' in assessing candidates, especially for roles where the CEO lacks expertise (like a VP of Engineering for a non-technical founder), Rabois suggests a method taught by Brian Chesky: identify five world-class individuals in that field and have coffee with them. This exposure helps calibrate judgment. For references, the goal is error avoidance rather than positive affirmation. A key question to ask references is blunt: 'Is this person a killer?' A strong, immediate, and enthusiastic response indicates a successful candidate, whereas hesitation suggests otherwise. This approach aims to build a 'culture of killers'—people driven to win—essential for building a winning company.
When to hire internally versus externally
The decision to hire internally or externally carries significant risk, especially for fast-growing companies. Rabois advocates defaulting to internal promotions, viewing external hires as akin to 'open heart surgery'—expensive mistakes if not done perfectly. External hiring should only occur when an employee’s growth cannot keep pace with the company's trajectory. For hyper-growth companies, the ratio might lean heavily towards external hires (e.g., 70-30), as few individuals can scale directly with extreme growth. A key indicator for considering external candidates is when internal employees begin to plateau. Brian Chesky’s method of assessing if a candidate can think six months ahead can help identify this plateau. The principle is to continuously extend opportunities and complexity to existing talented employees, observing when they naturally reach their limits. It is also generally better to hire for new capabilities rather than more of the same role, as adding a new capability can drive breakthrough growth.
The critical role of speed and 'cult' building
Speed throughout the hiring process is a startup's advantage. A lengthy interview process with more than five candidates diminishes returns and compromises speed, making it harder to close candidates. Asking candidates directly, 'Is there anything that would prevent you from accepting this offer?' is an effective way to surface and address potential objections upfront. Investors can also be valuable allies in the closing process, helping to address candidate concerns. Fundamentally, startups are often described as 'cults' – possessing unique worldviews that attract like-minded individuals. Therefore, founders should be clear about their 'cult principles' and only hire people who opt into that vision, rather than trying to convince those with opposing views or traits. This selectivity is crucial for maintaining team cohesion and shared purpose.
Time allocation and hiring with ego
A crucial, often overlooked, aspect of hiring is time allocation. Rabois challenges founders to review their calendars and see if recruiting genuinely occupies a significant portion of their time, suggesting that most founders do not align their time spent with the stated priority of hiring. He also posits a contrarian view on hiring candidates with egos. His observation is that almost anyone who has achieved world-class status in any field possesses an ego. He does not recommend filtering out candidates with egos, as he believes they are essential for building a winning company composed of winners. This is not about hiring arrogant individuals, but rather those with a strong sense of self-belief and a drive to succeed.
Mentioned in This Episode
●Software & Apps
●Companies
●Organizations
●Books
●People Referenced
How to Nail Your Next Hire
Practical takeaways from this episode
Do This
Avoid This
Common Questions
The team you build is the company you build. Having the right people makes solving challenges almost possible, while the wrong people make it nearly impossible. Focus on people over products or markets, as they are the ultimate drivers of success.
Topics
Mentioned in this video
Co-founder of PayPal, who advised Keith Rabois not to hire anyone over 30, emphasizing the difficulty of assessing older candidates against large companies.
Interviewed by Rabois, he stated it's his job to convey why Stripe is the most compelling thing an individual could do with their life.
Baseball legend who advised Rabois that confidence, more than just technique, is key to identifying all-stars.
A board member at Square who gave Keith Rabois advice on team building and later commented on Square's growth rate impacting hiring.
The coach of the 1980 US Olympic hockey team who designed a system to leverage unproven talent.
The speaker, sharing his insights on hiring.
CEO of Airbnb, who taught Rabois lessons on developing taste in hiring and how to assess people's ability to think ahead.
CEO of DoorDash, who interviewed a large number of early employees and conducted many references.
Keith Rabois's former boss who emphasized the need to create leverage on his team for promotion.
Co-founder of Square and Twitter. Taught Rabois the closing question for candidates and was adamant about hiring design-driven accountants.
Co-founder of PayPal and friend of Keith Rabois. Is a technical expert whom Rabois can consult to interview candidates for VPE roles.
A platform mentioned for finding and assessing potential hires, with profiles providing data points for consensus views.
A company where Keith Rabois worked and received key advice. Also mentioned in later anecdotes regarding hiring practices like the smoothie intern and design-driven accountants.
Mentioned as a company that ruthlessly used early hiring techniques, including reaching out to people's networks.
A large company that startups cannot outspend for talent. Also referred to as Facebook in the context of early hiring practices.
Organization hosting the event where Keith Rabois is speaking. Mentioned as having offices.
A company with a philosophy about problems being 'people problems'. Also mentioned as a company where Patrick Collison works.
A fitness company where Rabois filters people based on their ability to positively manipulate the world around them.
A company mentioned as a competitor that startups cannot outspend for talent due to their significant financial resources.
A company where Keith Rabois started his career and implemented hiring philosophies, including hiring friends and focusing on critical talent density.
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