Key Ideas

• There are opportunities that may look really interesting and potentially compelling for the business, but they’re really just a distraction. Conversely, there are things that look like a distraction, but they could actually turn out to be really important and just might be gems. The hard part of scaling is how to figure out those things and to find the truth in all of it — that’s the job of the COO.

• Hiring the Best — Barrels & Ammunition

  At a startup, you can be tricked into thinking you’re building a technology company, so you focus a lot on the product. But ultimately, you’re really building a team to build the product and then the company.

  • If you think about people, there are two categories of high-quality people: there is the ammunition, and then there are the barrels. You can add all the ammunition you want, but if you have only five barrels in your company, you can literally do only five things simultaneously.
  • Finding those barrels that you can shoot through — someone who can take an idea from conception to live and it’s almost perfect — are incredibly difficult to find. Whenever you find a barrel, you should hire them instantly, regardless of whether you have money for them or whether you have a role for them. Just close them.
  • The analogy of an editor is great because what an editor does is not the work product. Think about a reporter. The reporter writes the story. The editor may ask clarifying questions. But, fundamentally, editing is the role.

• Diversity in Hiring: Good or Bad?

  At a startup, you want to hire people who share your principles. If you don’t agree on these basic building blocks, you wind up getting into infinite loop arguments that impede execution.

  • Once you have people who agree on these first principles, then diversity in thought and background can create a lot of value — and it’s probably worth optimizing around.
  • You’ve got to define what talent looks like for your company in a way that you can actually execute against and make happen. For Rabois, this means you often hire people who are a little less proven and take a chance on them.
  • The one obvious challenge with this approach is that you need to become really good at identifying undiscovered talent. However, there are a few leading indicators which Rabois has found to work incredibly well:
    • The candidate can relay incredibly complex ideas in simple terms.
    • The candidate can see things you don’t see. Even within topics, you’re fluent in, they’re able to convince you of new points of view or make you realize you’re missing something.
    • They’re relentlessly resourceful. There should be things in their history, whether it’s on or off the résumé, which conveys that they’re able to make things happen, against all odds.
    • They’re often contrarian. Peter Thiel now has popularized a way of figuring this out. He asks, “Explain something that you believe, that everybody else believes is wrong.”

• Who Should Lead the Team?

  • His real belief structure was that whoever is best at a particular discipline should run that discipline.
  • What this means is that you actually have a merit-acquired culture. You don’t frustrate junior people because they know that the person leading them is better at their job than they are.

• How to Evaluate Your Team’s Performance

  • In a broader sense, you can often figure out if your team is functioning well depending on where they are relative to where they’re supposed to be.
  • If you want people to make smart decisions, they need context and all available information. And certainly, if you want people to make the same decisions that you would make, but in a more scalable way, you have to give them the same information you have.
  • Ownership at companies is now almost a cliché, but if you really believe in it then you need to live it and share everything possible with as many members of your team as you can.