keith rabois

How to Find and Grow Talent – Keith Rabois on Resources for Humans

Check out the Resources for Humans Episode Page & Show Notes

Key Takeaways

  • If you’re going to succeed as a startup, you need to be able to find and hire undiscovered talent
  • The optimal startup employee:
    • Is tenacious
    • Learns quickly without much instruction
    • Is incredibly resourceful
    • Thrives in a chaotic, unpredictable environment
    • Is out to prove something
  • When you need upside, hire aptitude. When protecting against the downside, hire experience.
    • “When you’re trying to create something from scratch, experience is often a handicap”Keith Rabois
  • The false-negative hires (the people you didn’t hire that could have been great) are, counterintuitively, more of a mistake than the mistake-hires
  • “If you believe you have people who have 10x value creation, improving their abilities has magnificent effects compared to trying to fix people who aren’t ever going to create 10x value.”Keith Rabois

Books Mentioned

Intro

How to Identify Talent

  • It’s much easier to identify talent internally (within an organization) as there are more data points
  • Identifying talent externally, based on an interview, is much more complicated: “But it’s one of the most important things a founder or executive does to build out his or her team” – Keith Rabois
  • Peter Thiel gave the following advice to Keith back in the early days of Paypal: If you’re going to succeed as a startup, you need to be able to find and hire undiscovered talent
    • If someone has a lot of data points on their resume that suggests their superb abilities, a larger company (i.e., Google, Facebook, or Netflix) will go after them (and they’ll likely be willing to pay much more than a startup can afford)
    • Keith adds: “It’s a little bit like drafting elite athletes out of college”

Before Hiring Anyone…

  • Figure out what type of role you’re hiring for:
    • Is it a value creation roll? (AKA creating value from scratch)
    • Or are you trying to preserve value? (AKA you’re already doing well and just want to make sure nothing gets screwed up)
    • ^These are VERY different – the former is much more challenging to hire for

How do you attract great people to your startup and away from larger organizations?

  • “The selling point is the opportunity”Keith Rabois
    • The opportunity to grow, the opportunity to run something yourself, etc.
    • Also good selling points: The challenge and degree of flexibility
      • Leverage the fact that, as a startup, the number of people who can tell you “no” or veto certain ideas is generally pretty small (especially compared to larger organizations)

The Optimal Startup Employee…

  • Learns quickly by “being thrown into the water”
    • Avoid hiring those who need a ton of instruction 
  • Is tenacious
    • “The tenacity of going over a wall, under a wall, through a wall, making friends with a wall, figuring out why the wall doesn’t matter… that’s the core skill most startups need” – Keith Rabois
    • How do you identify this?
      • You just know, especially after meeting them in person (or they have some background indicators)
  • Has “intellectual horsepower” 
    • Why? – Startups are solving problems other companies can’t, and solutions come from a combination of insight, tenacity, perseverance, and high IQ
  • Is incredibly resourceful 
  • Thrives in a chaotic and unpredictable environment
  • Has a bit of a chip on their shoulder/has something to prove

Hiring for Aptitude vs. Experience

  • “Generally, I believe in the people with aptitude, not experience” – Keith Rabois
    • At Square, Keith notes they rarely hired anyone with a payments/financial services background
    • “At Paypal, I think the only person who knew anything about payments was our general council” – Keith Rabois
  • 🎧 That said: In some roles, experience is undoubtedly valuable
    • Which? – Particular risk reduction-type roles
  • 🎧 “When you’re trying to create something from scratch, experience is often a handicap” Keith Rabois
  • Think about it this way: When you need upside, hire aptitude. When protecting against the downside, hire experience.

Hiring is a Skill

  • “I think hiring is itself an independent skill that you get better at by doing more of”Keith Rabois
    • You might be an excellent computer engineer, but that doesn’t mean you should interview potential engineering candidates or are good at assessing potential talent

When Hiring for Upside, You Will Make Mistakes

  • Don’t try to be a “zero-defect hirer.”
  • When attempting to identify/hire unrecognized potential, you will make mistakes by definition (if you don’t, you’re too conservative)
    • “Some of the most interesting people that create the most innovation have a screw loose one way or the other. If you overreact to that loose screw, you’ll miss some of the most talented people on the planet. So you have to be willing to make some mistakes.” – Keith Rabois
  • The false-negative hires (the people you didn’t hire that could have been great) are, counterintuitively, more of a mistake than the mistake-hires

How to Maximize Your Team’s Potential

  • Double down on your stars
    • To identify your star-employees: Notice who people in the company go to talk to that they don’t have to (watch whose desk becomes popular – this is especially noticeable in an open office)
    • 🎧 “If you believe you have people who have 10x value creation, improving their abilities has magnificent effects compared to trying to fix people who aren’t ever going to create 10x value.” – Keith Rabois
      • Management drag is created when too much time is spent helping struggling employees. This time should instead be directed to making the top 10-20% of employees more effective – that’s where the real impact comes from.
  • “Constantly expand the scope of responsibility for every single employee. Everybody will break at some point, but you want to keep pushing the envelope until they can’t discharge that level of responsibly successfully anymore.” – Keith Rabois

How to Deal with So-So Job Performance

  • Do you fire them? Do you let them be? Do you have them switch roles?
  • A good analogy:
    • Most managers in baseball usually make the mistake of leaving in their starting pitcher too long, as opposed to calling for the relief pitcher
      • (This is how you need to think about it – the starter got you so far, but you need a different skill set to go forward)
  • “The best leaders are thinking two or three steps ahead and can see when a certain person is going to start struggling, and are already recruiting, interviewing, and assessing people so they have someone who can step up to the plate when the time’s ready” Keith Rabois

How to Give Effective Feedback

  • The frequency and timing of feedback MATTERS
    • People tend to defer giving feedback for a few reasons: It takes work to do well, it isn’t always pleasant, etc.
  • Good feedback is specific (related to a specific scenario) – have something tangible and concrete to point to
  • Knowing where you want the person to get to helps you construct good feedback – you need to have an idea of their end destination

Team Structure

  • “I think you need to subdivide teams… I like small, vertically integrated teams that have accountability for a specific set of metrics” – Keith Rabois
  • With a small team:
    • People have an ownership mentality
    • You can see who’s doing well
    • It’s easier to spot the existing skill gaps
    • People have a sense of independence
    • A narrower focus/scope results, this improving execution 

A Culture of Transparency

  • If you don’t provide your employees with enough information, two things go wrong:
    • They won’t make the right decisions
      • “One of the reasons why CEOs get frustrated, more often than not, with parts of their team, is because people make decisions that aren’t aligned with what the CEO wants. The biggest reason for that is generally a lack of information. The rest of the team doesn’t have the full picture.” – Keith Rabois
    • A sense of distrust is created
      • “If you want people to trust you, you have to actually earn it. The more information you give people, ironically, the less an organization usually leaks it to the media.” – Keith Rabois
  • Keith believes in radical transparency, and sharing basically everything within the company
    • The only questionable item: Compensation information
    • “Complete transparency will lead to better problem-solving and more of an ownership mentality with your team” – Keith Rabois
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