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

Part two of culture and team, and we have Ben Silberman, the founder of Pinterest, and John and Patrick Collison, the founders of Stripe. Um, 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 going to 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 going to 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, you know, 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 want to ask a very open question, which is: what are the core pieces of culture that you found to be most important in building out your companies?

"Start. Sure. What are the most important parts?"

"Yeah, it's on. Oh, it's on. Um, yeah, I mean I think for us, like we think about it on a few dimensions. Like, 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? Um, three is what do we choose to communicate? And then I think the fourth is what we choose to celebrate. And 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—transparency internally. Uh, and I think it's something that's been really valuable for Stripe, uh, and also a little bit misunderstood. Uh, all the things people talk about, like you know hiring really great people or giving them a huge amount of leverage, uh, transparency for us plays into that. We think that, you know, 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 grow a startup."

"So, we've—as we've grown—you know, 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, you know, 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, you know, use Slack, how we use email, things like that—we can go into it more later—uh, but I think that's one of the core things that's helped us work well. Um, I think culture to some degree is basically kind of the resolution to a bandwidth problem, uh, in the sense that, you know, maybe when you start out working on something, you're sort of coding all the time, but you can't code all of the things that you think the product might need or the company might need or whatever. And so you decide to work with, with more coders, right? Um, and so, you know, the organization gets larger, and maybe in some idealized world—I don't think this is actually true—but kind of ideally you could be involved in every single decision in every single sort of moment of the company and everything that happens. But obviously, you can't—or maybe you can at 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, uh, 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 instead of fewer and fewer decisions over time. Um, and, uh, I think when you think about it that way, you know, maybe its 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 headcount growth is sort of on a curve that looks like, you know, one of the great companies."

"And, uh, yeah, that's super important. And kind of it manifests itself in a, you know, a bunch of different ways. Like, for example, uh, in hiring, uh, I think a large part of the reason why the, maybe the first 10 people you hire are kind of go-to sh decisions are so important is because you're not just hiring those first 10 people. You're actually kind of hiring a hundred people because you should think of kind of each one of those people as bringing along sort of another 10 people. And sort of figuring out exactly what sort of what 90 people you would like those first 10 people to bring along is obviously, uh, you know, it's going to be quite consequential for your company."

"But really briefly, I think it's largely about sort of abstraction. So one thing a lot of speakers in this class have touched on is how hiring those first 10 employees—if you don't get that right—the company basically will never recover, but no one's talked about how to do that. So, what have the three of you looked for, um, when you've hired these initial employees to get the culture of the company right? How have you found them and what have you looked for?"

"Uh, sure. So I guess this answer is different for every, 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. Um, 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 big misconception, um, that someone said once is that people think culture is like architecture when it's a lot more like gardening. Uh, 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, um, we hired people that were like ourselves. Um, and 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. Um, I looked for people that were creative, and that usually meant they were really curious—they had all these different interests. Um, some of our first employees are probably some of the quirkiest people I've ever met. Um, they were engineers, but they also had all these crazy hobbies. Like one guy had made his own board game, uh, 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 in the preview."

"And I think 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, um, tend to build really great products. They tend to be great at collaborating. Um, and the last thing is, you know, 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. Um, and that at the beginning is very, very easy to select for."

"If you were in our situation, we had this horrible office—like nobody got paid. And so there was no external reason other than being excited about building something, uh, to join. In fact, there was every reason not to. Um, 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, uh, a clean office, uh, you know, good equipment just for the chance to work."

"So um, to this day, I think a lot of those traits have been seated and are embedded in the folks that we look at now. Um, yeah, the first 10 hires are really hard because, you know, you're making these first 10 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—like their friends are telling them not to join."

"For our second employee, uh, he was like, I think maybe he accepted the offer or he was just about to, and his best friend took him out the night before. It was like a full-on assault for, uh, you know, why you should not join this company—why this is like ruining your life basically. Um, and so anyway, the guy subsequently continued to join, and actually one of those friends also now works at Stripe. Uh, but, uh, this is what you're up against, yeah. Um, and I mean it's also hard because no batch of 10 people will have as great an influence on the, uh, on the company—those first 10 people. Um, and I think everyone's impression of recruiting is, you know, you open LinkedIn, it's sort of like ordering off the dollar menu. You just like, I want that one and that one and that one, uh, and now you have some hires. Whereas, uh, at least for us, uh, it was very much over a very long time period, uh, talking people we knew, uh, or friends of friends into joining. Uh, we didn't have, you know, huge networks. Uh, Patrick and I were both in college at the time, so there were no people that we'd, you know, we really worked with to draw on. Uh, and so a lot of those early Stripes were people we had heard of—friends of friends. Uh, and the other interesting thing they all had in common is that they were all sort of, um, early in their career or undervalued in some way. Because when you think about it, if someone is a known spectacular quantity, then you know they're probably working in a job and very happy with that."

"And so we had to try and find people who were, uh, you know, in the case of our design that we hired, he was 18 and in high school and in Sweden at the time. Uh, in the case of our CTO, he was in college at the time. You know, a lot of these people—they were early on in their careers, uh, and the only way we could— you can relax one constraint; you can, um, you know, relax the fact that they're talented or relax, you know, that it's apparent that they're talented. Uh, and we, you know, not consciously, but we relaxed the ladder."

"Yeah, I think finding kind of the people who are kind, I guess you to kind of think like a value investor, right? You're looking for the human capital that's significant, undervalued 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 W to join, that's great, but they're probably harder to convince. Um, uh, John, I spent a little while yesterday afternoon sort of trying to figure out in retrospect, um, what kind of traits our first 10 or so people had in common that we thought were significant. Um, you know, in general, sort of speaking about culture, uh, you know, I sort of want to caveat everything we say with, you know, I, I, Paul, I think said that sort of advice is, you know, very limited experience—wildly over-extrapolated. Um, and uh, I think there's a lot of truth to that, but, uh, for our particular first 10 people, the things we sort of figured out that seem to be important were, uh, they were also genuine and straight."

"I think that actually matters quite a lot in that sort of there are people that others want to work with. Um, they're people that others trust—they sort of have an intellectual honesty in how they approach problems and so forth. Um, they were people who really liked getting things finished. Uh, 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. Uh, you know, there's a lot of talk about, for example, uh, hiring people, you know, off their GitHub resumes—whatever. I actually think that doesn't quite ring kind of correct to me in the sense that that places a large premium on sort of lots of different things. I think it's actually a priori sort of much more interesting to, you know, work with someone who has spent two years sort of really investing in going deep in a particular area. Um, and then, uh, the third trait that 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 were all these like crazy things we used to do that, um, I mean do in fact seem crazy, like we probably shouldn't have done them."

"But everyone was always like, well, was borderline insane instead of how much they cared about tiny details. Like we used to, um, uh, like every single API request that ever generated an error went to all of our inboxes and phoned all of us, uh, because it seemed terrible to like ever have an error that didn't go and sort of get a resolution from the user standpoint. Um, or we to like copy everyone else on every outgoing email, and we'd like point out, you know, slight grammar or spelling mistakes to each other because it'd be terrible to every send an email with a spelling mistake."

"So, uh, anyway, those were the three traits we come up with. Anyway, a genuine, um, uh, caring a great deal and, um, uh, sorry was my second one. The other one, yes, um, completing—sorry, sorry, yes, completing things, like list of three items."

"Yeah, and the only thing I'd say, I just don't think there's any wrong place to find people. Um, 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. Um, you know, we met people at a bar. We used to throw weekly barbecues at the office. It was like bring your own—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 Coupa because their office is like strategically situated next to the best coffee shop. Um, but I think that the really good people generally, um, they're generally doing something else. And so you have to go seek them out rather than expecting that they're going to seek you out. Uh, triple so, uh, when no one's ever heard of or is using, uh, the product that you're working on, yeah."

"And it's probably really important to have a great elevator pitch, not even for investors, but just because everyone you, uh, run into right now is, you know, maybe six months, a year down the road, a potential recruit. Uh, and so the right time to have gotten them excited about your company—the right time for them to have started following it and, you know, be thinking about it as they think about what they're going to do next—is, you know, as soon as you can start. Uh, it's going to take a very long time to recruit people. So being able to consistently get people excited about what they're doing, uh, will pay back dividends later."

"Maybe this is, um, a little bit tangential, but John and I were also chatting about yesterday afternoon sort of like a bunch of our friends have sort of started companies right out of school. We're sort of thinking about what seems to go wrong in those companies, and I think something that, um, that maybe the most common failure mode seems to be sort of doing something kind of overly niche or overly sort of specific and bounded. 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 startup, right? A class kind of plays out on a quarter or a semester or whatever, whereas a startup is like a five or 10-year thing. Um, and I think this is really problematic because, uh, it's actually quite hard to hire people for niche things, uh, 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 it also sounds awesome, right? Uh, and so it's actually pretty easy to convince people to work in it."

"Whereas if it's, well, you know, we're going to build this—I don't want to single out any particular idea because it probably sounds like I'm picking some actual startup 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'd solve as part of a class project, that's actually much harder to hire for."

"One specific question that has come up a lot, um, 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 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 work 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 hire just wasn't a good fit, you owe it to the company and to them, uh, to tell them how they can improve. And if they're not working out, to fire them. But I think that the generally that 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