a16z’s Latest Revelation: How Successful Startups Attract Top Talent

a16z's tip for attracting top talent in successful startups

Sense Thinking

1) Based on observations of many founders, those who are good at going from 0 to 1 and those who are good at going from 1 to 100 differ greatly in their ability models, ways of thinking, management methods, and radius. Reorganizing innovation in a stable, process-driven organization often encounters significant internal resistance and mismatched goal measurement, making it more difficult than starting from scratch.

2) People have a fundamental love for themselves, and many founders have an extreme strong mindset, making it easy to find resonance and recognition in people whose models are similar to their own. However, diversity in the founder team is crucial, and leveraging the strengths and complementarities of partners requires a certain amount of weak thinking and strong trust as a foundation.

3) Recruiting the right people is a skill, and sending away unsuitable people is even more so; the opportunity cost of mismatching is greater than imagined, and the potential challenge is how to objectively evaluate employee job performance and maintain sensitivity to excellent market talent.

4) A company has a clear personal color of the founder, even if he is not in the forefront. In the AI era, we see many founders endorsing products. With diverse and high-density media, users have the right and interest to understand the vivid individuals behind product creation.

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5) Even in the wave of anti-globalization, the pace of corporate globalization is becoming more firm, and people who truly understand market customs and ecology and can implement them on the ground are important anchors rooted in the market.

Recently, a16z gathered a group of early-stage CEOs to discuss business secrets and learn from peers who have succeeded in transitioning from fighting in the early stages of entrepreneurship to developing into large growth stages or even listed companies. This event invited a series of experienced founders and leaders for interviews, sharing their experiences and insights in running companies for decades.

These interviews covered many topics, and here are some highlights on recruitment, dismissal, and expansion.

Attached: Interviewed Companies

– Databricks: A big data processing and artificial intelligence company that provides cloud-based data engineering and machine learning platforms based on Apache Spark.

– Cloudflare: A leading network security and performance optimization company that provides services such as content delivery networks (CDNs), firewalls, and DDoS attack protection.

– CrowdStrike: A leading global cybersecurity company that specializes in providing endpoint security solutions and threat intelligence services.

01.

Ali Ghodsi, Databricks CEO

“What we do is think back to how we did things when we first started the company in 2013. I think the situation now is that a lot of smart people create great products, but then you go on to be a CEO and do other things. And now there’s no one in the company who can actually replicate your early actions.

“When you become a big company, the cycle becomes so slow. When you expand a little bit in the company, 99% of the people you hire are 1 in 100 or 1 in 1,000 people. They’re not zero-to-one people. So, you need to create the zero-to-one environment again for new product creation, and then hire people who can handle all sorts of challenges and be proactive. They might do a little bit of product management, guide some code, get customer feedback, and iterate quickly.“

“We’re trying to go back and find the PhDs who created projects at Databricks. We hire them from universities and give them this mixed product and technical leadership role where they work with a handful of customers and build things for them. There’s a huge additional burden of building anything at Databricks–mostly in terms of compliance and security requirements–so we try to relieve these people of as much of that stuff as possible so that they can incubate. And then we make them work very closely, so that some of our customers are wildly successful. Once we nail something for one company, then we start applying it to more and more customers, and then we build a product out of it.”

“Some people fail, but that’s life. If you operate lean and highly iterative, it’s okay.“

You have to have a lot of empathy for your employees; you don’t just want to be a heartless CEO. You always have to be aware of the truth and not lie to yourself. You have to understand the priorities that make the company successful and make decisions accordingly. Sometimes people lie to themselves or confuse priorities, like, “I have a co-founder as COO and we’ve always been good friends. If he resigns, he might take others with him, which could have a negative impact on our corporate culture and generate negative publicity in the media.”

But you have to start with the first principles: Do you have a great team that can win in this market? If not, you have to act in the best interest of the company. For us, that meant changing out the entire executive team.

You can’t build an org chart around people unless it’s the genius who created the entire product and is still responsible for everything. For everyone else, you have to make the right long-term decisions for the company.

02.

Matthew Prince, Cloudflare CEO

Before Cloudflare, I co-founded a company with two other people. When I was looking for co-founders, I was looking for people I trusted, people I would want to hang out with socially. So, I did actually start a company with two high school buddies. We all had a bit of a nerd streak, we all had technical backgrounds, we all had legal backgrounds, we were all about the same age and we grew up around each other. We constantly fought over who was really responsible for what. Because at the end of the day, we could all do each other’s jobs. If you drew a Venn diagram, all of our circles would be completely overlapping.

So when I was thinking about starting another company, the first thing I did was look for people who were a little more distant from me socially, but could complement me in the areas where I’m weak. Michelle and I were business school classmates. But I joke that if she invited 40 people to her birthday party, I might not get an invite. If she invites 50, I might make the cut – right in that range.

We do a really good job of cutting the world up into various parts. Our third co-founder, Lee Holloway, is a technical genius. Michelle is the one who makes sure everything runs smoothly. I’m the one who says, “Let’s go that way!” You need a lot of surface area covered when you’re starting something and you want there to be a little bit of overlap among the founders’ circles so you can communicate, but you want that overlap to be as small as possible so you’re covering as much surface area as possible.

03.

Michelle Zatlyn, Cloudflare COO

One mistake founders often make when scaling, generating real revenue, and building a leadership team is not hiring executives who are better than they are in a particular area because they fear being fired themselves. You worry that investors will say things like, “This person is better at sales than I am. Maybe they’ll fire me and have that person take over.” But the reality is that the fastest way to get fired is to hire someone who doesn’t have complementary skills. What you want is executives who are better than you in these areas.

The truth is, everyone wants you to stay and be successful. Companies led by their founders outperform those brought in external professional managers at that stage.

“In the early days, you have to find clever ways because you can’t put more money into the competition. You have to find something that you do better than others. As a founder, you can have personality and you should let your personality shine. For example, on our blog, everything under Matthew’s name is written by him. He doesn’t have a ghostwriter. He writes himself. Our CTO, who was also the 20th employee of Cloudflare, is also a very good writer.

We have high-quality technical content on our blog that attracts other great writers to come and join us. They ask, “Can I write a blog?” We say, “Yes, please write. The more technical and nerdy, the better.” We have some really great talent that we may not have been able to hire if it wasn’t for having them tell stories on our blog. Once we realized the blog was an asset, it became a self-perpetuating force.”

04.

George Kurtz, CrowdStrike CEO

In my mind, I rehire everyone every day. It’s difficult for people, including founders, to make the decision to let someone go who they have known for a long time. But the reality is that you have to let people go. If they’re not right in their current role, you want to find a different role or a different place for them. Or they may be the right fit when you have 100 people, but when you scale to 1,000 or 5,000 people, they may no longer be the right fit for the company . So I have a simple rule, which is: Based on what I know about someone today, would I hire them again for that role if I had to make that decision today? It’s a very simple formula.”

It may sound a little cold, but I’ve never regretted letting someone go too early. In fact, I always regret waiting too long. You really need to pay attention to whether they can adapt to the current scale and whether they are suitable for today’s situation. If they are not suitable, either find them a different position within the company or give them respect and condolences when they leave.

One of the important lessons for me is that helping you get to today’s people may not help you get to tomorrow’s. Companies must go through different stages of growth, and as the company expands, you must make some difficult choices over time.

Many companies, when expanding internationally, simply send a salesperson and an engineer to a foreign city and see how it goes. But the challenge of doing so is that you don’t have enough momentum. We’ve also made some similar attempts, but then we decided, “If we want to enter a city, we need to invest heavily. We will send a large number of personnel there to provide support and market promotion, and in order to succeed, we need to have some influence in that field. We won’t enter a hundred cities.” So now our international business accounts for 30% of total company business, which is similar to many large companies, but we hope to achieve a 50-50 ratio.

But I think one of the important lessons is: don’t try to scatter the power of international expansion, but focus on the key points.

The second lesson is that in other geographic markets, many people want to become the CEO and they come in acting very domineering. Don’t hire these people. You really need to hire those who are willing to do the work themselves, do the work, sweep the floor, etc.. Over time, they may not be the right candidates, but you must hire the right people at the right time, rather than, like our situation, hiring those who want to become the CrowdStrike emperor of the Japan region.

Reference material

https://a16z.com/2023/05/10/enterprise-startups-advice-on-hiring-firing-scaling-and-selling/