The Art of Hiring:
Lessons from Keith Rabois on Building Teams for High Growth
In any industry, the team you build defines the company you become. Keith Rabois, a venture capitalist with experience scaling companies like Square and PayPal, dives deep into hiring strategies that challenge conventional wisdom. Drawing on his insights, let's explore how to Attract, Assess, and Empower talent to create a winning team.
The Talent Dilemma: Undiscovered vs. Proven
The typical approach to hiring focuses on filling roles with experienced candidates. Rabois argues that startups can’t afford to rely on traditional candidates, the ones everyone else is competing to hire. Instead, he encourages looking for “undiscovered talent,” the individuals overlooked by bigger players but full of potential. Think of the 1980 U.S. Olympic hockey team, as Rabois describes it: a group of “misfits” who, despite lacking professional experience, defeated the Soviet powerhouse.
This isn’t about rejecting experience but identifying individuals with raw skills and ambition. For startups with lean budgets, the lesson here is crucial: take calculated risks on people with potential over those with polished resumes.
Actionable Insight: Instead of aiming for traditional “safe hires,” leverage personal networks. Ask each new hire to list the ten most impressive people they know, and reach out to them. This practice helped companies like PayPal and Facebook in their early days and may yield untapped potential.
Building a Recruiting System: Gene Pool Engineering
Rabois emphasizes creating a deliberate recruiting process he terms “gene pool engineering.” He suggests looking at companies known for having employees with the skills you need and then focusing on finding talent within that “gene pool.” Once you identify companies with a rich talent base, reach out directly to those individuals with a compelling pitch.
Startups can also use social media and company visibility as tools for recruitment. Rabois advises that announcing a funding round, for example, is more useful for attracting talent than securing customers. For candidates, a visible startup with some brand recognition can reassure family members or friends skeptical of career risks.
Actionable Insight: Build a “trailer” for your company, akin to a movie teaser, highlighting why your startup is the most exciting venture for ambitious professionals. Think of your startup’s “trailer” as a tool to attract candidates beyond just the first few employees in your network.
The Power of Nontraditional Interviewing
For Rabois, standard interview scripts fall short. He champions a dynamic approach, matching candidates’ strengths and motivations with real problems the company faces. This perspective views interviews as opportunities to assess not only skills but also whether a candidate has an “unfair advantage” in solving a particular problem.
He offers two revealing questions:
What would you have done differently as CEO in your last role?
If you could do anything with your life, what would it be?
These questions serve a dual purpose. First, they allow the interviewer to gauge candidates’ independence and creativity. Second, they offer insights into the person’s values and motivations—essential for determining cultural fit.
Actionable Insight: Look beyond resumes. People can demonstrate the qualities you seek—like problem-solving and risk-taking—in unconventional ways. Rabois hired a key player based on how they played soccer, not for their business experience.
Speed as a Strategic Advantage
The longer a hiring process, the more likely it is to lose a strong candidate to a competitor. After all, speed is one of a startup’s greatest assets. A lean interview process with quick decision-making shows candidates that your company is agile and decisive, enhancing your attractiveness as an employer.
Additionally, Rabois cautions against excessive interviews. Meeting with five people or fewer is usually sufficient. “Every additional person slows down the process and dilutes focus,” he says, and research supports that diminishing returns set in quickly in extended interviews.
Actionable Insight: Keep your hiring pipeline lean and prioritize quick turnarounds. Challenge your team to reduce interview rounds and extend offers promptly to avoid losing top talent to slower processes.
Hire for Value Creation, Not Just Value Protection
When evaluating potential hires, Rabois draws a line between roles focused on “creating” value and those dedicated to “protecting” it. Value creation roles benefit from fresh, creative thinkers who are likely to be unconventional. In contrast, value protection roles, like compliance or legal positions, require experience to navigate established practices and mitigate risks.
Rabois also believes in hiring potential founders, even if they express an interest in starting their own company someday. These individuals tend to be highly motivated, ambitious, and likely to push boundaries —> qualities valuable in a fast-growing startup.
Actionable Insight: Embrace candidates who see your company as a stepping stone to their own future ventures. They are often some of the most driven, innovative employees you’ll ever have.
Avoiding Mediocrity: The Case Against A-Minus Hires
There is a clear distinction between having an incomplete team and a mediocre one. Mediocrity spreads and compounds within an organization, while gaps in a team can often be managed until a top-tier candidate is found. Keith’s advice: If you’re unsure, don’t hire. The opportunity cost of waiting for the right candidate is far outweighed by the negative impact of a mediocre hire.
Actionable Insight: In roles critical to your startup’s trajectory, aim for top-tier talent even if it means waiting longer. Consider every hire as a critical contributor to your company’s “cult” of excellence.
Conclusion: Embracing the Art of Hiring
Hiring isn’t just filling roles, it’s about building a team that aligns with your company’s mission, ethos, and ambition. By focusing on unconventional talent, prioritizing speed, and crafting a process that seeks not just skills but cultural alignment, you can create a team that is a competitive advantage in itself.
Hiring may be one of the hardest skills to master as a founder, but with a deliberate and contrarian approach, it becomes a powerful lever for growth. Embrace the challenge, and remember: the team you build is the company you build!!
Happy Hunting!