Moneyball Startup Recruiting

People Analytics (as profiled in The Atlantic’s They’re Watching You At Work) is on the rise. The competition in the labor market, in particular for high tech workers, is increasing more and more. Consequently, tech firms are trying to figure out how to spot talent others aren’t. It used to be enough to look if an applicant came from Stanford, Google, or some other name brand institution. However, the number of positions available in the world far exceeds the number of candidates produced by elite institutions so you have to start looking elsewhere if you’re going to be a national (or international) business.

This conundrum definitely complicates growth for any company relying on highly skilled labor, including PaperG where we have thought a lot about our recruiting strategy. We certainly believe good talent can come from anywhere and have constantly search for overlooked signals of quality. 

My co-founder, Ka Mo Lau, has become our Billy Beane by figuring out how to build a talent pipeline and find talent farms that look unlike any of the traditional ones used by the big tech companies. Even as a profitable, growing, funded startup, we simply can’t afford to do it the same way as Google or Facebook. As Brad Pitt says in Moneyball, "If we try to play like the Yankees in here, we will lose to the Yankees out there."

We first started recruiting heavily from University of Washington because other Silicon Valley startups couldn’t be bothered to go up there. Of course, such opportunities, where you can easily get the same quality good as elsewhere, can only last temporarily before others realize your strategy and copy. The New York Times covered the rise of “U-dub” and soon it became hard again.

Then, we realized we were getting really strong quality talent out of Canada which most SF startups overlooked due to the hassle of visas and dealing with international logistics. Because Ka Mo is also our Canadian co-founder, we already had this part figured out early on. That easy opportunity lasted for a while before BusinessWeek covered the rise of the Canadian feeder schools.

We now look in other areas and backgrounds for strong signals. We also have begun to take on former “Yankee players” looking for something more exciting, challenging, and rewarding. We set up an engineering office in Seattle aimed at recruiting the best from Amazon and Microsoft. We’re testing paid advertising targeted to different segments to find where our mission and brand resonate with possible hires.

The point is that it’s never easy getting good talent. Recruiting strategy is constantly shifting as others catch up and adapt to this changing playing field.

As depicted in Moneyball, John Henry, the owner of the Red Sox, leaves Beane with a parting thought, "anybody who’s not building a team right and rebuilding it using your model, they’re dinosaurs. They’ll be sitting on their ass on the sofa in October, watching the Boston Red Sox win the World Series."

Lessons from Scaling to 50 Employees: Consistent Communication

Following up on my second lesson of the importance of middle management, I wanted to end my series with my last major lesson which was on consistent communication.

3. Consistent Communication Really Matters

I would always read and hear how leaders needed to be great at communication and repeat the message often but I didn’t appreciate the importance until now. As companies get bigger, there are new people who never heard all the previous communications so it becomes more and more necessary to repeat the message — and repeat it consistently with all groups. Otherwise, you start having different groups thinking different things are priorities which work at odds with each other eventually. Because of the need to repeat, you need to make messages even simpler or else you make it hard for the message to spread on its own without spreading misinformation.

Culture and vision are mostly transmitted orally within an organization. What you write down in an employee handbook rarely gets read more than once and employees will generally just ask a coworker for info rather than search through text. Consequently, if you can’t get a message down to its essence where employees can repeat it consistently among themselves, you have little hope of getting the whole organization aligned and in sync.

Having never led such a large organization before, I was surprised to find why these things are imperative to functioning as a company since Dilbert, The Office, and other satirical reflections of business life would make them all seem so bureaucratic, arcane, and useless. I can only imagine what other lessons will emerge as we get to 75 people or 100!

A fascinating glimpse into the real world economics of modern piracy. Some choice facts:

Ordinary pirates usually get $30,000-75,000 each, with a bonus of up to $10,000 for the first man to board a ship and for those bringing their own weapon or ladder.”

Some pirates find it difficult to retire because they end up in debt at the end of a hijack. Part of the ransom money flows to local communities that provide services to pirates.”

Arrrr!

Lessons from Scaling to 50 Employees: Middle Management Matters

Continuing my series on what I’ve learned as PaperG has grown to over 50 people, I wanted to cover my second lesson.

2. Middle Management Now Matters

Everyone loves the idea of “flat organizations” and we’ve wanted to keep it that way from the beginning. As companies grow, one unintended consequence of that is low bandwidth for managers to think strategically, be individual contributors in what they’re good at, or spend much time on any one thing. We refused to hire mid-level managers and executives for the longest time but we started to notice these issues crop up.

After talking to a lot of executives, it seems like many people are able to manage or oversee at least 1-3 people. A select fewer can be capable managers who are able to handle 4-8 direct reports easily. Beyond that, you really start having a hard time devoting enough time to developing talent, delivering on daily needs, and thinking strategically. You start facing much steeper trade offs when having to deal with 10+ people who need you on a daily basis to make decisions, give assignments, or provide guidance. 

Middle managers whether they are senior team members, lead positions, or executives drastically free up time and speed decision making. In spite of its poor reputation, middle management can actually make organizations move faster!