Hiring: False Positives and False Negatives

Hiring (and firing) is most important thing a CEO can focus on. It is also the thing that most first-time CEOs do a poor job on. From my own experience, I’m much better at hiring now than I was in my first few start-ups. Much better.

False positives and false negatives

When you are hiring, there are two mistakes you can make — the false positive (hiring the wrong person) or the false negative (not hiring the right person). Depending on your hiring strategy, you are going to fall into one camp or the other.

Big companies hire differently than small companies. Big companies need a lot of people (or, at least, they think they need a lot of people). Small companies need a few dedicated people.

So these big companies often err towards false positives. Great start-ups, by contrast, can’t afford to hire a B-player and must focus on only hiring great people and thus end up having lots of false negatives.

The biggest mistake I made on my first couple of start-ups (and the biggest mistake that most first-time CEOs make) is not being better at hiring great people.