The Power of Great People (why “good enough” won’t cut it)

The Power of Great People (why “good enough” won’t cut it)
Don’t outsource your hiring to a bureaucrat

Great people are five times as valuable as good people. This especially applies to engineers. You cannot just throw bodies at a problem (see the classic Mythical Man Month for more info). Sometimes less people can actually accomplish more.

Great engineers are head and shoulders better than good engineers. Good engineers are everywhere. At Rapleaf, we’ve received thousands of resumes from good engineers from MIT, Stanford, Berkeley, and IIT, where they received their masters and PhDs. They’ve worked at places like Netscape, Sun, Microsoft, Yahoo!, and Oracle. The only problem: they’re only just good, not great.

In fact, it’s pretty much impossible to tell from a resume if someone is great. It’s easy to look at a resume and say “this person is at least good” or “they’re not bad.” But great people are rare and very hard to spot on paper and it takes a long time to find them.

But great people are worth it. In markets characterized by winner takes-all – increasingly true in a globalized world – you need the very best; “good enough” will no longer cut it when against intense competition. These are the people that build great and lasting companies. Companies that are lucky are built on the backs of good people.

In a start-up, a great software engineer should have the following:
– ability to take a complex concept and write code that can be understood and adapted by other engineers
– ability to product manage oneself
– pleasant personality that is fun to be around and likes working with others
– creative mindset to think out of the box
– not valuing one’s own ideas more just because they were the one that generated the idea
– carpe diem attitude: they seize the opportunity to grow

In a nutshell, this is the person that everyone in an organization asks for advice. In college, this is the person that every other computer science student wanted on THEIR team.

Of course, determining if someone is great is not easy. It’s probably why so many people hire friends and former coworkers – because you know they are great. The best predictor of future employee success is past performance.

But determining a great software developer is not impossible either. To me it is amazing how some start-ups choose who they hire – many seem to hire anyone that went to MIT. That means they are outsourcing their hiring to the $40k/year admissions officer at the college who evaluated the person when they were 17! Do you really want to entrust your hiring to a bureaucrat? This is an extremely bad strategy. Of course, many people who went to MIT are real rock-stars and people who went to MIT might be more likely to be rock-stars than people who went to a lesser-known school, but most are only good … you need to work to find the great people.

By asking pointed questions and giving tough exercises, you can determine with high accuracy if someone is really amazing. In fact, I make it a point not to ask questions like “what do you like to do outside of work?” It’s better to ask them to solve tough problems and get to understand their thought-process. Great people have interests that often converge with what they do at work. At Rapleaf we do at least four rounds of interviews and we take our time. This means we occasionally lose some great people, but we err on not having false positives.

Note: I’ve found that determining a great software engineer is much easier than determining a great salesperson, marketer, etc. At the end of a series of interviews with a software engineer, I can tell you with great confidence if they are a rock-star or not. But with a BD person for instance, I have a much harder time being confident in my assessment.

Two things to note about great people:

1. They only want to work with other great people. Once you recruit a few great people, you’re in a bit of a quandary. You’ll need to, from then on, only recruit other great people or the great people you do have will leave. And if you hire any good people by mistake, the great people will (directly or indirectly) want you to let the perceived mediocrity (i.e. good people) go. And letting go of someone that is good is really hard to do. So you’re stuck and that’s the rub.

2. Great people feed off of each other in person. Like real estate, engineers in start-ups is all about location. You read about all these companies outsourcing offshore and doing development from virtual offices. (as a side note, even the idea that you can outsource a person drives me bonkers – no two people are alike and you cannot just throw bodies at a problem). But a distributed workforce is really hard to manage and real innovation rarely happens in distributed environments. Not to contradict myself, but I’ll acknowledge that sometimes it works, especially with open source projects like Linux and hadoop and Firefox which were developed by teams of people working out of various locations (many of whom never met in the early stages of development). And while there are some distributed workforce examples in the start-up for-profit world, it is very hard to find a highly innovative team based strictly on outsourcing and telecommuting.

Google’s early core engineers all worked in its early Palo Alto office. Facebook’s engineers all work together now in Palo Alto – in fact, Facebook provides a stipend to employees to LIVE in Palo Alto. At Rapleaf, we’re a small company and our 13 employees all work in our San Francisco office. In fact, all of them actually LIVE in San Francisco right now and over half live within walking distance of the office. Big innovation often comes from massive collaboration and rapid iteration, and that can much more easily happen when people work in close quarters and can see each other (no opaque walls or cubicles in the development center is key too).

Great people need other great people to feed off of. Being able to trust and rely on another person’s talents affords you the opportunity push your own boundaries (because great people are always looking to be better). You won’t have to worry about picking up the other person’s slack. You’ll be free to think and experiment with what’s new. You’ll be free to innovate.

If you are Google or Microsoft today, you can afford to hire good people. Great people are of course preferred, but 90% of their hires today are just good people. You have lots of processes, product requirement documents (PRDs), and you need people to just code to spec and follow instructions. In fact, you might even want to outsource, because creativity isn’t always required. It isn’t always needed … and with respect to a big company, creativity sometimes gets in the way.

But if you are Google or Microsoft, back when the company was under 50 people, you couldn’t afford to hire anyone but someone that was great. Anyone good would just have to wait a few years until the processes were developed enough to support those types of people. If you’re a start-up who’s goal it is to be the next Google, then you’ll have to attract, hire, and retain great people. And so if you’re looking to go from good to great, throw out your Jim Collin’s book and just focus on hiring great people.

(special thanks to the following people who helped me with this:
Ben Casnocha, Joel Hornstein. Lucy Jacobs, Manish Shah, Vivek Sodera, Hunter Walk, Chris Yeh)

And speaking of great people, we’re currently looking for great software engineers and a great BD/sales person (we offer at $10,007 referral award):
http://blog.rapleaf.com/jobs

16 thoughts on “The Power of Great People (why “good enough” won’t cut it)

  1. Peter.

    MIT is an especially important example of why you can’t rely on the weak link of admissions: http://www.nytimes.com/2007/04/27/us/27mit.html?_r=1&em&ex=1179720000&en=b5bbbe67417980b3&ei=5070&oref=slogin Also, many great people never went to college or finished… Plus, admissions are based in large part on grades in high school and standard test scores — potential weak links. Odd that your essay does not mention measuring / discovering great people based on their work. A great engineer can be found out by way of what people think of her code or product, right?

    Reply
  2. Lara Shackelford

    Thanks, actually, I did enjoy it. I have several open roles on my team right now and it is inspiring me to push harder to find the great people out there who are innovative and change adept.

    Reply
  3. Laurie Yoler

    Interesting article — thanks for sharing it.
    A couple of thoughts come to mind:
    First, in my experience, the reason why some teams can be distributed (like the Firefox team) is that they were creating an open source version of an existing product category that was pretty well defined at that point. It was not an entirely new concept, but a better version of an existing product category. It is harder to distribute teams when the concept is completely new.
    Second, I can’t agree more with your assessment of the importance of recent past experience over educational credentials. If you are hiring new college grads, then the filtering that went on in admissions is really helpful. But if they have been out of school for more than 5 years, I would argue that their work references should be weighed much more heavily.

    Reply
  4. Dan Arkind

    Hey Auren,
    Good to see you writing about this- yet another further reminder I really need to start blogging about hiring at startups 🙂
    Your post reminded me of something Marc Andreesen & Ben Horowitz talked about publicly in a wired article back in 2000 called “The Law of crappy people” a quote:
    “But even as the talent and the clients keep rolling in, there’s another lesson from Netscape that keeps Andreessen and Horowitz up at night: trying to get around the Law of Crappy People. “It scares the shit out of me,” says Andreessen. “The law applies to every company that gets big,” says Horowitz, “especially companies that get big fast, so we’re a prime candidate.
    “All you have to do is hire one person who isn’t very good,” Horowitz continues. “The Law of Crappy People kicks in because the worst employee at any level becomes the de facto standard for that level. Your executives sit around the table. Some EVP wants to promote one of his or her directors to vice president. Or maybe they want to bring in someone new. Someone at the table says, ‘That person isn’t good enough,’ to which the first person responds, ‘Hey, you’ve got Joe Schmo, who is a bonehead. This guy is better than Joe.’ So the guy who hired or promoted Joe Schmo shuts up.”
    Andreessen says, “You will inevitably make a mistake. The minute you do, the quality degrades. A people hire B people, and B people hire C people. So the bad people breed like rabbits – they hire more people like themselves or worse. We saw it happen at Netscape when we ramped up early on.”
    The full wired article is here: http://www.wired.com/wired/archive/8.08/loudcloud_pr.html

    I also think that a focus on exclusively hiring “self-directed personable high throughput engineering super heroes that get along with each other” is critical until you reach product/market fit.. Once you know what business you are in and need to scale & maintain stuff, engineering requirements change. The good news is that exceptional engineers will often drive you to product/market fit faster – but that’s a topic for a separate post.
    Andreessen again on product/market fit: http://blog.pmarca.com/2007/06/the-pmarca-gu-2.html

    Reply
  5. SortiPreneur

    “Great” Makes a Difference

    Auren has a good post on the difference truly outstanding people make in an organization, and emphasizes that this is especially true in start-ups. I could not agree more. I find that talent often provides the greatest bottleneck in technology

    Reply
  6. BobS

    Had I read this blog a few years back I could have saved 6 figures and a year of my life!!!!! Well written and I couldn’t agree more. Now that I have a great (and growing team) it really seems to be perpetuating itself.

    Reply
  7. Brad Templeton

    My first boss in a computer job expressed this another way.
    He said “only hire first and third-rate people.”
    First rate people are obvious, they are the great people you describe.
    Second-rate people however, are good but think they are first-rate. Third-rate people know they are competent but not first class, and want to do what they can within their limits.

    Reply
  8. Eric Marcoullier

    Auren — the reason great salepeople are harder to identify is because people tend evaluate them based on the wrong metric. Most people define a great salesperson as someone who is outgoing and can exciting. It’s very easy to show up, be exciting and look good. Great salespeople close deals. Tune your questions to focus on overcoming adversity in past jobs — long sales, hard-won sales, converting weak leads into sales — and you can identify the closers.

    Reply
  9. Naghi Prasad

    Auren – Great post and a very important topic! Internalizing the concept of not compromising on great is the key to building resilient teams.

    Reply
  10. Anthony Kuhn

    Your thoughts on creativity not being a totally necessary piece of the corporate success puzzle are interesting, as are your thoughts on outsourcing parts of the whole. This is a bit contrary to your admonission in earlier paragraphs that the whole team should be together to make iteration more easy and to facilitate a tight bond.
    So which is it?
    Outsource, or tight bundling?
    Anthony Kuhn

    Reply
  11. Patrick

    Really good post and feedback. It is truly a challenge to maintain these principals as the pressure of growth kicks in with success. Firing quickly may become even more important as the pace of hiring quickens.

    Reply
  12. Marc

    Interesting topic but a somewhat weak article. First, I find it hard to believe that you received thousands of applications from engineers from MIT, Stanford, Berkeley, and IIT; frankly that sounds completely made up. Second, assessing if someone is “great” based on tough exercises also appears questionable. That only demonstrates that a particular person is able to solve a spontaneous task and how he/she structured his/her thought process. It does not show if a person is “great”, many complicated problems take time to solve and hence quite different abilities; an analogy, if you like, would be to infer from great exam results that someone is brilliant, again this is not necessarily the case and only shows a person is good in taking exams. Finally, I very much doubt that one can actually classify someone as “great”. Being great, as you defined it, is very situation specific and therefore relative. You are looking for somebody who is great in your company or at a specific task you are trying to get done. It therefore appears someone far fetched to only expect “great” people. Sure it sounds good to say only “great” people work here but at the same time it is a somewhat meaningless concept.

    Reply
  13. Tubbie Shefalo

    These things are very subjective. A person may be great in one area and weak on another. A person may have a bad month or a good month. A person may be stuck on some code or able to nail it. Whether a person is “fun”, “interesting”, “knowledgable” depends entirely on the environment. Any you never know for sure about people. They are not machines. They all rise and fall in greatness. There is a natural disorder and frailty. Greatness may be revealed in the most circumspect ways. Unpredictability is one of the chacteristics that makes us human. And above all, to dust we shall return.

    Reply
  14. Sick

    What about great people who actually teach good people to get great? In my opinion,if you just scoff at ..worse people than you and just leave , you’re not really great.
    by my experience, the great people were always willing to teach you something..if you were good enough to listen.

    Reply
  15. Don Rich

    Lara: What could you say about your organization that would let a great person know that it’s the right pace for him/her? And would it be realistic?
    For the group:
    One of the unstated challenges of interviewing top performers is … they are also interviewing _you_ at the same time.
    And those same relentless quality assessment behaviors that make them so good will be applied right back at _you_: the interviewer’s competence and credibility, the effectiveness of interview process and questions, the physical environment, the chosen tool sets, the organizational mythology, resource availablity, staff attitudes and personalities, etc. The A players know what makes an organization great and what are the counter-indicators.
    They also know about opportunity cost: they are using their extreme talents for one employer to the exclusion of all others (usually) so it has to count. They want to look back at their careers and see meaningful accomplishments. And they don’t want to be taken advantage of. In short, they are hard people to sell to.
    Now, (almost) everybody wants the A players, but how many companies are prepared for those people? How many are managed by A level managers?
    Is your company?

    Reply

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