Course Curated By: Dr. G. Danford (London Business School MBA, Helsinki School of Economics PhD)
Advice Before Starting
The only proven method for measuring learning is to take a pre-quiz and post-quiz of the content.
Culture & Hiring 2/2
Cases: Pinterest and Stripe
- How to screen future employees for cultural fit
- How to get people on board as quickly as possible (the process)
- How to scale the culture of a startup
- The importance of transparency (and protecting information)
- How the role of the founders diminishes over time (and implications of this)
Ben Silbermann (Co-founder Pinterest)
Pinterest is a social pinning site which investors have valued at $10 billion. Analysis estimate that on the basis of average revenue per user, it’s only a matter of time before Pinterest surpasses even Facebook and Twitter.
Defining Core Culture
1. Who you hire & what those people value?
2. What you do every day & why do you do it?
3. What you choose to communicate?
4. How you choose to celebrate (the converse of this is what you choose to punish)?
Note: Ben thinks that running a company based on what you celebrate is more exciting than what behavior you punish!
When hiring you will never know 100% everything about a person until you work with them for some time. Therefore, the flip side is if the person you hired is not a good fit, you owe it to them, and to the company, to tell them where to improve. If they aren’t working out, then you owe it to everyone to fire them. Later in the startup journey, when you are hiring the head of finance, or someone like that, and you know nothing about finance, it’s good to make it a habit of talking to other people you knew and who are de facto world class in those functions. Just by asking advisers,’ what are the traits you look for in a finance position etc.’? What are the questions you ask those people when hiring? How do find those people? By asking this questions of others you can rapidly move up the learning curve.
Once you have people in the interview process, you can build that process over time in order to screen for quality. Pinterest, have an evolving set of questions that are rotating through and they are always asking if these are good indicators or bad indicators of quality people. The other thing the questions are supposed to do is give you a sense of, ‘is this the right place for this person to come and work’? This is related to being very transparent regarding what’s going to be easy or hard. Really great people want to do things that are going to be hard. They want to solve tough problems,
Hiring Fit: Pinterest & Stripe (5:00)
NOTE: this video will start and stop at the pre-assigned times 5:02-9:56
When Pinterest first started the hiring process it was all about needing a specific person. So the whole on-boarding process (organizational socialization) was about, ‘here’s your computer, we’ve already set up your environment, don’t worry, and this is the problem we have to solve together’. At that stage in the startup life-cycle you didn’t have to do much more with hiring process and on-boarding. However, as the company grows that process has to get a little more formalized. Today, Pinterest spend a lot of time thinking about this process and constantly trying to refine what that ‘ideal new recruit’ should look like (their first interview, very first day of work, and 30 days after they have joined etc.).
The kinds of questions they ask are; Does that recruit have someone’s name they know in the organization? Do they know who their manager is? Have they sat down with people on their team? Do they know what the general arch of the company is, and what the top priorities are? Pinterest have an established program to do this. Ben wouldn’t discount how important it is to get to know the person as a person (what’s their aspirations are ? what’s their working style? How do they like to be recognized? Do they really prefer being in total silence? Are they a morning person or night person?.
John Collison (Co-founder Stripe)
Stripe has received $190 million in funding; investors include; Sequoia Capital, Andreessen Horowitz, Khosla Ventures, and others. Stripe’s most recent funding round valued the company at $3.57 billion.
John thinks that the first and most important step is to get new employees up and running as quickly as possible in order that they can do their work. That is how you are going to find the problems, and is how progress is measured in the real work. Stripe have a much more, ‘push people off the cliff’ style of working however, they also try to quickly give people feedback. Especially giving people feedback on how to adapt to the culture. When you think about it, if you have built a strong culture, as all the companies are trying to, it’s going to take some adaption from individuals, and it’s not going to be necessarily easy. One way to achieve this more effectively is to write the culture down (Stripe do that).
Scaling Culture: Pinterest & Stripe (4:00)
NOTE: this video will start and stop at the pre-assigned times 5:02-9:56
Stripe changed tools when they were scaling the culture. Regarding those tools, it use to be the case that people could keep abreast of what’s happening in the company by reading all the email. Now Stripe have weekly ‘All Hands On Deck’ or AHM meetings. The purpose of the ‘All Hands On Deck’ meeting is quite simply to stir genuine emotion into their employees. In a AHM, the leaders speak about the current and future state of the company. They continuously present a vision of where they have been and where they are going. This is a way of getting out the compass, setting a course, and telling people how the company is going to get to that distant goal. Stripe actually have to put a lot of work into communicating what is going on in the company, since there is so much more to manage. The second point John emphasized is that you have to create social norms with such as obvious things as, what is confidential within Stripe. Stripe have had to create norms around when it is okay to jump into discussions and how those interaction work (communicating with outsiders), because people are around the stage much more.
Stripe has placed a large emphasis, more so than other companies, on transparency internally. John thinks it’s something that’s been really valuable for Stripe, and a little bit misunderstood. The founders think that if your people are aligned on a high-level about what Stripe is doing, if everyone really believes in the mission, if everyone has really good access to information, and everyone has a good picture of the current state of Stripe, then that gets you a huge amount of the way there in terms of working productively together.
Patrick Collison (Co-founder Stripe)
Culture, to some degree, is a resolution to a bandwidth problem, in the sense that when you start out working on something you are coding all the time. However, you can’t code all the things that you think the product may need. And so the organization gets larger. Culture is the invariant that you want to maintain as the founders get specifically involved in fewer and fewer decisions over time. When you think about it that way, maybe the intended importance becomes self-evident. Again, the fraction of things you can be involved in directly is diminishing exponentially as the startup grows.