Ryan Rutan: Welcome back to the episode of the Startup Therapy podcast. This is Ryan Rotan joined as always by Will Schroeder, my friend, the founder and CEO of Startups.com. Well, when we think about startup company performance, one of the things that we like to look at is like, how's the team performing, but also how's management, right? And so, Sometimes it's like easy enough to say if there's performing really well, it must be great coaches and great players. If they're not performing well, it's probably the players, maybe it's the coach, and we don't really necessarily know just by looking, so we have to dig in, we have to explore, we have to examine this stuff. When should we be doing this? When is the time to look at this in detail?
Wil Schroter: Right now, I didn't know it's funny cause I think a lot of people think there must be some moment where I have to. Reevaluate the talent and we take out a big funding round, or we all of a sudden start scaling, and yes, that kind of forces you to evaluate all of this. Realistically, most founders and most those executive teams really don't do a good job of stepping back and analyzing not just their teams but themselves, right? It's, it's hard to be able to say, are we not winning games because of the players or the coach. More often than not, it's bull, and again, and as founders, we have to be able to understand how to assess that, because we can't grow any faster than the quality of our team. And so if we suck at evaluating the quality of our team and finding out where these problems are, we can't grow, and I think most people, most founders are doing this for the first time. They've never had an organization under them, where they've built it from scratch, where all those decisions are theirs, and they kind of don't know how to assess it. So I think we should talk about that.
Ryan Rutan: Yeah, I think we should dig in, talk about the how, the what, the why, and then what to do about it, right? Once we do come up with some lines in the. that say look, it's not me, it's them or it's not them, it's me or it's all of us, then what are we actually gonna do about this? But let's, let's start with that. Where has this become most evident early on?
Wil Schroter: For me, in my career, it became evident early on the moment I hired somebody that was over 30 years old, 5 years, we didn't have a single employee. That was over like 25 years old, and like it was unheard of, and I don't even think we had somebody quote that old, like back then. You go,
Ryan Rutan: no, I remember exactly the same thing. When I was building the agency, it was all undergrad friends of mine, so literally no one had graduated, so we all had zero management experience. Most of them had also never even really had a real job where you would have been managed, so they had neither delivered nor received management, right? So it was a little wild westie at that point.
Wil Schroter: I'll never forget we hired this woman and and what was her name, let's call her Jen for whatever, and so Jen shows up and she's 30 years old and she is insanely professional. In in our minds, she was like the office mom because she was so much older in retrospect, I think she was 31 years old, but she came in, and I'll never forget, this is 5 years into the company. She came in and she's like, so, uh, how do you usually handle performance reviews? And I was like, it's like, how do you handle performance.
Ryan Rutan: I don't want to tip my hat, Jen, why don't you tell me?
Wil Schroter: Oh my God. And so I remember at that very moment as she's sitting across from me, and she's doing her best to like humor me and patronize me, which I actually did appreciate, uh, not making me feel stupid, it occurred to me that at that very moment, I'm holding things back, right? My lack of capability as a coach is preventing the organization from moving forward. And I just, I remember thinking, holy cow, if she hadn't said that to me, if she hadn't prompted me and challenged me, she didn't intend to, but just challenged me. She asked me like a very basic question. I wouldn't have thought, hey, are these the best players? Hey, I've got a whole company where finance is run by the only guy that took a finance course in college, right? The most and and I'm like,
Ryan Rutan: wow, he's a B math student, which puts him ahead of the rest of us, so. Yeah, how far into the business was this well I you said early on it was all young people. How far in was this? I mean,
Wil Schroter: she was probably our 20th employee, so it wasn't like 2 people in a room. We weren't at 700 people either, but I remember it was a turning point where it started to become a real business, right? And I remember thinking to myself, how many other things are we deficient at? And the answer was everything, right? But it, it went back to our inability to assess ourselves. And so then I started thinking in terms of, OK, wait a minute, of all the people we have, how do we know if they're any good? Like how do we actually know that? And and again, I use the performance reviews, oh, they'll do performance reviews. OK, compared to who? So let's say you've got a developer on staff, right? And and so the only developer you have. And develop developers cranking out code, building your MVP whatever they tend to do, and you're like my developer is awesome. Compared to what?
Ryan Rutan: Compared to not having one? Sure, I'm sure you get a lot more done
Wil Schroter: now. Yeah, exactly, or my sales team is awesome compared to what? Like, how do you know that? But the other side of it is what I think is really interesting is we've got a manager that's managing development or sales or marketing or whatever, right? And, and we're like, oh, I guess the performance of our team. is doing great because they're a great manager. Maybe, right?
Ryan Rutan: This is the question I started to ask myself all the time, which is, is this working because of the team or in spite of the team? Is this working because of me or in spite of me? Because just because it's working, it's in relative to what, right? Yeah, we're having some success relative to what, right? So we weren't selling anything last month, now we're selling more this month. That's good, but again, you're comparing it to a a very limited baseline, which of course, to begin. Stages of the startup, there isn't a whole lot of baseline there, and that's why it's important to constantly ask yourself these questions and reassess,
Wil Schroter: especially at the early stages. Yeah, and look, and I thought about it too, and I thought about, OK, at some level, no matter how the performance reviews we do, whatever, we're a young company, right? It's not like we're Microsoft, we just hire literally anybody we want, right? We, we get what we get, right? So there's some limits to that. But then I started to realize, hey, I'm going way back in the day. Hey, I can only pay somebody back then $38,000 right, which it obviously isn't a lot now, it was more back then. So wait, aren't I only getting someone who's as capable of that price point, all things being relevant? And said differently, no matter how much I coach them, I'm not gonna make them some absolute superstar. Ergo, my organization is essentially capped on talent based on what I can afford to recruit with. That's one purest thing. The other side of it would be, have I tried to recruit somebody better? Again, this goes back to the the the sunk cost theory of, I put all this time into this person, I guess they're the best person. And we had this happen, I'll never forget this, any agency has it started to scale, and we went from, you know, thousands of dollars to millions of dollars to 10s of millions of dollars to hundreds of millions of dollars of revenue coming through the company. We had an accountant, also we were named nameless, right? Essentially a CFO and when we were tiny, I thought this guy was a genius, right? I thought he was phenomenal, and and as we started to scale, we ended up getting who a guy who was a CFO of one of the major divisions of Chase Bank, right? So absolute, total stallion. And he came in and he made our existing guy, who by the way, was the CFO, look like he had never taken a finance course in his life. And I remember thinking to myself, holy cow, this entire time we've been running Bush league finance over here, and I'm thinking it's the greatest thing of all time, that because it was never one asked that question, you know what I mean? Yeah,
Ryan Rutan: it's funny because I think it it's it's so easily to be swayed or look, your problems change over time too, right? So I can if I go back in time, I think about probably He would have been the 2nd or 3rd developer that I hired. Let's call him Tim, because that was his name. So Tim solved some problems that we were having at the time with server infrastructure stuff, right? And it was like, he had all the answers to these things that were so important at the time, and there were big problems, right? And they were tough to figure out, and so this made Tim really important at that point, and then 56789 months later, when Tim is definitely not as fast as an needed him to be at developing the client work that we're actually doing, which is what we get paid for. But it took a long time to see that and even longer time to really choose to do anything about it, because Tim had been so important early on and was had this kind of Wizard of Oz level ability, not Wizard of Oz, Gandalf the Gray ability could just he did magic for us. He made things that we didn't know how to appear, which was cool at the time, but this as the organizations change. So do the needs, and so does maybe the ability of that player, and sometimes it just moves away from their ability set, or sometimes you just start to get beyond their actual capability, right? Maybe you could crush the ball out of a little league stadium, doesn't mean that just because you grew up, you're gonna be able to crush it out of a major league stadium, and I think this is part of the problem. You and I see this all the time, and I think one of the most obvious ones is non-technical founder. Picks up technical co-founder, who's maybe a reasonably good junior developer or something, but knows light years more, there's light years ahead of the non-technical founder, and so they become co-founder and CTO.
Wil Schroter: Yeah, at some point though, we've got this idea that we can turn water into wine, right? Like that developer you're talking about, I heard so many of those developers. First I know this. And then meanwhile, not knock you, we all hit a threshold. Tim was a great guy. Yeah, I've hit thresholds in my career where I wasn't the right person to take this any further, right? Sometimes we recognize it, sometimes we don't, a little bit different when you're among the founders like us because we're we're not worrying about our job in the in the prospect, right? Tim's got to worry about his job, which I respect. But that said, but as managers, as coaches, if you will, kind of sticking with that, we do have to understand. That no matter how much we coach somebody, it's not going to make them a better athlete. And and I think early in our careers, because we haven't seen this through yet, we have this kind of optimistic idea, like this, anybody can improve, anybody can be better. Sort of. Anybody can be a little bit better, but at which point they have to be geometrically better, they're probably just not that athlete. There's lots of people that make it to the NFL, I mean, really small in the grand scheme of things, but even then, only a very small percentage that actually play in the NFL and stay in the NFL, right? And just that that same concept of there are very few people that have that next gear. That next year is what you tend to see actually out of founders, like the Collison brothers who are running stripe right now. So be able to go from startup all the way to a true sea level position at at their age, at at that level is extraordinary. It it usually only even get that opportunity because you're the founder. It's not like they interviewed for the job and they got it.
Ryan Rutan: Yeah, because on paper they would have gone,
Wil Schroter: yeah, no, not a million years, right? And and again, some people can pull it off, and again it's usually the founder cause you get grandfathered into the job. But my point is for the rest of the staff, and I'm including management in this case, right? I'm including management. People will cap out. Let me give you an example. Let let's say uh you and I are doing a startup and we get to like we're talking about with my previous company, we get to 20 people, right? And we've got a couple managers that grew up through the process over time, right? And again, like the founder, they got grandfathered into the job, right? Over time, their ability to be a good manager may not develop, right? In other words, let's say they're technical. This happens all the time, uh, technical people get forced into management all the time, and no one ever says to them, are you a good manager? Here's what they say. You're the most senior technical person, and therefore you're the manager, right?
Ryan Rutan: It's the Peter principle, you get promoted to your highest level of, or what is it, your highest level of inefficiency, right? You keep getting moved up until you hit the point where you're no longer good at your job and then you stall out there. Yep,
Wil Schroter: and developers are notorious for this because there there's a correlation between management and senior technical ability, and so they always tend to get shoehorned into this job. Now that said, it's also historically how we drive at a corporate level, progression in your career. Progression means more people under you. I can't stand that theory, that's a different podcast. Um, but with that said, when we, when we get people to that level, there is a point where it's, no matter how much we coach Johnny, Johnny just can't hit the ball. Well, it's it's not a coach problem. Conversely. There's also a side of it where with the the the quality of the players, if we have a subpar coach, right, sticking with this analogy where the the coach was a great little league coach, right? But as you move that coach up to the major leagues, he's just not qualified to coach at that level, right? The organization gets bigger. Here's what I would say, I think we we need to talk about the difference between a great coach and a bad coach. Because here's the thing, I think among coaches, and we're talking about managers, I don't want to beat this, this sports analogy up. I don't think we have a good indicator among founders as to what a good coach slash manager really is. So my simple definition is this. A great coach, great manager, is someone that makes the team better. Like, in other words, the team would have been a C+, but because this coach exists, they're an A minus. If the coach leaves, they go back to a B minus C+. They actually can't function at their level without that coach. That's a great coach. I don't think most people are good coaches. I think most people are babysitters at best, and again in 30 years of doing this, most of what I've seen. I'm there to not break things. If problems don't bubble up, then I must be a good manager, and I look at that and and I'm like, no, that's good, by all means, you know, you don't want extra problems. But the true measure of a great manager is, how do you create geometrically better outcomes? Because you're there. How do you take the bad news bears, if you will, and make them a league winning team? Because you're such a good damn coach. Very few people can do that.
Ryan Rutan: Yeah, it is tough in the startup context particularly. When you look at this in a corporate context where there's existing teams, you're bringing people in with a specific ability to manage all that stuff, it's very different, but I think that because of the dynamics of a startup company where it's growing really fast, you may have somebody who is would otherwise have been a Better coach, but they're dealing with resources now, the team that they've outpaced, right, or vice versa, that that's the thing is that it one of the challenges why startups often go through these periods where that that hockey stick growth that we all talk about that actually looks like a a mangled wire of some sort. It's because of things like this, right? There's this disconnect between the speed at which the team is growing, or the team at which the the team is upskilling, the rate at which the manager is learning how to manage, how to coach, and so it ends up with this really herky jerky growth, or we just hit hard stops, like you said, there's just a point at which Johnny's not gonna hit any better than Johnny's gonna hit, so you're stuck there, which then puts that manager in a conundrum because it's like I keep coaching this person, and how do I get better at coaching so that I can make Johnny hit better? You can't. But then that also takes some maturity and time and settled to understand that that's just a player issue, right? The answer is hire somebody else, or add to or take away responsibility from Johnny give to somebody who can do a better job of hitting the ball. It's really difficult, which goes back to the point around we need to be doing this on a relatively constant basis. I, there are definitely times where I think it makes a ton of sense to look at these things. I go back in our history, Will, and we think about what it looked like to coach our teams when we were 8 people in a room. And we were 15 people in a room, and then we were 40 people in the room, and then there were 400 of us. It's a very different thing. And so clearly those size milestones where the company's growing, that's one of them. The other one we see a lot is right around post funding, where all of a sudden you're about to start making a whole bunch of decisions and just by virtue of spending a bunch of money, there's gonna be a lot more to keep track of and manage, not necessarily just people, but processes, softwares, tools, partners, all this other stuff, and this is a real stress test. On the teams, but I would say that the post funding probably more so where we are in the coaching roles, where that's the founder, co-founder, C-level management, or even the middle managers, if there are any at that point, becomes a real burden for them.
Wil Schroter: You know, something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done 1000 times before you, which means the answer already exists, you may just not know it. But that's OK. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all day long at groups.startups.com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it. You know, I, I, I think if if you were to say to those coaches, to those managers, hey, are you a good manager? Most people will say, I think so, yes. And the answer is by what measure? or what measure? Here's the benchmark that I always use in the back of my head. If a manager has C-level players, however you would grade those, The manager makes them B level players. They they they can drive them, they can find new people, they can recruit new people that that they can pull out people that that aren't performing, etc. But their whole thing is I make people better. If you were to say, are you a good manager, and the person says, absolutely yes, who have you made better? Who was just OK, but you were the difference maker and crushed it, and they'll say, I, I hired Jen and Jen was pretty good, and I gave her some additional responsibility and she performed. Next question would be, did she before because of Jen or because of you? Yeah,
Ryan Rutan: was it because of you in spite of you. Just
Wil Schroter: giving her more work, you didn't do shit. You give her more work, right? Hey, I gave her more responsibility, congrats. You gave her more of your work, right? But what did you do? Like what, like, how are you the Yoda to her Luke that made her the Jedi? Because if you were just there, if you were just like, hey, show up in Dagabod and figure it out,
Ryan Rutan: she carried me on her back for the last 4 years at the company,
Wil Schroter: right?
Ryan Rutan: I barely done a damn thing. Clearly I'm an amazing coach.
Wil Schroter: Yeah, that's what I'm saying, but I think that good coaches can say, OK, my team's a C+, I can see where they're deficient, but here's where I could push them, and it's always pushing them, right? Push them to do better, to perform more, to get that extra kind of level of competence and outcome from those folks, and I think a good coach, good manager, knows what that is. Someone who's early in, go back to my example, where I had this 30 something year old woman ask me what a performance review is. I didn't even know what a performance review was. How the hell was I going to the irony there, right? Like how is even gonna give her a performance I never even heard of one before. And
Ryan Rutan: at that time you couldn't just Google it.
Wil Schroter: Been invented yet, but I think about it, Ryan, in terms of as we get older, as we, you know, mature through our career, we start to see some of those benchmarks, we start to see some of those milestones. I'll give you another example. Many years later, same agency, same company, as we started to grow, I mentioned we we hired the one of the CFOs of Chase Bank, we also hired, Chase Bank had bought a huge bank called Bank One. And we hired the CEO of Bank One, who was almost a caricature of senior management, right? I'm not even kidding, he had, I
Ryan Rutan: can picture the haircut, the power tie, I can see
Wil Schroter: it all. The haircut, the power tie, he finger tinted when he talked, it was classic, right? When I picture a stock photo of guys stepping on a private jet. I picture that guy, right? That's to his credit, very smart, very charismatic, all all the traits, right? Incredible resume, right? But I remember sitting across from him and we we had hired him because the time we're looking to go public and we want him to to lead the offer. And, and I realized his body of experience and my body of experience were so incredibly far apart, right? Like, he had forgotten more than I'd ever known about managing people, right? He just took a huge step back. He had 50,000 people reporting to him at his last job, and here he had 700, right? Like he's slumming it. But my point is, it was once again where I I was like, holy shit, am I out of my league? So like, I thought I was a CEO. Nope, that guy's a CEO, right?
Ryan Rutan: It's relative to what, right? Like, I'm a great CEO because I'm doing a good job with my company. Cool. Are you Mark Randolph? Probably
Wil Schroter: not. And I look at it and I'm like, OK, it's very difficult for us in the formative stages of a company, even as we scale, to self-identify, to be able to say, hey, is the organization, are we a bunch of CD players and we don't even know it? The founder's job is to be step outside of that. And say, OK, I'm gonna forget everything that I've got here right now, all current status aside, and I'm going to say, I need a better organization. I gotta have a better organization, I can't scale. I can't build something better if I don't have a better organization. Guess what? It starts with better managers. There's no version where you're gonna hire great people using back to our letter grades. You're not gonna hire a talent. And give them C+ managers,
Ryan Rutan: and depending on who's responsible for the hiring, right? So this is an issue that I ran into at some point. When I stopped doing all the direct hiring myself, the quality changed, right? Their ability to assess exactly what we needed because they were looking at like at their level, right? They were looking at it from there. I have to look at it from a holistic level and say what's the company Culture Fit, how's this gonna interface here, and like, how do we look at this in a broader sense, where they were typically trying to solve the problem of the day, I'm thinking, what is 369, 12 months down down the road look like? And I think that's that draws another important distinction here, which is there's two lots of ways coaches can get involved, right, lots of way managers get involved, but the two that I think that I'm always trying to assess is Two things. One, what's my ability to help an individual, right? How, what is my ability to coach the individual and improve what they're doing, right? Like skills training type stuff, right? And then what's my ability to orchestrate that across the teams, such that I'm conducting and making everyone do a better job together. And I think this is where we get into like super rarefied space where you find people who are good at both of those things, and where you can both help somebody to become a better player and be the type of coach who can really do a great job of making sure that the lineups you're putting out, to stick with the sports analogy here, are going to optimize the the performance across the organization. And I think this is really tough to solve for, and I think again this is where people's own self-perception ability is really problematic for us, right? as as you're you're talking about because you're, you're hiring more people, you're doing all this stuff. You gotta think about who's doing this as well, right? And what is their qualification to do that? Because it turns out that C+ managers tend not to hire a talent because a lot of times they don't recognize it, or the a talent doesn't want to work for Cus manager.
Wil Schroter: Yeah, I've seen a couple of instances where people stumbled into that job, but the general. The axiom is that talent hires a talent, talent hires C talent and C hires D talent, and that's there's a reason you're at those those thresholds to begin with, uh, and usually the reason you're B talent or C talent is because you're not a talent, you're looking for for that level. And I've actually, I've generally seen that play out and it doesn't surprise me. What threw me was I was like, oh damn dude, I'm, I am the C talent right now relative to my experience in the organization. And it was something as simple as that woman saying to me, do you understand a performance review? Or I just had this out of body experience, and I was like, huh, I'm the problem, right? And that was a it was a minor thing relative to
Ryan Rutan: where you hear that high pitch noise as your adrenaline spikes, right? It's just like, oh no. I'm caught out in the open.
Wil Schroter: Let's talk about how you solve this, right? Cause at this point folks that are listening are like, oh damn, we're, yeah, OK, now what? Now I'm questioning everything. Here's what I did back then. I just, it just came to mind, but it really worked. I said, OK. Reset all the chains, right? Restart everything. Everyone has zero letter grade. Let's figure out first off, what we're even grading them by. If we're like, Allison in accounting is clearly an A minus compared to whom. I worked with one other person at a company, cool, OK, that's wrong benchmark, right? And part of the way I looked at that was, if we had all the money in the world, would we hire her? It obviously not that that's a straw man argument, right? But who would we hire? And, and there is a threshold at which point you don't need somebody better than that, right? And so, what was hard for me, initially was just saying we have to hit reset. All the expectations, again, we have to reset. It's cool that these folks were with us for a long time and did all these great things, but we are where we are now, and is this really the best team? And I had some good answers and some bad answers, and again, I'll I'll go back to what I said earlier, at the time, my first line of assessment. was I'm the problem, and that wound up being really cathartic, cause it got me out of my own shell, it got me hiring better people, it got me really trying to like, find those A and B players to make up for the fact that I was a C level management, by the way, the fact that I was like 22 years old. Yeah,
Ryan Rutan: for sure. Now it's, it's interesting too, as the, as a startup company, and oftentimes founders are very good on the occasion you get the person like they were an absolute rock star in the industry, they spun out and they decided to go do their own thing, but that's ones of people out of thousands of people. The vastly more more common cases you decide to start something, you have very little management experience, you have no experience running an entire company like this, and you certainly don't have any experience running exactly this company because no one does. It's brand new. And so you really struggle to have those benchmarks and and baselines, you're like using your own performance. So you've got 3 months' worth of performance data, not a whole lot to go on there. So one of the things that really worked well for me was to go out and ask other people who were as similar in size, shape, whatever, or maybe a little ahead of where I was and talking to them like, OK, so when, when you're thinking about your top performing developers, what are what are the questions you're asking yourselves or how are you gauging that and then just asking like, Really qualitative more so than quantitative questions. What are the things that they do that set them apart from your B players, from your C players, from your D players? And they were always really interesting answers, right? And they weren't always things that I could necessarily then go and sort out within my own teams, but it started to give me different ways of thinking about things and, and asking the same things, like, what is it that really frustrates you within your teams? What is it that we like, you look at, you go, I feel like this isn't enough performance, but I don't have any way of saying they should be doing more, they should be doing less. And so just asking, what are the what are where do you See and how do you assess these kind of failures or shortfalls, and in a lot of cases they'd tick off a list and I'd be like, yep, check, check, check, and then they they drop another like, oh my God, I hadn't even thought about that. So here's a whole new vector for assessment. And so I think that we talk about the fact that comparing yourself to other startups can be really dangerous if you're just looking at like the Instagram version, but I think when you talk to their founder or another manager in the same role that you're in, and you can talk to them about what that performance assessment looks like, not the percentage levels, right, not a quantitative analysis. But at a qualitative level, it gives you what you need to start to dig in and do your own analysis, apart from having a bunch of years of experience and data that you can lean on.
Wil Schroter: In one of our founder groups pretty recently, we had one of the members talked about her dev team and she was saying like at what rate the dev team was performing and shipping and things like that. And it was interesting because a bunch of the other founders in the room were like, that's slow as hell, and she was like, what do you mean? Yeah, if if my dev team was shipping at that rate, I would fire all of them. And and you could tell the same deer in headlights, she was like, are you serious? Yeah, that shouldn't be, but to your point, it's hard to benchmark your own stuff, if you're only point of reference, you start talking to other people, that's what I started doing. The way I was able to do it, it wasn't intentional, it just happened to happen, is we're growing so fast that just so many new voices just showed up. And they would show up with a bodied experience that was much greater than ours, which in retrospect, wouldn't take much, and they were like, hey, is this really the way you guys are doing things? The no performance reviews, and it out and we'd be like, yeah, but because we're able to start leveling up, and then I started to get really excited about leveling up people, like where recruiting became something that really mattered a lot to me. Yeah, I would start going after people that I had no business talking to in getting them, right, which I thought was really interesting. And every time they would come on, it would almost be like a class of people, right? You know there was like a like a a graduating class of the next people, and then we'd get like that year's new recruits of at that level, and they would make our previous recruits look like totally irrelevant to the organization, which creates some consternation, to be clear. Yeah,
Ryan Rutan: it does, but also creates progress when done.
Wil Schroter: Yeah, it does, it got me thinking like, what the hell are we doing 5 minutes ago? And let me say this, I just to be clear. You couldn't get that kind of level up with one damn person. One person, the right person in the right role, can fundamentally level up the organization, cause I, you and I've worked with lots of teams here, when one person is slacking, everybody sees it, but also when one person's crushing it, it also influences everybody else to go, damn, I I need to get on my game, right? So when you bring in that next level player, And in their starting the, it doesn't even matter what role they're in, right? But they start operating at that next level, it also pulls the whole team up, right? Again, it goes the opposite direction too. If one person is tanking everything, it drags the team down. But what I'm saying is one hire can be a difference maker. You don't need a whole graduating class of people, as a founder, you look for one person that you can start leveling up with, and here's what's cool. The next person you hire is gonna wanna work at that level. It does pull up, and we've seen this in our own evolution. Yeah, for sure.
Ryan Rutan: I, I think as you, to your point, when you realize that you can start to do that, then I think it becomes incentive because at the beginning you have no idea, right? You're just like, I just need, I, I have no one doing development, right? So I'm going from 0 to 1, right? Literally any developer is better than no developer if we need to ship code right now, there's a whole, there's a whole philosophical argument in there about building the wrong stuff. Forget about that for now. That's 0 to 1. And then when we want to move beyond that, it's like we look at these little level ups. I remember at some point thinking it was always they were like minor upgrades. It's like you, you go from your parents' house, your crap college or your dorm, your crap college apartment, your slightly nicer college apartment, your first job apartment, your first house, right, and there's like this kind of sequential leveling up. At some point I was like, why am I sequentially leveling up? Why am I doing this step wise, as opposed to saying, I now understand the ROI on the better hire. How can I aim as high up the food chain as possible without overshooting the mark, of course, from cost standpoint, or do we really need, I don't need the the the CEO of Microsoft to run my web design developments with 20 people on it. So there there are limits within this, but I started thinking in a way that was like, what's the furthest that I can see where I believe that will actually be the the right person for all the reasons that you just laid out, because it has this crazy ability to motivate the rest of the team. And it makes new hires really easy, because nobody wants to walk in and be the first real functional member of the Apple dumpling gang. Nobody wants to be like, on one hand, it'll feel really good to be like the relative best player, but if we lose all our games, that's no fun. And and and look, I'm sure you've heard this too, and it's one of the one of my favorite things to hear, right? And it's it's such an interesting thing, especially with startups, but like, good managers and good teams can make a huge difference in your hiring. You can actually get better people for cheaper because of this. How often have you heard, I took a new job, the salary is not quite what I wanted, but I love what they're working on, and the manager I'm gonna be working with or under or whatever is just like so amazing, right? This tells you everything you need to know about why the coach and why the other players are super important to attracting new talent as you move forward.
Wil Schroter: I agree, I agree, and I think for most of us, for most of us when we're trying to think about how to get those level ups or how to do those assessments, like I said earlier, it could just start with recognizing that you gotta reset everything, right? Like, like we said earlier. The second part is start to say, OK, based on who I have now, how am I benchmarking everybody? How am I benchmarking everybody? Is Johnny good because Johnny again, doesn't create a lot of complaints, or is Johnny good because he actually makes the entire team better? Do I benchmark that? Hold
Ryan Rutan: on for one second, cause I want to address something within benchmarking, it's something I see in startups all the time. They're gonna hear part of this, they're gonna say, OK, I'm gonna start evaluating. We'll get to a point where we have a benchmark, and then we'll keep evaluating. Evaluate your benchmarks too, and continuously move them, right? Because this is something it drives me insane when you start that we picked a benchmark, and we've used the same benchmark to gauge performance for 5 years. Didn't you also tell me you wanted your company to grow or change or become better? Then how the hell is the same benchmark gonna get you there? All right, diatribe over, but I had to get that out. But
Wil Schroter: my favorite part about that, just to build on that for a second, is when we take what we assume is an expert's benchmark, right? Developers get away with this all the time because like you said, they have a black art that nobody else understands, so they say, hey, it's gonna take longer, nobody freaking knows, so they just as they assume that's the case. But what's always been amazing to me throughout my career and just different things that I've done, is when I became an expert in someone else's job, and then listen to them tell me how long something takes, right? You and I joke about this all the time because I'm building a house, and I talk to all these different trades for carpentry and everything else like that, and they tell me how long things take. Turns out I'm actually a carpenter, and so I I'm like, yeah, no, it doesn't take that long at all. If I didn't know any better, I would use their benchmark as gospel, right? Turns out their benchmark sucks. How long it takes them to do something is hilariously bad, right? It's we talked about this uh in previous episode, right? Like, like when we're talking about, is it taking a long time cause you're not good at it?
Ryan Rutan: Yeah, does it, does it really take that long? It takes you that long,
Wil Schroter: but should it, it takes somebody that's not good at their job. It it it'd be like somebody saying, going back to the sports analogy, you talk to your star player, like, yeah, star players score about 4 points a game. Are you sure? I'm sure in basketball people score a few more.
Ryan Rutan: What sport are we playing? cause that may be that may, if you're playing hockey or soccer, that that's, yes, that's a star player. You're playing basketball. Let's,
Wil Schroter: yeah, that that's OK. So here here's what I would say. Here's what I'd say. So what I think for most founders for the teams, etc. the hardest thing is just doing that initial reset like we've been talking about, just admitting to yourself that we may be this C+ team. But as founders, we don't get to just lay on that and say, oh yeah some C+ team. We have to set an A standard and work toward it, whether that's leveling ourselves up, looking at our managers, leveling them up, usually that's where you want to start, and looking at the team members, there's no way to grow any startup to anything meaningful without leveling up the team first. So until we get that focus, until we say to everybody, we've got to move at this next level, there's no way to ever scale this startup.
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