Quotations
Arthur Miller on Newspapers
A good newspaper is a nation talking to itself. —Arthur Miller
Quotations
The Book of Why
Why We’re Not Venture Funded
It’s not because we couldn’t get venture funding. Rather, it was a strategic choice.
I’ve been around Silicon Valley long enough to know that getting venture money would take at least four months while we built hype, honed our pitch, and met with everyone. We wouldn’t be in a good negotiating position: women entrepreneurs rarely get venture capital; content plays rarely get venture capital; first-time entrepreneurs rarely get venture capital, and it’s a bad venture capital market to begin with. It seemed easier to build a profitable company from the beginning—this has turned out to be true. It’s another question entirely if we can scale to world-changing size sans venture capital. We’d be perhaps the first company ever to do it.
I’m confidant in part because my business decisions born out of sheer rationality have already achieved measurable results—we’re experiencing record-breaking growth for a start-up. There are also historical examples—some of the most innovative companies have been born because of strategic moves to route around constraints. For example, Dell developed its efficient distribution model in part because it was having difficulty getting in stores.
Still, it will be hard. And it depends entirely on you.
That is, it depends on you if you are an extremely talented, ambitious visionary with an abiding belief it’s your civic duty to reinvent the business model for the “4th pillar”. These are exactly the type of people I imagine read my blog.
Because, if this is you, then we want you to work with us. We need you to work with us. But it’s going to go differently than you expect: we’re radically innovating in the realm of corporate hiring. If you want to work for us, we’re going to let you. No resume, no interview. No job description—you’ll decide where you best fit into the flow of our company. It doesn’t matter who you are; it doesn’t matter if you’re experienced; it doesn’t matter what education you have. It doesn’t matter where you live (we’re a global, virtual company, after all.)
There’s only one thing that matters—how good you are, how able you are to integrate your skills in a way that provides measurable value, and how willing you are to demonstrate this in an objective, measurable way before you are paid to do so.
Why? Because this is how hiring should work. It’s the way that makes the most sense, both for you, and for us. Let me explain.
Our singular goal is to build one of those cinematic elite teams (you know, there’s an explosives expert, an electronics expert, a master of disguise, et. al.) that are all contributing their extreme skill and are going to pull off a world-changing caper. Of course, our team will require a different skill-set since we’re not trying to steal a Matisse from a museum. Rather, we’re trying to build a corporation that’s going to usher in the golden age of information (the age of Google will seem like the dark ages when we’re through.) There’s not much use for an explosives expert (yet) but we do need the world’s best technologists, writers, information designers, PR, marketing, business-people, et. al.
In Hollywood, the teams are always small, partially because it’s easier to make a movie about them. (We’ll require an Eisenstein, not a Spielberg, to make our movie, since our story is about hundreds of hero-worthy people working together.) But the teams are small in part because, at least with traditional hiring models, it’s difficult to hire such expert-types. They typically have mountains of student debt, and may not see the value of our world-changing caper when someone else has a venture-funded world-changing caper.
Small won’t do. We need to scale our elite team to epic proportion. Imagine the best people in the world all working together at one company; a company with a motto to “do good” rather than to settle spending their lives merely not doing evil. We’re in the information business because we believe that the essence of the world’s problems is informational. Thus, improving the world’s incentive mechanisms to produce and consume quality information is the most effective way change the world. Google is a small part of what’s needed: it’s a search engine over a trash can. Certainly it provides value; if I searched through the trash cans outside my apartment, I’d be able to find value too. The world wastes too much. But, it’s not about technology.
Everyone thinks it’s about technology, and when we started Bespoke Information, we thought so too. We thought we’d build the world’s most sophisticated RSS reader and information personalization technology. It’s technology in part—we do that too—but as we provided the service we began to hear first-hand, detailed descriptions of what information was vaulable to our clients, at the same time, we also began experiencing first-hand most of the information that flows through the world. It wasn’t just a matter of connection. It was something more. It’s the content, stupid. 50% of our client requests we are able to fill with existing content that we find for them using sophisticated search mechanisms, both human and technological. But the other 50% of the information isn’t out there. Sometimes the raw data is, but it takes extensive compiling, processing, writing, and information design to get it into the format that our clients want. Sometimes we even go deeper than that—our clients hire, in essence, their own journalists to investigate the issues that matter most to them.
Bespoke Information is a barely profitable enterprise that should become very profitable as we get more efficient, but we view it as a small part of our business. Our end-goal is to produce consumer-level content because that’s what changes the world. Inside, we’ve come up with at least 50 business-model innovations to experiment with. We’ve tried one, successfully. But to try the other 49 (and to think of more) we need to grow.
We’re terrified of growth, as much as we need to. Because, we already have built an elite team of the world’s experts, working together. We’re a small team of full time employees, and a much larger team of people that work with us on an as-needed basis. We all agree that it’s a great place to work. We produce a service that’s of amazing quality and our clients love us. We’ve a sense we’re slowly becoming masters at this information game. We’re innovating on every level, and we’re tracking metrics to objectively measure our success. We’re experimenting, iterating, and improving radically. We’re getting better and more efficient every day. We’ve done what few start-ups have ever done—become slightly profitable within the span of a month, without investment.
We’ve a distinct culture—we’re lean, ingenious, and value-driven. We’re doing things in the way they should be done, rather than how everyone else does them. We’re data-driven, and base everything on scientifically valid experiments. Our metrics constantly cause us to challenge everything conventional business wisdom would say. But it’s working. We’re a small team that’s creating value at an unbelievable rate.
It’s not only about our collective pooling of individual mastery; it’s that we share a specific sensibility. Some of us are experienced in a conventional way—our CTO has 31 years experience developing scalable information systems for financial institutions and a degree in mathematics. I, on the other hand, am experienced in an unconventional way. I’ve never been a CEO before, but it’s always been my plan: as a small child I followed corporations like they were sports teams. I think constantly about business processes and strategy. I’ve have read widely on every aspect of business—though I skim the popular best-sellers and focus on the hard-core academic literature. My work experience is varied, though brief—my goal was to get a glimpse on the inside of the world’s most effective and innovative companies, but not stay, so I could get hands-on experience in a wide variety of fields. So, I’ve worked at technology companies (Google and Amazon.com); I’ve worked in Silicon Valley doing venture capital (Omidyar Networks), a law firm (Fenwick & West), and a start-up (Noca). I’ve worked in Washington DC at a non-profit (Public Knowledge). I also do consulting work for a business-school professor of mine, so I’ve worked with large multinational companies in Europe and Asia in different industries. Essentially, I have a resume that makes me unemployable, but strangely qualified to be a first-time CEO.
So, if you’re an ivy league Ph.D., that’s fantastic, and if you’re not, I don’t care. Only one thing matters: what you accomplish here. That’s our sole measure.
Google was the best company I ever worked for. It was two and a half months before I even met a single person that I didn’t think was brilliant and skilled. Seriously. Once I spilled milk in the kitchen, and as I was wiping it up, a janitor came over and insisted on finishing for me. Because it was his job, but more, I think because it annoyed him to watch someone do it incompetently. He was amazing—it turns out wiping up milk can be a profound skill (one that to this day, I do not possess). I loved that—I want everyone at our company, even the janitors, to possess that level of professional mastery.
But here’s the thing. Google hiring standards are resume-dependent. Then, even if your resume is ridiculously pristine—you funded your ivy league undergraduate and graduate school education that you finished in four years with a dog walking business while also starting a clean-tech non-profit—that just gets you in the door. It will still take them six months to hire you. You’ll meet everyone in the department for an individual, hour-long interview. You’ll do endless, countless riddles; you’ll be given hypothetical scenarios. It turns out that in the end, it’s a lot of unpaid labor for you, and a lot of paid but unproductive labor for the Google employee interviewing you. Google spends a lot of time and money on hiring because it’s the most important thing they do. They’re right about that.
But what they’re wrong about is the method. The best way to judge candidates isn’t by resume-scanning and hypothetical scenarios: why not just give them something real to do? Google’s method doesn’t make sense on a number of levels. First, since it’s hugely expensive, they have to limit the number of candidates they interview. Thus, it makes sense to filter on the imprecise indicator of a resume. You’ll get good people that way. But you’ll also filter out a lot of great candidates. Next, because even if you had wealthy parents that valued education, and have been a smart, diligent person since high school that has jumped gracefully through all of society’s most challenging hoops, well, Google still needs to interview you. Because it’s not about raw skill: you also have to integrate well with the team. So, you have to meet everyone on the team. Everyone has to stop coding for an hour to meet with you. No productive work is done in that meeting because it’s an “interview”.
That’s dumb. It’s inefficient and forces you to rely on crude indicators that don’t matter in the end. I care that you’re good: I don’t care where you learned to be good. I care that you integrate well here: I don’t care how much your last employer liked you. I care that you behave ethically and responsibly now, and besides, our company needs to have systems in place that trust but verify: so I don’t care if you’ve made mistakes in your past. I care that the decisions you’re making now are data-driven, experiment-based, well-researched, and that there’s clear metrics to judge the outcome by: so I don’t care if you’ve had lots of experience at another corporation and have well-honed gut feelings. We do things differently.
I don’t care if you’re talented but still need to learn in order to become masterful: I just don’t want to pay for this. I don’t care if you’re used to being paid according to how much time you spend on something: at our company we get compensated for the value we create. It’s how we do business on all levels—we believe as a company we’re only going to capture 5% of the value we create for our clients, and as employees we’ll only capture 5% of the value we create for our company.
So we focus on creating a lot of value. That 5% might be millions of dollars. You’d know if you measured it, and companies would measure it if employee compensation, rather than the CEO’s compensation, was based on it. Trust me, if you’re any good, then you’re probably underpaid. If you’re focused on creating value, then you absolutely want a clear, objective measure of the value you’re creating. It’s the only way you can get better. At other jobs, this elusive value-creation is mostly measured by how much your boss likes you; it’s more politics than anything else. Not here.
This is scary at first. It was to me too. But then I realized that I’d do much better financially this way. It took me a while to get up to speed; I essentially worked for free part-time for seven months while making my living consulting. Our CTO worked for free, full-time, for four months. Everyone else worked for free too, until they created enough value for us to reward them handsomely. (Even our lawyer, used to billing $700 an hour!) This is why the founders of companies make billions—because they work for free until they can prove their value. It’s a good model, and an opportunity we think every employee should have.
Because here’s the thing about venture capital. We’d take $5m of venture money, give the venture capitalist 50% of the company, and then turn around to spend the money hiring employees. Because the venture capitalist funded the risk of hiring you (the risk you wouldn’t contribute more value to the company than the salary we paid you), the venture capitalist would be entitled to 50% of the value you did create. And he’d have earned it, too—risk, not labor, is what generates outsized returns. This isn’t a tome against venture capitalists—the value they provide to companies is real, and investment is essential if your business requires capital expenditure upfront.
In a business like ours, the expenses are all labor. The entire success of our company lies in our ability to manage the hiring risk. We’d have to make a $50k bet on every employee. (I say $50k because if you didn’t make more money for the company than we payed you as a salary by $50k, we’d probably fire you.) But this $50k investment would change everything. Since our intial investment in you was so high, if you turned out to not be elite-team level but merely slightly better than mediocre, we’d probably keep you around. It’s a common human flaw to throw good money after bad, even when you know better. But we wouldn’t like it. It would be corrosive to the team, who wouldn’t wake up every day excited to work with you. But it wouldn’t be good for you either, in the long run. Why spend the rest of your life being mediocre? There’s probably some other job that you’d be really fantastic at, that you’d love, that you’d be incredibly motivated to excel at, and when you found this job, you’d not only be happier, but you’d make more money because you’d be providing more value.
But this is what the typical corporate hiring process creates—it creates a corporation, rather than the world’s largest team of elite experts on a world-saving caper. It’s a deficient outcome, because it’s a deficient process. Even if you’re Google, and you’re fantastic at hiring, there’s a cheaper, better way to get the same results. That’s what we’re trying.
So, our hiring system doesn’t require you to commit to the unpaid labor of interviewing. Rather, we’ll let you do real work instead. We’ll hire you the moment you’re clearly providing value to the company, and we’ll work with you to measure this objectively and help you get there.
We’re doing it this way because this is exactly how we created our top-notch founding team. Only, we all knew each other beforehand. Why should we switch up our method that’s worked well this far merely because we now need to hire strangers if we’re going to grow? We should never need to hire strangers since there’s such an easy way to get to know us—work with us.
Most of our employees—particularly the ones in our on-call expert network—were hired only because they provided us their expertise for free, and it proved valuable. We keep metrics on it, of course, and on average, people in our expert network first offered us 6-8 hours of time—exactly the amount of time you’d likely spend on the interview process. Full-time employees (such as our CEO and CTO) spent 4-8 months working for free before becoming paid employees. We were happy to do so, because we realized that the founders of a start-up get directly compensated for the value they create. It took us each a while to figure out how to best create value, but we did, and it was worth it.
It seems like a shocking way to hire at first. But there are only three outcomes in the hiring process: if you’re skilled and figure out how to create value immediately, then you’ll be hired immediately. If you’re skilled but can’t figure out how to create value, then we don’t really want you working for us—you’re just not the type of employee that’s cut out for a start-up. When we’re a giant company, we’ll have the ability to invest in people that are slow to find value; there’s an important role for these types of people if they’re doing something like serious R&D. But that’s not what start-ups do. We need people who can innovate more rapidly, people that can cut to the value proposition. Most importantly, we need people who can execute.
The third outcome is that you’re slow to provide value, but the only reason for this is because you’re learning a skill you haven’t done before. Then, our value to you is educational. You’ll learn with us, you’ll work alongside the world’s experts (many of them university professors, actually) and we’re offering you a much better deal than a university would.
Seriously, if you’re a smart, responsible person who is passionate about learning to be the best in the world at what you’re doing, if you’re honest and straightforward, if you care deeply about quality and efficiency, if you respond well to criticism and are obsessed with objective metrics so you can measure your success, heck, we’ll even go so far as to promise you a $150k starting salary after you work for us full-time for free for for years. That’s a way better deal than a university can offer you.
Lloyd thinks it’s a fantastic idea, but worries our hiring method will be seen as exploitative. I don’t. (We obviously are in need of some skilled PR people since our CEO is under the delusion that you just explain contrarian theories to the world on your blog and that will suffice.) But honestly, if you don’t get how much sense it makes, if you don’t understand how you’re going to be much better off in the end, if you don’t believe in your own ability to make and measure value, and if you don’t believe in the world-changing nature of our corporate mission so you can at least rationalize to yourself that this initial outlay of effort is not so different from volunteer work, well, you wouldn’t want to work here anyway.
99% of the world isn’t going to want to do things this way—they’d much rather go through a typical corporate hiring process. Those are exactly the type of people we don’t want. This is what makes it a brilliant hiring method, in my opinion, and the only one that makes sense. Everyone wins.
You get to do productive work instead of interviewing, you get to be judged based on the only thing that matters—your actual work—instead of the usual imperfect indicators. You work when you want, how much you want, and on what you want. Eventually, you’ll get your share of the venture capitalist’s 50% plus the usual salary and stock options you’d get at any Silicon Valley start-up—and you don’t even need to live in Silicon Valley. But despite all this, you get to be certain that you like working with us so much, that you believe in the fundamentally civic nature of our mission, that you’d work here for free. There aren’t many jobs in the world you can say all this about.
We get to build a world-class team without raising venture money, because we don’t have to take on the risk in hiring; we’ll distribute the extra equity to our employees, so that we can be creating millionaire-employees 50% longer than the typical venture funded start-up; we know for certain that everyone we hire is going to work out perfectly; we’ll offend the type of people that we wouldn’t want working for us anyway with the audacity of our hiring method and we’ll attract the type of people we do want working for us, and all this while, we can stay focused on actually accomplishing our mission instead of spending 50% of our time recruiting and interviewing.
If we can’t convince enough people that we’re in the beginning stages of something huge, well, then we probably wouldn’t be able to convince investors either, so it’s a moot point. In the end, it’s much better for our company to have our first 500 employees convinced of our worth than a few investors.
The News Business
Like a Bird on The Wire
Like a bird on the wire,
Like a drunk in a midnight choir
I have tried in my way to be free.
—Leonard Cohen
The HBO television show The Wire is an epic, amazing piece of work. I watch it in bed, those mornings where it’s hard for me to get up and do my job. Like this morning. After an hour of this show, I’m ready.
I’m in the middle of Season 5. It’s not the best season, but it’s the season closest to my heart, because it’s about the newsroom—it portrays, with gritty realism, the tragedy of this dying beast, the modern news bureaucracy. It’s about how newspapers function, and how they directly tie into the political distribution of resources. Written by a former Baltimore Sun reporter,
nearly every scene is grounded in documentary truth.
The show’s creator, David Simon is exactly the kind of reporter I romanticize: a hard core, life-long reporter. A true professional with the essence of his beat in his soul. He knows what his job is: to tell it, exactly like it is, without falsehood, without adornment, to the American people so they can make the right policy choices. So democracy can work.
So what’s he doing now writing television? Not selling out. Far from it. Rather, after a decade of reporting, he realized that “newspapers are fundamentally not equipped to convey certain kinds of complex truths.”
Today’s social problems are complex. They’re systemic social failure. Newspapers are fundamentally not designed to understand it.
Watching The Wire, you understand it. You understand the reality that the newspaper’s can’t capture. This HBO show is a far better vehicle for this type of truth than the daily newspaper.
Watching The Wire makes me want to get out of bed and do my job. Because it’s a show about dedicated public servants. Police that want to police, politicians that want to lead, and reporters that want to portray truth. They’re all struggling to do their job inside this bureaucracy that makes it difficult. They do their best, they manage. They work the system.
I want an organization of people with this kind of dedication, and I want to remove the bureaucracy for them. I want to create the best organization possible, where they can pursue this end—getting people the actionable information they need—no matter what the form; whether it’s a daily beat of a miniseries drama. We’ve got to make a profit, of course, and we’ve got to be entertaining to make a profit, but like The Wire shows us, we can do real reporting work inside this construct.
The Book of Why
Why Are We a Global, Virtual Company?
I decided from day one that we’d be a global virtual company. Here’s why.
- So that we can hire the best people in the world. I consider it our main competitive advantage. Google can only hire the best people within an hour’s drive of Mountain View. We’re going to be able to hire the best people in the world. Our team is global and world-class. For instance, our Lead Information Designer lives in Winnipeg, Canada. Because his wife wants to, and since he’s one of the world’s best designers, he’ll get amazing work no matter where he lives. I simply couldn’t have recruited a team of this quality if I only had Silicon Valley as the pool.
- So that we can scale rapidly. In order to scale rapidly, we put corporate processes in place that can scale long before we need them to. We’re not going to need to change a thing to become a global media corporation: we already are one. We already have the back-end virtual communications system necessary to collaborate globally.
- For the global perspective. Having workers on the ground in every country means that we’re not building an organization with a distinctly American perspective. This is important to me. This inherent diversity helps us not be blind to the world.
- To keep overhead low. Offices are expensive. Really, really expensive. And dangerous for a start-up, in my opinion—it’s capital that’s tied up in a lease. It’s money I’d rather give our workers. If you could be paid $1k more a month, and give up your office, wouldn’t you? If our workers would prefer not to work from home; if they’d prefer to go into an office, we’ll rent them one and pay them less. But I don’t want to make this decision for them. Low overhead means we don’t need to take investment, and this means 50% more equity for employees.
- To focus on what matters. We all inherently believe that we’re going to be able to build a world-class media organization: we don’t need offices at the top of a high-rise to make us feel important. We need people who measure their effectiveness by one measure only: the work they get done. You shouldn’t have to go into an office to feel like you have a job. You know you have a job by what you produce. You shouldn’t have to need to play dress-up for your job to feel real. All the best start-ups have been able to imagine themselves as giant corporations when it’s only two guys in a garage in Silicon Valley. Even when we’re thousands of employees, I want us to remember these start-up roots. I want us to remain lean, to always focus on what matters like only a start-up can.
- Because it’s a revenue stream for us. We’re quickly becoming the world experts on running global virtual teams. I get paid a handsome consulting fee to teach other corporations what we’ve learned. In fact, our consulting arm is one of our most popular divisions.
- So I can fold laundry on conference calls. As a woman, I’m aware of the importance of work-life balance. Working from home makes it easier for me. I can work longer hours, of course, since I don’t have to commute. But I also can get household chores done during the day. And, I can work at any hour that’s works, since we have people working 24/7. This makes it much easier to live than keeping a 9-5 schedule.
There are downsides as well. (1) It may make it a more difficult to get work done; it may make us less efficient. Though this hasn’t proven true, I’m always aware of the danger. (2) Most CEOs in the world told me it was a horrible idea. I’m still not sure why: none of them seem to be able to articulate it. Still, I’m always wary of discounting the wisdom of the experienced. (3) It means that we need to hire people comfortable communicating in virtual channels; this may make some people not want to work for us. It’s something I’m willing to risk, since I’d rather not compete for employees that prefer to work in offices—every other employer is. We cater to employing the contrarian.
Business Women
Teachable Moment: How to Treat a Woman CEO
Last night, I was at a business dinner. Doing business, I’m frequently the lone woman in a group full of much-older men, and last night was no exception. It was me, two Japanese executives, two European executives, and a former business-school professor of mine from U.C. Berkeley who often hires me as a consultant. (We’re also writing a book together on biomimicry in business organizations.)
I was in my element: lots of wine, fantastic food, and interesting conversation about the future of global markets. Then, one of the European executives made a joking comment. Along the lines of, “Surprisingly, you’re actually insightful about business—at first we thought you were invited because you were having an affair with your professor.”
I was livid. Not because it was sexist, but because it was vastly unfair. My business school professor has always been a model of professionalism. He’s not once even glanced at me like I was a woman; I’m not even sure if he knows I am a woman. I’ve never once made even a slightly flirtatious comment to him. He’s always treated me like it was my ideas that mattered. He also seems adorably still in love with his wife; they have a brochure-quality relationship. I respect him greatly for this.
Now, granted, last time I had dinner with these executives I had been wearing a white Gucci blouse that was borderline inappropriate. On the way to dinner, I’d spilled coffee all over my shirt. My dry-cleaning was in the car, and I made the judgment call (perhaps wrong) that looking slightly too feminine was better than looking like a complete slob. At dinner they were perfect gentlemen, listening intently to my ideas. I was ecstatic about it. I thought that finally we’ve evolved beyond that feminist stage where women had to look and act like men to be taken seriously in business. I thought that maybe I could let down my guard a little, maybe being a woman CEO would be a lot more fun than I thought.
I’m wary of feminist over-correction. I don’t think a fully-neutered workplace is ideal. I dislike the idea that everyone has to be so cautious all the time. It’s no fun. But I am. Because at the end of every day I want to look in the mirror and tell myself that I earned it all. I didn’t slide in on my feminine wiles; I didn’t flirt or sleep my way to the top. (Anyway, like Sharon Stone said, you can only sleep your way to the middle.) Everything that I’ve accomplished, I’ve worked hard for. I’ve earned. I’ve built this company from ground-up without investment. I’m good at what I do—or at least both the market and my employees tell me so.
As long as you understand this, as long as we’re perfectly clear about this, you’re free to say anything you want. But be careful. The slightest whiff of sexism and my consulting rates triple.
The Book of Why
Why Are We a For-Profit Company?
Now that we’ve answered why we’re a company at all, it’s important to answer why we’re a for-profit company.
Our mission could easily be that of a non-profit, since it’s got a save-the-world tinge. We’re not happy with the elegance of the wording yet, so it’s provisional, but the core is there. We exist to provide the world with useful, actionable information; information necessary for them to create a world filled with truth, justice, beauty, intelligence, and freedom.
I’ve been influenced by the missions of two places I’ve worked: Google and Omidyar Networks. Google’s motto is: “don’t do evil”. I was surprised at how useful the motto was in day-to-day operations, how much it informed the daily decisions. Our motto: “do good”.
I’m slightly skeptical of it. Most of the harm in the world has been done by people that think they’re doing good: “do good” could easily become a prescription to rationalize doing harm. So it has to be a dialogue, an ongoing debate. What good is must be constantly challenged.
But, we’re not a for-profit company out of a desire for wealth. (Though we plan on generating lots of it.) We’re a for-profit company because I once worked at a non-profit and hated it. My problem was a lack of measurement: I could never tell the impact I was having. It was all faith. It’s why I left the non-profit to go work for Pierre Omidyar: he was working through this same problem in his philanthropy. And, he decided that instead of giving all his money to non-profit organizations, he’d only give a third to non-profits, he’d invest a third in public policy, and he’d invest a third in for-profit companies where the driver of the business was a social good.
The beauty of it: if the driver of your mission is a social good, then you can tell how much good you’re doing in the world by how much money you’re making. It’s an easy, simple unifying metric.
So, when I say “do good”, I mean: make the driver of our business a social good. Make the good we do in the world measurable through the medium of money.
So, we’re a for-profit because it makes it easier for us to measure the good we’re doing, and it also makes it easy to scale this good. I hated working at a non-profit because I felt like we were constantly begging for money to do good. If what we’re offering is so valuable, I wondered, then why aren’t people willing to pay for it? If we wanted to grow, it we wanted to have more impact, we’d have to get permission from a few philanthropists (like Pierre.) As a for-profit with social good as the driver of our business, we’re able to scale as soon as we achieve measurable results.
Thus, we’re a for-profit company so we can measure the good we do, and so that we can scale if we’re successful, offering more and more people this good.
There’s also the matter of personal wealth; I’d like every employee that works for us to end up wealthy. It’s not because wealth is important, or a motivating factor. (I want our employees to be motivated, rather, by a sense of craft and service.) But wealth is political; it’s what shapes the world. What you buy, how you buy it, and who you buy it from is of profound importance. People will join our company because of our values. We’ll be wildly diverse, but still, we’ll share the same values. The idea is that our corporation should function as a redistribution of wealth from the hands of those doing harm into the hands of those doing good. Because the way that excess wealth is spent, as Georges Bataille, would say, defines a society. And I want the people that share the same values as me to be writing the definition.
The Book of Why
Why Are We A Company?
The first entry in Book of Why is about why we’re a corporation. Why form a group of people that persistently works together? Why not remain free-agent consultants and come together to do projects?
Both Lloyd, the co-founder and CTO, and I are skeptical of the value of corporations. They become all to easily places of politics, not performance. They’re where people’s skills go to die. They’re not very flexible; they’re not very fun. They seem to exist to make their founders and top management wealthy, and give everyone else a steady paycheck.
Lloyd has spent most of his working-life as a high-priced consultant. He’s often asked to join as an employee, and he’d always say no. Being a consultant is better: a consultant isn’t mired down in the organizational drag. They’re hired to execute, and dropped as soon as they don’t. I too make a fantastic consultant, and a terrible employee: I find it difficult to execute broken processes; I want to fix the problem at its source.
Still, it takes people pooling their skills together to get anything done. So we’ve formed a corporation to make the transaction costs of a group of people pooling their skills together low. Essentially, we’re built a corporation to make it easy to build a team. We’re building a corporate identity so that we can attract people with the same values as us to work together.
We think we can do it differently. We think we can reinvent corporate process from the ground-up and obtain all of the benefits and minimize the pain. We think we can build the world’s most amazing organization: a global team of people with mastery in their respective crafts, efficiently executing a world-saving mission, and bantering wittily while doing so.
That’s what our start-up feels like now, and we talk frequently about how to not lose this feeling when we’re 400, 500 people. It’s the first entry in the Book of Why, and the most important one.
Solving Hiring
Notes On Hiring
The problem that’s been keeping me up at night is how we’re going to scale our current starring team.
We’ve built one. We’ve solved the problem on a small scale.
First, from day one, we decided that we’d be a global, virtual company. We decided we’d figure out the back-end communications infrastructure necessary to simulate being in the same room. We do this for the competitive advantage in hiring.
You see, Google can only hire the best people within an hour’s drive of Mountain View. We’re going to be able to hire the best people in the world. That’s a powerful advantage.
It’s working beautifully so far. Our designer, who truly is one of the world’s most brilliant designers, lives in Winnipeg, Canada. He lives there because his wife wanted to, and he’s so brilliant he can get work anywhere. So from this small, icy town in Canada our designer works on amazing sites: he designed the NYC department-store Barney’s first site (which they ruined in their last redesign). Though he favors working for companies with a save-the-world slant, like Acumen Fund, Generation Investment Management (the $1b fund co-founded by Al Gore), and us. (He’s currently redesigning Bespoke Information.)
However, the reason why we’ve only solved the problem on a small scale is because the way companies hire just doesn’t work for a start-up.
You see, the way our team knew that we’d form this ideal starring-role team is that we worked together before. This indicator is the best guarantee. PhDs, ivy league degrees mean nothing. Prior experience means nothing. How well-liked you were at your former job doesn’t matter to me. How well you interview means nothing. These things are the crudest of indicators.
The only thing that matters to me is what you actually end up contributing to the team.
The company that’s the best at solving the problem of hiring is Google. It’s the reigning world-champion of building a starring team. At every job I’ve had, I’ve met someone I secretly thought was an idiot in the first day. But at Google it was two and a half months before I did. It was amazing. And it was everyone: not just the engineers. It was the janitors. I once spilled milk in the kitchen, and the way I was clumsily wiping it up irritated the janitor so he insisted on taking over the task. I watched, amazed. He really knew how to wipe up spilled milk. I’d never considered the best way to do it, but he obviously had. He did it with a ruthless efficiency that was pure beauty. Working with such competent colleagues was inspiring; it made me want to be better to.
Google is fantastic at hiring. Here’s a few reasons why. First, they’ve focused on making Google the best place in the world to work. (Or rather, it’s a close second to Of Record.) This assures that there’s an every present stream of candidates. Second, it has ridiculously high standards; it requires PhDs from ivy league schools. Third, it interviews methodically and carefully: it can take up to six months of interviews to be hired at Google. Each interview is done individually, and later ranked by the interviewer. Part of every performance evaluation of Google employees is the statistical variance of the rankings. Thus, you’re supposed to rate some candidates high, and some low. This forces meaningful evaluation of candidates. Fourth, it experiments. Lately it’s been trying to focus in on arbitrary qualities that make a good employee with series of seemingly-irrelevant questions.
Our situation is different. We can’t afford six months of interviews. We haven’t yet branded Of Record as the world’s best place to work, so we don’t have a steady stream of ivy league PhD candidates.
We need a certain type of employee—one wants to work at a start-up. An entrepreneurial type that can figure out what’s needed, how to measure their value, and how to execute despite a lack of resources. Someone who thinks it’s fortunate that they’ll finally be compensated for their value rather than their time: a person that’s certain they can build millions of dollars worth of value, and thus would prefer to be compensated as a percentage of their value rather than an hourly wage. Someone that executes rapidly, immediately gets what we’re trying to do, and wastes no time doing it.
And we can’t afford to make mistakes. Bespoke Information is an expensive service, and our clients don’t mind paying only because they get vastly more value in return. Billionaires are the most value conscious consumer-segment that exists. (That’s why they are billionaires. I’m starting to think it’s more a value-conscious personality trait demanding constant excellence from everything around them.)
So it’s hard. But we have to figure out how to do it.
More later. I have to dash off to a meeting.
Problems Keeping Me Up at Night
Scaling To The World’s Largest Team of Expert Specialists That Work Efficiently Together (With Witty Banter)
My childhood fantasy was to be part of an elite squad undertaking a seemingly-impossible, world-saving mission.
It’s a team that’s a trope in Hollywood. Thus, I must not be the only one fantasizing about it. Every year there’s at least one blockbuster starring a team.
There’s the ringleader, the electronics expert, the master of disguise, the explosives expert. They’re all at the top of their game, they all contribute something critical to an impossible caper they never doubt they’re going to pull off. They all have the same sensibility of heroics in what they’re trying to achieve. And, best of all, they banter wittily while going about it.
Of Record is exactly this. We’ve got the team.
Every day, I love working with them. There’s four of us, full time, and then about fifteen consultants that work on individual projects for Bespoke Information. They’re all top-notch in their fields. I wake up excited every morning to see the loads of work that we’ll finish that day. We’re the world’s most efficient team; we execute.
Executing well means you need to grow. We desperately do. We’re already turning down clients that we lack the capacity to serve well.
But I don’t know how to grow and maintain our perfect Hollywoodesque team. The moment we lose that feeling we become normal, just another corporation. We’re living the fantasy and I don’t want to stop.
This is the problem that’s keeping me up at night. If you can think of any solutions for us, please leave a comment.
The Book of Why
Introducing The Book of Why
At our start-up, we’re rethinking everything from the ground up. We’re trying to rid ourselves of all the inefficiencies and unhappiness bred into organizations because that’s the way it’s always been done.
We record our thinking in a book called, “The Book of Why”. It explains what we do as a company, how we do it, and why we do it that way. We hope this book will facilitate asking the question “Why?” as we continue to grow. When we’re 400 employees, this book will provide a record of why things are the way they are, and will enable our future employees to continue rethinking everything, picking up from our lines of thought and improving our processes.
