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Summary:

As a startup, you might think the A-list employees are beyond your grasp. But Scott Weiss, general partner at Andreessen Horowitz, explains why you should reach for the stars – and why they might jump at the opportunity.

No. 1

No. 1In Europe, most sports leagues participate in a system of Promotion and Relegation. At the end of each season, the top three teams in the second league get promoted to the first league and the bottom three teams in the first league get relegated to the second league. This maintains the intensity of games for low ranked teams at the end of the season, among other things. Now here’s an odd fact: The very best players only play in the first league — it’s in their contracts. If their team gets booted to the second league, these folks roll off and immediately find first-league work, typically with some of the recently promoted teams.

If you’re a newly promoted team, you need to augment your roster quickly in order to compete. Rock stars that were impossible to attract in the second league suddenly want a tryout. Winning in the first league is all about signing a few new superstars and integrating them effectively with your existing team.

You can get Beckham

There is a similar analogy with the talent wars at technology companies. For recruiting purposes, when a company’s metrics start to explode and they raise a significant round of capital, the company has effectively been promoted to the “first league.” When a company hits a sustained plateau or is acquired by a large public company, they get relegated to the second league.

As far as talent goes, Silicon Valley is akin to 15th century Florence: The best of the best have moved here to work in technology. For all the talk about how hard it is to hire in the Valley, first-league companies can literally have their pick of the best people in the world at every function. This phenomenon is especially true of CFOs and sales VPs, as these leaders are usually hired later in the company’s lifecycle and the best people can be extremely picky waiting for the right first-league company to come along.

One of the biggest mistakes I made as a CEO was not hiring these rock stars as soon as it was obvious we had been promoted. I was overly worried about the cultural fit and hegemony of the team. Specifically, after I parted ways with my first VP of engineering, I tried a number of experiments with my existing team. I promoted some director-level managers and then moved the responsibilities under another VP. Things didn’t go well, and we ended up slipping a major release by nearly a year. My reluctance to bring on a “been there, done that” executive almost tanked the company.

After royally screwing this up myself, I have some hard-earned suggestions to pass along to others in this situation:

  • Act fast. Once you have a sense that you need to make a change, start the process immediately. It almost always takes longer than you want it to (think 6-9 months, not 2-3 months)
  • Aim high—higher than you think you should. Work with your entire network (mentors, investors, customers, partners and friends) to help you triangulate on the top ten people in the world for the role. Try to meet every single one of them, even if they are not looking. It helps to know what to aim for. I was surprised how many superstars were actually very humble, approachable and culturally compatible with my team. This was not my assumption going in.
  • Don’t be cheap. Use great recruiters who will know—or will unearth—the crazy-great candidates who are often stuck vesting out at larger (second-league) companies.
  • Interview the hell out of them. When we were adding members to the executive team, we did 20+ interviews with the finalists. That process included lunches, dinners and drinks. The very best need to be pushed back on their heels a little bit, not just sold.
  • Make the time to integrate the new executive a priority. I learned (through several mistakes) that as the CEO, I needed to be all over making the new person successful during their first few months. Plan on being in the office, actively managing introductions and role definitions, checking in with peers and coaching the group toward success. Don’t do it alone—the whole executive team should actively participate.

But what about…?

I sent a draft of this post to a first-league CEO who is grappling with this exact situation and had some very relevant questions. Here are my answers:

When do you know which of your existing players no longer make the cut?

If there’s some reasonable doubt about anyone’s ability to scale, you are probably right and you have an obligation to go meet some rock stars to compare. Few CEOs ever say, “I was too fast in making a key change with an existing player.” I certainly waited too long on several occasions.

Do some players deserve the chance to keep playing in their current role because of history, dedication, effort and loyalty?

I’m all for keeping hardworking, dedicated and loyal employees on the team, but they may need to be coached into a different role that is more suited to their abilities. I think every CEO knows who’s “beyond a reasonable doubt” in their roles. If there are people on the fence, then you need to start scouting.

When is it appropriate to bring in rock stars underneath existing execs who are not scaling to help make them successful?

There are very rare occasions when your existing exec’s strengths are so outrageous that they give you confidence the exec can make it over the hump. Is the existing exec special enough to get a few rock stars interested in reporting to him? That’s a good test.

Clearly this logic, taken to the extreme, without any qualifying criteria, would leave you shuffling your entire organization. Is that what you are suggesting?

If you are playing in the NBA, then you have an obligation as a coach to put the best talent you can find on the court. That said, running a business is a team sport, so team chemistry is crucial and you also need role players. But talent is talent, and if you are overly loyal to players who don’t have the skills to compete in the first league, then you will put your company at a disadvantage. It’s a balance.

Finally, once you get to the “premier” level, how do you separate the “mercenaries” from the big-league people who want to build the company with you?

This is a big risk that is mitigated by interviewing and reference-checking. This was one of my biggest fears that I later came to believe was unfounded.

Scott Weiss is a general partner at venture capital firm Andreessen Horowitz. He is the former co-founder and CEO of IronPort Systems, which was acquired by Cisco in 2007.

Image courtesy of Flickr user mueritz

  1. I’ve got a question? How is it I keep hearing talk about hiring such talented people at tech companies, but never once; when these companies flop and lose millions (often 100s of millions) of $, do we hear any stories about how they had hired a bunch of duplicitous mountebanks?

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    1. Wanting to hire the best is not the same as having the best. The best are never available for hire.

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      1. The best are always available for hire..just at a cost

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    2. +1. Times a thousand. People get so enamored with this valley nonsense that they’re never willing to admit how many of these companies fail. As a percentage, I’m sure it’s huge.

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  2. I guess, there’s always a diamond in the rough.. Now, the question is where do you find one? Most probably, they’re already employed by someone else or probably, they’re on the lookout for greener pastures.

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  3. Sounds good in theory but the fundamental problem author does not address is more and more people today think they’re rock stars especially which makes things a bit more messy to sort through to make right decision on who’s for real !

    newsflash: you’re only as ‘rock star’ good from what you can deliver tomorrow and near future….not yesteryear’s accomplishments ;)

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    1. That’s a great point. To me, the key way to avoid that is to follow Scott’s advice of interviewing the hell out of the person. If someone is a jerk or otherwise not the rock star they appear to be, they will reveal their true nature at some point. The more you interact with them (and the more you see them in different situations), the more likely it is that you’ll see the red flags. People can only fake it for so long.

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      1. > The more you interact with them (and the more you see them in different situations), the more likely it is that you’ll see the red flags. People can only fake it for so long.

        Bingo !

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  4. Thanks Scott for this. Another aspect is how will that person who has been promoted or relegated perform under new management. You could have a rock star promoted but flounder under poor leadership or a poor performer burst to the top of the charts after being relegated but coming into a good management fit.

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  5. I hate the term ‘rock star,’ especially when I hear this from a hiring manager or recruiter – it’s so juvenile …

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    1. Very true: http://blog.hirelite.com/what-developers-think-when-you-say-rock-star

      BTW, Beckham? You do realize that he is not that good, right? MLS is a second-tier league. If he was any good, he would still be playing in Europe.

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    2. I agree. I cannot stand this term when it is applied to anyone other than…well, an actual rock musician. I also despise the terms “guru” and “ninja.”

      I am not a “rock star.” I am a marketing professional.

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  6. good article and agree that you need a good recruiter that you can partner with. They know how to sell to key players and go after them. CEO’s job is to take care of plenty of other items and they are not the best recruiters and do not know the tricks of the trade. The part about 20 interviews is ridiculous. So a CEO and his team have time interviewing 20x for 1 hire? Really? I do agree with most of the article and reality is that it’s very competitive to find tech talent right now anywhere…

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  7. Excellent blog, which makes a lot of sense, but is also somewhat questionable in comparing a company that relies on aqcquired know-how and skills specific to the organization to a sports team where there are no pre-requisits about knowledge to succeed.

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  8. Very hard not to give loyal folks a chance to improve. But most of the times one could not afford that luxury.

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  9. Be very careful… Rock-stars tend to burn out and fade away. Don’t be suckered for trendy names for workers by staffing companies that are trying to market their “people” to you, they may very well be trying to obtain their commission in hopes of it really doesn’t work out, and they can gain another in the process. Have specific job requirements and not ones that read on into tomorrow, so as not to lose the trust and respect of prospective quality employees, which you should be seeking. Just a bit of advice from a previous VMS employee.

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  10. The Fifth column Friday, December 23, 2011

    Stupid article by a vc who has nothing but $ and cents in mind… When was the last time he actually worked in such a company and dealt with all the rock stars, sycophants, and slackers and credit takers?

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