Newsletter 57: on starting a startup #4
Newsletter 57: on starting a startup #4
How to assess talent?
Welcome to another edition of the Struggle.
The Struggle is a bi-weekly newsletter where I share my thoughts and learnings from running a startup in Southeast Asia.
In the last article, I am writing a series of essays to describe what steps I would take to build a startup in 2021. The series is designed to help a few friends who are currently starting new businesses and want to leverage technology to build scalable solutions.
A few weeks back, I took a course at Stanford University, where Reed Hoffman taught the concept of Blitzscaling.
If you have not read Reed’s book on the topic, I highly recommend it. A great read for people interested in entrepreneurship and how startups scale.
For those of you who have not read the book, consider the following definition of Blitzscaling:
“Blitzscaling is what you do when you need to grow really, really quickly. It’s the science and art of rapidly building out a company to serve a large and usually global market, with the goal of becoming the first mover at scale.”
Reed Hoffman author of “Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies”
The course involved many external speakers from organizations like Airbnb, Netflix, Google, Yahoo, and Mozilla Firefox.
One of the guest speakers was Shishir Mehrotra. Shishir used to run Product and Monetization at Google and currently is the Founder and CEO of Coda.io. During his time at Google, Shishir was overseeing the growth of YouTube, where he learned and later leveraged a framework called PSHE. YouTube mainly used the framework to figure what success looks like across teams and how people are going through it.
I personally love frameworks, and mental models as such tools allow me to break down complex concepts into easy-to-understand steps.
The PSHE framework resonated a fair bit with me because it’s easy to understand. In turn, it has been helpful in my day-to-day responsibilities as it comes to managing teams at Greenhouse.
PSHE stands for the Problem, Solution, How, Execution and is most commonly used at tech companies.
In my view, it can be a great tool for anyone managing a team as it can help you figure out:
How do people grow?
How to judge talent?
How to be an effective leader?
How to organize people and teams?
How to think about comparing people?
The Problem, Solution, How, Execution (PSHE)
Scope of work
The typical approach of judging how capable people are is by looking at their work scope. As in the example above, consider how the scope of work changes in product managers' case.
Junior roles will start working on features. ➡ As the person gets more experience, she will be allowed to oversee a group of features ➡ followed by product areas, ➡ the product itself, and ➡ an entire product line.
While that’s logical, it comes with limitations. Looking at the scope of work allows you to assess people only based on their experience. I do not think that experience is the best judge of talent, yet we all tend to make decisions anchored on what we know about the past experience of people undergoing a recruitment process.
That’s especially true in startup organizations where everyone is pressured to deliver high-quality work in a fast-paced, demanding environment.
The disadvantages of judging talent purely based on historical performance are:
Culture - you never know whether the newly hired person will click with the rest of the team. If it’s not a good fit, even the smartest people will fail.
Startups are hard - hiring someone with FinTech experience from a billion-dollar company into a pre-product-market-fit upcoming financial technology startup may not work out. Each phase of the startup journey comes up with a unique set of challenges. Working at a pre-product market fit startup is quite different than joining a well-established business.
Training wheels
In the words of Shishir, the left side of the graph could be categorized as “training wheels,” and it answers the question:
What’s the biggest scope you can give a person with no “training wheels”?
According to the “training wheels” approach, the best way to manage a new person on your team is by handing them the problem, followed by a clear solution, and last but not least, a detailed step-by-step process of how to solve the problem (the how).
An example
To illustrate how that would work, I will give an example in the context of content marketing.
Let’s assume I am having a conversation with a junior person working on my content team; let’s call him George.
Since I expect that George is new to content marketing, I would break down a task in the following way:
Problem - We are behind revenue targets.
Solution - We need to drive more traffic to our website.
How:
I need you to write a series of articles related to our core product’s value proposition.
Make sure the SEO team researches and passes you the focus keywords we need to optimize for.
Follow our internal template to figure out the keyword density and how to ensure each article is highly optimized for SEO.
Follow our process on internal and external links.
A/B test article titles.
Get approvals from the head of content before releasing the article.
Release the article and drive early traffic through email marketing and social media shares.
Now let’s imagine that George is an experienced copywriter who has a proven history of writing high-quality content at my organization.
Given that I have worked with George in the past, I have a sense of his competence. In turn, I would not need to break down the entire process of writing an article. I can trust in his ability to apply the best practices from the industry.
Next, imagine that you have got someone even more experienced than George —someone who did not write only articles but actively sought opportunities to make an impact (aka solutions). In the context of the content marketing example, solutions here would be similar activities to writing articles but via alternative approaches, e.g., link building, guest posts, on-site SEO optimization, etc. Following that line of thought and assuming that the activities mentioned above actually work out great, such an employee would deserve more responsibilities and a raise.
Finally, think of a situation where that same person takes the initiative and shares the following:
We have been writing high-quality content consistently, currently producing 10 articles per month.
Increased the # of backlinks by 30% MoM
Engaged multiple guest authors over the past few months.
In turn, our traffic is better than ever before but we are still failing to drive more revenue. My assumption is that we are going after the wrong problem. While we need to keep on driving more traffic and improving what we are doing, why don’t we try to implement the following changes to our product XYZ.
In such a scenario, you have got someone pulling more than his own weight.
A person who is great at execution and understands how to go after different channels. Moreover, that person compliments his flawless execution with an educated guess on what could be wrong with the current activity and the overall product.
Talent who can deliver on a day to day activities, experiment with different strategies, and even figure out the root of your business problems are referred to as t-shaped people in the startup world.
Going back to PSHE, now that you have a better understanding of the framework, your objective becomes to map the entire team and understand:
Who needs to be handed a problem + solution + a clear set of expectations.
Who can be given a problem, and then you would trust them to come up with solutions and clear delegation.
Who can be given a job and be trusted to figure out problems, prioritize, come up with solutions and then delegate a clear set of expectations?
Scope and Training Wheels
What’s counterintuitive in the PSHE framework is that people's path in their careers is not linear.
Early in their career, people tend to make progress based on their work scope. Yet, as time progresses, the curve turns almost in another direction. Becoming less about the scope of work and more about the mechanisms of how people are doing their job. Over time, the curve will flatten and go back to scope.
The highlighted period in the middle is tricky as it’s not an obvious progression.
For example, how do you determine the difference between level three and level five product person?
You may realize that it has nothing to do with the scope of work each person is doing. Both people might be doing the same job, but it’s much more about how they do their job, making it much harder to evaluate.
In such scenarios, the PSHE framework comes handy as it helps you figure out how good a job each person is doing. Hence, you can determine what success looks like and how people go through it.