Why Some Smart Startups Are Putting (Paid) Projects Ahead of Employment Offers
80–90% of startups shouldn’t follow the advice I’m about to give. Instead these companies are better off just investing resources in improving their hiring via candidate flow/sourcing, interview process, offer communication/negotiation and closing experience. Being at least A- in those areas will put you way ahead of most of your competition.
But for the rest of you I’m going to suggest it’s a great time to put ‘try before you buy’ experiments into place to help potential candidates learn about you, and you about them, not through an interview slate but through actual work together. Yes, I’m talking about short-term paid projects ranging from a few days to a few weeks. Especially at early stage startups I’m convinced that while this is higher risk, it also sharpens the construction of the founding team, especially when you’re hiring people you haven’t worked with before.
Once is a coincidence, twice is a trend? Increasingly I’m hearing about talented folks and sought after startups ditching the interview process as final arbiter of employment and instead opting for some sort of ‘try before you buy’ arrangement. If structured in a clear and respectful way, it makes perfect sense and can also serve to activate more passive candidates.
Some recent examples:
Startup pursuing executive from larger tech company. Mutual interest but exec just. can’t. make. that final decision to leave comfy environment. Company offers to bring him on as an advisor so they can get to know each other first.
Marketing manager tells startup that instead of discussing fulltime gig, she wants to pick a specific project she can work on for them over next few weeks and if it goes well, start the broader conversation about a job.
Product manager knows founders of a later-stage startup pretty well. He has an idea for a way to expand their product line and would join company if he can lead this particular effort. An engineer and designer from the company work with him to build a demo. Once done, the exec team and board will take a look and make a decision.
Some downsides to this sort of process:
It’s half-pregnant. No one is really committed but they’re trying to make themselves fall in love.
Candidate can be poached by another offer, or similarly the company can decide to hire someone else or go in a different direction.
Candidate needs job security if they’re going to give up current employment.
I know contractors get asked frequently to go full-time with clients. Are there other examples you’re seeing of “try before you buy?” As a founder or employee, would you be comfortable with these arrangements?
Looking back after a decade of startups I’m still a fan of these sorts of approaches. I’d emphasize that project work should be paid — don’t ask candidates to do free labor on your behalf. And how it’s structured should absolutely evolve based on company size, nature of role, and so on. But in the right situations it’s not just a way for the company to make sure it’s a good fit for them, but absolutely the opportunity to tap a type of candidate who isn’t going to jump to your startup without a higher degree of conviction.
I feel like some folks are going to TOTALLY DISAGREE WITH ME on this one ¯\_(ツ)_/¯
Some Recommendations For Startup CEOs to Help Make Sure Your Team Member Actually Shows Up
Most hiring processes start with an antiquated assumption that companies select people to work for them. In the world of technology startups we know that it’s usually the other way around: the best talent have plenty of optionality and the question is, how do you get *them* to choose you?
More recently though I’ve seen that signing an offer letter doesn’t always mean that person shows up on Day One. Counter offers and occasional ‘buyer’s regret’ have always been an issue, but a number of circumstances (including the shift to remote work) have anecdotally increased the renegs and no shows. As the Wall Street Journal reports maybe some of it is a byproduct of tight labor markets,
“The rise in no-shows “could be just an expression of job seekers having a lot more confidence in their ability to find a job,” said Nick Bunker, an economist at the job-search platform Indeed.”
Or from the same article, perhaps it’s a change in cultural norms.
“We have a generation of professionals who grew up on dating apps, where ghosting has been accepted as an annoying, but common, phenomenon,” he [Keith Wolf, a managing director, Murray Resources] said. “I believe that is leaking into the professional world.”
Regardless it’s become more common if not the new normal. So what are some ways that early stage startups can reduce the odds of a newly signed team member becoming regretted attrition before they’ve even signed into their corporate email? Here are a few tips we’ve been giving portfolio founders:
Limit the Time Between The Offer and Start Date
Anything longer than a few weeks and chances of something going wrong start to increase. Obviously people often need to give notice and wind down the obligations. And sometimes they might seek a break or have a vacation already planned. But really press to get a start date on the calendar sooner, even if it’s just a week of listening/onboarding before they disappear for a two week trip.
And if there’s a reason that they need to start 2+ months down the road, consider making them an employee sooner. Get them on your benefits, start vesting their stock and so on. Treat them as a team member who just isn’t there quite yet versus someone who hasn’t yet started.
2. Involve Their Family/Partners
Don’t just onboard them, onboard their social circle. If it’s a family, set up a dinner for them (delivered to their home, out at a local restaurant, whatever they prefer) to celebrate the new job together. Send company swag to give to family and friends. Record videos from team members welcoming them. Basically help everyone get excited about the change. In a ‘normal’ office environment, you’d be inviting them to happy hours, etc. Recreate that virtually as needed.
3. Introduce Them To Your Investors/Advisors
Hopefully you have some wonderful investors and/or advisors involved with the company. Giving them the chance to also welcome the new hire to the company with brief notes of introduction and let the new team member know they matter and will be supported broadly. Does this also create some pressure because if you choose to not show up there’s a bunch of industry folks who know? Sure, but this isn’t only about creating pressure, that’ll always backfire. It’s about keeping morale high and momentum going.
So these are three relatively simple strategies to execute that I don’t see everyone doing. They don’t require an incredible amount of resources or even a full HR/PeopleOps team to execute. If you’ve got other strategies to help prevent new hire ghosting, reply here or tweet at me.
I’ve Spoken With Hundreds Of Potential Employees, Most Don’t Ask Everything They Could
The other day I was sitting in a New York City park, talking to a senior engineer who had an offer from an early stage startup we backed. His questions of me were pretty comprehensive — trying to understand our rationale for investing, getting a VC’s perspective on what they needed to accomplish for the next financing, and most importantly, gut-checking some important cultural attributes which mattered to him. Two days later, he accepted the offer to join!
I’ve written before about how much I enjoy participating in the hiring process and how I try to make it about the candidate picking the company, not the other way around. The candidate I mentioned above did one other thing, which I often employ when I’ve referencing an individual or doing diligence on a company. Finish up with the open-ended “is there anything I didn’t ask about but should have?” (another way of phrasing when trying to get smart about an industry, “If you were doing investor diligence on this company, what questions would you be asking that I failed to raise?”).
I paused for a moment, and verbally ran through the stuff the engineer *did* ask about, to make sure we both had a sense of what was covered. Then I suggested there were three questions that might be of use to him, that he didn’t ask, but which I’d offer up and answer.
Has There Been Any Attrition At The Company?
Obviously the bigger and older the company, the more this question needs to be tuned for specifics, but at a young startup (say under 20 people), it’s fine to start with just “has anyone left” and see what the investor says. You’ll learn whether there have been any transitions, and whether they were ‘regretted’ or ‘unregretted.’ It will shine light on their hiring philosophy, how quickly they correct mistakes of fit (if applicable), and so on.
2. When They Raised Their Series A [or whatever their last round was], Did Any VCs Pass and If So, For What Reasons
Here you can understand whether there was a lot of competition and demand for their fundraise, and whether the investment community say it through the same lens. Or whether it was a polarizing deal with firms passing for similar (or different) reasons. This is an “outside-in” view of what the startup needs to accomplish, while similar questions of the exec team should provide you “inside-out” perspectives.
3. Do You Think The Current CEO Can ‘Go the Distance’
While it’s still quite early in the company lifecycle, you can get a sense of how the earliest investors project not just the current competency of the CEO, but their pace of growth and maturity as well.
You’ll notice I didn’t include a whole bunch of basic questions here about the company’s financial details. It’s my opinion that the founders should be the one to share company-specific data, and I trust they are doing so responsibly. I don’t want to erroneously contradict something they’ve said since they’re closer to the day-to-day numbers. One exception is that if a startup I’m repping has fewer than 9-12 months of cash on hand, I need to be able to convey the risk profile adequately to a candidate and share my perspective on how funding will go. From my perspective, it’s irresponsible to bring a team member on board if they don’t know the company will need to fundraise in the coming quarters, regardless of whether they ask directly or not. Many candidates are fine with this risk, especially when the company is doing well and insiders want to put more money in regardless.
What Makes A Culture “Bad” Isn’t Just That You Don’t Like It
I won’t invest in a startup that doesn’t care about its culture. Because a culture is going to form regardless so you might as well be deliberate about it. And it’s with your first hires that your intended culture will be solidified, evolved, mutated, or challenged. So be thoughtful about the characteristics you seek out; the motivations of those individuals; the processes and practices you put into place at the startup; and the behaviors and outcomes you reward. But in talking about culture with founders, I’m very deliberate when I characterize what I believe is a “good” culture vs a “bad” one. And I think we as an industry are very sloppy when we say “oh, Company X has a bad culture” because more often we really mean it’s just one that doesn’t appeal to us and isn’t objectively bad.
“Good” cultures are clear, consistent, scalable, actionable, well-matched to the company’s business model, and legal. By this definition, there are lots of “good” cultures that aren’t attractive to me as a team member. Amazon, from the outside, is a company culture that has always been extremely intriguing to me but where I’ve never felt a gravitational pull. Coinbase, which has been quite aggressive in defining what’s expected of you, isn’t my cup of tea, but I can still appreciate the clarity they are providing for potential employees. Similarly, the ‘holacracy’ style that has been explored by some startups sounds like a nightmare. But that mere personal attraction or repulsion doesn’t make them good or bad.
Some of the most controversial cultures in our industry are kneejerk labeled bad, in my estimation because they aren’t broadly appealing (on the surface) to a majority of tech workers. But so long as they meet the criteria in the paragraph above I’d call them polarizing, not bad.
Bad should be reserved for:
Inconsistency in how values are implemented into management practices, hiring strategies, reward and recognition
Lack of self-awareness, which prevents potential employees from understanding what that company values, and prevents current team members from improving or codifying practices
Incentivizing or permitting illegal or unethical behaviors on behalf of the company
In conflict with one’s business strategy and objectives
Are there certain types of cultural traits which tend to increase the probability of ‘bad’ things occurring? Sure, I’m open to the idea that the more aggressive, less respectful, binary-outcome cultures can attract people willing to break rules to win and managers who are incentivized to look the other way, but that’s a risk factor, not a fundamental quality of these systems.
Whether I’m on an org chart or cap table, I’ve historically found that culture is the most difficult part of a company to refactor once matured. Code can be rewritten. Products can be built, modified, sunset. Investors can be bought out. But culture is like super cement that’s oozed into every nook and cranny, often beyond the reach of a jackhammer. This importance is why the categorizing, assessing, and discussion of culture has to be very specific. So that we can understand the difference between effective vs ineffective, good vs bad, and ‘for me’ vs ‘not for me.’
Levels is a consumer health company focused on glucose monitoring and they run themselves in a very deliberate manner, mostly asynchronous and fully remote from what I understand. Levels publishes a lot of how they work and the above meeting guide is a great overview of system-thinking. Not all of it will necessarily be the right fit for your org, but it’ll certainly produce some ideas
Jared’s a really talented NYC entrepreneur who recently started blogging more. ‘Tough Love’ is about being good at giving hard feedback, especially as an investor. As Jared notes,
“The irony is that withholding the truth is the opposite of being founder friendly. There is a market for those who can do this exceptionally well. It’s something I try to do when I invest in companies and work with founders. And to my delight, it’s not just me who appreciates “real-talk.” Entrepreneurs crave it. They may hate it in the moment because it can hurt the ego, but it resonates. When it comes to company building, I want to partner with someone who tells it how it is and isn’t afraid to hurt my feelings than someone who prioritizes simply being liked. In my experience it’s those that dish out the tough love that I’ve grown closest to and admire most.”
Read the whole post and subscribe to his newsletter.
One of the advantages working at a high quality company provides is understanding what excellent execution really feels like. In this post Alexandr talks about when he felt that first within Scale.ai, how he communicated it to the team, and his philosophy on maintaining it. Not so much with org charts and KPIs, but with goal setting and optimism.
An incredibly sharp team that’s doing what the company name suggests: building a modern web browser. Ambitious, yes? The team comes from a ton of different web2 successes (and beyond), and they’ve eschewed a number of the traditional ways of measuring product success. Not just shooting for numerical targets as a true north but rather vibes. It’s one of the things I was getting at a few years back in my own post, We’re Running Web 2018 With Web 2008 Dashboards. And That’s a Problem, so I’m of course down with what they’re trying. And also a personal investor, so skin in the game.
Jeff modifies his partner David Sachs’ SaaS ‘Burn Multiple’ concept for marketplace businesses. I find these types of analysis really compelling and it forces you to justify why you’re a positive outlier if you aren’t tracking against their segmentation. That’s not to say that it’s 100% correct but it’s certainly directionally right. And Jeff just led a deal we participated in, so I’m excited to hopefully see this play out in that company.
There you go, five of the best things I read on airplanes this week 🙂
The Things to Know When You Lose Your Job In A Downturn
RIF aka reduction in force. Sounds like a Magic: The Gathering card but it’s actually a polite way of saying you’re being laid off. And with the tech valuation reckoning underway, if you’ve been RIF’ed you’re not alone. I can’t tell you whether this is just a few months of rightsizing or a multiyear recession but I do anticipate there are going to be more cuts — and outright failed startups — before our industry outlook returns to half-full instead of half-empty. In these moments there tends to be a lot of content to help CEOs and founders manage through a downturn, but not as much for those team members impacted. So let me take a (non-exhaustive) cut at Things You Should Know If You’ve Been RIF’ed….
NO SHAME. For many people this will have been the first time you ever got let go, and the emotions can be fierce. Know that many of us (myself included) have been in similar situations, and you shouldn’t feel embarrassed. It’s not the end of your career, your reputation has not be sullied, and there are still seats on rocketships waiting for you.
The Blocking and Tackling Basics of What to Do When You Lose Your Job. Our Head of Talent Beth Scheer wrote this resource as an overview of things to consider as you’re exiting a company. Not every situation will apply to each individual but folks have found it very helpful and comprehensive. If you have any questions about its contents or any ideas for things we should add, tweet at Beth.
Some Things You Can Ask For On The Way Out That You Didn’t Know You Could Ask For:
Rewrite Your Job Title
Very often at startups your title isn’t reflective of all of your roles, or is quite generic. This is great for company culture (in my opinion. I agree with Gokul.) but it’s not as helpful when you’re suddenly looking for a job. Sometimes, within reason, for the sake of specificity and focus (not aggrandizement) the CEO/your manager at your former startup will allow you to change your outgoing title, so that when you apply for new jobs, it better fits with what you’re seeking in the role. For example, I was sort of a non-engineer jack of all trades when I worked at Linden Lab (makers of virtual world, err metaverse, Second Life). When I left in 2003 we agreed that my final title could be focused on Product and Marketing, since that’s what I was interested in pursuing next. Obviously this can be a bit tricky but in small companies when you have kind founders and you’ve been a great team member, it’s ok to ask.
Extend Your Stock Option Exercise Period
The ‘average’ startup offers a 90 day period post employment where you have to exercise any vested stock options before forfeiting them back to the company. An increasing number of companies have created more flexible timelines and in the wake of non-performance based layoffs, can sometimes change the structure for terminated employees. There are tax implications, etc etc and IANAL (or accountant) but be sure to check your stockholder agreement and ask your HR person about this.
Prep your manager, peers to be references. Perhaps even ask founder/CEO for a favor chit.
Basically replenish your reference checks. Don’t script their answers for them, but keep them in the loop about what jobs you might be seeking out next, how you’re describing yourself, and so on. If you have a relationship with the CEO or another VP/C-level exec at your previous company, you might let them know that you might need their help. Basically, if there’s a job you’re applying for where you’re getting deep in the process, a note from a previous CEO or executive validating that you’re awesome, that you just got caught up in some hard decisions they had to make as a company, and that they’d hire you again in a new venture, is going to be a pretty strong thumb on the scale.
And finally, two conversations to have with yourself
Even if the job didn’t work out exactly the way you hoped, was joining the company the right decision? If you can focus on making the right decision repeatedly, you’ll be quite successful over time, even if some of the outcomes aren’t perfect. Understand your own framework for decision making and keep it honed for the next choice you’re going to make. Which is…
What do you want to optimize for next? I don’t believe you can start a job search without knowing what’s most important to you. It’s not about pros and cons, but tradeoffs. Figure out what 2–3 qualities matter most to you for the next phase.
Whether you’re heading right back into the job market or taking a break, Homebrew portfolio companies are eager to talk to you when you’re ready!
Andy Johns Was In-Demand As a Startup Growth Guru But Couldn’t Continue The Work Until He Helped Himself First
Andy Johns was one of the original notable ‘growth’ experts, working at a variety of startups and larger tech companies to help drive product strategies that resulted in organic and sustainable user acquisition. We were fortunate to include him as an advisor to our portfolio during early Homebrew investments, and he eventually crossed over to venture himself, before stepping back to focus on his own health. It’s that effort I wanted to focus on in this Five Questions interview. Thanks Andy for being open about your own diagnosis and subsequent healing.
Hunter Walk: Thanks for doing this interview Andy. We’ve known each other for a while and I wanted to focus today primarily on your recent writings about your personal journey to find mental health and wellness. What prompted you to start talking more publicly?
Andy Johns: My mental health journey first started in early 2010. Life was good at the time. My career was on the rise, I had the beginnings of a financial safety net, I was physically healthy and active, and I had a great group of friends. Yet I started to suffer from debilitating panic attacks, nightmares, depression, and an overall sense of feeling “out of control” in terms of my own mind and mood. It scared me enough that I feared my life was at risk so I began to reach out to therapists for help.
I’ve gone through several periods of focused mental health work, largely motivated by additional ups and downs that I’ve experienced since then. In the last 3–5 years I was able to process parts of my childhood trauma that contributed to the downward spiral that struck me in my late 20s. That involved many sessions of EMDR, a few intense but transformative psychedelic-assisted psychotherapy experiences, as well as over a month in a trauma recovery center where I worked 24/7 on my mental health.
As difficult as all of that work has been, it’s given me a new life to look forward to.
Due to the changes I’ve experienced, and the incredible people I’ve met along the way that similarly struggle with mental illness, the broad field of mental health has become a passion of mine. That’s what led me to start speaking publicly about mental health. Writing is not only a part of my wellness routine, and something that keeps me on track and accountable to maintaining my own health, it’s allowed me to connect in new ways with the technology community. Fewer of my conversations today are about startups and how to growth them. They’ve been replaced by deeper, closer conversations with people about the challenges they face in life and what they can do to find more peace and balance.
HW: This is an area that’s quickly destigmatizing, at least within the tech community. Have you found the same? Or am I just seeing what I want to see, given my own forthrightness about being in therapy too?
AJ: I would agree with you. On the whole, the technology community is more open about discussing mental health than most industries. The forward-thinking and open-minded characteristics common in the silicon valley have contributed to a broad awareness and acceptance of mental illness relative to most other places I’ve lived. That’s an attribute of the tech industry that I appreciate.
Yet I’ve also experienced a passive negative response in a few cases from a few people. And I know others that have lost career or business opportunities because potential partners in a deal were weary about working with someone that has a diagnosed mental illness. At an individual level, there remains plenty of narrow-mindedness amongst some.
That’s part of why I’m writing about mental health publicly. I don’t feel like I have anything left to prove professionally. I’m at peace with the work that I’ve done and the impact that I’ve had. I don’t crave millions of dollars or notoriety like the younger me used to. I have nothing to lose so it feels not only like a life calling but also a moral imperative. All I want for myself is inner calm, connection with others, my health, and to be fully aligned emotionally, mentally, and spiritually around a cause that gives my life purpose.
That said, what I want to do at this point is help others awaken from the trauma and conditioning of their past, and to free themselves from the perceived constrains of their present condition. I want to help others become free in the way that I have.
HW: How do you decide what to share, versus what’s more personal? For me it’s less about the content and more about the motivation. I really don’t want to write up stuff that feels like I’m being performative or manicuring something into a public narrative that’s not exactly true.
AJ: I feel the same way. If it’s inauthentic, I feel an internal disgust that won’t let me proceed since it knows that I’m being false. It’s as if the inner child in me is saying, “Listen, asshole. You’ve spent enough time living with this facade. Drop it and be real.”
When I write, I think about two first principles:
Emphasis on healing
What I mean by “reasonable vulnerability” is that I want to share but do so with appropriate boundaries in place. My audience doesn’t need to hear every single detail in order to understand the concepts I’m sharing or to derive value from it. On the flip side, if I’m not vulnerable at al,l then the article may come across as generic and inauthentic. That’s the last thing I want. I don’t want to write a generic Buzzfeed-like article on “The Top 8 Ways to Start Meditating”.
However, it requires that I do share enough of my personal insights and experiences in order for it to be clearly authentic. That’s why I also have principle #2 of “emphasis on healing”.
I write because I want to help myself and others heal. In order for someone to be ready to heal, they must first feel safe. You don’t teach a dog a new trick when it’s shivering and has it’s tail between its legs. You teach a dog a new trick when it is calm, focused, and safe.
The same is true for people. As a result, I think of sharing my personal stories and insights as a way to make my reader feel safe. If they know that I’m being open, honest, and real, they’ll feel safe. I think that’s one of the reasons that I’ve had so many people in tech reach out to me to talk about their own mental health challenges — they get the sense that they’ll be safe when they talk to me.
So, when I sit down to write a piece, I always have that in the back of my mind. I ask myself, “What can I write that demonstrates reasonable vulnerability and is written in a style that emphasizes healing.” Then, when I’m hit by a sudden motivation to write on a particular topic, I combine that with my two principles and I let the words flow.
HW: Besides continuing to make sure you dedicate time to this, are there certain types of work you now want to avoid? Or types of personalities/situations that are especially triggering for you?
AJ: Yes, there are very clear boundaries in place for me at this point. I recently wrote about the concept of an “acceptable range of tolerance” in this substack post about knowing when to stop and take a break from work.
It’s a well-established concept in biology that states that life will either flourish or struggle depending on a collection of factors, such as temperature, and that life seeks the optimal conditions for thriving wherever possible. This same concept applies to people. There are ideal conditions in which the body and mind can thrive. And there are conditions in which both will suffer.
An important point is that the conditions that are ideal or suboptimal for me won’t necessarily be the same for everyone else. We’re all unique biologically, neurochemically, physiologically, and so on. As a result, the conditions we define for optimal performance must be custom-tailored to the individual.
I’ve learned that there are a few things that are essential for me at this stage in my life:
I won’t work for or with assholes. I’ve had enough experiences with bullying growing up to know that it creates a lot of internal emotional disharmony. And I still have work to do regarding my ability to set boundaries with authority figures in particular. I quickly fall outside of my range of tolerance when around aggressive people with sharp elbows.
I work less and make less money in exchange for a quieter, more balanced schedule. I will not allow myself to do more than 20–30hrs per week of work. That will force me to maintain plenty of time for self-care while also forcing me to work smarter rather than harder.
I must maintain a daily schedule of wellness activities. If I don’t, my nervous system quickly drops back into a default stage of alert agitation (this stems from having Complex PTSD). That involves exercise, hot sauna and cold shower/bath whenever possible, walks outside when the weather is great, waking up early and going to bed early, and making sure I have a clean diet and take my psychiatric medications. If I do, I’m much more resilient when I face adversity.
I also focus on “heart-centered” work instead of “head-centered” work. What I mean by that is I have a boundary around doing work that purely comes from an intellectual place. For example, much of the work I did earlier in my career was motivated by making money and gaining notoriety. That’s fulfilling to my ego but not my spirit. Now I’m focused on heart-centered work that satisfies my spirit — the inner voice that knows what is fulfilling for me. If I find myself falling back into old patterns of working on projects because of financial gain as the prime motivator, then I know I’m pursuing work from ego as opposed to work from a place of love and compassion.
HW: What are some resources that you’d recommend to folks who want to start thinking more about their mental health — like the 101 foundational stuff?
In terms of foundational sources, I have a few recommendations:
This interview with Dr Gabor Mate covers the relationship between childhood experiences and how we present ourselves to the world as adults. He is a true master of his craft and covers complex subjects with utmost clarity and compassion.
The Body Keeps the Score is my favorite book on mental health and how to heal from trauma. It is comprehensive yet accessible. And it leans on a modern understanding of mental health in what is referred to as the biopsychosocial model. This book makes it clear that mental health isn’t simply a “chemical imbalance.”
The Way to Love by Anthony de Mello is my favorite book on philosophical and spiritual perspectives on health and happiness. It contains a series of short, simple essays that you can read dozens of times and still find new meaning contained in them. I like to read this before I go to bed as a sort of brief meditation.
Tribe by Sebastian Junger elegantly and simply covers our need for human connection and how loneliness sits at the center of why so many people are anxious and unhappy.
Reflections Prompted By A Conversation Between a16z Crypto Leader Chris Dixon & The Verge’s Nilay Patel
“Good-Faith Skeptic.” It’s a characterization that has been tossing around in my head since reading Chris Dixon’stweet about his interview with the Verge’s Nilay Patel. It was crypto true believer in a conversation with a crypto skeptic, but containing a foundation of mutual respect, curiosity and, I think, a fundamental love of technology. Here’s a transcript of the podcast if you want to click over to the source material.
For purposes of crypto, consider me an optimistic skeptic? Maybe one with less tolerance (and more judgment) of what I consider to be actors in the ecosystem who are greedy, exploitive, or selfish, but also certainly not willing to write off the entirety of what we’re seeing. My most personal interest is in the collective ownership aspects, having long believed that the only structure which can beat the network effects of entrenched marketplaces are cooperatives, where the participants ARE the platform.
But I should also be transparent with you. Nothing else in this post is going to take a ‘side’ with regards to cartoon apes, decentralized token protocols, or stablecoin pegs. Instead this is going to be about skepticism and what gets deemed good-faith or not.
Here are the primary characteristics, for me in this moment, of what it means to be a “good-faith” skeptic:
Enters the discussion without desire to win but instead to understand and be understood.
Believes accomplishing the above will ‘grow the pie’ of understanding for general benefit, rather than carving up a fixed pie.
Can be hard on the problem without being hard on the person.
Accepts that they may be incorrect, have had a different experience than others, evolve their own beliefs. And gives the other person the same courtesy.
Within the confines of the discussion space itself, if it’s shared, protects the other person from abuse and actively discourages ‘their team’ from doing so.
There’s no way this is an exhaustive list but it’s what comes to mind for me.
I don’t think good-faith has to ignore questions of what incentives an individual holds which might cause them to believe a certain idea or act a certain way.
I don’t think good-faith has to be ‘polite,’ in a manner which suggests detachment from realities which could be causing real people real harm.
I don’t think good-faith should include apologies for being in disagreement. You can feel upset or sympathetic for conflict caused by disagreement without being sorry for the disagreement itself.
I hope to be a good-faith skeptic in many cases where I disagree with a group’s beliefs or the current narrative. But this also doesn’t mean that every person or every concept deserves evergreen good-faith. As the saying goes, the master’s tools will never dismantle the master’s house, and I can see some people suggesting that “good-faith” skepticism is disagreement theater, where you have different POVs but still all go to country club for dinner after the discussion.
We live in cyclone of bad-faith accusations but also the world is a place where different people are disproportionately impacted by the current state of the world. I personally would find it challenging to have good-faith conversations with individuals who hold extreme perspectives on limiting human rights.
You tell me, what have you experienced as good-faith skepticism vs bad-faith? Are there other characteristics you look for, or methods for deciding when a person/perspective is worthy of good-faith attention instead of ignoring them?
Think Of Your First Non-Investor Board Member As a Senior Hire, And Not Your IPO Board
Being a CEO and running a startup is hard! So you’d think that founders would take advantage of every resource available to help them out. And for the most part they do. But one gap I see too often is leaving the Independent Board member seat unfilled for long periods of time. Often because it’s scoped as requiring a Director who will be with the company until its exit. When instead it should be thought of initially as “who is a senior outside voice who for the next three years or so can help advise this company’s leadership team.”
Before I make my case for a reframing of the Independent Director, I’ll back up and explain. Every company has a Board of Directors, whether it takes financing or not. Initially it’s often just the founders or executives of the company, but as they take outside financing, some classes of investors negotiate Board seats, meant to ensure there’s input into the company’s pivotal decisions which represent interests of all shareholders. So with a typical venture financing, a three person Board will be established (two ‘common’ seats — often the founders and one investor seat). Then as more capital is raised, the next expansion is often to a five person Board — the two founders, two investors and an open seat. This open seat is usually designated as ‘Independent’ meaning it’s not an officer or employee of the company nor a major investor. Rather it’s someone with perspective, gravitas, expertise, a personal brand, whatever, who adds value to the discussion and can be a steward of the company.
This Independent seat usually sits vacant for quite a while, there are other priorities at a startup! But it exists to ensure the Board is an odd number of votes, and while unfilled, it’s usually assumed that the founder/CEO will be its proxy. As a result, sometimes filling it can be seen as ‘giving up control’ since the vote will shift to an actual human being, who theoretically is weighing in on what’s best for the company, not necessarily the CEO (with the hope being those are aligned of course).
I’ve already written about the value of adding an Independent seat post Series A but my conviction has grown in recent years seeing what I’d call ‘Interim’ Independent Directors in action at multiple of our Series A stage startups. Individuals who are *perfect* for that stage of the business and bring real world perspectives to the conversation. They’re typically senior executives at other larger technology companies, not yet serving on public company Boards but also grown beyond the here’s a few common shares ‘advisor’ slot. It’s of great mutual benefit and the startups are more successful as a result because these folks aren’t just active at Board meetings but do 1:1s with the CEO, help with hiring, provide another non-investor perspective to the company exec team and so on.
Outside of the ‘control’ concern noted earlier (overblown in most cases), the two reasons these seats go unfilled are perceived search costs in finding someone (and actual costs in adding they — they get equity) and too upscoped a notion of who should fill the seat. Discussing the latter solves the former IMO.
At Series A/B you are very unlikely to get the CEO of a public company to take an Independent Board Seat. Yeah if you’re a travel startup the idea that the Marriott CEO should be your Board member sounds great but it’s not a fit early on, for them or you. Instead you’d benefit from, say, the VP Operations at a large hospitality brand, or the COO of a non-competitive larger teach company. These people are all available, identifiable and reachable. The only conversation which has to occur is “let’s think of this initial Board tenure as a 2–3 year role, after which we’ll mutually assess whether it’s best fit.” There! In one easy agreement you’ve removed all the weird stigma about transitioning a Board member and set a lower bar for who should be part of the company. It’s like hiring — you wouldn’t not fill a product lead role just because the Chief Product Office you might need five years from now isn’t currently a fit. No, you’d add the right talent to fit the role at the moment. Think of the Independent Board member the same way!
So go forth and find that person! It’s a chance to add knowledge to your Board, and sometimes even diversity as well (since we know what the venture investors are statistically likely to be…)
Selective Leaks of Previous Discussions & Policy Debates In The Name of ‘Transparency’ Would Put Twitter Employees At Risk
Typing “I know this makes me sound like a crazy person but..” as a blog post opener is usually a good reason to close my browser window and take a walk. But hey, it’s 2022, let’s soldier onward…
Since it was announced that Twitter’s Board of Directors and Elon Musk had reached an agreement to pursue a sale of the company there’s been a lot of speculation about how the service could change under his ownership.
Personally I’ve been upfront about my distaste for his style of abusive shitposting, impressed by his will to get things done, and saddened by the lack of vigor from Twitter’s Board and C-suite.
But I believe in capitalism and the will of markets, so if Elon ends up as owner I’m not going to cry liberal tears and close my account ASAP, I’m just going to shrug and see how things do. I’ve already changed my relationship with the service earlier in the pandemic, removing 98% of the accounts I’d previously followed and, as a result, spending much less time letting other people insert themselves into my day. However as the press covers Musk’s antics and speculates what the company’s content policies could be going forward to fit one person’s mutated version of ‘free speech,’ there’s another concern that’s not getting enough attention IMO: what’s about to happen to Twitter employees.
No, not their stock options or employment (job cuts are almost certainly coming but we’re in a robust market for talent and I’m assuming there are already many folks proactively looking for new opportunities), but the internal communications that sit within HQ. Namely, the years of emails and documents that detail debates over policy and legal stances. The chance of these getting selectively leaked by a new owner (or their proxy cutouts) just went up.
Get prepared for what looks like ‘embarrassing’ revelations around off the record chats, correspondence with politicians, poorly phrased questions or suggestions, and even an exploration of possible policy outcomes that seems biased. Yes friends, TwikiLeaks is looming.
Remember Musk has his family office manager use a pseudonym to hire a private investigator to dig up invented pedo dirt on someone who challenged him.
You don’t think publishing some “skeletons in the closet” in the name of transparency is beneath him or his hangers on? Like I said at the beginning, I know this makes me sound like a crazy person….
If I worked at Twitter I’d be using the next few months (the deal is still pending) to reduce my PII footprint, change passwords/2FA accounts and so on. Oh, and Twitter management should offer something like Tall Poppy as a benefit.
Look, maybe I’m overreacting and this would be beyond the pale for the new owner or team, who do need to keep the service running as a business (or at least I think he does, who knows). But the chance of something like this happening just went up and last time we had Pizzagate as an outcome.