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The "No BS" version of how startups are really built, taught by actual startup Founders who have lived through all of it. Hosts Wil Schroter and Ryan Rutan talk candidly about the intense struggles Founders face both personally and professionally as they try to turn their idea into something that will change the world.
EP253
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Ryan Rutan: [00:00:00] Welcome back to the episode of the startup therapy podcast. This is Ryan Rutan joined as always by Will Schroeder, my friend, the founder and CEO of startups. com. Wil, when we think about startup company performance one of the things that we like to look at is like, how's the team performing, but also how's management performing, right?
And so sometimes it's like easy enough to say if there's performing really well, it must be great coaches and great players. If they're not performing well, it's probably the players. Maybe it's the coach. And we don't really necessarily know just by looking, so we have to dig in, we have to explore, we have to examine this stuff.
When should we be doing this? When is the time to look at this in detail? Right. Now. What's your
Wil Schroter: name? I don't know, it's funny because I think a lot of people think there must be some moment where I have to re evaluate the talent, and we take out a big funding round, or we all of a sudden start scaling it, and yes, that kind of forces you to evaluate all of this.
Realistically, Most founders and most executive teams really don't do a good job of stepping back and analyzing not just their teams, but [00:01:00] themselves, right? It's, it's hard to be able to say are we not winning games because of the players or the coach more often than not at its bowl.
And again, and as founders, we have to be able to understand. How to assess that because we can't grow any faster than the quality of our team. And so if we suck at evaluating the quality of our team and finding out where these problems are, we can't grow. And I think most people, most founders are doing this for the first time, they've never had an organization under them where they've built it from scratch, where all those decisions are theirs and they kind of don't know how to
Ryan Rutan: assess it.
So I think we should talk about that. Yeah. I think we should dig in, talk about the how, the what, the why. And then what to do about it, right? Once we do come up with some lines in the sand that say, look it's not me, it's them, or it's not them, it's me, or it's all of us. Then what are we actually going to do about these?
But let's let's start with, yeah where has this become most evident early on?
Wil Schroter: For me, in my career, it became evident early on the moment I hired somebody that was over 30 years old. For five years, we didn't have a single employee. [00:02:00] That was over like 25 years old. I was unheard of. And I don't even think we had somebody quote that old.
Ryan Rutan: Like back then you go, no, I remember exactly the same thing. When I was building the agency, it was all undergrad friends of mine. So literally no one had graduated. So we all had zero management experience. Most of them had also never even really had a real job where you would have been managed.
So they had neither delivered nor received management. All right. So it was a little wild Westie at that point.
Wil Schroter: I'll never forget we hired this woman and I, what was her name? Let's call her Jen for whatever. And and so Jen shows up and she's 30 years old and she is insanely professional.
In our minds, she was like the office mom. Because she was so much older in retrospect. I think she was 31 years old. But she came in and I'll never forget, this is five years into the company. She came in and she like, so how do you usually handle performance reviews? And I was like I was like how do you handle [00:03:00] performance review?
Don't want to tip
Ryan Rutan: my hat, Jen. Why don't you tell me? Oh my
Wil Schroter: God. It. And so I remember at that very moment as she's sitting across from me and she's doing her best to like, humor me and patronize me, which I actually did appreciate. I'm not making you feel stupid. It occurred to me that at that very moment, I'm holding things back, right?
My lack of capability as a coach is preventing the organization from moving forward. And I just, I remember thinking, holy cow, if she hadn't said that to me, if she hadn't prompted me and challenged me, she didn't intend to but just challenged me. She asked me like a very basic question.
And I wouldn't have thought. Hey, are these the best players? Hey, I've got a whole company where our finance is run by the only guy that took a finance course in college. Right?
Ryan Rutan: The
Wil Schroter: most. And I'm like, wow. He's
Ryan Rutan: a, he's a B math student, which puts him ahead of the rest of us. So your finance. Yeah.
How far into the business was this? Well, cause I know you said early on it was all young people. How far in was this? I mean, she was [00:04:00] probably
Wil Schroter: our 20th employee. So it wasn't like two people in a room. We weren't at 700 people either, but I remember it was a turning point where it started to become a real business.
And I remember thinking to myself how many other things are we deficient at? And the answer was everything, right? But it went back to our inability to assess ourselves. And so then I started thinking in terms of, okay, wait a minute, of all the people we have. How do we know if they're any good? Like, how do we actually know that?
And again, I use the performance reviews. Oh, they'll do performance reviews. Okay. Compared to who? So let's say you've got a developer on staff, right? And so you're the only developer you have. And developers cranking out code, building your MVP, whatever, they tend to do. And you're like, my developer is awesome compared to what?
Compared to not
Ryan Rutan: having one? Sure. I'm sure you get a lot more done now.
Wil Schroter: Yeah, exactly. Or, my sales team is awesome compared to what? Like, how do you know that? But the other side of it is where I think is really interesting is we've got a manager that's managing development [00:05:00] or sales or marketing or whatever, right?
We're like, oh, I guess the performance of our team is doing great because they're a great manager.
Ryan Rutan: Maybe, right? This is the question I start to ask myself all the time, which is Is this working because of the team or in spite of the team? Is this working because of me or in spite of me? Because just because it's working, it's again, relative to what, right?
Yeah we're having some success relative to what, right? So we weren't selling anything last month. Now we're selling more this month. That's good. But again you're comparing it to a very limited baseline, which of course at the beginning stages of a startup. There isn't a whole lot of baseline there and that's why it's important to constantly ask yourself these questions and reassess, especially at the early stages.
Wil Schroter: Yeah. And look, and I thought about it too. And I thought about, okay. At some level, no matter how many performance reviews we do, whatever, we're a young company, right? It's not like we're Microsoft and we just hire literally anybody we want, right? We get what we get, right? So there's some limits to that.
But then I started to realize, hey I'm going way back in the day, [00:06:00] Hey, I can only pay somebody, back then 38, 000, right? Which obviously isn't a lot now, it was more back then. So wait, aren't I only getting someone who's as capable of that price point, all things being relative and said differently, no matter how much I coach them I'm not going to make them some absolute superstar.
Ergo, my organization is essentially capped on talent based on what I can afford to recruit with. That's one, heuristic. But the other side of it would be have I tried to recruit somebody better? And again, this goes back to the the sunk cost theory of I put all this time into this person.
I guess they're the best person. And we had this happen. I'll never forget this. In the agency, as it started to scale and we went from thousands of dollars to millions of dollars to tens of million dollars to hundreds of millions of dollars of revenue coming through the company. We had an accountant, also we were named nameless, right?
Essentially a CFO. And when we were tiny, I thought this guy was a genius, right? I thought he was phenomenal. And as we started to scale, we [00:07:00] ended up getting who a guy who was a CFO of one of the major divisions of chase bank, right? So absolute total stallion. And he came in and he made our existing guy who, by the way, was the CFO.
Looked like he had never taken a finance course in his life. And I remember thinking to myself. Holy cow, this entire time, we've been running Bush League Finance over here, and I'm thinking it's the greatest thing of all time. Because it
Ryan Rutan: was never one asked that question, you know what I mean? Yeah, it's funny, because I think it's so easily to be swayed, or, look your problems change over time too, right?
So I can, if I go back in time I think about probably, you He would have been the second or third developer that I hired. Let's call him Tim, because that was his name. So Tim solved some problems that we were having at the time with server infrastructure stuff, right? And it was like, he had all the answers to these things that were so important at the time.
And they were big problems, right? And they were tough to figure out. And so this made Tim really important at that point. And then, five, six, seven, eight, nine months later, One Tim is definitely not as [00:08:00] fast as I need him to be at developing the client work that we're actually doing, which is what we get paid for.
But it took a long time to see that and even longer time to really choose to do anything about it because Tim had been so important early on and was, had this kind of Wizard of Oz level ability, not Wizard of Oz, Gandalf the Grey ability, right? He could just, he did magic for us.
He made things that we didn't know how to appear, which was cool at the time. But this, as the organizations change, so do the needs. And so does maybe the ability of that player. And sometimes it just moves away from their ability set, or sometimes you just start to get beyond their actual capability, right?
Maybe you could crush the ball out of a little league stadium. Doesn't mean that just because you grew up, you're going to be able to crush it out of a major league stadium. And I think this is part of the problem. You and I see this all the time. And I think one of the most obvious ones is. Non technical founder picks up technical co founder who's maybe a reasonably good junior developer or something but knows light years more, there's light years ahead of the non technical founder and so they become co founder and CTO.
Wil Schroter: Yeah, at some point though we got this [00:09:00] idea that we can turn water into wine, right? Like that developer you're talking about, I, I, I've hired so many of those developers so I know this. In the meanwhile, not knocking, we all hit a threshold.
Ryan Rutan: Tim was a great guy.
Wil Schroter: Yeah, I've hit thresholds in my career where I wasn't the right person to take this any further. Sometimes we recognize it, sometimes we don't. A little bit different when you're among the founders like us because we're not worrying about our job in the prospect, right? Tim's got to worry about his job, which I respect.
But that said, but as managers, as coaches, if you will, kind of sticking with that we do have to understand that no matter how much we coach somebody, it's not going to make them a better athlete. And I think early in our careers because we haven't seen this through yet, we have this kind of optimistic idea, like this, anybody can improve, anybody can be better.
Sort of. Anybody can be a little bit better, but at which point they have to be geometrically better, they're probably just not that athlete. There's lots of people that make it to the NFL, I mean, really small in the grand scheme of things, but even then, only a [00:10:00] very small percentage that actually play in the NFL and stay in the NFL, right?
And just that same concept of, there are very few people that have that next gear. That next gear is what you tend to see actually out of founders. Like the Collison brothers who are running Stripe right now. So be able to go from startup all the way to a true C level position at their age, at that level, is extraordinary.
It usually only even get that opportunity because you're the founder. It's not like they interviewed for the job and they got it. Yeah, because on paper they would have gone, yeah, no. Not a million years, right? And again, some people can pull it off. And again, it's usually the founder because you get grandfathered into the job.
But my point is for the rest of the staff, and I'm including management in this case, right? I'm including management. People cap out. Let me give an example. Let's say you and I are doing a startup and we get to, like we were talking about with my previous company, we get to 20 people and we've got a couple of managers that grew up through the process over time.
And again, [00:11:00] like the founder, they got grandfathered into the job. Over time, their ability to be a good manager may not develop, right? In other words let's say they're technical. This happens all the time. Technical people get forced into management all the time. And no one ever says to them, are you a good manager?
Here's what they say. You're the most senior technical person and therefore you're the manager.
Ryan Rutan: It's the Peter principle, you get promoted to your highest level of, or what is it? Your highest level of inefficiency, right? You keep getting moved up until you hit the point where you're no longer good at your job and then you stall out there.
Wil Schroter: Yep. And developers are notorious for this because there's a correlation between management and senior technical ability and so they always tend to get shoehorned into this job. Now, that said it's also historically how we drive, at a corporate level progression in your career.
Progression means more people under you. I can't stand that theory, that's a different podcast. But with that said, when we get people to that level, there is a point where it's no matter how much we coach [00:12:00] Johnny, Johnny just can't hit the ball. It's not a coach problem.
Conversely, there's also a side of it where with the quality of the players, if we have a subpar coach, right? Coach was a great little league coach, but as you move that coach up to the major leagues, he's just not qualified to coach at that level, right? The organization gets bigger. Here's what I would say.
I think we need to talk about the difference between a great coach In a bad coach, because here's the thing. I think among coaches and we're talking about managers. I don't want to beat this this sports analogy up. I don't think we have a good indicator among founders as to what a good coach slash manager really is.
So my simple definition is this a great coach rate manager is someone that makes the team better. Like in other words, the team would have been a C plus, [00:13:00] but because this coach exists They're an a minus. If the coach leaves, they go back to a B minus C plus. They actually can't function at their level without that coach.
That's a great coach. I don't think most people are good coaches. I think most people are babysitters at best. They, again, in 30 years of doing this, most of what I've seen is I'm there to not break things. If problems don't bubble up, then I must be a good manager. And I look at that and I'm like, no, that's good by all means.
You know? You don't want extra problems. But the true measure of a great manager is how do you create geometrically better outcomes because you're there, how do you take the bad news bears, if you will. And make them a league winning team because you're such a good damn coach. Very few
Ryan Rutan: people
Wil Schroter: can do that.
Ryan Rutan: Yeah. It is tough. In the startup context particularly when you look at this in a corporate context where, there's existing teams, you're bringing people in with a specific ability to manage all that [00:14:00] stuff. It's very different. But I think that because of the dynamics of a startup company where it's growing really fast, you may have somebody who is, would otherwise have been a better coach but they're dealing with, resources now, the team that they've outpaced, right? Or vice versa. That's the thing is that it, one of the challenges is why startups often go through these periods where that, that hockey stick growth that we all talk about that actually looks like a, a mangled wire of some sort.
It's because of things like this, right? There's this disconnect between the speed at which the team is growing or the team at which the team is upskilling the rate at which the manager is learning how to manage, how to coach. And so it ends up with this really herky jerky growth.
Or we just hit hard stops, like you said, there's just a point at which Johnny's not gonna hit any better than Johnny's gonna hit, so you're stuck there. Which then puts that manager in a conundrum, because he's do I keep coaching this person, and how do I get better at coaching so that I can make Johnny hit better?
You can't, but then that also takes some maturity and time and saddle to understand that that's just a player issue, right? The answer is, hire somebody else, or add to or take away responsibility from Johnny and give him to somebody who can do a better job of hitting the ball. [00:15:00] It's really difficult.
Which goes back to the point around we need to be doing this on a relatively constant basis. I, there are definitely times where I think it makes a ton of sense to look at these things. I go back in our history, Will, and we think about, what it looked like to coach our teams.
When we were eight people in a room, and then we were 15 people in a room, and then we were 40 people in the room and then there were 400 of us. It's a very different thing, and so clearly those size milestones where the company's growing, that's one of them. The other one we see a lot is, right around post funding, where all of a sudden you're about to start making a whole bunch of decisions.
And just by virtue of spending a bunch of money, there's going to be a lot more to keep track of and manage, not necessarily just people, but processes, softwares, tools, partners, all this other stuff. And this is a real stress test on the teams, but I would say that the post funding probably more so where we are in the coaching roles, whether it's the founder, co founder C level management, or even the middle managers, if there are any at that point becomes a real burden for them.
Wil Schroter: You know, something that's really funny about [00:16:00] everything we talk about here. Is that none of it is new. Everything you're dealing with right now has been done a thousand times before you. Which means the answer already exists, you may just not know it. But that's okay. That's kind of what we're here to do.
We talk about this stuff on the show, but we actually solve these problems all day long at groups. startups. com. So, if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test, and be done with it. You know, I think if you were to say to those coaches, to those managers Hey, are you a good manager?
Most people don't know that. And we'll say, I think so, yes. And the answer is by what measure? By what measure? Here's the benchmark that I always use in the back of my head. If a manager has C level players, however you'd grade those, the manager makes them B level players.
They can drive them, they can find new people, they can recruit new people, they can pull out people that aren't performing, etc. But their whole thing is I make people better. If [00:17:00] you were to say, are you a good manager? And the person says, absolutely. Yes. Who have you made better? Who was just okay, but you were the difference maker and crushed it.
And they'll say I hired Jen and, Jen was pretty good and I gave her some additional responsibility and she performed. Next question would be, did she perform because of Jen or because of you? Yeah. Was it because of you or in spite of you? Just giving her more work, you didn't do shit.
You just gave her more work, right? Yeah, you gave her more responsibility. Congrats, you gave her more of your work, right? But what did you do, like what, how were you the Yoda to her Luke that made her the Jedi? Because if you were just there, if you were just like, hey, show up in Dagobahd and figure it out.
She
Ryan Rutan: carried me on her back for the last four years at the company, right? I've barely done a damn thing, clearly, I'm an eyes and coach.
Wil Schroter: Yeah that's what I'm saying, but I think that good coaches can say, okay, my team's a C plus, I can see where they're deficient, but here's where I could push them and it's always pushing them, right?
Push them [00:18:00] to do better, to perform more, to get that extra kind of level of competence and outcome from those folks. And I think a good coach, good manager knows what that is. Someone who's early in, go back to my example. Where, I had this 30 something year old woman ask me what a performance review is.
I didn't even know what a performance review was. How the hell was I going to the irony there, right? Like, how was I even going to give her a performance review? I've never even heard of one before. And at that time, you couldn't just Google it. No, it invented yet. But, I think about it, Ryan, in terms of as we get older, as we mature through our career, we start to see some of those benchmarks.
We start to see some of those milestones. I'll give you another example. Many years later, same agency, same company. As we started to grow, I mentioned we hired the one of the CFOs of Chase Bank. We also hired Chase Bank had bought a huge bank called Bank One. And we hired the CEO of BankOne who was almost a [00:19:00] caricature of senior management, right?
I'm not even kidding, he had I can picture the haircut, the power tie, I can see it all. The haircut, the power tie, he finger tented when he talked, it was classic, right? When I picture a stock photo of guys stepping onto a private jet, I picture that guy. Now, to his credit, very smart, very charismatic, all, all the traits, right?
Incredible resume, right? But I remember sitting across from him and we're, we had hired him because at the time we were looking to go public and we wanted him to lead the offer. And and I realized his body of experience in my body of experience were so incredibly far apart, right?
Like he had forgotten more than I'd ever known about managing people. He just took a huge step back. He had 50, 000 people reporting to him at his last job. And here he had 700, right? Like he's slumming it. But my point is. It was once again where I was like, holy shit. Am I out of my league?
So like I thought I was a CEO.
Ryan Rutan: Nope. That guy's a CEO. Yes. It's relative to what, right? Like I'm a great CEO [00:20:00] because I'm doing a good job with my company. Cool. Are you Mark Randall? Probably not. I didn't. And
Wil Schroter: I look at it and I'm like, okay, it's very difficult for us, in the formative stages of a company, even as we scale to self identify to be able to say, Hey is the organization, are we a bunch of C players and wouldn't even know it?
Ryan Rutan: Yeah.
Wil Schroter: The founder's job is to be able to step outside of that. And say, okay, I'm going to forget everything that I've got here right now. All current status aside, and I'm going to say, I need a better organization. I got to have a better organization. I can't scale. I can't build something better if I don't have a better organization.
Guess what? It starts with better managers. There's no virtual where you're going to hire great people. Using back to our letter grades, you're not going to hire a talent. And give them C plus managers.
Ryan Rutan: And depending on who's responsible for the hiring, right? So this is an issue that I ran into at some point when I stopped doing all the direct hiring myself, the quality changed, right?
Their ability to assess exactly what we needed because they were looking at like at their level, [00:21:00] right? They were looking at it from there. I have to look at it from a holistic level and say, what's the company culture fit? How's the skin interface here? And like, how do we look at this in a broader sense where they were typically trying to solve the problem of the day.
I'm thinking, what is
And I think that's, that draws another important distinction here, which is there's two, lots of ways coaches can get involved, right? Lots of ways managers get involved. But the two that I think that I'm always trying to assess is. Two things. One, what's my ability to help an individual, right?
How, what is my ability to coach the individual and improve what they're doing, right? Like skills, training type stuff, right? And then what's my ability to orchestrate that across the teams such that I'm conducting and making everyone do a better job together. And I think this is where we get into like super rarefied space where you find people who are good at both of those things, and where you can both help somebody to. Become a better player and be the type of coach who can really do a great job of making sure that the lineups you're putting out to [00:22:00] stick with the sports analogy here are going to optimize the performance across the organization. And I think this is really tough to solve for and I think again, this is where people's own self perception ability.
Is really problematic for us, right? As you're talking about, as you're hiring more people, you're doing all this stuff. You got to think about who's doing this as well, right? And what is their qualification to do that? Because it turns out that C plus B minus managers tend not to hire A talent because a lot of times they don't recognize it or the A talent doesn't want to work for C minus manager.
Wil Schroter: Yeah. I've seen a couple of instances where people stumbled into that job. But the general axiom is that A talent hires A talent, B talent hires C talent, and C talent hires D talent. And there's a reason you're at those thresholds to begin with. And usually the reason you're B talent or C talent Is because you're not a talent where you're looking for for that level.
And I've actually, I've generally seen that play out and it doesn't surprise me. What through me was, I was like, Oh damn, dude, I'm, I [00:23:00] am the C talent right now. Relative to my experience in the organization. And it was something as simple as that woman saying to me, do you understand a performance review?
Or I just had this out of body experience. And I was like, Huh? I'm the problem, right? And that was, it was a minor
Ryan Rutan: thing relative to where you hear that high pitch noise as your adrenaline spikes, right? It was just like, Oh no, I'm caught out in the
Wil Schroter: open. Let's talk about how you solve this, right?
Cause at this point, folks that are listening to me going, Oh damn. We're okay. Now what? Now I'm questioning everything. Here's what I did back then. And I just, it just came to mind, but it really worked. I said, okay, reset all the chains. Restart everything. Everyone has zero letter grade. Let's figure out, first off, what we're even grading them by.
If we're like, Allison in accounting is clearly an A compared to whom? I worked with one other person at a company. Cool, okay that's wrong benchmark, right? And part of the way I looked at that was, if we had all the money in the [00:24:00] world, would we hire her? Yeah, obviously not that it's a straw man argument, right?
But who would we hire? And there is a threshold at which point you don't need somebody better than that, right? And so what was hard for me. Initially, was just saying we have to hit reset. All the expectations, again, we have to reset. It's cool that these folks were with us for a long time and did all these great things.
But, we are where we are now, and is this really the best team? And, I had some good answers and some bad answers. And again, I'll go back to what I said earlier. At the time, my first line of assessment was I'm the problem. And that wound up being really cathartic because it got me out of my own shell.
It got me hiring better people. It got me really trying to like. Find those A and B players to make up for the fact that I was a C level management by way of the fact that I was like 22 years old.
Ryan Rutan: Yeah, for sure. Now, it's it's interesting too as the, like [00:25:00] we were saying as a startup company, and oftentimes founders are very new to this.
Yeah, on occasion you get the person, like they were an absolute rock star in the industry, they spun out and they decided to go do their own thing, but That's ones of people out of thousands of people the vastly more, more common cases. You decided to start something.
You have very little management experience. You have no experience running an entire company like this, and you certainly don't have any experience running exactly this company because no one does it's brand new. And so you really struggle to have those benchmarks and baselines. You're like using your own performance.
So you've got three months worth of performance data, not a whole lot to go in there. So one of the things that really worked well for me. Was to go out and ask other people who were as similar in size, shape, whatever, or maybe a little ahead of where I was and talking to them like, okay, so when, when you're thinking about your top performing developers, what are what are the questions you're asking yourselves or how are you gauging that?
And then just asking like really qualitative, more so than quantitative questions. What are the things that they do that set them apart from your B players, from your C players, from your D players. And there were always really interesting [00:26:00] answers, right? And they weren't always things that I could necessarily then go and sort out within my own teams.
But it started to give me different ways of thinking about things and asking the same things like, what is it really frustrates you within your teams? What is it that where like you look at you go I feel like this isn't enough performance, but I don't have any way of saying they should be doing more, they should be doing less.
And so just asking what are the, what are, where do you see and how do you assess these kind of failures or shortfalls? And in a lot of cases, they'd tick off a list and I'd be like, yep, check check, check. And they'd like, they'd drop another like, oh my God, I hadn't even thought about that.
So here's a whole new vector for assessment. And so I think that, we talk about the fact that, comparing yourself to other startups can be really dangerous if you're just looking at like the Instagram version. But I think when you talk to their founder or another manager in the same role that you're in and you can talk to them about, what that performance assessment looks like, not the percentage levels, right?
Not at quantitative analysis, but at a qualitative level, It gives you what you need to start to dig in and do your own analysis. Apart from having a bunch of years of experience and data that you can lean on.
Wil Schroter: In one of our founder groups pretty recently. We had one of the members talked about, her dev team.
And she was saying like [00:27:00] at what rate the dev team was performing and shipping and things like that. And it was interesting because a bunch of the other founders in the room were like, that's slow as hell. And she's what do you mean? Yeah if my dev team was shipping at that rate, I would fire all of them.
And you could tell it seemed deer in headlights. She was like, are you serious? Yeah, that shouldn't be, but to your point, it's hard to benchmark your own stuff. If you're only point of reference, you start talking to other people and that's what I started doing. The way I was able to do it, it wasn't intentional.
It just happened to happen is we were growing so fast that just so many new voices just showed up. And they would show up with a body of experience that was much greater than ours, which in retrospect wouldn't take much, and they were like, Hey, is this really the way you guys are doing things?
The no performance reviews and it out and we'd be like, yeah, but because we're able to start leveling up and then I started to get really excited about leveling up people like we're recruiting became something that really mattered a [00:28:00] lot to me. Yeah. I would start going after people that I had no business talking to.
Right, which I thought was really interesting. And every time they would come on, it would almost be like, class of people, right? In other words, like a graduating class of the next people. And when we get like that year's new recruits of, at that level and they would make our previous recruits look like totally irrelevant to the organization.
Which creates some consternation to be clear. Yeah, it does, but also creates progress when done. Yeah, it does. It got me thinking like, what the hell were we doing five minutes ago? And let me say this, I just, to be clear, you couldn't get that kind of level up. With one damn person, one person, the right person in the right role can fundamentally level up the organization.
Cause I, you and I've worked with lots of teams here when one person is slacking. Everybody sees it, but also when one person's crushing it, it also influences everybody else [00:29:00] to go, damn, do I need to get on my game? So when you bring in that next level player and in their starting, it doesn't even matter what role they're in, right?
But they start operating at that next level. It also holds the whole team up, right? And again, it goes the opposite direction too. If one person is tanking everything, it drags the team down. But what I'm saying is one hire can be a difference maker. You don't need a whole graduating class of people to As a founder, you look for one person that you can start leveling up with.
And here's, what's cool. The next person you hire is going to want to work at that level. It does pull up, and we've seen this in our own evolution,
Ryan Rutan: Yeah, for sure. I think as you to your point, when you realize that you can start to do that, then I think it becomes incentive, because at the beginning, you have no idea, right?
You're just like, I just need, I have no one doing development, right? So I'm going from zero to one, right? Yeah. Literally any developer is better than no developer if we need to ship code right now. There's a whole, there's a whole philosophical argument in there about building the wrong stuff. Forget about that for now.
That's zero to one. And then when we want to move beyond [00:30:00] that, it's like we look at these little level ups. I remember at some point thinking it was always they were like minor upgrades. It's like you, you go from your parents house, your crap college or your dorm, your crap college apartment, your slightly nicer college apartment, your first job apartment, your first house, right?
And there's like this kind of sequential leveling up. At some point I was like, why am I sequentially leveling up? Why am I doing this step wise? As opposed to saying, I now understand the ROI on the better hire. How can I aim as high up the food chain as possible without overshooting the mark, of course, from a cost standpoint or do we really need, I don't need the the CEO of Microsoft to run my web design development agency with 20 people on it. So there, there are limits within this, but I started thinking in a way that was like. What's the furthest that I can see where I believe that will actually be the right person for all the reasons that you just laid out, because it has this crazy ability to motivate the rest of the team and it makes new hires really easy because nobody wants to walk in and be the first real functional member of the apple [00:31:00] dumpling gang.
Nobody wants to be like on one hand, it'll feel really good to be like the relative best player. But if we lose all our games, that's no fun. And and look, I'm sure you've heard this too. It's one of the, one of my favorite things to hear, right? And it's such an interesting thing especially within startups, but like good managers and good teams can make a huge difference in your hiring.
You can actually get better people for cheaper because of this. How often have you heard I took a new job. The salary's not quite what I wanted. But I love what they're working on and the manager I'm going to be working with or under or whatever is just like so amazing, right? This tells you everything you need to know about why the coach and why the other players are super important to attracting new talent as you move forward.
Wil Schroter: I agree. I agree. And I think for most of us, for most of us when we're trying to think about, How to get those level ups or how to do those assessments. Like I said earlier, it it just starts with recognizing that you got to reset everything, right? Like we said earlier.
The second part is start to say, Okay. Based on who I have now, how am I benchmarking everybody? How am [00:32:00] I benchmarking everybody? It is Johnny good because Johnny again, doesn't create a lot of complaints or is Johnny good because he actually makes the entire team better.
Ryan Rutan: Do I benchmark that?
Hold on for one second. Cause I want to address something within benchmarking. It's something I see in startups all the time. They're going to hear part of this. They're going to say, okay, I'm going to start evaluating. We'll get to a point where we have a benchmark and then we'll keep evaluating.
Evaluate your benchmarks too. And continuously move them, right? Because this is something, it drives me insane when you start to say we picked a benchmark and we've used the same benchmark to gauge performance for five years. Didn't you also tell me you wanted your company to grow or change or become better than how the hell is the same benchmark going to get you there?
All right, diatribe over, but I had to get that out.
Wil Schroter: But my favorite part about that, just to build on that for a second, Is when we take what we assume is an expert's benchmark. Developers get away with this all the time. Cause like you said they have a black art that nobody else understands.
So if they say, Hey, it's going to take longer. Nobody frigging knows. So they just assume that's the case. What's always been [00:33:00] amazing to me throughout my career and just different things that I've done is when I became an expert in someone else's job and then listen to them, tell me how long something takes.
You and I joke about this all the time because I'm building a house and I talked to all these different trades for carpentry and everything else like that, and they tell me how long things take it turns out I'm actually a carpenter. And so I'm like, yeah, no, it doesn't take that long at all.
If I didn't know any better I would use their benchmark as gospel. Turns out their benchmark sucks. How long it takes them to do something is hilariously bad, right? It's, we talked about this in a previous episode, right? Like when we're talking about, is it taking a long time because you're not good at it?
Ryan Rutan: Yeah, does it,
Wil Schroter: does it really
Ryan Rutan: take that long, it takes you that long,
Wil Schroter: But should it? It takes somebody that's not good at their job. It'd be like somebody saying, going back to the sports analogy you talk to your star player like, yeah, star players score about four points a game. Are you sure?
Ryan Rutan: I'm sure in basketball people score a few more. What sport are we playing? Because [00:34:00] that may be, that may, if you're playing hockey or soccer, that's, yes, that's a star player. If you're playing basketball, less yeah. Yeah.
Wil Schroter: Yeah, that's a good, so here's what I would say, here's what I'd say. So what I think for most founders, for the teams, et cetera, the hardest thing is just doing that initial reset.
Like we've been talking about, just admitting to yourself that we may be the C plus team, but as founders, we don't get to just lay on that and say, Oh, I'm a C plus team. We have to set an A standard and work toward it, whether that's leveling ourselves up, looking at our managers, leveling them up.
Usually that's where you want to start. And looking at the team members, there's no way to grow any startup to anything meaningful without leveling up the team first. So until we get that focus, until we say to everybody, we've got to move at this next level, there's no way to ever scale this startup
Ryan Rutan: overthinking your startup because you're going it alone.
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