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Scaling Your Organization

Hiring talented people is the foundation for any startup, but convincing a high-quality candidate to leave their job and join your early-stage team is no small task. It might not be easy, but with careful attention, you can make sure your first hires help you find PMF (product-market fit) and shape a positive culture at your company for years to come. As a Founder or CEO, you’ll need to thoughtfully align your team and get things done. To be a strong leader at this stage, you’ll need to have clear priorities, and successfully manage your team. This chapter discusses what it takes to scale your company, lead a high-performing team, and build a positive company culture.

Chapter Authors

Chris Marty
Chris Marty
Andy Johns
Chris Marty
Jon Volk
Jon Volk
John Vrionis
Billy Bosworth
Andy Johns
Andy Johns
Jon Volk
Jon Volk
Jon Volk

What You'll Get

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Start module

3 Traits in Early-Stage Startup Hires

Hiring for an early-stage company is fundamentally different from hiring for a mid-sized, pre-IPO, or public company—and thus requires a radically different approach. As a founder or hiring manager, there's a specific set of traits you need to seek out in each candidate to make sure you're building the right team for the road ahead.

Besides role-specific competence, there are three must-have traits early-stage hires should have:

  1. An authentic attachment to your company
  2. The potential for exponential impact
  3. Cultural alignment

Authentic attachment to your company

In startup circles, you’ll often hear about the importance of hiring someone “mission-driven.” There’s a simple reason for this. If a candidate believes in your company’s mission, she is demonstrating an authentic attachment to your company. This means that when the going gets tough (and it will at an early-stage startup!), she will find the courage to stick it out. Mission-driven candidates exhibit a higher tolerance threshold and are better positioned to navigate the ups and downs of startup life. 

Another benefit to add: mission-driven folks are more likely to be referrers for other hires. And those hires generally are of higher caliber since they are pre-vetted by the employee that has an authentic fit with the company.

However, being “mission-driven” isn’t the only way to demonstrate an authentic attachment. For instance, a director-level candidate might be attracted to an excellent leadership team because that team mirrors her values. Or a senior engineer might be attracted to your technical environment because it offers interesting problems to work on, or a chance to work directly with an all-star technical co-founder. 

The point is there might be several reasons why someone would be genuinely excited to work for your company, and it’s up to the hiring team to flesh those out. If you haven’t done that with a candidate, you’re probably not ready to make an offer. The risks of getting it wrong are too high. 

Pro-tip: A candidate who values a high cash offer above all else does not have authentic attachment! On the flip side, a candidate who wants a lot of equity may be the mission fit you’re looking for.

Potential for exponential impact

With any hire, it’s important that you find someone capable of doing the job. At a startup, however, it’s critical that every hire has the ability (and desire) to extend beyond her core function, demonstrating an interest in scaling her impact as the company scales. 

By nature, startups are chaotic. An early employee’s scope of work doesn’t fit into a neat box and it won’t match the job description. You should aim to hire people who aren’t just OK with this, but are excited by the opportunity. 

During my time as Head of Recruiting at Wealthfront, the founder and CEO Andy Rachleff used to say to me, “Every startup hire should exhibit the potential to be a VP one day.” Essentially, what that means is that founders should set the expectation that change is constant and only hire those who seek out new challenges and thrive in an ever-changing environment. It’s worth pointing out that you don't want to hire the person that EXPECTS to become a VP right away. Rather, it's about the candidate having a very high slope, not very high requirements.

One good proxy for this potential for exponential impact or “professional upside” is looking at a candidate’s career trajectory. Here are few things to keep in mind as you vet the candidate:

  • Has the candidate made good career choices? Did they pick quality startups and demonstrate sound judgement by doing so?
  • Has the candidate exhibited resilience, demonstrated by significant tenure and a track-record of getting promoted from within? 
  • Does the candidate have a clear story for job changes? 
  • Is there clear professional intent behind each decision?

But there are other ways to look for this quality that go beyond a resume: 

  • Did the candidate put herself through college? 
  • Did the candidate earn a graduate degree while working full-time? 
  • Has the candidate achieved more than her peers, maybe having done so while at a distinct disadvantage?
  • Has the candidate shown exceptional ability/commitment outside of the workforce such as devotion and participation to their spirituality, community, or physical feats? (Unusual Partner Andy Johns likes to look for this since it also shows independent drive, which is essential to having a high upside.)

The above is not an exhaustive list. Essentially, you’re looking for a track record of grit and ambition. 

Cultural alignment

An early team sets a company’s cultural foundation. When hiring at a startup, it’s never too early to emphasize cultural alignment. Seeking a candidate that is the right culture-fit does not undermine the importance of making a technically strong hire. They are equally important traits. Remember, you can teach somebody a new skill, but it’s a lot harder to teach somebody passion. 

Maybe you’ve established company-wide operating principles that transcend function and role. For example: “Assume good intent,” or “Strong opinions, weakly held. Or perhaps you’ve already outlined a core set of values that dictate culture at your company. Craft interview questions that compel a candidate to demonstrate how they’ve lived those company values. You should hold the candidate to the same high standard you’ve hopefully set for your team. At Fleetsmith, we worked hard to create a psychologically safe workplace—one in which all employees felt empowered to take risks without fear of retribution or blowback. Weave these themes into your interview process. 

Culture alignment could also be showing that they have the appetite for risk and have worked at startups before. This is a critical trait for any founding team member. If the candidate only comes from big companies, but suddenly wants to try working at an early-stage startup, the risk of low culture fit and organ rejection is very, very high. Churning early team members can be a huge setback for a young startup and seriously injure team morale, so it’s worth spending extra cycles to ensure you’re making the right hire.

Pro-tip: Give candidates from big companies the specifics of their job offer upfront, and let them know that room for negotiation is minimal. Candidates joining startups from larger companies are likely taking a step back in salary, so it's much more efficient to be aligned on that upfront.

I put together this set of interview questions you can ask at each stage of the interview process to vet candidates for each of these must-have traits.

How do you find these candidates?

If you’re looking for candidates that exhibit the traits outlined above (authentic attachment, exponential impact, and cultural alignment), the hard truth is that hiring won’t happen overnight. Finding the right early-stage hire takes time. Here’s the good news: candidates who meet this criteria will often find their way to you. In many cases, the best candidates are running towards your company saying, “This is where I want to be!” Your job is to identify them early, run a swift interview process, and inspire them to join you. 

As a recruiter for our portfolio companies, I spend an outsized portion of my time with the candidates who express the most excitement. As long as I do a good job informing them about the role and company, they often end up selling themselves on the opportunity. If it’s time to extend the offer and you’re not sure they’ll jump at the opportunity, you might not be talking to the right person.

At the same time, you have to be ready to roll up your sleeves and do some active sourcing. Start with your own network and expand outward from there. For example, if you’re hiring a product leader, reach out to product leaders you’ve worked with before and industry influencers. It’s a really good bet they know someone you should meet. When you reach out to people with influence, word spreads quickly. 

Pro-tip: Tap into the “super-connectors” in your network. These are the folks who enjoy receiving an email request for an introduction. They’re the folks not only respected in their field, but also widely known. They derive joy from making connections, so don’t overthink reaching out to them for help!

Eventually, you’ll need to begin sourcing outside your immediate network. Use a targeted approach. Scattershot emailing rarely works. Instead, start by coming up with a list of 15-20 companies whose technical excellence you admire. From here, look for relevant employees at those companies who exhibit the traits we outlined above (eg. start-up experience, a track record of promotions and significant tenure, etc.) Remember, you’re looking for scrappy candidates who have something to prove. 

Once you've put together a thoughtful list of candidate profiles, consider using a modern sourcing product like Gem, which does the heavy lifting for you by automating all outreach and follow-up.

How do you engage these candidates?

Over the past 10 years I’ve partnered with dozens of hiring managers across all functions. Without question, I’ve learned that the most successful hiring managers emphasize relationship-building above all else. That’s not to say that there aren’t other important facets of running a strong recruiting process. Consistent expectation-setting, transparency around compensation, running a timely process, and creating a two-way street where the candidate feels as empowered to ask questions also matter. But at the end of the day, a candidate joins a company to work for someone. Therefore, at the crux of an excellent process is laser-focus on nurturing the potential employee-manager relationship. 

While at Wealthfront, I worked extensively with the design team, supporting hiring efforts across product design, visual design, UX research and design leadership. The team was growing quickly and time was scarce. In spite of this, Wealthfront’s Design VP, Apeksha Garga, made a point of personally reaching out to each design candidate ahead of all candidate on-sites. Apeksha ditched the usual canned email and instead spent 20-30 minutes with each candidate ahead of their final round interviews. Her high 90th percentile close rate reflected how valuable this touchpoint was for candidates. Relationships matter, and early-stage founders and leaders can differentiate their company by making the hiring process feel warm and personal.

Finally, I’ve always believed that the best start-up candidates demonstrate increased enthusiasm with each step of the recruitment process. As you become more excited about a potential fit, so too should the candidate. If there’s a disconnect there and the candidate seems to pull away, have an immediate conversation to understand if it’s worth continuing the process.

Here are a couple of simple steps you can take to get the candidate more engaged:

  1. Share content: Send over a relevant podcast episode, maybe one that highlights a different member of your leadership team. Candidates will be excited to hear multiple people expressing the same level of passion about your company.
  2. Help them backchannel: Ask the candidate, “What more do you need to know?” Offer to connect them with one of your investors or someone else in your network who knows how you work. You want to help the candidate envision what it would be like to work with you.
  3. Find creative ways to highlight your culture: Send a book that everyone in your company reads upon joining or invite them to a team offsite. (We took a recruit axe-throwing and the team surprised her with her own cardboard cutout!)

If all goes well, presenting the offer should feel like a celebration, rather than just a starting point.

Key Takeaways

  • Hiring for a startup is fundamentally different than hiring at a large company. 
  • Understanding a candidate’s technical excellence is always key, but just as critical is your understanding of a candidate’s passion, upside potential, and cultural alignment. 
  • Before you make an offer, make sure you can answer this question: “What makes me convinced that this candidate will still be excited to work here when things get tough?”
  • Consistently gauge a candidate’s enthusiasm for your company, and spend more time with those who are leaning into the process. 
  • Tap into your network to source candidates. Look for the “super-connectors” in your network who enjoy introducing people to each other and making new connections.
  • Make a list of companies whose technical competence you admire and narrow in on relevant employees who might be a good fit for the role. Use a tool like Gem to help automate the outreach process.
  • Build a relationship with the candidate throughout the process and go the extra mile to make the process feel personal and exciting: share content, help them backchannel, and invite them to team events. You want to help them envision what it would feel like to be a part of the team.
Start module

What Makes for a Good Product Manager?

Over the course of my career, I’ve worked on product at Facebook, Twitter, Quora, and Wealthfront, and have advised dozens of other companies on the role of growth and product. Now, as an investor at Unusual Ventures, I get exposure to an even broader collection of companies, and the product cultures within them. Despite that exposure, there is a lot about the role of product that I still don’t understand. But what I can say for sure is that there are as many philosophies on the role of a product manager (PM) as there are letters in the alphabet. And we’re nowhere near getting to a point of agreement on the basic question of, “What makes for a great product manager?”

The confusion surrounding expectations has always stood out to me as one of the most unique and challenging aspects about this role. If you ask an engineer what they want from a product manager, they’ll give you an answer from their perspective. Some might say, “I want them to do all the stuff I don’t want to do, like take meeting notes.” Others might say, “I want them to be proficient with SQL, so that they can pull data.” Or, “I want somebody with good design sense.” Then, if you ask a designer what they want in a PM, you’ll probably get a different set of answers. Same thing when asking marketing or an executive of the company. If you ask the PM themselves (or Twitter for that matter) what they think a PM’s job is, you’ll get yet another set of perspectives.

These completely different expectations make the PM job very difficult relative to most other positions because what makes for a great PM can’t be narrowed down to one or two objective measures. PMs have a broader set of definitions and expectations to live up to. If you view each of these expectations as a set of circles, the world’s greatest PMs are those who are very good at a combination of these overlapping expectations. For example, you may have a PM who’s really great at writing SQL queries, which might earn them the respect of an engineer. But they also need to be excellent at conducting customer interviews and reflecting the voice of the customer to really impress designers. Ideally, you’d find somebody with an overlap of these skills. A baseline set of expectations for a junior to mid level product manager might look like this:

To make things even more complicated, these expectations can also vary from company to company. Some companies don’t even want to have product managers. That’s how conflicted the industry feels about the product management role. However, at the risk of being too prescriptive, I’ve laid out my framework for PM skills development below.

Foundational Skills

In my opinion, below are the most basic set of skills that a Product Manager should master in order to establish their role within a team:

  • Create Requirements — They can create clear product requirements that satisfy the preferences of the engineers and designers they work with (i.e. it unblocks design and engineering). There are many different approaches to product requirements, so there shouldn’t be a religion around a particular style. What matters most is that design and engineering feel enabled by the requirements a PM produces.
  • Customer Feedback — They can bring together basic customer insights through customer interviews, reading customer service tickets, etc. They do an adequate job of reflecting the baseline expectations of the customer they’re building the product for based on an explicit set of requests from the customer (e.g. the customer says a part of the product is broken).
  • Data Insights- They have some basic data proficiency where they can look at the data related to their product and potentially use that data to make decisions. They will have working knowledge of data languages like SQL and know how to use popular business intelligence tools like Looker, Google Analytics, and so on.
  • Run Meetings — They can run effective meetings with the team. That includes setting the agenda and tracking action items. For foundational abilities, this does not include driving decisions within the context of product meetings as driving decisions is more common amongst senior product leaders. I’ll touch on this more in a moment.

From what I’ve seen, having this baseline set of skills means you can be average-to-good and generally command some reasonable amount of respect from cross-functional peers in engineering and design. Then there are the additional skills that separate a beginner PM with foundational skills from a more experienced PM with intermediate capabilities.

Intermediate PM

To be an intermediate PM, you also need to layer on the following skills on top of the prior set:

  • Customer Insights. Beyond collecting the plainly stated forms of customer feedback, this means deeply understanding the problems/needs of a customer and how that customer has historically solved those problems or met their needs. This PM can then diagnose how the product he/she is building will solve the customer’s unmet needs.
  • Basic Design Knowledge. Good PMs have working design knowledge so that they can distinguish between bad, mediocre, and good design. This predominantly comes down to UX fundamentals and not advanced topics like color theory. Does it require too many taps/clicks? Is the product copy unclear? Does it meet the stipulated customer needs? Is the cognitive load too high? Is the information hierarchy correct? These are the sorts of questions that a good product manager will ask when working through prototypes.

Exceptional PM

To be an exceptional PM, you must combine the previously mentioned skills with a few more skills. This person can operate at the executive level or be the product lead on the biggest, most important product initiatives within a company.

  • Customer Innovation. This PM not only knows the explicit customer requests and has intimate knowledge of the customer’s needs, but can introduce new products or features that exceeds the customer’s expectations and innovates on the customer’s behalf.
  • Vision and Strategy. Exceptional PMs can also internalize founder-level vision for the company and turn that vision into an actionable strategy. They have the most keen line of sight into the series of products/features that need to be built to achieve the founder’s vision. And once they have the vision and strategy clearly understood and explained to their team, they can enforce great execution against the vision and strategy.
  • Broker Hard Decisions. The best product managers are those that can also drive a team toward making a high quality decision in a world of uncertainty. Foundational and intermediate PMs can arrange and run the meeting, but aren’t necessarily great at driving a product team towards a decision in difficult situations. The best PMs are those that everyone else in the room looks to when making a hard decision and they typically make the best tradeoff decisions given the circumstances.

As you can see, the requirements for becoming an exceptional product manager are high and numerous. Going back to the original venn diagram analogy, exceptional product managers need to have a lot of overlapping skills and each function within the company places particular emphasis on some of those skills. Engineers might assess a PM based on data proficiency and quality of requirements, design might assess based on customer-centricity and some degree of design thinking, while executives may assess a PM based on the ability to lead a product team through complex initiatives and fidelity of vision and strategy. Across the board, everyone is expecting a PM to be a good decision maker.

A Needle in a Haystack?

That said, it’s no surprise to me that I often hear founders gripe about how they can’t find great product managers. They often say they only come across average PMs. As part of that, I arm them with the above framework so that they can be more specific when it comes to critiquing the caliber of their product managers, in particular once they’ve adjusted their expectations for the level of seniority.

When I dig in more deeply, what they are really saying is that it’s very hard for them to find product managers with the exceptional PM qualities of customer innovation, clarity of vision and strategy, and ability to make hard decisions. Unfortunately for PMs, most founders expect them to have the skillset of an exceptional PM, regardless of their level of experience. This triumvirate of skills (customer innovation, vision and strategy, and ability to make hard decisions) is what I call “Founder’s Feel”.

For example, when Facebook was working on Messenger, it first started out as an integrated messaging app as part of the web client. One day, Mark Zuckerberg declared that it must be made a standalone mobile app and that Facebook users would be required to download it if they wanted to chat directly with one another. That wasn’t an obvious decision at the time, certainly to most of the rank and file employees, yet it was the correct decision given the pressure Facebook was feeling amongst a growing collection of competing messaging apps. Facebook was being unbundled by competing products so they decided to get ahead of it and unbundle themselves. This is the sort of decision-making that great founders make and, sometimes, exceptional product managers can make as well.

I’ll give you another example from my time at Wealthfront. We had just launched our mobile app and the number one source of customer feedback we were getting was that customers wanted to see their daily returns front and center in the mobile app. In other words, customers wanted to be able to log in and see whether their account was up or down relative to the previous day, and they wanted that front and center in the app. I remember telling our product manager at the time that we were never going to do that. The PM looked at me like I was an alien and kept repeating that customers were asking for the feature.

I explained that customers were asking for that feature based on what they thought Wealthfront was at that point in time, which was a tool to manage their investments. But what we were going to be a few years into the future would be their holistic money manager where we would handle their financial planning, banking, investing and so on. Holistic money management is not about showing daily returns because whether the market goes up or down 1% per day does not matter in the long run. Most customers were investing and planning for something several years or even decades down the road. I pointed out earlier that a great product manager understands customer feedback first and foremost. But an exceptional PM knows how to contextualize that customer need within the broader company vision and strategy, and then decide whether or not to implement what the customer is asking for.

Fast forward a couple years, we took daily returns and relegated it to a lower position within the app and put long-term financial planning front and center for the customer. Eventually, we saw that the savings of customers who engaged in that long-term financial planning feature went up by a double digit percentage. Sometimes, listening to explicit requests from the customer can lead you in the wrong direction, as would have been the case here.

Developing “Founder’s Feel”

So what does it take to develop “Founder’s Feel” in order to become an exceptional product manager? How does one go about building strong instincts around customer innovation, a vision for the future, and a knack for making high quality decisions that others don’t necessarily see? The bedrock of it is in knowing the customer better than anyone else.

The way I think of it is that you’re collecting unstructured data every time you have a conversation with a customer. It’s not structured like the data you retrieve from a database. Rather, you’re looking for structure (i.e. patterns) in the data that only becomes apparent once you’ve had enough customer conversations. For example, imagine that an insight from a customer conversation is a data point that you plotted on some nebulous graph, like I’ve shown below. Each time you have a conversation you collect insights and start plotting them into groups based on similarities/themes. Once you’ve had enough conversations, the themes start to cluster around common insights or customer needs.

Once you hone in on the clusters they start to make sense to you and “feel” obvious, especially after you’ve had enough conversations with a customer. In the below example, each cluster outlined in red could lead to a meaningful product decision.

Each time you talk to a customer, you capture unstructured data. If you have enough conversations with customers, that unstructured data starts to take shape in the form of extremely strong instincts around potential for customer innovation and product vision that seems less intuitive to others. That’s what “Founder’s Feel” is.

The founders of Wealthfront talked to hundreds of initial customers face-to-face and read most customer service tickets from the first couple thousand customers. Several years after founding the company, the founders continue to read customer service tickets and talk to customers face-to-face. When you compare their ability to make a decision in an uncertain environment vs. a product manager who hasn’t talked to any customers, there’s no comparison to be made. They have a “feel” for what to build (and not build) for Wealthfront customers that is unmatched due in large part to the sheer volume of unstructured information they have collected over many years while building the company.

Closing Thoughts

Returning to the original question: What makes for a good PM? The answer is it’s really complicated.

To start with, good PMs can navigate ambiguous expectations and can apply their skills based on the team’s needs. They know the different levers to pull depending on who they’re working with and can adapt accordingly. One thing that can’t be sacrificed is knowing what the customer needs better than anyone else. This means doing customer research, design testing, and diving into customer support tickets, spending time sitting with the customer support team, and so on.

If you’re just getting started as a PM, focus on building the foundational skills I outlined above. That’ll be the foundation through which your cross-functional peers see the value you add. With time and practice, you can hone the additional skill set I’ve outlined that can make you an intermediate or exceptional PM. But if you’re not good at the fundamentals to begin with, you’ll lose the respect and trust of your team and they might wonder, “What is this person’s job exactly?”

For senior PMs, you have to have the ability to broker decisions in situations where it’s hard to make the right call and drive alignment around the vision and strategy. In addition to that, you can weigh in on product decisions using some working design knowledge. I’m not talking about weighing in on square corners versus rounded corners. I’m talking about the overall flow of products, if the experience is clear or cumbersome, and if it meets or exceeds customer’s needs or expectations.

Finally, the rarest of PMs develop their own “Founder’s Feel” — i.e. a knack for making the best strategic decision that’s informed by a top rate understanding of the business, customer, and the market. They know how to work under uncertain conditions and get a sense of the bigger picture. Those exceptional PMs can translate the founder or CEO’s vision into a clear execution plan.

With all this in mind, though, my default position is that the vast majority of product teams are better off being led by a small group of cross-functional owners as opposed to the outdated notion of “the PM as the CEO of the product”. The most effective product teams are those where the leads on Product, Design, and Engineering (and sometimes other functions like marketing, customer service, and data science) are all mutually bought in to being experts at understanding the vision, the customer, and have shared ownership of the outcome. This means that a Product Manager should often defer to Engineering or Design when key decisions need to be made, specifically when those other functions are better fit to make those decisions. And that’s often the case! I would argue that a great PM also shows “Founder’s Feel” by referring to the right person in the room to make the decision.

In my experience, small group decision making typically leads to vastly better outcomes and if you have a true product leader, that person emerges naturally just like any leader does. There’s no explicit conversation about “who is in charge” of the group. Rather, they do such a good job that the peers around them see it, they know it, and there’s not a discussion about it. That person simply rises to the occasion. It’s the person that everyone in the room naturally turns to for the hard decisions and the mark of an exceptional PM.

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Candidate intent assessment

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Pre-screen Interview Questions

Outline Series A board meeting deck template

Founder prioritization heatmap template

Kickoff Meeting Template

Project Review Template

Amazon Press Release Template

Product Requirements Template

Customer Research Guide

Offer Letter Template

Company/candidate checklist

Recruiting Brand Checklist

Tools in this chapter

Scaling Your Organization

Let’s get going

Long before you interview your first candidate, you need to establish your overall philosophy. We always start by vetting for three key traits in early-stage hires, then strategizing how to engage the candidates that possess them. Discover how in our first step: The three must-have traits in early-stage hires.