The interview focuses on the recruitment decisions Stripe have made in the 5 years since their founding, with a lot of focus on the first 10 employees. They are doing a lot right if recent valuations are anything to go by. See: ‘Stripe to Land $5BN Valuation in New Investment.’
So what were the key takeaways?
1. Working on Hard Challenges Makes it Easier to Build a Great Team
Collison discussed the fact that by building something challenging and durable, it appeals to the best people. This gave them a distinct advantage in attracting talent. They also benefited from pushing the recruiting time horizon out, as they knew it would take a while to launch. Hence, it took almost 2 years to hire their first 5 people, but they had lots of conversations early on taking their time to get the right people. This is no longer as easy given the employee’s numbers now exceed 250.
For example, some hires took years to recruit, but they rationalised the prolonged engagement on the basis that they were ‘planning to succeed and to build a great company’.
Another thing they did early on was that they started working with people before hiring them. In some instances they found out that certain candidates were not the right fit.
It is extremely valuable if you can work people before definitively deciding to work with someone.
Sometime this included ‘trial weeks’. With all of their first 12-13 people, they worked with them for at least a week before making an offer. The net effect was that it helped to make sure they did not make bad hires.
So what were some of the key criteria they applied when making early hires?
They were very focused on hiring smart happy people who were ‘pleasant to work with’.
We try to hire people who are intrinsically happy.
They also ensured that early hires were experienced and were able to ‘hit the ground running’ – all had run their own businesses. For the first 10 hires, they knew what they wanted to build and simply had no time to train people.
2. Hire Good People who will Attract Others
They also focused on hiring people that were ‘known to be good by others’ i.e. so that they had the ability to attract other great individuals to Stripe.
It is clear that they were focused on culture from early on, even allowing employees to veto a new hire.
Stripe also made a conscious decision to distribute equity amongst the early employees. They were keen to remove the focus away from salary, so that they attracted people where salary was not the deciding factor. As a result their retention rate has been much higher than normal.
For our first 10 people at Stripe, we gave away more than 10% of the equity. Be extremely generous with your first employees and less so with your investors.
3. A Culture of Transparency
They believe strongly in a culture of transparency and allowing employees to access information from all departments. Internal email communications are open to all, motivated by a desire for federated understanding, to sate people’s curiosity and to help people make the best decisions.
For example, the traditional view of engineers ‘in the valley’ is of them as implementers, whereas Stripe takes a much broader view of what an engineer does. Engineers there meet customers and write blogs as well.
This post is part of our Recruiting strategy series.
4. Unique Onboarding Process
They also have a pretty unusual onboarding process based on some mistakes Twitter made in terms of silos that were created (a number of early Stripe hires were ex Twitter).
To avoid the problem of silos being created, every engineer who joined would ship something on every other team before joining their own team. By encouraging cross pollination it helped ensure that new hires gained broader context. While this approach is at odds with departments seeking new recruits to start straight away, Collison felt that the time delay between when they start and when they join the team was of crucial importance.
5. Recruiting Management
Finally, he talked a little bit about the fact that they should have recruited managers earlier.
We weren’t one of those companies that believe we shouldn’t have managers.
They now look to promote from within wherever possible, although this does carry the obvious downside of ‘snipping out your most productive people’ from the teams they are playing leading roles in.
He concluded by arguing that entrepreneurs don’t think about the wider management piece early enough.
Overall, some very interesting areas for all startups to reflect on as they build out their teams.
Alan Gleeson is a digital strategist.