# Inside the Group Partner Lounge: Don't make these hiring mistakes

**Author:** Harj Taggar, Michael Seibel, Brad Flora
**Type:** Video
**URL:** https://www.ycombinator.com/library/J2-inside-the-group-partner-lounge-don-t-make-these-hiring-mistakes
**YouTube ID:** CUZ6PKJZvXE

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Step inside the Group Partner Lounge to hear Y Combinator Group Partners Harj Taggar, Michael Seibel and Brad Flora
discuss the many different mistakes founders make when they approach hiring for their startup and how to grow your team
the correct way.

## Transcript

i've been trying to hire our first engineer for a year and like i can't like find anyone and it's not because there's literally no one with the word engineer on their resume that they can hire right [Music] hello this is michael with harj and brad welcome to inside the group partner lounge so syc group partners we find ourselves repeating the same advice over and over again to startups before covid we'd often gather together in the group partner lounge at the yc office to try

to figure out why this was the case and how we could help startups figure it out faster but now that we're all online we're doing it in front of all of you today we're going to talk about startup hiring so hard frame this challenge for us because man this is something that we debate founders with all the time yeah so one of the most common things founders tell us they need to do during a yc batch is higher and one of the most common bits of advice we give is to not hire this is something we should talk about and like you know

where we sort of have headwinds and giving this advice is if you look at the list of the top yc companies or top startups they have thousands of employees so obviously you do have to hire in order to build a big company we totally get that and so when we give this advice to the startups to not hire so much a lot of well you know there's a little word out there saying oh like yc partners don't get how to build companies like you know you need to hire youtube like they really ramp up your hiring and so we have to find like the right level of advice that lands with founders um

and gets them to make the right decisions yeah for me when i think about this challenge what's tricky is that almost all the advice that's written online about hiring is written for post-product market fit companies folks that have products that users love and those companies are trying to scale up to offer that product to more and more people most startups are pre-product market fit so now we confront this like very large dilemma like you're reading advice for a stage that not only are you not at now

but odds are you will never be at and it turns out if you apply that advice to your pre-product market company you might accelerate your death so how do you deal with that that's the challenge so brad why don't you start what are the lies that yc founders and founders in general tell themselves about why hiring will solve all of their problems sure we'll jump into a couple of them so the big one is the thought that if you only had more people we could get more things done

i i hear this every week from a founder we need more features brad we don't have enough features that's right uh we need to get the android app out we need to get the ios app out we need specialists for each of those different apps um i i i've even had people tell me that we need to hire more people so that we can reach profitability faster and do those people bring are they somehow paying the company instead of collecting salaries they're receiving negative salaries that's an interesting business model

fascinating harj how about you what are you hearing is the reasons why founders give to hire away yeah i think another one is just it's a marker of progress and so um founders feel like investors will be more impressed with them if they have more employees i think they feel like customers will be more impressed um and yeah it risks becoming like a kpi right that you focus on it feels good when you tell your friends too you're like oh like you know how's the company doing you're like oh yeah we're at like 100 employees now so i think like you

know things must be going great i think this is one of those fun stats that like second time founders react to differently than first time like i remember when we were all going through yc like number of employees might have been the primary kpi for every one of our companies like and i feel as though like after managing people i'm like oh god if i could just do it with fewer people that brings up uh you know another set of lies that founders tell themselves and we all told

ourselves at some point which is that um just because you are a startup founder it doesn't mean that you are good at hiring and managing people and i think the first time around you don't know that and the second time around maybe you do know that that you are not good at those things yet and i think i think some of that is because when you're running your company you're thinking about all these problems that the company has all the problems that you're carrying around in your head and then you magically hear that some smart person is available or looking for a job

and and so that's another lie you can tell yourself is that i should hire that person because they're available this is an opportunity that i need to seize um the thing is though is like some companies do that but they are very large companies that product market fit not your startup right now google does that well yeah i think there's also a confidence thing so sometimes when i'm talking to founders i feel like what happens is once you're a startup founder you kind of forget how

hard it is to make the leap to start a company and try and go from like zero to one on anything because you're just like slapped in the face by reality every day um and so like early stages of the stages we're dealing with companies right like the challenge is in just figuring out like what's the first experiment to run whether it's like sales marketing product or whatever and then it's really tempting when someone like comes along who's got a resume where they were like vp of sales at some company you recognize like oh wow like a sales problem fixed and like you

underestimate like uh like the tenured vp of sales might be amazing at managing it like team of like 100 sales people but like they are probably not as good as you are figuring out like how to make the first sales call like how to get the first 10 customers like all this stuff that that you would assume they could do like they might be totally lost um and i think that's actually more common right like do you guys see that when you're talking to these companies and you're like man like you're a founder like this you're like you have a unique skill set

you don't you can't hire for that like you know the problem probably better than anyone else you certainly know how your product works better than anyone who's selling it right way better yeah that's the the way that that looks like in my office hours is someone shows me a plan to hire some people and we have to go down the list and i have to say over and over again that's your job no no that's your job too that's your job right now um because there's just nobody else that can can do a lot of the things that the founders do

at this stage you can't hire for some of this stuff like figuring out what the customer wants figuring out how to adjust your product so that it does the things that they needed to do that's the founder's job what about this one raj i think you've seen this one like i need an exec team it's time to start hiring execs like i never quite understand why like do you have any experience on like why that happens like what triggers that in someone's head to be like oh now it's time i need an exact team

i think it's it's i think it's the cargo culture thing right it's like there's just so like the majority of startup advice and stories that are out there are from the already successful companies and so if you look on the surface of ah like let me go look at the about page of airbnb oh like chief operating officer cheap blah blah blah officer like like i have all those squares on my team page are missing so i better like go hire those people in right i think i think a lot of it comes down to that yeah and i think a lot of the times when

i see it it's because the founders already have the relationship with the person maybe it's someone they worked with before or they've known in some other context for a while and they figure well i'm gonna hire this person eventually i might as well hire them now and give them this and that person just wants the fancy title because that's important to them for legitimate reasons but it doesn't mean that it's a good idea to bring them on right now before you have product market fit you know the other one i see a lot and it's i actually had office hours today on this subject was a founder saying to me it's like well we

know we're going to have this problem in the future so we might as well just hire the person who can solve it now and it was like so funny because i was like as an advice giver here's how we get in trouble like this is what i explained i was like well your startup has like one or two six alarm fires burning any given time right and those are where you should really be focused but there's also like 50 smoldering fires right there's like 50 little smoke coming up right some of them's going to turn into big fires some of them are not

and i always get yelled at when i tell people don't hire people or worry about the little you know the little smoke coming out somewhere else and the founder always comes back to me a year later and it's like well one of those 50 things turned into a fire and i saw it and if i had only done this we could have prevented it and i'm like but the 49 other ones did it and so like it's still better to fight the fire after it's like a massive fire and i think that that's intellectually frustrating

right like you you almost feel like you should be able to predict the future and act whereas so much of the startup is just reacting to when things are horribly broken i love the old like you know we know what we need to hire because we know what's going to happen in the future i mean especially over the last couple of years like can you imagine like you know like airbnb like covered hits that kind of changed up their business like you imagine like instagram amazon buying whole foods like that probably changed up the business like there's just it's just like yeah like when you're at the earliest earlier stages every like you need to be able to

turn the ship like very quickly on a dime kind of because you just don't know what's going to happen and i think that's what founders don't appreciate it's like when you when you don't have product market fit you're really early and you just kind of need to take it day by day almost and like the bigger the ship is the more people you've got to now coordinate to like get them rowing in the same direction and turn the ship and if it takes you like three months to turn the ship you might just be dead like boom so let's let's go to the devil's advocate side though so

you know hard you brought this up like the first point which i think is like really important is like if you're going to be a big company you're going to have a lot of employees eventually right like can you speak to that you know big companies do have a lot of employees viable companies have a lot of employees it's true and like and again this is where the advice is nuanced and has to be personalized right so like this is why so when we're like think when we're doing office hours it's why we care so much about figuring out like what's your growth rate like how

much wrong way do you have just so we can get a read on okay what kind of company are you and if it's like a post-product market fit and things are going well accelerating like that's when you start hiring um but like if you're not then the advice is not to and i get like if you look at all the top yc companies yes they have more employees but they and michael you've been there you can see there's like airbnb like they didn't hire a thousand employees in their first year right like those employee hiring accounts are pretty back loaded well let's take airbnb as an example

right so you know we'll screw with history a little bit and just say that like they launched at that south by southwest in the beginning that would have been about six months before getting into yc i think that means that outside of the founders it took them 18 months to hire their first employee before their first event 18 months and it was six months post graduating from yc and raising money and it was funny because you know the first person they hired was

an engineer and it was two designers one engineer and nate was like drowning and they still took six months to find someone who was great and that helped establish the culture i remember stripe being very similar to that i'm striped like they they certainly they so they certainly hired people right they certainly had a team and if anything actually stripe was a little like it went against the conventional wisdom because i think it had a team of maybe eight to ten people pre-launch um

but like the product took a while to kind of launch publicly and just like that i think they were just like three people for like the first year at least um and possibly 18 months so again like the timelines are probably like have a bit of margin of error in them but the point is like they they really hide slowly at the start and then ramped up when they started becoming these like um you know machines and rocket ships so like another devil's advocate position is that like sometimes the specialist can

save the company a lot of money so we actually encountered this in justin tv and twitch where um we hired someone from youtube who worked on scaling out their video instruct infrastructure and um that person his name is john was ridiculously helpful in saving us a ton of money like he taught us about free peering like he taught us everything i think that what's interesting though is that john wasn't the first person that worked on video you know kyle co-founder

vp engineering was the first person he built the video system and like we only brought on john when we had the problem of spending too much money on bandwidth and then he was the appropriate specialist to help us but like our first problem wasn't spending too much money our first problem is nobody cared to watch video on our product so saving money wasn't really the problem um any of these other deviled advocate positions you guys thinking about yeah the other broad thing though that's good to acknowledge is that

every ceo that ever gives a talk any successful ceo that ever gives a talk about what they do and their most important skill always says hiring and so yes you're going to as a founder you're going to have to learn how to hire you're going to have to build those muscles and get really good at it our job though at yc is is to say like that's not the most important muscle to be building right now so yes you will get good at it tuck that away in your brain but just not right now that's not the that's not the thing that's on fire to figure out

yeah i think if we move to the takeaway here what's so interesting is i find it so interesting how often yc's critiqued on these points to be completely honest like i think about what a normal vc someone who sits on a board what most of their experiences with is with post-product market fit companies whereas what most of our experience with is with pre-product market fit companies and so i can see why both founders hate our advice because nobody wants to be told their pre-product market fit and like vcs are

like ah like you guys know what you're doing like but what's so weird is that the smartest founders somehow kind of innately get this like the smartest founders i find like they don't want to sit in a room of 30 people when they're trying to figure out a really hard problem like that's never how they succeeded in their past like um and so it's interesting how like they somehow innately get like oh a smaller number of really smart people are probably going to figure this out way

better than a large number of mediocre people i also think i also feel like with the highest quality founders like they have just such high standards for who they want to work with that like part of the reason why they're like oh man it's like so challenging to find so i've been trying to hire like a re i've been trying to hire a first engineer for a year and like i can't like find anyone and it's not because there's literally no one with the word engineer on their resume that they can hire right it's just because they like it's like

it's like they have super high standards as you should it was funny we always had this saying in the company that every hire should increase the average iq of the company and like whenever you start thinking about new people that way you're like huh maybe we could do it ourselves we don't need that person i think another interesting thing is this this quality of and heart i think you said it the instinct to over hire like it seems like whenever we encounter hiring advice

like the instinct we're hire is always like i need more people i need more people i need more people and i think that like what those people never get is that over hiring leads to higher burn leads to lower runway like they never make those connections and whenever we see a company post yc that's running low on money it's almost always employee burn right it's almost always salary burn it's it's never some service they're using or some like it's always employees like i've never had a company say i'm

failing because we have so much money in the bank we hear all the time i'm failing because we're running out of money and it's because they hired too many people you know another thing i often see is like good quality founders like one of the main causes of burnout is also like people problems um and i said they realized that they just didn't it turns out that they thought they were gonna love managing and having a great team and it would feel awesome and it turned out to actually just drain all of their energy and so again like you got

to hire people and those that are inevitable but you can say like it's what you were saying before michael right like when you speak to like the the second time or the the super successful founders they're always like man like i remember the days when it was just like five of us in a room and like you know they were like it's just like it was like an energizing time and i find that sometimes the founders you over overhire like it can be a lot more draining and cause burnout than you'd imagine yeah i mean if we assume that there's a five

ten percent chance of any reasonable higher ending up being toxic and making it really unfun to work at the company you know who knows what the actual odds are but like those aren't great it's better to just not play that game i love it let's do that right five to ten percent chance of just like a horrible fit toxic culture and you only let go of 10 of the people you hire because of course you're an amazing hirer and you have a team of 25 people like like boom like you hate your life

that's almost like a equation for hating your life at any given time you probably have toxic people in your inbox every day so maybe the way to wrap this up is that if you're post-product market fit ignore everything we talked about go crazy hire away if your pre-product market fit double down on everything we've talked about hiring is probably not your savior if you're confused and you don't know whether your post or pre-product market fit don't hire to figure that out like

figure that out first and then make this decision on whether you should hire or not and and um perhaps you'll come to a better conclusion all right brad hearts great to see you guys thanks guys thanks [Music]

you
