By There’s a long-running meme in the tech & startup ecosystems that goes something like this: The top 10% in any given professional field are the only ones good enough to work at a startup. And even among these, the 90th-99th percentile only contribute 1/10th as much as the amazing, top-tier 1%. A great team can only be built by recruiting that 1%, often called the “10X” engineer/marketer/bizdev/designer/etc. You’re not recruiting professionals to work at a company, you’re recruiting superheros to build the next Justice League.
(via Lauren Montgomery)
You can see this bias illustrated in bold relief by a recent Hacker News thread:
…the point I’m making is that people who a) have enough development capability to ship software products and b) also know AdWords well enough to get entrusted with a company’s budget are as rare as hen’s teeth. Because many, many companies have 6 figure AdWords spends monthly and generate millions of dollars of revenue as a result of them, someone who is capable of applying their skills horizontally across a company’s AdWords operation (+) can be very, very useful to have around.
There’s approximately four people in the world that can do that. Two of them like their jobs, one just got funded, and the fourth one can charge whatever he darn pleases. (This is an exaggeration, but not much of one.)…
Reading that, I developed a sinking feeling that just as the hacker community discovered that maybe marketing is a valuable skill after all, one of the forum’s few respected marketers told us that talented ones are rare enough to be mythical. My perspective has been very different, not just in the field of marketing, but across every discipline.
It’s certainly true that top performers exist, but in my experience, they’re nothing like “10X” what a good performer can bring to the company. I’ve tried to illustrate below (note that you could substitute “marketer” for “engineer” or “salesperson” or any other individual contributor role):
I’m challenging some strong startup world lore here, but my experience tells me it’s accurate. An average contributor with a relatively strong culture fit to your company will likely produce just under half of what the most amazing contributor in that role could achieve. Believing that a single individual will actually have the same impact as a mixed team of 5-7 good and average folks is unrealistic and potentially dangerous.
I’ve hired in all four of these categories before, and I’d say honestly that the only one I wouldn’t hire again is the “poor” contributor” You might think I’m crazy for not wanting to only hire the cream of the crop, but there’s a litany of reasons for this:
- The exceptional, 10X contributors often produce phenomenal results, but are perceived as being exceptionally desirable. Retaining them is a huge challenge and coming to rely on them, only to lose them, is an even bigger one.
- Compensation can become a serious issue. In the US, equal pay laws are very strict about having those with equivalent responsibilities earn equivalent salaries. Although startups are rarely targeted, having dramatically different salaries for 2+ employees doing the same work can result in nasty audits and require a lot of paperwork to back up the reasoning.
- Beyond legal issues, it’s very wise to structure your compensation as though everyone in the company were going to find out what everyone else makes (trust me, it happens, no matter how much you think/wish it didn’t)
- Those in the “average” and “good” buckets on the chart will often move up with solid mentorship and training. Unfortunately, I’ve seen many times that individual contributors in the “10X” group get frustrated when they feel held back by their managers/peers. That’s a very tough problem to work on and can create serious team strife.
- In the chart, I assumed everyone had the same degree of culture-match, and we’re just talking about skills/smarts/productivity – in real life, this is never the case. There are the super-rare, very humble “10X” performers (like the “pretty girl/handsome guy who doesn’t know s/he’s pretty”), but far more common are the divas who can deliver great results, but also cause great problems.
This last point is particularly important. As teams grow from <5 to 10+, the quantity and quality of work put out by a team member cannot be the sole consideration. The ability to work in a group, bring positivity to a team environment, and align on core values outweighs raw productivity, skill, or smarts. Many growing startups fail at this point, and I’m convinced that once the magical “product/market fit” is achieved, culture’s the biggest threat to survival.
“10X” performers may indeed exist, but I’ve never seen or met one who realistically lives up to that moniker. I have, however, seen plenty of managers, teams, and companies suffer needlessly because they overvalued output and skill, while undervaluing teamwork and cultural cohesion.
The last point I’ll make is in regards to hiring. If you are seeking your technical/marketing co-founder, you can and should afford to be picky. But once you’re past hire #3 or 4, make sure you don’t have an unrealistic, dangerous belief that a single individual can (or should) build 10X as much as the average of the last 20 engineers you worked with (or develop a “growth hack” that attracts 10X the customers of what the last 20 marketers you worked with could achieve). That person doesn’t exist, and false expectations will lead you down a perilous path.
Update: I was pointed to Jason Calacanis’ post on this topic which presents the myth that I’m arguing against here in great detail. Hat tip to Ric Dragon.