Episode 12: Toptal’s Taso Du Val on Finding the Top Distributed Talent

Howdy, my name is Matt Mullenweg, and I run a company called Automattic with over 950 employees distributed across 70 countries. We're growing really quickly, so I spend a lot of time thinking about how the company is going to find the very best people. Since our team leads might never meet a FarFund applicant face-to-face until well after they've been hired, our hiring process has to be comprehensive, and sometimes it can be a little bit of a slow and long process. But what if you needed to hire top talent quickly? What if you need a world-class project manager on a short-term basis and you don't have time to rigorously vet a bunch of applicants or set them up on a payroll platform? Well, you might turn to TopDown, the freelance marketplace that aims to provide companies with a fully vetted pool of talent that represents the top 3% of their applicants. Toptal's CEO, Tasso DuVall, joins me today to talk about how he built his company, which happens to be distributed all over the world, about how current approaches to recruitment are undergoing a major sea change. Let's get started. All right, we're here today on the latest episode of Distributed with Matt Mullenweg, and we have the CEO and founder of Toptal, Tasso Duvall. Welcome very much.

Thank you, Matt, for having me.

Just for listeners who might not know what Toptal— you or Toptal, do you mind— your journey to Toptal, and then you can introduce what Toptal is.

I was doing some consulting work and working with some companies doing contract software development. And at the time, I was mentioning to them that they should use some other resources to be able to get software developers. I mentioned the freelance marketplaces, the internet. And so many times they said to me, those are terrible places. You can never find good resources there. Meanwhile, I was having a great experience finding great resources there. And so I said, hmm, this is fascinating. I keep hearing time and time again that people are having terrible experiences finding top talent, yet I'm having a very consistent experience finding top talent. What is the difference? And the difference really came down to my domain expertise, being able to identify and screen that top Talent. And that was really the genesis for what TopTal is today.

And your background, like myself, is engineering.

Precisely.

And in fact, we met at like, was it a MySQL open source conference?

Yes.

In 14 years ago or something.

2007, 2008, after the first MySQL camp at Google. So that was a really long time ago.

So TopTal is, if we were to summarize it, so I can go and say, hey, I want XYZ. It's— you cover a few areas now.

Developers, designers, project managers, product managers, and finance experts. So we just launched recently project managers and product managers, and that has been phenomenally successful. So I would say the demand and the experience that people are having with product and project managers far surpassed what we thought it would by a long shot. And so it's been really cool to see a management type of role people take place remotely and be so successful. With developers, they have a long history of working remotely, even designers. And that's in part because individual contributors can contribute more rigorously to a project. You have Git in the case of software development where you can commit code. In the design world, now lots of tools are evolving to be something similar.

InVision, Figma.

Precisely. And so if you look at it from that perspective, it's very conducive to the remote working process. When it comes to management, it's still a little bit new. Of course, not for us internally and for many fully distributed companies, but for outside consumers, it's a little bit more new. They've been very receptive to it and it's worked really, really well, more, more so than we anticipated.

So if I've got a job to be done, I can go to Toptal and I hire someone and Can I hire someone to come into an office, or is it all through the platform?

Well, we do some onsite work. Generally what we do is 95% remote. And so when a client or someone wants someone onsite for a certain period of time, we allow for that. However, we're not generally the conduit for facilitating onsite work.

And the advantage of going through y'all versus just finding freelancers is you ensure the quality of the talent and you like have tools to kind of mediate the experience, right? Like, I don't need to worry about how they're getting paid. I can just pay you and you take care of it all.

Precisely. And I would say the biggest value add is the time it takes to acquire the talent and the energy it takes to screen the talent. We've done all that for you. And so no kidding, this is a real stat. Our Send-to-hire ratio is about 1 to 1.5. For every 1.5 quote-unquote candidates that we send you, you will hire one of them.

Oh, wow.

And so we aren't like a recruiting shop. We aren't like a typical staffing company whereby we send you 10 resumes and you say, okay, I want to screen and talk to all these folks. We generally send you one. And the reason that we're able to do that is because we actually have a lot of process and domain expertise internally to be able to vet those, let's say, talents, whether it's in finance or software development, to ensure that that person, before we send them to you, is the perfect match. And so it's about getting information from you upfront in a more modern way than a staffing or recruitment company generally does it. And then facilitating the matching process through software and processes that are reinforced through software.

Let's do some level setting around the company. I know you're private.

Yeah.

To whatever extent you can talk publicly about like how many people is it, how many people are on the platform, if you can talk about revenue at all, just to give the listeners an idea.

In terms of a core team, we are approximately 500 full-time internal folks. And so those folks work on software development for our platform, for the website, for different technologies that help facilitate the screening, matching processes, so on and so forth. And then we have other folks who work in operations, marketing, so on and so forth. So that team is about 500, let's say, in terms of active engagements, talents that are contracted to clients globally. It's in the several thousands. We don't— highlight that number publicly, but combined, that actually makes us the largest fully distributed workforce in the world. If we were to be characterized as an internal team solely, it would be in the top 5. I know that you guys are, what, 700 now? 800?

900. Oh my goodness. Yeah, 500 is definitely one of the bigger ones. The good news is it's not the biggest anymore. Elastic and Envision, I think, are both over 1,000 now. No. GitLab, I think they've said they're going to try to get to 1,000 by the next year or something like that. I forget what they said publicly. Were you distributed from the start or?

Yeah, we were distributed from the start. I started the company on a handshake and then contracting out a software developer to a company almost without a website. And so that is really how the company started. And I was in Palo Alto at the time. The individual who was contracted out, actually we pretty much had two, was in Argentina and South Africa. And I was actually going to an office that my roommate's family's friend allowed me to have as a way to go to work every day. And it was very kind of that person. However, the point was rather moot. I was going into an office but not seeing anyone or interacting with anyone except myself. And so it almost was this zombie-like walk to the office every morning where I'm going to to the office because I go to work, but I don't see anyone who I work with. And so I actually started waking up and just working on my computer at home. And then I said to myself, well, why am I even working from home? I should just go somewhere else because I've never really traveled. And so I ended up going to Europe and all sorts of different places. And that's what took me on my remote journey, so to speak.

So like Fotolog and Slide, places you were before, Were— did those have distributed teams or they're mostly co-located?

Those were in-office companies. And so I went into the office pretty much every day. The remote working nature was there, but it was very light.

So 500 people now. I know a couple of years ago you said it was over $100 million in revenue. So I imagine it's beyond that.

Yeah. And this year we are likely to be, let's say, in the 9 figures in net revenue. Which is a really big accomplishment for the company.

Congratulations.

Thank you.

That's huge.

Yes.

And again, I think it's good to set this up because not that many know about— people know about Toptal yet.

Well said.

After this podcast, at least dozens more will.

A few dozen. A few dozen.

One of the worries people have about building distributed companies, distributed work, is this hiring aspect. So how does that work for y'all? Like, how do people find you? How do you screen them? What can you tell us about that process?

Well, a lot of people find us through our brand, so freelancers find us in different countries. On the client side, I would say it's similar. Now, of course, we do marketing. However, we do often have referrals, and word of mouth is a strong way that we get a fair amount of business. So those are on both sides really how people know about us, generally speaking.

How many applications do you all get?

Oh my gosh. So here's an interesting stat, actually. So at this point in time, I believe, and I'd have to double-check this, it's over a million a year.

Wow.

And to put that in perspective, Google as a company gets approximately 1.2 million applications a year.

Wow.

As a company. And so if you look at it from that perspective, wow. Yeah, it's actually a pretty sizable volume. It is a little bit apples and oranges because all we do is screen talent. That's, that's it.

But it probably speaks to how much global talent there is that's looking for remote opportunities, which is one of the big advantages of being a distributed company.

It does. And that is kind of the miracle of it, I suppose. While we are doing, let's say, a million applications a year, I think that absolutely pales in comparison to what's out there and what we could do if we put even more effort behind it. My assertion, if we went pedal to the metal, we started doing a lot more advertising, we actually worked to amplify it, let's say, I think we could get easily 4 to 5 million applications a year globally.

Wow. I can't imagine that applicant tracking system.

Well, we built our own, right? Because all of the other ones were certainly not sufficient. And so if you think about it from that perspective, that not only highlights the amount of people that are talented all over the world, but it also highlights the amount of people that want to work remotely that are not today. And so the far majority of our applications want to work remotely, meaning they're not working remotely today, but they are applying because they see it as a huge life-changing opportunity for them. And so It's really interesting to see the dichotomy between what is today versus what we're seeing people want tomorrow to look like.

So I'm an engineer somewhere. I want more flexibility. I go on TopTal.

Yeah.

Let's say my resume makes it through. Like, how do you determine whether I'm top 2, 3% or not?

Well, let's say it's a subjective process. And so I can't state it's perfect, but we err on the side of conservatism so that we have a, let's say, near-guaranteed great experience for our clients in a similar sense that McKinsey does, or that some other, let's say, top-tier firms that offer top talent, so to speak. The real high-level details are that you go through what is in effect an interview process, and like you're going to be hired, like you're going to be hired at a Google or a McKinsey or a company like this, depending on the let's say, vertical that we're—

How important is their, their kind of technical skills versus their people or soft skills?

They're both incredibly important to us. And so we have looked at, for example, how McKinsey screens people, and we've actually taken some of those processes, I would say, and refined them and introduced them into our screening processes. Same with Google, same with some other companies that are keen on hiring good cultural fits. Now, I wouldn't say in terms of our network there's a unified culture, but there are certainly elements that unify people in terms of soft skills. They have high integrity, they have punctuality. No kidding. Something we screen rigorously for. They have good judgment, which we're able to screen for in different areas. So if you think about elements like that, you can actually screen well beyond hard skills. Do you know how to write an algorithm in constant time versus quadratic time or something of the nature like this, which is still a very important skill to have. But I would actually say the soft skills are, especially when working remotely, more important.

So even if I'm a brilliant engineer, I show up late to your, your interview, it's going to be a mark against me and you might not hire me if I don't have those good soft skills.

Oh, 100%. The punctuality component is very, very real. So if you show up just a little late, you will literally be rejected automatically.

Wow.

And people get pissed on this point because they're like, hey, you know, I was on another call. I went through the— hey, look, that's our integrity on the line. If McKinsey and the best companies have survived by upping the bar in terms of integrity, we're going to do the same.

I was going to ask how you test for integrity, and punctuality is an interesting window into that.

Yes.

What are some other things that you feel like are really important to the Toptal culture?

Well, one element that I can speak to is the character of the person. And so, as many people know, great engineers can be very abrasive. And I would say there was a point in my life, if not still in many cases, I can be abrasive. But if you go into an interview process and you understand it's professional, you have to show your best self.

Mm-hmm.

And if you are abrasive when you're showing your best self, it doesn't go uphill from there, right? It kind of goes downhill. And so you have to be very, let's say, judgmental on those factors, because if they are introduced to a client that then experiences Toptal as a group of abrasive but brilliant people, that's not going to resonate with them very well. So you have to take elements like that that are a little bit more, let's say, subjective, a little bit more nuanced, and factor them into the equation because it's not just about can you write algorithms or not.

Now, with all distributed workforces like your own, for a lot of people, English is not the first language.

Correct.

So are there resources you point to or anything, or is that something people kind of need to learn on their own?

Well, internally at Toptal, we have provided English lessons before. We don't anymore, but it's generally something both in our core and externally in our network that we expect people to know coming into Toptal, whether that's through our network or through the core team.

Yeah. I actually was pitching this to Austin from Lambda School. Part of what they're doing is taking people who don't know how to code, teaching them to code. I think there's a huge opportunity in that there are probably millions of great engineers who are great coders and don't know English well.

I would say that's the case.

And so versus teaching someone how to code, teaching me— I don't know which is harder, to be honest. They're both learning a language, just artificial versus natural language.

We have thought of Putting people through different reskilling programs. However, I've never thought about it of, well, if you already know blockchain but you speak Chinese, can we just teach you English and will you be able to work with people internationally?

How do you decide who you're hiring goes to the Toptal internal team versus clients?

It's very separated. And it's very separated so that we have clear client expectations and KPIs, and we have clear internal KPIs and processes. You'd think we would mix them and that we would leverage the incredible technology that we've built for our network, but it wasn't so easy to compartmentalize.

And so, so Toptal itself is not a client on Toptal.

We are in some instances, but we are not using it to the extent that people would think we would use it.

And when you say KPIs, like, what are the differences?

Well, we're looking at time to hire, time to fill, so on and so forth. So we'd have to disable all of these components in regards to how we do our screening. We have capacity metrics and triggers that exist in there to help manage the pipelines. It's a really big system, rightfully so, for Toptal, the network. Internally, it's a little bit difficult to decouple from the purpose that is already being constructed to serve.

Let's zoom into the virtual walls of Toptal for a bit. Sure, sure. Tell me a bit about how the company's set up. Like, who are your direct reports? How's your hierarchy? What's your structure? How should people think about Toptal?

Let's kick it off with how the company operates. I think that's a good window into how we work. And gives you some good insights into how structured we are, how we set goals, how we actually work day to day. We have an OKR method that we use, like many companies, to set objectives quarterly, annually, so on and so forth. And we're very rigorous about it. We're very methodical about it.

So you have— as CEO, you have some OKRs? I do. Yeah. Who's on your exec team? How do you meet?

Sure. So our executive team is, I believe, pretty traditional. It depends if you're looking at a more traditional company or an internet company. We have a fair amount more executives that report directly to me.

So how does that work? Is it flat at the top?

I have about 12 direct reports. And from what I've seen via conversations and from what other companies are doing, that tends to be on the larger side of things. You know, I have seen companies with 20 and we, I think we even had 20 at one point not realizing how bloated that was. And so we—

So what reports directly into you? Is there like a CTO, HR?

CTO, CAO. We have a chief administrative officer. That person is really working to refine all the processes, data analytics, business insights, a VP of people. VP of brand marketing, VP of growth marketing, VP of design, a VP of comms, a VP of finance, and probably two others that I'm missing.

And how do you all get together? Like, where are those people located?

Oh, well, our VP of finance is in Pennsylvania.

Mm-hmm.

Our general counsel's in Massachusetts. Our VP of product is in Greece.

So these people are all over the world.

They are all over the world.

And do you meet weekly, every other week?

We meet biweekly. So every 2 weeks we have meetings and that is the cadence at which we meet. We also have an all-hands that's monthly. And so that gives you insight into how often our all-hands occur with our company.

Yeah, we do kind of a similar thing where once a month we do, we call it a town hall and Typically the questions come in via text, but everyone's on video now. Yeah. So we can all be on Zoom. You can get hundreds of people on Zoom pretty easy now. And it's— so sometimes they come in real time. I really like it. I also enjoy not knowing what's coming next. You know, we don't pre-moderate or pre-screen the questions or anything. So yeah, it's just like whatever pops up at the time. Everyone sees the question being asked. Yeah. Not like I can skip them. I don't like it. And sometimes the conversations are difficult. Sometimes the answer is, I don't know.

Right.

Or maybe we made a mistake or things like that.

Right. We used to do it via text. Now we've just chosen to do it in a freeform style so that it's a little bit more engaging. We also had a method by which you could do it anonymously, which we've totally abolished across all of Top Towel. We don't have anyone be anonymous. And while I understand that there may be ramifications of people not being as forthcoming as they may, it's really our duty to ensure that we create an environment where they can be.

When did you do that and why?

So we did that because you're actually taking an action that encourages hiding, and we don't believe in hiding anything. We believe in radical transparency, radical truth, bringing difficult conversations and difficult topics to the forefront. And by taking that action, you're saying we actually believe in hiding something. Well, I don't believe in that. And I would say our executive team doesn't believe in that. And so we have abolished it.

When did you abolish it?

About 7, 8 months ago.

Oh, so pretty recent. Yeah. Yep. Okay. I've got some quick ones as we wrap up. Tell me quickly, what's your ideal workspace? Like, where are you productive?

I am productive sitting at a desk I am familiar with.

What I mean is— Do you have a big monitor? Like, what's, what's your kind of—

So I don't have a very big monitor. I have, let's say, a regular-sized monitor, but I'm just familiar with the setting. It's something about the familiar setting that allows me to be focused. So if I'm in a hotel room, my first impulse, I suppose, is to get out of the hotel room, go to a meeting, go connect with someone because you're traveling. It's not to sit down and focus and go through Excel and dive deep into the nitty-gritty details of whatever it might be, whether they're financial reports, or they are reports about whatever it might be, and scrutinize them. Likewise, when I'm on a plane, I'm always reading. It's just my natural state, so to speak, on a plane. And so whenever I'm at a desk that I'm familiar with, with my computer that I'm familiar with, I can do work much more productively.

And how often would you say you're home versus on the road or traveling?

I'd say it's 80/20 now. So I'm more so settled working than I am traveling.

It's actually a good thing to note that a lot of people think remote or distributed means you're on the road all the time.

Oh no.

And actually, I think the vast majority of people at Automattic, at least, they're in the same place.

Yeah.

95% of the time.

100%.

How about meetups? So when does your team meet up in person, if ever?

Yeah, our team, our executive team probably meets up on average every 18 months. And so not so much, but I don't see it as a requirement. When we meet up, it's generally when there are some executive changes and we are unfamiliar with one another. And so—

And are there other meetups within the company? Like—

Yeah, actually, as we're speaking right now, there's a function that's having a meetup in Miami and they are doing that.

So like all the designers, all the engineers might get together or something like that.

Yeah, precisely. It's a little bit too large for the engineering team being about 200 people to be able to do that. But yeah, on a functional basis, especially with some of the smaller functions, they'll be doing that.

Do you have any must-have equipment that makes your ideal work?

A laptop and a phone.

That's it? Nice. What are some off-the-shelf tools you use?

Slack, Zoom. In terms of product management, we use Jira. What I find really interesting is Confluence. I find Confluence very interesting.

Is there like an internal blogging thing, right?

It's actually more like a Wikipedia slash—

Yeah, like document management plus some internal, like what I would call blogging, but you can use it instead of email, right?

Right. It's still a little bit cumbersome, still a little bit big in some instances, but it is a really good tool.

I know Atlassian runs on it religiously. Like, it's really— they say it's their secret weapon. It's the thing that makes everything work.

We've started to go down that path actually for knowledge management., and for documenting processes and for, let's say, other elements that are important for the company to be unified on.

And so those are some off-the-shelf ones. Any other that come to mind? Google Apps, Office 365?

Like, yeah, Google Apps. Yeah, I would highly recommend it.

They did a good job there. You mentioned Zoom, Slack, phone. Do you make phone calls? Do you talk to people? Like, how much are you on text versus video versus audio?

I would say I have moved to mostly video.

Hmm.

When I'm mobile, I don't do video generally because my battery is dying, but generally I'm on audio when I am traveling and I'm on video when I am situated.

Last question. Let's fast forward 20 years from now. What percentage of jobs do you think will be distributed or remote?

I believe that at least 50% of all technology jobs will be distributed.

Hmm. That's wild because it's probably— I don't know, what is it today? Probably under 10%.

It's about under 10%, but it is growing so fast and there is such a strong movement across the world for this. You have all of these strange companies, Toptal, Automatic, Envision. GitLab, so on and so forth.

We're not that strange, but I get what you say. Right now it's the exception. In the future, I think it's the rule.

Exactly. And they're looking at us saying, okay, yeah, they create a billion-dollar company. It's a billion-dollar company. We're a $200 billion company. This is hogwash, right? Well, more and more people are doing it. More and more people are picking up on the fact that This is the future. And that is becoming more and more compelling to the talent. So more talent are keen on working for those companies, the TopTals and the Automatics of the world. And that's just going to grow. And so what's going to happen is all these small companies where they're working remotely, well, actually, that's going to be the majority of the talent in the world. And when these companies can't recruit them, anymore. And there are millions of people working remotely that are skilled and they're saying, well, we want you to work in our office. They're going to say, you know what, I don't work for companies like yours because you're the old stodgy company. You're the company that doesn't understand the future and opportunity and innovation. And that's when it's going to come and force them to be remote. And so you're going to see that happen because the workforce of talented people is going to be more keen on remote work than not. And people don't see that now. But once they're unable to recruit at all from anywhere, in effect, that's when the change is actually going to happen.

Thank you again, Tasso, and I hope to continue this conversation in the future.

Thank you.

That was Tasso de Waal. And very glad that he was able to join and share his experiences. On the next episode of The Distributed Podcast, I'll be speaking to Lydia X. Z. Brown. Lydia is a lot of things: a writer, advocate, organizer, strategist, educator, speaker, and attorney. I'm interested in talking with Lydia about how distributed work can make work more accessible to people with all kinds of disabilities and learning more about what inclusion means in a distributed context.

Thanks.

Thank you so much for joining us, and see you next time.