The performance gap between a top engineer and an average one is roughly 100-to-1, but you don't need to pay them 100 times more. A 3x salary premium for A-players over B-players delivers disproportionate returns. Hire the exceptional ones.
One of the greatest returns that you can make as an entrepreneur is paying someone who's exceptional exceptionally well. Steve Jobs says, if you go to New York City and you get an average taxicab driver versus the best taxicab driver, the dynamic range between average and the best is at most 2 to 1. But the best marketer and the worst marketer, it's not a 3x difference, it's probably a 100x difference. Same thing for the best engineer. Now that's the best and worst. What about good and top 0.1%? The difference between those guys is probably still like 25x. It's huge. The arbitrage is that you don't typically have to pay the best guy 25 5 times more than the good guy. You can just pay him 3 times more.
