This content was created by Tim Draper. This content was uploaded by Tim Draper. This is a YouTube talk titled "The Art of Recruiting | Garrett Smallwood, Wag VP of Product" (uploaded 2019-02-25T20:36:20Z). The excerpt is a monologue by Garrett Smallwood addressing startup founders about recruiting co-founders and early hires, equity allocation, realistic valuations (409A/NPV), competitive tech talent markets, and a growth-focused mindset exemplified by his favorite question "Why not?" The speaker offers practical advice on paying up for top talent, selling the vision, and diagnosing growth shortfalls.
Chapters
Is anybody recruiting yet for a co-founder, someone they want to work with, or someone like that? Super cool. So, like, this to me is like, you need to fill roles really quickly. Like, it's like the number one art form in the Valley is recruiting. Like, if you can work with exceptional people, you're gonna have exceptional outcomes 50% of the time. Like, B's hire B's, C's hire C's, but like, you really— if you fill really great roles quickly with really great people, you are on a whole other path for success. Like, this, to me, is incredible. If you're a phenomenal storyteller, so if you can do this really well, then you can recruit people really well, right? You can tell the story, you can get them excited, you can convince them to leave their high-paying Google job where they make $400,000 a year as a senior software engineer on the staff team, and convince them to go work with you on a company that now has a 10x chance of accomplishing its goals. Crazy, right? Pay up. I know you guys aren't really paying salaries yet, you're probably paying equity, but like, your equity's not worth anything. So pay for— pay it, right? Like, if someone asks for a lot of your company, realize that your company has zero value right now. It's not like you got like a $50 million valuation, someone's asking for 5%. Maybe they're worth it, I don't know. But like, you have— does anybody here have a valuation yet? Anybody here's had an outside valuation set, done an NPV, done a 409A? No one. So it's not bad, it's just great. But like, the way to think about it is that you don't have a company valuation yet. No one outside of your realm of your head has said, your company's worth something. It's worth $200 million. And you're like, cool, okay, it's worth $200 million. That's awesome. Now I can give equity away because I know what it's worth. Right now, it's just all made-up money. You're literally playing with Monopoly money. You'd be lucky to have people join for Monopoly money. You better sell the vision. You better sell the results. And you better pay up. So pay more equity. You have to compete in Silicon Valley. You have to compete. Pretty much anywhere there's amazing tech talent. To me, tech talent locations: LA, New York, Seattle, Silicon Valley, Israel, maybe London. Depends if you're in fintech. Anybody here fintech? Sick. Cool. Anybody here start a company in Israel? Man, it's the most amazing talent. So anyway, just pay up. Like, commit, commit equity. Like, just do it. Please do not, like, do not fight. Like, if someone's asking for 40% of your company, you should probably think about that. You better like love this person. But if someone's asking for a few points and they're like exceptional and they're willing to like quit their job and help you, just like do it. Um, my favorite question is, why not? That's like my favorite— that's my favorite question. Hey, why'd you start that company? Cool. Uh, how, how fast is it growing? 60%. Why not like 90%? Like, what are you not doing, right? Like, as an angel investor, that's like my favorite thing. Like, why, why, why not that? Why isn't your CAC lower? Oh, I don't know. Because you have to answer things you're not doing. Oh, I haven't tested this. Oh, I don't. I actually don't have the right person. I'm like, oh, that's a problem, right? So my favorite question: ask it to yourselves, ask it to your team, ask it to your parents. Mom, why not? Why don't you love me? I don't know, but like find out why. And so I think really what really matters is it forces a clear-cut discussion. The best founders I've ever worked for ever ask why not the most. They don't ask like they don't say like great job, that's awesome, and they're not like condescending. They're just like hey, why not? Like, help me understand. I don't get it. Because they just don't, right? I don't get it. Why not? Why aren't we growing 50% a month? And you're like, fuck, we should be growing 50% a month. And if you have a good answer, they'll like listen. They'll hear you. They're like, ah, okay, cool, man. You're doing everything you can. I get it. But like really great founders, they want to know why. They want to know why not.
