Recently, I read Peter Thiel’s new book on startups called Zero to One: Notes on Startups, or How to Build the Future. It’s a handy little book filled with powerful shorthand business advice, philosophies, success indicators, failure indicators, as well as some entertaining anecdotes from the PayPal founder and venture capitalist who has built multiple breakthrough companies.
In the chapter Mechanics in Mafia, under the section title Recruiting Conspirators Thiel claims that “Talented people don’t need to work for you; they have plenty of options” (Thiel, 120). He gives the example of an engineer who could work for your company or simply choose Google where he would likely gain more money and prestige. If you’re a new startup, your first employees have plenty of incentive to join. They have more power to make meaningful decisions about the company’s direction and are typically entitled to more equity than later on. So we’re not talking about those ones – we’re talking about the ones that come later.
For startups like this to be successful, Thiel suggests they ask themselves this vital question:
“Why should the 20th employee join your company?”(Thiel, 120)
While Thiel’s book was written mostly with startups in mind, I think his question applies whether you’re hiring your 20th or your 200th employee. Here are some bad answers to the vital question, in Thiel’s own words:
- “Your stock options will be worth more here than elsewhere”
- “You’ll get to work with the smartest people in the world”
- “You can help solve the world’s most challenging problems”
The problem is that these answers are cliche. Everybody says this about their company and at this point it’s all just fluff and conversation filler. These phrases have been so overused that they are now meaningless to today’s talent. Talented workers expect to work on challenging problems and assume that they will be working with other smart people. Company stock is a standard offering. These benefits are valuable and you shouldn’t ditch them, but you need to come up with a better answer for why someone talented should join your company that differentiates you from other options.
In the book, Thiel was very clear on how your answer to this question should be special. “The only good answers are specific to your company so you won’t find them in this book” (Thiel, 121). So I can’t literally write your answer because only you would know it. Your good answer is dependent on the unique characteristics of your company. Regardless, here is a basic answer guide in Thiel’s words:
- “answers about your mission”
- “answers about your team”
- You will be “creating a new digital currency to replace the U.S. Dollar”
That last one only applies if you are hiring for PayPal and this is 15 years ago, but I put it there to give an example of the type of answer that attracts the right talent. By communicating his unique goals clearly, Thiel knew that anybody who was excited about a mission to replace the U.S. Dollar would be the right fit for PayPal. This vital insight helped bring in people that built the company up to a value estimated today around $40 Billion with a potential worth of $100 Billion if it were broken off eBay, it’s current owner.
It’s also worth noting that the talent Thiel brought in weren’t coming for the perks. Free beer, basketball tickets, a trip to North Korea, and pet daycare aren’t the right answers to why someone should join your mission.
The biggest challenge in answering Thiel’s question won’t be coming up with the reason your mission is unique, it will be actually saying it. Since nobody else has your unique mission, it might feel strange to say it, and you don’t want people to think you’re crazy. You are probably already stating your mission in some tangential and ‘safe’ way. What you need to do is open up more to the vision that drove the company to exist in the first place. Thiel would have gotten an entirely different talent pool if his answer to why someone should join PayPal was “to build an online payment processor” rather than “to create a new digital currency to replace the U.S. Dollar”. The former answer is far less attractive to ambitious talent. In order to capture ambitious talent, you must state an ambitious mission.