‍I. Session Takeaways

Date: September 2024

Executive Hiring: Building your Executive Team

Like your product, your leadership team will evolve as you scale.

• The structure and makeup of your executive team will change as you scale and your business has new needs
• Increasingly, this will mean hiring external executives to scale functions where no internal leader is scaling
• No single structure - best heuristic is to optimize for your strengths and complement yourself with leaders 
• Today, Pedro and Saji have 7 and 9 direct reports and have gone through 3+ iterations of their executive team

The archetype of successful executives

• Pedro looks for candidates that have seen scale at a successful company where they were the number 2. These people often want to prove themselves, have a chip of their shoulder, and want to graduate to becoming the #1
• Four of Brex’s first hired executives fit this archetype and were successful:
  • Michael Tannenbaum (CFO): VP Finance and then CRO at SoFi during high-growth periods
  • Vince Cogan (GC): Stripe’s first General Counsel
  • Sam Blond (CRO): Scaled Zenefits to several hundred million dollars of ARR
  • Cosmin Nicolaescu: Helped scale Stripe’s Global Engineering Teams 

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Pedro on his archetype for early executives

"The archetype was basically someone that has been in the company that had gone through scale and wasn't necessarily in charge or but was very close to number one. So basically a number two that wasn't in charge. And one thing that I think early on we try to learn is whether the company is successful despite them or because of them.”

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• Saji looked for execs who had been in roles similar to where the company aimed to be in 18 months, rather than just having experience in big companies or previous high-ranking roles. He finds that if you look too far ahead, execs tend to fail because they apply big company solutions to smaller companies

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Saji on his archetype for early executives

“I don't think anyone had been like the number one at some super successful startup. I found a lot of people who had been number two, and sort of seen it before at the stage I was trying to get to. So really optimizing for where we need to be in 18 months. And has the person actually been on that part of the journey? Oddly enough, even though I knew that when we were 5 million of ARR on my first exec team, I totally fucked that up for like, my v2 exec team, I got some people were like, way too big company,”

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Executive hiring is hard, expensive, and time consuming, but the payoff can be huge

• Saji and Pedro spend upwards of 20-30 hours with candidates and their success rate is still 50/50
• This is generally because executives are good at interviewing and it is hard to parse out who is truly exceptional
• That said, the time commitment is worth it. Successful executives create far more value than the equity sold

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Pedro on the impact of successful executives

“If you're giving 1% of your company to a very senior hire, which  may make sense. If it works, the person will make the company way more valuable than 1%. If it doesn't work, it's a huge waste of time.”

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Saji on the grind of executive hiring

“While you're building your management team, you should be spending 50% of your time recruiting. It's a lot. You tell the same story over and over and over again. It's very exhausting, but it's just a grind. But you should do it.

Executive Hiring: Identifying Candidates

Build an archetype for what you want in the role before you start interviewing candidates

• Knowing what you want is key to making a successful hire. Both Pedro and Saji spend time upfront coming up with an archetype for the role to better target candidates but also to calibrate on what they are looking for
• Saji asks his board members to introduce him to 3-5 leaders in a relevant function who are about 18 months ahead in their careers. He meets with these leaders for informational interviews to gain a deep understanding of the role and what the interview process should look like.

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‍Saji on building his archetype

“Go ask your board to find like three of the best people in their portfolio for you to just have an informational conversation with. And you should go use them to build the archetype of what you're looking for. You should ask them things like, what they do day to day, how their founding team interviewed them, and what they look for when they joined the company. Ask them for advice on your interview process. Maybe if you get them really hooked and liking you, you can get them to sort of help out and interview the candidate for you. But I usually try to build what I'm looking for by meeting some people from a trusted source known to be good.”

• In an ideal world, you have candidates that are great at everything. The reality is that this is not true and there are very clear archetypes of candidates. Pedro starts searches by writing a role scorecard where he outlines his target archetype.
  • For Brex’s recent CPO search, Pedro wanted a candidate with a GM background. This implicitly meant he was optimizing for business acumen instead of someone who is an amazing product crafter or someone that sweats the details.  
  • To come up with these archetypes, Pedro follows a similar process to Saji where he meets leaders

‍Pedro on scorecards and archetypes

“The reality is when you go meet the people and the human beings that can actually fulfill the role, what I found is that there are very clear archetypes, because, like, people come through these careers in obvious tracks. So you may have someone that was like a technical person that went into product management. You may have someone that was like a business background that went into product you may have someone that's a GM that happens to run a product function. The first thing that we try to do is just meeting people that we believe are the best in the industry. First thing that I learned was I don't want someone that came from a traditional product background. I want someone that has very strong business sense. So basically, the archetype for the search was a GM with a Product background. And that, like, really, sort of changes the universe of people that you're talking to. You are also somewhat implicitly describing the trade-offs that you're okay with in the search. [With the GM archetype] I am optimizing for business acumen, you know, instead of, for example, with someone that's going to be an amazing product crafter.”

• Coming up with an archetype and a clear understanding of the role clarifies tradeoffs and forces you to hire for strengths vs. lack of weaknesses. For Saji, some of his worst hires have been candidates that have no clear weaknesses, but also no clear strengths

 
‍Saji on hiring for strengths

“Hire for a clear strength, not for a lack of weakness, where they're good at everything. Some of my worst hires, [have been] when I'm like this feels like a head of HR that 100% checks all the boxes, versus they are exceptional at one thing.”

Executive Hiring: Building Pipeline

Leverage Search Firms to identify candidates. Search firms have candidate access you won’t have.

• A recruiter's job is to get people to talk to you that you can’t otherwise talk to, not to make the ultimate decision
• Beyond sourcing, the best recruiters also help read the candidates and help candidates navigate processes

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Saji on the role of executive recruiters

"The truth is you make the decisions, the executive recruiter is just there to get people to talk to you who you can't talk to otherwise. Like, it's kind of like an intermediary agent sort of thing. Because, executives who have good jobs aren't going to raise their hand and say I'm looking for a job. They're concerned about trust. They want things to be vetted. They don't have time as they've got busy jobs already. They don't have time to vet this stuff out.”

Picking the right recruiter for your company and role is important – Not all are created equal

• Pedro and Saji optimized for chemistry and storytelling above specialization and/or firm brand
• In their experience, a great recruiter can build a high quality pipeline across most roles. The most important driver of success will be their ability to tell your story and whether or not you have a strong relationship where you can be open and honest with one another (e.g., share that X might not be a good fit for Y reasons)

Case Study: How Saji and Pedro picked their recruiters?

• Saji has worked with a single recruiter (Julie Wrapp) for all his roles regardless of specialization
• Benchling was a difficult business to explain and he found that most executive recruiters did not do a good job
• Therefore, Saji decided to work with one partner and spent time with them perfecting their storytelling
• Over time, this compounded because Julie became really good at selling Benchling and also Saji
• In addition to storytelling, Saji optimized for chemistry with the partner. These hires are so critical and you spend so much time with your recruiting partner that you need to want to work with them every day

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Saji on the role of executive recruiters

"I really optimized for someone who could tell our story. That was the problem I was trying to solve and then someone who over time got really good at selling like me as well, because she they then knew me so well that it also helped get these executives in the door who we had no business talking to. [It’s also all about] chemistry you have with that partner. Like, do you want to pick up the phone and talk to them? Do you want to give them feedback that these two candidates sucked and you want something else? There was a period of my life where my top dialed people were my mother and my executive recruiter.”

• Like Saji, Pedro has worked with a single recruiter (Paul Daversa) for all his roles regardless of specialization
• Pedro did this for similar reasons to Saji – to maximize storytelling ability and for chemistry with the partner
• For better or worse, there are only so many candidates in the world. By going deep with one person, you also position yourself to get first looks at many of the best executive candidates.

Best Practices for Working with Search Firms

1. Calibrate upfront on candidates

• Spend time upfront with your executive recruiter to align on candidate profiles
• Ideally, meet scaled executives and build your archetype. Share this with your executive recruiter
• In the early days, Saji spent a few hours reviewing lists with his recruiter to calibrate on profiles
• Today, he just sends his recruiter a list of 5 people that fit his archetype and they build off that 

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Saji on calibrating with recruiters

“In the early days of search, we calibrate before we even talk to anyone. We're just looking at LinkedIn together. I'm saying what I think I think I like, what I don't like. They're showing me stuff. Nowadays, I'll just go into the search and say these are the five people I want to try to get to, and they'll pattern match off those five people and get more. LinkedIn makes the world very visible, and you can go find a lot of interesting people.”

2. Work on storytelling together

• Your recruiter needs to be able to tell your story well to generate high quality candidates
• Naturally, they will not be as clear as you are, so you need to work with them to tell your story 
• To do this, Pedro listened in on 2-3 candidate calls with Paul Daversa in the early days of their relationship
• He then collaborated with Paul to craft a narrative that would work with executives

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Pedro on workshopping storytelling with recruiters

"Early on with Paul, I was let me listen in to like, two or three candidate pitches. People have heard of us, but they didn't really know the vision and what we're trying to do at a larger scale. Making sure the recruiter knows these are the three things that would convince a candidate that this is a worthy call to take. I think it is useful [to spend time together on refining the pitch].”

3. Shift the incentives from filling the role to hire success

• Sometimes incentives drive executive recruiters to optimize for filling the role versus candidate success
• One simple tactic is to loop your investors into 1) the weekly meeting or 2) the search for the role
• All of a sudden, the recruiter cares about the role success much more because they want the investor to be a net promoter with other companies

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Saji on changing incentives

“I don't do this anymore, but I would understand do it again if I was your stage, which is like, once you have your executive recruiter, like, invite one of your board members to weekly call, I think a good executive recruiter wants to, like, really knock you out and park so that your investors are impressed that they start telling all the other portfolio companies to use, use you. So I think it's a good, good trick.”

4. Ask them to bring in their specialist partners for certain roles

• Saji worked with one recruiter for every role. That recruiter is part of a broader organization
• For roles with some specialization (CFO), he asked his recruiter to bring in a specialist for the search

Do not bring executive recruiting in-house. The best recruiters run their own firms

• Internal recruiters 1) do not have the network and 2) can’t act as neutral intermediaries with candidates
• Both Saji and Pedro strongly advised against bringing executive recruiting in house for these reasons

Pedro on bringing recruiting in-house

“We have it in-house mostly for VP level roles, but for all exec levels, we never ran one of these searches internally. I'm glad we didn’ because they don't have the network and they don't have the access. I also think an exec recruiter has this weird ability, because they sit outside of your company, to serve as career coaches. The candidate knows they're working for you, but the candidate listens to them on things that are like, Hey, what should I be doing with my life, and what should we do in my career?”

Executive Hiring: Assessing Candidates

You are the primary assessor of candidates – not your search firm or other executives 

• While executives should meet candidates for new roles, they rarely have the experience to assess appropriately. Instead, use these interviews for cultural fit. You will be the primary assessor of candidates

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Saji on executive hiring

I don't know how many heads of sales my head of engineering has hired. As you get more execs, it is important for cultural fit. And can I partner with this person? And am I excited to work with them? But, like, a functional evaluation is kind of hard for those people to do, I found. And then the like, worst mistake, in my opinion, is letting the teams that are going to be reporting to this person be a big part of the interview process”

Deeply understand candidate past experiences. Past success is the best predictor of future success

• Go into an excruciatingly painful level of detail with candidates by understanding their past case law/history
• Even when asking hypotheticals, always pushes for specific stories versus framework-type answers 
• Pedro finds this is the best way to screen for ability to operate at all levels early on in the interview process
• This interview technique (used by both Pedro and Saji) is inspired by the book Who: the A Method for Hiring
• Saji also likes to understand business intuition before going deeply into their background – he’ll spend 30 minutes asking about their current company’s product, GTM, and model. If they can’t do this, he eliminates them. At the executive level, you need to be commercial and business savvy
• By asking these questions, you are trying to understand if their past company scaled because of them or in spite of them. Sadly, there are a lot of executives in Silicon Valley where companies scaled in spite of them.

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Pedro on getting signal from interviews

“The biggest predictor of someone's success is past success. So just go into the past experience of a person in an excruciatingly painful level of detail. To the point of like, okay, like, you used to work at this company. What time did you wake up? What did you do? Like, how did you spend your day? Who did you meet? Why did you meet them? What were the meetings like? How did you run the meeting? Getting a feel for what the person was actually doing. And I think you'd be surprised by how much you learn by doing that.”

Saji on understanding business intuition

“I'm trying to figure out are they a good business thinker and do we have chemistry? Even if they're like the head of HR, my first thing is always like, asking about the company's current product, and the GTM. And if I can study their company for 30 minutes on the outside, and then they can't explain it to me really well, you know, kind of right there. You'd be surprised how many people can't explain their company's product, the value proposition, or how they go to market very clearly. And so that is my first filter.”

Case Study: How Pedro interviews executive candidates

• Who: The A Method proposes deeply evaluating a candidate’s past roles with the 5 questions below:
  • What were you hired to do? 
  • What accomplishments are you most proud of?
  • What were some of the low points during your job? 
  • Who were the people you worked with? 
  • Why did you leave your job?
• These are basic questions that a candidate could answer in 30-45 seconds. If that happens, it’s not a useful exercise
• You need to push and go deep with candidates to understand their motivations, accomplishments, and style
  • Pedro goes year by year through candidates' experiences to understand these five questions
  • This gives him context and is a great way to predict whether candidates can operate at all levels

‍Example Bad Interview

• What were you hired to do? I was hired to run FB marketplace
• What accomplishments are you most proud of? The company grew from X to Y
• What were some of the low points during your job? We had to do a layoff.
• Who were the people you worked with? My boss was the CPO and the relationship was good
• Why did you leave your job? I wanted to leave to try a startup

‍Example Good Interview

• I understand you were at Meta for 6 years. Let’s go year by year. For each year, Pedro asks questions like:
  
  • What was your responsibility?
  • What was your goal?
  • What did you actually achieve?
  • Who did you work with?
  • How did you spend your time?
• This lets you answer the five questions from the A Method for Hiring, but with richer context and data

Case Study: How Pedro balances “selling” while going deep with candidates

• Executives are busy. Important to keep the balance between selling and assessing
• Pedro ensures there is an exchange of value each time he meets with candidates
• He starts interviews with “what’s on your mind?” to understand key reservations
• He then spends the rest of the interview grilling the candidate on their background
• At the end, he starts to sell the candidate using the context learned from the whole interview

Case Study: Saji's standard executive interview questions

• Can you briefly explain your company's product and go-to-market?
  • Value proposition
  • Sales motion
  • Buyer
  • Expansion characteristics
  • Implementation and customer success
  • Competitive pressure
  • Geographies
• What are you personally responsible for? Your team? Other executives?
• How do you segment your customer base? How does the GTM motion differ?
• What are the roles and responsibilities on your team? 
• Can you take me through each of your direct reports and their strengths/weaknesses?
  • Who are some of the best external and internal hires you have ever made?
  • Can you tell me about a bad hire?
  • Who are the top 3 people you will try to hire if you take this role?
  • Will they follow you?
  • What are your manager's strengths and weaknesses? If I call them, what will they say are yours?
• What KPIs or metrics do you regularly look at?
  • Can you tell me about a meaningful decision you drove based on those reports?
  • What about vice versa, where data/metrics caused you to miss the big picture?
• What are the circumstances in which you spend time with customers?
• Can you tell me about an executive you had a challenging relationship with? 
• What are your company's top strategic priorities? What is controversial about the strategy?
  • What would you do differently if you were CEO?
  • What are the lowest and highest performing parts of the business? Of your org? How do you know? 
• What businesses have you learned the most from observing? Which companies do you really admire?
• If you could go back in time a few years, what would you do differently?
• What's the #1 area you've learned or improved on in your current role?
• When in your career have you felt most accomplished?
• What was the toughest feedback you have received?
• What do you anticipate will be the biggest challenge coming into Benchling?
• What would you do over in your career, if you had the chance?

References are critical to cutting through the noise of interviews

• Interviews are noisy and execs are very good at them. The best way to truly understand a candidate is to speak with references
• Saji begins references early in the process (even as soon as after the first meeting if they like them)
• Your goal is to build a competing parallel history of what they are saying in the interview process
  • Polarizing feedback is OK. You should only be worried if its a pattern from multiple calls
  • If something is recurring, bring it up with the candidate and get their feedback/response
• Keep going until you aren’t learning anything new from references - typically 10-15 interviews
  • To find new references, ask your network and also ask references “who else should I speak with?”
• Share references back with candidates you hire – this is helpful so they can work on development areas

Case Study: How Saji runs reference calls at Benchling?

Process

• Saji starts references with softballs to warm references up and 
• After softballs, he shifts into his core questions – these are designed to stack rank / get candid feedback
• He finishes with a closing question about the candidate and repeats his takeaways to them

Tips

• Frame reference calls. We are excited about a candidate and want to figure out how to make them successful.
• Be confident when you ask hypothetical questions.
• Long pregnant pauses are good, err on the side of providing less context and letting the reference lead the conversation.

Opening Softballs

• Where did you work with the candidate? How long did you work there?
• Tell us about your team and role.
• How long did you work with the candidate?
• What was your relationship with the candidate? Do you still keep in touch?
• Tell us about projects that you worked on with the candidate.
• What in particular did the candidate excel at? What did she/he prefer to do?
• What type of work was she/he weak at? Why?
• How did they resolve conflicts with team members?

Core Questions

• Would you rehire the candidate for your team?
• If you start your own company or join a new company, is the candidate the first person you would take with you? Why or why not?
• What did the candidate’s last performance review say? In the plus and minus columns?
• How does the candidate rank relative to her/his peers in her/his previous role? Why or why not #1?
• How can we help the candidate succeed in this role?
• What type of people does the candidate need around them to succeed?
• What type of work does the candidate prefer? Can you think of an instance where they took on a less-than-desirable project that needed to get done?
• How proactive is the candidate?
• How did they rank in getting work done relative to their peers?
• Can you rank the quality of their work relative to their peers?

Closing

• Where do you see the candidate in 5 years?
• Summarize their reference check and say it back to them to make sure they agree.
• Anything else I should know about the candidate?

The single biggest predictor of executive success: Ability to operate at all levels of detail

• Conventional advice suggests that the best leaders are primarily great managers of people, not ICs
• The reality is the best leaders have a deep understanding of their function and how to do the job
• Pedro believes the best leaders operate at all levels meaning they are exceptional ICs, understand their function deeply, and can also manage people. Brex tests every leadership candidate for IC skills
• Pedro likes to work on actual problems with candidates versus hypotheticals. This is the best predictor of ability to operate at all levels of detail.
  • For their CPO, Pedro worked with the candidate on their pitch deck for enterprise customers. They spent 4 hours together in Seattle crafting the narrative and the updated deck was used to win one of their largest customers
  • For their CRO, Pedro listened to Gong calls with the candidate and went deep on what should change
• Pedro finds that this gives him so much more signal versus interviews alone

Pedro on testing for ability to operate at all levels

“I remember when we ran our first CTO search someone said you're gonna run a CTO search, and this person isn't gonna know how to code because, like, at some point in management, they stopped coding. Bullshit. Do not fall for that. Run a technical interview and actually make them go through a coding interview. And one of the things that we do at Brex today that people hate and so many people fail is we assess for IC skills in all levels of leadership, and people hate that. All your exec search firms are going to say don't do that. But we've just seen so many people that are really highly qualified and completely lost the craft. And I think you want the person that leads the function to be excellent at doing that function really well.”

Executive compensation is Binary. Don’t be cheap about paying for talent (within reason)

• Pedro and Saji view executive comp as binary. Either it works and they generate exponentially more value than their cost, or it doesn’t. In reality, there's a one-year cliff. By the end of year one, you'll know if you're satisfied with their performance. If not, you can recover the equity. If a candidate is over negotiating on compensation, it is a red flag

Executive Hiring: Biggest Mistakes

Most common reasons for hiring mistakes

1. Giving in to your desperation

• It is common for searches to drag on and for you to get tired of interviewing/screening candidates
• Once this happens, you’ll start feeling internal pressure and pressure from board members/investors
• When Saji has ceded to these pressures and made a hire it has never worked out

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Saji on giving in to his desperation

“You've been searching for a very long time. You're getting tired. It's not your head of engineering or head of sales. It's like the head of HR or Head of Finance. You're kind of like this candidate is good enough, I have a board member that's pretty enthusiastic, and we're all tired. Those hires never work. Don't do it.”

2. Wrong culture fit

• Saji writes 30, 60, 90 day plans for all executives. During this period, he’s prescriptive
• These new executives bring new skills, but don’t have context or internal clout. The worst hires:
  • 1) Subtly push back on what he asks them to do by making up rational excuses
  • 2) Are “too big company or 3 to 4 years ahead” – these people have trouble scaling down
• This might look different at every company - but if the exec is doing things that are not representative of the way your team works, this is a red flag and a potential cultural mismatch

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Saji on subtle non-compliance

“I hired an executive where I gave them this long list, and they just kept squirming out of it. I rationalized it to myself at some point, I was like, okay, like, you know, they're from a bit bigger of a company. I know we're trying to scale, but maybe at that size you can't spend time going and talking to the individual contributor sales rep on the ground to figure out what's working for you. Your job is done. Hire the leader who hires the managers Total fucking disaster. It was the first of many situations that didn’t feel right.”

3. Mercenaries

• In 2021, it was really hard to tell whether executives wanted to join your company because they think it's a good company or because they thought they would make a bunch of money. This is challenging especially when the market turns or changes. 

Setting up executives for success

• Both Pedro and Saji are prescriptive in the first 90 days and also let executives know they will feel like micromanagers. This is OK. Do not let executives run wild when they onboard - they have no context and know significantly less about the business
• Pedro’s framework is trust with gates. Start by giving the candidate a task to complete in a short window and progressively increase the window over time. Do not hand over keys to the kingdom.

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Pedro on trust with gates

"[When an exec joins] I'm like Hey - I'm just going to tell you how my brain works, and if there is a bottleneck, I'm gonna spend all my time there, and I don't care if it's like sweeping the floor, I'm gonna go do it and then I'm gonna be working with your ICS and your team, and I'm gonna be changing things that I think are wrong. And you're welcome to join me, and I would love for you to join me, but a lot of the times you're gonna find they just don't like that. They just feel like, Oh, I'm not empowered. What we try to do in the first 30-60 days is just like being very prescriptive on what we want done. It’s sort of like trust with gates. Candidate, do x in like a two week window, then maybe move to one month window, where it gives them a little more room. I think filtering for execs that are okay with you getting the weeds and don't see that as like, oh my god, they don't trust me, but, but instead of like, hey, there's a way that things are done in this company and this person's trying to help you set up for success, I think it's a better mental model.”

Hiring Case Studies

Brex CPO

Webflow CPO

FAQ

Have you ever pulled offers?

• No - try not to do this. The talent world is small and this will impact your hiring brand
• You can do it if you find something terrible, but try to do all your checks before offering someone a role

Senior with a network versus high slope with limited network

• Network is important, but wouldn’t hire only for this reason if they don’t have a network. Pedro optimizes for slope and intensity. He also believes that up-and-comers often have a really good network of high slope people, which may be useful in the future
• Someone should at least have a couple people willing to follow them

Hiring someone with a known weakness we will fill with hiring?

• Hire for strengths - everyone will have weaknesses
• For these gaps, work very closely with your executive and hold veto rights on anyone they want to bring in

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