Shower thoughts, hiring A+ talent, COBOL, & crypto countries.

Sajith Pai's somewhat irregular newsletter #11

Here is issue #11 of my somewhat irregular newsletter:) Comprises thoughts too long for twitter, but too unpolished for blogposts.

For newer subscribers, a PSA. All issues follow a template. There are three sections.

• Writing(s) - a piece of my original writing(s) or a link(s) to one or more

• Listening(s) - notes on a podcast (or two) I listened to and liked

• Readings - excerpts from 3-5 articles or books that I enjoyed with my take on it. 

I may skip Writing or Listening if I haven’t done either that week or preceding weeks.

Here we go. Feedback in the comments or at sp@sajithpai.com (on anything re the newsletter). If you want to reach me for a funding request then write in at sp@blume.vc (replies in 3-4 days).

*Writings*

‘Shower Thoughts’

A frequent conversation topic that comes up with founders is that of indivdual employee performance. Once a company nears Series A, team size crosses 30 — I haven’t heard of too many Indian companies with low team counts (this is a topic for another post!) – and invariably the founder’s attention is drawn to managing employee performance or the impact of this. Almost every month or two, someone is being let go, or counselled. Sometimes more frequently than that.

As Blume’s team size has grown, we too have had our share of less motivated and low-performing teammates.  Clearly when the team size is smaller, it is hard for non-performers to stand out, and hence they get weeded out faster, or even get the right feedback, and improve. However as the team grows larger, these non-performers can sometimes linger for a while.

I have been thinking about this topic, and have found the metaphor of ‘shower thoughts’ useful to approach this. This metaphor comes from an article i read by Ben Kuhn titled ‘Attention is your scarcest resource’. Bold and Italics mine.

Kuhn references a post by Byrne Hobart, and writes

“That experience of mine resonates strongly with Byrne Hobart’s observation about focus in knowledge work: The output of knowledge workers is extremely skewed based on focus. The productivity tiers seem to be:

1. <10% focused on the job at hand: meaningful risk of getting fired.

2. 10-50% focus: “meets expectations,” gets regular raises.

3. 50%+ focus: superstar, 10x engineer, destined for greatness.

“50%+ focus” is roughly when something becomes the top idea in your mind. It’s when you start caring enough to think about it in the shower. It’s when you start habitually asking “how could this go faster?” It’s when you get relentlessly resourceful. It’s around when you start annoying your coworkers and/or significant other, although that part is avoidable with practice.”

I find that early on, when team sizes are in the <20 number, you have about a third to half of the company as the ’50%+ focus’ workers – they have ‘shower thoughts’ about the company and its problems. They work long punishing hours, are proactive and get things done, often without necessarily seeking permission. They are incredible brand and cultural ambassadors internally and externally.

The rest are in the ’10-50% focus’ / meets expectation category. As the company gets bigger, the proportion of the ‘shower thoughts’ workers drops to about 10-20%; you also start seeing the first of the “<10% focused” folks.

Hiring and increasing the number of ‘shower thoughts’ workers

There is no one universal rule to hiring or even enhancing the number of these shower thoughts workers. Still from my experience there are a few.

• Missionary cultures and high purpose orgs attract a lot more ‘shower thoughts’ workers. It is vital that the founder / CEO spend a certain amount of his or her time communicating the mission, how it came about and the key values underpinning the mission and the journey towards realising it.

• ‘Shower thoughts’ workers can also emerge when the ’10-50% focus’ category starts working with a manager who is from the ‘shower thoughts’ category. The reverse can also happen. Never make a ‘shower thoughts’ executive or engineer work with a non-‘shower thoughts’ manager.

• Cultures or processes enabling frequent, fair feedback as opposed to those where feedback takes longer time to emerge, tend to encourage the emergence and growth of ‘shower thoughts’ workers. This could be either personal or even product performance feedback – they are interconnected – product performance eventually impacts personal performance.

• Cultures that enable ownership and initiative – most startups fall in this category – clearly support the rise of ‘shower thoughts’ workers.

I suppose there are more, and would love to hear what I missed out.

Interestingly, one rule I have seen is that, shower thoughts workers are typically introduced to the org through references. Someone who has known the ‘shower thoughts’ worker writes ahead introducing the ‘shower thoughts’ worker.  Alternately the name of the ‘shower thoughts’ worker comes up prominently when asked ‘Who is the best ____ person you have met?’ (insert growth / product / tech etc).

Are ‘shower thoughts’ workers thinking the right thoughts?

My colleague Ria Shroff-Desai, who leads our people practice, and with whom I shared an early draft version of this article, raised an important question. How do we know ‘shower thoughts’ thinkers are having the right thoughts? How do we incentivise obsessing over the right questions, she asks? This is important, and I suppose the best solution is when the leadership communicates priorities right. Prioritising, after all, is one of the 3 jobs of the startup CEO.

Working with non-‘shower thoughts’ workers

I came across this wonderful article from John Danner where he writes about how to work with the ’10-50% focus’ workers. He refers to them as nonGSD workers (GSD = Get Stuff Done, his term for ‘shower thoughts’ workers). It is a good framework to approach conversations with non-shower thoughts workers.

Conclusion: an alternate framework to ’shower thoughts’ is ‘work as play’

An alternate framework to ‘shower thoughts’, and one I have often used is that high performance workers don’t see the work they do as ‘work’, i.e., something that needs to be dealt with for 5-6 hours and then moved on from. Instead they see work as play. The find it easy and enjoyable. This is what is referred to the in the saying “Choose a job you love and you will never have to work a day in your life.” (source unknown)

In this regard, here is an excerpt from a paper I came across called ‘The Mundanity of Excellence’. Here is a good summary of the paper by Aditya Khanduri; the paper is a study of what drives and leads to emergence of elite swimmers.

The excerpt details how champion swimmers find the punishing conditions and intense regiment of training enjoyable. Clearly if you enjoy training in unpleasant conditions, you will do more of it and will be better trained than your competitor. There is some of this in the ‘shower thoughts’ folks too. When you get obsessed with something, it doesn’t feel like work. It feels like fun.

I would like to thank Ria Shroff-Desai for reviewing an early draft of this piece, as well as for sharing a perspective on whether ‘shower thoughts’ workers are even asking the right questions.

*

A twitter follower reached out with a few questions around my information diet and how I try to retain what I read. I wrote back to him, and then I thought it would be useful to share it publicly. Qs from him in bold.

Q1. What do you choose to read and how?

A: I subscribe to 70+ newsletters (keep dropping and adding new ones) curated via twitter and other sources including thebrowser.com which is a key source, as well as a few odd RSS feeds.  I glance through them rapidly as they come - a few i read while browsing, and about 4-5 long form pieces (some times more) are downloaded as pdf to my Remarkable2 and I read these over the week.

In addition twitter also throws up a bunch of interesting reads - typically i mail these to myself as reminder, and download it as pdf to Remarkable2.  I curate the people i follow on twitter carefully. Keep dropping some follows as well, and adding new ones from time to time.

Over the past few years, I have come to the conclusion that the most underrated content is podcasts - i either get them transcribed or read transcripts. These are usually startup podcasts - joincolossus.com / 20VC / Full Ratchet or general interest ones like Econtalk / Tyler Cowen / Farnam Street Knowledge Podcast / Ideas of India etc. Increasingly my diet is 50-50 in this ratio (articles to podcast transcripts), and I have decided to bump this up even more in 2022.

I find that I also read diverse stuff while researching for a piece I am working on.

Q2. How do you decide to spend time on certain content or not?

A: Instinct and interests. Over time you have an instinct that this is interesting content, which you sense when you do a quick scan of the content. Then of course, I have my interest areas / obsessions. A combination of these, I suppose.

Q3. How you consume content you choose - both tools, time, no of re-reads, what you choose to note etc.

A: Long-form pieces / podcast transcripts - I read on Remarkable2 and annotate as I read. I sit over the weekend - typically sat evening / sun morning - and capture them to my Apple Notes. And then over the course of the week, I share them socially.

I try to read 2 long-form pieces a day - 1 podcast transcript + 1 article, as well as 1 book chapter. I don’t always succeed.

Notes - i usually capture what i annotate - i look for something I or my founders, followers can use or learn from. Sometimes I capture stuff that will be useful to add to my research notes for future pieces i can write.

Q4. Retention mechanisms (if any) - going back to your notes etc.

A: This is the biggie. The key key hack is creating a system to revisit your notes. The most useful way is to write regularly, and whilst writing / researching, revisit your notes. Or even better, say you have your weekly newsletter and you need to write. Then open your notes and search on a specific keyword - retention curves, or PMF or creativity, and you will see 5-6 notes on that. Use that as raw material for a piece.

Revisiting your notes or creating a system to revisit your notes is the most valuable practice you can adopt. It will supercharge your learning like no other. Too often I have found that people use the fanciest note-taking tools (Roam, Notion etc.) and keep adding to their notes but don’t revisit it!

*Listening*

I have been reading a lot more podcast transcripts these days. In particular, I enjoyed the Ashwin Damera - Shailendra Singh chat during the last Surge cohort, as well as an interview of Bill Trenchard of First Round Capital, by his LP Chris Douvos.

Here is what I found particularly interesting and insightful. For a comprehensive set of highlights, listing all that I found interesting and useful, do visit my public notes page on Notion. Links to the talks - Ashwin Damera; and Bill Trenchard.

Ashwin Damera on overindexing time for hiring A+ talent

Ashwin: “If you’re spending 30% of your time, versus if you’re spending 60% of your time on hiring, youwill see a dramatic difference between the quality of people that you have. Why is that? And, it’s easy for me to say this. It’s very difficult to do it, because 60% of your time is still a huge commitment of time. And there’s a fire every day in every nook and corner of the business that you have to put out.

So how do you spend 60% of the time? I think of it as a bitter pill. You spend 60% of your time hiring A-plus people, in three months or six months, they will put out the fires, there’ll be less fires. You spend 30% of time hiring people — let’s say you get average people, you will continue to spend your time putting out the fires.

If you’ve not interviewed at least 10 to 15 people before you hired for an important role, if you didn’t have three candidates at the end of that for whom you think, “I could hire any one of these three”, then you haven’t actually done the right job in hiring.

If you’re just doing interview-based hiring, it’s 50:50. And as a founder of a company, you just cannot accept 50:50. So, the number one thing I would say is hire from referrals. That’s a 90% chance of success.

So, one is to go on referrals. The second thing I would say is, in some cases, if you’re trying to hire a very senior person, and you’re a smaller startup and you can’t afford them, then maybe even ask them to advise you part-time.

They get to know you, you get to know them, and then maybe when you’re a little bigger, you close your next round or you have your first customer win, you may be able to convince them to come on board, because senior people are always difficult to hire.

I always say this, “For A-plus hiring, if you make an offer to three A-plus people, two should reject you”, because A-plus people have other things to do. That’s their nature. If you just made an offer to three and all three accepted, I doubt whether all three were A-plus.

The last thing I would say is, “When you want to hire A-plus people, don’t just talk about money, compensation, role – talk about the mission.

Bill Trenchard on the First Round Capital IC Process

Sajith Pai @sajithpai

I thought the most interesting part of this podcast between @cdouvos LP in First Round Cap (FRC) interviewing @btrenchard of FRC was this fascinating description of how First Round's IC process works. Link to the podcast by @tseides: capitalallocators.com/podcast/first-… #venturenerd

December 12th 2021

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*Readings*

Wrapped up Becoming Trader Joe, and started on Andrew Chen’s Cold Start, and a novel (New England White by Stephen L. Carter) simultaneously. A bit more time on my hands, now that our holidays have begun.

Thoughts on Becoming Trader Joe

If you are in retailing or strategy or the intersection of the two, this is an exceptional read. From the founder of Trader Joe's comes this book that explains how he and his core team arrived at the entire Trader Joe model, basis a detailed understanding of regulation, and where they could be 'outstanding on price'.

The Trader Joe model was
- 2k or so SKUs (v low for US) selected on the basis of high value per cubic inch, easily handled, high turnover and ability to price advantageously ('outstanding on price')
- highly paid store clerks and buyers
- store clerks and buyers with great product knowledge (helped by low SKU count)
- willingness to stop retailing products where they did not have a price advantage, and focus on private labels instead of brands
- willingness to retail discontinuous products where the product is not consistent from year to year, and can even drop in volumes (provided they got a good margin)
- premium locations
- focus on college towns and as he calls it educated but not rich 
and so on. I loved how he constructed / arrived at this very coherent strategy optimising for high volume / turnover.

There is an interesting model / mental framework called double entry retailing where he describes how demand side factors and supply side factors intersect.

All in all, I think this is a must read for retailers, offline ideally but even those selling online.

Fave articles I read last week

1. Great Protocol Politics. Balaji Srinivasan, the most pre-eminent technophilosopher of our time, and geopoliticist + urbanist Parag Khanna, on how existing nation states will have to work with the rise of crypto protocols, and how the monopoly of violence that the state could traditionally exert is blunted by decentralized nature of crypto.

2. The Code That Controls Your Money. This was a terrific read. Well-written piece by Clive Thompson (@pomeranian99 on twitter) on COBOL's long half life, and why a COBOL programmer never needs to worry about retirement.

3. The Incredible Tale of the Greatest Toy Man You've Never Known. Al Kahn is one of the living legends of the toy industry. He is the man who introduced Pokemon to USA. A look at his rise, fall, and re-emergence. Along the way it introduces us to colourful figures such as prolific toy inventor Eddy Goldfard (100 years old and still alive) and the complex, secretive Marvin Glass, whose company operated high tech labs for game design and prototyping in a window-less supersecure office in downtown Chicago, “a Bell Labs, a Xerox PARC, but for toys”. Great fun!

4. The Decentralized Country. Interesting post by Mario Gabriele (@mariogabriele on twitter) on what he calls 'DeCos' (for decentralized countries). We are beginning to see provocative thinking on the future of nation states (Balaji Srinivasan has has done a lot of thinking on this - see this essay on network states) & this essay by Mario is certainly one.

   Fin/

   That is it folks, for this issue. Feedback in the comments or at sp@sajithpai.com (on anything re the newsletter). If you want to reach me for a funding request then write in at sp@blume.vc (replies post 10th Jan when my break ends).