@andrewchen

Weird, contrarian business ideas
One of the best books I’ve read in the recent past is Hard Facts, Dangerous Half-Truths, and Total Nonsense by Stanford Professor Bob Sutton. (He now also has a great book called The No Asshole Rule, which you may have heard of also) In the Hard Facts book, he talks about a variety of different common business topics, and compares the academic research on each of the topics versus what paid management consultants often preach.

In particular, one of those question is – there’s a ton of anecdotes around the idea of The War for Talent, popularized with such phrases like “A-Players hire A-Players, B-Players hire C- and D-Players” etc. Embedded within many of these notions is, of course, the really big assumption that you can actually interview for talent, and that interview processes actually work. In the Hard Facts book, Professor Sutton actually points at a bunch of research that says that in fact, there’s tons of evidence that the hiring process doesn’t work well. And if you look at the marks that people get coming out of a hiring process versus the on-the-job marks they get in their first year in a job, they are actually not correlated at all.

I personally find the idea that interviews being poor predictor of job performance both unsurprising, but also troubling! Interviews predicting job performance seems like one of the core building blocks of American business.

This has been a particularly interesting topic for me to think about because of the differential that exists between technical and non-technical interviews also. All of the non-technical interviews I’ve ever involved in have been terrible, and I’m still not 100% satisfied by my thoughts on how to improve them.

Anyway, I wanted to embed a video interview of Professor Sutton discussing his book below, which you can watch at your convenience. Unfortunately he doesn’t mention job interviews in it, but he talks about a bunch of other interesting stuff.

(scroll down past the video to continue reading the blog post)

Short-term activity used to predict long-term activity
In fact, the core of job interviews really is about using some short-term activity (like dating, interviews, etc.) to try and predict some longer-term success (marriages, job performance). These little prediction scenarios pop up all over the place, and they’re inherently subjective.

Here are some other places where this takes place:

• Investors evaluating a pitch, in order to invest in a company
• Looking at headshots to cast someone in a play
• Reading the script of a movie to greenlight the film
• Being a great premed student versus becoming a doctor
• etc.

Some of these evaluation processes are closely aligned with the actual long-term activity, but sometimes they are not. For job interviews, it would seem that it may not be the same skills to get your resume noticed by a recruiter, then filtered up to a hiring manager, then passing an interview – that is hugely different than actually doing the job in a team setting. This discussion also reminds me of a common discussion I had with pre-meds back in college, where the primary shor-term selection criteria seemed like acing the easiest classes possible, pulling all-nighters, and memorizing obscure biology/chemistry textbooks. However, in the long run, being a good doctor was as much about dealing with people – be it other doctors, nurses, and patients – as it is about having good grades.

Is dating a good way to predict marriages?
OK, before we jump into job interviews, let’s talk about something more fun: Dating

The traditional notions of dating are a funny thing, because of how contrived it is in many ways. In particular, you might consider dating to have characteristics like:

• Pre-defined activities designed to be fun and happy
• Strong cultural, familial, and peer pressure that specifies standards and traditions
• Low sample size relative to long-term marriage commitment (dating for 6-12 months and then intending to be married for 60+ years)
• Relatively strong separation of stuff like finances, scheduling logistics, etc.
• And of course, no sense of what raising children is like

Contrast this to actually being married, as imagined by an unmarried guy like myself:

• Long-stretches of normal, domestic life that can be exciting, but is often not
• A very long-term outlook on the relationship, spanning 60+ years
• Lots of intermingling of legal issues and logistics
• And of course, the entire process of raising kids, having a house together, is almost an enterprise in itself regardless of the romanic situation

The fact that the before and after is so different, in many ways, means that you better hope that the stuff you learn about the other person while dating gives you a strong view of how the long-term relationship would work.

Job interviews as predicting long-term work relationships
Of course, job interviews are very much like dating as well. Inside of the job interview process, there are a bunch of inherent assumptions about what kinds of candidates are good candidates.

For example, you often have processes that prioritize top schools, or that prioritize “culture fit” and other intangibles. Interview processes often test very specific skills against a “snapshot” of a candidates skills at any given moment of time. Is it fair to ask engineers questions about SQL or specific language trivia when it’s something they might learn or pick up in hours or days, not months? It’s not clear.

The worse issue is around the inherent bias that comes into play. People like to hire people like them, and every startup full of Stanford-educated 20-something guys ends up hiring more Stanford young dudes. Sutton refers to this in his book as homosocial reproduction. How important is it, really, what school you went to? Is it more important your grades? Do you really need to know obscure things about a programming language, or go lower-level, when your day-to-day job is unlikely to utilize that knowledge? I think a lot of these biases come from the people who design the interview, and don’t objectively evaluate success or failure in professional settings.

Do interviews miss the “intangibles?”
Most damning, of course, is if interviews simply don’t test the majority of a job applicant’s fit to a role. Let’s have a thought experiment where for any job candidate, that skillset accounts for 20% of their performance, and other things like motivation, communication, and possibly weird, obscure skillsets actually contribute 80%? Then you can test the 20% all you want, but in any sort of 1:1, contrived conference room interview setting, you can’t scratch the 80%. In fact, you might find candidates that fail most of the 20% but are such amazing fits elsewhere that it’s in fact an awesome match!

Over time, I’ve come to believe that interviews likely test a small amount of a job candidates skills, and you have to more directly test them in realistic work scenarios to get at the other stuff.

How would you more directly test job performance?
In many ways, thinking about job interviews as inherently bad predictors has a strong tie to the Built to Fail blog post I did a while back – except rather than assuming that your code is bad, and needing unit testing to support it, instead you assume job interviews are bad, and you need a larger framework to support that.

So taking the ideas from that post, I would recommend the following:

• Accept that traditional job interviews suck, and you can’t learn much about a person in 30 minutes to an hour
• You should interview MORE people, and potentially lots of weird people that don’t seem to be good matches right upfront
• You must streamline your interview process to handle more people, in larger batches simultaneously – thus 8 hours of 1:1 interviews probably doesn’t scale
• And you should test your job candidates in realistic work scenarios – assigning real tasks to groups of candidates (potentially mixed in with employees), working together in tandem
• Also perhaps instead of focusing your hiring on specific individuals, instead you make offers conditional to entire teams that seem to work well together, and keep them together in their actual job

In many ways, I think this is closest to the Boiler Room or Bootcamp view of the world, which was pointed out to me by a long-term mentor, Bill Gossman. You bring in more people, test them in real-world settings, and hire whoever comes out on the other side, regardless of background or performance. To me, this has the benefit of a truly meritocratic society, where people are hired because of their real performance, rather than what the designers of the interview decided were subjectively important or unimportant.

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Encountering the Silicon Valley echochamber
I grew up in Seattle and worked there for many years, and finally moved to the Bay Area in 2007 because I wanted to be at the epicenter of the startup scene. When I was in Seattle, I always lamented the fact that there wasn’t a “scene” the way that the Bay Area has one. I used to talk about it as one of the big negatives of the region, since you didn’t have the density of events, bloggers, and general activity in Seattle as in the Bay.

Now that I’ve been here for a few years, it’s clear to me that the Silicon Valley echochamber has its clear negatives as well. Being out of touch with the average American consumer is one obvious negative. Chasing down technological rabbit holes is another.

But I believe one especially strong issue is the constant peer reinforcement from fellow entrepreneurs to be working on stuff that everyone deems “hot” or easily relatable. And how easy it feels to be left behind when there’s a “hot new trend” in a particular direction, even when there’s obviously many good markets to be explored at any given time. I would argue that this strong peer reinforcement from fellow entrepreneurs makes it easy to focus on very short-term successes, and ignore long-term contrarian bets.

Peer reinforcement from fellow entrepreneurs
One of the most common conversations you’ll overhear at any startup event is one entrepreneur giving another entrepreneur their elevator pitch. Or, you’ll overhear an entrepreneur giving their pitch to a prospective startup engineer. In fact, I would argue that many startups spend more time talking to other people “in the know,” than they do potential customers, whether those startup savvy people are investors, job candidates, fellow entrepreneurs, advisors.

And just as similarly, a common conversation you’ll overhear is the equivalent of the “hot tip” on a stock – but instead, the conversation will be about a particular market or company. Oh, did you hear that company so-and-so is doing X million in revenue? Oh, the Y space is blowing up.

All of these conversations, as insular, belly-gazing discussions establishing the social pecking order at any given time, provide quick feedback about the entire startup ecosystem. It’s what guides the decisions of many employees or investors to dive deeply into the “hot” markets. In many ways, this is one of the deep strengths of Silicon Valley, that the information is so efficient, and new markets can be quickly identified and exploited by dozens of companies simultaneously.

Copy cats galore
At the same time, these conversations can easily reinforce the feeling for many entrepreneurs that “You’re missing out!” It causes many people to look at the sectors that seem to be immediately doing well, and jump into them as copycats, because it looks like easy money. There’s nothing like the feel of a gold rush to make everyone go nuts.

Interestingly enough, many of these copycats are only in it to exploit the short-term advantages of the market, and some are self-admittedly not passionate about the area they go into. In particular with this economy, a long-time mentor described it as “Silicon Valley’s version of quitting your idealistic startup and going back to work at Microsoft” – meaning potentially soulless activities that generate revenue, regardless of actual passion or long-term belief in the projects as viable businesses.

Focusing on the long-term
As an entrepreneur, I can’t help but look at the short-term choices that get made in an environment like this without some degree of disappointment. There are many brilliant people who could be trying to make the world for the better and really create long-term value, but instead they are engaged in a zero-sum game to extract as much value as possible from the world. Now perhaps as a market, these startups will collectively make the world a better place – such is the wonder of markets – but at the same time, it disturbs my sense of idealism about entrepreneurship.

More importantly, building a startup takes years no matter what the economic environment – maybe 5, maybe more. And if you’re going to be stuck doing something for 5 years or more, then you might as well pick something you’re really excited about. Taking a long-term view, I think, means accepting that many of these new markets will significantly change over time, possibly merge with other markets, or possibly turn out to be too small.

It’s worth thinking about what kind of company you want to be in 5 or more years, rather than just grabbing onto whatever trend seems to be floating by at the moment.

Staying focused on the long-term
So how do you stay focused on the long-term, when there’s so much noise? Here are a couple thoughts for you:

Stop reading blogs so damn much
Every once in a while, I’m busy enough that I don’t read any blogs for a week or so at a time, and you know what? The world doesn’t end Obviously it’s useful to keep up with how the rest of the tech industry is moving, and where the markets are developing, but clearly there’s a diminishing returns to the minutiae around the startup word.

Have a strong vision that’s flexible yet specific
Another issue is how easily small companies are swayed when the vision is not clearly defined and understood. It’s easy, when internal values and vision haven’t been set, to follow the customer to wherever they would like to go. Or to fast-follow whatever is the darling startup at the moment, or to be swayed by competitor moves. So you need something that’s specific enough to figure out how much external data to incorporate, but also be flexible enough that if you hit contrary data, your entire startup’s core thesis doesn’t fall apart. The tension of the two is what makes this a challenge!

Ignore the competition
For most startups, the market is not clearly defined enough to also have clearly defined competition. In most cases, you’re better off focusing on your customer and learning from them both quantitatively and qualitatively, rather than emulating what your competitors are doing. And in particular, if you are extracting a ton of interesting knowledge about your customer, you may end up with a unique set of insights that would beat whatever you’d get from copying anyway.

Don’t go to startup events
Another common environment where you’re compelled to pitch your startup over and over is startup events. Skip these, and you’ll find yourself thinking more independently from other entrepreneurs.

Forgo short-term opportunities if they are clearly short-term
One very difficult challenge is that along the road to success, there will be many tempting rabbit holes to go down. Many ideas are hard to scale into larger businesses, but make a ton of sense at a smaller scale. Many ideas are also unsustainable, as a hole closes in the market, or because customers don’t get enough long-term value. Of course, sorting out long-term from short-term is the difficult part here.

Move down to the Peninsula, not the city
One of the small geographical differences that exist between the city and the peninsula is that there are far more media-oriented, hipster entrepreneurial engineers in San Francisco compared to Palo Alto, Mountain View, etc. As a result, the city is a fun place to get your company started, as there’s ample idea exchange between all your fellow entrepreneurs. On the other hand, once you get going with your startup, the sheer number of parties, get-togethers, and coffee meetings can get overwhelming.

Be skeptical of opportunities that are both hot, and easy
The most interesting opportunities I hear are ones that appear to be easy revenue, and I hear about them from multiple sources. Many of these opportunities are the equivalent of windows of arbitrage that appear in the stock market – they’ll quickly be closed, and never appear again.

Remember that you only need one big success
The final point I’ll make is that at least as far as startups go, you really only need to find one awesome line of attack on a market, and that’s it. Maybe that takes a month to find, or maybe it takes years. But ultimately, if you are making forward progress on your business and you reach a huge market eventually, it doesn’t matter much what happens between now and then. In this way, having a great deal of patience is very useful if you can systematically discover high-quality, long-term opportunities. This may be harder than the short-term stuff, but it also creates the ability to become a category-defining company.

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UPDATE: Thanks to Marc for reminding me about startup events and peninsula living also!

Why do social products tends towards clutter?
One of the toughest design problems for people working on social products is the inevitable path towards cluttered interfaces and diluted brands, as you try to build more social activities and richness within your product. As a result, these products tend to drift towards “portals,” “hubs,” or “platforms,” rather than clean, single-purpose destinations. This might be good or bad, depending on your viewpoint, but it certainly introduces a number of design challenges when every central “entity” on your site (be it a video page, or profile) has dozens of jumping off points for more complex interactions. Or when you have a “tab explosion” as you bolt on common social application paradigms like blogs, chat, or whatever.

For MySpace, this manifested itself as a massive top menu detailing all the different ways to interact with the site, including Classifieds, Music, Games, Video, Forums, and others. For Facebook, they had to build the Windows-like application bar that shows up on every page and allows access to chat and commonly used applications. It seems as though this clutter is almost inevitable as you try to centralize a wide variety of social activities.

Users push you towards more social activities, not less
The central driver, I believe, for this social activity explosion is that people want to have LOTs of different ways to interact with their friends. These different activities let them have very nuanced interactions that have deep and meaningful social signaling.

Let’s take an offline activity, for example, an invitation to a date – there are lots of nuances that can be read into asking someone to:

• have a quick mid-day coffee
• come over and have a nice dinner
• go to a movie
• have a drink mid-week versus Friday/Saturday
• go out with a group of friends to a music show
• having brunch with your parents
• etc.

All of the above activities provide different social signals based on how big of a time commitment it is, who’s involved, what time of week it happens, how expensive it is, etc. And if you were to build online equivalents of these types of activities, it would be better at each step, since it allows for richer interactions.

As a result of this, your users will always like any new social interactions you push out, and will often suggest/demand new activities.

The social web laundry list
As a result of the demand for new social activities, you inevitably get a series of bolt-on design patterns that recur across many different social products. An incomplete list might include:

• polls
• quizzes
• reviews
• comments
• forums
• chat
• blogs
• videos, photos, and other multimedia
• avatars
• leaderboards
• private/public messaging
• status messages
• etc.

What else am I missing? Suggest some other ones in comments, and I’ll be happy to continue extending this list

Either way, there’s probably some rule that if a new social product these days decides that, “hey! What our product needs is polls!” then the design philosophy of the product probably should be reevaluated. It’s a powerful indicator that the product roadmap is overly focused on short-term user engagement versus a long-term market position.

Drawing the line between “core” versus other
These mechanics are so easily bolt-on-able that it destroys the differentiated value of a product – this happens through clutter, confusion, and overduplication of features relative to other sites. It becomes a trap that weakens the brand long-term, while producing higher engagement in the short-term – quite the devilish dilemma.

Ultimately, to avoid this fate, every product needs to draw a line in the sand on what is core, and what are extraneous social activities that should happen off the site. Or, if not off the site, in a carefully cordoned-off area. Either way, these choices need to get made, otherwise clutter ensues.

Potential solutions
Several companies have dealt with this design problems in different ways – let’s go through all of them:

Solution 1: Build everything
In the MySpace example, the site ultimately decided to incorporate a very large chunk of all the functionality they could think of. Just explore the top menu bar, and I think you’d be surprised by how much product is sitting inside of there.

Solution 2: Open up the CSS/HTML layer
Interestingly enough, MySpace also used another method of allowing users to extend their profiles by allowing people to just copy and paste arbitrary CSS/HTML. Another company that did this is eBay, as well as many blogging sites. Outside of the obvious security issues, the nice part about this is that this is a really simple integration that works with many different kinds of tools and widgets.

Solution 3: Provide a rich onsite platform
This is the Facebook/OpenSocial approach, where applications exist on a site rather than off of it

Solution 4: Create off-site APIs and activities
To some extent, this can happen by itself with an API or not, as passionate users will create forums, mailing lists, blogs, and other social structures about your product. But as Twitter and blogs show, you can build an API which allows off-site applications and websites to build richer functionality. It will be interesting to see if Twitter eventually creates an on-site API a la Facebook, or if they will always make their onsite experience very simple and clean.

Solution 5: just focus on one thing
And the final solution is just to ignore your users, and focus on the main value that your product provides. This certainly has a nice charm to it, but obviously few companies follow this – more ambition leads to more features, typically, even though the user experience might suck as a result.

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