“The best people in any industry on the planet—whether they're building rockets or electric cars—are artists.”
There are many schools of thought when it comes to evaluating technical talent. Whether your company uses algorithmic problems, take-home projects, timed tests, or some combination of the three, it's hard to prescribe a one-size-fits-all process for analyzing the potential and ability of a candidate.
One heuristic, however, that AngelList Founder Naval Ravikant has found to be a powerful signal of technical talent is a candidate's artistry. As Naval says, “The best people in any industry on the planet—whether they're building rockets or electric cars—are artists.”
Elaborating on his stance, Naval expanded on the importance of artistry, skill-based hiring, and properly aligning incentives.
“By artists, I don't mean someone who picks up a paintbrush. I mean someone who's doing it for its own sake, who loves the craft, who just enjoys what they're doing...Really great developers very often will code for the sheer joy of it, or to solve a very specific problem that they have.
“I've had hundreds of ideas that I have put a little bit of effort into here and there. A few dozen turn into real projects, of which almost a dozen turn into companies, and then a few turn into larger companies. AngelList is very much such a project. It was just a mailing list while I had another job.”
“You look for tinkering. You look for hobbies. You look for side projects... Real artists always have art projects going on the side. If someone is very, very good or is meant to be an entrepreneur, they're probably going to have multiple entrepreneurial things that they've tried—not just one.
“You have to be a little careful. It's not about the number of metals or the number of things you've done. It's about the quality of a few things that you own. Accountability, ownership, those are important. Show me the work you did when you were in flow. Show me the work you're proud of.
“I also just look for signs of independent work and thinking. So, side projects that look really interesting, I put a lot of weight on those. What they did on their own matters 10 times as much as what they did as part of a job or a team or group where they were instructed what to do.”
“I don't think years of experience matter that much. There's a younger version of me out there who's better than me at almost everything. And there should be because society progresses. The learning tools have gotten better. These people are raised with iPads and the internet. They should be smarter than me. They should have read more than me. They should be better at math than me.
“I think you have to get away from age- and experience-based hiring and go much more towards skill-based hiring and intelligence-based hiring. That skill and intellect can be revealed through their actual work that they've done for the sheer joy of it—almost like artists.”
“I struggled for a long time against hierarchy, because I think hierarchy buries talent. Your incentive is to manage up to your boss rather than to do what's best for the company. As Charlie Munger says, 'If you can be working on incentives, don't work on anything else.' I think he's absolutely right.
“The number one job of a manager, after recruiting and retention, is incentive design. You pick your strategic goals, you know what you want, and you hire the people for it. Then you design the incentives properly to hit those goals.
“Now, incentives are a lot broader than purely financial incentives. If you're super productive, one could be remote work. But if we're not hitting goals, then we want to get together in one place. Those kinds of things can also be used instead of just money. But money and equity still matter. You have to also align those.
“There are some people who are just vastly more productive than others...five, 10, 20 times as productive. How do you keep and motivate those people? We don't pay five or 10 or 20x. That's socially unacceptable. Plus, it's hard to separate how much was done solo, how much was lucky, how much was teamwork. That's where stock grants should come in.
“I believe that people should get lopsided equity grants and ownership based on what they've done for a company. One thing Silicon Valley gets wrong is it gives you a lot of equity based on when you joined...Inevitably you have someone who joins in year three or four who has a sliver of the equity of their neighbors. And yes, their neighbors took some risk, so they should have some more equity, but it usually ends up extremely lopsided. That's why companies find it harder and harder to recruit.
"You have to be willing to compensate employee number 21 better than employee number three if 21 turns out to be super productive, and three is not."