Daniel Gross: Why Energy Is the Best Predictor of Talent - 52 minutes read

[Auren Hoffman] Welcome to World of DaaS, a show for data enthusiasts. I'm your host, Auren Hoffman, CEO of SafeGraph. For more conversations, videos and transcripts, visit SafeGraph.com/podcast.

My guest today is Daniel gross. Daniel is founder and CEO of Pioneer a reimagined version of the startup accelerator. Daniel, welcome to world of daps.

[Daniel Gross] Thank you very much for having me. I am delighted to be here and being in the accompaniment of you and all your data nerds.

[Auren Hoffman] All right now, we've had a few conversations before on spotting talent. And I kind of consider you an expert on spotting talent. So okay, so let's say you and I were starting a hedge fund together, and we get to invest in the future equity or the future income of a 16 year-old. But you know, we're competing against all these other hedge funds. What types of kids do you think are the underpriced assets?

[Daniel Gross] So to the extent that you would rethink the question of like, “the venture market is so overcrowded, boy, I'd be neat if we could just find these excellent founders and maybe invest in their businesses before anyone else got to them”. This question is interesting to contrive, and from kind of investment, you know, hedge fund standpoint, but in reality, I think it applies to anyone who's hiring, anyone who's really in any position to figure out if they want to surround themselves by other people. And so I actually think it's worth thinking about this kind of regardless of where you are in the world, and what to look for in high quality talent, especially early on. And I think the simplest answer to this question, I'm coming at you as a person who has spent and has built and run a huge amount of psychometrics machine learning, like I've read all the books, and again, I'm still an idiot, but the simplest thing to be on the lookout for is actually really hard to measure, quantitatively, or even qualitatively. And that is energy, literally, the person's energy. And I think the best way to think about this is that Paul Graham, founder of Y Combinator, aphorism of you want there to be a sense in your heart of for mutability, and almost fear from the person you're engaging with. And, you know, for me fear is not quite the right emotion. I think just raw energy is really important. It's one of those things, you often will tell this to people, and they say, “Well, you know, what does that even mean?” I think everyone knows what it means. And I think everyone, when they see it, when they have a good experience, they themselves leave energized. And the issue is, these people are maybe one in ten or a hundred, depending on where you're looking, a million. And so you spend most of your time not being engaged with energetic people. And so you tend to forget that it even exists, but of course it does. So energy, I would say, by far is the one thing I look for.

[Auren Hoffman] You have to like spend an hour with a person to know that they're energetic, or there's some other data point to know if someone has high energy?

[Daniel Gross] We could talk about all sorts of funny little biomarkers that would be predictive of it, I was always interested in this class of people that would always be wearing shorts, even when it was cold outside, running hot, you know, you get the sense that there's a kettle on, the steam is kind of bubbling out. But in reality, I think if you spend 5-10 minutes with someone, you really know, and I believe they've done these interesting studies about professor charisma, where they say, take an hour lecture from a professor talking about something and then they have students grade, the overall kind of charisma and that person's ability to communicate, and then they still … an hour, that's really long. So let's slice that into 30. And it turns out, you keep like 80% of the accuracy. And then they slice that again to 15 minutes and you keep like 70% of the accuracy and then they slice that all the way down to, I think it's something like two minutes, and you still have better than chance accuracy. So the mind is doing a lot, you know. I think when you just interact with someone in a very, very powerful way. One way I conceptualize it is, I think for every kind of unit of interaction you have with a person, like literally every second that goes by, especially if it's in the real world, you are conscious, at least I think, again, I'm not really sure, but I would hypothesize that you are constantly ingesting information, the brain is decoding it and searching for similar in patterns that it's seen in the past, and then applying those predictions to that person. Now, this could cause you to overlook people, just because you may have not met, I don't know, a lot of like, really successful people from Indonesia. And so you may meet someone that kind of has the aesthetic of an Indonesian, I don't know randomly why I'm picking on them, that has the aesthetic of Indonesian, and you may mis-rate them. But broadly, I think the system from an evolutionary standpoint exists in our mind, because I think it generally kind of works. So I think you can kind of tell if you just think about energy, which by the way, I think is true across all genders, all cultures, all everything, everyone has energetic types and non-energetic types. So I think that is a very important thing to look for. And one thing, you know, when I first got into this stuff, we built and rolled out and did a lot of work around IQ. And I know the ins and outs of IQ psychometric testing, I think, at least a few avenues of it that the type that the military likes to use called ravens, Progressive Matrices, which is, you know, a visual test. It matters less if you speak English well, or fancy words. I used to think IQ really matters and look, to some extent it does, like do you have to have the ability to reason through complex problem spaces, you do have the ability to have working memory, but that tapers out pretty quickly.

[Auren Hoffman] There's like, basically saying there's some sort of asymptote where it matters to a certain amount, and then it doesn't matter much anymore?

[Daniel Gross] Yeah. And I think Warren Buffett has that quote, of, you know, if your IQ is above 130, give the extra points away, and trade them for emotional stability or something like that. And you know, that's very true in his business where I mean, Warren Buffett is paid to be relaxed. That is ultimately what you're paid for there. The founder is slightly different, but energy matters much more. Final thought on this, if I didn't really nail the point already, in the story of a founding company, the main reason why energy matters is you need at the end of the day, whatever the person's hypothesis early on in the business, it's generally wrong. And so what you're trying to evaluate is two things: one, will the market give you enough tailwind and excitement so that you continue bouncing around and trying other things, and two: how many things you're going to try and how quickly you're going to try them, so you know investing in someone who's starting a company and who's energetic is like just having more shots on goal. So you kind of need that because I do think pre product market fit, it's really dark. It's you know, it's like punching a pillow, you get no feedback from the thing. And so you know, you need someone who's really going to give it their all.

[Auren Hoffman] Is there an analogy to energy, to enthusiasm? Are they somehow related to one another?

[Daniel Gross] Another question I like to ask myself in the interview if I'm interacting... I'm not talking about the world of psychometrics and quantitative analysis now, because I think that's less applicable and interesting to the everyday person because you kind of can't do that yourself. So like, qualitatively, when you meet with someone, another question I think that's really important to ask is if you would work for them, and there I think you're automatically thinking about, are they energetic? Are they charismatic? Are they excited? Because I think you find that you generally want to work for these people. A related quality that I think about a lot, especially now, in the kind of hot button political environment that we live in, is whether that person is funny. I think funny people are really underrated.

[Auren Hoffman] And why do you think so?

[Daniel Gross] Just as a quality to look for it doesn't sound very erudite to say I'm looking for funny people, but I think at the end of the day, charismatic leaders are pretty funny. And they have the ability and humor is a really important emotion for two reasons. One is if you can evoke it a lot and you can be funny, you can kind of create a sense of bonding, there's generally speaking in a remote world in particular, there's like a shortage of emotion we feel. The oxytocin exchange between us now as we stare at each other here at our computer monitors is maybe 1/100 of what it would have been if we were in the real world. And so when you think about it, why do movies succeed is that movies substitute the real world interaction with synthetic emotions of horror, humor, action and drama. So you want leaders that can do the same over Zoom. That's why peloton instructors have all the jokes that they're saying it's the same exact effect. And so anyway, humorous leaders I think matter in particular in an era of Zoom, but there's a second reason why I think humor is important, which is, if you were to imagine a kind of Maslow's hierarchy of needs, I at least find with myself. I'm not able to think about a joke if I feel like basic stuff isn't right, and so you know if you're not sleeping well.

[Auren Hoffman] You have the gallows humor, right. So, you know, typically people in the middle of the trenches in World War One or something like that are coming up with some pretty good jokes and stuff. So maybe it does substitute even when you're low down on the mental hierarchy.

[Daniel Gross] It's a great point, I think it's because those people actually had their basic needs met because they were with other people they really liked and so you have that “World War One, we're in the trenches-joking” about it, and we’ll all go to hell. There is a sense of relaxation from that. I think if you're truly panic stricken, if you're walking down the street and a car almost crashes into you, it’s not going to be a great time to think of a joke. Anyway, I think humor is really fun to look for. The final case for humor is just, selfishly, it's fun to be around funny people. You do have to be careful though, you have a court jester type. These are people where I think they're so insecure, they'll do anything to get a laugh or get a joke. And you usually see it in kind of lower quality humor. You see this in standup comedians, if you go to a standup comedy club somewhere, and it's just some random guy trying to get a laugh, they usually go for very vulgar jokes, because it's a very cheap laugh. Cursing is cheap. But of course, like Jerry Seinfeld, I mean, world renowned for this fact, he never curses and he gets a laugh.

[Auren Hoffman] Or making fun of other people is maybe an easier way to get a laugh, but it probably does not lead to camaraderie.

[Daniel Gross] It does not lead to camaraderie, I think that a lot of people, who are much more successful than me, use self-deprecation, which is always good. I think there's an element of not taking yourself too seriously there that's good. So anyway, I think that's an interesting one to think about. And the one adjacent thing that's just been on my mind, maybe the past two days, I've been thinking a lot about this is a bit more relevant for people hiring, so say you're looking to hire and you're trying to figure out if something's good, what's another thing to base yourself in is I think people get caught in these dynamics where they hire people, where the opportunity is ultimately not truly a leg up for the person that you're hiring. And there's no sense of indebtedness, meaning a lot of people hire for lateral moves, and I don't think that works. So what I'm asking myself is, is this person genuinely going to become better by me investing in them, by me hiring them. And I really think the best dynamics are those where the other person is truly grateful for the opportunity. When I think of the people I really respect in life, it's because they gave me some type of opportunity that I kind of almost didn't deserve.

[Auren Hoffman] One of the things I think people struggle with is spotting ambition. It seems even with super successful founders, you see the ones that just kind of end up spending most of their time at their winery. And then you see the ones that are actually like, go to bat again and again, again, and try to change the world and stuff like that. Like there's some sort of level that sometimes where people reach and then their ambition no longer kicks in anymore. How do you know what that level is about somebody a priority? When you meet this amazing 22 year old? How do you know how ambitious that person truly is?

[Daniel Gross] My view is that ambition, you know, to the extent that some of these things are nature, and some of them are nurture, ambition is a bit more of a nurture thing. And what I'd like to think about is, who is that person performing for? Who are they really trying to impress? Who's in their friend circle, and who's just beyond the friend circle that they wish they knew better, and that respected them? Because what I think happens with the people that leave to Hawaii fairly quickly, which is a great thing for the economy of Hawaii, but not a great thing if you were hoping their business would go to the next level, is they've clearly surrounded themselves in a culture where that's acceptable. And the people that don't, and there's one exception to this, we'll touch on it in a second, but broadly, the people that don't earn a culture with that is unacceptable, because there's something else that you want either a next strata of wealth, or you want the company to just have an x strata of impact that it has not had. And what I found fascinating is even at the tail end of the map of capitalism, we still have like Bezos at the end of the day trying to be Elon. And you still have people who run 100 billion dollar companies that are looking at Oracle and Microsoft as the real titans. So that it's interesting that that hierarchical tree doesn't end. I would say in 2018-19, it's reduced a little bit, maybe because my audience’s changing, but I would meet people, and I realized that they're ultimately performing for Twitter. And so there's like a bunch of people on Twitter, they really want to like their tweets. Because capitalists are generally not that much on Twitter. Venture capitalists are but like, I'm not really considering them in the bucket here, they just don't end up like creating valuable things. They end up creating tweets that get liked by people in academia, or like the intellectual sphere that is super exciting to them. So I think a good question that just sit and pose to yourself in an interview is “who are you performing for?” You can try to ask the candidate this type of question. I would classify all whimsical, tricky questions in this bucket where you have to be careful about how you ask it. And you probably need to repeat it a few times, just because when you ask a candidate a question, that's an uncast (?) thing that they're actually going to have to think about, you have to give them space to do that, which is really hard to do in an interview,

[Auren Hoffman] Could you ask it ahead of time and have them come to the interview with the answer or something?

[Daniel Gross] That would be thoughtful, you end up in a dynamic though where there's a perfect amount of time and too much time, you actually end up getting a super pampered answer where they're giving you the answer you want to hear as opposed to the good one. There are many strategies to overcome this. There's a whole different topic of how to run an interview that I'm still learning about, which is totally different from questions to ask. And I do think you could take all these excellent things to be on the lookout for, all these excellent questions and totally screw them up by running the interview in an obtuse way.

[Auren Hoffman] Is there a way we could on average, make people more energetic or something? If energy is the core thing, is there some way to make our population more energetic?

[Daniel Gross] Look, it's funny, for every type of talent question I find there's different layers, like a networking stack that you can reason about. And there's the kind of biological endocrine layer, which is always fun to pontificate about, I don't know how true it is, this idea that we really advanced from the Dark Ages, to the kind of industrial revolution as a byproduct, from moving to ale houses to tea and coffee houses. I do think there's some truth in that, people used to meet, and we didn't have purified water, so we were literally drinking wine for water in the Dark Ages. And if you kind of replaced all Starbucks with pubs, and people meet there at noon, you're not going to have a very productive society at 3pm. Instead, people are literally meeting to take stimulants. So, the fact that caffeine does not have, as far as we can tell, or I know, no real long term negative side effects is a real miracle for human productivity. I'm not here to talk about the endocrine layer, I'm not smart enough. I do think if more abstractly. Say you run a little island somewhere and you do want to raise the energy and ambition levels of the country, what do you do? I think at the end of the day, as far as I can tell from humans, and look, I'm just someone from Jerusalem that accidentally bumbled into Silicon Valley. And now I'm on a podcast with you purportedly talking about as if I know anything, that is a great study of anything that I think humans have, like a huge dynamic range that everyone is kind of born with, and the question is, how much of it are you going to activate? And that is, I think, a byproduct of the environment that you're surrounded by. So probably, if you were kind of czar of this little island somewhere, I think just bringing people by that are impressive and successful, to be seen by your citizens is a very big deal. You know, I remember anecdotally, for me, I was 18 years old when I moved to Silicon Valley. And it's may sound kind of weird, but Mark Zuckerberg came by to give a lecture or something. And back then Facebook was roughly what Stripe is now, the company everyone wanted to be, and being able to just see him and understand that it was a real person that I could kind of be too, you can't experience that digitally. That's a real thing. And there's like a lot of the brain is just reorganizing itself once you have that observation. So I think if you were running that little island, that's probably like one important thing you could do.

[Auren Hoffman] If optimism is correlated with energy, there's certainly societies that are more optimistic. Some people say America's more optimistic than Europe or something. I don't know how you create a more optimistic society.

[Daniel Gross] Do you want to hazard a guess as to the number of Chinese Nobel laureates that are from China? So not that of a Chinese descent but are from China.

[Auren Hoffman] Based on what you're saying, I would assume it's low.

[Daniel Gross] I think it might be six, maybe seven, on the nation of a billion people. And so I think it's an interesting question, why aren't there more? They're clearly very smart because he Chinese people, if you look at them as their ethnicity, they have quite a few Nobel prizes, but it's mostly people from California. I've asked this around and one answer I got that I thought was interesting is there's this idea that you just don't have freedom to think, almost even optimistically due to an over-injection of competitiveness. And as a result, there's a lack of optimism in China, that I think leads to a lot of local maximization at the cost of global maximization. I think it is also true that if you look at a lot of the great geniuses here in the United States, Jim Keller, who designed the x86 chip, Kary Mullis, who invented PCR, Steve Jobs, across the board, these people or Richard Fineman, or were pretty crazy, very optimistic and pretty crazy. And so there's a level of kind of outlandishness that you get here in the US, that leads to pretty optimistic thinking, which I think comes from not being overly competitive, oddly, and more interested in actually societal good. And I think that's a real big difference from many other countries in the world. Israel, where I grew up, I can say, I don't actually know anything about China, but I know a little bit about Israel, and where I grew up is a byproduct of your neighbors trying to constantly kill you and this constant war, you end up with a society that's very, I wouldn't say pessimistic, but it's realistic. And it's actually not optimistic.

[Auren Hoffman] But Israel has a very high percentage of Nobel laureates.

[Daniel Gross] And it has a ton of startups, so what's going on there? Israel has no market risk companies, it has only execution risk companies, and that's a byproduct of that. And I think a lot of the Nobel Prizes you'll see from Israel are like, “if you can make this happen, huge”. If true, no one is going to dream up Snap, or Facebook in Israel, but they will definitely get a semiconductor chip, and I think that's because there's no blue sky kind of optimism. I think that all feeds from just like a might be a deeper Jewish thing, I don't know, but it feeds from a deeper sense of kind of a harsh society and worry about your own existential living. So I do think going back to your theoretical question, you're designing this island, the right degree of oppression is important. You don't want you know, too little oppression, otherwise you end up like New Zealand, you don't want too much oppression. But some is good.

[Auren Hoffman] What do you think is the biggest motivator for founders? Is it pure respect? Is it money? Is it what do you think really motivates people?

[Daniel Gross] I would say that Silicon Valley was almost entirely not commercial in what early founders wanted. It was not purely academic either, those people are in academia. It's a kind of a Walt Disney sense of “I want to build a really cool place. And I want people to think it's awesome.”

[Auren Hoffman] It doesn't seem it's changed in the last 10 years, it seems like way higher percentage of conversations around money today than it was 10 years ago. Do you agree with that statement?

[Daniel Gross] Yeah, and I think it's a byproduct of two things, one: crypto, which provides instant liquidity, and as a result, I think just add a much more of a money thing going on. But two is I think, as all systems grow in popularity, you have this internal September effect, what attracts most normal people, and I think most normal people are actually just interested in making money. And it's a good thing, incentives. As far as I can tell, from my reading of high EQ and Milton Friedman, that's a great thing for a productive society, but it does pull forward how long term you are. And so you do end up meeting a lot of founders today. It's a great question and abstract to ask them, from first principles reason about why is SaaS more popular than starting a new SpaceX, or starting a new SpaceX, say, 10 years ago? Or is why SaaS more popular than starting a new biology company? And I think the answer to that is, most founders need to see a very clear map to the company working, getting revenue and getting rich.

[Auren Hoffman] Every few months, you're getting inputs to know if you're on the right track, whereas if you're starting a biotech company, that might be every few years to actually get inputs to know if you're on track.

[Daniel Gross] Totally, and you can see a lot of the SaaS success around you and new categories you just can't see. Technology as a sector doesn't really exist anymore. I think it's just business, like all businesses are technology businesses. And I think you're going to get more and more people that just want to chase some type of short term obvious thing that will work. And so that's why you see SaaS proliferate everywhere. Like cloud seeding, California is burning on fire. The country I grew up in you could seed its clouds. It's not that simple and it's not really clear that it works, but broadly speaking, select the most underinvested obvious bet, just command clouds to appear when it rains. But you don't see founders working on that, because the type of person that becomes a startup founder today on average, there are exceptions to this rule, but on average, I think they're kind of trying to figure out what is an easy path to build, like a SaaS thing that I can visualize in my head will get big in like three to five years. And you say, “well, while you're doing that?”, and they say, “well, because I saw these four other founders do that and now they’re billionaires.”

[Auren Hoffman] Can you see this optimistic versus pessimistic? The pessimistic if you think of the fires or climate change we’ll say, “let's reduce consumption” or something. And then the optimists will say, let's invest in technology, let's change the world so that we don't have this type of thing, or whatever. And there's a bit of a tension that happens. And it does seem like the pessimists are more ascendant than the optimists or maybe you disagree with that in society.

[Daniel Gross] I think there's a general human condition, which is, I think the brain is probably much better at imagining downside than upside, which makes sense from an evolutionary standpoint, like “you don't die”. And I think in addition, in a world of Twitter, where one is rewarded in a synthetic currency of love and admiration by producing content, it's actually much easier always to produce content that worries about the downside as opposed to the upside. Doing the upside requires real creativity. I think that's kind of why from a sprain synapse standpoint, you tend to get more of that chatter. But it is true, I find for every topic in the news, I always think of it as “move forward or move back”. And there's a lot of “move back” chatter versus “just carry on”. “Keep buggering on” was the Churchill quote. At the end of the day, the technologists, because once they do produce something, even though they're a small minority, the optimistic people that look forward, once they do produce something, it does really spread.

[Auren Hoffman] If you think of like the pessimism of the 60s and 70s, there was overpopulation, and we won't be able to feed everybody. And then the green revolution happened, and then we just move on to a new pessimism. It's not like they all of a sudden they become optimists or something, right, that's a new thing to be pessimistic about.

[Daniel Gross] I think that's okay. I generally think I've used cnn.com as a menu of moral panics. You know, what do you want to panic about?

[Daniel Gross] Yeah, we have all sorts of things for you to panic about, and please click on all of them. We'll show you the ads first, some crazy outbrain article.

[Auren Hoffman] Part of the reason it's so popular is people love panicking about stuff, right?

[Daniel Gross] I think it's popular because there's a part of the human brain that thinks “I should consume this information, because some of it may be useful for me to protect myself”. I think it's very elemental. Why news is interesting is the brain is seeking information, “Okay, maybe there's a hurricane coming, so we'll build shelter”, that is helpful. But the issue is that the number of news items, in total, the ones who have agency over, it must be like one in 1 million things a year and I do think that that is an important thing. Generally speaking, I only read really two news sources, the Financial Times and Bloomberg because they tend to report things, at least just facts, and generally speaking, you have agency over and they report them in a very agente way. I love that at the bottom of every Bloomberg article, here are the relevant stocks. So their view is at least trade on everything that you know. And I think that's good. As a result, you see them reporting less about the latest political thing, unless of course you can trade on it. I'm not a great study trader, but the grounding of financial news, especially in this day and age is really helpful, because they're not really interested in pontificating and I also think, by the way, actually, if you have theories and opinions, getting conviction to the point where you're going to trade on them, I think is very helpful. It makes one very truth seeking because today, in order to underwrite an idea, all you have to do is tweet it. And people don't really seem to value their social currency that much. And so technically, that's what you'd be devaluing, but they'd be happy to tweet it. Whereas it's a whole different conversation, if you tell someone, “oh, it's popular topic, I think China will invade Taiwan in the next month”, I say, “Okay, so then we should put a quarter of your net worth in TSMC puts (?)”. And then suddenly, though they’re like “maybe it won't be next month”.

[Auren Hoffman] Even on the climate change discussion, there's probably a lot of ways to trade on that. And one way to trade on that probably would not be buying Manhattan real estate or something. But, but it seems that people sometimes trade almost in the opposite way of their beliefs.

[Daniel Gross] I think that's right. I think climate change is a great example of people who want to go backwards versus forwards, meaning, is it: drive less? Or is it: carbon capture? I think, in reality, I actually visualize the spectrum of people who want to go backwards, people who want to go forwards, and then most people in the middle, who, in reality, don't really care, but the revealed preference is always to continue doing what you want to do. And to go backwards,  people always want people to change behavior. In reality, if people aren't going to really change their behavior, they're just going to follow whatever incentive they want to. But yeah, I see this now, with COVID. There's that there's a real semblance going on with “please vaccinate yourself”. In reality, the person has decided whether they're going to vaccinate themselves or not, there's no article on CNN or message from the CDC that's going to change their opinion, it's really fascinating that those sources don't realize this, there's no celebrity infomercial that's going to cause someone to change their opinion on that. But you know, I think the much easier path forward would be stop trying to get people to vaccinate themselves and just focus on therapies. Because once someone gets COVID, they very much want therapy. And so I think that's kind of an interesting model, and how you could think about to go forward, go back with people just meet people where they want to be met, and don't try to convince them to change the behavior. But we've strayed now from the topics for what you invited me and all the information we're discussing is probably wrong.

[Auren Hoffman] We've had a discussion before about how to ask good questions and stuff. And I know that you sometimes ask people questions about movies, especially kind of maybe controversial movies like Whiplash. What's kind of reasoning around those types of questions?

[Daniel Gross] This is kind of going back to the topic we briefly touched on earlier, which is, I think there's a lot to be said for the aesthetics of the conversation. A lot of interview questions that are very good are pretty obtuse. And you know, Peter Teal (?), will come out to you with “what's once a secret you believe that no one else in the world agrees with you on?” You end up selecting for odd answers in that situation where people are now thinking, “What's a clever thing to say?” So I find when you ask people, and this is, in many ways something I learned from just observing Tyler Cowen, when you ask people easygoing questions, especially if you have a Midwestern accent, they'll just give you honest answers. And you can get actually the same alpha if you decode the answers. So questions like “how do you spend your day?” Or “what movies do you watch?” are honestly just better conversation because there's no consensus that the other person is going to perform for you, which is not what you want.

[Auren Hoffman] Like your judgment or something per se.

[Daniel Gross] Right. Exactly. And I think you can learn a lot about revealed preferences from people.

[Auren Hoffman] What do you think you learn about by asking people what movies they watch?

[Daniel Gross] Well, it's usually not just the film, which you can learn a little bit of, from someone watches a lot of adventure movies, I think they're probably an adventurous person. But more deeply, you can have a great conversation about the film and people reveal interesting things there. So you know, I like “Whiplash”, because there's conflict in that story. It's not really clear. If you're going to be pro and con, you tend to select for a very specific narrative. For context, “Whiplash” is a movie about a drummer that gets pushed a bit too hard by his music teacher or coach, and you tend to instantly filter out the insecure overachiever types who say “I thought it was an amazing film”. And they're kind of saying is “I wish someone would push me that hard”. Oh, then there's a different answer, which is just a different type of person who says, “Well, it's like a great movie about bad work life balance, and we shouldn't push too hard” and whatever. And I instantly know what type of person now that is. For me, personally, I am interested in those insecure overachievers, and I'm not interested in a person who's worried about a drummer burning out, to each their own. I find, by the way, with many of these talent selection topics, we all want the same people, it's we're really trying to just pair up with people that are similar to us.

[Auren Hoffman] And it's almost like a dating problem.

[Daniel Gross] It's totally a dating problem. And I presume the person who's super worried about burnout and whatnot is going to do really well with other people that are worried about that, and not well at all with me. You can have fun conversations about film's and it's just more relaxed. The other trick, by the way, it's kind of obvious in hindsight, I think, to do an interview that's kind of similar to asking about media and content, to just say all the things we're discussing now about the kind of meta conversation, out loud. And so I tend to start interviews literally by just talking about how most interviews are really boring for both parties. And how my hope is that we're just not going to have that. I think that relaxes things.

[Auren Hoffman] It just gets people more in the mood and more willing to take up to actually have a real conversation and less performative?

[Daniel Gross] Yeah, I think so. And I also say things like, “Look, I'm going to ask you a couple of questions here that are kind of easy softballs to get just the conversation going. And then we'll go on a random walk. I don't know where we're end up. I really hope it's interesting. I might interrupt you. If, if that's okay, just to keep things interesting for me, you should interrupt me. If I asked you a question that I think you're not going to have the answer to, I'm going to vamp for a little bit before I let you answer just so you can think about it. So anyway, I want you to have a fun 30 minutes”. And I have to do these all day. So I selfishly like to have a fun 30 minutes too. And that really changes the atmosphere.

[Auren Hoffman] When I think of where I've had these incredible interviews where the person I thought was amazing, and stuff like that, long term, a lot of those people they turned out to be very interesting academically type of people. And a lot of them ended up leaving the corporate world and doing something in academia. And they actually were very, very interesting people, but they might have not been, they were good, solid players, but they weren't necessarily like the A players at the company. And someone who like had maybe a good interview, but not a great interview, sometimes was more likely to be the A player. Have you had similar experiences? Or like, what advice would you give to me to like changing my interview structure?

[Daniel Gross] I've heard from people who interview experienced interviewers and people that have pedigree, and there's a common narrative there that you hire that person and then you let them go or put them in a different position, and it doesn't work out, and the kind of random newb ends up doing really well at the company, which is related. And I do think that at least in my head, I have to readjust my defaults on what's good, because what you're kind of told is good, I think, is actually not good. You're told the super polished, great interviewer, whatever person has a great background, a lot of times those people have seen their greatest days already, they're in their past. You have to be really interested in when someone raw and who's like 23 years old comes in and they don't really have all the answers not really put together, but they seem energetic. You have to realize that that person is worth 10 times the person that was at Google for 10 years and thinks they have all the answers.

[Auren Hoffman] They could be higher beta, right?

[Daniel Gross] They're definitely higher beta. But at the end of the day, usually, I don't know I found those have worked out for me much more in hindsight, and it's not the priors that you have. Maybe there's a dichotomy here that we're talking about just between polished and raw. I actually feel very uncomfortable in interviews because they're extremely polished. Sometimes I'll say this in an interview, I'll say I feel some extent like I'm in a boxing match here and you're punching way faster than I can respond. And that helps, talking about the inner conversation on dynamics always, always helps in my opinion, it takes courage to do. It feels a little awkward to do at first, but it always helps.

[Auren Hoffman] If I think of the true 10X’ers in my career that I've worked with, I don't think I really could have predicted them versus some of the other people I hired at the interview stage that they would become the 10X’ers. Obviously, anyone you hire someone you think is talented, otherwise you wouldn't hire them. But if you hire 100 people and five become the 10x’ers or something, I don't know that I would have predicted those five.

[Daniel Gross] If I told you to reevaluate your algorithm. You're not trying to predict 10X, but you're trying to predict 3X, would you have been able to do that?

[Auren Hoffman] I don't think so. Maybe if I go back in time. Everyone you're hiring you think good of, otherwise you wouldn’t hire that person. But it's like you're hiring, let's say a software engineer, and you already have a pretty high bar for your software engineers, or your product person, your salesperson, whatever it might be. Some of them turn out to be very good people in the company, some of them turn out to be just transformative people in the company. I think it's very difficult, at least for me, it's been very difficult to know.

[Daniel Gross] I do agree that with software engineers in particular, the 10X folks, the interdisciplinary skill set, there's no good curriculum for it, because the curriculum, or the interview panel currently built for software engineers is to see if the person can code whereas the real 10X people have the ability to translate a product idea into a fully fleshed out thing, which involves communicating with other people, having a sense of aesthetic, which literally there’s no interview questions for. How do you test for aesthetic in a software engineer? I have ideas about this, but I think we're the only company that does them. I think good writing is actually a very good proxy for visual aesthetic. They have no design eye but they can make something that looks pretty decent can also probably write pretty decently too. But you're right, that this is an unsolved problem.

[Auren Hoffman] What do you think about these engineering you definitely are a pioneer in leaderboards and thinking about leaderboards and stuff. And a lot of sales organizations are run on leaderboards. At SafeGraph where I work, at sales everyone knows what everyone else is doing. It's public for basically anyone that company can know how everyone's doing, it's pretty common to have certain types of leaderboards, whether it's for your BDR, or your salespeople, etc. Very few companies have a leaderboard for engineers. I don't even know exactly how you would do it. Have you thought through that?

[Daniel Gross] Yeah. So this is one of the most interesting areas of research. There's obviously many startups trying to do this, just how do you quantify engineering productivity? And I do think there's a view that is not totally wrong. But if you could just do this, you fix a lot of problems and say, all Triplebyte should have done is just build this algorithm. And so there's companies that try and if you just like Google quantify engineering, productivity, generally speaking, what's done is just like looking at Git commit cadence, which isn't great. There's two or three interesting papers that try to understand code complexity over commit time. So that's somewhat useful. I am of the view, by the way, there's a great example in I think KPI management, where you have this issue and you're going to have to pick between a dirty metric that's easy to explain and a correct metric that's really hard to explain. And that by the way, the team's not going to measure right for six months, and they keep on correcting. The dirty metric is usually the right choice. I do think if you broadly speaking, just measured line change, you'd probably directionally get there. And when you might say well, someone's going to add jQuery and so they're really going to blow up our (?) and say “Hey, whatever, just move on”.

[Auren Hoffman] For sales people, I would say, a successful sales person is extremely highly correlated to how many hours a week they work. And the harder working people just need to end up having double the amount of sales is the less hard working people. It's almost like that's the only metric sometimes in sales, whereas for engineering, at the plenty of times, the best engineers work under 40 hours a week or something. Obviously, you might know after you work with someone for a while, but is there some way to predicting ahead of time?

[Daniel Gross] Yeah, the best engineer I've ever worked with, across my life, maybe 11 years or so of working today, would leave work every single day at 3:59 pm religiously, and it didn't matter, I was happy he just came into work at all. By the way, this person you would have caught, if you would have just measured code, just lines.

[Auren Hoffman] Just lines of code. Okay, just extremely productive while they were working.

[Daniel Gross] If I think of myself, as an engineer, some fraction of my time is like, debugging, thinking about what to write. But he would basically spend maybe 30 minutes in the morning thinking about what to do, and then the rest of it was just output. And so I do think the odds of the piece of code that you write is going to run correctly on first run, is very predictive of intellect and intelligence. And there's a lot of people that are like “oh, it didn't work. Well, let me just literally brute force”. And I've often thought we need different names, because the person who's doing that, who just has it in their head, they write it, it runs, is literally a different trade from the person who's can't figure out how to get the CSS to work, and is going to change every single parameter based on their Googling that they do on Stack Overflow until it loads properly. These two people do not have the same profession. If I think about how I would have predicted that guy, I think it was pretty clear the moment he walked in the door, he was incredibly smart. I feel like you when you interact with these people, you kind of realize that it's an alien level of intelligence.

[Auren Hoffman] There are these engineers who were directly all over the codebase. So there's these super amazing engineers that are just in this very narrow part of the codebase. Like, there's this one machine learning thing. And those are really, really valuable for your company. But then there's these other engineers, they have commits everywhere. And you're like, how do they even know about this other thing going on? Like, that's not even in their org, but somehow they're everywhere in the code base, and they're both pretty valuable, like the one that's kind of like the connector, they've got like the (?) score something where they're bringing all this stuff together.

[Daniel Gross] Yeah, you have kind of synthesizers, which are the broad scope people that you're talking about, versus specialists who just do that one particular thing. I do think the true knockout engineers, at least that I've worked with are almost both. It's the guy who definitely, like you hired him to do this one particular thing, but then it turns out, they're just rewriting random libraries. Here's an interesting thing I found those people have that I think is true across the board, maybe you have salespeople, see if you agree. What they consider easy work is actually what a lot of other people would consider a lot of hard work. Their baseline, just like a sense of what a task is, is just really different from other people. I remember once, just asking a sales guy to water plants. Someone on our team asked him to do that. He went and he watered all of them. And without just thinking about it. He just did it. This is like dozens and dozens of plants. And you always got the sense that like for him, that's what you do. It's not a big deal. It's not a big chore, that's what the water plant task means. Whereas I could imagine a lot of other people that would have barely remembered to water just one. And I found this for software engineering too like, “What do you mean, you rewrite the whole library like because it wasn't well documented?” “Well, I just did”.

[Auren Hoffman] I would say the common trait of many 10X’ers is that they don't actually understand what's in their job description and they think like a way bigger piece is in their job description than is and so they just kind of end up doing a whole bunch of other… it's like, “oh, I'm in sales, but then I also end up doing marketing, I do products, I do customer success. I sit with the engineers”, and so they end up like doing a lot more than you would expect in their job description.

[Daniel Gross] I think that's right. At least what I've experience with those folks is there's they don't even realize why they're doing all these other things. They just sense that that's right. “Why are you rewriting the internal HR guidelines and fixing typos?” “It was just wrong, so I fixed it.” Yeah, it almost feels like they're not in control of what they do. It's just like a conscientiousness overdose, like “I just had to do it, so I did”.

[Auren Hoffman] I know you've really studied leaderboards. Are there other ways you think companies can use leaderboards in some sort of effective way?

[Daniel Gross] Well, I do think in general, just staring at charts, and numbers and leaderboards together as a team is helpful in a remote world where there is just like less bonding going on. I think broadly charts are a pretty good antidote. Staring at charts together is a pretty good, not antidote, I think these are called partial agonists. It's like 20% of being in the real world together. Generally speaking, you need to get as to as close as you can, as to what the free market charts and leaderboards do. And then on stock market, there's a couple of interesting things going on there that I think are worth reverse engineering for anyone building a leaderboard in their organization. First of all, the time that it is open, where there's going to be action and risk, is fixed. And so everyone has a sense of fixed beginning and fixed end. This doesn't apply to all categories, but if you can have that, that's really big. Because if you have that you have team synchronicity, people are going to be looking at that together.

[Auren Hoffman] So it's like, we have a monthly cadence or something is that you are talking about?

[Daniel Gross] You have a monthly cadence. Or if you have a meeting, and you only reveal the stats, over the course of a couple of hours in that meeting, it's much more interesting. These leaderboards really work because they create conversation at the end of the day. And so that's what you want. I would say that, like that would be number one. Number two, liveliness is really important. If you get an interactive brokers account, and you stare just at the tick by tick as it comes in, you're transfixed, there's information and risk coming in every single second. And what's interesting, as you go through this loop, the brain starts to develop pattern recognition systems, so it's thinking, “Well, it's on an uptake. Wait, no, it's on a down take. Wait, it's always goes on an uptake at 9:32”. That's really interesting. Why is that happening. And in the stock market, all these theories are wrong and that's why quant funds make a lot of money. But if you're staring at, say, your live users onsite or something, the team starts to have, especially if it's synchronous, conversations about it. So liveliness is really important. Ideally, you want to get things coming in, like on a millisecond basis, even if the data is dirtier, more action. And then the third thing I would say that that kind of stuff goes around a lot, but maybe three, the third thing I would say that that kind of free market gets right, is in the metrics and numbers, there's real risk. It's not that actually interesting to stare at a stock if you don't own it. If you own it, you want to stare at it, you (don’t?) want to stare at it too much. And so to the extent you can have metrics that actually matter and have risk, I think that's really important. Fundamentally, going back to my earlier point, I think there is, in remote work, a shortage of emotion, there's a shortage of oxytocin, there's a surge of dopamine, there's a shortage of emotion. And you need to overcome that emotion in other ways. So leaders that make jokes is one way, adding risk into like a leaderboard or a chart is another way. Otherwise, just work isn't going to be that engaging. And I think there's going to be a real productivity tax for some people who are extrinsically motivated. In remote, generally speaking, not the first person to have this observation is a tax if you're extrinsically motivated, and a huge benefit if you're intrinsically motivated, but a lot of people are extrinsically motivated and so they need these kind of this emotional soup to work.

[Auren Hoffman] You mentioned a lot about humor, like humor inherently can be unsafe. In today's environment, how does one be humorous, while still ensuring there's some level of high level of protection and inclusivity, etcetera?

[Daniel Gross] Well, I think it's tough to be humorous. The larger the audience, and the more you care about the audience, it's kind of harder to be humorous because we live in a world where there's an abundance of reputational short sellers, who are looking to find one thing you said, and they can short your reputation and they can benefit, but you lose. And I think you just don't want to have people in your company. I think the reason humor is a good thing to strive for is to proof that you actually do feel safe. I would fire these people. I do think organizations today are suffering because the reputational short sellers, their Robin Hood, their platform that they short sell on is Slack, or Twitter or something. I mean, Slack is the enterprise version of that, where you get these slack emoji riots going on and that person who's starting the slack emoji riot, you realize at some point is a leader, they're actually employed by a different company. They don't really work there, they work for themselves, basically. They might not even fully understand who they work for. So I do think it's important to make sure those people don't exist in the business and they're kind of the modern day corporate raiders or reputational raiders. I don't think they belong within companies.

[Auren Hoffman] A couple last questions. You mentioned you grew up in Jerusalem, as a more Orthodox Jew, how has your faith evolved over time? And how is that like influenced your founder path?

[Daniel Gross] It's an evolving topic. And on the odd chance, my high school Rabbi decides to listen to this podcast I'll be careful with my words. But look, I think how valuable it is to be brought into the network of Silicon Valley, which is the gift I was given, that I think is really important to pay forward, not just selfishly, because you can make good investments. If you want to have better things in the world, I think, generally speaking, they come from outsiders. And I think the interesting thing for my stance is, if someone who grew up orthodox, near the old city in Jerusalem can build a search engine that gets acquired by Apple, I think it goes to show this problem…by the way, amongst those 60,000 or so refugees in Afghanistan, if you could sort them by whatever the right thing to sort is, you'd put some great founders and great companies to work. I really think, at the end of the day, the natural starting conditions for what it takes to start a company are actually pretty even. The natural starting conditions for what it takes to become a chess champion, tennis champion, and leading mathematician and Nobel laureate are not. I do think there are genetic gifts in that world. But in order to start a successful business, I actually think the skill sets depending on the market that you go into are pretty universal. So anyway, that's my reflection on when I think about the religious world I grew up in.

[Auren Hoffman] Last question we ask all of our guests, if you if you can go back in time, what advice could you would you give to your younger self?

[Daniel Gross] Maybe two things are on my mind, I just turned 30. And so it's actually been on my mind a lot. One is I think I am moving at 5% of my potential speed.

[Auren Hoffman] Most people are between one and five, you think?

[Daniel Gross] I don't know, it's, but all I know, is I am nowhere near and so my first piece of advice would have been to just everything should have been done faster. Like, if I had a board of me, I think they would say just “you should have done everything faster”. And the second thing that's more practical is, I do think I've really benefited at Apple from learning from the people who I worked with. And I think, especially in your 20s, when you're so impressionable,  it's actually really helpful to be surrounded to be an apprentice somehow to someone, and when we sold, I was 23. And I lacked that form of apprenticeship, really, and you learn a lot from experience, it's a different kind of learning. I constantly need to apologize to my early team, because as an 18 year old getting into management from Israel is like not actually who you want to work for, I think. But anyway, finding someone to apprentice under I think is really important. And I wish I would have done that sooner. If you think of it in compounding math every year, I didn't do that I'd lost quite a bit actually.

[Auren Hoffman] So your growth rate was x and your growth rate could have been x plus 10% or that type of thing you think?

[Daniel Gross] Yeah, 100%. At least for me, I think other people are probably better than me. In general, I'm like living in 5% of the total potential. And so the question on my mind is how to get to 100% or even 105% would be great. And I think there's a lot of factors that go into that. But like the big one is probably environment and you know who you're surrounded by.

[Auren Hoffman] Okay, this has been really fun. Where if people want to find more about you or Pioneer on the internet, where do they do that?

[Daniel Gross] Well, Pioneer’s website is pioneer.app. We don't own the .com because we've yet to outstrip the Japanese audio conglomerate for market cap. So that's that. I'm sure people can find me on Twitter. I don't tweet that much.

[Auren Hoffman] I do like your tweets, though. I follow you on Twitter.

[Daniel Gross] Thanks. And so I'm followable there. And honestly, people should just email me. Most of my day, like literally most of my day, and so most of my brain power, I don't know if this is good or bad, it goes into a different social network called Gmail. So you just email me.

[Auren Hoffman] Awesome. This has been a lot of fun. Thank you so much for your time.

[Daniel Gross] Absolute pleasure. Great questions, and thanks for setting this up.

[Auren Hoffman] Thanks for listening. If you enjoyed this show, consider rating this podcast and leaving a review. For more World of DaaS (DaaS is D-A-A-S), you can subscribe on Spotify or Apple Podcasts. Also check out YouTube for the videos. You can find me on Twitter at (A-U-R-E-N). I’d love to hear from you.

Source: Safegraph.com

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