The CEO of a US fintech unicorn worth more than $2.6 billion spends a third of his time recruiting. Here's why he 'hires for spikes' rather than seeking well-rounded candidates.
- US fintech Plaid is currently hiring more than 200 staff as the startup expands rapidly across three global offices.
- Plaid's technology powers other well-known financial startups such as Stripe and Venmo, helping them link up to people's bank accounts.
- CEO and cofounder Zach Perret spends approximately a third of his time on hiring as the company, valued at a rumored $2.6 billion, looks to continue its growth.
- Perret says that he "hires for spikes" and looks for specialists and leaders in their fields as opposed to generalists.
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Building a company from scratch is all about getting the best talent. It's an old adage that people make a place, but how to go about it?
It's a massive task for startup CEOs juggling manifold issues but according to Plaid cofounder Zach Perret there is a method to succeeding in securing the right staff.
Plaid is a US financial tech startup and reportedly valued at $2.65 billion. It's a little different from other well-known unicorn startups in finance such as Robinhood or Venmo. Instead, it provides underlying infrastructure that powers these consumer finance startups, providing a set of APIs that allow developers to connect up people's bank accounts. It counts payment firm Stripe, money-transfer firm Venmo, and Robinhood among its users.
The New York-based fintech said that it hired 200 people between June 2018 and 2019 and is currently hiring around 230 people across the US and Europe, according to job postings on Linkedin.
Perret estimates that about a third of his time is spent on hiring, whether it's finding the best people to hire, conducting interviews, or closing contracts with candidates.
That isn't necessarily unusual. Silicon Valley CEOs have long espoused the benefits of being deeply involved in hiring with Facebook boss Mark Zuckerberg apparently spending as much as 50% of his time on new hires. And the competition is intense.A recent survey from Indeed, the US's largest employment site, claimed that 86% of tech recruiters and employers were struggling to hire top talent in an increasingly limited pool of star candidates.
"We focus on hiring people who are incredible in a given area, and tend to look more at identifying strengths, rather than an absence of weaknesses. We call this hiring for spikes," Perret told Business Insider in an interview.
"Fitting our culture is obviously non-negotiable but it's the opposite of just hiring well-rounded people," he added.
There is a risk, of course, that you end up with "brilliant jerks" through this method of hiring - people who might be highly specialized and skilful, but lack soft skills that make them easy to work with. But Perret's approach is common to startups moving into scale-up stage, which often evolve from relying on generalists at the early stage who can help build out all facets of the company, to specialists who can be more effective in a given area.
Plaid raised $250 million in December 2018 to fuel its expansion
Clients like Robinhood and JPMorgan Chase use Plaid's infrastructure, and venture capital investors have poured money into the company in recent years to help fuel its expansion.
Some $353 million of funds have come from Index Ventures, Kleiner Perkins, Goldman Sachs Investment Partners, and Andreesen Horowitz, among others. Mostly recently, the firm raised $250 million in December at a rumoured $2.6 billion valuation.
"When we [cofounders William Hockey and Zach Perret] founded the company aged 23 and 24, we had relatively limited networks so spent a lot of time learning to do outbound recruiting," Perret said. "We probably talked to 20 companies about how they built their hiring processes, and tried a lot of different things in the early days. These early learnings helped us build a deep focus on hiring across the company which persists to this day."
This specifically included conversations with senior engineers at companies who helped establish Perret's vision around interviewing tactics, where to source candidates, and importantly how to close desired hires. The CEO also leaned on his board of investors to help with more senior leadership hires, with Plaid boasting the storied investor Mary Meeker as a member of the board.
Similarly, the company has its own "head of people" McKenna Quint who helps Perret make tricky hiring decisions as part of a process that involves "hiring quickly but carefully" with hundreds of new staff joining the startup every year. "The best advice we got was to be maniacally focused on recruitment because that effort generates returns for us," Perret added.
Examples of the company's out-of-the-box staff have included Erik Anstine, a former opera singer with no formal engineering experience, (who joined the company as part of its purchase of Quovo). Anstine has said the company is supportive of his passion and that he still performs two to three times a year.
Similarly, Emeline Minor, a business development lead, had little to no tech expertise but her corporate and finance background was seen as a major boon to the company's credentials.
"You don't always see payback on those hires sometimes for months or years but you know when you have the right people and it's shown in our growth so far," Perret said.