It is a truism in Silicon Valley that star employees are worth ten to one hundred times as much as ordinary employees. This calculus is especially true for software engineers, but also applies to product managers, sales executives, and other key employees. If you are a star performer, the sky’s the limit in terms of what technology companies will be willing to attract or keep you.
We’ve seen this again and again. Facebook bought Friendfeed for$50 millionjust to get its highly talented engineers (co-founder Brett Taylor is now Facebook’s CTO). Last year, Google made a$3.5 millioncounteroffer to a staff engineer to keep him from going to Facebook. And this year, it paid two top product managers as much as$150 millionto keep them from going to Twitter.
Hire stars, and not only will they work harder than everyone else, but they will also lift the performance of the entire company. I’ve witnessed this happen at both technology and media companies. The stars come in and raise the bar, and everyone else picks up their game as a result (either out of pride or fear, or some combination of the two).
But not everyone can be a star. And sometimes stars fade when they are taken out of the environment in which they became stars in the first place. AHarvard Business School studyonce looked at star Wall Street analysts and concluded that they did not tend to do as well when they moved jobs. Furtherresearchsuggested that some of the factors for moving stars successfully include how similar the new company is to the old one in terms of culture and resources, and the ability for the star to bring along his or her team.
None of these studies look at the dynamics of technology startups. They are focussed more on Wall Street or large corporations, where stars are defined differently. Yet a recentblog postbyFast Companyco-founder Bill Taylor tries to apply the argument to Silicon Valley and says that great people are overrated. Taylor brings up the Boston Bruins and the Dallas Mavericks as counterexamples that great teams can do better than rivals with star individual players.
When I retweeted this article a few weeks ago, Square COO Keith Rabois almost immediatelyresponded, “he is wrong.” Oh yeah, I asked, what about the Bruins? To which Rabois replied:
@erickschonfeldSports are subject to salary caps and other socialist constraints (like drafts). Imagine if you could recruit everyone.
Imagine if you could recruit everyone and offer them virtually limitless upside in stock—that is how hot startups recruit. People like Rabois are selling the dream every time they hire someone. It helps if they’ve delivered on that dream before or can demonstrate so much traction that it makes it hard for the best hires to turn them down. Because who doesn’t want limitless upside?
What it comes down to, then, is whether the company doing the recruiting is a star in its own right. Star players want to work for star companies. And there is no limit to how many stars a startup can hire, especially if it is paying mostly in stock.
But that doesn’t mean that stars don’t need to be team players. The best stars lead the people around them. They motivate, inspire, and lead by example. They also help their teammates whenever they can because they know they cannot do everything alone.
Hiring stars versus hiring a great team is a false choice. You should always try to hire the best people you can find: people who are stars or have the potential to become stars. Especially in tech startups, stars attract other stars because the smartest people want to work with other smart people. Hiring mediocre players is the surest way to create a mediocre company.
The best stars are those who can work with other people, and lift the entire organization. A company filled with stars can end up with the stars feeding off each other and forming a great, cohesive team. They hide each other’s weaknesses by picking up the slack between them just like a great basketball team is always passing the ball to whoever is in the strongest postion at any given time.
Too many stars in one company can also create rivalries that take the company down. But those people then cease to be stars. Companies are a team sport. You can’t be a star if your team sucks.