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has
a culture; every company
is
a culture. A startup is a team of people on a
mission, and a good culture is just what that looks like on the inside.
BEYOND PROFESSIONALISM
The first team that I built has become known in Silicon Valley as the “ PayPal Mafia”
because so many of my former colleagues have gone on to help each other start and
invest in successful tech companies. We sold PayPal to eBay for $1.5 billion in 2002.
Since then, Elon Musk has founded SpaceX and co-founded Tesla Motors; Reid Hoffman
co-founded LinkedIn; Steve Chen, Chad Hurley, and Jawed Karim together founded
YouTube; Jeremy Stoppelman and Russel Simmons founded Yelp; David Sacks co-
founded Yammer; and I co-founded Palantir. Today all seven of those companies are
worth more than $1 billion each. PayPal’s office amenities never got much press, but the
team has done extraordinarily well, both together and individually: the culture was
strong enough to transcend the original company.
We didn’t assemble a mafia by sorting through résumés and simply hiring the most
talented people. I had seen the mixed results of that approach firsthand when I worked at
a New York law firm. The lawyers I worked with ran a valuable business, and they were
impressive individuals one by one. But the relationships between them were oddly thin.
They spent all day together, but few of them seemed to have much to say to each other
outside the office. Why work with a group of people who don’t even like each other?
Many seem to think it’s a sacrifice necessary for making money. But taking a merely
professional view of the workplace, in which free agents check in and out on a
transactional basis, is worse than cold: it’s not even rational. Since time is your most
valuable asset, it’s odd to spend it working with people who don’t envision any long-
term future together. If you can’t count durable relationships among the fruits of your
time at work, you haven’t invested your time well—even in purely financial terms.
From the start, I wanted PayPal to be tightly knit instead of transactional. I thought
stronger relationships would make us not just happier and better at work but also more
successful in our careers even beyond PayPal. So we set out to hire people who would
actually enjoy working together. They had to be talented, but even more than that they
had to be excited about working specifically with us. That was the start of the PayPal
Mafia.
RECRUITING CONSPIRATORS
Recruiting is a core competency for any company. It should never be outsourced. You
need people who are not just skilled on paper but who will work together cohesively after
they’re hired. The first four or five might be attracted by large equity stakes or high-
profile responsibilities. More important than those obvious offerings is your answer to
this question:
Why should the 20th employee join your company?
Talented people don’t
need
to work for you; they have plenty of options. You should
ask yourself a more pointed version of the question:
Why would someone join your
company as its 20th engineer when she could go work at Google for more money and
more prestige?
Here are some bad answers: “Your stock options will be worth more here than
elsewhere.” “You’ll get to work with the smartest people in the world.” “You can help
solve the world’s most challenging problems.” What’s wrong with valuable stock, smart
people, or pressing problems? Nothing—but every company makes these same claims,
so they won’t help you stand out. General and undifferentiated pitches don’t say anything
about why a recruit should join your company instead of many others.
The only good answers are specific to your company, so you won’t find them in this
book. But there are two general kinds of good answers: answers about your mission and
answers about your team. You’ll attract the employees you need if you can explain why
your mission is compelling: not why it’s important in general, but why you’re doing
something important that no one else is going to get done. That’s the only thing that can
make its importance unique. At PayPal, if you were excited by the idea of creating a new
digital currency to replace the U.S. dollar, we wanted to talk to you; if not, you weren’t
the right fit.
However, even a great mission is not enough. The kind of recruit who would be most
engaged as an employee will also wonder: “Are these the kind of people I want to work
with?” You should be able to explain why your company is a unique match for him
personally. And if you can’t do that, he’s probably not the right match.
Above all, don’t fight the perk war. Anybody who would be more powerfully swayed
by free laundry pickup or pet day care would be a bad addition to your team. Just cover
the basics like health insurance and then promise what no others can: the opportunity to
do irreplaceable work on a unique problem alongside great people. You probably can’t
be the Google of 2014 in terms of compensation or perks, but you
can
be like the Google
of 1999 if you already have good answers about your mission and team.
WHAT’S UNDER SILICON VALLEY’S HOODIES
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