On recruiting and culture

Nivi: You’re listening to the Naval Podcast. Today we’re going to be talking about recruiting, hiring, team, and culture.

The Best Only Want to Work With the Best

Nivi: There’s a famous quote from Vinod Khosla, “The team you build is the company you build.” Or in other words, they told you it was a technology game when it’s really a recruiting game.

So I pulled up a tweet from Naval from August 2025: “Founders can delegate everything except recruiting, fundraising, strategy, and product vision.”

Naval: Recruiting is the most important thing because you need creativity; you need motivated people. Ideally, the early people are all geniuses. They’re self-managing, low-ego, hardworking, highly competent, builders, technical—maybe one or two sellers—but you can’t watch everything. You can’t micromanage everything.

The early people are the DNA of the company. When you outsource recruiting, when you have other people hiring and interviewing and making hiring decisions without your direct involvement and veto, that’s a sad day. That’s the day that the company’s no longer being driven directly by you.

There’s now a fly-by-wire element in between. There’s some mechanical linkage going through another human, often at a distance. And other people are not going to have the same level of selectivity that you will as a founder.

The important size at which a company starts changing is not some arbitrary number, like 20 or 30 or 40. It’s the point at which the founder is not directly recruiting and managing everyone. The moment that there are middle layers of management, then you are somewhat disconnected from the company, and your ability to directly drive a product team that can take the company from zero to one goes away.

So we really cannot outsource recruiting. People think you can. They hire recruiters, for example. Maybe you can outsource a little bit of sourcing, but I would even argue that’s difficult. The reason recruiting is so, so, so important—and a lot of it is obvious, I’ll skip the obvious reasons—but one non-obvious reason is that the best people truly only want to work with the best people.

Working with anyone who’s not at their level is a cognitive load upon them. And the more people they’re surrounded by who are not as good as they are, the more keenly they’re aware that they belong somewhere else, or they should be doing their own thing.

The best teams are mutually motivated. They reinforce each other. Everyone’s trying to impress each other.

One good test is when you’re recruiting a new person, you should be able to say to them, “Walk into that room where the rest of the team is sitting. Take anyone you want—pick them at random—pull them aside for 30 minutes, and interview them. And if you aren’t impressed by them, don’t join.”

When you do that test, you will instinctively flinch at the idea of them interviewing randomly a certain person that’s kind of in the back of your mind. That’s the person you need to let go. Because that’s the person keeping you from having this high-functioning team that all wants to impress each other. That’s the bar you have to keep, especially for all the people you’re going to directly manage—the first 20, the first 30, the first 40, the first 10—whatever that number is.

In those early people that you’re going to directly manage, what are you looking for?

There’s the old Warren Buffett line of “Intelligence, energy, integrity.” I would add “low ego.” Low-ego people are just much easier to manage. They tend to engage less in interpersonal conflict. They care more about the work than about politicking or fighting for credit.

You just scale better. You’ll be able to manage 30 or 40 low-ego people when you might only be able to manage five high-ego people, because you’re always massaging their egos.

So I think Vinod’s phrase is absolutely correct: the team you build is the company you build, especially for the first N people that you are directly managing—they’re the DNA of the company.

You’ll Never Be Able to Hire Anybody Better Than You

Naval: Back to the tweet: You can’t outsource fundraising because investors are betting on you. If you’re outsourcing fundraising, whoever you’re outsourcing to is really the person running the company. Good investors, certainly, are not going to back a company where there’s a proxy fundraiser, which is why companies that raise money through bankers are always starting off on the wrong foot.

You shouldn’t need a banker to raise money for you. Now, in later rounds it’s a little different because you’re reaching money that’s outside of the normal venture market. But especially in early stage, if you’re engaging a banker, that’s symptomatic of a deeper problem.

Strategy: You have to set and communicate the strategy.

Product vision: This is the one that’s up for debate. There are some founders who outsource product vision, but I would argue that because your job here is to take the best team you can find and distill their energy into a perfect product—to instantiate their knowledge and creativity into a product—you need to unify the product vision.

One person needs to hold any complex product entirely in their head. And this is where it helps to have more than one founder, because it’s rare that someone can fundraise and recruit and hold product vision entirely in their head.

Steve Jobs was one of these people. Elon Musk is probably another one. But usually you see a two-person team: one person who’s better at selling—although it helps if they have some builder background so they know what they’re talking about—and one person who’s better at building, but it helps if they have a little bit of a seller bone because they’re probably going to be recruiting the other builders.

I don’t think you can outsource any of those four.

There are cases where product vision has been outsourced—there’s some brilliant person underneath who’s driving the product vision—but those are rare. Usually all four are handled by the core founding team.

Nivi: There will never be a better recruiter in the company than the founder. And I mean that in two ways.

One, in any successful startup, the founder is always a great recruiter.

But there’s also the flip side of that, which is the quality of the founder as a recruiter, as a human being, or as a contributor, is a cap on the quality of anybody you’re going to bring into the organization.

You’re never going to be able to hire anybody who’s better than you are.

Naval: Right. People say, “Hire people who are better than you.” I don’t think that really works. People who are better than you don’t want to work for you for long.

Now, it may be different down the road when you’ve built a huge enterprise and there’s a network effect and an amazing product. Then maybe you can hire people who are better than you because you’re bringing a lot more than just you. But early on, all you’re bringing to the startup is you. And for people to want to work for you, you have to be at least on their level.

This is why I think early-stage investors judge the founding team so heavily. They don’t even care about early progress—at least the good ones don’t—or about partnerships or domain expertise. They just want to see how good you are. And the clearest way you can show how good you are is by recruiting great people.

Break Every Rule to Get the Best People

Nivi: Another reason you can’t outsource recruiting is that recruiting takes a tremendous amount of creativity. Otherwise, you’re going to be doing the same cookie-cutter stuff that every other company in the world is doing, and you’re going to end up with the same interchangeable talent every other company has.

Naval: So don’t take the fact that you don’t know anything about recruiting as a negative. Absolutely. In my own most recent company, I think I’ve recruited the best team I’ve ever worked with by far, and I’ve broken so many rules.

Every single hire, we had to break some core rule of recruiting. I won’t go into all of them because some of those are still tricks that are valid in the environment. Some of those are probably pushing boundaries.

But we break every rule.

We break all the objections around commuting.

We’ll break the objections around “Oh, I’m having a kid.”

We’ll break the objections around “Oh, I can’t afford to exercise these options.”

We’ll break the objections around “Oh, but I’m at a university.”

We’ll even break the objections around people who may have goals, like, “Oh, I want to be surrounded by the best scientists,” or, “I want to work in a different kind of environment.”

In the 2025 environment, everyone is trying so hard to recruit AI people and engineers. The dema...