• Startup Archive
  • Posts
  • Keith Rabois on what Peter Thiel taught him about promoting people

Keith Rabois on what Peter Thiel taught him about promoting people

November 12, 2024

“So I actually learned from Peter Thiel back at PayPal that you only really want to promote someone when there’s a significant delta between that person’s performance and the next best person. The bigger the delta, the easier it is to promote somebody. Otherwise you’re better off leaving things flat until the gap is just unmistakable.”

The key benefit is a flatter organization with less bureaucracy. But Keith also argues that layering talented direct reports under an executive is a bad for morale:

“You’re going to demoralize them, and you’re never going to see how much upside they really have. As long as you think someone has unbounded upside, I’d be very leery of suppressing their potential.”

Keith Rabois on how to identify great talent “There will be some people who you don’t expect—with different backgrounds, without a lot of experience—who can just handle enormously complicated tasks. So keep testing that and pushing the envelope.” (full article).

Keith Rabois: “The velocity of your company improves by adding barrels” “Most companies—once they get into hiring mode—just hire a lot of people. And you expect that as you add people your throughput and velocity of shipping things is going to increase. But it turns out it doesn’t work that way. Usually when you hire more engineers, you actually don’t get that much more done. You sometimes get less done.” (full article).

Keith Rabois shares the focusing framework he learned from Peter Thiel “The insight behind this is that most people will solve problems that they understand how to solve. Roughly speaking, they will solve B+ problems instead of A+ problems. A+ problems are high-impact problems for your company but they’re difficult—you don’t wake up in the morning with a solution to them, so you tend to procrastinate… If you have a company that’s always solving B+ problems, you’ll grow and add value, but you’ll never create the breakthrough idea because no one is spending 100% of their time banging their head against the wall every day until they solve it.” (full article).