Sam Altman on the biggest mistake startup CEOs make when scaling a company

“When you’re a Seed or Series A company, you spend a huge amount of effort recruiting, but almost no effort retaining talent — and that is [the right strategy] at the beginning. But if you don’t shift to viewing retaining talent as as much of your job as recruiting talent, you eventually have some level of a disaster on your hands.”

Sam recalls Mark Zuckerberg speaking at Y Combinator and saying he only hires people he’d report to if the roles were reversed. Sam reflects on this:

“If you’re hiring people that are that good — which you should be doing — they have as many opportunities as you do… And so if you don’t make the role good enough that you yourself would stay in it, then you have a hard time retaining your best people for a long period of time.”

Sam gives three pieces of tactical advice for CEOs who want to retain their best people:

#1 Spend one-on-one time with your best people

“The thing that your best 5-10 people crave the most is time with you, the CEO. And that is something that as people get busier, they spend less and less time on. Some of the best CEOs in our portfolio, every month they will take out for a one-on-one dinner or drinks or something each of their best 10 people. This is a huge time commitment. If you think about it, you only get 30 dinner slots in a month. It’s a really big thing to do. But I think it actually works because that is the thing these people really crave… They want you to ask them what you think they should be doing and listen to them and have a personal connection. That’s super important.”

#2 Continually give them more responsibility

“I think if you stop giving people more responsibility, they will eventually leave. If they get to take on new tasks every year or additional tasks every year, they’re happier.”

#3 Proactively re-up their compensation

“I think most founders are very bad about proactively re-upping — to the level that they should — their top 5-10 lieutenants.”

Full video: Khosla Ventures “Startups | Sam Altman“ (Jul 2016)