Stone Soup and Senior Hires

Stone Soup is a common folk story that has been told throughout history in many different languages. The picture book version by Marcia Brown was first published in 1947 and is a nighttime favorite with my kids. It’s a story I love for many reasons, including its enterprising spirit and its timeless lessons on leadership and cooperation.

The tale opens with three French soldiers walking through the countryside as they return from fighting in a war. They approach a small village hungry and tired, hopeful for some hospitality. Sadly, the townspeople are themselves fatigued from the strife of war. They are closed and suspicious to these strangers, and they hide their food and claim that all of their beds are full. The soldiers announce to the townsfolk that they have an idea: if there is no food, then they will make soup from stones and feed all of the townsfolk. They set a great kettle over a fire in the middle of the town and prepare for the soup by first adding three large stones. Of course, a dash of salt would make it better, the soldiers muse, and quickly someone dashes to “find” some salt. Then cabbage and carrots are somehow found, as this contribution would indeed make the soup more tasty and the project more successful. One by one, as ingredients are suggested by the soldiers, townspeople bring them to the pot. By the time the soup is ready, it is rich with meat and vegetables, tables are set, bread is added, and a feast is had by the entire community. The townsfolk have each joined the cause (unknowingly) and added a small bit of their contribution to the success of the meal.

My kids always love the way the soldiers innocently suggest ideas and make this happen. I love the way the story illustrates that each successful project requires different contributions from lots of people.

Recently, four experiences with companies in the True portfolio got me thinking about the lessons from Stone Soup, and how important it is for companies to not just start with a good core team, but to consistently add big talent to their team over time. The best Founders somehow coopt an entire community, an entire village to work for their cause, and the best teams need to be open to contributions from lots of people—people who can contribute important, new ingredients like carrots and onions, people who can set the table and procure bread, and people who can light a fire under the pot.

When we make an initial investment at True, most of our focus is on the founding team. We have long said that our firm has five very strict investment criteria. The first three are the same: people, people, and people. Resourcefulness, vision, drive, story, and the ability to amass resources far beyond one’s initial grasp define all True Founders. That is why we like to invest in missionary founders, and we try hard to avoid the mercenaries.

Putting Founders first has worked incredibly well for us, but in reality, that’s just the start. Post-funding, we focus on helping our teams add great software engineers, designers and back-end dev ops to the effort. Early team building is a staple of startup life, not just for True companies, but for all in the valley. As a company grows in size and scope, its needs change too.

Our most successful portfolio companies consistently bring in new senior leaders, new C-level folks or VPs. We don’t hear this talked about much in the Valley, and in some ways there is an entrepreneurial bias against “big company” people early on, but recent examples have made me want to call out this bias and disagree.

Greatness in our midst has been consistent with those cultures that successfully bring in people “better than themselves” in terms of experience, perspective and scale. The values of a culture stay the same, but the skills constantly need to be up-leveled. The stark reality is also that normally, post-funding, startups run into the same challenges—customers of any kind are hard to convince, and all of those potential hires you had in mind might prefer the security and safety of their large paycheck than actually joining you and your Co-Founders.

I recently witnessed this lesson firsthand at four of our highest-growth portfolio companies. In one case, we landed a huge-scale CFO from Microsoft who instantly changed our fast-growing hardware company for scale. A second situation involved bringing an incredibly talented senior executive in from Google as COO. The third involved bringing a public company CFO into a rapidly growing private company. And the final example, the successful recruiting of a string of very senior engineering leaders, including landing a VP of engineering to a very “hot” startup in our portfolio. Four huge hires on teams I work closely with, all within the past few months.

The results across the board have been astounding. In each case, these hires have brought renewed vision to our teams, streamlined basic processes with better ones, brought in new expertise, and added a wealth of industry perspective and contacts. In all four cases, they have re-energized our existing leadership. They have challenged our CEO’s thinking, which is critical to growth and learning. Over time, every culture develops bias and ingrained behavior. Sometimes these are good and they stick because they work, but sometimes they stick just because of precedent or politics. New senior leaders can question everyone’s assumptions, challenge team biases with fresh and very educated eyes. These four senior leaders have upped our game dramatically. Each of the Founders have called me with a mix of relief, a feeling of “why did we wait so long” and most importantly, hugely renewed energy for their part of the journey ahead.

It’s obvious when a company reaches massive scale that it needs folks with massive scale experience, but I think the lessons of Stone Soup apply at all stages.
If you’re a company that reads this and says, “Nah, we don’t need that kind of talent yet; that can wait,” I’m here to tell you that you are wrong. Across eight years and over 200 investments, the failure mode most experienced by our portfolio is a company’s inability to attract (and retain) senior leaders post-financing. Sometimes this inability stems back to a market problem, an idea problem, or the product, but these can be fixed with creativity.

All too often (and most often), the failure to recruit incredible people is a failure of leadership and ingenuity. Indeed, it’s a failure of the ability to actually be an entrepreneur. After all, the biggest part of “amassing resources far beyond one’s immediate control” is brainpower, skill and capability. In short, people.

Regardless of stage, I’d inspire you to look carefully at your team and the ecosystem in which you operate. There are many others around you who can help make a difference and add capability to your effort. Growth requires everyone to chip in constantly with new capabilities. Success requires an openness to constantly bring in incredible talent and skills to your team.

Oh, and try hard to aim high. All of us are lucky enough to be operating in a historic time of entrepreneurial creativity and impact. Our industry is changing the face of global economics, and startups are leading the way. The most talented people in the world are joining this industrial revolution, so really, no great talent is out of your reach.

As Marcia Brown writes in her version of Stone Soup:

“Many thanks for what you have taught us,” the peasants said to the soldiers. “We shall never go hungry, now that we know how to make soup from stones.”

“Oh, it’s all in knowing how,” said the soldiers, and off they went down the road.