SPEAKER

Farhan Thawar - VP of Engineering @ Shopify

Farhan is currently VP, Engineering at Shopify via the acquisition of Helpful.com where he was co-founder and CTO. Previously he was the CTO, Mobile at Pivotal and VP, Engineering at Pivotal Labs via the acquisition of Xtreme Labs.

“That's my number one problem with interviewing. Not that good candidates can pass an interview. It's that non-traditional candidates will likely fail your interview”

<cite>- Farhan Thawar</cite>

He is an avid writer and speaker and was named one of Toronto's 25 most powerful people. Prior to Xtreme, Farhan held senior technical positions at Achievers, Microsoft, Celestica, and Trilogy. Farhan completed his MBA in Financial Engineering at Rotman and Computer Science/EE at Waterloo. Farhan is also an advisor at yCombinator and holds a board seat at Optiva (formerly Redknee).

Show Notes

• Farhan’s origin story being recruited to start Helpful.com by Daniel Debow. (1:28)
• Impact and examples of going above and beyond in recruiting using unusual ways to reach potential candidates. (8:30)
• Using speed as a competitive advantage, especially when you’re small. (12:44)
• How to prevent speed from backfiring by thinking about decisions as “one-way” or “two-way doors.” (14:36)
• Critical structures to best assess candidate fit. (15:17)
• How Farhan starts from first principles to leverage creativity in recruiting. (20:38)
• Farhan’s MOST IMPORTANT indicator of performance, and how to uncover it in an interview. (25:49)
• Results of speed in the hiring process - 15 min interview (31:36)
• How the 15 min interview works. (33:47)
• What’s different in hiring an engineering leader. (35:41)
• How to increase your pool of potential candidates through “backward promotions,” interim titles, and recruiting people who haven’t “done it” before. (42:41)
• Examples of what happens when bias is removed in the interview process and people are given a shot. (48:03)
• Farhan’s most terrible leadership mistake & how to turn underperformers into extremely high performers in 30 days with Performance Improvement Plans (PIP’s). (49:36)
• Farhan’s most impactful leadership action: the power of personalization. (53:56)

Transcript

The Impact of Going Above & Beyond in Recruiting

Patrick Gallagher: Farhan, thanks for joining us!

Farhan Thawar: Thanks for having me.

Patrick Gallagher: Given that our episode is going to be all about the recruiting and hiring process... We'd love to dive in first to what your recruiting and hiring process was with joining the team at Helpful.com. How did you become the cofounder? How'd you meet Daniel?

Farhan Thawar: Yeah, sure. So, I mean, maybe I'll first off, start off with how I learned about recruiting. Like my first job out of school was at a company called Trilogy in Austin, Texas. And I would say most of what I learned about how to recruit was from there, I'm so happy to go into that story, but let me, let me tell you a little about Daniel and Helpful.

So Daniel Debow's is a serial entrepreneur in Toronto. And the way I met him was that, you know, I'm not a... super shy person. He was actually about to do a presentation on stage for this conference called the mesh conference, which was I think in 2005 or ‘06... A while ago in Toronto. And he was literally walking up the stage to start speaking, and I walked up the stage with him...

] Like it was super strange. And he was like, "Hey, what are you doing? I'm about to do a talk."

And I said, "Hey, my name's Farhan. I'm, I'm friends with James. We used to work together actually at Trilogy. I just wanted to say hi."

And he just thought it was like super strange 1) that I was following him up the stage. But then 2) I said the thing that I knew would hook him...

Which is that James who worked with him and was super sharp. Also from Trilogy. I knew that that would get him thinking about, "I want to talk to this guy more."

So he actually grabbed his co founder and said, "Hey, can you like skip my talk and talk to this guy outside in the hallway?"

And that started our discussions with Daniel, he ended up trying to recruit me to Ripple, which was his company at the time.

I ended up actually getting him to be a customer of Extreme Labs where I, where I was a few years later. And that's how we got to know each other, I was like a customer.

And then when we were, when he was, , you know, after the Extreme Labs acquisition and he had been acquired by Salesforce. He wanted to chat with me about what to do next.

And so he texted me and said, Hey, let's meet up on Thursday. And let's chat about, you know, what we're going to do next. I said, no problem. And at the time, Daniel had three kids. He has four kids now, and I have three kids. And I texted him in the morning. I said, "Hey, looks like we won't be able to meet because my middle son was throwing up all night. I've got to take him to the doctor."

Like it was that severe.

Patrick Gallagher: Oh my gosh.

Farhan Thawar: He goes, you know? Yeah. And most people would, would say, "cool, let's reschedule..."

And Daniel doesn't do this right. Daniel says. "Where's your doctor's office?"

Right. Like, this is the first... the mark of like, this is a different kind of person. so he goes, "where's your doctor's office?"

I'm like, "okay. It's, you know, not too far from my house."

So I give him... texted them to where it is. He meets me there. Right. Which is amazing.

and we sit in the waiting room. My son's like, lie, like sleeping on me basically. And Daniel's chatting and we're just, we're actually just not chatting about anything. Just shooting the shit.

He doesn't come to me in the room with the doctor, but then he's still waiting there. I come out and he goes, "what are you doing now?"

"I'm going to say, I go, I'm gonna take my son home, , to let them like, you know, sleep it off or whatever."

And he goes, "where's your house? Like, what's your address?"

I'm like, “okay”

I give him my address. And he has it. He has his bike, like bicycle with a basket in front, and he follows, like, you know, follows me. But he goes to, he comes to my house on his bike, I'd drive it from home,

And then we’re at my house. He kinda goes like, "what are you doing now? I'm like, well, I'm going to hang out with my kid. But I gotta go to the Pharmacy,"

and so he goes, "I'll walk with you."

And so my wife is at home and she's like, "who is this dude who's like following you around when your son is sick?"

And we go to the pharmacy, we come back, we're just talking about life. And then we finally go to my back deck of my house. My son is sleeping now. I picked up some like Pedialyte or whatever, and he opens his laptop and he has a PowerPoint, PDF presentation of it says Farhan +Daniel, and it's a deck he wrote about why we're starting a company... like together.

And it started off with our values that we share. Interesting technology ideas, the ecosystem of Toronto, all the way down to like how we would fund it, timeline over the next 12 to 18 months, equity split. Like it was insane. The amount of detail.

And what was amazing about it was. One, he defines tenacity, right? Like he wasn't taking no for an answer, even just to meet. And then two all the detailed thinking. He had anticipated all my questions.

And then my, I went into my kitchen after him and Daniel was still on the deck and my wife looked at me and goes, who is this guy? And I told her, and she goes, you've got to start a company with this guy.

Like literally, right?

She had two questions, like one is like what?

Like who is he? But she also just asked another very important question, which is, "if you do this and it fails, are you more or less valuable to the market?"

And the answer was more valuable.

She goes, "well, that answer combined with this, dudes crazy. Like you… you have to start this company.

Patrick Gallagher: Wow. I mean, what two sort of metrics to measure. The validity of making the decision. Your crazy matches his crazy. And on top of that, you become more valuable.

Farhan Thawar: Yeah. And I mean, the other thing, if anybody, you know, for people who know both of us, they know our crazies are quite different, right? Like the Venn diagram of our crazy overlap is very small.

He is an unreasonable, impatient person who sees the future and wonders, "why is it not here yet?"

And I am a like maniacal, like 1% a week. How do we get towards that future?”

But you know, completely in the completely different ways to get there.

Jerry Li: I actually have a follow up question on that. How do you feel as a, someone being poached.. Recruited by Daniel. When he follows you to the pharmacy and the doctor's office and your house, what's your feeling? What's your response to it?

Farhan Thawar: Well, my first feeling was one awesome! Because I actually am a big fan of the, like go beyond what other people would normally do “mantra.” Like I'm a big fan of that.

Two, it was surprising how closely that matches my own recruiting, right? Like when I'm working on recruiting somebody or talking to somebody, like my wife always says, it's about me. Like, you'll figure out a way. I always figure out a way, right? If there's, if there's like, Hey, you need to get to so-and-so person, I will figure out a way to get so and so person. Right?

and when I was at Extreme Labs and I was at a party and literally I saw somebody across the room, I looked up on LinkedIn, like, that's so and so at the party. I will like figure out a way to like roll up and casually be like, Hey!!! And start talking, knowing full well that I'm trying to create a business relationship.

And be like, “Oh, I didn't know you worked at company X?”

Like I knew everything. So I will use all the tools at my disposal to figure out a way to make that happen. And so Daniel was just using the same tactics that I would use. And that's why I thought it was a... It was a good match for us. Right? Very similarly is how I went out and then recruited the initial hire, the team of Helpful.

Right? I spent a lot of time with a few key early people convincing them that what they were doing was not going to be as impactful as what we were doing. Using similar techniques, meaning mostly being like… I wouldn't consider it the aggressive, but very assertive. It was very assertive, right?

He wasn't forcing himself up. He's just like, where are you going? What's the address? Like he wasn't being overly, he was just being very assertive and I liked that.

Jerry Li: Yeah. Do you happen to have an example that you use similar tactics to recruit people into Helpful?

Farhan Thawar: Yeah. So actually, if you're going to like this one...

We had a funny time hiring machine learning scientists because I actually didn't have any background in machine learning data science, and I don't… I didn't have a network of those types of people.

So… there was a course, an online course called the “Machine Learning Summer School” that was happening in Toronto. I think a few months before we were trying to look for people and so I just found out about it. I'm like, “Hey, machine learning summer school…. This is cool. Wouldn't it be cool if we could like target all the people who went to machine learning summer school?”

Our third co-founder David Pardi, figured out that the Google form that everybody, you know, used to sign up for deep learning summer school was open.

So all the people who attended the summer school was open. So I was like,”wow, we have this big list now of like 500 people.”

And I'm like, “what's a really quick way to filter this down by everybody in Toronto?”

so I just used like oDesk, like Upwork. And I went on and I paid somebody 20 bucks and I go, I want you to look at each one of these 500 people.

on LinkedIn, maybe their LinkedIn profile, their city, their current title, blah, blah, blah. And within 24 hours, I had a filtered list by city of all the people who had gone to deep learning summer school who live in Toronto. And then I just emailed all of them cold and the title of my email said "hello from deep learning summer school."

Which I had no affiliation with deep learning summer school. I just literally sent it as the hello from deep learning summer school. “Hey, wanted to have a conversation with you about this exciting new startup we're working on.”

And one one thing that was funny about that was one, I ended up inadvertently emailing the organizers.

Of deep learning summer school who were very confused...

Jerry Li: Oops

Farhan Thawar: By the email ... yeah, but what's the oops? Like, who cares? Right. I met with them actually and they… I spent time with them and they invited me to hold their seminar. It was actually really funny. The first meeting was funny cause I didn't know what it was about and they didn't… like, I was trying to recruit them and they were trying to recruit me into this fold of being part of a deep learning summer school.

But I ended up hiring an engineer from that. Like a lot of people said, “Hey, thanks for the reach out. I've already got a job at, you know, whatever.”

And a few people were just super interested in machine learning. And I hired one of our first machine learning engineers, and he's at Shopify today because he came in through the acquisition.

So, it was very fruitful and a great way to meet like 15 to 20 people in the field, given that I didn't know the field , and , it worked right? Like it was a way to kind of get to people that wasn't a way that they, they weren't available to other people cause it was a private email list basically.

Jerry Li: That's a fun story now you pretty much use twenty bucks to hire an engineer to follow you and not just, to Helpful, but also to Shopify now. You almost, you got a job from the school.

Farhan Thawar: Yeah, exactly. No, it's really, it's, I mean, I'm just saying, but that's a good example of... like...

The normal way would be to post a job... Right?

That's not what we did, right? I mean, and I, and I hired that engineer after like, you know, just going for a coffee for like 15 minutes. Right? We were talking about my engineering process. But it worked out very well.

Jerry Li: How do you think the importance of, , you going above and beyond using unusual ways to reach out to potential candidates?

How does it make a difference from the engineer you hired, from his perspective or her perspective?

Farhan Thawar: Yeah, I mean, I think there's two things going on.

One is, is that because we're so small... And I even think this is true, even at a big company like Shopify is. The person doing it makes a difference.

Right? So the fact that I was doing it right, the fact that I was meeting...

Like, you know, my, the joke was that in Toronto, you know, maybe even a song for San Francisco, Daniel or I could get a meeting with anybody, right? Like that was our thing. Like, we can easily get a meeting and so that was, that worked in our advantage.

Cause when I would email these people, they would look me up or look Daniel up and be like, wow, these folks have done a bunch of stuff. It'd be interesting to meet them. Right. So that was a good way just to make sure we got a meeting.

When I talked to the candidate, they felt that one, because. You know, I, it was me, like I said, meeting them personally, not like my recruiter, not, and again, we didn't have recruiters, right? But it wasn't somebody like one degree from the person they would be working with that made it much more compelling for them to have that first meeting. So it was me reaching out, me having the coffee. I would love to meet with you for a walk. Right? Like that was a big part of it.

The other thing was because the process was so fast, they were using that as a proxy for how the company must run.

So for example, if there is no admin and layers and long processes for how to recruit, they were using that as a proxy for, “wow, there must be no layers and admin and processes for how this company runs.”

So they were using that as a proxy for like, “this recruiting process is fast. This company must be working moving fast.”

And that was very powerful for them to be like, “wow, I want to, I want to work here. “

Speed As a Competitive Advantage

Jerry Li: Great. So that's a competitive advantage for, from a perception perspective, knowing your company is fast moving and also related to the experience they're actually going to have after joining the team.

Farhan Thawar: Yeah, I mean, I can, I can give you another example of that. Right?

So at a company before, Extreme Labs. We hired lots of interns from the University of Waterloo. And what we did, and we have ultimately got sort of banned, or they changed the process from Waterloo, is I would go in to hire interns. And what I would do is I would have an info session. And at the info session, I would talk to candidates and I would hire them before the internship like program even opened.

So all the best engineers would end up working at Extreme Labs and they would never even enter into the candidate pool to then go work at like Google and Facebook and Amazon.

And so again, I just use speed to my advantage. I had this happen many times where I had a candidate who had had an interview loop with Amazon, and because our process... and we'll get in to our process… but because our process would end with them getting an offer the same day that they were in our office, it would be like, “wow, this process is faster than Amazon.”

And they would sign. And you know, within, I wouldn't pressure them to sign. I would say, "Hey, it's an offer that, you know, you'll have about three days to decide for your working days. If you need more time, let me know."

But usually they would sign within three days. And that would negate them from ever even entering into a process with anybody else because they would because our process was so fast.

Jerry Li: Has the leverage of speed ever backfired?

Farhan Thawar: It's a good question. I mean, if you only, if you believe that the... any... whatever decision you're entering entering into is a “one-way door.”

If you think it's a "One Way Door", right? Like we talk about this sometimes, like whether it's like getting married or having a baby.

Company going public, like these are "One Way Door"s, but it's basically like, it's a hard thing to come back from.

So you should be, you should be more sure you should take, you should take time on those one-door decisions. Like some companies are like, "Hey, let's publish everybody's salaries."

Cool. Good experiment. It'd be really sure because you can't unpublish everybody's salaries after. But hiring, I think somehow hiring for people has this feeling of like it's a lifetime commitment.

Like me hiring somebody or them joining a company... It could be a lifetime commitment. It could. You could work with that person for 20 or 30 years in your career, so they should have a great experience and you should have a great relationship, but the job you're offering somebody is not a lifetime commitment. It's not high stakes, irreversible.

So for all of those types of decisions, I don't think lots and lots of time should be spent. Typically, there's probably an 80/20 there where you can get 80% of the data with 20% of the time. And my argument as we'll probably get into is that...

I'd much rather use real world on the job performance to determine whether somebody is a fit for the company versus a proxy.

Like. Conversation, interviewing, whiteboard coding, anything else.

Jerry Li: Right. And also interviewing is not that reflective of people's performance afterwards because there are so many variables that can play a role in terms of the performance of the employee after being hired. Before jumping into the next question... I would like to dive a little deeper to sort of understand when you use a very untraditional way of hiring, like leveraging speed and also the example you gave about between you and Daniel...

How do you balance the social norms and also being creative, hiring people?

Farhan Thawar: Yeah, I think, I mean, over time people got used to the fact that we were going to try lots of crazy things, but at the beginning, I think it was just explaining to people... so explaining to the team and explaining to the folks who were hired... And don't forget, we hired everybody the same way, so they knew what it meant...

And what it looks like is the following, right...

When I would give someone an offer, I would say, "Hey, just so you know, the first 90 days is a way for you to evaluate us and for us to evaluate you. Let's really treat it like a period in which we're getting to know each other. If you feel for any reason that you're not a fit for Helpful... you should feel free to let us know, give us feedback and like, you know, feel free to like quit in the first 90 days.

And we'll do the same with you. We'll give you feedback. If we don't think that the way in which we work is suitable to the way in which you work."

And so it's mutually beneficial. Like anytime we let somebody go from helpful, , they would say, “Oh yeah, no, no, I knew it wasn't, and it wasn't working out. Like, it wasn't a surprise”

In the best possible way.

Like, they're like, “I knew it wasn't, it wasn't a fit. Thanks for letting me know.”

And in Helpful’s case, we actually gave them, you know, severance to help them find their next thing. That would never prevent them actually from referring friends to us to be like, “Hey, it didn't work out for me here, but it's a great company. You should look at it too.”

Because it was so transparent and explicit.

You know, I think all companies actually implicitly already work this way. If you get a job at Facebook. And you go through the, you know, I don't know what it is, 15 hours of interviews, 10 hours of interviews, whatever it is… and you don't work out.

And they can, you can both figure it out in the first 90 days. I hope that you would not work at Facebook after that. Unfortunately, what I think happens is it usually takes people about a year. Mostly I think on the company side to figure out if somebody is not a fit, but sometimes even on the candidate side to know that, that, that they're not a fit for that company.

It might take a year, in which case, kind of like a year lost, right? Versus like three months in and out. Like people don't even have to really put it on their LinkedIn if they don't want to. Right. It's that short.

Jerry Li: Totally. And a lot of people surprisingly don't even know. There’s a severance package if something goes bad.

Farhan Thawar: Yeah. I mean, I think there's two things going on. One is, and not every company has to right? Like I know in California law, even Ontario law, you don't have to give a severance package within 90 days.

And a lot of companies, you don't even… like benefit employee benefits don't even start within 90 days. So it can be a true probationary period where you're like, "Hey, look we're going to try to figure each other out. If it doesn't work out, no harm, no foul. It's at will employment and you can kind of roll out."

We opted to do severance because we felt that it was something... And at Helpful we did. And I know at Extreme Labs we didn't do it, cause that was, you know, we were just growing so fast and there was lots of, there was a much more, , much more volume. So we didn't do it in that company. But in Helpful we did.

I think it's just good to be explicit. Right. So, as long as people understand what's going to happen in the first 90 days. The team and everybody understands that. Now what it did was from a pipe cleaning perspective on the process, is it meant that we had to get people up to speed quickly.

So we could tell if they were a fit. And if people were not a fit the team has to be okay with people who kind of, you know, not sticking around the organization.

Now one way you can make this less of a big deal at your company is if you have lots and lots of interns, this happens automatically, right?

Cause you've got people coming in for four months at a time or coming in for the summer. So you're already used to onboarding people, having them off board within a couple of months over the summer. Maybe it's a four month internship. So I'm a big fan of internships for particularly this reason because it actually helps you bring people up to speed quickly. And then they are offloaded quickly as well, and you can hire them again. You can have them come back for full time.

Like all those things are great signals for whether they'd work in your company. And so having that process set up well... If you, if you actually, here's a good test for you... if you can't onboard interns into your company within and get them productive within four months, you could probably never do this...

And maybe that's a different problem that you want to solve.

Jerry Li: What is the thing that makes you so comfortable to leverage creativity, in recruiting?

Farhan Thawar: Yeah, so it's an interesting question. I mean, I'll answer it in a couple of ways.

One is for sure the way in which I was recruited at Trilogy had a long lasting impact in my career for how I should recruit people. So I definitely learned about a different way to recruit. I think secondly, like you use the word creative, like it's funny cause I don't think of myself as creative at all. I don't think about that as like a, I don't think I'm a good at coming up with different ideas.

I think what I tend to at least try to spend my time on is starting from like first principles. Like if we have to recruit somebody, what are all the things that we could do to try to recruit that person? Right?

So, you know, another maybe a funny example for you again, is I was at a career fair many years ago. And I get to the career, I get to the booth and me and our ops person, we get to the booth and we don't have any of our collateral. We don't have a sign, we don't have flyers, we don't have a TV screen, and we don't have anything.

And we're around a bunch of big companies that have all their booths set up. And what happened was that we were in mobile development at the time. This was at Extreme Labs. So I was lucky in that we had, we each had two phones because we, this is the days when we used to walk around with like a Blackberry and an iPhone or Android and iPhone...

So we put all our phones on the table. And we just stood there. And as people kind of walked by, students walked by, we would talk to them. And so I talked to some students and what I noticed was like, I was like, "wait a second! I'm just going to ask them interesting questions."

So I would ask, have students give me their resume and I would turn the resume over and I'd write something down.

I said, "Hey, you know, you're in computer science, why don't we, you know, quickly walk through a quick problem. I just want to talk about the problem."

And I would write down like a little short, like computer science problem. And then I would say, "feel free to like, you know, walk away and come back and let's talk about it."

So people would do that. And they would come back. And over the course of the day, some people of course, when you give them a problem, wouldn't come back at all, which is totally fine. and then some would come back and we'd chat. And at the end of the day, you know, all the companies that were, you know, officially our rivals, right? Cause we're all trying to recruit...

We all started chatting with each other cause they're all taking their booths down. And they said... I went to booth ‘A’ and I said, "Hey, how'd you do? And they said it was great. You know, we gave away 50 tee shirts.

Cool. I went to Booth "B", "How did, how'd you go?" And they're like," Oh yeah, you know, we collected like 100 resumes.

I'm like, awesome. And they said, how'd you do? I'm like, I said, I hired 7 people.

Jerry Li: Wow!

Farhan Thawar: Like, what do you mean? And I was like, well, we came here to hire right? And they kind of looked at me. I was like, “yeah, my goal was to hire”

Jerry Li: And to clarify... Sorry, clarify the folks you hired... what level they are. Interns? Or... entry level?

Farhan Thawar: Yeah, in this case they were all summer students. I think some might have been new grad hires and some, I remember having seven people. Some might have been new grad hires, like full time hires and some might have been interns. Probably mostly interns. Not one of them asked me compensation question. They just liked what we were saying, how we were approaching the problem.

And all of them showed up on Monday morning and we all, and we gave them like we didn't, we didn't give them local offers that gave them the appropriate offer for their level, for an internship. Cause we'd had so many interns. Now none of them even knew what we did. But again, they use that speed advantage.

But what was funny about that was I didn't think it was creative to like interview them on paper. And like, I didn't come up with that as a creative solution. I just came up with it.

I said, what is the goal?

I looked at, you know, Leroy, who was with me and my ops guy, and I said, the goal is to hire right. So let's hire, the goal wasn't brand building t-shirt, handing out resume collection, anything. It was hiring. So we hired.

Jerry Li: what did you do to, to say, you know, I'm going to hire you? Was that a, was there an interview or was it just a casual conversation?

Farhan Thawar: Yeah, it was the conversation. Plus they went away and did a little bit of coding on a piece of paper. And then when they came back, you should have seen their faces, right.

I'm like, “cool, you're hired.”

And they're like, “what?”

I'm like, yeah, “you're hired. You start on Monday.”

And they're like, “okay…?”

I would say like, okay cool… talk to Leroy.”

And Leroy, who is on the ops side would give them a bunch of information. “Here's our address. Send me your email. I have your resume, I'll send you an offer letter over the weekend. Like, we're a legit company, you know, you can look up our website like all the things.”

But again, I'm just trying to make a distinction between the word creative, like I just don't think it was creative. I think it was just, I had a plan, I had a mission, and I was like, “what's the shortest way to the mission?”

nd now again, if none of that worked, right, if I hired zero people, I probably would have said, okay, it's not working. Let me adjust. Okay, let me instead say, come on Monday for an interview or come for a tour. Like I would have changed it, but because it started to work, I just kept going.

Jerry Li: And what's the outcome like in terms of performance after they'd been hired?

Farhan Thawar: So it's an internship… so I know for sure. I don't remember exactly cause I, again, I hired a thousand people over four years at Extreme. But I remember one person, but in particular, this guy Nima, who went on to be, , pretty successfully he worked in engineering. Then you worked in product, I think he went through Y Combinator.

He's now in San Francisco doing like a bunch of small startup plus running like a little seed fund. So I kept in touch with him over that time and I remember him specifically , from that cohort as somebody who I, who, has done well, you know, 10 years later.

Jerry Li: what do you think is a good indicator for performance during interviews.

Farhan Thawar: I don't think there is one...

I think, I mean, if you, if you end that sentence with “what, with, what do you think it is, is a good indicator performance?”

The answer is performance. I don't think there's a good indicator.

I think there's a lot of, there's certain groups of signals. For example, you could say, "Oh, you know, if you are computer science at Stanford, you might have a good chance of passing… of being a good engineer at my company. And, and henceforth go backwards and say they might have a good chance to pass your interview loop.

Instead of what I wanted to find out was how do I get all, like how do I widen my filter to find all the best people from whatever diverse backgrounds.

And the reason... you know, I think it's becoming in Vogue now to talk about like diversity and inclusion, like, "Hey, this is good for your company, or you should do this" as like a, as like a side hustle thing.

I actually looked at it completely differently and said, "in order for us to win, we must have the most diverse team. Why is that? Because we want to have the best all sorts of different opinions and all sorts of different backgrounds to build the best products."

So if you start with the way, the reason you want diversity is because you want to win. Then you approach the pipeline and talent process quite differently than “I want to have a diversity check-mark.”

Jerry Li: Right.

Farhan Thawar: And so I want to make sure that we have the best team. So starting with that, you have to look beyond typical indicators like school, GPA, where they worked before.

You have to instead look for: interesting background. How well do they do in the actual job? How quickly can they learn? Do they have a history of overcoming difficulty? Like you look for those things.

So one thing that's good about what Shopify does is they have this thing called the life story, where we basically have people sit for 30 to 60 minutes and have a conversation with somebody about their life. And we try to dig into what difficulties have they encountered?

Have they been in situations where they had to learn something quickly? Have they been in a situation where they've had to collaborate? Like all the things that we think are successful for you to be at Shopify.

nd we don't care if they've gone to school and if they've got a PhD and if they've worked at Google, we mostly care about the go-forward potential of that person.

Jerry Li: What do you ask them during interviews?

Farhan Thawar: Well, so we just, we just walked through one of the, one of the important steps, which is "life story". Like we literally, we literally will say something, I think you can look this up… I think we've got… there's like YouTube videos about the Shopify life story. But basically we start and we say, let's go back to high school.

Tell me about your experience in high school. What's your favorite subject? Who are your friends? Like literally find out about high school and find out about the potential interesting nuggets of things there that will lead them to be an interesting person.

That along with... Then you know, if it's technical, we'll then get into more of a conversational, “Hey, tell me about an interesting system you've designed. Let's draw it out. Oh, cool. Like what was, what was interesting, like what were some interesting parts about this system? Why did you develop it this way? What problems did it exhibit? What would you do differently next time?”

Like more conversational versus like “whiteboard coding”. Like, “Hey you know, can you determine if there's a cycle on a linked-list?”

Jerry Li: Right. Do you do coding at all? During Interviews?

Farhan Thawar: Yes, we do. Yes, we do. We also, as part of this, we'll do like a pair programming interview, which is closer to a collaboration around writing code to solve a particular problem. Because we're Shopify, like the problem will be closer to a problem you might encounter at Shopify than like an abstract computer science question.

Jerry Li: And the person being interviewed will pair with one of your employees? And do they code or they talk?

Farhan Thawar: So there's different ways to approach it. At Shopify today, they, the candidate will code and the employee will coach them on their solution.

But I've also seen in other companies, I know at Pivotal, for example, a pair programming interview there, is the candidate does not write code. The candidate navigates while the interviewer writes the code.

Tactics of Speed in Hiring & Dynamics of Hiring Engineering Leaders

Patrick Gallagher: I have a follow up question... We've been telling them, or you've been sharing with us a couple stories about the competitive advantages of speed in the recruiting process. Can you share a little bit more about some of the results that you've seen in the different companies that you work with? In running these experiments with reducing the barriers for bringing somebody into the company, what, what results have you experienced in. And the different ways that you've implemented this?

Farhan Thawar: Yeah, so it's hard to know numbers at many of the companies I worked at, cause they're just larger organizations. But I know at Extreme, for example, we had a very succinct short interview process. Like over time we got it down to less than 15 minutes for example.

And I would say that about 85% of the people continued on an extreme after their 90 days meaning about 15, 1-5 percent of the people... mutually... we would chat with them... would not be a fit. And so they would not be at Extreme Labs after 90 days. The interesting stat I think is the one after that.

So after you pass your 90 days, we had extremely low attrition, like less than 1% attrition for people after the 90 days. Cause I think there was extreme confidence in the fit. They worked with us for almost 90 days. So they felt that they enjoyed the work environment. We felt that there was a good fit.

Attrition after that was extremely low. Then they'll be like, I also mentioned... of the 15% of the people who left, many of them... I would say almost all of them… still a fan of Extreme Labs. Would refer their friends. Would talk very highly of the company and the process. And that was a major factor as well from a recruiting standpoint, because nobody was walking away saying, "wow, I can't believe I wasted my time."

They actually said they actually felt, you know what? Some people would say, "thank you for letting me try."

It wasn't even, it wasn't that they just got a chance to interview. They got a chance to try really working at the company. So, and of course, you know, working there, you know, full time, you were full time, you got paid, like everything was available to you.

They didn't feel like they got stopped at the interview process. They felt like they got, wow, I really got it. I really got a chance to try here. And they knew what they had to do to make it in that environment.

Jerry Li: The 15 minutes interview is very fascinating. I'm sort of thinking, what if we do a live interview? Like say we do five minutes. And say if you want to hire Patrick right now...

Farhan Thawar: You could but it... but I already know Patrick and I would already hire him.

Patrick Gallagher: Thank you. That means a lot.

Farhan Thawar: the interview, I don't think the interview is, that much different than what you would expect in any 15 minute conversation?

Like, so for example, in a... If for an engineer, usually it would be three or four very short programming questions in that 15 minutes, it wouldn't be a conversation.

I would more be looking for, “what's the thing that matters for an engineer to be successful?”

it's likely that they've written a lot of code.

The real interview, again, is going to be pairing with somebody full time over the course of like, you know, 30, 60, 90 days. That's a real interview.

This is more of a, a baseline test to see if they've had any coding ability at all. Like now what's interesting is in these very easy... You know, for anybody listening is, you know, like Fibonacci or FizzBuzz or like very easy or modifications of those questions... Would just give you a baseline for like this person who has written code,

maybe surprising or not surprising to people is that about 90% of the people will fail this very easy coding question. And that's by design because if you've written lots of code, if you’ve written lots of code in high school, you should be able to pass this... This question.

And I give two or three just because usually people who've coded a lot can fly through these questions very quickly. And so if you can do two or three of these in 15 minutes, you're well-suited to having written lots of code. Now, will you be a fit at Extreme, maybe, maybe not? Or at, you know, at a company that really values engineering.

But it shows you one aspect, which is writing lots of code. And again, I'm not trying to, I'm just trying to have a baseline filter. The real filter comes from pairing with somebody day in, day out, like 40 hours a week.

Jerry Li: What in the interview will be different if you're hiring for an engineering leader?

Farhan Thawar: Engineering leadership is quite different because it usually takes longer to determine if somebody is a good fit.

So typically you'll tend to be more conservative in your hiring. So when we talk about "One Way Door"s and "Two Way Door"s, it's still a "Two Way Door" in that you can bring somebody on and then they may not be there. And it might take you longer than three months in some cases, because sometimes the changes and the onboarding that happen when a new engineering leader comes on might take longer to manifest themselves.

So you might take six months instead of three months, you might take nine months or 12 months. , but I think the same thing is true in that you really want to overweight real world performance vs. interview performance.

So one of the, one of the things I work with a bunch of Y Combinator companies on them getting to, you know, raise the series B and then hiring their first VP engineering.

And usually what I tell the people is, "what's the... at 90 days... What are the things that you want to... what are the questions you need to ask in order to determine if this is a the right hire for you.

And so typically...

...And so basically

Jerry Li: ...Define the criteria for success first, and then ... define the 90 day...

Farhan Thawar: Exactly the 90 day success criteria.

And then for your, and every company is different... And then for that, from that list of criteria, try to design a list of questions or scenarios in which you can try to ascertain whether those would be passed. Right.

So for example, you might have an organization that's growing from 25 to 100 engineers.

Maybe your criteria is "this person has hired three engineers in their first 90 days."

So what are the things you think could be good signals to them having hired three engineers within the first 90 days? Is it that some of their team is going to come over and you can ask them a question, Hey, you've moved from company to comp.... ... you've moved around a few companies has that, have there ever been engineers that have come with you?

Or you have to hire three people in 90 days. What are the things you're going to do? Do you usually work with recruiters? Do you have a short list of great candidates already? Do you know that LinkedIn or other marketplaces have been successful for you to attract engineers? Where would you job post? What talks would you do on different various events? Because those have been ones in the past that had been good for you to recruit from. Like there's a bunch of those things that I would ask. I don't know...

Jerry Li: And that's during the interview or that's after they got hired? Those questions?

Farhan Thawar: I would, I would do both.

I would do it definitely. And before if you can, because if you, if we think that this is longer. Is this a lot? It takes you longer to figure that out. These are questions that potentially can help you. Like they may not be useful, right? You might ask all these questions and not get any data.

Now cause because what happens in many cases is if the person hasn't done it before...

This is where interviews really suck, right? If the person hasn't done it before, they may not have any answers, right? If Daniel had asked me, “Hey, this company is going to really rely on machine learning. How are you going to hire machine learning engineers at Helpful?”

I would not have had an answer. Meanwhile… clearly we did a good job because we figured out this hack via deep learning summer school.

So the problem isn't that I didn't have the answer. The problem was that he had to make sure that I would be able to figure out the answer when I got to Helpful.

Jerry Li: Yeah, that's hard to find out, during the interview.

Farhan Thawar: Well, it's hard to find out.

And the problem with interviews in general are they're very biased to either things you've done before or they're biased to some other signal like school you went to company, you worked for, GPA in some cases, right? Google used to use that... And it excludes a wide swath of people. That's the problem. That's my number one problem with interviewing. Not that good candidates can pass an interview. It's that non traditional candidates will likely fail your interview.

Jerry Li: Right. Which hurts diversity eventually.

Farhan Thawar: Well, but I don't care about diversity. It hurts the team. Right? Like, diversity is a byproduct of having a great team. If you have a great team, it will be diverse. Like I think it's flipped around.

I think people have to try to build a great team and by default it should look diverse. Like that's kind of your lagging indicator. I think it's wrong to think like, "Hey, we should have, we should try to hire a diverse team.”

I think that it has to be flipped. You have to say, “I want to hire the best team, and it should, it'll automatically, be defaulted to be diverse.”

Jerry Li: Yup

Farhan Thawar: If you widen your funnel. If you widen your funnel

Jerry Li: and going back to the interview, for hiring engineering leaders. The methodology you mentioned earlier, hire fast and leverage more on the performance of the first 90 days...

But for engineering leaders the risk of letting one person go is much higher. How do you deal with that?

Farhan Thawar: I mean, like I said, I think it might take you longer. I mean, one thing that I always do say is that once you know that somebody shouldn't be at their organization, like, I've never fired somebody too fast.

Meaning, you can never... Once you figured out that somebody is not a fit, you're probably better to make that happen sooner rather than later for both parties.

Jerry Li: Right. Regardless, of whether they are engineers or engineering leaders.

Farhan Thawar: Yeah. I mean, Once you, once, you know, you know. Right. I think that's something that should be done more quickly and usually takes a long time.

I think because it's so amorphous. Like the only thing you can do, like I said, is come up with criteria that will look like success, whether it's in 90 days, six months, 12 months, and work back from that criteria to try to figure out, are there signals you can use.

Now, again, if the person hasn't done it before, you'll be hard pressed to get good answers there.

And I think, A better way to set that up and again is maybe controversial, is to try it! Like I do really feel by trying lots of things, even on organizations and people, will eventually over time make the organization more antifragile right? Because if you brought in a leader, they didn't work out. You brought in another leader, they didn't work out.

There's a few things to take from that.

One is your interviews, like you may never have been able to figure that out of the interview stage anyway. So it's better to have tried that person, figured out what doesn't work again.

Right? I now figured out that this person is not a fit.

Maybe that'll inform you for the next person, but you're at least trying the person versus keeping the role vacant for six months

Jerry Li: And also make a team more resilient to changes.

Farhan Thawar: I agree. And I think, and again, going in eyes wide open, right? Letting the team know, "Hey look, we've hired this new person. We're going to both spend lots of time over the next 30 60 90 days. We may not figure it out in that time period, but we hope to, and here's what we're going to evaluate the person on and make it transparent to the person, to you, here's the criteria. You've got to hire a few people in 90 days. You have to make a few engineering process improvements"

Then come up with that list and together work through it.

Jerry Li: Yeah I like that, and that will probably help the, you know, IC's on the team to have a better understanding of what they want from a leader after seeing someone that is not a good fit.

Farhan Thawar: I think you're totally right because they will have now tried in the new company, people who maybe, maybe some of them like worked for them but didn't work for the company.

Jerry Li: Right.

Farhan Thawar: And they'll get a better view into that. You may also have an engineering leader emerge from your own team to say, you know what? Actually the things that we think need to be done, I'm already doing. Maybe I should be the engineering manager?

Jerry Li: Yep,

I've heard a lot of stories that companies at a certain size, they have a urgency to hire a senior leader and they're looking for people, with a good pedigree on paper. The person they hired supposed to be very successful in the role.

But it didn't work out for things that they cannot think of head of time.

Farhan Thawar: It happens all the time when somebody with the right pedigree comes in and doesn't work out. Like it happens all over the place. And that's why... If you're going to, if you're going to take... If you're going to go through the process anyway of bringing someone in, evaluating and then exiting them, why not work from a larger pool?

Right? Like that's the only thing that I'm like, why work on this small competitive market of people with the same pedigree when you could be using a different market? Like a less, I mean, in some ways less competitive, right? Cause maybe they haven't done it before. Right?

Like I think that's the, that was the key. Like at some point... Like even, here's a good example, right? I had never, I never hired like a thousand people before going to Extreme. Right? Like, I didn't know, like, who knew I, the biggest team I ran before Extreme was 15 people. One five. so who knew that by trying these crazy experiments that we were able to scale the company so dramatically and that I would be able to scale along with that, nobody knew.

I think that's true of lots of lots and lots of people.

The, you know, we didn't get to this, but one of the things that... Where we do well at Shopify is we do like this thing called “backward facing promotions.” Like we look to see if somebody has been acting at that se... more senior level over a sustained period.

And then we, and then we promote them versus... trying to like do it like most companies do, which is like the Peter principle. Like you promote somebody and you're like, Whoa, it's not really working anymore because the person is like in a role that they, you know, are "trying".

And so it's a good way to be like, “Oh, you really want to be, you know, go from like level six to level seven. Cool. Here's all the things you've got to do to act like level seven.”

And then if they do those things and they are sustaining it and enjoying it, everybody's feeling like its successful, you can then promote them.

And guess what? Paradoxically, they may not like level seven. Which I've seen too. They're like, “you know what? I can do it. I don't really enjoy it.”

I'm like, “cool, like just crush level six.”

And now there's no like demotion. There's no like, title change. There's nothing. So it's, it's actually quite a successful,

Jerry Li: Yep, and the same thing applies to the transition from an engineer to an engineering manager.

So it doesn't work out, doesn't work out, you can go back to your previous role, which is a very good thing. And not supposedly perceived as a demotion.

Farhan Thawar: Exactly. And that's why I'm actually a big fan of the acting titles or interim titles for people to try things out. Again, I would love for people to try. I think that's the way in which people can really figure out.

You can figure out if they're suited for the role, if they're ready. And I've seen lots of movement. I mean, one thing we say in Shopify is it's a jungle. It's a jungle gym. It's not a career ladder. And the jungle gym is you go up, you go sideways, you go down, you go into a different playground, like you try all kinds of things in order to continue your learning journey.

And I think a lot of people just feel like it's like, Oh, well I was senior developer. I now have to become staff developer or otherwise, like my career is not progressing. And I've been happy to see that it's not true here at Shopify. People like, you know, we had a VP engineering become an individual, an IC. Like amazing. And it's celebrated.

Patrick Gallagher: This is the first time I've ever heard about backwards promotion. So my mind is being blown and it makes so much sense because if you want this role, act as if. And then your behavior then earns you that particular position. So I feel like that's such a better validation in somebody's ability to take on a leadership role or in a different skill set.

Farhan Thawar: And then again, paradoxically, YOU MAY NOT LIKE IT! Like it happens. People are like, you know what, actually I did the things and you know, like for example I had to work cross group and I got this project going, whatever, and it was super tiring and I don't enjoy it. I really just want to focus on my craft.

I'm like, “cool, now we know. Just continue crushing it down the technical path. You don't have to.“

Patrick Gallagher: And I think at a high level too, like the thing that I keep going back to is what you said earlier about the importance of expectations. And in a way, when I'm thinking about like the recruiting process, the hiring processes, one of the biggest competitive advantages other than speed is like making somebody feel valued or important and even like in looking at this example of the backwards promotion, you setting clear expectations of that behavior, that action makes them feel valued and important. Because now they have agency in that role and they feel like they're being invested in. And then they, like you said, in the hiring process, they have an opportunity to have a shot.

And that makes them feel valued and important.

Farhan Thawar: Yeah. And again, you're going to get all sorts of nontraditional people In those roles because people are allowed to try it.

Patrick Gallagher: Do you have some examples of when you've removed bias from the interview process or like the proof of work process, the examples of nontraditional candidates, you've been able to empower them to these different roles?

Farhan Thawar: Yeah. I mean, I think people would be surprised at a lot of the leaders that emerged, right? Like people who had high school diplomas, but no university.

Or people who did History and then they're doing, they're now like leading engineering teams. Like there was all, there was so many examples of people really rising in impact without having, without, and if you looked at the resumes, actually, the funny joke is that if I sent you some LinkedIn profiles, like they're just blank. Like they don't even have a LinkedIn profile because they're, they just didn't care about LinkedIn yet. They really crushed it in their roles.

And sometimes it was, they didn't have any of that in the back and behind them. And they really just wanted a shot going forward. And there are many, many examples of that. And also people going from design into engineering, from engineering into product people trying management and coming back into individual contributors.

Like there was so many examples of people kind of moving around because we made it like such low friction? People changing groups, people changing platforms like moving from iOS to Android, moving from mobile to backend. Like there was so many examples of that. And you know, the term I think is like expert generalists, right? Not specialists.

People became really, really good at a bunch of different things. And there were lots of reasons for that, but one of it is just the low friction of being able to try things.

General Leadership Questions

Patrick Gallagher: what was the most terrible leadership mistake that you've ever made?

Farhan Thawar: It's a good question. I mean, probably most of them had to deal with taking too long to let someone go. Because either some attachment to a previous level of performance, previous project… probably my own biases. Like usually in these cases, the peer feedback has been clear...

… The person shouldn't be at the organization or there, they've lost the energy or whatever it is, and I've taken too long to kind of… I mean, it has to be made, right. What I was trying to think of was like, I don't have to make a decision. The decision is being made by the team. I just haven't executed on it.

And that's not something that you can give to the team. Right. You have to do it.

Patrick Gallagher: Yeah, So for, if there's somebody who's listening right now who is in a similar position where maybe they're going back and forth on whether or not to, to let someone go, do you have advice for them?

Farhan Thawar: Yeah! So there's a framework I use. I mean, a lot of, there's a lot of frameworks around PIPS, like performance improvement plans, but one that I really like to do is you sit down with somebody who has been having a tough time with performance. And what you want to do is get them to an extremely high level performance in a short amount of time.

So typically what I do is I give them like a 30 day PIP, and what I'll say is, “Here's what like, great looks like not good.”

The problem with most pips is that after 30 days of like giving some a person a task, it's still kind of unclear how well they did. You're kind of like, “Oh, they kind of did half of the thing…”

You, you don't get the, the, the clear signal you want after 30 days. So what I would typically do is I would try to figure out what is extremely high performance looks like at the end of 30 days. And I would tell them, I'll say, “Hey, look, kinda had a rough go, here's what we need you to do in the next 30 days and we're giving you a shot.”

Like it's super impactful. It's energizing, it's clear if you do these things, even people on the team are like,” if they can do these things. They 100% should still be here.”

It should be like really hard to do.

And what I've found is 20% of the people can do it and they will crank it out and they will crush it and they will be valuable for the long term.

80% of the people won't make it. So there'll be like 20% won’t make it. They'll try and I would say 60% of the people will resign on the spot. Like they'll literally look at the list and go, “I can't do this”.

And they'll, and they'll resign. And what I've found with that process is they weren't mad. They were, they understood, because again, we have this process, right? Typically, it might happen in the first 90 it might not happen like after that,

but they might go, “you know what? I understand what this is. I don't think I can get there in 30 days, which would make it clear that I should stay. I should just resign now.”

And again, not a bad thing. I've had people come back to me who went through that process, who resigned, and then years later asked me to be a reference for their next job.

Like it was totally, it wasn't a bad thing. It was just that they weren't able to kind of hit that level of performance. And they themselves didn't want to like “sign up” for the challenge. Which is a good thing, right? Because we both know it's not about any kind of half ass it for 30 days. Right.

Patrick Gallagher: So I'm thinking about the impact of that, and it's like the 20% of people that opt into that and crush it, that's a huge career turnaround for them.

Farhan Thawar: HUGE!

Patrick Gallagher: And like radically changes their life. And then like with what you're talking about with like the expectations for like, people that opt out of it, like to still have that relationship. Like still also is like a, a win-win down the line.

Farhan Thawar: Yeah. And you know, again, to go back to my first job out of school, Trilogy, I was on a PIP within the first six weeks.

It's how I really, yeah. It's how I understood about the process and how I turned myself around. I was like, “Holy shit, I'm not gonna make it.”

And so I “signed up.” And I, you know, put on the turbochargers, I worked a hundred hours a week and I figured out how to make it work. I was like, I need to make this work.

Patrick Gallagher: That's, I think the world is a better place for that, having that turnaround story.

Farhan Thawar: but I think that's exactly like it'll happen to anybody. I mean, there definitely been times in my career where I was not as effective as I should have been. And that just shows you that not every company is right for every person. It's not about the person. It's about potentially the environment plus the person you may or may not be a fit for you. So, figure that out and find a environment which is conducive to your how you want to work.

Jerry Li: what is the most inspiring leadership action that you've ever seen or experienced? An action that might be small, but made a big impact?

Farhan Thawar: I mean, one, one thing that I found really impactful, maybe it's a weird one for this question, but is that we really tried to get away from cash rewards.

I'm at extreme meaning we didn't do bonuses, we tried to do cash rewards. And I think that I found most impactful was when, whenever we found out....

So whenever we want to reward somebody, we figured out something that they needed or would wanted, and we just bought it for them. And I saw just the reactions of the people were so heartfelt because it was a combination of you took the time to figure out something and then you did it.

A good example was, I remember one of our designers. Was going to Brazil for a vacation and we bought her flight. Or another, someone in our company was an aspiring DJ.

And we bought this little like MP3 recorder thing that they could attach to their equipment and it would record their whole DJ set and turn it into an MP3. These are not expensive things, but we figured out what they wanted.

I remember one of our engineers was moving into the new house since we bought them a TV, and there were like these little things where people were like, “wow, you really try to find out to find out about my life and you bought me something that would enhance my life?”

And I found that people really, really, really resonate with that. And they remember to this day, “remember when you bought me this thing?”

So I think the combination of one was just like diving deep into there. Into the finding out about the person and then, and then, and then executing on it. Like buying something.

And it sounds funny as a thing that I remember, but it was just that we took the time to do that. People really were like, wow, they really took, they took a chance to like find out about my life and

Jerry Li: You showed that you cared

Farhan Thawar: Exactly. They didn't just give me a gift card... Right? They really tried to figure this out.

And I think that those are the moments where people go back and they're like, wait, I remember that this is like, this is like the thing from there.

Jerry Li: Thanks for taking time to chat. I learn a lot. And even though we have a few conversations that already. I can learn new things from me every, every time.

Farhan Thawar:

Same. And like I said, this is the trick, right? I think I learned a lot from this conversation. Also, like hearing the questions and the feedback. , and I think that's why I like having these conversations.