Build the Pipeline From Personal Contacts
Naval: Your best pipeline comes from personal contacts. You literally have to sit down with everyone in the company and say — tell me the 10 best people you've ever worked with or gone to school with. I don't care if they're getting their PhD, starting their own company, or just joined Google a month ago.
Get those 10 names. Pound the pavement. Have lunch, coffee, dinner with each of them. Even if they're not available — demand three referrals from them. Keep in touch. When they come loose, you want them thinking of you.
Tell me the 10 best people you've ever worked with. I don't care what they're doing now. Get those names.
Attract Through Mission
Naval: Because you're a small company, the way you're going to attract people is by your mission. If you find people who have encountered the problem you're solving — or have loved ones who have — your mission will resonate much more with them.
You'll also have a unique advantage pulling people out of universities who've done specialized work. Those people may not be fully valued yet — they might be doing normal engineering jobs but have a special affinity for what you're doing.
You're small. You attract through mission. Find people who've personally encountered the problem.
Champion-Veto System
Naval: We moved from consensus — everyone agrees, everyone chimes in — to a champion-veto system. The problem with consensus is you get bureaucratic groupthink. Nobody gets excited. Nobody feels responsible.
Champion-veto: anyone can say 'I really like this person, I'm championing them.' That's good enough for an offer. Unless someone vetoes. You only bring in people at least one person is really excited about. You only reject when someone's really unhappy. No lukewarm motivations either way.
One champion pulls them in. One veto keeps them out. No lukewarm. No groupthink.
Your First 10 Hires Are Everything
Naval: Your first 5 to 10 hires are critically important. This is the DNA of your company. Everything you build after this will be an extension of these people. There will come a point where you're no longer coding, where you lose connection with the product — it'll all be up to these people.
Give them a lot of stock. Make them late founders. 1 to 3% of the company before product-market fit is not unusual. Keep it flat. Keep it meritocratic. Be generous with equity. But be quick to fire — if someone's not working out, get them out as quickly as possible.
Your first 5-10 hires are the DNA of your company. Give them a lot of stock. Make them late founders.