Rujul Zaparde: Why Hiring Inexperienced People is Better | E1144

Intro (00:00:00)

• Rujul Zaparde prefers hiring inexperienced people with potential.
• Inexperienced people are more likely to have original ideas and iterate faster.
• Speed is an advantage as it allows for quick learning and moving on.

Background (00:00:47)

• As a child, Rujul Zaparde and his friends engaged in various business ventures, such as creating video games and selling bumper stickers.
• He believes in releasing products quickly, even if they are not perfect, to gather feedback and iterate.
• Lack of experience can be compensated for by asking questions, learning, and iterating faster.
• Being responsive and intuitive to customer feedback can build strong customer advocates in the early stages.

Founding Zip (00:02:38)

• Rujul and Lou, the co-founders of Zip, faced challenges when they were designated as business owners of a large software contract at Airbnb.
• They encountered difficulties understanding and navigating the complex processes and systems, such as creating a purchase requisition (PR) and selecting the appropriate cost center and GL code.
• The process involved multiple intakes and requests, including raising an IT ticket, a security request, and a privacy request.
• It was challenging to track the progress and status of the contract renewal request due to the involvement of various teams and systems.
• Hiring inexperienced people can bring fresh perspectives and new ideas to a company.
• Inexperienced individuals are often more adaptable and willing to learn and grow.
• They can be more cost-effective to hire and train compared to experienced professionals.
• Inexperienced employees can bring enthusiasm and a sense of urgency to the workplace.
• They may be more open to taking risks and trying new approaches.
• Inexperienced individuals can provide valuable insights into customer needs and preferences.
• They can help identify inefficiencies and areas for improvement within the company.
• Hiring inexperienced people allows companies to mold them according to their specific culture and values.

Thriving in Massive Markets with Minimal Competition (00:05:33)

• Rujul Zaparde discusses the advantages of hiring inexperienced individuals and investing in markets with low competition.
• He emphasizes the significance of user experience in a distributed buying environment and the decentralization of spend initiation with centralization in spend review.
• Zaparde highlights the impact of the macroclimate on delegation of authority, with some organizations experiencing severe reductions in budget approvals.
• He stresses the necessity for fluidity in decision-making and the challenge of standing out in a crowded market saturated with similar buzzwords.

Product Decision: Balancing Specificity & Versatility (00:10:05)

• When starting out with limited resources, focus on solving one specific pain point rather than building a broad platform.
• Differentiation is key in a crowded market. Your unique selling proposition should be clear and communicated effectively.
• It took about six to seven months to refine the positioning and messaging of the product.
• The process involved writing out investor and customer pitches daily (later weekly) and testing them during calls.
• As they talked to more people, they created an Excel sheet with different potential ICPs to better understand their target market.

Managing Early Customer Demands (00:13:39)

• Inexperienced hires can be more adaptable and eager to learn, allowing for quick assessment of an idea's viability and enabling entrepreneurs to move on to other projects if necessary.
• Entrepreneurs should focus on solving the right problem, as evidenced by repeatability in pitching and yielding the same results to the same type of person.
• Avoid common mistakes like getting free customers or design partners, which can waste time and effort.
• Aim to close the first 10 customers cold off of LinkedIn to ensure a real problem exists and customers are willing to pay.
• When building a successful company, prioritize the functionality and effectiveness of the product over external factors like optics and consistent metric growth.
• Avoid choosing the wrong design partners and customizing products for each customer, as this hinders repeatability and makes it challenging to prioritize features, messaging, and target personas effectively.

Rethinking Product-Market Fit: Experience from Zip (00:19:32)

• Product-market fit is a complex matrix that requires continuous validation for every subsequent product, persona, channel, industry, and vertical.
• Verticalizing sales teams can be expensive and should only be done at a larger scale. However, bootstrapping verticalization by hiring an experienced person can help determine messaging, systems, and positioning for a specific vertical.
• Building a sales team requires understanding every component of the sales cycle, including the role of sales engineers in handling technical questions.
• Assessing sales skills is difficult as metrics alone may not provide a complete picture. Confidence is crucial for salespeople, but it can be challenging to measure and improve. Enablement and practice can help salespeople gain confidence and improve their skills.
• The founder-to-sales transition can be challenging and requires trust-building and close collaboration.
• Hiring inexperienced people can be advantageous as they are more likely to be coachable and adaptable.

Speed as an Advantage (00:27:24)

• Speed is crucial for a company's success.
• A horse that learns quickly and changes path will reach the destination faster than a horse with a perfect strategy but slower execution.
• Companies tend to get slower as they grow.
• Retaining speed with scale is challenging, but founders can lead by example and reward quick actions to maintain a culture of speed.
• Founders must lead by example and reward quick actions to set the DNA and culture of the company.
• Repeatability can also contribute to speed by making things more known.

Fostering Creativity within the Organization (00:30:04)

• Hiring inexperienced individuals with high potential can foster original ideas and creativity within an organization.
• Encouraging employees to express their thoughts, rewarding unconventional ideas, and promoting first-principles thinking cultivates a creative environment.
• Diverse cross-functional teams can generate unique solutions to complex problems through brainstorming sessions.
• While focus is crucial, allowing for some unfocused execution in certain functions like marketing can be beneficial.
• Quick decisions may not always be the best; reflecting and considering different perspectives can lead to better outcomes.
• Airbnb's initial idea emerged from brainstorming sessions exploring sharing concepts beyond houses, resulting in the idea of sharing cars at airports.
• Running an operational business like a car-sharing service poses different challenges compared to a SaaS company.
• Choosing a scalable business model that generates significant profits is essential for success.
• Working at a top-tier company like Airbnb provides valuable insights into high talent standards and personal skill development.

First-Time Founders vs. Serial Entrepreneurs (00:37:06)

• Rujul Zaparde prefers serial entrepreneurs over first-time founders because they have experience in hiring processes, recognize greatness, and have learned from their mistakes.
• First-time founders may be more willing to take on market risks, which can lead to significant outcomes, both positive (e.g., Snap) and negative.
• Serial entrepreneurs may be less inclined to take on market risks due to their experience and broader perspective.
• Trey from Founders Fund believes that serial entrepreneurs in SaaS are underutilizing their skills and talents by focusing on B2B Enterprise SaaS instead of B2C.
• Rujul argues that B2B procurement involves a significant amount of money, and even a small increase in efficiency can create substantial value in the economy, which ultimately benefits consumers.
• Rujul acknowledges the lack of personal anecdotes in B2B compared to B2C but emphasizes the positive impact of B2B on job creation and productivity.
• Rujul highlights the importance of attention to detail in product design, as demonstrated by Brian Chesky at Airbnb.
• Chesky's meticulous focus on details, such as spacing and design elements, sets a high standard for product quality and reflects the company's culture.
• Rujul believes that product quality, design standards, and speed are all cultural aspects that originate from the founders.

Selective Micromanagement (00:41:06)

• Micromanagement should focus on critical core values and areas that need improvement.
• Analyze call recordings and identify patterns of success to understand the human aspect of sales.
• Scaling the sales organization, especially the business development team, requires maintaining productivity and providing a clear career path.
• Outbound sales efforts generate the majority of net new client acquisition despite the strong brand and investor sentiment.
• Targeting accounts through inbound methods is challenging due to the lack of clean data and varying job titles.
• AI can revolutionize outbound sales by creating an infinite supply of messages but won't replace human interaction in the near future.
• Explore opportunities to increase sales team leverage using tools like ChatGPT to reduce manual work and improve efficiency.
• Hiring inexperienced people can bring fresh perspectives, adaptability, and eagerness to learn, leading to increased productivity and innovation.
• Inexperienced employees may be more cost-effective to hire and train, allowing for cost savings.
• They may be more open to taking risks and trying new things, fostering creativity and problem-solving.

Motivating Remote Teams to Return to the Office (00:45:35)

• It's challenging to motivate remote teams, especially for companies born during the pandemic.
• Different functions have different needs.
• Engineering, product, and design teams are mandated to be in the office two days a week (Mondays and Thursdays).
• This decision was made because many early employees felt lonely and craved social engagement.
• In-office days are prioritized for meetings to create a healthy balance.
• Initially, the founders used Facebook portals and kept a Zoom meeting going all day to foster social connection.
• As the team grew, they continued the practice of having a Zoom meeting with everyone every morning.
• Sales calls were left unmuted so that everyone could listen and learn.
• These practices helped accelerate internal enablement and learning.

Hiring Mistakes (00:48:06)

• Prior experience at a similar scale may not always be the best indicator of success, consider candidates with demonstrated potential and willingness to step into bigger roles.
• Maintain open communication with trusted individuals within the organization for early feedback on employee performance and address issues promptly.
• Avoid premature hiring before achieving clear product-market fit.
• Hiring inexperienced people can foster open communication and trust within a small, close-knit team.
• Rujul Zaparde and Lou were confident in their company's market need and growth rate, so they were not overly concerned about the high valuation in a short time frame.
• Rujul believes in building a long-term, generational company that will be known and recognized.
• Rujul thinks founders who discuss their next company while still working on their current one are not fully committed to their current venture.

Quick-Fire Round (00:54:57)

• Rujul Zaparde discusses various topics in a rapid-fire Q&A format.
• He has shifted from using a spreadsheet to a notecard system for daily task management.
• He is concerned about the potential misuse of generative AI for malicious purposes, such as voice imitation for fraud.
• He identifies a misalignment between VCs and founders in terms of time horizon and the significance of outcomes.
• He admires Frank Slootman's recent accomplishments and would add him to his board if possible.
• He criticizes the common advice to immediately hire to solve problems, suggesting that there might be better alternatives.
• He reflects on the challenges of building a world-class product in the tech industry, drawing from his experience working on search platforms and ranking systems.
• He emphasizes the importance of video in the current media landscape and regrets not starting a YouTube channel sooner.
• He acknowledges that some decisions made while building a world-class product may not have been optimal due to time constraints.
• He envisions a future where procurement processes are automated, eliminating the need for human approvals.