PayPal

Hire barrels before adding more ammunition. Early PayPal had about 254 people in Mountain View, of whom roughly 12 to 17 were barrels. A barrel can take an idea from inception to success alone, motivating people, gathering resources and measuring progress. A large company like Lotus had two.

Adding people without adding barrels just stacks them behind the same initiatives and raises coordination cost. Rabois: "the ratio of barrels to ammunition is what dictates the number of important initiatives that can be pursued simultaneously."

Founders▶ 1:03:38

Build the team on undiscovered talent, not what every recruiter wants. Startups have a fraction of the salary cap of big competitors, so don't compete for people everyone targets. Ask what Meta, Google or Coinbase would miss about a candidate and why. PayPal hired through Thiel's and Levchin's networks, and its dense talent pool seeded many later companies over 25 years.

Peter Thiel taught this to Rabois in his first week at PayPal, and Rabois has followed it for 25 years. Younger people have fewer data points, so rigid screening processes score them poorly, which creates an edge. Rabois: "you have to build a company on undiscovered talent."

Founders▶ 14:58