Variant recently hosted a conversation with OpenSea’s Alex Atallah and Nadav Hollander about how web3 companies can think about scaling their engineering teams for maximum efficiency. They discussed how identifying company values establishes team culture, which in turn sets the stage for assessment. They also looked at the tougher aspects of building a team: firing underperformers, avoiding ineffective managers, and getting past the discomfort of giving feedback.

Here are some things I took away from the discussion: 

Hiring your early team 

Your first five engineers help solidify the tone for the whole organization, so it’s important that teams get early hiring right. A few tips:

• Even if you’re going remote, consider hiring locally at first. Body language and tone of voice don’t translate well to Slack, but interacting IRL with founders at the early stage helps engineers understand company values and priorities, almost by osmosis.

• Building in public has its benefits, so look for engineers within your early contributor base. If people are involving themselves in your project at its earliest stages, chances are some of them align with the company you’re trying to create. 

• Be rigorous about screening and not settling. Jesse pointed out that at Variant, we make a list of qualities we’re looking for in a candidate: “must have, should have, nice to have.” And then we hold ourselves to it. 

Building a culture

The goal is to build a rigorous, robust engineering culture because it’s the engine for your company’s success.

• Nadav reminded attendees that there’s “no one-size-fits-all culture”; Amazon’s rigor and Facebook’s “move fast and break things” are two different approaches, but both are extremely successful. To get the culture you want, you have to codify it, communicate it, and check in regularly, according to Nadav. 

• At the beginning, everyone is taking their cues from the founders. To shape company culture, model what you want to see and “reward the people who do that,” Nadav said. If you “do that by proxy,” before your culture is solid, you won’t get the results you want. 

• Alex recommended optimizing for curiosity — people who can keep asking questions until you get to the root cause of what’s working or what’s not working. 

Hiring a manager

Alex and Nadav actually believe you should hold off on hiring engineering managers for as long as possible. As you grow, it will become inevitable. Here’s what they suggest: 

• Be slow to hire and only do so when there are serious bottlenecks at the founder level. That way you can keep the talent floor high and maintain consistent values across the company.

• It’s much better to look within your existing cohort of engineers for someone who actually likes managing. They’ll likely have more “technical judgment and culture fit” than any external hire, no matter how impressive the resume is.

• If you do hire outside, “get extremely explicit” about what you want a manager to do. There’s a lot of variation in this role across industries, so be clear about what you expect in terms of time spent leading people, performing technical tasks, etc. 

Giving feedback…and firing

You’ve hired, you’ve communicated your cultural values to the team, and you maybe even have a manager leading the charge. Rather than go on autopilot, effective founders press the advantage by giving feedback and, when they have to, cutting staff that don’t serve the team.

• Track the things that are relevant to your culture and provide feedback along those lines. If you want a culture where people work a lot, for instance, that should come up in feedback. 

• From a tactical perspective, not everything needs to be private. If you’ve got tools for measuring time spent, commits, etc, make reviewing these metrics a shared experience. 

• Deliver feedback quickly and regularly rather than waiting for a formal review process. This will get everyone accustomed to receiving feedback — positive, negative, or neutral — and stop dreading it. It will also prevent avoidable mistakes from recurring while calibrating performance toward what is working.

• If you’re firing for performance at a smaller company, you often have little institutional support and it feels psychologically harder. But “if you’re thinking about it, you probably should,” said Nadav. 

• If there’s a cultural rift, offer an exit package. You want to keep the people who want to be there. The same holds true for a pivot: Give people an “opportunity to get on or off the bus.” 

If you’re in NYC and want to attend the next Variant Network event, join us at our upcoming Builder Day on the Crypto Security Stack, featuring Blockaid, Turnkey, and more.

+++

This post is for general information purposes only. It does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice or investment recommendations. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by Variant. While taken from sources believed to be reliable, Variant has not independently verified such information. Variant makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This post reflects the current opinions of the authors and is not made on behalf of Variant or its Clients and does not necessarily reflect the opinions of Variant, its General Partners, its affiliates, advisors or individuals associated with Variant. The opinions reflected herein are subject to change without being updated.