Ask why it won’t work — Rick Song’s lessons from Square and building from 0 to 1

[00:00:00] I think the one thing that you've consistently found true for building a business. Is that almost anything can work. It's actually a lot more about how all the pieces are put together than trying to find the best piece for everything. I made this analogy to some folks, which is like building a team is not about finding the greatest talent for every single role.

It's actually a lot more about how does every single person work with each other. You're building an NBA team. It's not about finding five. All-stars. It's really about finding five synergistic players who can really play off each other. And I think the same. Really applies to building a business as well, which is it's nationally.

I figured out, oh, what is the perfect thing? Like what did this best company do? It's a lot more about thinking about much more holistically and how all these parts interact.

[00:00:48] Welcome to in depth, a new show that surfaces tactical advice, founders and startup leaders need to grow their teams. Their companies and themselves. I'm Brett Berson, a partner at first round, and we're a venture capital firm that helps startups, like notion, roadblocks, Uber, and squared tackle company building firsts through over 400 hundred interviews on the review.

We've shared standout company, building advice. The kind that comes from those willing to skip the talking points and go deeper into not just what to do, but how to do it with our new podcast in depth, you can listen into these deeper conversations every single week. Learn more and subscribe today@firstround.com

for today's episode of in-depth. I'm really excited to be joined by Rick song. Rick is the co-founder and CEO of persona. A platform that enables companies to create the ideal identity verification experience for their customers before founding persona in 2018, Rick was an engineer at square for five years and an early team member at square capital.

It was here where Rick had the insight that led to starting a company from fraud prevention and lending. To trust and safety with food delivery for caviar, he saw that there's a wide range of use cases in identity verification. So a one size fits all solution just won't work with low and no code building blocks.

Persona enables customers to craft a more tailored experience. On a personal level. I first got to know Rick after first round invested in personas seed round, and I've come to believe he's one of the most thoughtful founders around what I think is particularly special about this episode is that it comes at an exciting inflection point in Rick's journey of building persona from zero to one.

Just last week persona share that they've raised $50 million. The company is around 50 employees and they're looking to double the team this year to keep up with revenue that surged more than 10 X and a customer base. That's grown to include some big logos, including square Postmates and Gusto in my conversation with Rick today.

There's one theme that stands out. He's somewhat obsessed with the idea of pre-mortems or figuring out why things might not work out from all the ways a candidate might fail to why a customer won't want a product to how a commonly used framework might not be a good fit. Rick brings this mindset to every aspect of running persona, starting with recruiting.

Rick shares his lessons learned from his time at square. I found there was a lot of counterintuitive thinking in his answers here, including why he likes hiring folks who haven't worked at a startup before and why he doesn't try to convince candidates that persona is a company that will change the world.

Next we chatted about why Rick believes it's not about going down to first principles, but rather studying other companies to find unusual moves and experiment with different strategies. He shares what he's learned from studying companies like Google, Microsoft, Atlassian, and Shopify, any dives into why popular frameworks like OKR or jobs to be done might not work for your business.

From the strategy behind personas multiproduct approach, including a candid discussion about the risks, to why his engineer's sell and cold email prospects, rich share some really detailed go to market thinking here. I think there's tons of insights in this conversation for anyone who's a founder or thinking about starting a company one day, but there's also plenty in the year for engineering leaders and hiring managers as well.

I hope you enjoy this episode. And now my conversation with Rick, Rick, thanks so much for doing this with us. We so appreciate 

[00:04:57] it. Thank you so much, Brett. Really appreciate the 

[00:04:59] time as well. So the place I thought we could start is on interviewing it's something you would be at talked about from time to time over the last couple of years.

And maybe we could start all the way at the top with the way that you think about interview process. What's good and bad. Things that you've relied on both during your time at square. And now of course, building from zero to one at persona, 

[00:05:21] I think interviewing and hiring really evolves from the earlier stages all the way to the later stages.

So for earlier phase companies, I think there's a really big piece of the first 10 people that I hired. Make a huge difference for your company. This is pretty common advice, but the first 10 folks of the company, oftentimes we'll set the entire foundation for the culture. As much as the CEO or founder would like to dictate what a culture looks like.

It really will be the motivation of these first 10 people who really will dictate the things that this company values and to really find that I think first and foremost, referrals makes an enormous difference. Keeping the early conversations, casual, having it, where you're not trying to suss out can this person do their job.

Making sure the relationship there is more so a horizontal like camaraderie type based relationship where you look at the individuals equal because for these first 10 folks, it really will be like that. And in order to really suss out, there's a couple of things that we value a lot here at persona.

Number one is. Conversations with everyone here. And oftentimes how we think about it is this individual has to work well with all the first 10 people. As companies generally tend to scale, you can have more and more pockets of groups, you know, individuals who kind of collaborate here or there, and you can really structure the company in a way that hopefully for any sort of problematic relationships, it's a little bit more hidden away.

But for the earliest set, there is no escaping though. So you really have to think critically about whether this individual will actually interact well with everyone else here. The second piece is references makes. An enormous difference. You'd imagine that every single individual they'd never give references who wouldn't speak positively of them, but how the person speaks positively about them makes a huge difference.

The last piece I always talk about is the best advice actually received from someone at square before, which was oftentimes when you're about to extend someone, an offer, you're thinking to yourself that, oh, this person can solve this problem. They could solve that problem. There's so many problems that they can help solve.

This person will be absolutely amazing. And this almost certainly will be true. But it's actually far more helpful to think about all the ways in which this person may not work out for your organization focused on the team, that they may not interface well with the types of projects they may not succeed in.

And a lot of ways, the first, like three months of any new hire it'll look like kind of a honeymoon type of period as a result, it will really mask a lot of otherwise clear problems they may have, especially if they're here longer. And one big piece of this is really thinking deeply. About all of these kinds of like potential pitfalls can really help set you up for success downstream and make sure that this individual is successful.

And also if it doesn't work out that you can take action far, sooner than you'd otherwise imagine. And this is a mistake that we've made countless times now. So it's really been drilled into us and something we've thought a lot about. 

[00:07:54] So on the pre-mortem idea where you sit down and think about all the ways this candidate might fail, when they join you, how do you actually do that?

And how is that operationalized so that you can then take action 

[00:08:07] on it? The first part of it really is I oftentimes think a lot about how this individual. Interact with the top five people expect them to interact with on a daily basis. And in particular, what are core areas that I believe that their working style has made it for?

If one person is particularly process heavy, whereas the other person's much more loose and adaptive to the current situation. If the communication styles are fundamentally different, if what they value differs greatly. And for those top five people to interact with, I think it's absolutely critical.

That, that interaction will be positive. And it's complimentary, you just sort of do a 

[00:08:41] mental exercise or you open a doc and write it out in some structured way. 

[00:08:45] So in the, the days I used to always write a doc about it, I put something down for myself, whereas as we've gotten larger, I stopped writing it down.

But in the earliest days, I used to try to write something down for myself as to who would this person work with and how would they do. These days, I think a lot more of is we really coach hiring managers here to just think deeply about this and more importantly, to make a really strong pitch themselves, why this person may not work out and just be heavily, heavily aware of it.

So how we oftentimes talk with hiring managers here is externally to the rest of the team. You should be the absolute champion for this individual. If you are thinking about hiring someone, it's critical that the rest of the team knows that you have their back. So that means whether in the hiring part, otherwise you.

Are incredibly supportive of them and frankly, you know, always biasing towards why they'd be successful while internally and possibly, you know, with you're thinking about what may not go so well. So what would 

[00:09:36] be an example of a pre-mortem one, two, three things that you would think about and then how do you actually.

Act on it. So you don't wind up saying, yeah, I could see the bus hitting the wall. And then 90 days later, the bus hits the 

[00:09:49] wall. The number one thing earlier mentioned is what kind of people, this person to interacting with the number two is what kind of projects do we think this person will be least successful in?

So whether that be particularly complex projects, projects, where there's a lot of nuances, is this person more of a big idea type of thinker? Are they someone more social versus a leading type of role versus do they really. Prefer to be kind of in a supporting type of role and thinking through the type of projects they'd be successful in.

And the third aspect of it would really be who are they as an individual and what will really make them feel excited about being here every single day and making sure that we can really help provide that and making sure that whatever role that they're in, who they work with to project that hours to anything else that this is a place that'd be successful for them.

So thinking through those three key pieces, how do we operationalize that? I'd say number one, If you don't feel strongly about this as a hiring manager, you have the decision. And oftentimes, although saying no may feel harder, it's far better to be a little bit more pessimistic on this side, just because hiring such a big deal when you're only 10 people, 20 people, 30 people.

It's a 10% incremental difference in terms of size of your team at 10 people. That's enormous. So being a little bit more pessimistic on this can really save a lot of heartache in the early days. I think it oftentimes feel so hard to hire folks. We actually had a tendency to rush their own decisions and like hire someone a little bit sooner than we actually needed them.

There was so much difficulty in trying to convince anyone to join us, but I think the aspect of being a little bit more cautious and honestly, again, biasing towards no. Has just paid off so much for us when you were 

[00:11:20] talking about the pre-mortem a lot of what you were getting at is things tied to a really deep understanding of the candidate.

And so I think it would be great to learn about how do you learn that it's very different if obviously you're recruiting somebody who you worked with before and you know, them intimately. But if you don't know them as well, how do you structure a process? So you can learn enough to have that fidelity that they're strong in this way.

They're weak in this way. These are the types of projects that they will or will not be successful in those types of things. 

[00:11:47] Depends a bit on the role, but especially for a lot of the non-technical roles, it can be really difficult to. Overly emphasized on how a person will actually be able to do in the job.

There's just, aren't exercises out there that can really put up for the individual, unless, you know, it's a particularly kind of operational type of role that you can have a great assessment as to whether this person will do well or not. So. Instead for most of my interviews, I actually speak very, very little about how will you solve this problem?

What was the hardest challenge you've ever faced or anything like that? I think oftentimes a lot of people out there have canned answers for this, or I've thought about it. So for myself, I actually spend a lot more time on focusing on the incentives of the individual. What do they care about? What motivates them?

What drives them? If it's an hour interview spending 40 minutes, actually diving very, very deep into. What does this person want to do? What is their ideal day to day? Like what do they care about? And people that they work with, what do they care about and the product that they work with and trying to nail the motivations and incentives for this person, because I'm a big believer that if you can get to the root of what someone's motivations are, you can kind of like problem solve and theorize exactly how someone would tackle a lot of problems out there.

And I think that key piece there is really kind of how we build up this mental model. Of how this person behave in certain situations. For example, if someone's incredibly motivated by supporting others, by making all their success by elevating others, you can usually have a really good sense of how will they behave when there's a product launch, how will they behave when a customer challenge arises, how would they behave?

If there's. A misunderstanding or a disagreement between two Indians. Are there 

[00:13:22] specific questions you find most illuminating? You sort of rattled off a bunch of different areas. Are there any specific ways that you phrase things or questions that you find the most signaling? 

[00:13:33] I always ask a couple of them.

One of them being, what do you want to do after your next role? And oftentimes framing it around the idea of most likely you won't be here for the rest of your life, if you are, that'd be absolutely incredible. But. At the end of the day, hopefully this helps you get a little bit closer to whatever that future you envision or, you know, wherever you want to wind up is.

So we put a lot of emphasis on trying to understand how can we make sure that we're setting you up for that right. Future, you know, and in addition to that, I always ask, like, what do you believe in, why do you believe in it? What is the probability that this is right, and really drilling deep into what kind of role view have they established over their career?

And then lastly, a lot about what are the most important things that you're looking for in your next role. And I think oftentimes it's very, very common for individuals to focus a lot more on the size of the market and impact on the world. But for us, I very, very heavily biased towards people and like first startup, especially of our size, I usually really try to set the frame that as much as we'd like to change the world, it's an immensely challenging task.

And. Startups, especially in the early days, honestly, it's a huge grind. So if I don't hear that, the number one thing that motivates them as people, I usually think that this probably isn't the best fit for the individual, frankly, people 

[00:14:54] people they work with. Yes, absolutely. Or the people they support or whoever that may be, but people in a very, very general sense and oftentimes I'll drill a lot deeper.

And to who, why people, when, when you say people, like, what does that mean? Does that mean day-to-day, it's someone that you can joke with or after work or go and hang out with? Or is it people from the perspective of this person's motivations are amazing? Is it people that you admire versus people that you respect, people that you can learn from?

What aspect of people and why does it matter so much to you as an individual? How 

[00:15:21] do you think about hiring for potential versus experience? I 

[00:15:25] think it's incredibly role dependent. Then on the engineering side, I think the best analogy here is if you're trying to hire someone to set up a foundation, regardless of the amount of the potential, the individual has the foundation, you can't really bet on that because everyone else will really be building off the exact same foundation that this person has set up.

So no matter how much potential this person has, if they set up the foundation poorly, the long-term cost of it will just very, very quickly outweighed the short-term benefits that the individual can grow into. So. I think this really applies to kind of any type of roll out there is this person setting up a foundation that impacts others where the exponential effect of the missteps this individual might take, regardless of the potential outweighs the growth potential of that individual versus is this a much more isolated type of role where they can learn without impacting too many other people and then downstream and longterm from all of the learnings that they have there's benefits 

So how does that map to, when you think about the first 10 folks you hired a persona, does that mean most of them tended to be more experienced? Or even in those first 10, some of the folks building more foundational things, sort of one way versus two way door type work, it 

[00:16:27] depended on the, for example, the first business hire and currently the individual who leads pretty much all business efforts here.

Christie, we brought in someone who had a lot of experience leading people. Who'd been at a variety of startups and kind of knew what she was doing because she'd be setting kind of the business direction. Of the entire team from sales, marketing, customer success, and much, much more. Whereas on the engineering side, both Charles and myself came from engineering backgrounds.

So we could really tackle a lot of the foundational pieces. And we could actually bring in some folks who may not have been nearly as experienced on that side, on the product side. Oftentimes the mistakes that you make are much less costly. There's a lot of two way door opportunities there. So. We could hire a little bit more junior on the sentence that on the potential individual grow with us, because at the same time, we're still trying to understand what our product is.

So any mistakes that we make at this time, It's really hard to say whether it would have been correct or not. Design was another one where oftentimes, especially in the early days, like the foundation that's built there, it's a lot easier to mold and redesign. So we were able to hire a little bit more junior on this end.

It really depends on the type of product that you're building though. We were a B2B SAS type of business. So. Design, wasn't an absolute pillar around how do we actually go to market over time? I think this is evolved and change. So as a result, we've also started hiring more and more senior folks. 

[00:17:43] We talked a little bit about pre-mortems.

We talked about some of the ways that you spend time trying to get to somebody's core motivations. We talked a little bit about hiring for potential versus experience. Are there other pillars or building blocks to the way that you've approached? Interviewing folks that you find particularly useful. I'd say 

[00:18:02] one thing, big area for us in terms of thinking about hiring is almost an exercise of segmentation.

I don't think this is something that you can deliberately figure out as you go into the market, but just being cognizant that there is a segmentation that's happening within the market. An example of this is today. Oftentimes if you're every single startup out there, speak about hiring for mission, we're going to become the largest company in the world that you know, you're riding on a rocket ship.

As a result that segment is incredibly crowded and everyone kind of speaks the same message there. So for us, we've actually taken it almost in completely inverse approach towards how we communicate ourselves. And I think it's also been really helpful in terms of how we build out the culture. So things I oftentimes say to candidates is we're not trying to change the world.

We're just hoping to make it slightly better. And hopefully if we succeed. People never think about their personal information being lost or mishandled ever again. It's almost like essentially like just moving a burden for a lot of people out there. We oftentimes speak about how, whether it's a rocket ship or not.

I can't promise that to you. I think it'd be amazing if we could grow in that way. But at the end of the day, we're just trying to take a step by step and frankly, make sure that this is a great place day to day for everyone here. And a lot of this messaging hopefully runs a bit counter to, I think like traditional startup messaging, which has been really helpful for us because for a lot of the folks who end up joining us, we become their top pick.

They oftentimes tell us that this is the only company I was considering, especially after everything that you've told me. And this has helped us a lot from just purely the segmentation piece and also reinforcing aspects of our culture from a culture of humility, a culture of really wanting to work with other folks.

And caring a lot more about the day to day. Not so much about how large this can all be, but really just about doing a good job on every single project. So to kind of like tie all this back together, I would say. Thinking a lot about this segmentation piece and finding out what is uniquely attractive about your company.

And that doesn't have to be, you know, what's traditionally attractive, but rather there will always be a segment of the market that is under-tapped. And once you start isolating more and more on this, and once you start realizing that, yes, this is something that I think. People resonate with, and they don't hear from everyone else.

It can really help you attract a lot of talent that you don't have to compete nearly as hard for. And frankly, hopefully resonates more. So with what makes you uniquely you? I always tell folks, especially that we interview, I don't know where persona will be in 10 years. If we are huge, that'd be absolutely amazing.

Oh, we're still alive, frankly, but that also still be amazing. But all I really try to index for is that 10 years down the line, if we were to suddenly go out and say, Hey, there's going to be a reunion. We all really look forward to seeing each other. Again, it's not because we're all friends, but because we really miss working with each other, we all really respect the working ethic, the quality, just the overall experience of working with each other.

And if that were true, I think I've done a great job in terms of huge success. For myself. When 

[00:20:47] you think about this topic of hiring and interviewing, what are the things that you learn from square that you're applying? And I'm sure some of it is some of the things we talked about and maybe what are some of the things that you changed or didn't work or approaches that were 

[00:21:00] non-transferrable big mistake around this in the earliest days where we try to create an entire track for interviewing.

So when it was Charles myself, And maybe two other people, we try to prematurely create like an entire interview loop with like phone screens and interview problems and on-site interviews and make it seem a lot more mature than it actually was when you're large, like square. Oftentimes when people apply, there's a very high probability that they'll join you.

You're an established company. They intentionally came in. There's an entire foundation that the company has built that is supporting. Recruiting efforts. And when you're small, it's actually much different. Like it isn't just about assessing whether this person's qualified anymore, but actually every single interview is also a cell.

And that was a really, really key thing that we realized after a couple of conversations where we can't like assess how good this person is, whether there'll be a fit or not. And then after trying to sell the candidate, we actually started doing that simultaneously. And it was a strange thing to tread, but we found that balance where it meant turning the interview a lot less from like, Hey, let me ask you a whole series of questions and afterwards, speak with the team about whether this person would be a fit or not, but rather it became much more of how about this become a conversation, teach us what you do.

Especially given that we were early. We didn't know half these functions the same time. We'd also be able to understand better about how you think about things. And really making that a much more back and forth process. And I think especially maybe less than 20 folks, most interviews will be like this.

You know, if you're trying to attract top talent, it just can't be like, oh, first let me make sure that you're good enough. I think it creates again that weird power dynamic that makes it incredibly hard to hire. You really have to start with a much more kind of like back and forth type of approach where, you know, even show that vulnerability of these are things that I'm not particularly good at.

These are things that, you know, we really, really need help with. And you. Can make an enormous difference here and showing how flat the entire organization is before just trying to assess like, oh, how, what about anything 

[00:22:58] that jumps to mind that square did exceptionally well? That is something that you've adopted or as part of the way in which you approach hiring 

I think pieces that were really, really well done there. So there was actually an entire training process for anyone to become an interviewer. And especially on the engineering side, this was very, very rigorous. You'd start off being on the interview panels, whether that be a technical interview or more so Q and a cultural type of interview, you'd really start there.

And once you got the bearings, there had done a fair number of interviews understood how the process worked and generally found good signal that, you know, you were able to assess whether this individual was a good fit or not. You'd become a phone screener, and that'd be someone who actually is on the initial calls.

Today’s episode is with Rick Song, CEO of Persona. Before starting the identity verification company, Rick was an engineer at Square and an early team member at Square Capital. On the heels of raising a Series B round, Rick shares his approach to building from 0 to 1, from why he favors pre-mortems and unusual recruiting moves, to Persona’s go-to-market strategy.