Claire Hughes Johnson: Scaling People
Reframing Talent To Build Lasting Companies
Hey friends! I’m Akash, an early stage technology investor.
I study the strategies behind great technology companies and aim to distil those learnings into actionable insights for founders.
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Today, we’re speaking to Claire Hughes Johnson. I was lucky enough to sit down with Claire during Slush in snowy Helsinki, which definitely became the highlight of my trip.
Claire Hughes Johnson was Chief Operating Officer of Stripe between 2014 and 2021, as it grew from being a small startup to one of the world’s most valuable private companies. Prior to Stripe, Claire spent 10 years at Google leading a number of business teams, including overseeing aspects of Gmail, Google Apps, and Consumer Operations, as well as serving as a Vice President for AdWords online sales and operations, Google Offers, and Google’s self-driving car project.
Claire interviewed a dozen founders, CEOs, and company leaders across industries to learn their insights on leadership, management, and company building for Scaling People. Readers will find quotes and stories from LinkedIn cofounder Reid Hoffman, Economist editor in chief Zanny Minton Beddoes, Zoom founder and CEO Eric Yuan, and many more throughout the text.
I read ‘Scaling People’ cover to cover and ended up making scrupulous notes and highlights, given the density of insights. I highly recommend the book for founders and operators looking to master talent as effectively as they are seeking to master GTM - ultimately, your people are your company and we need to acknowledge that enduring companies frame the importance of talent as such.
Actionable Insights
Articulating your mission in your founding documents helps you become a magnet for customers, employees and investors.
Brand matters and it’s important to cultivate your brand in the places where your ‘forever users’ cluster.
BizOps is a critical function in the hyperscaling journey; there are good arguments for hiring a Head of BizOps with then intention of growing that person to become the COO when you find PMF
Dedicate attention to hinge points as you go multi-product, as your multi-product adoption will only increase if there are teams internally responsible for making your product suite coherent to the customer
Invest in employee (and especially new leader) onboarding and measure ramp up times; the ROI is difficult to measure but certainly compounds
One thing, that struck me when you discussed founding documents is Stripe's mission of ‘Increasing the GDP of the Internet’, which is an inspiring rallying call for employees to get behind, and how you obviously articulated that very early.
Founding documents play other roles too, but what would you say is the importance of the mission in other aspects, like hiring? You have the founding documents where you have the mission and values, but the mission itself, getting that down on paper very early, and how that allows you to then have this talent vortex, hopefully over time?
I tried to address what you're asking in the “Foundations and Planning for Goals and Resources” chapter where I talk about the founding documents. I tried to explain that, some of that work is probably not appropriate to do until you have product-market fit, or until you're really starting to get traction because for now you're just trying to survive. You sort of have a sense of what you want to build, but you're still building it and figuring out who you are, which is what you're seeing. And so I think you want to avoid, as a founder, getting too wrapped up in building all this substrate until you believe you need the substrate to exist.
That said, the mission. The very beginning of that work is important early on because in the same way you have to do the pitch deck, you need to be able to articulate why you exist, not just to investors, but to prospective early employees.
Having a compelling reason for your existence is attractive, and it shows you're trying to embody your ambition in something that's a little bit more crisp. But it's hard. You don't just sit down and say “I'm going to write a mission statement”.
For Stripe, Patrick had said it and written it in a place on the website, and then people started repeating it back to us. It resonated because it aligned with the other things they were seeing and hearing about the company. It sort of got handed back to us.
And even with Google, my understanding is that Susan Wojcicki, who had Larry and Sergey building the company in her garage, pushed them, “what are you really trying to do?”. And she's the one who made them try to write down ‘to make the world's information universally accessible and useful’.
So what I would say to founders is to listen for the crystallisation of what you're trying to be and listen for people trying to repeat it back to you or people who are pushing you to articulate it, because you may find your mission early, and that will be powerful to help attract people.
And then as soon as you kind of believe it, it becomes your tool for expressing what you want to be. But it is a little bit organic so you can't force it. The fact that it's sort of discovered and you have to be receptive to the world telling you what it is, it also means that it's different for every company and who they'll hear it from.
What I find interesting is sometimes when founders pitch me, if I feel like they're pitching a feature or a product, I then push them: “Where does this go? This must have another chapter in your head”. And then they tell you. So I follow up asking ”Why didn't you start with that destination? The mission is often this destination.
Be unafraid to articulate the thing in your mind that maybe you're not telling everyone.
The analogy of talent acquisition with marketing and sales was profound. What I really found compelling is the Capture The Flag contest and just how much goodwill that created among developers,many of whom you obviously ended up hiring.
Subsequently, with Stripe Press and various ways that Stripe has built soft power or mindshare with folks is really exemplary. I'd be curious how you advise founders to go about brand building in the early days.
What would be some generalizable advice for how much attention to give to the brand so that it has this top of funnel effect on hiring, but also how they should go about it?
The question is if you think about the top of the funnel company brand building as part of your acquisition strategy, not just your customer acquisition strategy, but your people acquisition, what does that look like? I think if you abstract from what Stripe did, you really need to know who your (I call them) “forever customer” is.
Who's your true, true target? For Stripe, our “forever user” will always be developers because it's fundamentally APIs. And if we lose sight of that, we're going to have a problem because the product has to work for them. Now, of course, the decision makers are often not the developers in bigger companies.
They're like the CFO or the CTO. But still the product must be built for the person we hope to love the product and who wants to use it wherever the next company they work is.
So who is that for you as a company? Let’s take an example and say it's salespeople.
Maybe you're building a sales product. Well, where are those people? f we use sales as an example, there are certain industry conferences that are extremely large targets for sales teams who are trying to sell into that industry.
You’ll find there a lot of salespeople who sell to retail companies and their job is to go work with their customers. But what if you showed up there with your product and just walked around demoing it to salespeople? As you're building the product, you basically use it for your “forever user” testing. But you're hoping some of those users are like, “Wait a minute, is this available? Could I use this?” And they become some early adopters.
And then I think you have the challenge of viral adoption, which is do salespeople talk to other salespeople? And this is where I think the analogy could break down. I would hesitate to assume it's possible that you can get viral adoption depending on who that end user, that forever user is. You should be really honest with yourself.
I think be honest with yourself about what your goals are, but let's use a sales analogy for a final point, which is what's exciting about what I think might happen if you went to, say, a retail conference and you met some salespeople, is they might get excited enough about your product and then want to join. You might be a little early to hire sales, but it does not hurt to have some early employees who are your target..
But if they're really good, then they may know other people that they can then help sell to. You can create your own, but looking for those opportunities that seem unscalable is the bottom line.
Yeah. It's just like how Figma hired design advocates who were their best users, and then with developer relations, that's usually what we see. Yeah.
Even Stripe had some earliest users who were the most prolific in finding bugs and helping other users. We hired one as our first Head of Support.
Thank you. Maybe if we shift gears, one thing that really struck me is that anecdote you shared about Omid Kurdistani, who's the Biz Ops hire who basically interviewed himself and explained, ‘hey, you need me as a Biz Ops person’. You mentioned also how you joined as the Chief Business Operations person before Billy gave you the COO title. In the SaaS literature, there isn't as much attention given to business operations as a key function in scaling.
I'd be curious, when you speak to founders, how much is this neglected? And if you could articulate in a crisp way how important it is.
I think it's not articulated because “BizOps” or “business operations” is generic, which is what's powerful about it, but then hard to nail down.
What does it mean? For example, I'll just say Google's business operations team was pretty much exclusively staffed of ex McKinsey, Bain, BCG consultants. And they were really an internal consultancy team, which was very important and powerful, but not the same as Stripe’s BizOps team. Stripe had a mix often of ex consultants and also entrepreneurs. It was much more of a Swiss army knife team. General athletes that come in and tackle whatever shape problem - we're going to help figure out what it is and start to address it.
Stripe's BizOps team would literally come in and do the work if we had no one to do it, which in scaling is often the challenge. You realise, oh my gosh, there's a whole function we need that we've never seen before.
We need someone to start doing it so we can figure out what it is and how to hire for it. Sometimes that's a known function like product management, sometimes it's an unknown so I'm a huge fan of the concept of a team that is more general athlete builder, that provides leverage, and this by the way, was John and Patrick's innovation, not mine.
I walked into Stripe and there was this really talented BizOps team that I had to understand. And they were one of the first teams that reported to me. I had to understand them and they became very quickly my most important team when I was facing a scale challenge, or when we had a thing to figure out like, “how do we do company planning”? “Do we need more product management”? It would be very different shape of problems.
When I see founders hiring chiefs of staff, I'm not a fan of that, I'm just going to be honest because chief of staff, as a title, is such a wide continuum of what it could mean. And it's confusing, is it like a very sort of a souped up administrator assistant or is it like a COO? It can be either of those, which is too wide.
So I would say instead of that, I tell founders to hire a BizOps lead, or even a Head of BizOps, especially before they're thinking of hiring a COO. And then maybe that person becomes the COO, which is much less risky than bringing someone in. At Stripe, the head of BizOps became my direct report, which was great for both of us.
But you have to define it first because it could mean something very different.
Yeah, it's so interesting that there's not as much conventional wisdom about what role should precede the COO, as in who can grow into the COO. Some people think it's the Chief of Staff, and some would say that it could be the Head of BizOps. There's various schools of thought.
There are. I think one of the answers is often in your business model. For example look at Apple and Tim Cook, it's an operations leader who is actually truly a chief of operations.
But in other companies, it might be your CFO, for example if you’re in financial services or a fintech area, ormaybe your main buyer is the CFO. The CFO might become the COO. I've seen that happen at a few companies.
But really, actually look at yourself, look at what you're selling, and think about what role could become that. And then it's about the talent, too. It's “who do you have?” And this is a nice segue to, by the way, you don't automatically need a COO. I know I don't sound like the first person to say that, but I would say too many people think they need it.
When would you say, though, as a rule of thumb, is the right stage to install a COO?
I think, as a rule, it's probably Product-Market Fit.
Basically at pre product-market fit stage, you're about existence and proving the product and the business model. Hopefully some people get the product and they figure out the business model, but I would prefer to do both at once. And as a founder and CEO, you're just really focused on that as you should be and you're not doing long term planning.
You're like, “Let's survive next month. Let's see if we can get more users”. Once you start to get traction, and by the way, repeatable traction (don't get fooled by some early wins), you now have to build a business and not even maybe scale it that much, but run it in a more organised fashion. And then as a founder you have this challenge, which is that you’ve been doing product building mostly because it is your main skill set. But now you have to go do company building.
And by the way, you still have to do product building. So now you have, two very big jobs that are quite different. And that's where I do think it's valuable to think “Who's my partner on this”?
You may need to divide and conquer more, and across both of those things, if you don't have a cofounder or you don't have a cofounder who's oriented in that way, that's where I think this whole BizOps Lead concept could be really powerful. Which is, why don't I just go hire a really ambitious, smart, general athlete person who's going to look at the problems I'm seeing and to whom I can delegate some things to because often what you want to do in that role is go look at other companies.
I had this boss, I'd come to him with a problem and he'd be like, “Has no one ever faced this before in the history of man?” And I would go back and interview people and call them and ask how did they deal with it. Sometimes that's what the person can do. They can help give you some outside research.
Yeah, that's the great thing about the Valley, where people pay it forward and share their learnings. Hopefully in Europe we're getting to that sort of density, of goodwill being circulated.
Moving on, I think one really interesting anecdotefrom the book is how Bar Raisers at Amazon and the Stripe Elevate program was a key part of keeping the bar very high for talent that you brought in. As you mentioned in the book, there's a way to assess who should be the bar raiser or the Elevate interviewer.
It’s hard to maintain that high bar especially as a founder when you're getting to that point where you're becoming a bottleneck. How should the founder go about picking his Bar Raisers or Elevate interviewers when there isn't much data to crunch yet to say, like, these people are the best at interviewing.
So the first thing I guess I would say is, I don't think the founder should get out of the interviewing business anytime early.
Your early employees are your company. They are going to be the most critical resource you have. So you should be actively involved in hiring them.
I would make the founder the main Bar Raiser as long as they can. But it is true over time sometimes you don't want a bottleneck hiring, you're starting to scale. And what we did at Stripe is we just extended that role of the founders to the executive team.
We got some scale because we doubled the number of people who could meet a candidate and be the Bar Raiser. And then we as a team started to develop some patterns, there were maybe six other people and we would sit in the hiring committee meeting and we'd start to see the judgment, start to see people who understand how to press in an interview, who've maybe learned some skills on identifying talent.
So I think there's a way to more qualitatively versus quantitatively do it early on. There were certain people that I really trusted at Stripe to hire really elite, ambitious, ‘I can build stuff’ kind of people and keep a very high bar.. If they interviewed and they really liked someone, I followed their guidance.. I should have told these employees and I should have done an early Elevate program. And so I think that at scale, first using some kind of generalist team to teach, and then over time you get the data and you can start to do it more widely.
But you do want to build in a check to make sure that the Bar Raisers really are Bar Raisers, or else it's very dangerous. And so that's when you do want to start looking at the data and not just in one time, continuously if you can, that tip of syncing the ATS with the HRIS system is such a nice hack to do that, that everyone really should do as soon as they have that data there.
I think one of the mistakes that we actually made, even though we tried not to, is we should have done better people data collection earlier and actually really treated that as a first class thing to do in the company. How do we develop more insights on what people are doing, giving them credit for that work and manager assessment of people? As you get past a few hundred people, it's very hard to know. Just like I said, I would know the best interviewers when you asked me when I joined Stripe, but I wouldn't know a year later.
It's a bit like we see so much rigour in the Go To Market functions because of the obvious top line impact, but your analogies of talent acquisition and talent portfolios with sales acquisition and customer portfolios is a wonderful reframing.
Exactly. I think there's so many ways that people can quickly get up to speed; the people are your foundation.
And if we’re using a similar lens of assessment and data. Exactly. And I guess what I'm saying to you is I think I could have even pushed it further with the right spirit of insight and support of people.
You could build it. You just translate the same practices from go to market.
Thank you. This was really interesting.
We see so many companies go multi-product these days, sometimes very early in their journey, as we see with Rippling and Wiz and others. In the book you talk about hinge points.
The product marketing team, for example, being one of those hinge points. With dotted and solid lines of reporting between business leads, the org structure can become so complex in a multi-product company. You need those hinge points, as you say, where the focus shifts from the product level to the customer and the customer's experience of being sold multiple products at once.
I'd love it if you could maybe articulate an example or is it just mostly product marketing? Are there other hinge points? We'd love to dig into that a bit more?
You don't have to have this in the transcript, but you are the first person who's asked me about this and I have been waiting for this forever because people always ask me about multi-product. I think it's just so complex that the diagrams even in the book are very complex. It's a complicated answer because multi-product is very complicated.
So thank you for noticing. The amount of time we spent on those diagrams was a lot. And I don't think people want to hear the answer because it's hard to hear.
And the answer is no, it's not just product marketing, which is also why it's hard because you might not even have product marketing. Okay, I'm going multi-product, but I haven't really built out product marketing. Where's my hinge?
And you have to answer that question because otherwise it'll be answered for you.
Or, you'll do the thing that a lot of companies do - by the way, Google has done this - which is you ship your org chart as a product. If you look at certain stages in Google's life and development, like when mobile became a big thing, or even the NAV bar on the main search page, it'd be like Gmail, Calendar, Maps, Photos.
And it got really long, and you're like, oh, my gosh, they're just all independent products that are just surfing off the distribution page of search. Which, by the way, wasn't bad. Maybe for your company it's okay because they're all consumer products and you want the same consumers using them.
I'm not judging Google here, but there was a point where some of the app experience was weird. You lose a drop down menu and be like, why is this separate from the map, which over time has now been integrated? But it was because of this problem. So, one, if you don't identify your hinge point, you're going to just ship your product page.
If you want to avoid that, you want to be more customer focused, you have a decision to make on who's the synthesiser, what team is taking all this product input and turning it toward the customer?
And then sales is often the answer. But what you kind of need to create, in my opinion, is some specialized sales resources who have some multi-product hats, right?
You have a main product, and you have some people who are the satellite sales, the specialist sales, who come in and help sell the new products, which is also very popular because customers love to hear about new products. And you bring in different people to explain this new product to you. And so it's quite effective.
However, you have to make sure that the sales team is not just externally facing, but internally, because they are also the feedback loop, in particular on your number one problem, which is that your products don't actually interoperate.
And so where are they? Not just going out, but coming back in and saying, ‘we got to build this differently’. It doesn't feel like a solution to the customer. It feels like two different people showed up at a meeting with two different products. And eventually you want it to feel, more coherent for the customer.
So I think Sales is another good potential hinge with some specialist capabilities.
So Amazon did this thing that as far as I understand it was a sort of version of this, which is they created these category managers. I think you can create a form of product management that is actually a category or a customer. So you might have an enterprise product manager.
Their job is the customer segment view of the product.
So that would be my third idea - do you create a special role that will be very challenged internally because they've got to be more of a horizontal instead of a vertical.
But this is what hinges are.
They have to operate horizontally. But you could create a special role whose job is to represent the customer need or the category that you're developing, especially if the management team is made aware of how much a lack of a hinge is leading to lower cross sell rates or a poor acquisition experience for the customer. And if you can quantify or at least measure where you're losing without having a hinge, there could be a data driven way to do this.
And it's all about how successful, how much multi-product adoption are we seeing? And if you're not seeing it, it's a sign of a problem. And the problem may be in the product just purely, but it's often actually in the execution.
We could tell a lot of the people out here to start a company around this.
It's a little bit amorphous though, right? It's difficult for the data to be emitted in a way that is really traceable to that hinge point’s impact. It's always this attribution problem.
It is an attribution problem. That's why if you had a specialised role, what are their KPIs? Do you measure them and then give them a voice? And I don't want them to be blamers, but they could say, look, it's a challenge that the core sales team doesn't want to help sell my product. Or it could be a product problem.
And their job is to do that in a constructive way. Which is to say, I think our root issue on not getting enough cross sell is X. And then they should be part of the solution and they need leadership backing to not be sort of shut down.
If it doesn't have leadership backing, I think it's probably unsuccessful.
I’ll slip in one quick final question - the onboarding experience at Stripe got so much attention, which was wonderful to see. In the onboarding chapter you talk about how much this materially improves ramp up time.
And most people like to just think about ramp for sales and think, oh, we need to ramp these guys faster.
By the way, you should also think obsessively about engineering. Developer productivity should be a core metric.
Of any tech company. Yes. And there's so many great snippets from David Singleton about investing in developer productivity.
But do you think that is also an area much like the hinge point where some data can be collected to make a stronger case that improving the onboarding experience has such a material impact on ramp up time and hence it also deserves more attention?
Here's my idea.
This is one of the hardest ROIs to measure. I think if I went back and had to do it again, I would have developed some sort of very lightweight survey tool for all managers and I would train them on it. And I would say, this is not a surveillance tool, this is an insight and data tool, mostly for you.
Once a month I'd ask them to answer five to ten questions, make it very quick to answer and I'd say it's all your data, but we are going to talk about their team and about what they're observing. Was this a high impact month for this individual? Medium, low? And they could have a few words on why.
Do you see this person having a ton of future impact, future potential? I'm just sort of taking a temperature. How productive is this person being? And then if not, if your answer is less productive, is it your fault? It would become this really good source of data for the manager to help coach and give feedback and sort of observations, but also to avoid recency bias.
Because often when we give performance feedback, we're looking to last month, not the last twelve months or six months. And we should but what it would also do is you could study new employee ramp and you could pull the data. Give me everyone who's only been here three months.
Give me everyone who's been here six months and then see, and then you could even run some A/B tests with your onboarding. If you had a headcount that's high enough.
Talk about founding ideas out of this conversation. I think there's a really interesting toolkit there that I think even better would be to have some form of it that employees could look at. Where do we both think about how I am doing and where's my impact? And am I productive?
It's very introspective. But I do think we don't do enough and we do too much sort of “how do I think this person is doing” when we could actually be asking ourselves that question in a more organised, scientific way?
Especially where the atomic unit of that person's ramp up time is like sales productivity.
Productivity is so easy to measure in certain functions. So why not give it to others? So the A/B testing would be quite scientific.
Thank you for reading the book so closely!
Thank you for your time Claire! I've been telling lots of people today about the book. I said, go to the Stripe stand and pick up the free copies they have because there's this chapter you really need to read because it's this problem that you have.
Well, it certainly got more attention than I expected. And the fact that people do care about this is meaningful to me because I do think it's the way you build lasting companies.
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Quote of the week
‘Charlie’s exhaustive screening process requires considerable self-discipline and results in long periods of apparent inactivity. But, as Charlie says, “Hard work is an essential element in tracking down and perfecting a strategy, or in executing it.” For Charlie and Warren, the hard work is continuous, whether it results in current investing activity or not—and usually it does not.
This habit of committing far more time to learning and thinking than to doing is no accident. It is the blend of discipline and patience exhibited by true masters of a craft: an uncompromising commitment to “properly playing the hand.”
Like world-class bridge player Richard Zeckhauser, 66 Charlie scores himself not so much on whether he won the hand but rather on how well he played it. While poor outcomes are excusable in the Munger–Buffett world—given the fact that some outcomes are outside of their control—sloppy preparation and decision-making are never excusable because they are controllable.’
Thank you for reading. If you liked it, share it with your friends, colleagues, and anyone that wants to get smarter on startup strategy. Subscribe below and find me on LinkedIn or Twitter.
Great read. Thanks!