Dear friends,

In JC’s Newsletter, I share the articles, documentaries, and books I enjoyed the most in the last week, with some comments on how we relate to them at Alan. I do not endorse all the articles I share, they are up for debate. 

I’m doing it because a) I love reading, it is the way that I get most of my ideas, b) I’m already sharing those ideas with my team, and c) I would love to get your perspective on those. 

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🔎 Some topics we will cover this week:

• You should view culture as a subscription product: every employee needs to make the conscious decision to renew that subscription

• Amazon removed top-performers involvement from their interview process - which led to a drop in talent

• How layoffs and the recession lead to a downshift in salaries and compensations for new hires in tech

• Some inspiration for new hiring questions

👉 The culture lab: a podcast digest of “Transforming People operations with Jessica Zwaan (COO at Whereby)” 

❓Why am I sharing this article?

• I agree with what is shared about company building and culture. 

• Focus on having people who are there for the mission and who want to do the best work of their career. 

• Treat culture and ways of working as one of the products that our company is building.

• Culture and business is a subscription product: every single month every single employee should make a conscious decision to continue that subscription.

• Do the best work of their career

• Do everything to impact the company’s mission

👉 Amazon is quietly streamlining its hiring process by dropping its ‘Bar Raiser’ program for some interviews. Employees worry it’s lowering the quality of candidates getting jobs at the company. (Business Insider)

❓Why am I sharing this article?

• Why we need to never drop our talent density and keep investing in always raising the bar.

• Don’t drop the bar or you will lay off.

• Should we be more selective in who joins our pool of interviewers?

• Amazon dropped its renowned "bar raiser" process for some job interviews, effectively lowering its hiring bar in the lead up to the recent layoffs.

• Last January, Amazon began removing bar raisers from interviews for entry-level software engineer applicants out of college, according to an internal message seen by Insider. Some of the other non-engineering, entry-level positions also got rid of bar raisers from their interview loops in recent years.

• Bar raisers still give advice on the entry level hiring decisions, and interview the more senior positions.

• Bar raisers, who are usually top performers and have to go through a stringent training procedure, didn't grow at the same pace as Amazon's overall employee-base, making it a burden to fulfill the position's interview load.

• By abandoning the bar raiser for some mostly entry-level positions, Amazon shortened the hiring process and was able to hire more aggressively. That, in turn, dropped the quality of talent in these positions.

• Bar raisers are usually chosen from the company's top-performers and considered a badge-of-honor. Only about 1% of Amazon's total corporate workforce earn the designation.

• Internal data at the time, pulled by one of the bar raisers, showed that only 6% of the bar raisers were reaching the targeted two-per-week interviews, with the remaining 94% doing only 1 or less interview per week on average. Back then, Amazon had 5,001 bar raisers out of its total 1.2 million employees (which includes its warehouse workers).

👉 Pay in tech is dropping fast as firms like Microsoft and Snap use layoffs and a looming recession to wrest power from workers (Business Insider)

❓Why am I sharing this article?

• Interesting datapoints for salary discussions!

• During one of his weekly talks with employees, dubbed "Ask Evan," where the founder answers a few preselected employee questions, Spiegel acknowledged there would be a further delay to Snap's annual review of compensation because of the rapidly changing labor market.

• Tech executives are looking to cut costs where they can, with layoffs and reduced pay, as the plush economic environment tech companies have operated in for over a decade has come to an end.

• At Microsoft, offers to prospective employees are being cut by 30% amid layoffs.

• The founder of Levels.FYI, a platform that collects data on tech compensation. In 2022 alone, Musa said median pay for a software engineer fell by almost 9% between the first and second half of the year. For software-engineering managers, it's down by 10%. For product designers, it's down 13%. And negotiations among people who are managing to get job offers are getting tougher, he said.

• In addition to resetting salaries for new hires, tech companies are "downshifting" other forms of compensation, Shah said, like grants of equity and retention bonuses, which is happening at Snap and Meta.

• An estimated 200,000 tech employees have been laid off since last year, according to Layoffs.FYI.

👉The Future of Work (Medium)

❓Why am I sharing this article?

• DAOs are less of a thing, but some interesting concepts & ideas came from them

DAOs:

• DAOs have at least three distinct advantages over traditional organizations: (i) speed of capital formation (ii) voting is transparent and easily executed, and most importantly, (ii) they mitigate the trust requirement around jointly-owned assets.

• I would also hasten to note that DAOs are not without challenges. Decentralized governance is hard. Free rider and blockholder problems continue to exist.

• It’s also worth noting that although the smart contracts relieve us from trusting each other, we now have to trust the code.

Learn-to-earn

• It would be somewhat analogous to Adobe giving you a few shares of stock for learning how to use Photoshop. However, these aren’t centralized software developers, they’re networks.

• Networks become more valuable as more people use them, but potential users first need to learn how to use them. By rewarding users to go through the process of becoming informed, the networks get user acquisition, which enhances value, while the users learn a new skill and earn ownership in the protocol for doing so. It’s a win-win for both parties.

➡️ I like this notion of rewarding people to learn to use your product, which is what we are trying to achieve with the “token project”

👉 Gen Z calls it ‘quiet quitting.’ Millennials call it setting boundaries. Gen X calls it ‘slacking off.’ 3 generations unpack the buzzy workplace trend. (Business Insider)

• In a recent Gallup survey, 60% of employees reported feeling emotionally detached from work; 19% said they were miserable.

👉 How Much Dilution is Normal? (The Split)

❓Why am I sharing this article?

• Interesting data points (I’d be careful with averages though).

• If you've never modeled out the scenarios of raising venture capital before, this will likely be an eye-opening chart and read.

👉 Hiring Questions: Thread by Carl Vellotti (PingThread)

❓Why am I sharing this article?

• I found those questions really good!

• We might want to remix some of our interview questions to leverage these questions.

• "Tell me the story of your career and focus more on why you did what you did."

  • Looks for: "I want to hear the story. Why you did what you did. And that tells me a lot about the person when they're answering the question, not the what."

• "A group of scientists have invented a teleportation device. They've hired you to bring this to market. What two questions do you ask, and then what's your plan?"

• "I ask them to teach me something new in one minute." 

  • Grades on three different criteria. 

    • 1. Completeness. Did they actually finish the lesson within one minute? 

    • 2. Complexity. How complicated is the thing? 

    • 3. Clarity. Do I actually understand?

• “The company that you're working at, what's the product? Why is it better? Who is it for?" 

  • Looks for: Can you answer it at all? "It's the most basic positioning question you can ask, but a lot of people can't answer it."

•  "What is a risk you regret not taking, why, and what did you learn about yourself?" 

  • Looks for: Biggest thing is a growth mindset, to be able to reflect and be vocally self-critical without unproductively being hard on one's self.

• "What have you learned about yourself? How are you different from other people?”

  • Looks for: Self-reflection and understanding of strengths, self awareness about what makes you different, and where you can harness that.

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Let’s talk about this together on LinkedIn or on Twitter. Have a good week!