- The Muse is a company that helps people navigate their careers and connect with companies
- They have over 50 million users and work with top companies like Facebook and Goldman Sachs
- The importance of hiring the right people for both individuals and companies is emphasized
- The industry needs to catch up with the future of work and focus on finding the right fit for individuals
- Startups should identify the culture they want to build and broadcast it to attract the right people
- When hiring, it is important to know what skills and values are needed and to have a structured process in place
- The founders share their mistakes in hiring, including hiring someone attracted by the shininess of a startup and hiring people who were passionate but not suited for the job
- The importance of diversity and inclusion in hiring is discussed, and the concept of "culture fit" is criticized for its potential for bias.

- The speaker discusses bias in hiring, including bias against introverted people and individuals from marginalized communities.
- They emphasize the importance of focusing on values and culture fit during the hiring process.
- The speaker shares a personal story about firing a client who did not align with their values.
- They also discuss the importance of shared values with external partners, such as investors.
- The speaker highlights the need for early-stage founders to be aware of their own blind spots as their company grows.
- They discuss the influence founders have on company culture and the importance of addressing personal weaknesses.
- The speaker encourages founders to build their company in a way that aligns with their own values, rather than conforming to societal norms.

Recorded live at our Female Founders Conference in New York, Kat Mañalac sits down with The Muse cofounders Kathryn Minshew and Alex Cavoulacos.

We’re also posting the other talks from the Female Founders Conference today. You can see all of them and read the transcripts at https://blog.ycombinator.com

If you’d like to learn more about the Female Founders Conference, head over to https://femalefoundersconference.org

I'm 1 of the partners at Y Combinator and I'm really excited to be kicking off this fireside with Catherine Minshew and Alex Kavalaugas.

The Muse was a company that went through Y Combinator in winter 2012, and they're based out of New York.

So before we get started, can each of you give us a quick introduction on yourselves and The Muse?

So I'm Catherine Minchiel, co-founder of The Muse and CEO.

I'm Alex Kavalakis, co-founder and president.

And when we describe The Muse, it's a company that's all about helping people navigate their careers and connect with companies more authentically to find the right fit.

So Today we have 50 million people every year, actually quite a bit more than that, but more than 50 million people who use themuse.com and hundreds of the best companies around the world from Facebook, Dropbox, Slack, to Johnson & Johnson, Capital 1, Goldman Sachs, that are really all about telling a more authentic story and using that to hire people who genuinely want what they're offering.

And we have about 120 employees now based here in New York City, so both with our clients and with the muse itself, we've gone through a lot of the good, bad, and ugly of hiring.

So let's talk about hiring as a force for culture.

So at a high level, why is this important?

This is really important both for individuals and for companies.

So for companies, if you have the right people, that is what makes or breaks whether you're going to be successful, particularly in a startup where you only have so many bodies to do the things that you need to do.

But for an individual, you are spending more hours at work than you ever did in the past.

It's such a huge part of your identity, especially here in New York or on the West Coast.

The first question you're going to get when you meet someone is, what do you do?

And whether that is something that resonates with you, that aligns with what you want to be doing or not, is actually hugely important.

And so The industry has not caught up with the changes, with the future of work, and we believe that it really needs to.

We also think a lot about finding the right fit for you, and I think that's particularly important for startups because every startup is so different, right?

They have different cultures than each other, they have different cultures than a large company for sure.

And I think that we live in a culture these days that's obsessed with the best places to work list or sort of ranking companies, rating them from 1 to 5 stars.

But 1 of our really deep beliefs is it's all about alignment, not ratings.

It's about what is the right thing for you.

And so we'll talk more about this, but I think when you're a startup founder, 1 of the most important things you can do early on is really identify what is the culture you're trying to build, what are the characteristics of the company that you want to create, and how do you kind of broadcast that, you know, loud and proud so that people who want that will be drawn to your company and people who don't want that will say no thanks and they'll go find somewhere else to work.

So many people in the audience, so how many of you have already started a startup?

So many of you might be thinking about hiring your first employee or your first few employees.

So how do you know who the right person or, you know, first few people to bring on are?

I think 1 of the biggest things when you're hiring is you have to know what you're looking for.

And so you might be like, okay, I need a salesperson, they need to be able to close a deal.

But what are the values that are core to your company as well?

And then how is your process allowing you to actually figure that out?

Especially early stage, especially if you haven't really interviewed a ton prior to starting a company.

A lot of people just jump into it and they go with their gut feeling and they're like, I think this person can do the job.

But you really actually need to set up a process.

And it can be a lot less arduous in the early days than it is if you get bigger.

But what are you going to ask for every single person going through the process?

How are you going to compare them head to head?

And actually just thinking through the process at the beginning and identifying what you want.

Because there are many types of salespeople, many types of marketers, many types of engineers.

You don't just want an engineer or a salesperson, you want 1 with a particular skill set to make your company successful.

So would you be willing to share some stories and mistakes you made at the Muse early on when it comes to hiring?

So, first of all, we made so many mistakes in the early days when it comes to hiring.

And I think 1 of the sort of ever-present truths of startups is that everyone makes mistakes, you too will make mistakes, and what separates the mistakes that are painful but survivable and the mistakes that kill you is how quickly you identify them and how quickly you move to remedy them.

So I'll give you 2 examples of early Muse hiring mistakes.

1 was sort of not doing what Alex just talked about and vetting for values and mission alignment when you're hiring.

So when we started the Muse, I mean, we were like, nobody wanted to join the company, nobody wanted to fund us.

So this is a picture from after our YC interview in November 2011.

And we were beaming ear to ear because it was actually the first VC pitch in months at which people hadn't basically just laughed us out of the room.

And so, you know, we were kind of very used to the only few people that were interested in working at the Muse were people that were deeply passionate about the mission and deeply aligned with the values that we had.

All of a sudden, we get into YC, that news becomes public, and we had all of these people wanting to work for us, we didn't realize a lot of them actually just wanted to work for a YC startup.

They wanted to work for a company they perceived as sexy.

They didn't actually want to work for us.

So 1 of our first hires was an engineer, I'll call him Bruce because we've never hired a Bruce, and you know he and he said all the right things, he seemed so passionate, he was also in San Francisco where we had just moved to do Y Combinator, he was ready to start the next day and so you know he seemed to check all the boxes.

At the time, Alex now codes and has been, you know, ran product through the first, like, what, 6 years, 5 years of the business.

But at the time, neither of us were incredibly technical, so we thought this is a great solution.

And it was great for exactly 7 weeks until he shows up 1 morning after, I will say, I had sold $25,000 of the Muse's first product to our early customers, and he says, hey, I want to talk.

I want more equity I want to be the 1 that they talk about in TechCrunch, and I'm not writing a single line of code Until you give me these things Now we're pretty low drama, so we don't have a lot of tolerance for people bringing drama

It's also only a few weeks before demo day.

So in terms of holding this over our head, we were really being put between a rock and a hard place.

And without going into all the gory details, we had a couple of quick conversations, and then we're pretty much like, great, well it sounds like you should work somewhere else, and we should find another person to partner with because obviously that's not an example of shared values and you know the thing is again like you're gonna deal with a lot of crazy things and startups I think we were lucky that we had the YC community who was able to hook us up with somebody else we you know paid more than $25,000 of that revenue to build that early product.

But we did get to a place where we were able to launch with demo day with these customers with a working product.

Because I think there were a lot of signs early on that this person was just attracted by the shininess of a startup, of YC.

That said, you can make the opposite mistake, which we did about a year later, which is get people who are so into your mission and so into what you're doing that they don't actually want to do the job that you're hiring for.

So just a quick version of that story is that I did our early sales.

Because, you know, when you're 5 people in a room, actually I think 3 or 4 people in a room, and it's like, okay, we need to go talk to customers, like, nose goes, it was me.

So I sold our first probably about 35 or 40 companies who were hiring partners of the Muse and when we needed to then hire our first salespeople we found people who loved what we were doing.

They were so passionate, they wanted to be part of the Muse, They did not actually want to do sales.

And unfortunately, you gotta do that in sales.

And now I think we have just a much more thoughtful structured hiring process where we try and assess to the extent that it's possible to do so, you know, how quickly can this person get up to speed, how much do they have the skills and the desire to do the role, how much are they values aligned, mission aligned, and the last thing I'll say is nobody is perfect.

So unfortunately, it's kind of a harsh rule of thumb.

But if you have sort of for every 10 people you've hired, if there's not 1 person that you're either managing out or firing, you're probably being too soft on performance.

So a lot of companies have started to talk about diversity and inclusion.

So what is 1 thing that founders of the audience can do to improve what they're doing in that space?

So 1 of the things I have actively fight against is the notion of sort of culture fit in interviewing.

I do think there's culture and different ways to think about how culture evolves, but culture fit, especially for people who are not skilled interviewers, have not done it for a long time, is an amazing force for bias.

Can you talk a little bit about what culture fit interviewing is?

Yeah, so often in an interview process, someone will meet, the question is, say, would this person be a good fit for our company?

So they'll go and they'll interview them, they'll talk to them, they'll come out of it and they'll be like, yes, this person's a culture fit or no, this person is not a culture fit.

And if you have not as a founder identified actually what culture fit means, what you get is, is this someone I'm comfortable around?

I found both in terms of introverted people, oftentimes, interview less well for culture fit, but also any sort of community of color, if you are a white teen, any sort of women, if you are a male teen, whatever you are, you look and you are more comfortable with people who are like you, who have your background, who joke about the same movies, who travel to the same places, whatever that might be.

And so when people interview at the Muse, and I hear someone, usually someone who's newer to the company, is interviewing, maybe 1 of their first rounds of interviews and says this person's not a culture fit, I get to ask, great, which of the values were you concerned about?

And if they can point to 1 of them, absolutely, let's talk about what it was that came up in the interview that made them wonder, but if they can't point to it, then that actually I don't care.

The fact that you didn't click with them is not a prereq.

The fact that you're not good friends and want to buddy buddy up with them is not a prereq to work here.

I often have to tell extroverted people, being extroverted is not a prereq to work here.

Because that's often a place where you will find bias.

The other thing I would say is starting day 1 and really valuing that and putting that into your process.

Because the larger the company gets, the harder it is to change the culture, the harder it is to become inclusive if you're not, the harder it is to become more diverse, have a more diverse team, which breeds success.

And so if you are truly committed to it from the beginning, that's actually a competitive advantage.

So you've both talked a lot about how important culture and values alignment is for people who work within your company.

But what about people that you work with, you know, that are external to your company?

So investors that you might bring on or partners.

Yeah, I think shared values is just as important for the people outside your company than in it.

And it's always been really important to Alex and I because, you know, We started a company together before the Muse that failed really painfully, like in a ball of flames because of co-founder issues.

And because of a total lack of shared sort of values and ethics.

And I love when Jessica said, you know, find someone who has a similar moral compass.

Because you might think, like, oh, we can make it work.

We've even held the shared values test to clients.

Actually, yeah, we've had a couple of clients, 1 in particular I think of right now, that we ended up firing a client for just not working well and treating people well and sort of did what you would do is have a conversation, give the feedback, say this is acceptable.

You get the absolutely, totally understand, won't do it again.

We returned their money and decided not to work with them.

And It's a hard thing to do, but I think it's...

Values are only so important and only are real if they're difficult choices.

And on top of that, I think 1 of the most challenging thing for early stage founders is to think about how that applies to your investors, because I wish that the early Muse company had lived in a world where we got to pick and choose all of our investors.

We're actually very lucky in our series A and our series B, we had multiple term sheets, we had a lot of different options.

And so for those, I did 8 different reference checks on all of the investors that I was seriously considering to lead both of those rounds.

And I was really happy with the people we were able to pick.

But for our seed round, I was basically like walking around New York and Silicon Valley like Oliver Twist, being like, please sir, can I have some more?

Doesn't matter how small the check is, we'll take it.

Yeah, I mean, We raised our first $1.2 million.

We had 1 300K check size, 2 100K checks, And the remaining, what is that, like $700,000 was basically made of like 50K, 25K, 10K.

And we actually faced a really interesting situation, which some people might know about, where we had an investor, who actually was a seed investor in 2012, who came back in 2013, offered to write us a huge check, and right at the end of the process, basically proposition me for sex.

So we had to sit there, And the way that process had gone, the other fund had drawn it out so that we were actually down to about 2 months left of cash.

When we got the term sheet, we had like 5, 6 months left of cash.

We were down at the kind of, we thought the money was gonna be wired into our account any day.

And we ultimately made the decision to walk away from that entirely.

Through literally a miracle, I raised $750,000 in 5 weeks.

It was surreal, but I think that that also made me a really even more passionate advocate for shared values with everyone I work with, and actually was really powerful in, gosh, earlier this year, like March or so, to be able to talk about it in Fortune, and the guy ended up stepping down from his post, because it turns out he was literally doing it to someone 6 months before the article came out, same old thing.

And I think, you know, that's why it's also, It's not only important to make those decisions in who you work with, but I actually think when people really cross the line, it's also important to stand up and tell others because that's the only way that we're gonna change the industry.

I mean, I think it is really important and So many stories have come out in the past year, and I'm so grateful to all the women, and you included, that have been brave enough to do that.

Because I'm sure there are so many more stories out there.

And hopefully, you're helping bring forth a future where this doesn't happen to anyone.

But to wrap it up, let's talk about 1 blind spot that you think every early stage founder should be aware of as their company grows?

Yeah, so I think 1 of the things that has been most fascinating to me, because we're now 120 people, 6 years old, is in the early days, you sort of understand that your culture is kind of an average of your personalities, of your values, sort of as founders, how much of an influence you have.

And then as our company grew, I think we genuinely believed, like, now there's so many more people that influence it.

And then as we got even bigger, we realized, nope, it's still, That's still true, for better and for worse.

The things that I'm proud of about us, I think are such a huge part of our culture to draw and people can identify just walking into the room.

But also the things that we've had to work on as founders, things that are our own personal weak spots, are things that are also weak spots for the company.

And so as you not just hire, but think about how you grow as a company, take those into account because you will be such a huge influence on your company, not just when it's small, but throughout the entire lifetime.

Yeah, and I'll give you an example of that, which is, you know, I think that when Alex and I started The Muse, we really wanted to build a company that treated people with respect.

We have a very strong no assholes culture that we hire, fire, and promote against.

But personally, I struggled in the early days of the muse a lot with giving candid direct feedback.

And I've worked on that, I've gotten a lot better.

What is it, Radical Candor, great book if you too suffer this affliction.

But it is really humbling and also really painful to all of a sudden look around and realize you have a 90 person company that is collectively bad at giving direct honest feedback because you personally are bad at it and somehow that's just replicated and morphed itself across an organization And it's much harder to change 90 people than it is to change yourself.

And so I can't tell you how many things you can look at at the Muse right now and you can trace a lot

you can also trace a lot of the challenges to things that maybe we weren't as good at personally.

And I think that the more you're aware of that, the easier it is to actively have other people say, look, this is something I'm good at.

Can you help me counteract this in our culture?

Can you help me make sure that we don't build a team that suffers the same flaw at scale?

1 other thing I'd say in terms of a can be a blind spot and you know seeing rooms like this and Having so many more female founders than there were when we started the Muse Hopefully we'll change this but Know that you can start a company that is the reflection of what you want to build and doesn't have to be what everyone else Is building in terms of what you do how you do it how you approach it?

If There's such a range and there's companies in New York that we know well who've grown really quickly.

I'm like, wow, I have no idea how they're growing so fast and then I get to learn more about the inside and I'm horrified.

You do you, but the way that you want to do it, I think, is okay.

And staying true to who you are, there are people who are going to want to work as part of that and be a part of that culture, and that's going to be refreshing compared to a lot of other environments.

So don't let the sort of model that you know be the 1 that you think you have to fit into.

Yeah, the rejection that Jessica was talking about, it's not only people rejecting sometimes your idea or telling you no for funding, but it's also people saying, oh, If you try and build your company like that, it'll never work.

In fact, Alex's daughter is somewhere in the back.

But I think we were told over and over again, like you can't do that, you can't build a company that does that and make it work.

And it does sometimes mean it's harder, but I think that if it's something really important to you, of course, like learn as many lessons.

We learned so much from other founders about the mistakes to avoid, how to build faster, but I also think that there's not 1 right way, especially when that 1 right way is often, you know, a bunch of dudes basically deciding what they think like the best possible company is, and there's real power in just owning what you believe is right, and then just fucking doing it.

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Fireside Chat with Kat Mañalac, Kathryn Minshew, and Alex Cavoulacos