A Product Market Fit Show | Startup Podcast for Founders

This founder was hours from hiring a VP Product—turns out, he was a total fraud. Here’s what he learned.

Mistral.vc Season 3 Episode 47

It's the first time I see a candidate BS his way through interviews with multiple people, impress each one of them, and ultimately end up being a complete fraud. But the biggest learning wasn't that you should watch out for fraud-- it was that you shouldn't trust interviews nearly as much as you'd think.

While fake candidates are rare, candidates who are 10x better at interviewing than they are at the job are quite common. In fact, the only thing you know about candidates with great logos is that they know how to interview. Otherwise, they wouldn't have worked at Google in the first place.

What you don't know is if they're truly great. Here's how to find out.

Takeaways

  • Don't rely solely on interviews when hiring
  • Hire based on referrals and conduct thorough reference checks
  • Former founders are often the best hires
  • Logos and impressive resumes don't mean as much as you think

Keywords
founder, hiring, fraud, interview skills, backdoor reference checks, referrals, former founders

Send me a message to let me know what you think!

Pablo Srugo (00:00.142)
So a founder calls me and he's like, hey, I've got this product, I've interviewed him, I've done references, I think he's a great fit, I wanna hire him, what do you think? This is a founder that I've been working with for many years, we're investors in a startup, and he's one of the founders that honestly I work more closely with. There's ultimately different styles and for different reasons, I work more closely with some founders than others. He's one that I work pretty closely with, and I knew he was looking for a head of product, but I hadn't seen this particular candidate or heard about him or whatever.

And so I'm like, okay, cool, like send me, know, send me some information. So he sends me an email, kind of like strengths and weaknesses. He says, you know, this guy, we'll call him Joe. Joe is, you know, strong leadership, UX focus. He's creative. He's disruptive. He can easily kind of report to the board on product, lead product decisions. His weaknesses is he might move too fast without like considering other aspects of the business. I'm literally like reading the email, by the way. Culture fit wise, he's more aggressive than the current team, but that could really like spice things up and get us moving faster. But.

you know, the con is he could come over as abrasive and this comp is $180 ,000. This would be like the most expensive person that we've hired this company so far. And it's a critical role because the company is doing very well. It's got product market fit. It's over $2 million in revenue. But a lot of the challenges that the company has are around product, around bugs, around different integrations not working exactly as they should. And so this head of product is a critical role.

And the founder tells me, you we don't have a lot of time. I'm trying to make a decision by the end of the day because this guy, Joe, he's got an offer from Shopify that's going to expire either today or tomorrow. I don't remember exactly. And so we need to get back to him. So I'm obviously a little bit taken aback because it's hard to make a decision that fast, especially when like you haven't even spoken to the candidate. But he tells me, you know, the other VC, he's met the candidate. He thinks really highly of him. And I know that other VC really well and I trust him and his judgment of people.

He also tells me that he did two references. He did a reference with the founder and CEO of the company that Joe is currently at and the CEO of the company that he was at previously and both references went really well. So as I'm talking to him, I'm kind of like just checking out his profile and I start noticing some things that are like a little bit weird. Like for example, his LinkedIn profile, he doesn't have a picture. That's a little weird, but you know, whatever. I start reading about his current role and he says he had this company that, you know, he put out a product and that product's doing like $30 million in revenue year. I'm like, wow, that's impressive.

Pablo Srugo (02:20.142)
You know, this guy, you in his profile, he's worked at Google, he's worked at Facebook, he's got a pretty rock solid profile. But you know, I decided to check out his last company, and so I click it, and I see there's only like, you know, six profiles associated with it on LinkedIn, which is a little weird for company that's supposedly doing over like 30 million dollars. I check out the website, and honestly, the website looks like I built it on Wix, and you don't want me building websites. And so, I think that's a little weird, especially from somebody who's gonna be like,

head of product, know, VP product, and should probably have a sick website. So I was saying this to the founder, the founder's like, yeah, I don't know. You know, I haven't looked into it. Obviously this founder's got a million different things to do. This is one of the things he's doing. Yeah, it's high priority, but he's meeting a lot of different candidates. He's trying to move fast. And so, you know, not every single kind of I is going to get dotted, every T going get crossed. And so, you know, that's fine. I keep kind of like looking through his profile and I noticed that he was VP product at a startup where I know the founder. So I tell.

I tell this founder, like, hey, let me just reach out to this guy, kind of back door and just see what he thinks. And I reach out to him and I just say, hey, can we have a quick reference call? We're looking to hire Joe and I know he worked for you, so just curious to hear what you think. And I get an auto reply being like that he's out of the country or on vacation. I'm like, okay, probably won't hear back. But then literally minutes later, I get this email and he says, hey, Pablo, I'll save myself 15 minutes and your startup two months of severance. Don't hire Joe.

He changes his name online regularly, sometimes goes by, and he kind of writes some other names that I won't share here, and he's dishonest about his past experience. In a loose definition of fraud, he would fit the criteria. And then he shared a LinkedIn post of somebody else that he had given this person's name as a reference, and this person had found out because the person doing the reference check had then messaged her privately asking follow -up questions, but then she realized,

she never had had a call with this person. And it turns out that he gave her name and then had somebody else impersonate her as part of the reference. So obviously, like when the founder told me that he spoke with the reference of the founder of his current company and the CEO of the company before that, those in all likelihood were fake references. So I share this with the founder and I say, like, do you have the emails of the people you spoke to? He's like, no, I just got the phone numbers. So bottom line, it was all fraud. Like 100 % of it.

Pablo Srugo (04:43.98)
was a fraud and obviously, we didn't hire this candidate. I share this story because obviously it's just a crazy story, but in a sense, what that proves is the exception. I fraud obviously happens, but it's not that common and that's why when these stories happen to you, you're just, for me, it was just so shocking because I'm like, holy shit, I just hadn't never seen a person, especially for a role like this, at an early stage startup, go out and just fake their entire career.

and then provide fake references and all those sort of things. know, what really struck me, so that like to me tells me, know, again, like founders have to be careful because fraud happens, but that wasn't the biggest takeaway for me. The biggest takeaway is actually that this guy interviewed exceptionally well. This interview blew away this founder and he'd interviewed other people in the company. And some of them had like some suspicions about it, but overall he interviewed exceptionally well. And I think what that really highlights

is that there are people, many people, who are very good at interviewing. And just because somebody's really good at interviewing, this goes for people committing fraud and those that don't, right? And it applies much more in the latter case because there's a lot of people out there that will interview exceptionally well and then they will be exactly mediocre at the job. And that's the thing that for a founder, you really have to watch out for. And I'll go step further and to say the only thing you know for sure about a candidate who's got logos, because a lot of time,

That's kind of the thing we go for. We look on the paper and we see, okay, they've worked at Google or they worked at Facebook. They must be great. The only thing you know for sure about a candidate who works at Google or worked at Facebook or Shopify or whatever, name your big company, is that they interview exceptionally well. Because those interview processes, I know people that have gone through it, they are a high bar. They're really hard to get through. But the only thing you really know is that they got through that and that's why they worked there. It's just like many other things. Like med school is the same. It's so hard to get into med school.

But once you're in, it's actually quite hard to fail. And these big companies are many times kind of like that. They're very, there's exceptions obviously, but as a rule, they're really hard to get into. And once you get into, it's really hard to fail. Even if you're just okay, you probably won't get fired. You have to either do something bad or like be really bad at your job. And so the point is relying just on interviews as the biggest thing to determine who you're gonna put inside of your team as an early stage founder can be a huge mistake.

Pablo Srugo (07:07.992)
So what can you do about it? Well, like this same founder has somebody for a different role that they're looking at. And he said to me that this person that they're looking to hire has worked with somebody else on his team for a long time. And I'm like, to me, that's all that matters. If you have somebody you trust who knows that person, not just because of an interview or they met a couple times, but has worked with that person and thinks highly of him or thinks highly of her.

then that's the candidate you want to hire because there's a huge difference between interviewing somebody once, twice, three times and working with somebody for months or years in terms of the likelihood that that person is going to do well in your company. So that's the first thing you can do is hiring people based on referrals. The second thing is you have to do backdoor reference checks. And obviously when you're getting references from the candidate themselves, make sure it's an actual email, not just a phone number.

If somebody's saying that they worked at company X, make sure you're getting the email address of that reference and it's at x .com and not at gmail .com or how about that's just like an easy way to make sure you're talking to the person you think you're talking to. But more important than that is everybody's always going to cherry pick the references they give you. Go through the profile and find a way to do at least one or two back door reference checks. And that can be because you know the person, you know the CEOs or founders or

managers of those other companies because your investors do, or even if you have to reach out gold or find a mutual intro, but that's worth the time. Especially for more important hires, for leaders in your company, it's worth doing every single time. It'll take longer at first, but it can save you a lot down the road. And the last thing I'll say, and this is big bias of mine, but I think early stage founders have to hire a lot more former founders than they do. I think in general, it's really easy to be impressed by logos.

but the reality is they don't mean as much as you think they do. But somebody who started their own startup, and especially if they had any amount of success, even if the company ultimately failed, but they were able to get some actual revenue, have some customers, raise some money, it wasn't just like they were a entrepreneur, they actually were legitimately a founder, that's a person who's willing to take risks, that's a person who's gonna be a self -starter, who's not gonna need to be managed, who's gonna be able to own something, who's gonna have that kind of attitude of,

Pablo Srugo (09:31.5)
I'm the owner of this area and not just I'm an employee, how do I get a salary bump or how do I position myself to not get fired, these sort of things that a lot of times the bureaucratic kind of thinking that spreads in big organizations, former founders tend to not think those ways. And so at the early stages when you don't have time to manage your head -ups, you need them to just be running independently, but you don't yet need, but while you need some specialization,

You don't need complete spears that are only excellent at their one function because things are just not that structured yet. And so having somebody who has an edge in marketing but was a former founder, has an edge in finance but was a former founder, in my opinion, those are some of the best profiles you want to hire from. I just gave you content that you liked so much, you actually listened to the end. And guess what? You didn't pay a single dollar. Not only that, I didn't even put any ads.

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