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Episode 204  |  15:31 min

#146: This Billionaire Investor Bet Big On Meritocracy (Here’s How He Did It & Why You Should Too)

Episode 204  |  15:31 min  |  02.25.2019

#146: This Billionaire Investor Bet Big On Meritocracy (Here’s How He Did It & Why You Should Too)

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This is a podcast episode titled, #146: This Billionaire Investor Bet Big On Meritocracy (Here’s How He Did It & Why You Should Too). The summary for this episode is: Results matter, but how do you create a performance-based culture from scratch? Today on Seeking Wisdom, DC and DG talk about meritocracies – and why they think every high-performing business should be one. In a meritocracy, the best ideas rise to the top based on merit alone. DC shares his three-part framework for how to create a meritocracy and evaluate team members based on loyalty, harmony, and results.
Results matter, but how do you create a performance-based culture from scratch? Today on Seeking Wisdom, DC and DG talk about meritocracies – and why they think every high-performing business should be one. In a meritocracy, the best ideas rise to the top based on merit alone. DC shares his three-part framework for how to create a meritocracy and evaluate team members based on loyalty, harmony, and results.

DG: This is the first episode of this new studio. If you can't see right now, DC, is why you need to go to YouTube and watch. Subscribe on YouTube because DC has, what is one of these things called, a cassette player? What is this?

DC: It's called a turntable?

DG: There is now a turntable in the studio.

DC: I just put on something tasty for you. Hopefully it'll play.

DG: This is where all the copyright laws are going to go right out the window.

DC: We're going to get banned off.

DG: So we're on YouTube. We do post every video on YouTube. If you're listening in the car, at the gym, whatever, right now, we have brand new studio here. I'm looking at behind me a picture of Anthony Bordain.

DC: I might not know how to turn this on.

DG: There's a subway map of New York City. I see Albert Einstein. What is that? Is that an Andy Warhol, Colin Kaepernick. This is crazy. So go to YouTube, check it out. We're going to have a lot more stuff here in the store.

DC: All right. It's playing, but we can't hear it yet because we don't want to get banned off of here, but check out this studio right here.

DG: It's amazing, it's amazing. It just feels like home.

DC: The home at, Becky, hooked up the studio. And what she did was to ask me about visuals that bring back what it was like growing up in New York. So we have Bad Brains, Cro- Mags, PMS over there. We have CBGB Shots. We have Biggie Smalls, Anthony Bordain. We have the Ramones. We have New York City subway maps. This feels like home. Petite Felipe because we respect the copywriting. We have a shot over here. If you don't know what that shot is in the corner right there. That is the building that's featured on the Wilco Yankee Hotel Foxtrot album. And we have lots more. We have someone who looks like Bjork up in the corner, but you can't see that.

DG: Becky, amazing, amazing.

DC: All right. This is finally starting to feel like home. We got the... This is called a record player. DG didn't grow up with a record player.

DG: Cassette player.

DC: We're playing the 12 inches. We've got the Wu Tang plane here. Forget about it. Let's go.

DG: So that's why. Come hang out on YouTube. All right, DC, today on this episode of Seeking Wisdom, we're going to talk about an email you sent to the company on Sunday night, the subject line of the email is meritocracy.

DC: Okay.

DG: You said," Drift is as close to a meritocracy as I have ever experienced. That is by design. As I can not be around people with a sense of entitlement, sycophants or mercenaries."

DC: That's quiet an opening. That's a good opening.

DG: That's an opening. And then you have the Wikipedia definition of meritocracy." Meritocracy is a political philosophy, which holds that certain things such as economic goods or power should be vested in individuals on the basis of talent, effort and achievement, rather than factors such as sexuality, race, gender, or wealth. Advancement in such a system is based on performance". Why did you send this email?

DC: I sent this email because this is a reminder to the team. In creating a company and creating Drift this is my thing that really fuels me, that I really want to create this company. And I believe all companies should start to try to create a meritocracy, an idea meritocracy, where the best ideas always rise. And I think this stemmed kind of early in my life as always being a troublemaker a little bit and always questioning authority like most of the people in these photos back here. If you subscribe to YouTube, remember G2 need some YouTube subs.

DG: Needs some YouTube love.

DC: The thing that you see here is that all these people created genres or created movements. And that's why beyond their music, beyond their art that they've created inspired movements. Their ideas, despite not being popular at the time, rose to the top based on the merit of their ideas. And that is the kind of environment that we want to create within a company. And so an idea meritocracy is something that I always wanted to create. I was once younger than the young nephew-

DG: Younger

DC: -if you can believe that. And I was the youngest person within the teams that I was on. And I always wanted there not to be a preference for just age or for experience and within companies. And I wanted the best ideas to be able to surface whether you were 22 or 52.

DG: Yeah, I think there's two things that I think that we live at, Drift at, matched at. So number one is the age thing. It doesn't matter if you're 100 or 20, if you put results on the board, you will progress.

DC: Yes.

DG: Here. No doubt. The other thing is, you said this from the beginning, that no matter who you hire or bring in or starts in the team, it could be the whoever of whatever, the most best company in the world, if they came to Drift, they always have to start over. Because you want people to show results and put points on the board, so to say, early on, as opposed to just resting on a resume that somebody was hired for.

DC: Yeah. And I think it's also my view on when we talk about kind of diversity in the workplace. I come from it from more from a different angle of like what I think about and what I strive for is equality. And what I want is an environment where it is this idea of meritocracy, where the best ideas, despite someone's gender, color, age, experience, it doesn't matter. The best ideas will always rise to the top. And those are the ones that will be rewarded. And that's the kind of environment we want to create.

DG: Sticking to one of our favorite things, which is the rule of threes, the fact that people are more likely to remember things that come in threes. You have these three factors, where people get ahead based on three factors. Number one, loyalty. Are they committed to the success of our customers and of Drift? Will they put those interests ahead of them ahead of their own? That's the opposite of mercenary. What does that mean, opposite of mercenary?

DC: Because mercenaries are one of the things that I don't love. Someone who's out for themselves. Versus the team, versus the customer, versus the greater good. I tried to think of the three things that if I were thinking about, who are the people who should get ahead? And I thought about these three factors, loyalty being the first. It's really, are they committed to the success of customers, first, and then of Drift, of their teammates and those around them, are they willing to put those ahead of themselves? Which is hard because we're all selfish to some degree. Are they the opposite of what is a mercenary?

DG: Yep. Second one is harmony. Do they treat everyone around them with dignity and respect? Do they make their teams better? Do they make Drift better? Are they a positive amplifier on the team? I think this is a super important one because you can't really have the second one if you know the first. You can't have harmony if you don't have loyalty because it is all about the puzzle pieces. Looking at the greater makeup of the team as opposed to one individual.

DC: Yep. And so harmony to me is... There are people who can be loyal without some harmony who don't make the rest of the team better. They can have high results. They can be loyal and putting the company and the customer ahead in themselves. But they might not be the person who creates harmony amongst the people around them. Ideally you want people who are amplifiers of who you want to be around every day. That was always a big thing for me in terms of hiring that. One of the first things that I look for and that I have looked for is, do I want to be around this person? That screams for harmony. Do I want to be around this person? We have people who amplify that. We have people like Michelle in the partner program. So shout out, Michelle.

DG: Yeah. Shout out Michelle, She's going to go nuts. She loves Seeking Wisdom.

DC: She's an original Seeking Wisdom emoji. And she just celebrated her one year anniversary of starting the partner team. Shout it out.

DG: Damn, that's pretty good.

DC: So anyway, but Michelle is someone, look her up, who amplifies harmony. Everyone wants to be around Michelle. She's a magnet. She makes everyone around herself better. She also is loyal, but she also has this harmony effect. And so she's someone that, even though you don't know her, listeners, you should know her. Check her out.

DG: Yeah. I mean, think of somebody on your team and your company. The other thing that you talk about a lot, which is kind of related to this is to find those people within your company, look at people who their desk always has the most traffic. Just people there all day asking questions, wanting to hang out, get a coffee, whatever. And I think you see that with Michelle. And I think that's also another indicator in the harmony group.

DC: In the harmony group. They are a magnet.

DG: Yeah. And the third one, by the way, why you got to be watching on YouTube right now? The next part of this is going to be a little kind of matrix of high results, low loyalty, low harmony, what that means. We'll have that up on the screen.

DC: Just on YouTube only.

DG: Just on YouTube only. I mean, because there's no way to show it if you're driving in the car, listen to audio. Ultimately though, number three. Number one, loyalty. Number two, harmony. number three, results.

DC: Results. That's the easiest one.

DG: Because you could be the greatest. This is the thing that people miss when you just listen. Oh, loyalty. I'm going to be loyal. I'm going to be loyal to the company. I'm going to be a very good teammate. It doesn't mean you get to hang around.

DC: Yeah. Those are just nice people. Usually, it's very common. You see those are nice people. Those are great. You want to have them around, but they're missing the third one, which is super important, which is results. Are they in the top decile of performers consistently year over year? Whatever they take on as they grow, are they always showing results? Showing results is a hard one.

DG: Showing results is the hard one. Then you go through, and again, we'll put this up on YouTube and in the blog post that's going to go with this episode, grab one of these and talk about the different mixes of high results, high loyalty.

DC: I was trying to basically take those qualities and say," How do you judge them?" Because there's going to be people who are strong on different qualities. And obviously the easiest one is if someone has low results, low loyalty, high harmony. They're great to be around, but their loyalty is low and they're low results. They're probably not a okay.

DG: Might be a great friend. As Patty McCord says," Your company's not your family." I think the difference is here, great to hang out with, but low results, low loyalty, not a good fit for the company.

DC: Yeah. And then on the extreme other end, you have someone with high results, high loyalty, high harmony. And that's someone who you want to invest heavily in and you want to be ahead of them creating new opportunities for them. And so those are the two ends of the spectrum. And then the people that fall in between, and as people progress and as time goes on, people may come in and out and be strong in different areas. But the ideal is someone who's strong across all those. Very few of us are strong across all of those, but that's what we strive for.

DG: All right. So that is meritocracy, initially inspired by, do you want to talk about Ray Dalio book at all?

DC: Yes. Ray Dalio, the homie Ray Dalio, Uncle Ray,

DG: Yeah, Uncle Ray.

DC: How are you doing, Uncle Ray?

DG: Big listener, yeah.

DC: Big listener too. He's a six star rater. Uncle Ray wrote a book called" Principles," which we've talked about in the past. Go buy a copy. The only complaint that I've heard from the peoples on" Principles" is it's hard for a lot of people to go through that book. Lot of words, a lot of writing in there. Yeah. For me, I get supercharged reading it because I'm on the same wavelength. I think the same way. But for most people they're like," Ooh, this is heavy duty."

DG: Well, it's also right up your alley. Something, I think you post on Instagram or Twitter recently @ DCancel, which is like all the books you're reading right now about systems, systems of thinking. crosstalk

DC: Yeah. So it might be a heavy duty first principles systems thinking, but it is a perfect book. It is a perfect systems Bible to have on your desk or on your nightstand at home and to revisit, to use the principle that we've talked about often, which is it's okay to put books down and revisit them later. This is a perfect book for that. And you can go in and out. You can think about life principles, work principles, you can do all that kind of stuff. But anyway-

DG: That's great advice by the way, which is get the book, but don't be freaked out that it's 500 pages long. Pick up a chapter, get something from it and then move on.

DC: Yeah, put it down.

DG: I love that.

DC: This is a perfect book because each of the chapters in here stands on its own, so you can do that. And so Ray Dalio, the most successful hedge fund business and investor in the world, has a company called Bridgewater Associates. Look it up. Bridgewater Associates is an idea of meritocracy. That's where these two things come together. I've been rereading this. I've been thinking about meritocracies. I've been thinking about how we've been trying to create one. And then I try to put this frame about what are the things that we look for. But reread that book" Principles." If you're on a team, you manage people, you run a company, you aspire to be the next generation of leader. You should be thinking about meritocracies because that is the way the world is going and that you need to be set up for success.

DG: Yes. Okay. That was lovely. Thank you.

DC: Lovely. Tremendous.

DG: I want to show you something. Have you seen this in person yet?

DC: No. I haven't seen this in person.

DG: What that sound is, this is a DC bobblehead that I received as a gift from all the way across the country from our friends at Proof. Gans and I were eating lunch and I got a DM on Twitter that's like," Hey, are you at Sasser? I need you to hand deliver this to DC." This is pretty good. It's it actually looks like you, which is good.

DC: It totally looks like me.

DG: It does look like you. I've seen other ones. Other people have tried to do this. This one looks exactly...

DC: Yeah. I've seen a lot of bobbleheads, and they don't work. And this one strangely looks like me. DC just posted it. Is it because of the round head?

DG: No, I don't know what it is. I don't know what it is. They got your chin. They got the facial features. It's pretty good. So shout out to the guys at Proof.

DC: Thank you. Thank you for not putting as much white as there is in my beard in this beard here. This is a nice, dark beard, and it reminds me, time to go get a tan.

DG: All right. We're out of here. Don't forget. You're the only one who can do the right call to action. Six stars only.

DC: Come on folks. This is Six Star Only Podcast. The first Six Star Only Podcast in the world. World's first, only Six Star Podcast. Let's show the people how we get this done. We live six stars. Remember, go to iTunes. Go to Stitcher. Go to Spotify where it says five stars. Fill out five stars. In the comments, leave six stars. Shout it out for G2. He needs love. He works on love. He is fueled by love.

DG: He thrives on love.

DC: He is love.

DG: Let me tell you, G2 is a great travel partner.

DC: He is?

DG: Yeah. Good travel partner. Knows how to hang out. Went to dinner a couple of times. He did a good job.

DC: Really?

DG: He's a good travel partner.

DC: He's hard to travel with.

DG: I'm hard to travel with.

DC: Yeah, me too. Yeah.

DG: Yeah. DC is hard to travel with. It takes a couple of times to know, DC, do not wait. If you're going to be there, you got to be there.

DC: Awful to travel with. I'm the worst.

DG: Awful. It would be like," Hey, meet me in the lobby at 8: 00." He'll text me at 7: 40," Where are you at?" I'm like you said," Meet at 8: 00." He's like," Oh, all right. I already went to get coffee." You're easier to travel with than Alias, though. Alias is a heart attack guy.

DC: He's a heart attack. I'm precise. I think I might be swift.

DG: Swiss?

DC: Yeah. You don't know.

DG: Yeah, that's pretty good. All right. We're out of here.

DC: All right. See ya.

DG: See ya.

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