Morning Coffee: How to hire the wrong people, by Sam Bankman-Fried. JPMorgan analyst purports to spend $32k in a week
Maybe investment banks have been doing it wrong? Rarely has an industry set more store by credentials. But Sam Bankman-Fried, the 30-year-old billionaire and CEO and founder of crypto exchange FTX, says this is a bad approach. If you hire people because they have the correct credentials on paper, they mostly won't work out, says Bankman-Fried. They will likely be underperformers who prefer to coast.
It's not clear whether Bankman-Fried's thinking applies to hyper-credentialed college-graduates from top universities (of which he is one), but it probably applies to more senior people who flit from job to job collecting big names on their CVs before presenting themselves to FTX. It certainly applies to senior executives who might be considered trophy hires. "It's common for us to hear something like: “you should hire this CFO of a big public company and make them your CRO.” This is never a good idea, in our view. It never works," Bankman-Fried told The Generalist. Often, this sort of person wants to take it easy in a retirement job, he added. And you don't really know how good they are, or how well they performed. " – Why do they want to leave their job if they’re such a high performer?"
Instead of these people with big credentials, he said the best hires are often not the "right" hires on paper: "They might not have the fanciest resumes or most experience." At FTX, they prefer to hire people who, "can enter a busy, complex, messy environment and work hard," said Fried. "We like people who grind, who want to work. And who are willing to do the work themselves." The worst thing you can do is to hire managers who like to manage other managers.
How do you identify these people? When he's interviewing, Bankman-Fried says he doesn't ask about FTX ("Candidates don’t have enough context to give a response that’s predictive for me as an interviewer.") Instead, he asks them to,"concisely explain a project they worked on and outline their primary goals, in a way that survives a sanity check." The goal is to assess "clarity of thought." It's something that is often lacking...
Separately, if an analyst in an investment bank spends $32k in a week for his birthday, does this indicate that he's extremely dedicated to continuing his job and perpetuating his lifestyle, that he's a fool (given that analysts at JPMorgan only earn $175k-$260k gross) or that he's lying about being a JPM analyst/has an additional source of income?
Either way, this is what one recent TikTok video claims to show. Much of the money seems to have gone on Ubers, hotels, and clothes, including various items from Bruno Cucinelli, an Italian clothing boutique where a pair of ripped jeans costs nearly $700.
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