In a previous start-up I worked for, hiring was done haphazardly. At Mint.com, I’ve had very rigorous hiring. We use a technique called Topgrading, which reveals patterns in behavior. In the history of Mint, I’ve only fired two people and one left voluntarily. – Aaron Patzer, Founder and Owner (until Mint.com sold to Intuit)
MINT.COM (40 EMPLOYEES, GLOBAL CUSTOMERS)
Industry: Personal Finance Applications
- “Do it yourself” Topgrading successful
- Start up with Topgrading — 90% of people hired turned out to be A Players
- Topgraded business sold after 2 years for $170 million
“Do it Yourself” Topgrader Makes $170 MILLION
Meet Aaron Patzer, founder of Mint.com, and only 28 years old, who just sold his company to Intuit in 2010 for a cool $170 million. I read that he attributed some of his success by using Topgrading methods. So I called Aaron, and here’s a brief version of his story:
Aaron grew up in Indiana, got into computers at age six, paid for school by designing Web sites starting at age 16, graduated Duke University in computer sciences and electrical engineering, dropped out of a Ph.D. program at Princeton and received a MSEE instead.
He joined IBM, got three patents on Play Station and quit because IBM seemed to promote people on the basis of seniority and Aaron guessed he would not have a fun job for more than a decade. He joined a start up writing code, and soon he was interviewing candidates on the phone.
With about a 600 IQ, Aaron wasn’t satisfied with his interviewing skills, and he picked up the 2005 version of Topgrading: How Companies Win by Hiring, Coaching, and Keeping the Best People. I suspect he memorized the book and particularly the Topgrading Interview Guide. He asked the questions about education years and then investigated a person’s career by asking about – for EVERY job – successes, failures, bosses (“I figured if a candidate’s last 3 bosses were jerks, I’d be one to hire him.”), boss appraisals, and reasons for leaving. Aaron “got it,” the power of gleaning patterns and the importance of asking “why?” 1,000 times. He used the TORC (Threat of Reference Check) Technique and asked finalists to arrange reference calls with past bosses.
Aaron says Topgrading is “the best business book I’ve read,” although he says the first part included name dropping with famous Topgraders, and too much “selling” of Topgrading. (Aaron’s viewpoint caused me to downplay Global 100 Topgraders in my next book!) He instructed his managers to read the practical advice.
Back to his success story. At age 25, Aaron was working 75 hours per week and frustrated with the additional hours necessary to manage his personal finances using Money or Quicken. The bolt of lightning struck – he’d create the best personal finance software. So he did it, he launched Mint.com, with occasional self-doubts. After all, he was attacking Microsoft and Intuit with no business experience, no leadership experience, no knowledge of Java Web services, and, by the way, no money. Ahh, but he already knew how to hire A Players. Google Mint.com to see details of his business, videos of how someone can enter a few super-secure credit card and bank accounts in 6 minutes and immediately begin saving money and time. And it’s free.
So, at 26 years of age Aaron stared hiring people for Mint.com, and now he had 40 employees at the time he sold it to Intuit, where he heads their personal finance division.
How did he Topgrade Mint.com? He used the Topgrading hiring methods, with a few tweaks to really, really zero in to be sure he wouldn’t make a mistake. For example, he asked engineers general questions about their methods to determine if they are so customer service oriented that they sit with users and note any frustration. And what was his track record? Four mis-hires out of 40. Not bad! A couple of others quit for good reasons – a dad died and another of Aaron’s employees returned to Asia to take over the family business. Looks like a 90% success record, with successful hires not just “okay,” but true high performers. As Aaron put it, “I don’t think Mint.com would have succeeded without my Topgrading and having only a few mis-hires.”
Aaron Patzer makes assembling a team of outstanding performers look easy. He just got the book and became a “do it yourself” Topgrader, without even attending one of our Topgrading Workshops. (Imagine that!). He didn’t happen to mention one small factor that actually does make Topgrading “easy” – he’s clearly an A Player!
Aaron stayed with Intuit, is Vice President Product Development, and is continuing to use Topgrading methods with his new team.