Cofounder, Doma
"How can I hire people who can do the impossible?" w/ Doma CEO Max Simkoff
Today's question: "How can I hire people who can do the impossible?" Max Simkoff is the Founder and CEO of Doma (fka States ...
About Max Simkoff
Max Simkoff, cofounder and CEO of Doma (formerly States Title), has been discussing the company's efforts to use technology to streamline the mortgage closing process. He has stated that the company's value proposition is "better, faster, cheaper," and that its machine learning platform can underwrite title insurance instantly for many transactions, with some lender partners seeing loans close four to five days faster. Simkoff has described his motivation for founding the company as stemming from his own experience closing a mortgage, which he found to be time-consuming and opaque. He has also noted that the company is not currently profitable but is investing in technology and expects closed order growth to exceed 50% annually. Simkoff has also spoken about the company's decision to go public via a SPAC merger with Capitol Investment Corp. V, which he said allowed Doma to control the process and be selective in building its investor base. He has discussed partnerships with large mortgage originators including Chase Home Lending, PennyMac, and Homepoint, and has described Lennar as a strategic partner and largest shareholder. In interviews, Simkoff has emphasized the importance of hiring people who are willing to take on difficult challenges, stating that he looks for candidates with a "chip on their shoulder" and who are willing to do things that others say cannot be done.
Transcript (17 segments)
R
Roy0:02
Hi everybody, welcome back. We are here for another one of your questions about work. Today we're getting a little bonus in a few ways. We're going to get an extra question. Also, I always feel a little like we're cheating here when I'm talking to somebody I've been friends with for a long time and we've probably even had this conversation. I don't think we've argued over this one, but this will be great to get Max's view. So for those of you who are here for the first time, I'm Roy, I'm a startup investor in the future of work. We were fortunate to be investors from the very beginning in Max's company, which is now called Doma. Doma is a company that uses technology to help you buy a house, starting with the process of title. If you don't know what title is, Max can tell us. So Max, you started out doing this thing and the domain example is a great one, but you've done it before too, where you're going to try to use technology on something where literally technology has never been used before. You can describe what the process was and lots of people said no, it can't be done. When you are hiring somebody, whether as the founder of a company or the leader of a team, to do a thing that people say cannot be done, is there method or is it magic?
M
Max Simkoff1:14
I think there's a method. There's always plenty of magic in starting a company too, but there's a method. When you're going to hire people to help you achieve the impossible, to do something that everyone says can't be done, go public in five years, then you need to hire people who don't have any experience. Because by definition, if somebody has experience solving problems, the more experience they have, generally the more jaded they're going to be and the more convinced they're going to be that it's not worth solving these impossible problems. Let's give one of these Catch-22s: this person has all this experience solving impossible problems, why would they want to go do that again? They've made their name, they've been successful, they've done the impossible. They're probably taking roles that are less risky where they have to put less on the line for the amount of success they're going to drive. Later on in the company's lifecycle, like where we are right now, there's plenty of room for hiring senior executives with lots of experience when you're starting, because then the cost of being wrong goes up so much.
R
Roy2:36
Let me ask you to elaborate on one thing. Hiring for somebody who lacks experience might be necessary, but it's insufficient because there's lots of people who are completely... In addition to that, what else are you looking for?
M
Max Simkoff2:56
Look, you're looking for people who you click with, people that you can spend a lot of time being super stressed with. It's like you're almost screening more for family members than you are for coworkers, because you're going to go through some extreme highs and lows. Sometimes it is like meeting somebody's new significant other and you just want to make sure they're going to stick with them through all the crap that's going to happen. Another quality is I like people who have a chip on their shoulder, something to prove to themselves, to their significant other, to their friends. Somebody probably told them at some point that they weren't going to do X, they weren't going to go as far as Y, and it stuck with them. They didn't want to stick around through the traditional methods and hierarchies and political crap to try to get to the top the old-fashioned way. Those are probably the big ones.
R
Roy4:09
I love that. That reminds me of this thing we sometimes said: there's a George Bernard Shaw quote that a reasonable person sees the world as it is and adjusts themselves to it, and an unreasonable person sees the world as it is and adjusts the world to meet them. It's kind of like hire the unreasonable people because they're just going to insist on some level. That's not always enough to do it, but I've never seen a startup succeed without some of that unreasonable insistence.
M
Max Simkoff4:36
Look for stuff that is so unique about the individual that you just can't find it anywhere else. Our founding CEO, Christopher Morrison, I met him through his sister. She is an executive at Phil's Coffee and I was advising the company. I was telling her about the business idea and she said, 'Oh, you should meet my brother. He's really passionate about insurance.' I was like, 'What? Who is passionate about insurance?' At the time, Claire was Christopher's sister, probably 32 or 33. I said, 'Is this your older brother?' and she said, 'No, it's my younger brother.' Somebody in their 20s who's passionate about insurance? I can find you a lot of people in their 50s who have grown passionate about their insurance over time, but somebody in their 20s is like, wait a minute. Also, ask people who you know have every incentive to give you the highest validity positive reference. In this case, a conversation with a woman I know and trust, and actual friend. What incentive did she have to push her younger brother on me as the founding CEO of an insurance company?
R
Roy5:53
Would you agree that one thing you do a lot is when you tell me about a new hire, you find specific ways to brag about them: she was in the White House doing this, he's 20 and interested in insurance. Thinking about what you would brag about to somebody if you were trying to get them excited about this hire is a reasonably good way to think about that?
M
Max Simkoff6:22
I guess. But I wouldn't necessarily have bragged about this guy who is passionate about insurance.
R
Roy6:31
You did, good for us.
M
Max Simkoff6:32
But that's what I mean. In convincing somebody involved with the company about why he would be good for you, it's like what story would you tell that is so unique that you will never find anyone like that? Adrian Harris is another great example, our founding Chief Business Officer. I made my wish list of what I would ideally be able to find: somebody who could help us launch this business model from scratch, with regulatory chops, political experience, commercial, knows the legal world because the world we're in, title and escrow, came from a method of legal work that transitioned over time from common law British stuff from the 99-year leases from the 18th century. When I asked my network, I had another person who had every incentive to only give me a good reference, Ben Lawske, former head of the Department of Financial Services in New York. He said, 'I know the perfect person for you, Adrian Harris. She's done all these things, she's ready to take on an opportunity with more risk, she's cuddled to joining a startup.' There's nobody else like that in the world.
R
Roy7:44
I think that makes complete sense. Let me ask you from the candidate perspective. There's a candidate, Kahi Sang, a Rhodes Scholar from South Africa, asking if hiring folks without experience is sometimes optimal, how do you gauge when companies are willing to take the risk? For companies that are later stage like yours that need some people with experience, but he doesn't have experience, graduating from school. From the perspective of a company like Doma for somebody like that, what does the candidate do? They just go earlier? What does the candidate do to apply if they have no experience and want to find companies at this sweet spot?
M
Max Simkoff8:50
I've been surprised by how easy this question is. You reach out directly and authentically to the person you want to work with, and then you convince them that you should work together. Let me give you an example and give away a secret for the way we ran our startup. In the startup days of Doma, the initial screen for the job was we put up a job posting on Craigslist, LinkedIn, etc. We described the job, and at the end of the posting we said, 'Here are the specific criteria we're looking for. If you think you're a good fit, submit a cover letter that specifically addresses these four or five criteria.' 98% don't do it. You get cover letters that are stock. 2% of people actually took the time to read the whole thing and follow directions.
R
Roy9:58
It's like the Rolling Stones contract with the green M&Ms, where you know they actually read the thing. Most people don't. I have a blog post about how to write a forward intro email, and the example has an error—not intentionally, it's a real example—and the number of people who don't change that thing shows they didn't read it. But while we have time, one more question. We talked about early hires, but first customers. You have this new untested product and you need a first customer. In your case, customers are potentially taking not only mission-critical business risk but a solemn responsibility for someone buying a home. How did you convince the first customer to say yes?
M
Max Simkoff11:13
First of all, nobody wants to be your first customer. You're always going to deal with this. Funny thing about second customers: they're like 'Oh yes,' like the VC thing of 'Tell me when you have a lead.' To sell the first customer, first, exhaustively map out all the questions you would have to answer to make your value proposition riskless to the customer, so they know they'd be stupid not to try it. Second, find some other reason that the individual you're talking to wants to buy other than what you do for a living. In our case, our first customer at Doma, a financial institution executive, said, 'This seems like a great idea, I know you don't have any other customers, and I want to be your first customer.' Why? Because he was so fed up with the industry and excited to see somebody do something different. There's also an archetype of people in corporations who like being the first customer. You often find it with software buyers who brag about being first. Finding the person who wants to be first but is also knowledgeable and powerful enough to do it within their organization is key.
R
Roy13:20
What you're saying is it's target selection as opposed to saying the magic words in the meeting. In your case, it took a lot of pitches and passionate conviction.
M
Max Simkoff13:32
I believe that. For all the other folks selling a new product, the more ancient and sclerotic the industry, the more you can harness people's frustration. You want to sell HR feedback tools? There are lots of HR people who'll try the new tool. But if you want to do something in aircraft flight routes or freight forwarding like Flexport, or real estate title, you'll find more frustrated people out there.
R
Roy14:16
I hear that and respect that. I'm on the record saying I intend to hold my Doma shares for 50 years, so you better live a long time, Max. For everybody watching for the first time, I made this comment while we were going. The reason we call this 'Not Advice' is because we're not telling you what you should do in your specific situation. Advice is always about the autobiography of the person giving it. This is Max sharing his experience as a two-time, three-time founder, having taken a company from concept to public in less than five years. That's crazy. Thanks everybody. If you have questions or comments, find us on the internet. Thank you, goodbye.