MATT MULLENWEG: Howdy. My name is Matt Mullenweg, and I run a company called Automattic, with over 950 employees distributed across over 70 countries. We’re growing quickly, so I spend a lot of time thinking about how the company is going to find the very best people. Since our team leads might never meet a far-flung applicant face to face until well after they’ve been hired, our hiring process has to be comprehensive, so sometimes it can be a little bit of a slow and long process.
But what if you need to hire top talent quickly? What if you need a world-class project manager on a short-term basis, and you don’t have time to rigorously vet a bunch of applicants or set them up on a payroll platform?
Well, you might turn to Toptal, a freelance marketplace that aims to provide companies with a fully-vetted pool of talent that represents the top 3 percent of their network’s applicants. Toptal’s CEO, Taso Du Val, joins me today to talk about how he built his company, which happens to be distributed all over the world, and about how current approaches to recruitment are undergoing a major sea change.
Let’s get started.
MATT: All right, we are here today on the latest episode of Distributed with Matt Mullenweg, and we have CEO and Founder of Toptal, Taso Du Val. Welcome very much.
TASO DU VAL: Thank you, Matt, for having me.
MATT: Just for listeners who might not know what Toptal — do you mind explaining your journey to Toptal and then you can introduce what Toptal is?
TASO: I was doing some consulting work and working with some companies doing contract software development, and at the time I was mentioning to them that they should use some other resources to be able to get software developers. I mentioned the freelance marketplaces on the internet. And so many times they said to me, “Those are terrible places. You can never find good resources there.”
Meanwhile, I was having a great experience finding great resources there. So I said “Hmm, this is fascinating, I keep hearing time and time again that people are having terrible experiences finding top talent, yet I’m having a very consistent experience finding top talent. What is the difference?” And the difference really came down to my domain expertise, being able to identify and screen that top talent. And that was really the genesis for what Toptal is today.
MATT: And your background, like myself, is engineering.
MATT: And in fact, we met at — was it a MySQL open source conference 14 years ago, or something?
TASO: Yes, in 2007, 2008, after the first MySQL camp at Google. So that was a really long time ago.
MATT: So Toptal is, if you were to summarize it, a site I can go and say, “Hey, I want X, Y, Z?”
MATT: You cover a few areas now — developers, designers…?
TASO: Project managers, product managers, and finance experts. We just launched recently project managers and product managers, and that has been phenomenally successful. So I would say the demand and the experience that people are having with product and project managers far surpassed what we thought it would by a long shot. So it’s been really cool to see a management type of role take place remotely and be so successful.
With developers, they have a long history of working remotely, even designers, and that is in part because individual contributors can contribute more rigorously to a project. You have, in the case of software development where you can commit code, in the design world now lots of tools are evolving to be something similar.
MATT: InVision, Figma, and things like that.
TASO: Precisely. So if you look at it from that perspective, it’s very conducive to the remote working process. When it comes to management, it’s still a little bit new, of course not for us internally, and for many distributed companies, but for outside consumers it’s a little bit more new. They’ve been very receptive to it, and it has worked really, really well, more so than we anticipated.
MATT: So if I’ve got a job to be done, I can go to Toptal. I hire someone, and I can now hire someone to come into an office, or is it all through the platform?
TASO: We do some on-site work. Generally what we do is 95% remote. And so when a client or someone wants someone on site for a certain period of time, we allow for that, however we are not generally the conduit for facilitating on-site work.
MATT: The advantage of going through you all versus just finding freelancers, is you ensure the quality of the talent?
MATT: And you have tools to mediate the experience, right? I don’t need to worry about how they’re getting paid, I could just pay you and you take care of it all?
TASO: Precisely. And I would say the biggest value-add is the time it takes to acquire the talent and the energy it takes to screen the talent. We have done all of that for you. And so — no kidding, this is a real stat — our send-to-hire ratio is about 1:1.5. For every 1.5 “candidates” that we send you, you will hire one of them.
MATT: Oh wow.
TASO: We aren’t a recruiting shop, we aren’t a typical staffing company whereby we send you ten resumes and you say “Okay, I want to screen and talk to all these folks.” We generally send you one. And the reason that we are able to do that is because we actually have a lot of process and domain expertise internally to be able to vet those talents, whether it’s in finance or software development, to ensure that that person, before we send them to you, is the perfect match.
So it’s about getting information from you up front in a more modern way than a staffing or recruitment company generally does it, and then facilitating the matching process through software and processes that are reinforced through software.
MATT: Let’s do some level setting around the company. I know you’re private.
MATT: But to whatever extent you can talk publicly about how many people is it, how many people are on the platform? If you can talk about revenue at all…? Just to give the listeners an idea.
TASO: In terms of a core team we are approximately 500 full time internal folks. Those folks work on software development for our platform, for the website, for different technologies that help facilitate the screening and matching processes, and so on and so forth. And then we have other folks who work in operations, marketing, and so forth. So that team is about 500, let’s say.
MATT: Were you distributed from the start?
TASO: Yes, we were distributed from the start. I started the company on a handshake and then contracting out a software developer to a company almost without a website. So that is really how the company started. And I was in Palo Alto at the time. The individual who was contracted out — actually, we pretty much had two — were in Argentina and South Africa. And I was actually going to an office that my roommate’s family’s friend allowed me to have as a way to go to work everyday.
However, the point was rather moot. I was going into an office but not seeing anyone or interacting with anyone except myself. So it almost was this zombie-like walk to the office every morning where I’m going to the office because I go to work, but I don’t see anyone who I work with. [laughs] And so I actually started waking up and just working on my computer at home.
And then I said to myself, “Well why am I even working from home? I should just go somewhere else because I’ve never really traveled!” So I ended up going to Europe and all sorts of different places. And that’s what took me on my remote journey, so to speak.
MATT: So, FotoLog and Slide, places you were before, did those have distributed teams or were they mostly co-located?
TASO: Those were in-office companies. I went into the office pretty much everyday. The remote working nature was there, but it was very light.
MATT: So 500 people. I know a couple years ago you said it was over $100 million revenue, so I imagine it’s beyond that.
TASO: Yes, and this year we are likely to be in the nine figures in net revenue, which is a really big accomplishment for the company.
MATT: Congratulations, that’s huge.
TASO: Thank you, yes.
MATT: Again I think it’s good to set this up because not that many people know about Toptal yet.
TASO: [laughs] Well said.
MATT: And after this podcast, at least dozens more will.
TASO: A few dozen, a few dozen.
MATT: One of the worries people have about building distributed companies and distributed work is this hiring aspect. How does that work for you all? How do people find you? How do you screen them? What can you tell us about that process?
TASO: A lot of people find us through our brand. Freelancers find us in different countries as we are generally the best source for them to get good jobs remotely, especially within the United States and with Fortune 500-type companies, companies that are doing more serious engineering work and are longer-term engagements.
So our reputation has permeated in those types of environments on the talent side. On the client side, I would say it’s similar. Now, of course we do marketing, however, we do often have referrals, and word of mouth is a strong way that we get a fair amount of business. So those are, on both sides, really how people know about us, generally speaking.
MATT: How many applications do you all get?
TASO: Oh my gosh. Here’s an interesting stat actually. At this point in time, I believe, and I’d have to double-check this, it’s over a million a year.
TASO: And to put that in perspective, Google as a company gets approximately 1.2 million applications a year as a company.
TASO: So if you look at it from that perspective it’s actually a pretty sizeable volume. It is a little bit apples and oranges because all we do is screen talent, that’s it.
MATT: But it probably speaks to how much global talent there is looking for remote opportunities, which is one of the big advantages of being in a distributed company.
TASO: It does. And that is kind of the miracle of it, I suppose. While we are doing a million applications a year, I think that absolutely pales in comparison to what’s out there and what we could do if we put even more effort behind it. My assertion, if we went pedal to the metal and we started doing a lot more advertising, we actually worked to amplify it, I think we could get easily four to five million applications a year globally. If you think about —
MATT: Wow. I can’t imagine that applicant tracking system.
TASO: [laughs] Well we built our own because all the other ones were certainly not sufficient. If you think about it from that perspective, that not only highlights the amount of people that are talented all over the world but it also highlights the amount of people that want to work remotely that are not today. And so the far majority of our applications want to work remotely, meaning they are not working remotely today but they are applying because they see it as a huge, life changing opportunity for them. And so it’s really interesting to see the dichotomy between what is today versus what we’re seeing people want tomorrow to look like.
MATT: So I’m an engineer somewhere, I want more flexibility, I go on Toptal. Let’s say my resume makes it through. How do you determine whether I’m top two, three percent or not?
TASO: Well it’s a subjective process, and so I can’t state it’s perfect, but we err on the side of conservatism so that we have a near-guaranteed great experience for our clients, in a similar sense that McKinsey does or that some other top-tier firms that offer top talent, so to speak. The real high-level deals are that you go through what is in effect an interview process.
MATT: Like you’re going to be hired?
TASO: Like you’re going to be hired at a Google or a McKinsey or a company like this, depending on the vertical.
MATT: How important are their technical skills versus their people or soft skills?
TASO: They are both incredibly important to us. So we have looked at, for example, how McKinsey screens people. And we have actually taken some of those processe and refined them and introduced them into our screening processes. Same with Google, same with some other companies that are keen on hiring good cultural fits. I wouldn’t say in terms of our own network there is a unified culture, but there are certainly elements that unify people in terms of soft skills.
They have high integrity, they have punctuality. No kidding — something we screen rigorously for. They have good judgment, which we are able to screen for in different areas. So if you think about elements like that, you can actually screen well beyond hard skills. Do you know how to write an algorithm in constant time versus quadratic time, or something of the nature like this, which is still a very important skill to have. But I would actually say the soft skills are, especially when working remotely, more important.
MATT: So even if I’m a brilliant engineer, if I show up late to your interview, it’s going to be a mark against me and you might not hire me if I don’t have those good soft skills?
TASO: Oh 100%. The punctuality component is very, very real. So if you show up just a little late you will literally be rejected automatically.
TASO: And people get pissed on this point. They’re like “Hey, I was on another call, I went through the—” Hey, look, that’s our integrity on the line. If McKinsey and the best companies have survived by upping the bar in terms of integrity, we’re going to do the same.
MATT: I was going to ask how you test for integrity, and punctuality is an interesting window into that.
MATT: What are some other things that you feel like are really important to the Toptal culture?
TASO: One element that I can speak to is the character of the person. As many people know, great engineers can be very abrasive. And I would say there was a point in my life, if not still in many cases, I can be abrasive. But if you go into an interview process and you understand it’s professional, you have to show your best self. And if you are abrasive when you’re showing your best self, it doesn’t go uphill from there. Right? [laughs] It kind of goes downhill.
So you have to be very judgmental on those factors because if they are introduced to a client that then experiences Toptal as a group of abrasive but brilliant people, that’s not going to resonate with them very well. So you have to take elements like that, that are a little bit more subjective, a little bit more nuanced, and factor them into the equation, because it’s not just about whether you can write algorithms or not.
MATT: Like all distributed workforces, like your own, for a lot of people English is not their first language.
MATT: So are there resources you point to or anything or is that something people need to learn on their own?
TASO: Internally at Toptal, we have provided English lessons before. We don’t anymore. But it’s generally something, both in our core and externally in our network, that we expect people to know coming into Toptal, whether that’s through our network or through the core team.
MATT: I actually was pitching this to Austin from Lambda School. Part of what they’re doing is taking people who don’t know how to code and teaching them to code.
MATT: I think there’s a huge opportunity in that there are probably millions of great engineers who are great coders and don’t know English well.
TASO: I would say that’s the case.
MATT: So versus teaching someone how to code, teach them English. I don’t know which is harder, to be honest. They’re both learning a language, just an artificial versus natural language.
TASO: We have thought of putting people through different re-skilling programs. However, I’ve never thought about it as well — if you already know blockchain but you speak Chinese, can we just teach you English and will you be able to work with people internationally?
MATT: How do you decide if who you’re hiring goes to the Toptal internal team versus clients?
TASO: It’s very separated. It’s very separated so that we have clear client expectations and KPIs and we have clear internal KPIs in processes. You would think we would mix them, that we would leverage the incredible technology that we’ve built for our network, but it wasn’t so easy to compartmentalize.
MATT: So Toptal itself is not a client on Toptal?
TASO: We are in some instances but we are not using it to the extent that people would think we would use it.
MATT: When you say KPIs, what are the differences?
TASO: We are looking at time to hire, time to fill, so on and so forth. So we would have to disable all these components. In regards to how we do our screening we have capacity, metrics and triggers that exist in there to help manage the pipelines. It’s a really big system, rightfully so, for Toptal the network. Internally it’s a little bit difficult to decouple from the purpose that it has already been constructed to serve.
MATT: Let’s zoom into the virtual wall.
TASO: Sure, sure.
MATT: Tell me a bit about how the company is set up. Who are your direct reports, how is your hierarchy and what’s your structure? How should people think about Toptal?
TASO: Let’s kick it off with how the company operates. I think that’s a good window into how we work and gives you some good insights into how structured we are, how we set goals, how we actually work day-to-day. We have an OKR method that we use, like many companies, to set objectives quarterly, annually, so on and so forth, and we are very rigorous about it. We are very methodical about it.
MATT: As CEO you have some OKRs and those..?
TASO: I do, yeah.
MATT: What are some off-the-shelf tools you use?
TASO: Slack, Zoom. In terms of product management we use Jira. What I find really interesting is Confluence. I find Confluence very interesting.
MATT: That’s their internal blogging thing, right?
TASO: It’s actually more like a Wikipedia slash —
MATT: Yes, like document management plus some internal — what I would call blogging, but you can use it instead of email, right?
TASO: Right. It’s still a little bit cumbersome, still a little bit big in some instances, but it is a really good tool.
MATT: I know Atlassian runs on it religiously.
MATT: They say it’s their secret weapon, it’s the thing that makes everything work.
TASO: We’ve started to go down that path actually for knowledge management, and for documenting processes, and for other elements that are important for the company to be unified on.
MATT: So those are some off the shelf ones. Any others that come to mind? Google Apps, Office 365?
TASO: Yes, Google Apps. Yes, I would highly recommend it. [laughs]
MATT: Yes, it’s pretty good. They did a good job there. Who’s on your exec team? How did you meet?
TASO: Sure. So our executive team is pretty traditional. It depends if you’re looking at a more traditional company or an internet company. We have a fair amount more executives that report directly to me. That’s a personal choice.
MATT: So is it flat at the top?
TASO: I have about 12 direct reports. And from what I’ve seen via conversations and from what other companies are doing, that tends to be on the larger side of things. I have seen companies with 20 and I think we even had 20 at one point, not realizing how bloated that was. And so we —
MATT: So what reports directly into you? Is there a CTO, HR?
TASO: CTO, CAO, we have a chief administrative officer, that person is really working to refine all the processes, the data analytics, business insights. A VP of people, a VP of brand marketing, a VP of growth marketing, a VP of design, a VP of comms, a VP of finance and probably two others that I’m missing.
MATT: How do you all get together? Where are those people located?
TASO: Well our VP of finance is in Pennsylvania. Our general counsel is in Massachusetts. Our VP of product is in Greece.
MATT: So these people are all over the world.
TASO: They are all over the world.
MATT: And do you meet weekly, every other week?
TASO: We meet biweekly, so every two weeks we have meetings. And that is the cadence at which we meet. We also have an all-hands that’s monthly. And so that gives you insight into how often our all-hands occur with our company.
MATT: We do a similar thing where once a month we do — we call it a Town Hall. Typically the questions come in via text but everyone is on video now. We can all be on Zoom. You can get hundreds of people on Zoom pretty easy now and it’s — so sometimes they come in real time. I really like it. I also enjoy not knowing what’s coming next. We don’t pre-moderate or pre-screen the questions or anything. It’s just whatever pops up at the time. Everyone sees the question being asked. It’s not like I can skip them if I don’t like it. And sometimes the conversations are difficult, sometimes the answer is “I don’t know” or “Maybe we made a mistake,” or things like that.
TASO: Right. We used to do it via text. Now we’ve just chosen to do it in a free-form style, so that it’s a little bit more engaging. We also had a method by which you could do it anonymously, which we have totally abolished across all of Toptal. We don’t have anyone have anonymity. And while I understand that there may be ramifications of people not being as forthcoming as they may, it’s really our duty to ensure that we create an environment where they can be.
MATT: When did you do that and why?
TASO: We did that because you’re actually taking an action that encourages hiding and we don’t believe in hiding anything. We believe in radical transparency, radical truth, bringing difficult conversations and difficult topics to the forefront. And by taking that action, you’re saying “We actually believe in hiding something.” Well I don’t believe in that and I would say our executive team doesn’t believe in that, so we have abolished it.
MATT: When did you abolish it?
TASO: About seven or eight months ago.
MATT: Pretty recent.
MATT: I’ve got some quick ones as we wrap up. Tell me quickly what is your ideal workspace? Where are you productive?
TASO: I am productive sitting at a desk I am familiar with.
MATT: Do you have a big monitor? What’s your —
TASO: I don’t have a very big monitor, I have a regular sized monitor, but I’m just familiar with the setting, it’s something about the familiar setting that allows me to be focused. So if I’m in a hotel room, my first impulse I suppose, is to get out of the hotel room, go to a meeting, go connect with someone because you’re traveling. It’s not to sit down and focus and go through Excel and dive deep into the nitty-gritty details of whatever it might be, whether they’re financial reports or they are reports about whatever it might be, and scrutinize them.
Likewise, when I’m on a plane, I’m always reading. It’s just my natural state, so to speak, on a plane. And so whenever I’m at a desk that I’m familiar with, with my computer that I’m familiar with, I can do work much more productively.
MATT: How often would you say you’re home versus on the road or traveling?
TASO: I’d say it’s 80/20 now. So I am more so settled, working, than I am traveling.
MATT: That’s a good thing to note, that a lot of people think remote or distributed means you’re on the road all the time.
TASO: Oh no.
MATT: And actually I think the vast majority of people at Automattic at least, they’re in the same place 95% of the time.
MATT: How about meetups? When does your team meet up in person, if ever?
TASO: Yes, our executive team probably meets up on average every 18 months. So not so much, but I don’t see it as a requirement. When we meet up, it’s generally when there are some executive changes and we are unfamiliar with one another. And so —
MATT: And are there other meetups within the company?
TASO: Yes. Actually, as we’re speaking right now there’s a function that’s having a meetup in Miami.
MATT: So like all the designers, all the engineers might get together, something like that?
TASO: Precisely. It’s a little bit too large for the engineering team, being about 200 people, to be able to do that, but yeah. On a functional basis, especially with some of the smaller functions, they’ll be doing that.
MATT: Do you have any must-have equipment that makes for ideal work?
TASO: A laptop and a phone. [laughs]
MATT: That’s it? Nice. You mentioned Zoom, Slack, phone? Do you make phone calls? Do you talk to people? How much are you on text versus video, versus audio?
TASO: I would say I have moved to mostly video. When I’m mobile I don’t do video generally because my battery is dying. [laughs] But generally I’m on audio when I am traveling and I’m on video when I’m situated.
MATT: Last question. Let’s fast-forward 20 years from now, what percentage of jobs do you think will be distributed or remote?
TASO: I believe that at least 50% of all technology jobs will be distributed.
MATT: That’s wild. Because it’s probably, I don’t know, what is it today? Probably under 10%?
TASO: It’s under 10%, but it is growing so fast and there is such a strong movement across the world for this. You have all of these strange companies, Toptal, Automattic, InVision, GitLab, so on and so forth.
MATT: We’re not that strange. [laughter] But I get what you say. Right now it’s the exception. In the future I think it’s the rule.
TASO: Exactly. And they’re looking at us saying “Okay, yeah, they created a billion dollar company. It’s a billion dollar company, we’re a $200 billion company. This is hogwash,” right?
MATT: It’s a toy. Yeah.
TASO: Well more and more people are doing it. More and more people are picking up on the fact that this is the future and that is becoming more and more compelling to the talent. So more talent are keen on working for those companies — the Toptals and the Automattics of the world. And that’s just going to grow.
So what’s going to happen is, all these small companies where they’re working remotely, well actually that’s going to be the majority of the talent in the world. And when these companies can’t recruit them anymore and there are millions of people working remotely that are skilled, and they’re saying, “Well we want you to work in our office,” they’re going to say, “You know what? I don’t work for companies like yours because you’re the old, stodgy company. You’re the company that doesn’t understand the future and opportunity and innovation.” And that’s when it’s going to come and force them to be remote.
So you’re going to see that happen because the workforce of talented people is going to be more keen on remote work than not. And people don’t see that now but once they’re unable to recruit at all from anywhere, in effect, that’s when the change is actually going to happen.
MATT: Amen. [laughter] I think that’s a great place to end it. Thank you again, Taso, and I hope to continue this conversation in the future.
TASO: Thank you.
MATT: That was Taso Du Val, and I’m very glad he was able to join and share his experiences.
On the next episode of the Distributed podcast, I’ll be speaking to Lydia X.Z. Brown. Lydia is a lot of things: a writer, advocate, organizer, strategist, educator, speaker, and attorney. I’m interested in talking with Lydia about how distributed work can make work more accessible to people with all kinds of disabilities, and learning more about what inclusion means in a distributed context.
Thank you so much for joining us, and see you next time.