The High Cost of Hiring Big Names

Throughout my career, I’ve witnessed many good decisions—and plenty of bad ones.

In my opinion, one of the worst mistakes a company can make is hiring people simply because they carry prestigious titles.

I’ve seen this happen in both large corporations and startups.

For example, when I joined a startup, its core business was already growing rapidly. The company then decided to hire several university professors and senior executives from well-known companies.

After one of these executives joined, the company started building a cloud computing business.

But cloud computing had little to do with the company’s existing operations. There wasn’t even a closely related business that could justify such an expansion.

So why did the company need him in the first place?

Hiring university professors was even more ridiculous.

Just because someone has taught students at a university doesn’t mean they know how to build reliable infrastructure, develop successful applications, or run a profitable business.

And when these people joined the company, they often brought their former colleagues and students along with them.

Some of these students had just graduated from university, yet they were given surprisingly high positions and salaries.

Naturally, many existing employees felt this was unfair.

After all, the company’s success hadn’t been built by these newly hired executives, their students, or their former colleagues. It had been built by the employees who had been working hard long before they arrived.

I once asked the company why it made these decisions.

I was told that bringing in prestigious people would make the capital markets value our company more highly, among other things.

But guess what?

Looking back years later, I think those arguments were just bullshit.

The company’s business wasn’t built by those famous executives or professors.

And this shit doesn’t just happen at startups. Throughout my career, I’ve seen large tech companies make the same mistakes.

Just look at China’s major tech companies. Over the years, many of them established departments with impressive names like “Research Labs” or “AI Institutes.” They hired university professors and other big names to lead these organizations.

In recent years, some of these initiatives have been acknowledged by management as failures.

But by then, substantial company resources had already been wasted on decisions that, in hindsight, should never have been made.

Meanwhile, the employees who never worked in those prestigious labs, but instead spent their days building and maintaining the company’s actual business, were often treated as ordinary, lower-level employees.

Is that fair?

Looking back at how far the market valuations of many Chinese tech companies have fallen from their peaks, I can’t help but wonder how much these kinds of management mistakes contributed to their decline.

The success of these companies wasn’t built by prestigious titles.

It was built by thousands of ordinary employees who did the actual work.

And when I left China to begin a new chapter of my life, I discovered that the same shit was happening in American companies, in much the same way.

Yet American companies seem largely unaware of how damaging these practices can be.

I think the difference comes down to where the two countries stand in their economic cycles.

China’s era of rapid growth, driven by decades of reform and opening up, has largely come to an end. After decades of expansion, the slowdown has made organizational mistakes much harder to ignore.

America, on the other hand, is the new Rome of our civilization.

And this new Rome is still far from reaching its peak.

Its cycle of prosperity has lasted far longer, and continued economic growth allows companies to overlook inefficiencies and mistakes that might be impossible to ignore elsewhere.

Growth can hide a lot of bad decisions.

And that leaves me with a question:

If we can avoid these mistakes and build companies the right way in this new Rome, how far could we go?