Garry Tan, the chief executive officer of Y Combinator, offers straightforward advice for companies about hiring. He says businesses should only hire new employees when they face acute operational pain. They should not hire because they think they might need someone in the future.
The Core Principle: Hire Out of Pain
Tan explains his philosophy clearly. "Hire out of pain. Don't hire because you think you'll need someone soon or maybe sometime later," he states. He advises waiting until you or your team are genuinely struggling. This means working weekends, missing family dinners, or dropping important tasks. According to Tan, that specific pain is the real signal that a new role is necessary and justified.
Learning from Experience
Tan says he learned this lesson the hard way. He watched founders, including himself, hire people ahead of actual need. This often resulted in employees placed into roles that were not fully formed or clearly defined. The consequence was mismatched hires and inefficient teams.
He gathered this insight from both venture capitalists and other founders. They observed that hiring during periods of operational stress actually helps companies. It forces them to better define the new role's responsibilities. This clarity leads to more successful hires and stronger team integration.
Why This Method Works
Tan elaborates on why hiring during pain is more effective. The right time to post a job is when the current team reaches a breaking point. This situation makes the hiring process itself more successful.
"When you hire out of pain, you know exactly what the job is because you've been doing it yourself," Tan points out. This firsthand experience allows managers to evaluate performance accurately. They know what good work looks like for that specific position.
Furthermore, the new hire understands that management will support them. "The new hire knows you'll step back in if they fail, because you were just doing it last week," Tan adds. This creates a safety net and demonstrates immediate need, making the role's importance undeniable.
A Warning to Students and Future Founders
Last year, Garry Tan also directed a warning toward engineering and business college students. He criticized certain unnamed university entrepreneurship courses. Tan suggested these programs might foster an environment where students feel encouraged to bend the truth. This behavior could emerge in their pursuit of startup success.
He referenced prominent tech founders Sam Bankman-Fried of FTX and Elizabeth Holmes of Theranos. Both individuals were convicted for fraud and received lengthy prison sentences. Tan warned students that following a similar path carries severe risks. Exaggerating traction, misleading investors, or fabricating product capabilities could lead to serious legal consequences, including jail time.
Tan's comments connect his hiring advice to broader ethical business practices. Building a company on real need and transparent operations, he implies, is safer and more sustainable than chasing growth with deception.
Garry Tan's guidance combines practical management strategy with a cautionary note on integrity. For startups and established companies alike, his message is clear. Let genuine operational need drive your hiring decisions. Avoid speculation about the future. This approach builds stronger, more authentic, and legally compliant organizations.
