Writing
Hiring talent from emerging markets is challenging
Why hiring from the first wave of a hot industry is harder than it looks, and how to tell surfers from swimmers.
Hiring someone from the earliest wave of a fast-growing industry looks like a cheat code. Their resume has outcomes nobody else can show: growth curves that bend the wrong way, margins that sound made up, products that went from nothing to everywhere. The numbers are real, which is exactly what makes them dangerous.
In the first phase of a new market, demand outruns supply so hard that average work produces great outcomes. Distribution is cheap because nobody else is bidding for it. Competition is thin because the competent people haven’t arrived yet. Customers forgive everything because the product is the only one of its kind. In that environment the tide lifts every boat, including the leaky ones.
Then the wave passes, the market matures, and those people enter the hiring pool with paper that says they did something rare. Some of them did. Most of them were standing in the right place.
Beta dressed up as alpha
Finance solved this problem decades ago and hiring never borrowed the answer. Investors learned to split a fund manager’s returns into beta and alpha. Beta is what the market gave everyone. Alpha is what the manager added beyond it. A manager who returned 20% in a year the market returned 19% did almost nothing. A manager who returned 8% in a flat market might be a genius.
Resumes report total returns with no benchmark. “Grew revenue 40x” reads as skill, but the base rate is missing. What did the median company in that market, in that window, with that tailwind, do? In the first wave of a hot industry the honest answer is often “also 40x.” The outcome was mostly beta. The interview treats it as alpha, because the interview has no column for the market.
It’s a quieter cousin of survivorship bias. Survivorship bias hides the failures; tailwind attribution mislabels the successes.
Mediocre people from a great wave will beat great people from a flat market in any resume screen you run.
Innovators and passengers
Every wave has two kinds of people on it. Somebody made the wave: figured out the mechanic, the channel, the pricing model, the product design that everyone else then copied. A much larger group rode the thing the innovators built, executing a playbook that was already working before they touched it.
Both groups walk away with the same logos and roughly the same numbers. On paper they’re indistinguishable. That’s the entire problem, because their value to you is wildly different. The innovator can generate outcomes in a new environment. The passenger needs an environment someone else already made generous, and a maturing market stops producing those.
Mediocre people from a great wave will beat great people from a flat market in any resume screen you run. If your screen can’t correct for that, you’re not selecting for talent, you’re selecting for luck with tenure.
Telling them apart
The good news: you can detect the difference if you ask about mechanism instead of outcome.
Start with decision rights rather than results. What did you own that wasn’t already working when you arrived? What did you change, and what resisted the change? Passengers narrate outcomes. Owners narrate decisions, including the ones that went wrong.
Then ask the counterfactual directly: if someone else had held your seat for those three years, what would have happened? Strong operators have usually thought about this already and answer with uncomfortable honesty. Weak ones treat the question as an insult, because it threatens the only story they have.
Asking why it worked is just as revealing. Innovators can explain the mechanism from first principles: why that channel was mispriced, why that product format fit that moment, what everyone else got wrong. Passengers just list what happened, step by step. That depth is hard to fake for more than a few minutes.
And weight the post-wave years heaviest. The cleanest signal in the entire file is what the person did after the environment stopped being generous. Someone who produced results in the boom and kept producing them in the drawdown has demonstrated alpha. Someone whose impact line goes flat the moment the market did has demonstrated the opposite. Their earlier numbers should be repriced accordingly.
The point isn’t cynicism
None of this means avoiding early-wave people. The innovators of the last wave are among the best hires in the world. Even honest passengers know how fast-growth environments behave. The wave inflates everyone’s paper equally, so paper is exactly the wrong instrument for reading it.
Outcomes tell you what happened. Skill is what would have happened anyway, somewhere else, without the tide. Hire the person who can make a wave, or at minimum explain one. Be careful with the person who can only tell you what it was like to be carried.