Mar 16, 2018 · 26m · 20vc
20VC: Why Virtually All Companies Hire The Wrong Way, Why EdTech Is The Most Brutal Market & How To Scale Your Sales Team for Engineering Founders with Mike Sliagadze, Founder & CEO @ Top Hat
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, Top Hat Founder and CEO Mike Silagadze discusses overcoming EdTech market challenges through a bottom-up sales strategy, building high-performing teams using scientific hiring methodologies, and scaling sales operations as a technical founder.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 28.3% of the talking time here. How this is scored →
Harry as informed peer 4.2 Guest teaching 6.0 Guest disagreement 2.2 Harry pushing back 3.4
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:37 Education as luxury consumption
Mike strongly rejects the widespread belief that higher education is an investment driving economic productivity, reframing it as a luxury good that wealthy societies consume.
Hardest push from Harry ▶ 4:08 Host pressing on VC EdTech skepticismHarry directly confronts Mike with the widespread VC aversion to EdTech investments, asking whether historical skepticism in the sector is fully justified.
Biggest teaching moment ▶ 17:04 Why hiring gray-haired sales leaders fails early onMike educates young technical founders on the common trap of hiring senior sales executives early, explaining why candidates from large companies usually fail in early-stage environments.
Harry holds his own ▶ 13:03 Harry citing Mark Mader on IQ vs cultureHarry demonstrates active domain knowledge by bringing in external insights from Smartsheet's CEO to challenge and frame the conversation around cognitive testing in hiring.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| The Origin and Motivation Behind Top Hat | 4 | 6 | 2 | 4 | Harry challenges the EdTech sector by noting VCs typically wince at the mention of EdTech. Mike validates this view completely, educating Harry on why go-to-market barriers make EdTech one of the most brutal markets. | |
| Top Hat's Innovative Go-To-Market Model | 2 | 6 | 1 | 2 | Mike outlines Top Hat's innovative bottom-up GTM strategy of selling directly to professors rather than university provosts. Harry takes an agreeable, listening role as Mike explains how they bypass long institutional sales cycles. | |
| The Science of Hiring and Common Corporate Mistakes | 5 | 6 | 1 | 4 | Harry quotes Smartsheet CEO Mark Mader regarding IQ versus cultural fit in hiring. Mike expands on this with data, explaining cognitive assessments and work samples as scientifically validated predictors of workplace success. | |
| Internal Promotions vs. External Executive Hiring | 5 | 6 | 3 | 4 | Harry probes Mike on his past sales scaling mistakes and internal vs external hiring decisions, citing Minted's Mariam Nafisi. Mike offers contrarian founder advice against hiring senior sales leaders too early. | |
| Sales Team Management, Metrics, and Lessons Learned | 5 | 6 | 4 | 3 | In the quickfire section, Mike shares provocative views on higher education being a luxury consumption good rather than a economic productivity investment. Harry guides the conversation through topics like Bay Area echo chambers and Adam Smith. |
Statements from this episode (19)
Silagadze: Traditional Chalkboard and Paper Lectures Fail to Effectively Teach Skills
“Chalkboards and paper books and all this stuff that hadn't changed for hundreds of years. And not only that it hadn't changed, but this is, it doesn't work. It's a really terrible way to teach people skills, actually.”
Silagadze: Only 10 to 15 EdTech startups have reached $10M+ revenue
“Out of the, you know, thousands and thousands of companies that have been funded over the last decade or so, only a handful, I would say probably 10 or 15, have really broken out past the, let's say, tens of millions in revenue milestone and, you know, are on …”
Silagadze: Most venture capital investors in EdTech have lost money
“Most people that have invested in EdTech have lost money in EdTech, and so, yeah, there's good reason to be skeptical.”
Silagadze: I wouldn't have invested in early-stage Top Hat today
“If I was evaluating Top Hat in the early days, I don't know if I would have invested knowing everything that I know now, just knowing how difficult the market is.”
Silagadze: Higher education sales cycles can take three years for small deals
“If you want to sell something in higher education, generally speaking, you know, you have to go through a committee process that can take years, sometimes three years for relatively small transaction sizes.”
Silagadze: EdTech products fail because buyers and end users are mismatched
“Products in education technology are generally terrible because The decision makers aren't the users.”
Silagadze: Teaching quality is a very low priority for universities
“Teaching, as surprising as it may be, is really very low on the total pool of priorities in higher education. In fact, that's just, it's not how universities get funded. You know, universities are not known generally because of the quality of their teaching. I…”
Silagadze: Top Hat abandoned top-down university enterprise sales as a dead end
“So that's what we started, actually. I mean, we started trying to do enterprise sales in universities, and very quickly, within a matter of months, realized that it was a dead end. I mean, the business just could not exist.”
Silagadze: Standard corporate hiring processes systematically favor charismatic extroverts
“Virtually all companies out there completely ignore this research and instead implement the same kind of hiring processes that have been shown repeatedly not to work, that have been shown to have tons of bias and be in favor of hiring basically extroverts that…”
Silagadze: Work sample tests are highly predictive of employee performance
“One of those things is a work sample. I mean, that's one of the most predictive things. So you actually have people do a sample of the work that they are going to do, whether it's programming, if it's developer or doing a presentation of their sales rep, that'…”
Silagadze: Companies should measure IQ because it strongly correlates with performance
“Most companies don't measure IQ at all, and that's wrong. I mean, there's a zero-point-six correlation between IQ and job performance, and that is, in fact, if you could base your hiring decision on one factor, you could only base it on one factor. IQ is actua…”
Silagadze: Top experienced talent is harder to find because high performers are locked in
“And so as a result, people who are experienced paradoxically are, as far as the distribution, it's more challenging to find top performers because they said that the good ones are already locked in somewhere.”
Silagadze: Premature promotions usually lead to departures since demotions are impossible
“We've certainly made The mistake of promoting people too early, and unfortunately, that usually doesn't end well, because what tends to happen is you can't demote them, because that's, you know, politically or whatever, from an optics perspective, you can't re…”
Silagadze: Technical founders' early sales leadership hires fail almost 100% of the time
“There's one mistake that almost every young founder makes, engineering founders in particular, honestly, almost a hundred percent of the time is at some point they decide, you know what, we need to start figuring out sales. And then they correctly assess, well…”
Silagadze: Top sales individual contributors usually make poor managers
“When you've got somebody who's a top rep and, you know, is clamoring for a promotion to management, more often than not, that's a bad idea. You need to figure out how to level them up and give them the opportunity for growth within the, you know, as an individ…”
Silagadze: Measuring engineering velocity with metrics is nearly impossible
“Whereas in engineering, that's difficult, if not impossible. I mean, you basically, you almost don't have any metrics when it comes to measuring engineering velocity.”
Silagadze: Higher education is a luxury good, not a productivity investment
“I think many people believe that education is an investment that makes you more productive. In a sense. And I think beyond some of the very basic stuff that you learn in primary school, I don't actually think that's the case. I actually view education as a con…”
Silagadze in 2018: Crypto bubble could dislocate the global economy
“You know, it seems like certainly the crypto mania is concerning. I worry that it's going to get large enough to where I'll actually dislocate the global economy just like the real estate bubble did not too long ago.”
Silagadze: Canada Lacks Executives Who Have Scaled Companies Beyond $100M
“And biggest challenge I would say is lack of executive talent. There are very, very few people in Canada that have scaled businesses past a hundred million dollars. And as a result of that, it's challenging to build a business that scales to that degree becaus…”