Feb 18, 2022 · 40m · 20vc
20VC: Faire's Max Rhodes on Three Steps To Hire the Best Candidates, Why Every Company Should Have a Strategy Doc and How To Do It & The Art of Referencing; How to Get the Most Out of Every Reference
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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 20VC, host Harry Stebbings interviews Max Rhodes, co-founder and CEO of Faire, to explore the founding insights behind the wholesale marketplace, how to write transformative strategy documents, and actionable methodologies for hiring and conducting reference checks.
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 30% of the talking time here. How this is scored →
Harry as informed peer 2.3 Guest teaching 4.6 Guest disagreement 1.3 Harry pushing back 1.6
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 19:53 Reframing personal structured thinking
Max explicitly pushes back on Harry's premise that managing rapid change is difficult for his structured mind, explaining that he actually craves change and has to actively guard against changing directions too fast.
Hardest push from Harry ▶ 30:38 Challenging the exclusion of childhood historyHarry refuses Max's strictly professional interview framework, pushing back to argue that deep childhood background and family history contain a candidate's true character.
Biggest teaching moment ▶ 27:21 Masterclass on reference checking mechanicsMax delivers a detailed breakdown of how to conduct reference calls, including specific question design, calibrating 1-10 rating scales, and using candidate self-disclosed weaknesses to elicit honest feedback.
Harry holds his own ▶ 35:10 Citing investor references on guest's weaknessHarry demonstrates high expertise and preparation by confronting Max with feedback directly gathered from Faire's top VC board members regarding Max's underinvestment in his personal public brand.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Episode Sponsorships | 0 | 0 | 0 | 0 | This segment consists entirely of host monologue ad reads and episode introductions with no guest interaction. Per instructions, host-side and guest-side dynamic scores are marked zero. | |
| The Founding Story and Core Insight Behind Faire | 1 | 5 | 1 | 0 | Harry asks a broad open-ended question about the founding moment of Faire. Max provides an extended narrative explaining trade show friction, retailer risk aversion, and how net-60 terms solved the core online wholesale problem. | |
| Lessons Learned from Square and Culture Building | 3 | 4 | 1 | 1 | Harry uses insight gathered from Faire investors like Anouk and Anu to prompt Max on product velocity and culture. Max outlines key lessons from Square, including mission-driven culture and written strategy documents. | |
| Crafting Effective Strategy Documents | 3 | 6 | 1 | 2 | Harry presses into the specific mechanics of crafting strategy docs. Max walks through book recommendations, defining business versus customer problems, and detailing his iterative multi-month planning process. | |
| Navigating Strategic Pivots and Organizational Agility | 3 | 5 | 3 | 3 | Harry questions whether Max's highly structured nature makes sudden pivots difficult. Max counters the premise, noting he actually gets bored easily and craves change, using the analogy of steering an aircraft carrier versus a speedboat. | |
| Building a Disciplined Hiring Process | 2 | 6 | 1 | 2 | Harry prompts Max for tactical advice on executive hiring and interjecting to ask for definitions like deep behavioral interviews. Max outlines the Who Method, mission-outcome-competency documents, and reference rigor. | |
| Mastering the Art of Reference Checking | 2 | 7 | 2 | 3 | Harry admits to being weak at referencing and asks how to handle split rating signals, while also arguing that childhood history reveals character. Max provides a blueprint for referencing questions and counters Harry's premise on childhood background. | |
| Capital Allocation and Global Expansion | 4 | 4 | 1 | 2 | Harry brings up specific feedback from Max's top investors regarding his lack of public personal brand as a weakness. Max candidly accepts the feedback and shares his managerial and capital allocation growth. |
Statements from this episode (12)
Rhodes: Unsold inventory risk is the primary barrier for retail buyers
“The trade show solved like a really fundamental problem for retailers, which is when they are placing an order for a product, they need to know that it's going to sell. If it doesn't sell, they could go out of business. And so there's all this anxiety that's w…”
Rhodes: Etsy and Bonagora failed at wholesale by ignoring retailer demand
“Moving that online, people had tried it. Like Etsy tried this. There was this other website called Bonagora a while back that tried it. Everyone who tried it Would get a bunch of brands signed up, but then they couldn't get the retailers to order.”
Rhodes: Faire launched with free returns and net 60 terms
“And so we realized in that moment, that was the core problem that we had to solve. And that's how we ended up launching fair with free returns, net 60 payment terms, basically like try before you buy.”
Faire requires annual CEO and pod-level written strategy docs
“Every year I write a strategy doc for the whole company. Every product pod writes its own strategy doc that kind of ladders up to the broader strategy doc.”
Writing prevents sloppy thinking and forces strategic rigor
“Forces you to really think through your ideas and to connect your ideas together. You can't hide sloppy thinking. And so it forces rigor, and I also think it creates clarity.”
Faire's strategy drafting process grew from three weeks to three months
“Our first year, it maybe took me like two or three weeks to write it. Now it's, you know, a three month process.”
Early Faire hiring mistakes stemmed from falling in love with candidates
“The big mistake that I used to make is I would fall in love with candidates. I still have this problem. But I get enamored with candidates. All of a sudden, I move into confirmation bias mode. I totally ignore any sort of red flags, just focus on all the posit…”
Rhodes: Keep conducting executive reference checks until you find negative feedback
“And then using references to round that out, and to make sure that, and doing a lot of references, like, for really senior roles, five, six, seven references, one of the pieces of advice I've gotten is keep digging until you find something bad, and then are th…”
Max Rhodes: In reference checks, 7/10 is poor and 9/10 is stellar
“And that one to 10, I also think is really revealing because you get calibrated on like, most people will say somewhere between seven and 10, and if you do six or seven references, you can create a composite score that like, if the person's consistently gettin…”
Max Rhodes: Frame candidate weakness checks around interview self-disclosures
“I say, this person mentioned this was one of their weaknesses in the interview. Can you tell me a little bit more about that? And I pick out the weakness that I'm most worried about that might be the most likely to be a deal breaker. You know, when they say th…”
Max Rhodes: Interviewing candidates on childhood yields less value than recent work
“But I think the value of that time is a little less than the value of more recent professional experiences.”
Rhodes: Early-stage startups should prioritize speed over financial forecasting
“When you're an early stage startup, speed is so important. And there's so many unknowns that you can easily waste time trying to predict what's going to happen. And a lot of times the best way to figure out what's going to happen is just to do it.”