. Bimodal talent distribution is rare but more frequently observed in creative industries, including some types of software companies. While Pareto companies compete for A-players (“high-IQ generalists”), bimodal companies compete for linchpins (those who are uniquely gifted at a task that few others can do). These differences account for variations in management style and corporate cultures.
Bimodal distribution: Talent follows a bimodal distribution, where companies benefit from identifying, hiring, and retaining “linchpins,” who make up a fraction of headcount, but drive most of the company’s success. Frequently seen in creative industries (ex. entertainment, fashion, design), as well as software companies solving difficult technical problems (ex. infrastructure).
Production is standardized and hierarchical, work is broken down into smaller tasks, and employees operate in lockstep as a machine. The competitive advantage of these companies lies not in a select number of top performers, but in the strength of its processes, built on specialized knowledge that is refined through years of practice.
A-players can be quantitatively defined and ranked against B- and C-players, which is why management consulting firms use IQ tests, math tests, and personality tests to hire A-players. Because this type of talent is easier to identify, Pareto-distribution companies often have robust recruiting programs to hire graduates straight out of college: specialized skills matter less than general competence.
Companies that benefit from bimodal talent distribution succeed by attracting and retaining “linchpins,” whose unique skills provide a competitive advantage to the company. In contrast to A-players – generalists that like to solve any problem thrown at them – linchpins are specialists who are very, very good at one particular type of task, which most other people in the world cannot do. This type of company is rare, but more frequently observed among software companies tackling difficult technical problems, as well as creative industries.
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Linchpins are qualitatively defined, and are thus especially difficult to hire for, or even identify. While A-players willingly cram for their exams at Tier 1 management consulting firms, software engineers frequently criticize code interviews and hiring practices because they think they don’t accurately test for ability. The lack of consensus around what even constitutes a 10x engineer, again, points to the difficulty in quantifying linchpin talent, even if everyone ‘knows it when they see it.’
“I came to see that the types of people who are good at pleasing admissions committees are not the types of people who are good at founding companies.” – Michael Gibson, Paper Belt on Fire, reflecting on the Thiel Fellowship program, which he helped launch and run Linchpins are more frequently observed in software because, unlike physical engineering, software has sprawling complexit View Highlight 2024-03-30
fixing bugs has an equally infinite (and frustrating) possibility space; unlike a civil engineer, who can see and inspect a malfunctioning bridge, code that doesn’t act as expected can be blamed on any number of invisible dependencies. The gap between an average and exceptional software engineer, then, is much bigger than that between an average and exceptional physical engineer, as an exceptional developer can “see” possibilities that an average one cannot, due to some amorphous combination of intelligence, creativity, and intuition. [3]
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Bimodal-distribution companies benefit from what Sebastian Bensusan calls “high variance management,” which he compares to producing a Hollywood movie instead of a Broadway play. With a live performance, an actress must be able to deliver her lines correctly at every single performance, so it’s important to select for consistency. But when filming a movie, the actress can fail six times if that means she produces one really amazing performance. Thus, a movie director can be more adventurous in deciding who to cast, as well as encourage her to take risks with her performance.
“Talent with a creative spark…is where the bureaucratic approach is most deadly.” – Tyler Cowen, Talent: How to Identify Energizers, Creatives, and Winners Around the World At bimodal-distribution companies, only a handful of linchpins are needed; everyone else at the company plays a supporting role. View Highlight 2024-03-30
Linchpins are more likely than A-players to produce work of public benefit, such as inventing a new technology or design, which can muddle their market value to employers. By contrast, an A-player’s value is usually confined to their employer – for example, managing teams or projects, or generating sales – which makes the return on investment clear.
companies don’t fight to hire prolific open source developers – unless having their expertise in-house gives the company a competitive advantage – because an open source developer’s output is primarily a public good: they will produce that same value regardless of whom they work for.
Right hands don’t necessarily have senior titles, nor is their true impact and favored position always visible to outsiders. Unlike A-players, they don’t tend to follow a typical corporate leadership path – they’re more likely to start their own companies afterwards, versus becoming an executive at another company
For example, while Google likely started as a bimodal-distribution company to build its advantage in search, it appears to have become more of a Pareto-distribution company as the organization matured
OpenAI’s heavy mission focus and its unusual governance and funding structure can be partly explained by its need to attract “linchpin” AI researchers
