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20 Jul

Skin is the game.

In a job interview, one of the most tricky questions to respond to is —"Why do you want this job?"or"Why do you want to work in this company?"

Often, we are taught to offer a neatly packaged response comprising equal parts passion and objectivity. If it works in your favour or against depends on how truthful you seem while responding.The response usually is some combination of :

"I want to work this job because —

it aligns with what I am interested in getting better at;

it improves upon my prior learning;

it will be challenging and push me out of my comfort zone;

it will stimulate learning."
I have also come across memes around responding to this question with abject dispassion.Something along the lines of —

"because I need the money;

because you were hiring;

because I’m unemployed..."

I find those funny, and it would be interesting if a candidate used one of them in an interview.

But on a serious note, a response to this question helps gauge the person’s intent. The judgment could be inaccurate, but an expert hiring manager can tell the difference.

And the reason why it is necessary to gauge intent is to understand the prospect's motivations and incentives to show up for the job.

In a formal environment, we can’t tell a passionate person from a hardworking one on day zero regardless of all the vetting and detailing on CVs.

And in the long run, passion matters a tad more than hard work.At least those are the people most founders chase to have on their team.You must’ve heard of many startup founders on Linkedin or Twitter harping on about having "skin in the game."

Skin in the game basically refers to having a set of factors that make it difficult for an individual to slack off or defect from the contract because, if they do, they too stand to lose something in the bargain.

Working with skin in the game invokes a fear of losing something you value. To a certain extent, that fear pushes you to uphold the contract.

For instance, consider the times when you’ve attempted to negotiate an offer. We’re aware that negotiations are best when both parties walk away equally unhappy. You fear not getting the same offer again, and the other party fears not getting a new customer, or candidate again.

So, you’re forced to cooperate for different reasons.In fact, you can think of incentive alignment as the set of reasons that would make all the parties in a contract cooperate. The more of these reasons, the better the incentive alignment. Negotiations are one example where the value of incentive alignment plays out and is starkly evident. But there are many others all around us.

In the times of kings, the cook would have to first taste the food before serving it to the king to prove it safe for consumption. The cook had a fear of losing his job, the king was fearful of all threats to his life. The cook and the king had what I call skin in the game.

Arguably, you could say that when the penalty for defecting was death, things were much simpler; skin in the game was much starker.

Today, we resort to complex contracts with several clauses to guarantee cooperation between two parties.

Enforced contracts subvert the need for trust. 

But to me, formalizing skin in the game by making contracts of guarantee count as a proxy for someone’s intent misses the larger point.

Let me simplify.

If A has skin in the game to do a job well, a contract need not be enforced with details on what incentives make A do the job well or what freedoms will be taken away in case A falters.

This makes having skin in the game no different than a carrot-and-stick policy.

Think of your job offer letter. It is a contract summarising what you stand to gain and lose as part of working the job. It gives you reasons to do the job well. These reasons are often external to you. 10 days of paid leave, 2 sick days per month, emergency leaves, and health insurance are some of the external reasons, or as we call them —"perks" — for you to do your job well.

It creates a transactional frame for doing the job. We think of work as a give-and-take. And while thinking transactionally helps move things along it could make us inconsequential to our work.

But if we get tied down by too many external reasons to do something, it only breeds a sense of indifference down the line. An indifference that one has to constantly fight off, simply because one feels the fear-driven need to uphold the contract.

For instance, the rise of a movement like quiet-quitting validates what I said about skin in the game. The loss of meaning at the workplace results in the act of doing the bare minimum.

A movement like quiet-quitting might be a temporary reaction and not a cause for worry, but it highlights how most of us are driven to do jobs by reasons outside of us.

You might argue that there is nothing wrong with external motivation or doing the bare minimum. But that would be missing the point.

The point is: skin in the game and externally enforced motivation might serve as a crutch, but ultimately aren't the right spirit to filter people with. 

There is something better.

For now, I’m calling it “Skin is the game.”

Let me share a few examples of where I’ve noticed this spirit —

In Product

'Product', these days, is an abused term.

But when Substack was pitching itself as a product to new customers it was pitching the idea that Substack was a 'paid-publishing platform'. But that pitch ran into resistance from writers, who Substack wished to onboard. You see, as writers, they were already publishing elsewhere.

What worked in their favour was that the first few employees on the core team were writers themselves. These writers naturally understood what writers publishing on other platforms struggled with. They knew what other writers could benefit from. This depth of understanding ultimately helped Substack crack its positioning as a 'newsletter platform'.

Substack worked because it was a product for writers, made by writers.

This essential value that the core team of writers delivered at Substack is what I refer to as “skin is the game.”

When your skin is the game, you naturally do a better job. You understand the domain better. And you do not need external reasons to finish a task or keep at it, do better at it. There aren’t external incentives or reasons to pressurise you into performing.

You are in the game because, in some sense, you are the game.

In Hiring

If you hang around Twitter or LinkedIn often, I’m sure you’ve heard of CRED’s hiring filters. The one where they prefer candidates who are proficient in a sport or craft that is unrelated to the core of their work is my favourite.

I think such a filter is an in-CRED-ible way to gauge how intentional or committed the candidate will be once they’re hired. Proficiency in any task arises from a place of grit, practice, joy, and an ability to do things without seeing them as mere means to ends.

I am willing to bet that any task you do because you think it looks good on a CV is easily distinguishable from when you don’t. When you do it for a CV, you incentivize yourself to practise the task in a slightly mechanical way. Those incentives might not last and could affect how you work.

But when your craft isn't something you only practice from 9-5 but extends to the zeitgeist of your life as a whole, the quality of your work is substantially different.

Now that I think more about this, even Ultrahuman in their job descriptions explicitly mentions that a preference will be given to fitness enthusiasts.

From a hiring perspective, it is both tricky and rewarding to filter for those who operate from a place where their skin is the game. Zeroing in on a small pool of people who enjoy the context of their work more than the perks of it is rare to find and essentially non-scalable.But optimizing a hiring process to look for this “skin is the game” trait could be exceptionally rewarding in the long run.

Those few employees will keep at it despite of ambiguity surrounding a business.

Because their skin is the game.

In Influencer Marketing

This one is easy to spot. You, as a consumer of content on social media, can easily spot an influencer who is forcing a brand integration from another — who does the same brand integration more naturally, with taste.

What's usually different between the two is that the former doesn't relate to the product they're promoting on a core level (and people can make out quite easily) while the latter does, because they're deeply attuned with the domain and the product they're promoting; their skin is the game.

Consequently, whatever this influencer says about the product is also 10x more convincing to the audience. It is honest and it involves detail. And most importantly, it doesn't feel like an ad.

But a marketeer might get sold by the reach, likes, or engagement numbers an influencer provides. They might feel compelled to cooperate so as to not lose on the number of likes and so forth. But only once commissioned would they find out that the influencer hasn’t before promoted the category of products the brand belongs to.

This usually means a failed integration for the brand and lost money. The influencer-product fit just isn't natural, and obviously so.

The marketeer in this example operates from a skin-in-the-game mindset. They are driven enough to push a successful campaign out based on a set of deliverables. One post, two stories, three tweets, a casual mention at some event...

But all of this ends up missing a more crucial aspect of such a partnership — brand alignment.

Had they operated from a skin-is-the-game spirit, they’d have spent more time crafting a more impactful campaign with an influencer who might have lesser reach but are better suited to the brand and will pitch it with more honesty and integrity.

Generally speaking, skin in the game works, because it scales.

Enabling a large group of people by incentivizing them to do something is the basis of how our society has evolved. Give-and-take is what we do all the time in all our relationships, formal and otherwise. There is nothing inherently wrong with transactional exchanges. They make us functional.

When I have to hire at scale, it might be easier to use skin in the game as a filter because it will help shortlist those who work best within incentives and structures.

But while creating something consequential, riddled with ambiguity I am better off hiring those who operate with a skin-is-the-game mindset. Because most likely they play the game for fun without needing too many external reasons or reinforcers.

If you’ve observed this at work before, I’d love to hear from you.

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