Talent as leverage

Companies become highly leveraged when they hire lots of superstar talent. They can reduce the risk this creates by hedging against their business model. Basically, this involves asking, “In a world where our main product fails, what other products or services are likely to be successful?” and then building those themselves.

Leveraging your company with talent increases your volatility - either you orchestrate a revolution, or you implode.

Reflexivity is at work in talent markets as well. (...) No prospect is more attractive to a 10x engineer than working with other 10x engineers, and no opportunity is more irresistible to an investor than funding a team of 10x engineers.

The leverage you get from hiring really talented people is a huge risk during rough times, because these people have lots of other options and the ambition to pursue them.