Should Startups Ever Hire “Straight A” Students?

A few months back, I was speaking with a colleague who, in turn, was recounting a conversation he’d had with an internship recruiter from a global finance company. I think it was Goldman Sachs, but my memory is a bit hazy. The gist of what the recruiter had told him was this:

We get so many applicants every year for our internship program that we automatically throw out anyone who doesn’t have a 4.0 GPA.

Remember, the above statement is a paraphrase of a conversation with someone who was recounting yet-another conversation, so please don’t interpret what I’ve written as a direct quote. Nobody from Goldman Sachs (or any other company), explicitly made the statement to me, and I’m not sharing this information to indict, expose, or otherwise impugn any specific company (if we can even consider “high standards” a reason for speaking poorly about a company).

Instead, I’m more interested in the underlying sentiment of using a high GPA as a filter for hiring interns and new college graduates. It’s a strategy I’ve heard described enough times — from both recruiters and students — to know that many of the world’s biggest companies won’t consider fresh-out-of-colleges applicants if they don’t have high enough GPAs.

That brings us to the most important question for our purposes here: if GPA is a good filtering mechanism for some of the world’s most successful companies, should startups use it, too?

The relationship between GPAs and intelligence

Despite the common perception that a student’s Grade Point Average — GPA — is symbolic of the person’s overall intelligence, it doesn’t take someone with a 4.0 to understand why GPA is a poor indicator of either intelligence or skill. First of all, GPAs mean different things at different schools. For example, some schools are notoriously strict about imposing grading “curves,” while other schools are notorious for their grade inflation.

In addition, even within the same school, GPAs are significantly impacted by the classes students choose to take. For example, some types of classes impose more subjective grading systems (e.g. humanities courses), while other types of classes rely on more objective measures (e.g. math classes). As a result, it might be harder to get an A in a philosophy seminar than a calculus class because a certain epistemology professor believes, “nobody’s work is ever perfect,” but it’s also less likely the student will get a C.

Since I’m surely not revealing any sort of big secret about the unreliability of GPAs as a measure of intelligence, I find myself needing to ask the following question: Why do companies use college GPAs as a way of judging applicants? I refuse to believe the hiring experts at companies like Goldman and Google and Facebook would see high GPAs and automatically think: “This applicant is brilliant!” Something else must be happening.

Why large companies care about GPAs

Every year, the largest companies in the world get an obscene number of applicants. I’m not a recruiter for any of those companies, so I don’t have exact numbers, but I know they have to at least be, on average, in the tens of thousands. For example, a recent CNN article describing the highly competitive Google internship program placed the number of 2018 applicants at 125,000 for roughly 1,500 spots.

Eek! I’m pretty sure if I applied for one of those positions right now, 15+ years into my career, I’d still struggle to be a competitive applicant.

Regardless, when we consider the application review process from the perspective of a company sorting thousands of applicants, I can appreciate why they might decide to apply strict initial filtering criteria. They need to thin the candidate pool and make it a manageable size. From that perspective, one of the most powerful filters they have is an applicant’s grade point average.

Consider GPA from the perspective of large companies. Even though GPAs across different students and different schools don’t reveal much about a potential job candidate as it relates to overall knowledge and/or intelligence, it does reveal plenty about how that applicant operates inside a large organization with lots of rules because that’s exactly what a university is. Universities are well-established, hierarchical systems with clearly defined expectations and reward mechanisms.

Students who excel at traditional schools are often thought of as the “smartest” students, but that’s not necessarily true. Being successful in school only represents certain types of intelligence. Specifically, I’d argue students who succeed in school — particularly at the collegiate level — are especially good at understanding the rules of an established system like “college” and then adhering to those rules while doing their work. In other words, they’re students who are able to understand what rules/systems they need to adhere to in order to succeed within the system of “school,” and then they’re motivated to follow those rules because they perceive the outcome as being desirable (e.g. getting good grades, getting a “good” job, getting into med school, etcetera).

In lots of ways, large companies are similar to colleges and universities. They’re composed of well-established systems with clear hierarchies and expectations about what rules (written and unwritten) their employees need to adhere to in order to progress in the company and earn desirable rewards (e.g. bonuses, raises, promotions, and so on).

I could expand on that analogy for a while. There are tons of structural similarities between school and big corporations, but I think the similarities are reasonably obvious to anyone who’s been in both places, so I suspect you can imagine them without too much help from me.

Instead of wasting your time comparing corporations and schools, let’s jump to what happens if/when you agree with me. Once you agree that school and large corporations are similar types of systems that reward similar kinds of behaviors, you’ll also appreciate why GPA is a great hiring filter for big companies. Specifically, people with high GPAs are people who’ve proven they’re good at understanding the rules of the systems in which they’re operating and they’ve subsequently proven a desire to operate within those rules. After all, that’s what made them so successful in school.

From the perspective of big companies with lots of rules and systems, finding employees who are able to quickly learn the rules of a system and are willing to operate within those rules is great. Those are exactly the kinds of people they need to hire. But what about young, small companies that don’t have many rules and systems?

The messiness of startups

If you’re ever lucky enough to take a job at a large corporation (or unlucky enough, depending on your opinion of working at large corporations), the company will immediately begin indoctrinating you into its system. You’ll receive an employee handbook with the company’s rules and regulations beautifully printed and bound like it belongs on your bookshelf. You’ll attend orientation with lots of other new employees starting at the same time. Everyone will be wearing a nicely printed name badge so you can get to know each other. Your orientation will be expensively catered, and it could last anywhere from a few days to a few weeks. During that time, you’ll learn about everything from the history of the company, to the employee leave policy, to the details of your 401K plan. In other words, your entry into the company will be a highly choreographed dance designed to turn you into an employee that understands the “way things are done” as quickly as possible.

In contrast, when you begin working at a startup, none of those systems are in place. If you get an employee handbook, it’ll be a cobbled-together PDF pulled straight from a poorly formatted Google doc. You may or may not spend an hour filling out paperwork with an overworked HR “director” in a small, cramped office that used to be a storage closet. And your “orientation” will consist of a bunch of individual meetings with other employees as they quickly explain what they do and how you might be able to help them. If you’re lucky, you’ll get a “welcome lunch” consisting of pizza or whatever local sandwich shop is nearby. Then you’ll be left at your desk with a laptop, a password to the WiFi on a sticky note, and maybe a keycard to the office (if they have enough extras). From there, you’ll be expected to find your own way of delivering value.

In that kind of startup world, people who got straight-As in college often struggle because they’re used to figuring out the rigidly defined rules of their new system and following them. In contrast, as members of a startup team, those rules don’t exist. If anything, it’s part of the new employee’s job to help build the rigid system, and that’s not usually a skill straight-A students are equipped with. Or, if they are, it’s not usually something they’re interested in doing. They’d rather operate inside an already-constructed system than build their own.

To be clear, I’m not arguing that working at big corporations is worse or better than working at startups. Nor am I arguing that people who prefer to work at big corporations are worse or better than the people who prefer working at startups. I’m not even arguing that people who get straight-As can’t successfully work at startups.

Instead, I’m trying to understand what having a 4.0 GPA means. I don’t think it represents intelligence. Nor do I think people with 4.0 GPAs are destined to always work for large corporations. However, I do think getting straight-As in school reveals certain characteristics about someone’s capabilities and preferences as they transition into the working world. For better and for worse, the capabilities represented by getting straight-As aren’t as valuable for startups as they are for large, established corporations.

Does that mean startups should never hire straight-A students. Well… never say “never.” Instead, I’ll argue this:

Startups should never hire people just because they have 4.0 GPAs.

Other indicators should suggest the potential employee will be successful in a startup environment in spired of the fact that they’ve gotten straight-As.

Don't miss another article! Subscribe to my newsletter here!

Aaron Dinin teaches entrepreneurship at Duke University. A version of this article originally appeared on Medium, where he frequently posts about startups, sales, and marketing. For more from Aaron, you can also follow him on Twitter or subscribe to his awesome podcast, Web Masters.