The Four Types of Jobs

"In the limit, the only jobs are creator or regulator." — Naval Ravikant

One of the benefits of doing Transformations with McKinsey & Co. for almost 10 years was that I saw a lot of companies, some good and some bad. Over time, and with inspiration from Naval Ravikant, I developed the view that there are four types of jobs. Effective organizations should manage the relative size of each:

  1. Building
  2. Sales
  3. Regulator
  4. High-IQ, great logo

Building is the first category and the easiest to identify. Analysts and Associates at consulting firms and investment banks are building. Engineers are building. People working in the warehouse or on the factory floor are generally building.

If you ever wonder why governments struggle to build anything on time or on budget, it's because they don't have many builders and instead have lots of regulators.

Sales. As Peter Thiel notes in Zero to One, many jobs are actually sales in disguise. Leaders at law firms, consulting firms, and PE funds are in the sales business. Investment bankers are in the business of selling companies to (often) professional managers with a principal/agent conflict. Effective comms and marketing individuals are actually in the business of sales.

Regulators. While growth is the lifeblood of startups, regulators are an essential function inside all organizations, large and small. The issue is that, especially in companies where the founder no longer runs the organization, regulator roles tend to proliferate over time.

When hiring, many leaders misidentify that they've hired someone in category 1 or 2. Instead, they have hired someone in category 3, with the result that the output of the team doesn't increase as it should, given the additional resources.

Essential regulator roles are in Legal, Finance, and HR — be mindful of how many people your organization has in each. I can speak from personal experience that giving someone a "Privacy" role seems to create privacy issues when people in an organization want to get something done.

High-IQ, great logo. The fourth category is one where I've seen many ex-colleagues end up, some falling for a "prestige trap." They take one of these roles at a great logo, not realizing they've capped their earning power and influence. The roles with upside at those great logos are in category 1 or category 2. Roles in this fourth category include "Chief of Staff," "Strategy and Operations," and, more recently, "GTM." People who take one of these roles and want upside, need to ensure there's alignment that their next role will be in category 1 or 2.

When you see a company hiring for lots of roles in this fourth category, one of two things is true: they're a monopoly in disguise — including one tech company that has had the greatest business model ever — or the company is due for a regression to the mean, like Peloton pre-2022. Companies that hire lots of consultants sometimes get a bad rap and see their performance decline. Actually, in the non-monopoly case, that's a symptom, not a cause.

Finally, if you have people in your organization who can do 1 and 2, they are priceless. They may have started at your company in a junior role and grown over time. Use this framework to find them and give them opportunities to succeed.

"Learn to sell. Learn to build. If you can do both, you will be unstoppable." — Naval Ravikant