Startup Exercise: What can't be solved with money? (2011)

By the time you realize someone is a fraud you've disrupted your progress for months compared to where you should have been, and firing people is not free in terms of culture and the psychological health of your other employees and their families. If you have to fire someone because they don't fit the profile you actually want you have severely fucked up. That's IF you can tell. Most people can't tell who is talented and who is not even after hiring them.

For every highly skilled / talented person there are 500 that think they are and have a resume that is consistent with that, but they are still trash.

If you are hiring/firing this much of the time your company culture will become a stalinist purge mentality where people have no trust or loyalty in each other and act primarily out of survival. That means they will withhold help from each other and even sabotage things to ensure they aren't the one the bear catches that month. Maybe you have only ever worked at terrible giant tech companies or come from a culture where this is normal, but it's literally death.

The culture you really really want to have is a group of genius misfits on a mission from god, very hard to join but steadfastly loyal to each other, and willing to pour their entire life into achieving their mission.

I think this is a theoretical exercise for you, you should revisit this after you have some experience.

Those things are possible (in a limited way), but a big bucket of money doesn't make you better at it, which is the context here.

Checking with another expert is just the same problem with extra steps. It's very common that someone has a stunning reputation and after a few minutes of chatting with them you realize they are a fraud (if you have expertise in the thing you are talking about). So the CEO's 'technical friend' is as likely to be a fraud as not, if not more likely as frauds are very likely to cluster around people who are making decisions that could lead to checks being written, and CEO's are much more likely to be sales-focused extroverts and we are all biased towards trusting people like ourselves (and an extroverted salesperson has a ton of overlap in terms list of characteristics with a con man).

I've been in this industry a long time, I have seen plenty of 'technical leaders' who were complete and total charlatans, up to the point where their resume was very obviously fabricated (companies that never existed, job roles that never existed, the websites for the companies on their resume being fake and obviously created by them). It didn't seem to harm their career much if at all, and their bosses never once caught them out for their incompetence, even after years.