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The speaker discusses the three levels of employee talent and skill development in the context of entrepreneurship. The first level is understanding what to do, where individuals focus on learning and executing tasks as individual contributors. The second level is understanding how to do it, where individuals transition into teaching others and becoming managers. The third level is understanding who can do it, where individuals become leaders and focus on systematizing processes and building a machine that builds the machine. The speaker emphasizes the importance of recognizing these levels in oneself and others to determine the next steps for growth and development.