Talent grabbing war at the GYM

Published on August 2nd, 2005 by Jeff Clavier Search, Strategy

Did you also have this feeling that the “Big 3” (Google, Yahoo and Microsoft – let’s refer to them as the GYM) were not only deploying new features on an accelerated “tit for tat” basis, but they are also on a wide ranging talent grab ? I bet you did.

At BlogHerCon, social media expert danah boyd announced that she was now consulting for Yahoo at the Berkeley Research Center that opened a couple of weeks back, headed by Marc Davis. Two great recruits, amongst the many Yahoo has done recently. At the same event, I gathered that Google had enrolled the services of Prof. Ellen Spertus to work on Orkut.

Every week we hear about a tech figure going to the GYM: Louis Monier (eBay to G), Larry Tessler (Amazon to Y), Gary Flake (Y to M), Kai-Fu Lee (M to G – with a bonus lawsuit), and on and on.
Update: I should have said every day instead of every week – Chad Dickerson, InfoWorld’s CTO has announced yesterday that he was joining Y.

BusinessWeek ran a long piece on the topic, titled: “Revenge of the Nerds – Again”, quoting that Google had hired 230 engineers this year, and counting. The article quotes Joe Kraus, the CEO of JotSpot and noticed CEO blogger, on the difficulty to compete against G in recruiting talent. Greg Linden, Findory’s CEO, mentioned having the same issue, and when I asked him about candidate’s reactions to the “financial upside” argument, he answered:

Frankly, Jeff, it can be a challenge.
As you know, that promise of financial upside comes with considerable risk. Certainty can be appealing to some.
It would help reduce the perceived risk if we offered competitive salary and benefits. That is not possible while we remain self-funded.
Hiring difficulties is one of several pressures causing us to more seriously explore external financing.

So on one front, bootstrapping to product launch an online play requires tens to a few hundred thousand dollars. On the other, it is challenging to find a critical mass of engineering talent who will agree to work for equity-only for a (sometimes non trivial) period of time, when they can go to the GYM and enjoy interesting/challenging environments with most of the perks and resources one can hope for. As Greg said, competitive salaries and benefits don’t mesh well with a bootstrapped approach. Not to mention the common wisdom that startups, even after being funded, need to be frugal in the way they use their capital, and therefore will not offer premiums on hiring conditions, offering an upside on the equity side as the main attraction.

At the end of the day, it is also a personal choice to work in a fast moving, agile, startup in which one’s contribution can have a much higher impact on the company. And there are tons of people in that mindset.

I actually wonder how developers who have fully vested in the GYM look at the reverse situation, i.e they have made some money and now can go back to a startup environment for the fun and the potential upside.

~~Any views from the trenches ?~~

Any feedback from CEOs like Greg as to how they stand up to that relative talent shortage ? Is this only a Silicon Valley/West Coast issue ?

Slashdot: Google and Yahoo Creating Brain Drain

http://mkbergman.com Mike Bergman

I find this post parochial. What is the “trenches”? Silicon Valley only?
A GYM approach suggests that only the hugely successful survive and warrant discussion and attention. The true view from the “trenches” is that most of us pursuing these dreams work and fight like hell every day to generate enough revenue to stay alive. That is the truth; that is the “trenches.”
Navel gazing based on GYM will both give you “stubborn belly fat” and not produce any insights of meaning.
Sorry. I guess I don’t get it. If you want to engage in meaningful discussion about start-ups, getting screwed, getting lucky, and all of the rest, forget the 0.0007% solution. Instead, concentrate on the dozens of current ventures that are struggling (and sometimes surviving) to achieve getting revenues into the black.
http://www.petercooper.co.uk Peter Cooper

I briefly covered this the first day the story ran. I agree with Mike; I find the whole idea parochial. It covers valid ground and makes good points, but the fact is, the market is a whole lot bigger than the A-list bloggers and San Francisco/NYC/Chicago.
http://www.petercooper.co.uk Peter Cooper

Oh, while I’m at it, I just noticed you use RSS Digest on your sidebar. I have now deprecated RSS Digest (though it still works) and have launched FeedDigest.com. The FeedDigest architecture is significantly faster and more reliable, so you might like to jump on board. You can also do cool stuff like mix multiple feeds into a single digest, etc.
http://blog.softtechvc.com Jeff Clavier

The problem is exacerbated in Silicon Valley, and the West Coast since this is where the GYM have their headquarters. And to your point on the Silicon Valley focus, well, this is where I and many of the journalists/bloggers quoted are based.
Thanks for the point to FeedDigest by the way. I have implemented it.
http://www.zoliblog.com/blog/_archives/2005/8/5/1110881.html Zoli’s Blog

Trouble Cooking for the GYM

Jeff Clavier ponders about startups’ hiring difficulties in the face of competition from the “Big 3”: Talent grabbing war at the GYM