As Tech Giants Scramble For Talent, It’s Buy Or Die

Posted: May 10, 2013 in Funding & Exits, Opinion, Technology

The writing’s on the wall. Mobile is the future, and it
requires different skill than the web. Entrepreneurship
is more fetishized than ever, making standard hiring
tough. The result is days like today where Yahoo,
Twitter, Salesforce, and Box all bought startups, and
Facebook and Microsoft were reported to be in talks for major acquisitions. Big is a scary thing to be right
now. The tech giant story goes something like this. You
start as a visionary founder with a crazy dream. You
recruit your friends to give it a shot. Suddenly there’s
a breakthrough or some traction, and everyone wants
to work for you. You’re small and nimble. Employees
are trusted to make quick decisions, and the whole company can pivot on a dime to pursue a new
opportunity. But to beat competitors to the punch with the muscle
to accomplish your dreams, you have to get bigger.
Bureaucracy sets in and decisions take longer. You
have too much momentum to shift directions.
Allocating resources to chase a hunch gets tougher.
You’re no longer the startup; you’re the giant. Despite your perks and hefty paychecks, no one wants to
work for the giant. They want an adventure. The
adventure you already had. Then some punk kids come out of nowhere with the
company you would have founded if you started five
years later. You could try to build it now, but that’s
too slow and they’re already winning. Or you could try
to partner with them or someone else, but that’s
messy and unreliable. You end up with a choice: They either eat your lunch or you buy their lunch.
They disrupt you, or you acquire them. So you buy them. Then you either keep their product
running and reap the benefits while knowing they’re
not a real danger to you anymore like Facebook did
with Instagram. Or you shut down their product, fold
their team in, and have them keep your core products
relevant and evolving, like Box did today buying Adobe Acrobat-killer Crocodoc. This same story has played out over and over again
throughout the lifespan of Silicon Valley. But there are
new factors putting even more pressure on the big
guys to swallow up the little guys. Mobile Design On the web, you threw everything at the wall, and
anything that stuck even a little got left in the product.
With plenty of screen real estate and instant rollouts
of changes, you could afford to do too much. But
mobile is minimalist. People want one app to nail one
use case. It has to work in bite-size sessions. Bloat is painfully apparent. You need not just mobile designers, or even mobile-
first designers. You need mobile-best designers. The
advent of the web happened slowly, and several
generations of startups were built on it. A star product
lead from a few years ago could work magic again.
But mobile came on fast. Not necessarily in the advances in technology, but in adoption. Even just a
year ago, mobile was thought of as an option. Now
some giants like Facebook have more users on
mobile than the web. You either “get” mobile, or you’re
doomed. If you can’t build it, and you can’t hire it,
you’re pretty much forced to buy it. Yahoo didn’t buy GoPollGo to concentrate on polling. It did it because
the startup was mobile in its heart. Sexed-Up Startups Blame it on the finance sector’s collapse, the seed
funding explosion, Y Combinator, Instagram, and tech
blogs like us. Chalk it up to an entitled generation
where everyone wants to be their own boss, not a
loyal soldier. Or say it’s mobile and the cloud’s fault
for making it so easy to get a business to market. But whatever the cause, great tech talent is fragmenting.
People are willing to gamble on the chance of having
a huge impact on the world and getting rich at the
same time. The people you want to hire aren’t
applying and interviewing, they’re running their own
companies. Meanwhile for VCs, everyone wants to be the toast of
the town by being the seed investor in a hot startup.
That means anyone with a good idea, or some
combination of an okay idea and a good track record/
connections/academic pedigree can raise money and
take a swing. And why not? Best-case scenario: You change the world, grow into one of the new power-
players of Silicon Valley, and maybe sell or IPO for a
boat-load of money. Worst-case scenario: You fail
and lose (mostly) someone else’s money. You end up
with a fundamental learning experience that will build
character, maybe make you a better person, and quiet your professional wanderlust forever. Plus now, thanks to the old giants’ scrambling to stay
young, there’s a mediocre-case scenario: You sell
while you’re still small, take a cushy job at a big
company, work on something making a difference,
and learn skills while you bide your time for your “next
adventure.” A Comfy Bed To Dream In You could argue that all these acquisitions and acqui-
hires are kneecapping innovation. That they’re
preventing potential giants from ever hitting their
stride. But few people are fighting for the abstract
cause of “Innnovation” with a capital I. Thanks to disruption insurance through acquisitions, it
could be hard to truly kill Yahoo — a company many
thought was marked for death years ago. Mark
Zuckerberg disrupted Myspace in a blink of the
Internet’s eye. But if he keeps buying talented teams
and phenonema like Instagram rather than letting them mature into real threats, it could take a lot
longer to displace Facebook. Giants want to keep their dreams alive. Founders
want to chase them. Acquisitions make both less
likely to wake up to a nightmare.

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