Hire the Engineers without Pedigrees

Stanford_Graduation

One of the biggest challenges of a technology startup is finding star engineers. There are plenty of them in the Valley, but we have to compete with companies like Google and Apple who dangle six-figure starting salaries in front of their prospects. Not to mention other employee perks and benefits.

Silicon Valley is a dog-and-pony show where pedigrees command a premium. In the last 3 years, 80% of the startups funded by the top five VC firms had team members from one of either Stanford, Harvard, or MIT.

But apart from investors, who cares?

McKinsey consultants began advocating the War for Talent in the late 90s dotcom boom. With no real metric for measuring talent, managers deferred to the US News rankings of the applicants’ alma maters. This standard has persisted into the present.

McKinsey also advised Enron to recruit the best and brightest. Remember Enron?

Emboldened by the mantra of A players, Enron created an undisciplined, narcissistic company that believed it was too talented to fail.

Enron succumbed to a culture of dishonesty because no A-player was willing to admit failure in a company that was too talented to fail.

Startup employees need to be ready to fail. And they need to be honest when something fails.

The highest-pedigree employees are particularly averse to failure. They probably haven’t had much practice at it. Nobody goes to Stanford for a PhD in Computer Science because they want to embrace risk.

Star engineers don’t even necessarily make the best employees. Intel hired me because I’m a stellar circuit designer, but I spent most of my workdays watching cartoons or hiding in the bathroom. No amount of pedigree can make up for a lack of motivation.

In a startup, anything less than committed passion is death. Will that Stanford PhD you hired remain loyal in your startup’s darkest hour – even with Google recruiters knocking on his door?

Last week, Seth Godin made a case for having a war for attitude, not talent. Motivation and honesty trump skills and talent any day. Cal Newport says that the ability to focus will be the superpower of the 21st century. These three things are all harder to find than an Ivy-League diploma.

You don’t need a degree from Harvard, Stanford, or MIT to be able to focus and yield a positive attitude.

There’s a good argument against purchasing pedigree dogs – they come from a limited gene pool and are often inbred. The same applies to hiring pedigree engineers – get all your employees from the same three universities and your company becomes inbred, narcissistic, and diseased.

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The Marginal Utility of Time

I had dinner with a very dear friend last night. He had recently received a $264,000 job offer from a tech company up the street, but turned it down after receiving an even better offer elsewhere.

OH MY GOD, I said. Is that what people are making in the Bay Area these days??

You could easily land something similar, he said. I could recommend you for the position I turned down. You just have to promise not to quit your job again after four months. That would make me look bad.

Damn. I had to think about it pretty hard. When I was at Intel, I was working over 50 hours a week for less than half that salary. Adjust for taxes, benefits, and vacation time, and I’d estimate that I was pocketing at most $45 for each hour of work.

Chump change. The decision to quit was easy, because I derive more than $45 worth of enjoyment value for each hour that I spend to myself.

But just how much more? Now that I’m unemployed, it’s especially hard to compare the marginal utility of my time against the value of previous hours.

The job comes with free food, he said. (He knows me so well.)

If the job didn’t suck, they wouldn’t have to pay someone $264,000 a year to do it.

No, thank you, I said. My time is still worth more than that. I think.

Besides, golden handcuffs are very difficult to shed.
Golden handcuffs