Personal investor and Hunch CEO Chris Dixon posted an interesting article yesterday titled, Every time an engineer joins Google, a startup dies. The gist of the article is that Dixon believes venture capitalists should be doing more to keep the top entrepreneurial whiz kids from seeking jobs at big companies like Google or Goldman Sachs because larger companies aren’t driving innovation as much as startups do. Innovation, he says, is the key to improving low VC returns over the last several years, not scaling back investments as others have suggested.
“As much as we like to think of our culture as being entrepreneurial, the reality is 99% of our top talent doesn’t seriously contemplate starting companies,” writes Dixon. “Nothing is more motivating and inspiring than the sense of ownership and self-direction only a startup can provide.”
Dixon’s post has attracted well over 100 comments, spurring a fascinating discussion of the current state of the VC industry. The theme amongst the comments seems to be the question of whether or not the VCs are doing enough to make sure top talent doesn’t slip away to large companies with higher salaries and more benefits. Have VCs been caught sitting on their hands?Some suggest that VCs become more like Y Combinator and TechStars, more actively recruiting talent instead of playing the waiting game.
“It’s absurd that [VCs] are just waiting around for projects to climb their way up the ‘get your project pulled together enough so it’s investable’ cliff and then cherry picking,” says one commenter.
Another commenter suggests the VCs could send a message by funding the top talent individually as ‘post-grads-in-residence’, while some say they should increase their presence on college campuses to compete with the larger companies which have connections through career services departments. Others blame the innovation slump on culture, saying that kids grow up being told they working for larger companies is their one-way ticket to success.
“I’ve seen many cases where a young person is deciding between say Google and a startup and basically their parents say they are crazy to go with a company they’ve never heard of,” writes Dixon in the comments.
Is a cultural shift in order to teach students that entrepreneurship is as smart (if not smarter, as some would argue) a path as joining the ranks of big companies? This is already happening to a certain level as more colleges offer entrepreneurial degrees, but certainly an increased VC presence on college campuses (not to mention high-school campuses) couldn’t hurt to spur those efforts either. Obviously changes can’t occur overnight, but as parents begin teaching their children that wanting to be the next Evan Williams is as good an aspiration as wanting to work for Google, more graduates will leave college ready to embrace the startup community.
Be sure to give Dixon’s article and its comments a good read, as both are filled with intelligent and thoughtful insights. Also, be sure to let us know your thoughts here in the comments below.
