When Facebook bought Instagram for $1 billion earlier this month, casual observers scratched their heads. “A billion dollars for a company with a photo-sharing app and zero revenue? WTF?”
But the acquisition was not all about the app. Important as the app is to Facebook’s mobile strategy, Facebook is also paying for the people behind Instagram and the skills they bring to Team Zuckerberg. And hiring talent by acquistion is becoming an increasingly popular practice in Silicon Valley and elsewhere.
Talent is the scarcest commodity in the industry today, and the big players are willing to pay large sums to get elite people on board. (Facebook’s acquisition of Tagtile a week after the Instagram deal, for example, was all about the talent.)
Get “Aq-hired”
So how can you leave behind the all-night programming and the Cup O’ Noodles diet and get acqhired? Chances are, you can’t.
Be a “Manquisition”
“Should you start a company with a hope of getting a job at Facebook? That’s a pretty stupid idea because it’s so unpredictable,” says Paul Kedrosky, editor of business blog Infectious Greed and a senior fellow at the Kauffman Foundation, where he focuses on entrepreneurship, innovation and the future of risk capital. “People see these manquisitions and they think, ‘Hey, why can’t that be me?’ So they launch their own startup and hope for a similar outcome. But you’ll never convince me that’s a smart thing to do.”
Become an Engineer
If your goal is less stress and a good paycheck, Kedrosky recommends going to work as an engineer. With smart programmers in short supply, you can sit back in your Steelcase chair and wait for the bidding war to commence.
But he acknowledges that the “send” button has been clicked and the top young engineers have gotten the email. They’re well aware of the trend toward lucrative talent acquisitions (Facebook alone has made 20 or so in the past few years) and they want in. So they start their own companies, and the only way for a tech giant to hire them is to pay big. (The Instagram founders initially asked Facebook for $2 billion!)
Do the Math
“You see this new calculus among startups,” Kedrosky says. “They’re thinking, ‘Should I take that $80,000 salary now or start my own company with a 10% likelihood of a $10 million payout split between me and my co-founder? OK… I should do a startup.’”
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