Wednesday, December 5, 2012

Shooting Technology Across the Bow

This is a warning shot.

There appear to be many cultural behaviors creeping into Technology that surprisingly look like common practices from Finance during its days as master of the main deck. Here are a few.

Free Agency
You can clearly see this when major players from the hottest firms jump ship to the latest hottest firms, particularly with the more visible companies like Google and Facebook. The discerning question is: what is the motivation? Are these sharp shooters compelled to move because they want to face the next challenge and reap the equity returns or are they being lured because of a good deal on trading up responsibility and a bigger paycheck? If it is more of the latter, beware.

Opaque Screening
Here are the symptoms: Requiring x years experience for a position whose category only came into existence less than x ago. The catch-22 demand of industry specific expertise, when effectively the whole team is learning on the job. Downgrading front door applicants because they did not come through the side door (connections). The lack of clarity or communication on final decisions after interviews. These are all the little details of elitism - a good way to build yourself at odds with the general public.

Mishandled Talent
This is in partial a root cause of the first observation, but deserves to be separated. There is massive demand for engineering talent in the Bay Area, and fierce competition for it. As a result, the perqs and pay have gotten misaligned with contribution - but the ability to code is only worthwhile in the context of other talent. This atmosphere creates a culture where every other skill is devalued or grossly undervalued in the startup context. See: treatment of engineers in east coast finance. As a result you end up with the free agency problem and a talent-inflation problem.

Hollywood Interest
Granted this is a bit more on the frivolous side, but every time finance seemed to get a little heady, Hollywood got a little ahead of itself with a TV show based on the industry. Remember: The $treet, Wall Street Warriors or Traders? Of course not. They got canceled. Bravo now has a reality television show based on the startup life called Silicon Valley. That will get canceled too, but not before reputations and public impressions get formed. You get the point.

How will Silicon Valley hold up against these early encroachments on its collaborative and innovation culture? Let us hope it does much better than Wall Street did over the last three decades.

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