I’ve often been asked, “Why did you found ZestCash in Los Angeles?” This is polite code for “You’re an idiot. There are no good software engineers outside of Silicon Valley. You can’t build a technology company anywhere else.”
Robert Solow won a Nobel Prize in Economics for arguing that labor is the source of comparative advantage. If it is possible to address Silicon Valley’s comparative advantage in engineers, then technology companies must acquire talent equivalent to that in Silicon Valley to succeed.
If you want to build a great startup outside Silicon Valley, finding great talent is all that matters. There are really only three ways to get talent: You can grow it from scratch, you can train it or you can poach it. Your ability to do any of these three — especially the third — is driven largely by your company’s culture.
Grow your own talent
Growing engineering talent from scratch means hiring people straight out of college. In our case, we’ve hired new grads fresh out of CalTech, Cal and Harvard, among others. You get brilliance and high energy, but you still have to build basic work skills. You’ll need to teach recent hires how to communicate with a team in a work environment, and assume they will have limited productivity for three to six months. It’s a tax, but after you pay it, you get top-notch talent trained exactly how you want.
Alternatively, you can retrain software engineers from other domains. Although they don’t know your language, environment, or process, as long as they’re crazy smart, you can teach them all that.
We do this by creating “starter projects,” which are complete projects, each lasting about four weeks, that require use of the entire stack: technology, infrastructure and process. The goal of these projects is for experienced engineers to get their hands dirty with each element that they will use on your products. After a month, the engineers know enough about your technology to join one of your core projects and, on the way, have built something useful.
Beg, borrow — steal!
Another way to get technical talent outside of Silicon Valley is to poach it from larger companies that are in Silicon Valley. Startups have a real advantage here: Big companies tend to get sclerotic. It becomes harder and harder to launch products, there are more politics and hierarchy, and each line of code makes less of a difference.
Thus, the startup advantage: We don’t have enough people to have politics, and everyone has to contribute or the work doesn’t get done. In my experience, great engineers want to know the work they do every day and are often willing to leave their “mother ship” for such an opportunity.
There are, however, two big issues with the poach approach. First, you will have to relocate the engineers. This probably scares some startups that think it is expensive, difficult and time-consuming. We’ve found it’s no more expensive to relocate a great engineer than to pay a recruiter fee to find one, so the cash costs are a wash.
The second — and far more important — issue is that you have to build a culture that is appealing to engineers who might want to leave a big, established (safe) company in the Silicon Valley to come work for you in, say, Hollywood.
Build a culture where engineers matter
Part of what makes the Valley work is that most of the companies are flat, non-hierarchical and communicate openly. Everyone can talk about everything. Although the resulting chattiness is sometimes annoying, engineers want to feel they are involved in the company as a whole, not simply whatever task they are coding.
To entice great engineers to leave their sinecure to come to your risky startup, you have to double down on culture. Engineers have to feel the future of the company depends on them. If they have a bad day, something bad will happen — a feature won’t launch, a sale won’t happen — and, in contrast, when they do well, the company is materially better off.
Your strong, distinctive identity is your corporate culture. Building a culture that engineers want to be a part of will allow you to grow, retrain, or poach the best engineers out there.
Douglas Merrill (@DouglasMerrill) is the CEO and founder of ZestCash, a financial services technology startup committed to serving the needs of the underbanked. He is the former CIO and Vice President of Engineering at Google and author of “Getting Organized in the Google Era: How to Get Stuff Out of Your Head, Find It When You Need It, and Get It Done Right.”
[Image: NASA Goddard Photo and Video via Flickr]