How does a startup compete against Google for talent, especially when its employees are extremely well paid?
A few years ago, early PayPal-er Max Levchin, Palantir co-founder Stephen Cohen, and Founders Fund’s Peter Thiel advised startups how to sell themselves and nab big hires.
Startups can’t compete with Google in terms of compensation. And a startup idea alone probably won’t win a recruit over. Instead, a startup has to play to a person’s ambition.
According to Max Levchin:
“Since engineers think any new idea is dumb, they will tend to think that your new idea is dumb. They get paid a lot at Google doing some pretty cool stuff. Why stop indexing the world to go do your dumb thing?
“So the way to compete against the giants is not with money. Google will outbid you. They have oil derrick that spits out $US30bn in search revenue every year. To win, you need to tell a story about cogs. At Google, you’re a cog. Whereas with me, you’re an instrumental piece of this great thing that we’ll build together. Articulate the vision. Don’t even try to pay well. Meet people’s cash flow needs. Pay them so they can cover their rent and go out every once in a while. It’s not about cash. It’s about breaking through the wall of cynicism. It’s about making 1% of this new thing way more exciting than a couple hundred grand and a cubicle at Google.
“We tend to massively underestimate the compounding returns of intelligence. As humans, we need to solve big problems. If you graduate Stanford at 22 and Google recruits you, you’ll work a 9-to-5. It’s probably more like an 11-to-3 in terms of hard work. They will pay well. It’s relaxing. But what they are actually doing is paying you to accept a much lower intellectual growth rate. When you recognise that intelligence is compounding, the cost of that missing long-term compounding is enormous. They’re not giving you the best opportunity of your life. Then a scary thing can happen: You might realise one day that you’ve lost your competitive edge. You won’t be the best anymore. You won’t be able to fall in love with new stuff. Things are cushy where you are. You get complacent and stall. So, run your prospective engineering hires through that narrative. Then show them the alternative: working at your startup.
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