The War For Talent

Steve Blank says in his New Rules For The New Internet Bubble:

hiring talent in Silicon Valley is the toughest it has been since the bubble

I'm hearing this from everyone I know in Silicon Valley. And you can see the evidence on the web.

Joshua Schachter posted this on his twitter feed yesterday. This is what a new developer gets when they show up at work at Tasty Labs.

Tasty dev setup

Quora posted this on their website yesterday.

Quora dev setup

I guess the developer setup is a key part of the recruiting war in Silicon Valley. Tasty Labs earns their name with the inclusion of Dr Pepper in the standard dev setup.

But seriously, there is a war for talent, particularly developer talent, going on. Not just in Silicon Valley but also in NYC and many other places around the country.

Companies, small and large, are resorting to all sorts of creative ideas to recruit. Free lunches, free yoga, pushing code day one, cool schwag, options, RSUs, pretty much whatever it takes.

We are watching this anxiously. It is likely to get worse before it gets better. But we are not just sitting around biting our nails. We are working with our portfolio companies to help in lots of ways. And I think it is making a difference. If you want to work in the USV portfolio, here is the USV portfolio jobs page. And if you want to drink Dr Pepper and write code with Joshua Schachter, here is how to do that.

#VC & Technology

Comments (Archived):

  1. RichardF

    Is Tasty Labs a USV company, Fred?I like that post by Steve Blank. I had my copy of 4 Steps delivered from Amazon US a little while back. Ridiculous that I couldn’t order on Kindle but still worth the wait (and cost)

    1. fredwilson

      Yes. And I just realized that its not on our investments page. Thanks formaking me think about that

  2. Paul Sanwald

    Hardware is a really inexpensive way to make us coders happy. My dad is a woodworker and last time I was visiting him he was showing me a new planer he got and how much easier it was for him to prep wood how it made all his projects easier. Hardware, and also development platform, is very similar for engineers.

    1. fredwilson

      That makes perfect sense. What do you think of the tasty labs setup?

      1. Paul Sanwald

        it looks great, I’d certainly be excited to see that on my first day! I have 2 20″ monitors at work but actually prefer working on a single larger monitor, particularly with apple’s aspect ratio.everyone developer I know prefers the mac/osx environment for development, you can do normal unix stuff and also have great looking fonts, etc. I use a trackball mouse but that’s personal preference.the stapler is kind of weird :). can’t make out which o’reilly books those are, am kind of curious. since there are 2 books and with o’reilly you can usually buy 2 get one free, I think they should add: “Mastering Regular Expressions” by Jeffery Friedl. It’s one of those rare technical books that is useful no matter what language/platform you work in.

        1. mike gilfillan

          Regarding mac/osx, what about all the MS .NET developers?You’re in NY – are all the start-ups really launching with LAMP & Rails?

          1. Paul Sanwald

            I work with quite a few .net developers as a significant part of our platform is MS office related stuff. every single .net developer in my group uses a mac at home.

          2. falicon

            FWIW – many of the NY startups actually use Python (Tornado is pretty popular)…I would say two years ago it was really heavy Rails, but these days almost everyone I talk with is doing stuff in Python instead (and it’s been my own experience that the Tornado framework behind nginx scales insanely well)

          3. Uno

            Any talented software engineer either codes in Java or C++/C# and many in both…the rest is simply the latest scripting langauges and frameworks.Try and explain that to a typical recruiter. LOL!

          4. mike gilfillan

            Good point!

        2. John A Arkansawyer

          The little book on top is “Tim O’Reilly in a Nutshell”, a sweet piece of conference swag. (I ended up with two.) I once asked Tim when they were going to put it on sale. He seemed slightly embarassed by the idea. I’m glad to see he changed his mind.

          1. Paul Sanwald

            thanks john, sounds like it’s worth a read.

          2. joshua schachter

            well spotted!

        3. joshua schachter

          so actually this was just one developer’s requests, plus a little humorous staging (stapler, books, etc.)people get whatever they want at Tasty but everyone has converged on macbook airs, though.

          1. Mike Caprio

            So the books were staging, not requests? Still curious what books they are. πŸ™‚

  3. LIAD

    Its an increasingly acute problem.There are so many shiny objects out there, developers are awash with opportunities and temptations.A great hardware setup is important but:”if you live by the sword, you die by the sword”We need to hook people on vision and imbue them with passion. We need to take talent acquisition wars out of Maslow’s basement.

  4. Dave W Baldwin

    Interesting post. In our case it is a matter of working toward an end run vision the best talent shares. The trappings are not such a problem then.

  5. Dan Lewis

    At what point does this affect your investment thesis? I mean: if developers are in too high a demand, then the cost of producing products heavy in new technologies goes up and/or their success rates go down. But there are other ways to innovate, such as implementing existing technologies in new ways, which are not nearly as developer-reliant.For example, Groupon, HuffPo, Thrillist — these things don’t seem to fit under your investment thesis. But they also aren’t very dev reliant. What has to happen for those to be interesting to you?

    1. fredwilson

      This is one of the things I mentioned last fall when I started ringing thealarm bell. Its making us more cautious about putting capital to work atthis stage in the cycle

      1. Dan Lewis

        OK, but what about less tech-heavy consumer internet plays? (I think those would mostly fall under the media category, but I’m suffering from blinders here.)

        1. fredwilson

          Large networks of engaged users don’t take a lot of developers to create butwhen they scale into tens of millions or hundreds of millions of users theydevelop voracious appetites for software engineers

          1. PhilipSugar

            I’m going to disagree a bit with you on this one.When we do integrations with Facebook, Foursquare, Twitter….we can see how the creative people (which are great and made the whole company) haven’t had hard core coders build the base.For instance if you had one or two of the guys that build systems to take bets on March Madness in Vegas…you wouldn’t think those loads are too high or worry about up time.

          2. Paul Sanwald

            from my perspective, 10 years ago it took more developers to bootstrap a webapp than it does today. tools, frameworks and the open source ecosystem have gotten a lot better and it’s pretty easy for a small team to build something really you mention, scaling is currently a pain point where I think a lot of companies do need to pay for engineers experienced with those problems, but there is so much thought and buzz around scaling now that I expect it will just get easier and easier as we gain more collective experience, as web app development has done over the past 10 years.

      2. RichardF

        The heat in the group messaging sector is an example of what is going on at the moment. It seems like every VC and his dog is piling into it. Those marketing lines are going to grow in that sector.

  6. ErikSchwartz

    An awesome set up is the cheapest thing to do. Multiple monitors makes every developer much more productive. The ROI on the extra monitor is huge. It is necessary to do this, but not sufficient.Give them ownership, both in terms of equity and particularly responsibility. Especially early on.

    1. Dan Lewis

      Multiple monitors is good for everyone, not just devs. I’ve played many different roles and it’s always been better to have two monitors running instead of just one.

  7. DGentry

    Being able to hire talent from all over is an argument for telework, yet attempts to coordinate remote workers have met at best “mixed” success for 15 years or more. That seems to be a facet of human nature, that text/voice/video isn’t enough. We want the sense of physical presence.Someday we will solve it. The economics are too compelling for it to remain untapped.

    1. kidmercury

      IMHO it’s not entirely unsolved. we do have wikipedia and open source software communities that can do amazing things. i think developing management structure along that trajectory is one of the most promising opportunities and the way to create “the next big thing.”

  8. johnmccarthy

    A red Swingline stapler. Nice touch!

    1. fredwilson

      I noticed that too

  9. mcenedella

    At TheLadders we started off with one monitor, then two, now three is standard for many developers and some have the 4, 6, or 8 monitor setups that you might see on a trading floor. I am crazily passionate about the tools we provide our people and always wish we were doing even better.I’d like to see us pay more attention to mouses. People focus on keyboards, perhaps because that’s where the letters are, and that’s outstanding. In addition, the mouse and its fit with your work style is incredibly important for making work easier and enabling you to “just do”.Overall, there should be an even greater emphasis on the productivity and happiness increase achievable through better tool selection for each individual (it is definitely not one size fits all).First, it’s cool and it makes for a better environment.Second, it is a great business decision — a topnotch hardware set-up costs $2,000 – $5,000 depending on the role. For the sake of argument, say it’s actually $10,000 per person. Depreciated over three years, that’s $3,333 per year. Depending on the stage of your business, your fully loaded cost per person ranges from $60,000 to $120,000 per year.The break-even point for even this theoretically outrageous setup occurs if your people are 5.5% more productive. Five point five! If you’ve ever seen anybody with a properly tricked-out multi-monitor set-up, you know this is far below the actual productivity boost experienced.So I can’t possibly agree with Fred’s post more — you need to give people the tools they need (and want!) to make them happy coming to work for your company.

    1. Matt A. Myers

      Macs and jellybeans and yoga for all!

    2. zburt

      brilliant post, thanks

    3. PhilipSugar

      Couldn’t have said better myself.Add an adjustable desk and great chair for an extra $3k.You use the best tools. It doesn’t matter whether you are a carpenter, plumber, or mechanic.I can tell how good you are the second you come in my house by how good your tools are.Artisans work with only the best.

      1. Tereza

        The basic human need is that we “matter”.So yes a really good chair is essential. An uncomfortable chair says, “hi! you’re a temp!”Generally, a setup that’s ergonomically solid says the person matters.Also, health insurance. When we’re young, we don’t bother going to the doctor. But later it can make a big difference. When you have kids and become a power-user of medical insurance, you quickly learn if you have a sh*tty plan and who has generous ones. People talk!

    4. Mark Essel

      Given a choice of working where your time is perceived as valuable and afforded a high end setup, versus working in a cube farm with the cheapest systems IT and legal can cook up, there’s really no choice at all.Glad to see sharp startups and leading corporations move towards spoiling their teams with excellent tools and peak work environments, and reaping the rewards of a happier and more productive workforce.

    5. Mike

      As a software engineer in the financial space, I’ll add this: I’ve taken my hardware setup for granted; it’s a given. When I interview, I want to know about business processes and the tools afforded to the company to manage efficiency (e.g., I do not want to have to generate customizable management reports because of cheap software purchasing decisions).

      1. JerryH

        “manage efficiency” – isn’t that an oxymoron πŸ˜‰

    6. JerryH

      Don’t forget the chair ;)http://www.jeremyhutchings….

    7. fredwilson

      Great points marc. I’d love to see that eight monitor developer setup

      1. mcenedella

        You can see some of our standard twos and threes for our sales, cs, and marketing teams here:…but not the 8-monitor setup. i’ll take some photos on Monday and post here.

        1. fredwilson

          instant reblog on!

    8. Gregory Magarshak

      I definitely agree. Developers need to have tools that can help them work productively, and tools they enjoy to use. That also results in more developer satisfaction, and thus more productivity.My developers finally convinced me to use Mercurial as the source control, and let me tell you, I’m not going back πŸ™‚

    9. Tereza

      Marc consider offering the people whom it would help a setup at home as well. Maybe 2/3 of the monitors at the office and 1/3 in killer home setups.Flexibility of work/life is a leading driver of retention.

      1. Donna Brewington White

        Re “flexibility” — very true, Tereza.Also, you used a key word here: Retention. Not enough emphasis placed on this and this is where the real war begins. Recruiting is merely the battle.

        1. FAKE GRIMLOCK


    10. Uno

      I agree with that and also an office. Any talented developer will demand thier own office or at least a shared office.Nothing takes away from developer productivity more than cubes….even better is if you seat them between sales and support or on some funky bean bag in a NYC loft like some start-ups…. that works great for productivity. LOL!$60,000 to $120,000 fully loaded?Good to know that The Ladders does not provide any 100K + jobs LOL!

    11. Chiadisan

      “I’d like to see us pay more attention to mouses”.Mice? – Not so much…

  10. andyswan

    1. Build relationships with talented people that you don’t need yet. Add value to their lives before you ask for it in return.2. Hire best available talent, tech or otherwise.3. Give them everything you would want for yourself in terms of working conditions and a tie-in to the overall success of the company.We do this because once we find incredible talent that is passionate about producing excellence (and proves to deliver consistently)….you’re part of the team. For life. Not the life of the business, life.**edited for Sat morning brevity

    1. Matt A. Myers

      I’m good at building relationships in person but over the internet sucks, just can’t read people as well – even through Skype.

      1. andyswan

        Agree 100%. Gotta be there. Bourbon helps. Really a lot like dating

        1. Matt A. Myers

          I think bourbon could help you not care / not pay attention as much to your feelings of hesitation (even if they are valid feelings). I prefer to have a clear head when getting involved with someone. With dating too. πŸ™‚

          1. Fernando Gutierrez

            Clear heads are overrated!What about the bond created when getting drunk together? fights (against other people) make the bond even stronger, but you should not use that strategy too much or you risk permanent damage.I don’t know about yoga πŸ™‚

    2. fredwilson

      When facebook comes calling and offers your top guys 1mm in RSUs you justgotta hope all that love keeps them loyal

      1. andyswan

        Shhhhh. Facebook doesn’t know we exist yet. πŸ™‚

      2. kidmercury

        money only goes so far. a sense of purpose goes much further.

        1. andyswan

          “I want you to look me in the eye and tell me you think .0014% of facebook will be worth more than 2.7500% of SWAN 20 years from now” works well too.

    3. Donna Brewington White

      You are very wise not to focus just on the “sales” aspect of recruiting (getting the person in the door). Someone can always offer cooler “tools” or “toys” — or even more money — so this alone does not promise retention. The way that you describe your approach to recruiting has “retention” written all over it and in the long run, this is what matters.

    4. harryh

      I have only recently started to understand this but it is so true. I wish someone had explained this to me when I was younger. Much younger. Like before I went to college.

  11. Tom Labus

    So why not treat all employees in this fashion?

  12. CliffElam

    Here is the good news – there is plenty of talent available for hire … just not in the metro areas.My entire team is distributed across the US, India, and Costa Rica. True, we have “Gigantic Company” support systems (which are sometimes more like a braking chute than a joist) but when I do my next startup I certainly have no plan to central hub my people.-XC

    1. fredwilson

      Do you think that model scales to hundreds of developers

      1. CliffElam

        Well, if you can specify X, Y, and Z for hundreds of developers and remove “you have to live in one of the most expensive cities in the world” from your requirements … then I think you may inherently improve your hiring scalability.You do either have to setup satellite offices (which I dislike for a number of reasons) or hire people who have the experience, ability, or interest in working at home. You have to spend a bit more on the interview, there are some challenges around informal team-building, etc. But I’ve been managing that for years so it’s not intimidating.So you add some barriers, but don’t you think it’s funny that the technology that removes barriers has to move slower because we want someone who lives within an hour of our building? How very 18th century.-XC

        1. HumphreyPL

          I think that’s a great skill to have and I think the whole area is a little bit daunting for those who are not used to doing it but I totally agree. I guess you just have to have the right systems to find the best engineers and have a communication process that works for everyone. Arent 37signals a distributed work force? I know KissMetrics uses a designer in Australia. I think this is something I need to learn more about and bring down the fear factor. Cheers!

        2. Tereza

          IBM’s been doing work at home for about 10 years.

      2. Uno

        Easily scales. It is the NYC bean bag loft start-up model that does not scale.We had hundreds of developers spread across – USA, Canada, India, Romania, Moldova.The problem is management and a lack of understanding about what software engineering actually is and what the software development process actually is….to start1. it is NOT coding nor hacking. LOL!2. it is NOT SDLC nor Agile. LOL!

  13. William Mougayar

    That USV job list is mind-blogging…Tells all about “GROWTH”. How many employees does Zynga have?But these perks are ok as tactics to get attention. Often, the startup’s reputation precedes it, so you need more than these entry-level perks to keep loyal employees.I like this job from Zynga “Prep Cook””…it would be great if you possess an art for sandwich making” Anyone?

    1. Matt A. Myers

      Subway is also hiring sandwich artists. Tough competitor..

    2. fredwilson

      I don’t know the exact Zynga headcount but they hire and acquire like crazy

    3. Donna Brewington White

      “But these perks are ok as tactics to get attention…so you need more than these entry-level perks to keep loyal employees.”While my focus is more on management/leadership roles, I would think that this is very true even at this level.So much of hiring/recruiting focuses on the “sales” tactics of getting people in the door when it’s the “marketing”, “product development” and “customer service” aspects of employment that keep people IN the door.Effective retention starts with the recruiting process in the expectations that you build and the methods used to attract. I imagine the tools provided send an important message, but I wonder how much they serve to retain people. Just wondering…

      1. William Mougayar

        I agree. I’m with you. The startup mentality is often short term focused, unless you suddenly become a giant like Twitter, Zynga, Groupon, FB, etc.There are 3 modes for startups & each will probably dictate different recruiting tactics:Get acquired Survive Acquire others

        1. Donna Brewington White

          I guess the looming exit (although this can be years down the road) will have bearing on retention strategies too.But seems like companies that hire with exit in mind are going to have some inherent problems that go well beyond talent issues.Interesting, much of the talent being vied for in this bubble will not have memories of the last one — so I wonder if the same mistakes will be repeated in making career decisions. Although for many it was a great ride even with the downsides.

  14. paramendra

    It likely will not get any better for a while.

  15. ShanaC

    I rue the day where Joshua Schachter hires a developer who is anti soda.

    1. fredwilson

      Jamba Juice works too

      1. ShanaC

        Metal water bottles? Encourage low waste and better teeth?

    2. kidmercury

      soda sucks. thumbs down for soda.

      1. ShanaC

        When I was a kid I used to think soda was poison. And I still dislikepretty much all sodas (I will drink sparkling mineral water on occasion, andthose Izzy carbonated juices extremely rarely)Otherwise, I am in total agreement with you. πŸ™‚

  16. David Semeria

    I can see a nice arbitrage opportunity here.There are thousands of highly-talented young developers here in Italy who really struggle to find even a boring job.It would make a lot of sense to setup some sort of outsourcing facility so that demand can meet supply.I’ll go now, before Andy Swan and Dave Pinsen show up and yell at me.

    1. ShanaC

      Honeslty, knowing how bad the situation is in italy

    2. Matt A. Myers

      What I am seeing emerging are development companies who are also an incubator and provide services to other companies. They hire and keep the talent which gains experience, and as the incubator and/or company grows and needs the more experienced talent – they have it. Maybe making a profit but more important is helping sustain that ecosystem (reducing risk, increasing potential).This is what I’d love to do locally – and I’d work on my own projects too. Anyone want to fund me? πŸ™‚ Might even be able to get local government money to help towards this. City I’m in has seemed desperate for something like this. I’d really enjoy running something like this – and the administrative people certainly exist here.

      1. Mark Essel

        1) what are the minimum requirements to begin2) how can you cut corners or defer costs until later (distributed teams working from home, renting cheap meeting space, borrowing space for early customers, reusing abandoned warehouses)3) who would benefit most from the type of community you wish to foster, can you get any of them onboard? Is one development market in higher demand than another, start with that (mobile apps, IOS/android)4) what bootstrapping options are on the table: customers, companies, gov agencies, schools, universitiesBoth you and David are seeing local opportunities, but the path forward isn’t too clear.



    3. Rick Mason

      You don’t have to go all the way to Italy. How about Michigan? Plus the developers cost half as much and with all the snow there aren’t as many distractions half the year.

      1. David Semeria

        I can understand a demand / supply imbalance at the inter-country level because of all the physical and bureaucratic obstacles.But I can’t understand how such an imbalance can be sustained over time *within* a country (even a big one like the States).Why don’t Michigan-based devs just relocate?

        1. Fernando Gutierrez

          Language and working visas are obstacles to relocate to another country. But there are other obstacles that you have when you move to another country or to another city within your country: family ties, mortgages, significant other’s job… and I’d say that these ones are really powerful.

    4. fredwilson

      Are there any US companies with dev teams in Italy?

      1. David Semeria

        Not that I know of. But there are quite a few Italian startups that relocated to the States but maintained development in Italy.The most famous example is Funambol which is very big in mobile synchronization, and there is also Balsamiq which is doing very well (albeit on a much smaller scale) in the page mockup space.Both companies have emphasized on their blogs how US biz dev and Italian-based development is a very attractive combination.

      2. Andrea Giannangelo

        Hi Fred,the problem with Italian developers is that they are not connected, both to each other and to startups. The result is that talent doesn’t emerge.About a month ago, some great guys organized Hack Italy (hacking&pasta on APIs in Milan), inspired by your Music Hack Day. The event was awesome, and the hacks terrific. I was personally amazed by the quality of the hacks.Considering how you love the Music Hack Day, both US companies and you are invited to the next Hack Italy :)Andrea

      3. Stefano Bernardi

        Funambol is the biggest example. Raised ~30m in the states, all the development is done in a town near Milan.The problem with italian developers is they’re very academic, and right after university go on to work for this mega Java software houses. We have no engineers in the startup scene, which is mostly comprised of business guys.We are trying to change that. We started HackItaly ( and the first edition was a success. We hope to go on.Anyways, I’ll be moving to the bay area in June so I’ll gladly take advantage of these talent wars. And also try to transfer all the things I’ll learn about how a valley startup engineering team works back to Italy.

    5. Fernando Gutierrez

      The problem with Italy (and most other Western Europe countries) is that you get the bad things of sending part of the tasks abroad but you don’t get all the savings you can get in India, Phillipines, China or even Slovenia… I think that you can still make great companies in Europe (although we need to change many things to compete globally), but not based on labour costs savings.

      1. David Semeria

        I’m not suggesting Italian developers are in any sense better than those in the countries you mention.Nevertheless, the fact remains that there exists in Italy a very talented pool of developers that struggles to find even a mundane job.Most of the best and/or ambitious ones move abroad.It’s sad indictment of Italian companies’ unwillingness to invest in web tech, but it does represent a great opportunity for any company that has some sort of access to this talent pool.

    6. Max Ischenko

      Here in Ukraine there are plenty of outsourcing companies of varied sized that provide R&D services for US companies, startups and all.There are sites like eLance/oDesk that help with remote talent search. I am not sure if there is something like “B2B oDesk” to find bigger teams. Might be an opportunity.

      1. David Semeria

        Notwithstanding my initial comment, I was thinking less of outsourcing and more in terms of direct local hires.Even the Google office in Milan only has two technical guys, and they’re both in sales support.On the rare occasions I go to startup / hacker events here in Milan, I feel very much like the time I found myself in a pool tournament where the men were outnumbered 20:1 by top models (staple male fantasy come true).So much talent, and no-one asking them what they were doing later….

        1. Max Ischenko

          I wonder why you don’t have local R&D centers from giants like Google orIntel. At least it appears so from your comment. I think I know why we don’thave them in Ukraine: relatively small pool of talent (hard to hire 20+teams quickly) and hazardous state. I am curious if Italy is similar in thisrespect.I’ve had a conversation around these lines with the president of one of ourTOP20 outsourcing companies, (google translated).

          1. David Semeria

            I think Microsoft (and perhaps IBM) have some research centres – but they’re not focused on the web.Italy is anomalous because of the big imbalance between the size of its talent pool and the opportunities available to this pool.And clearly, as you point out, no-one thinks of Italy as a potential outsourcing destination – even though, with recent reforms, labour costs in Italy can now be very competitive when compared to the UK, France or the US.

    7. Scott Lawton

      A reply for Italy, Estonia, Brazil and other countries not yet mentioned in the thread: I encourage anyone who has access to good developers to TRY different ways to put them to work. For example, vWorker (RentACoder),, Elance and such may have lots of lousy projects, but also some good ones that go unfilled. Another: respond to Craigslist ads that allow telecommute.The hardest part: establishing a good reputation. Key factor: under promise, over deliver. My experience so far is that outsourcing rarely works out well — but since there ARE good developers around the world, there’s still a market opportunity for doing things right. With the war for talent, some companies may be willing to take more risks — but given the problems to date, I think the offshore developers have to take some risk too. e.g. be willing to start at lower cost as long as there looks like a reasonable opportunity for advancement.

      1. Uno

        “My experience so far is that outsourcing rarely works out well”Not true, 90% of managers have no clue how to run offshore engineering centers.As long as they view them as body shops, they will never get quality results.Google, Microsoft,ect …. all have great, world-class offshore engineering centers.

    8. joshua schachter

      hiring elsewhere is very difficult for us, because we are trying invent a new product. we need to talk a LOT (we spend much of the work day discussing/whiteboarding/etc) – bandwidth is key.also, hiring and managing without someone feet-on-the-ground seems very hard.i hope we are successful enough to have offices in other places someday, though!

      1. David Semeria

        Yes, I agree with all that. I would have the same reservations if I was considering hiring someone in the States from here.Still, in this day and age it’s quite absurd that certain skills be in high demand in one nation and not at all in another.

    9. Uno

      True, but from my understanding, most will not give up the Italian lifestyle to work evenings and weekends at a typical American start-up.

  17. jkaljundi

    Wonder if some US tech companies will start using more European development teams from now on? There have been some good case studies, like Skype doing all of their product development (400 or so people) here in Tallinn, Estonia. It’s cheaper, there’s great talent available (although in limited quantities) and the cost level is lower. Then again Skype technical founders were all Estonians. Skype itself made a decision to build a engineering office in Silicon Valley last year, so that’s a change in other direction for them.Although I’m pushing all Estonian & European startups to have their customer facing operations, sales, marketing and may be even product vision in the US, I still would suggest them to keep majority of engineering here. True, multi-office setups and people in different time zones are a pain, especially for early stage companies, but it can be made work.

    1. fredwilson

      we are investing in europe for this exact reason

  18. Hi!

    I wish I could get this outside London in the UK.

  19. zemanel

    … while on this side of the ocean i couldn’t even accept a position at a northern europe bank because i can’t afford relocation at the moment, and everyone tells me people are hiring like crazy in NY/SV. Life can be bull sometimes πŸ™

  20. Prakash S

    Joshua has a good sense of humor, that looks like a red Swingline stapler on the right corner.

  21. AlexHammer

    The key is to get the top people one step before they are recognized by others. Often that includes skillful “projecting” — seeing the upside based upon trajectory and already developed strenghts.

  22. Adrian Sanders

    Perks like this go a long way. It’s basically a nuanced touch that you see in luxury experiences. My guess is most young devs are not used to luxury experiences and even if they are, they aren’t necessarily expecting it in the work environment.A tech startup is basically just a team. There’s no warehouse of stuff. You’re not managing a massive stock of items, but people’s lives and how fulfilled they feel.I think that what TastyLabs has done is fantastic. But I’d put a dollar down that what really sold the new hires was the vision and excitement of the company – the schwag was just a nice flourish on the end of an already great opportunity.

  23. Nathan Hurst

    The demand for developers is getting pretty intense, but I don’t think awesome desktop setups will fix much. It certainly helps, but from what I’m seeing as a developer and founder of a company in the hiring space, it’s either a minimum requirement or it doesn’t matter at all.The big problem now is that the hiring market is fundamentally tipped to benefit companies and not job seekers. This usually makes sense because there are typically so many more job seekers than jobs available, but when the talent wars start for high demand candidates, you really start to feel the imbalance.If you think of the hiring process as an “employee acquisition” funnel, it’s practically designed to cause as much drop off as possible at each step. Under usual market conditions, companies usually say no to candidates – causing the drop off themselves. But in a market where job seekers (developers) have more power, each step can turn them off and has the potential to deter more passive, often already employed, candidates.For example, if an employed developer sees a job that might be interesting, companies often ask them to create a resume (a few hours of work if they don’t have one already) instead of just asking for a few links to their web presence and sample code (similar to what USV did with it’s analyst and GM positions). Then they have to take off work to go interview. If they truly want to get a feel for the job market before jumping ship, it could mean quite a few “dentist appointments”.There are a few things I see consistently matter to developers (none are quick fixes): 1) Quality tech team and leadership – talented people want to work with other talented people. 2) Limited “fire fighting” – the developer’s time will not be wasted because of poor planning. 3) Cultural fit – for developers specifically, having a specialist vs generalist role, high vs low importance of work life balance, interest in technical problems/motivations vs business problems/motivations.Fred, there will be an Internet Week panel to discuss this issue. Let me know if you’d like to be a part of it: https://www.internetweekny…. [email protected]

    1. fredwilson

      i think there are better experts on this issueyou are one of themyou guys are doing great stuff!



  24. Aaron Klein

    I may be a bit of a contrarian here but we’re starting off with as little capex as we can afford to do with our seed round.When our user base and revenue are starting to scale nicely, then I’ll definitely pull out the amex and make sure everyone has the best tools.Until then, I feel like we’re living on borrowed time with our investors’ money and I’ve got the best team in the world who feels the same way.

    1. Mark Essel

      Know when to burn or when to tighten the belt. That’s your charge. But after a seed round the costs for high end setups are pretty small. What are you guys doing for work environment-> out of homes/apartments + rented shared space?

      1. Aaron Klein

        Very true. My rule is: if we need it, we buy it. No hesitation. One out of three team members has a MacBook Pro on its last legs and we will probably pull the trigger on a great one for him shortly.For the other two of us, getting by for a few more months with what we have won’t hold us back in a material way. I completely agree with the other comments here about having the best tools, so as soon as we’re scaling, we’ll do that.On the workspace, I’m fortunate to have a sizable home office. So we all work out of our homes, and use my space for working together. We’ll lease a small and cost effective office when we hire Employee #4 in the fall (again, after we’re scaling our user base).

        1. Mark Essel

          Sounds great Aaron, your team is in the groove and I have little doubt you targeted a juicy market.

          1. Aaron Klein

            Thanks Mark! We sure think so, but there are about five different factors that I know we could be wrong about. We’ve built the whole plan to give us the ability to adapt our approach at each of those points, and maximize our chance of success.

  25. Peter

    Talent is a resource any smart company should pay handsomely for. If these companies can recruit with small perks like the ones mentioned then their HR department has talent.

  26. Bernardo

    How about hiring overseas? Are the SV startups doing it now?I know some “Bigshoots” are doing it (Facebook).Here in Brazil we have a huge engineering talent pool that gets wasted either working in low valued tech positions, or pursuing business carreers in banks or business strategy consultancies (eg. McKinsey). I am not talking about middle level talent: graduates from the MITs and Caltechs of Brazil have to face this choice and most go to the second.I am sure there is a complexity and fixed cost involved (VISA, travels, etc), but I am sure over time it would pay itself easily.

  27. pbreit

    Why do these companies need so many employees? Many of the companies I see are dramatically over-staffed and do progressively worse work as they grow.

  28. JerryH

    Given the demand you’d think more employers would make an effort – it’s still hard to find places that what to make people happy. Hopefully as demand increases the more inept companies and management will loose out.

  29. Sebastian Wain

    The future is in cloning the body and the brain state πŸ™‚

  30. kidmercury

    can’t believe how little interest there is in the governance layer. of course you know why that is, right? because the governance layer has many political implications and creating value in that layer requires living in awareness, not ignorance, of those political implications. seeing the governance layer without the truth is pretty much impossible.ignorance is futile. only the truth can set us free.

  31. joelfan

    Hi Fred – how do you evaluate Steve’s last line “In the new bubble PR may be your new best friend, so invest in it.” (Thinking about your post re marketing from a few weeks ago).

    1. fredwilson

      he works for a PR firm

  32. tylernol

    I am not impressed by ping pong tables or the size of the LED monitor or the free soda. I would like to see startups give their engineers decent stakes, and perks such as the ability to sit in on at least one board meeting.

    1. falicon


      1. Donna Brewington White

        Got your response to my question. Thanks! Really think this is a great product. Have I already said this? ;-)Yeah, was on the road and in meetings yesterday so came late to the party on this one. Seems like we have some similar thinking here, even though I am not in a “tech” role and most of the hiring I’m involved in is at the management/leadership level so different “attraction” tactics are needed.But I am a strong proponent of retention tactics even though poor retention brings in more business for people like me. Companies that don’t pay attention to this create low hanging fruit for recruiters.

  33. AndrewD

    I am a NYC based software engineer who has just accepted a job offer with and is relocating to Seattle. Being in my early 40’s with two kids, I have found it very hard to find a good software engineering position in New York City which would allow us to live in a good neighborhood and send our kids to a good school. We have been in NYC for over ten years, and it is becoming harder and harder to live here. When Amazon came after me, Seattle looked extremely attractive. A couple of my software engineer friends with families are now planning to follow us to Seattle from NYC for exactly the same reasons. I think most of this war for talent in Silicon Valley and NYC is for people in their 20’s who are seduced by large monitors but don’t need to worry about where they send their kids to school. I would love to stay in NYC but I have concluded it is just not possible for us.

    1. Donna Brewington White

      I think your perspective is an important one. Not all engineers are 25. And people like you are not as likely to jump ship because you are offered multiple monitors. I hope someone’s paying attention to this.BTW, hope you enjoy Seattle. It’s a fantastic city with some of the sophistication that a NYC transplant might appreciate.

    2. fredwilson

      i am sorry to hear thatgood luck in seattle. i hope it works out better for youi know how expensive it is to live in NYC and raise kids. i have three of them.

      1. Douglas Crets

        To be fair, the problem of living in a good neighborhood and sending your kids to a good school gas very little if anything to do with the war on talent.Douglas Crets CEO, dB C MediaNew York, New York+1 917 499 1993

  34. Michal Illich

    Hiring developers in Czech republic goes pretty well. You guys should move here with your startups πŸ™‚

    1. Tereza

      Ach jo teda, strasne moc bych chtela do cech. πŸ™‚

    2. Tereza

      Hey Michal! I now see you were head of internet at Nova/CET21. That’s bezva. Guess what, I was their first employee. 1993.I worked for Vladimir himself before we built the sales department.Not much internet going on yet. We hired LOTS of great people. Several hundred in less than a year!

      1. Michal Illich

        Must have been interesting times :)I sent you e-mail this morning, hope it arrived.

        1. Tereza

          yes — got it and responded. will love to have that cup of tea when i’m next in Praha. they were absolutely crazy times. totally insane.

  35. Tereza

    Half the battle of the war for talent is getting top prospects to say yes. The other half is retaining the talent you have.Retention is not about money. People don’t leave jobs for money. They leave people.So you have two key levers in retention. One, have great people that want to be together and management that’s respected. The second, which is largely overlooked in the startup world, is flexibility. Allow people to actually have a life. This is proven. Once someone’s had a taste of flexibility, it’s almost impossible to give up.The large companies who wage these talent wars know this — they’ve done the studies. (I’ve been involved in some of them) Very powerful glue.So instead of Marc Cenedella’s example setup of 4/6/8 monitors at a star developer’s desk at work, I’d ask, why not two sets of 2/3/4 monitors. One set at work, and a second killer set at home. Let them split their workday — 8-10 hours at the office, ability to see their wife + kids, or go for a run, or whatever else they need to do to manage their life or recharge, and then be able to do a second shift at home if/when it’s needed. And they can sleep in their own bed. This setup may also killer tools when in transit — trains, soccer games, etc. Or for people like me who have a ~2-hr commute each way. That 3-4 hours MUST be productive.I know, many of you are going to say, we don’t want our people leaving the office. We want them together 18+ hours a day. And during intense early-phase time, this is partially true.And I think the real truth is that offering flexibility is not easy to do for people not experienced at managing startup teams. It’s not for the novice project manager. A manager who’s never needed flexibility usually doesn’t understand why someone would — or views it as a weakness.Enabling flexibility requires strong project management skills and realistic planning.But there’s a lot of talent to be tapped that’s outgrown the churn-and-burn model.Consider differentiating your company via a legitimate commitment to flexibility.It’s cheap and it works.

    1. Dave W Baldwin

      On the money Tereza. In the case of those that may put too many hours in, especially at the beginning, you have to encourage them to have a life also. Burn out bad.

    2. Donna Brewington White

      Missed this one earlier. A lot of wisdom here, sister.Can’t wait to see what kind of culture you create at Honestly Now, Inc. I suspect I’ll be writing blog posts someday using you as an example of what to do right. Hurry.



  36. dacort

    That’s nothing. SEOmoz in Seattle is offering a $12k referral for both the referrer and the employee (…. And it’s only getting more difficult with bay area companies opening development offices up here.

  37. HumphreyPL

    Hi Fred, attracting people to apply is very different to interviewing so you get the right people. What recommendations do you give to your portfolio staff on making sure they have the best people who are the best fit as well? Have you ever read the TopGrading book? Cheers Humphrey

  38. ZengXeng

    Wow, OK, I never thought about it like that before.

  39. David Shellabarger

    So who wants to hire me? πŸ˜‰

  40. Donna Brewington White

    I know that your focus in this post is on getting people in the door, but I hope that even more focus is being placed on keeping them there. That’s the real war for talent.

  41. JohnDoey

    Wow, they buy you the one remaining functional PC platform? The one remaining name-brand Unix? That is the basics, right there, not a luxury setup. Anything less would be like shooting the person in the foot before the race.When you give that setup to a sales person, then maybe you are doing something nice for them (while also dramatically reducing the lifetime help desk costs of that sales person) but for a developer or designer this is bare minimum. Compared to a low-end PC, it pays for itself on day one.Honestly, the least you can do. Anything else says “we don’t know WTF we are doing.”

  42. Uno

    Fred, what salary level are you and your NYC start-ups offering to these “talented” developers?also what type of “commitment” …. you want to offer low pay and long hours including weekends but will provide free junk food…. is that correct?’cause here is a creative idea…offer to pay more….offer a 4 day work week…There is a ZERO shortage of talent.I can source litterly 100s of world-class Java and C# / C++ developers for all your start-ups in NYC if you are willing to pay 200K-300K per year plus health benefits.Entery level lawyers, most not even near the skill set of a top developer in my opinion, are making an easy 200K+ in NYC.Many actually talented and experienced developers are working for the hedge funds some making over $1 million per year, all making over 200K.Many experienced solid developers are all working at big companies where they work 9-5, no weekends, full benefits, and are getting paid more than NYC start-ups are offering “talent”.If you want developers please contact me, no need for free soda pop, chips, pizza because the developers I can source don’t eat that crap.Talent does not equal cheap. It is a very simply concept.Here is another idea, get rid of 2 MBAs and 3 Lawyers and replace them with one talented developer.

    1. fredwilson

      most of our companies have no MBAs and lawyersand they offer equity that can someday be worth multiples of that $200k to $300k/yearthe equity we give out to the early developers is often worth more than that day one based on what i pay for my equitybut not everyone is willing to take a riskotherwise, they can work at a soul less blood sucking place like a hedge fund and be miserabletheir call

      1. RW

        An issue in NYC is that at least a handful of the soulless blood sucking hedge funds and prop shops are clued in and offer better working conditions and more interesting work than the startups.For example, 2 Sigma’s office is a loft in soho and Gilt’s office is a fluorescent lightbulb windowless former cube-farm in Murray Hill.There is a focus on content or commerce based startups where you are working on a payment gateway or boring cms type thing for some psycho MBA type from the food and beverage, magazine or fashion industry. In contrast, you can work for a DE Shaw or Jane Street where the founders are hyper hacker nerds themselves.Finally, any engineer who has been around the startup block can do the math on equity. .25-1% isnt going to be worth as much as a typical prop shop bonus unless it’s a google sized ipo.

        1. fredwilson

          1% of $100mm is $1mmthat’s four years of work at a hedge fund

          1. RW

            With a normal vesting schedule it’s four years of work at a startup,tooAnd that’s if all the stars align correctly and there’s 100m exit

  43. Bala

    I think all this is showing me that the startup bubble is real… when has anyone talked about making a Programmer “happy” by giving him toys! the only time I remember is during the bust. Programmers, software engineers and everyone else in the design, development side are happy when what they are doing is Cool, tools are just icing on the cake. When I say cool, I mean really stuff that matters. Writing awesome code and working with a team that does other awesome complementing things is what makes the development team happy. In Iceland we get by with not providing anything like this, we make up with putting together an awesome team that solves some tough problems, tools are adequate but there is no way I am spending money on Mac for developers… Scarcity is the mother of innovation. Iceland has capital controls and a Mac costs 3 times more than in the US. I just think the US startup scene is too spoilt! Fire away… I am just saying

  44. Ricardo

    The problem is that everybody is fishing in the same pound. There are lots of talent outside the US that speak english. The beauty of code is that is a universal language.

  45. Bala

    Oh, BTW, what do you do with your kids… do you bribe them to clean their room or teach them principles of cleaning the room and act as a role model? All this “Talent War” just reminds me of really pushing up the demand and price for talent and I believe that there is too much money chasing too few ideas in the Startup Universe and again a symptom of that is THIS post. I just wish it does not end up the same way as did in the bust.

    1. fredwilson

      it may very well end up therei posted about that about six months ago

  46. Uno

    Fred, the best book on why there is a “talent” shortage was written back in 1997.Death March: The Complete Software Developer’s Guide to Surviving ‘Mission Impossible’ Projects – Edward Yourdon”Death march projects are becoming increasingly common in the software industry. The symptoms are obvious: The project schedule, budget, and staff are about half of what is necessary for completion. The planned feature set is unrealistic. People are working 14 hours a day, six or seven days a week, and stress is taking its toll. The project has a high risk of failure, yet management is either blind to the situation or has no alternative. Why do these irrational projects happen, and what, other than pure idiocy, leads people to get involved in them?”

  47. J. Pablo FernΓ‘ndez

    Kinesis Advantage For The Win!!! I wouldn’t type on anything but that.

  48. Eric Dosal

    Great post as usual. We’re in the final stages of launching a new web app using an outsourced dev firm that’s local to us in Miami. We were in San Fran / Palo Alto two weeks ago interviewing for CTO / Director of Development. All the talent seems to be out there and they are demanding high compensation and perks. Wonder how long this will last before the market readjusts?

  49. alex deve

    We’re launching a new service called Whitetruffle to help start-ups hire great engineers. We’re matching companies with curated talent (eharmony for talent). We’ve kept it under the radar so far since we’re fine tuning the product. We’re in alpha, and only have accepted a few companies, but the results are pretty good so far. I’m happy to add one or two more companies if someone wants to give it a try. The only criteria are: based in Silicon Valley & great company!

  50. andyidsinga

    Fred, it would be cool if your USV jobs page had a “telecommute yes/no” column beside the location field (or similar).

  51. reece

    I dunno… cool gadgets are great, but at the end of the day, that new laptop isn’t going to make you any smarter or better as an engineer.Great people want to work with other great people, have autonomy over their career, a sense of purpose and room for learning/growth.With these in mind, you’ll attract awesome people who don’t care about a difference in salary or a shiny piece of gear.So long as they have *enough,* they’ll be happy working on cool shit.

  52. Douglas Crets

    I am looking for a job, and I know I am hireable and I have a worthwhile background. I am not a developer, but it has been an interesting journey looking for the right fit and right level of interest in the field I am looking in — content strategy and social media development.

  53. RJ Johnston

    DC anyone?

  54. Gordon

    My developer brother in law who just switch jobs did it almost purely for the extra dollars.Anyway as a recruiter am professionally committed to the “the war for talent is heating up” position. Still, I was interested to note these charts (from nfib) on Kevin Drum’s blog note that labor quality has fallen to eighth out of eight possible “number one concerns” for small businesses generally. Of course, small businesses that rely on developers are a small subset of all small businesses.

  55. Guest

    Nothing is as effective as a nice girl around!

  56. teknobabble

    All this for recruitment, but what about retention? It’s a seller’s market out there again.

  57. marfi

    With the war for talent comes and the war for commitment.The guys that would work on these desks are employees. They are not startupers, what is the guarantee they will not go to the one offering more perks and giggs? None. They invest or loose nothing.We are treading on a very thin line here.

  58. Rob Rawson

    I don’t know how any company can compete with Google and Facebook for top talent. Why look in Silicon Valley? Why not hire across the entire globe. Half the people in Silicon Valley emigrated from India, Russia etc, so why not hire directly from these places at a fraction of the cost. Or hire from any city in the US and Canada?

  59. fredwilson

    Yup. We need to inspire more kids to code

  60. ShanaC

    This is an ideal kickstarter project

  61. mike gilfillan

    I completely agree with everything Charlie just said, especially since .Net and .Net MVC are such great platforms and with plenty of developers with solid enterprise experience.My site ran MS all the way for many years with great success, even as early adopters. We hired great programmers, not people who just knew the latest “shiny new thing”.No fluorescent is definitely the way to go!

  62. Scott

    Working conditions are really a hygenic issue. The competent are not attracted to a place because they have a good chair and monitors, but they are turned away when the basics are not present, just like if you go someplace and hear grumbling about employees having to pay for coffee in the break room, or that the bathroom seldom is stocked with toilet paper, or that developers have to punch a time card even though they are on salary.

  63. Nik Cubrilovic

    operating systems used to come with compilers and dev tools built in – they don’t anymoreand ‘view source’ has become a lot more complicated and intimidating than it was 10 years ago. A teenager today getting curious at how a website is made and going to ‘view source’ would be turned off for life

  64. PhilipSugar

    Charlie…have you really scaled things on rails????I don’t want to start a flame war…but we do some serious high transaction stuff and tested it……NOPE.

  65. Guest

    ? I would say its a great time to showcase coding.And I see developers being really passionate about their field, having fun while coding, solving problems, discussing tech & trends…Seeing that itΒ΄s a no-brainer for me that kids will love it, with some real life and fun context (minigames, personal opportunities, tech) and not the boring if-when coding at the beginning. (which I had at school 10 years ago and killed any interest)

  66. Matt A. Myers


  67. mike gilfillan

    Just curious, but why not rely on MSFT? They provided great support over the years to my team and their platform is pretty well built out.Their “MVP” program creates lots of knowledgeable online contributors and their internal staff like Scott Gu are pretty transparent.I’m not aware that Microsoft’s platform requires THAT many more servers, but hardware costs are pretty cheap these days (esp compared to labor).The programmers can have their religious wars, I just think .Net & .Net MVC are viable alternative to the popularity of Rails in start-ups, especially when talent is in short supply. It’s a proven scalable platform in the enterprise class. I’m sure many of the programmers stuck in larger organizations would love to move to (or back to) a start-up environment.

  68. PhilipSugar

    “If you choose not to decide you still have made a choice”You are always going to be dependent on somebody.So even with open source you are dependent….so you make your choices.I see some of the tones going religious and that might make sense, but I tend to think:You make your best choice at the time, realizing if you are nimble and truly embrace sunk costs you can iterate three times and be ahead of the game.

  69. Uno

    Google nor Microsoft is centralized. Sure there is a main campus but both are spread all over the globe.