4/17/12 - How to Retain Talent at a Start-up Company

I wrote the following article in March 2000 when I served as COO of an Internet startup named ComputerJobs.com.  12 years later, I've been running a startup again for the last 7 months, so the message below seems timely.  You can see the original article .

How to Retain Talent at a Start-up Company

As the great songwriter Radney Foster suggests on his last CD, "If I knew what I was doing, I'd be doing it right now." When it comes to the continual effort it requires to retain IT talent at an Internet start-up, some managers may feel like singing that song. First interviews that used to open with questions on benefits or 401(k) plans now begin with questions on stock options, vesting schedules, equity requests. What's the strike price? When's the road show? Hey, can I bring my dog to work? It's hard, yes. But not impossible. It requires, as it should, a significant portion of the good manager's time, but there are a few fundamental things you can do to reliably retain IT talent in a start-up environment.

Here's the short list:

  • Respect the Talent over the Pedigree
  • Absorb Insecurity
  • Don't Dislike Anything

Respect the Talent Over the Pedigree

There's a line in Larry McMurtry's novel "Lonesome Dove" in which the lead character, Gus Mcrae, reveals a long-held wish. "I'd like the chance," he says, "to shoot at an educated man."

In a start-up environment, education and experience may well be mutually exclusive. They don't have to be, certainly, but some of the best IT professionals I know don't come from traditional backgrounds. I know a start-up where guys with advanced degrees in Computer Science sit beside structural architects. Next, the former lead singer of Steaming Cup of Joe codes furiously near a one-time photographer. In the corner, a former prison guard works quietly as his colleague, a reformed restaurant manager, codes web-based programs.

This mix is vital in a start-up community. You need the absolute best your team can offer. In all likelihood they'll work harder and make less money than they will elsewhere. The potential of course is huge but so is the possibility that the pay-out will never come. Striving for a blend of creative and talented technologists, the most successful start-ups secure the best talent, but their first rule is to ensure the talent fits the culture. That's flatly essential.

Next, and whenever possible, they wisely hire educated professionals, but they don't hire under the assumption that the most degrees necessarily equates to the most qualifications. Respecting talent and the huge impact of cultural fit are cornerstones of the most successful, well-staffed start-ups. As it happens those same start-ups will almost always stand out as leaders in retention of their core staff. Rather than shoot at each other (educated or not), the IT staffs of these start-ups use their diversity, experience, and education to solve the most complex of problems as a team.

Absorb Insecurity

Last June I heard Esther Dyson (author of "Release 1.0″) relate an encounter with a fairly high-level manager for a European company. Being cordial, she asked him to describe what he did on a daily basis. With some frustration he looked for the right words and finally announced, "I absorb insecurity."

Then and now, I get a kick out of this job description. I'm confident it's accurate virtually everywhere, but it's dead on the money at an Internet start-up - particularly if the start-up takes the process of retention seriously. That's not to say the IT staffs for a start-up float aimlessly through their days, waiting for hugs and reassurance. Far from it. These technical teams play roles of fundamental importance in their company's success, working ridiculously long hours to deliver all that's needed for the company to thrive. And in most cases, they receive little praise for doing this.

But absorbing insecurity does happen, every day, and you'll find this manifested in the course of answering questions short and long, simple and complicated. Questions ranging from alternative minimum tax (AMT) liability to concerns over the cultural fit of the new executive brought in from a corporate background. From where to put the next 100 employees to the date to expect more Mountain Dew in the drink machines. From scheduling the next official poker night to wondering why there are no more official poker nights.

Largely, these aren't questions with a simple answer, since most operate on several levels. There's the actual question, and the implied concern that things are changing. And since most people hate change, and change occurs each day at a start-up, the need to absorb insecurity doesn't cease.

Don't Dislike Anything

The CEO of a company where I once worked dispensed praise like a miser handing out hundred dollar bills. It rarely happened. When it did, his highest compliment came in the form of this statement: "I don't dislike that." Almost to a person, new hires to this company had no idea what to make of this statement. They couldn't tell if he was pleased or displeased, happy or angry.

At a start-up, IT staffs want genuine emotion and real communication. In fact it's not criticism they fear; it's being shielded from the truth. It's not bad news they dread; it's vague news, or no news at all. They may need you to absorb a good bit of insecurity, but in the end it's honesty they're requesting. That's why the best start-ups manage their IT staffs with the good sense to speak plainly. These technologists don't want unwarranted praise any more than they want a mystic compliment. A well-timed "Is this the best work you can do?" is one of the most effective things you can offer.

In short, the best technologists at a start-up are looking for directness. They want honest, positive feedback on their jobs, their performance, and the company's future. In all things, they're looking for as much direct information as they can get. The most successful start-ups provide this daily, like vitamins. Retaining IT talent at a start-up calls for a company to continue moving at Internet speed without losing touch with its core staff. The most successful managers rely on respect, support, and honesty to see them through. Consistency in these three areas makes it easier to know what you're doing.

Posted by Jack Williams at 13:33


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