The Bay Area’s obsession with the “it” company syndrome for “poaching talent”

In 1995 when I reached Silicon Valley from Baltimore, HP was the company to poach talent from. Most startups and mid-sized companies during that period were keen to hire away from HP. It was known as the place that had a very refined “Management API”. Every executive and manager from HP was defined as having been through rigorous training, experiences and situations to help them navigate the complexity of running technology companies.

A few years later, the “it” company to hire from was Cisco and then Siebel was the target. Now it the “it” companies to poach talent from are Google and Facebook.

Surprisingly if you are a founder, and have an exit, you have lived through hell and back, but if you crave relevance and recognition, then you are better off being the 150th employee at an “it” company than the founder of the 150th exit.

In fact the most sought after founders are not serial entrepreneurs with a small exit, but an early to mid-stage employee at an “it” company.

That’s the Silicon Valley “meritocracy” in action. Working at “it” companies is regarded as a proxy for good pedigree. If you don’t have a Harvard or Stanford degree, but are working at an “it” company, you will be courted.

Yesterday, I had a chance to drive up to the airport with a good friend, who had a good exit (small, <$20 Million at an ad tech company in NYC). He had a very surprising observation to make. For all its “meritocracy” discussion, the only thing the valley values is pedigree. Which is not surprising. Which also means Silicon Valley is more similar to Hollywood than it is to any other place in the world.

Let’s say you are a successful entrepreneur (good, but small exit) and are looking for what’s next. You head over to the valley VC Mecca – Sand Hill road, thinking yeah, you have been successful, made money and have been thorough the grind and know how to exit and make money, so people should be interested in funding your opportunity – right?

Then you are in for a rude shock, because no one gives a damm. Most of the folks are chasing the ex-1200th employee at an “it” company, who worked on an arcane part of their advertising solution. That employee may have never actually built an entire product let alone a company, but they are “it” right now.

So, how do you break the mold? Only by showing success. It is the path that will be harder to take. It will be road with more obstacles.

You may hear stories of how an ex “it” company engineer raised $5 million on the back of a napkin over cocktails. That’s not going to happen to you.

You may hear that 2 engineers with a prototype got a series A term sheet, while you with a product and revenues, are still struggling to close your seed investors, even though you are in the valley as well.

That’s the nature of the valley, so don’t be disheartened. You too will shine and grow. Until then though, focus on building your business and keeping customers happy enough to tell others.

The rest will follow.