Reading, Writing, and Reflecting

Recently, Silicon Valley has been a buzz about Google losing key employees to Twitter, Zynga, and Facebook and the massive retention bonuses that Google has given to keep key executives.  Now, in the Valley, employee turnover every few years is commonplace so I wonder, is this type of turnover any different than the typical Silicon Valley career path?   I believe it is and to understand why, let’s first consider a blue print High-Tech career path.

About 10 years ago, noted and veteran Silicon Valley Venture Capitalist and academic Jack Gill led a high tech career planning session which I was fortunate enough to participate.   Here’s how the model would be depicted graphically.

Key points are:

• Get a solid education in either a business or technical field.
• Start your career at a large, mature, well respected giant, ideally growing 10-15% a year.  Learn the basics and develop professional maturity in a low risk, slower career development environment.   In 2000, companies in this category would include General Electric and H-P.
• From there, move to a more dynamic growing company with a 30-50% growth rate where one can latch on to mentors, gain more responsibility while making significant decisions, have more rapid career development, and participate in more meaningful equity levels.   In 2000, Microsoft and Cisco would be example companies in this category.
• After this experience, for the risk taker, one would be ready for working at startups typically at $10-30M in sales, growing 100% a year over year, be given even more responsibility and/or a management position, offered a larger equity position, and be ready for a higher potential/payoff but high risk with high failure rate experience.

So, that was a suggested high-tech career blue print a decade ago.  The question is—does that blue print still apply today for the Internet industry?

Now, let’s look at the first two career categories in 2010.   In the Work 3-5 Years at a Large, Well Managed Company, generally 10-15% annual Growth category here’s who you might see as key options for Internet professionals (although in these cases, growth was single digits).   Note, the growth struggles of Yahoo! and eBay have them in the slow growth category even though their revenue base is lower than expected for this category.

And for the Dynamic, High Growth company, generally 30-50% annual Growth category in 2010, the key players would like this, including Google.

But it’s not a big leap to add a couple of extremely high growth, very young companies to this category, albeit with a lower revenue base.  Yes, Facebook, and to a lesser extent, Zynga and Groupon.

So, by adding Facebook, Zynga, and Groupon to this category, what have we done to the career plan model?  We’ve basically moved them out of the high risk startup status which in one way they still are given their age of only 2-3 years old in the case of Zynga and Groupon.   But their growth is nearly unprecedented in the Internet space.  In this Wall Street Journal article, a comparison of growth between today’s mature Internet companies including Google, Amazon, Yahoo!, eBay compared to today’s young social media kings Facebook, Zynga, and Groupon yield some interesting results.  None of the mature companies even came close to achieving $750M in revenues in the two years that it took Groupon to reach those heights—an unbelievable rate of growth.

So, now for talented professionals early in their career, they have the option to have much of the benefits of the startup category of more responsibility, learning to lead in a company growing 100% a year, and have the potential for higher payoff without taking usual startup risk for this type of experience.    And with the mere existence of these companies in the Dynamic, High Growth company category, but with 200% or more growth rates, they’ve unfairly moved the perception of Google into the Large, Well Managed Company category, even though Google’s growth rate is significantly better than the Microsoft’s and Yahoo’s of the world who also are in the category.

So, it’s not a surprise at all that Google is having a harder time keeping existing employees from Facebook and Groupon.    The typical tech career path of a decade ago is most certainly changing.