
Every time an engineer joins Google, a startup dies - moses1400
http://cdixon.org/2010/02/11/every-time-an-engineer-joins-google-a-startup-dies/
======
nfnaaron
"Whenever I see a brilliant kid decide to join Goldman Sachs, McKinsey, or
Google, I think to myself: a startup just died, and as a result our world is a
little less wealthy, innovative, and interesting."

Or, a future founder just began the process of gaining experience and
perspective.

~~~
philk
This is a bit of a trap. It's easier to take big risks if you have little to
lose. Once you're established at McKinsey, Goldman Sachs or Google you have a
comfortable standard of living and a job that gives you both challenges and
social status. Letting go of all that to be the guy slaving away at a crazy
idea is often harder than trying the crazy idea because you have little else.

Also when you're busy at work time can just fly by. It's easy to look up from
working and find a few years have gone past.

~~~
jasonkester
Ah, but if you have managed to make yourself ridiculously employable by
proving yourself at a few high-profile companies, then you suddenly have
"little to lose" again.

One of the reasons I feel like I can safely Entrepreneur myself down to a few
grand in the bank before looking for a contract to top up the finances is that
I know I'm pretty much a single Twitter post away from a good job offer.

Had I not first established a bit of a reputation before taking off on the
startup track, I wouldn't have that safety net, and might be a bit more quick
to grab any contract job that came along.

~~~
gaius
Exactly. And having a "name brand" on your CV helps more than having been to a
top college. 3 years at McK or GS and you will never have trouble getting
anyone to take you seriously in business. It doesn't excuse you from anything
important, but it does mean you don't need to waste time establishing your
credentials to everyone you speak to.

------
larsberg
There are a bunch of advantages to the non-startup route:

\- Weekends are yours.

\- Guaranteed good pay. After ~4 years at MSFT, I was making nicely north of
$200k gross. As a developer. In 2004 dollars --- it's probably more now.

\- There are technical people more experienced than you, interested in
mentoring your growth. I used to joke as a hiring manager that you could tell
quickly in an interview how long someone had been in the startup pit because
they had learned no new concepts (only new technology) since they started.

Why would anyone technical who doesn't explicitly want the startup experience
do it these days? It's not like the mad IPO cash-out and low corporate pay
days of the late 90s / early 00s.

~~~
strlen
> \- There are technical people more experienced than you, interested in
> mentoring your growth. I used to joke as a hiring manager that you could
> tell quickly in an interview how long someone had been in the startup pit
> because they had learned no new concepts (only new technology) since they
> started.

It's hard to over-state that. When joining company (start-up or not), I always
make sure I am would _not_ be the smartest person in the company (having made
that mistake once and deeply regretted it).

~~~
orborde
Care to explain?

------
mrshoe
_there are probably 100 Steve Jobs born every year. The vast majority just
never have a chance or give a thought to starting a revolutionary new
company._

A Steve Jobs that doesn't give a thought to starting a company is not a Steve
Jobs. That's _all_ he thought about from a young age. Just because our "top
talent" often goes to big firms doesn't mean our _top founders_ are going to
big firms. A startup founder is more than just top talent; it's a very rare
breed.

------
pg
I think the reason so many VCs think the VC business needs to shrink is not
that there' some limit on the number of startups, but because of a historical
accident that caused the VC business to bloat suddenly. The bubble of the late
90s caused a great increase in the number of VC firms, and many of the new
arrivals were incompetent. When VCs say the VC business is going to shrink,
it's largely a tactful way of saying that those firms are going to get GCed.

~~~
apsec112
Actually, I pretty strongly think that there is a limit on the number of
startups, if by "startup" you mean "small company in which people create
wealth largely through computer programming".

According to the BLS, there are 1.3 million "software engineers" and
programmers in the United States (cite: <http://www.bls.gov/oco/ocos303.htm>).
This number will go up over the next fifty years, but not by that much;
projected growth is 2% annually. One could see this number increasing more
rapidly if programmers are in so much demand that their salaries (either in
the form of cash or startup equity) go up very fast, but we don't see that
happening; programmers nowadays don't get paid that much more, in either
dollars or equity, than programmers five or ten years ago.

Now, how many of these programmers have the skills needed to start a
successful company? Let's be optimistic and say 10%, which is probably above
your estimate ("The top 5% of programmers probably write 99% of the good
software", cite: <http://www.paulgraham.com/wealth.html>).

Now, out of those, how many have the personality and determination needed to
start a successful company? In the overall population this number is probably
less than 5%, but the traits needed to become a good programmer (high energy,
determination, ability to think well) probably correlate significantly with
the traits needed to start a successful company, so I'll be optimistic again
and say 25%.

Now, what's the viable window for programmers to start companies? At a guess,
I'd say probably around age 22-37, so 15 years. I'm going to be optimistic
again and assume that all working programmers are within this age range.

Now, how many founder-class programmers do you need to start a successful
company? This number could probably range from one to five, but I'm going to
be optimistic again and say one.

So, dividing it out, the number of successful startups every year is bounded
above by 1,300,000 * 0.1 * 0.25 / 15 = ~2,200, and this is almost certainly an
overestimate.

~~~
pg
The number of programmers is pretty elastic. People can and will learn to
program if it starts to seem like that's a valuable skill. E.g. there is a
founder in this current YC cycle who came to the US to go to business school,
but then realized that if he wanted to start a startup he'd be better off
spending the time learning to hack instead.

I'd say the upper bound on the number of startups is the number of people who
are determined and smart enough. That's probably between 1 in 100 and 1 in
1000.

~~~
gaius
_People can and will learn to program if it starts to seem like that's a
valuable skill._

But they won't tho', not really. In the dotcom boom there were plenty of such
people who learnt HTML and were (well) paid for it for a couple of years. But
they didn't or couldn't make the jump to possessing a skillset that kept them
in the industry after the meltdown. The guys with C++ or Sybase or whatever
under their belts, just kept right on truckin'.

~~~
DaniFong
All of the scientists I know know how to hack. A philosophy grad student I
know built a neat little philosophy bot.
<http://webscript.princeton.edu/~amendelo/skeptic/>

Hacking is starting to be a new literacy. What's more, the most important part
of startups isn't really programming, which is getting easier and easier, but
understanding customer's problems. Here a wide range of backgrounds are
useful.

------
fnid2
When I was in college, I went to the career center looking for a job. I had my
resume all spiffy and on it was a startup I had been working on in college.

The recruiter asked why I didn't pursue the startup idea and I said, "I need
to pay the rent."

I think that sums it up right there for most. We enter college with nothing,
and we leave college with less than nothing (i.e. $100,000 in debt). So we go
get a job so we can pay the bills meaning we get $5k a month coming in pretty
easily and that's a lot of money. It's definitely enough money for a college
kid to pay for rent and be happy for a while and they probably end up being so
happy that nothing else is worth the risk.

Why risk $60k a year on a startup that will buy you (if you are _lucky_ ) some
ramen to eat and some space in your parents' basement? A BMW plus a phat
apartment in a high rise is difficult to turn down for something that appears,
for all intents and purposes, to have about a 1 in 1000 (at best) shot of
success.

That's why we have no entrepreneurs anymore. Life is too easy without them.

~~~
Psyonic
"That's why we have no entrepreneurs anymore. Life is too easy without them."
Any evidence to support a decline in entrepreneurs? The internet seems to be
overflowing with them.

~~~
fnid2
It's probably selection bias. It's easy to find people you want to find on the
internet, but look around you in the real world. If you aren't in silicon
valley, it's very difficult to find entrepreneurs and it's even harder to find
them outside the internet.

~~~
garply
I'm in Beijing, I'm in the food industry, and I'm surrounded by entrepreneurs
who almost never go online. I turned down the posh jobs out of college and my
partner quit McKinsey to found our company. A friend just bought a million
dollar factory for his t-shirt and pants company. Entrepreneurship is not just
online and the notion that entrepreneurship is in decline feels very wrong to
me. I'd like to see data.

------
rythie
V.C. is suffering because there are not enough companies that have got to a
big enough stage for them to fund.

There needs to be more put into early stage companies. I meet endless
companies in the U.K. that can't easily even get $20k to get off the ground.
Yes, we've got SeedCamp, but it only funds 5 or 6 companies a year. There are
1000s of good potential companies in the U.K. alone that can't get this first
step of funding. And that's the U.K. which is fairly developed for this and
there are lot of countries that this could apply to.

Basically, I think we need several Y-combinator style companies in every
country in every industry. I think as people see the returns come into
Y-combinator there will be explosion of these companies as there a lot of
people can spend $2m/year on a range of outside bets.

------
carterschonwald
I know a number of people who after they graduate would love to focus on
startups under the right circumstances, but one of a number of constraints
they have is that they need health insurance, which isn't at present something
that fits easily into a "Boot Strap Budget"

~~~
jasonkester
Health insurance is $89/month if you're young. That comes in on the monthly
budget right alongside beer and hosting.

Housing and Car payments are the thing that get you.

~~~
ericd
Could you point to this health insurance? The cheapest I've found was ~250/mo.

~~~
usaar333
I have Blue Shield VitaBlue 1900 which costs about $69/month including dental.
If you are willing to accept an extremely high deductible ($1900 annually
here), you can get relatively cheap health insurance.

~~~
ericd
Nice, that sounds perfect (though I'm not sure Blue Shield operates in NY...).
Know of any good sites that show what insurance plans are available in what
states? (or did you find that via some other method?)

~~~
silverlake
have you checked out the freelancers union in NY? They offer cheaper insurance
and other benefits.

~~~
ericd
Looks like the 10k deductible plan for health alone through Freelancers is
still $196/mo... better, but still seems a bit high, considering I've never
been hospitalized.

~~~
usaar333
You need to find the plans that aggressively discriminate based on health
history. If they aren't hard for the average American to qualify for, you
won't get the low rates.

Oh and I don't know your health and finances, but if you are healthy (and
presumably hardly risk-averse), no health insurance beats a 10k deductible
that costs you $2.4k a year.

------
larsr
"Whenever I see a brilliant kid decide to join Goldman Sachs, McKinsey, or
Google, I think to myself: a startup just died"

Many smart "kids" (gee, thanks dad, glad you know what's best for me!) want to
solve interesting problems, not muck around with all that other stuff you have
to deal with as an entrepreneur.

~~~
robryan
Arguably the best place for that though is a startup where your first employee
with a large stake? There's no doubt there would be many very interesting
positions at Google, but I'd imagine there would also be some very boring
positions for developers straight out of college.

~~~
nostrademons
First employees have to deal with _a lot_ of gruntwork. Possibly more than the
founders, because they're often the ones stuck setting up the production
servers, dealing with customer complaints, hacking through that sticky bug,
firefighting, training/interviewing new employees, and generally doing all the
boring stuff while the founders are out sealing business deals.

As for Google - it's what you make of it. I know some people who've gotten
stuck in a narrow corner of the company, but I've personally been exposed to a
pretty deep cross-section of the search stack, and worked on some fairly
exciting projects. Working for a big company doesn't excuse you from actively
managing your career - if something exciting is coming up, volunteer for it!
And nobody can stop you from working on other stuff - if there's something
interesting, just go hack it up and ask for forgiveness later.

~~~
anonjon
"if there's something interesting, just go hack it up and ask for forgiveness
later."

This is probably the best advice given on hacker news today.

------
GiraffeNecktie
"Whenever I see a brilliant kid decide to join Goldman Sachs, McKinsey, or
Google, I think to myself: a startup just died"

What does mere dumb brilliance have to do with creating a successful startup?
I thought it had more to do with stamina, discipline, luck, persistence,
flexibility, hunger, vision etc.

If that brilliant kid is more interested in working for a big company, maybe
it just means that they were smart enough to realize that they weren't cut out
for the ramen life.

~~~
alain94040
Or it could be that they didn't even know it was an option for them. Going to
work for Google is the easy thing to do after college.

------
dusklight
Yeah but not all engineers who join Google stay in Google forever.

The ones who eventually leave and start their own company bring with them
whatever parts of the Google culture that they felt were valuable: maybe it's
the data-driven, engineer focused management style, maybe it's the code review
and use of real computer science in the creation of software, maybe it's the
free food rule.

They also leave after meeting a lot of smart people and making a lot more
connections that could potentially help them in the future.

------
andylei
Most people here seem to think that startups are more net productive /
innovative / whatever than large corporations? Even if this is true, that
doesn't mean that everyone should join a startup.

Big companies like Goldman, McKinsey, and Google provide value not only to
normal people, but also startups. Google builds tools and infrastructure that
help power the Internet. There are probably tons of startups that rely on
Google products like Gmail and Google Maps, and without smart engineers
working at Google, those startups would be worse off.

McKinsey provides consulting services to companies big and small, including
startups. Some startup engineers may not have the best knowledge for how to
best access a foreign market, and companies like McKinsey, who do this
research all the time, provide valuable business advice about how to set
prices, enter new markets, structure growing organizations, and all kinds of
other business questions that startups may not know how to answer.

Even Goldman Sachs has something to contribute to startups. GS financial
advisers (as well those other banks, obviously) are the ones telling large
sovereign wealth and pension funds to diversify their allocations into
categories like venture capital. This money is critical for lots of startups
to grow.

Maybe these companies aren't completely necessary for startups to start and
grow, but they do have a lot to contribute to this space.

------
gxs
The company where I work currently, an analytics company, was founded by a
McKinsey alumn.

The company is going on 9 years.

Our biggest client last year was McKinsey and when he first started the
company (i.e. before biz dev), he leveraged the contacts he'd made at McKinsey
heavily.

All in all, I'd say the article argues one extreme, when as usual the truth is
somewhere in the middle.

------
agravier
Many ex-googlers I know are now startup founders.

~~~
aditya
Right, however most are not.

~~~
MikeCapone
Most non-ex-googler engineers aren't either.

------
rajatmehta1
This article is very true.Normally when a person is fresh out of college the
responsibilities are less, he might not be married or might not have a housing
loan etc, so it is the right time to start a startup. Once a person joins a
big company he comes into something known as a 'comfort zone' , its easy to
get into that zone by following a defined path or trend i.e to say good
college + good marks + some contacts and you land up a good job with good
pay.Its difficult to get out of this comfort zone. I personally feel
innovation happens mostly in startups.It does happen in big companies but in
bits and pieces but in startups it happens all the time because innovation is
the only thing that can make a startup a success.

------
grok2
BS. This is true of anybody joining any company.

~~~
jmtulloss
He didn't say it wasn't.

------
rflrob
Is it just me, or does it seem unfair to lump Goldman Sachs, McKinsey, and
Google all into the same class? In particular (having worked at none of them),
I'd reject putting Google, an engineering company, into the same category as
the other two, which largely cater to institutional clients.

~~~
nfnaaron
They're all subsidiaries of BigCorp. Once you get past a certain size
(employees, sales, market cap, whatever) it's unavoidable to become BigCorp,
regardless of the differences in your particular company's culture. Once
you've become so capitalized that your company's stock is itself a commodity,
you're BigCorp.

~~~
krakensden
Thank you Mr. Tautology.

------
__Joker
Not I think. He anybody has ideas and/or dreams and believe in himself he
would have pursued it anyway. Now if you have some doubts then obviously go
for the safer option. And may be as nfnaaron points out may be they are
gaining experience.

------
ALee
This seems to be subtly jabbing Aardvark's acquisition, specially since Hunch
(cdixon's startup) is still out in the open.

------
tybris
VC just needs to get out of its parents basement and spread out more. Why not
open offices at major universities?

------
flogic
It's hard out there for a venture capitalist... Cry me a river. Let engineers
choose the life that it best for them.

