The monoculture of tech

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com

Worrisome and very true:

(3), combined with (1), gets at what TrendCo’s real complaint with Mike is. He’s not their type. TrendCo’s median employee is a recent graduate from one of maybe ten “top” schools with 0-2 years of experience. They have a few experienced hires, but not many, and most of their experienced hires have something trendy on their resume, not a boring old company like Microsoft.

Whether or not you think there’s anything wrong with having a type and rejecting people who aren’t your type, as Thomas Ptacek has observed, if your type is the same type everyone else is competing for, “you are competing for talent with the wealthiest (or most overfunded) tech companies in the market”.

If you look at new grad hiring data, it looks like FB is offering people with zero experience > $100k/ salary, $100k signing bonus, and $150k in RSUs, for an amortized total comp > $160k/yr, including $240k in the first year. Google’s package has > $100k salary, a variable signing bonus in the $10k range, and $187k in RSUs. That comes in a bit lower than FB, but it’s much higher than most companies that claim to only hire the best are willing to pay for a new grad. Keep in mind that compensation can go much higher for contested candidates, and that compensation for experienced candidates is probably higher than you expect if you’re not a hiring manager who’s seen what competitive offers look like today.

By going after people with the most sought after qualifications, TrendCo has narrowed their options down to either paying out the nose for employees, or offering non-competitive compensation packages. TrendCo has chosen the latter option, which partially explains why they have, proportionally, so few senior devs – the compensation delta increases as you get more senior, and you have to make a really compelling pitch to someone to get them to choose TrendCo when you’re offering $150k/yr less than the competition. And as people get more experience, they’re less likely to believe the part of the pitch that explains how much the stock options are worth.

Just to be clear, I don’t have anything against people with trendy backgrounds. I know a lot of these people who have impeccable interviewing skills and got 5-10 strong offers last time they looked for work. I’ve worked with someone like that: he was just out of school, his total comp package was north of $200k/yr, and he was worth every penny. But think about that for a minute. He had strong offers from six different companies, of which he was going to accept at most one. Including lunch and phone screens, the companies put in an average of eight hours apiece interviewing him. And because they wanted to hire him so much, the companies that were really serious spent an average of another five hours apiece of engineer time trying to convince him to take their offer. Because these companies had, on average, a ⅙ chance of hiring this person, they have to spend at least an expected (8+5) * 6 = 78 hours of engineer time1. People with great backgrounds are, on average, pretty great, but they’re really hard to hire. It’s much easier to hire people who are underrated, especially if you’re not paying market rates.

I’ve seen this hyperfocus on hiring people with trendy backgrounds from both sides of the table, and it’s ridiculous from both sides.

On the referring side of hiring, I tried to get a startup I was at to hire the most interesting and creative programmer I’ve ever met, who was tragically underemployed for years because of his low GPA in college. We declined to hire him and I was told that his low GPA meant that he couldn’t be very smart. Years later, Google took a chance on him and he’s been killing it since then. He actually convinced me to join Google, and at Google, I tried to hire one of the most productive programmers I know, who was promptly rejected by a recruiter for not being technical enough.

On the candidate side of hiring, I’ve experienced both being in demand and being almost unhireable. Because I did my undergrad at Wisconsin, which is one of the 25 schools that claims to be a top 10 cs/engineering school, I had recruiters beating down my door when I graduated. But that’s silly – that I attended Wisconsin wasn’t anything about me; I just happened to grow up in the state of Wisconsin. If I grew up in Utah, I probably would have ended up going to school at Utah. When I’ve compared notes with folks who attended schools like Utah and Boise State, their education is basically the same as mine. Wisconsin’s rank as an engineering school comes from having professors who do great research which is, at best, weakly correlated to effectiveness at actually teaching undergrads. Despite getting the same engineering education you could get at hundreds of other schools, I had a very easy time getting interviews and finding a great job.

I spent 7.5 years in that great job, at Centaur. Centaur has a pretty strong reputation among hardware companies in Austin who’ve been around for a while, and I had an easy time shopping for local jobs at hardware companies. But I don’t know of any software folks who’ve heard of Centaur, and as a result I couldn’t get an interview at most software companies. There were even a couple of cases where I had really strong internal referrals and the recruiters still didn’t want to talk to me, which I found funny and my friends found frustrating.

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