David Cummings on Startups

Recycling Talent in a Startup Community

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David Cummings

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Most startups fail — it’s inevitable. What isn’t inevitable is that the talented people that learned lessons during the failure go back to normal, non startup jobs. In fact, people usually learn more from their failures than from their successes, and post failure is a great time to join another startup so that the lessons learned can be shared.

Startup communities need to embrace and help facilitate the recycling of talent.

Here are some ideas around recycling talent in a startup community:

  • Creating an environment where many startups work in the same physical area, and thus have great startup density, naturally increases the recycling of talent
  • Failing at a startup should be seen as part of the process, and a good time to recycle talent into other startups that are working
  • Reducing the fear of startups poaching from other startups, knowing that talent should work on the best opportunity available, is an important philosophy for the community

Talent is the most scarce resource anywhere and needs to be recycled in the startup community to increase the odds of success.

What else? What are your thoughts on recycling talent in a startup community?

Comments

6 responses to “Recycling Talent in a Startup Community”

  1. Dave Williams Avatar
    Dave Williams

    In my mind the main problem is that very few employees benefit from startups. At Blinq all employees were large shareholder versus giving stock to VCs or investors, we gave it to the people that invested blood, guts and tears. In most startups, employees are under compensated in regards to salary, bonuses, and work their asses off without much to show on the back end success or not, unless they were early at ISS, UPS, HomeDepot, Coca Cola, EarthLink or other life changing companies such as Google, Facebook, etc, even in Atlanta. In my mind, founders in Atlanta need to be much more generous with stock grants to early employees as that is the money that is what makes startup exciting and builds the future of our community and given the typical low exits distributes wealth appropriately. Success breeds success. Just look at x-Mindspring, ISS, JBoss ployeees that had the financial comfort to go out on their own and then hire the friends that helped them with the first success. I don’t agree that startup employees without successful exits should just be recycled as many of them “lost” and want life back to normal. With Blinq I am proud of the wealth that was created and distributed and truly expect this to be a true catalyst for Atlanta success. I held 1/3 of the shares and distributed the other 2/3 for acquisitions, execs, early hires and employees at all levels at aggressive valuatin strike prices. Of course, I love hiring people with startup experience as this is critical to success but if they also have had success in a startup I love the idea that thehay sweatband what success taste and feels like. And, once you taste it that is super powerful motivator.

    Reply
    1. David Cummings Avatar
      David Cummings

      Great perspective Dave. I think that’s an awesome approach.

      Per startup employees being “lost”, that wasn’t the intent of my thinking. The idea is that failure is part of the process and we need to do a better job of plugging the people involved with startups into the next startup up the hall that’s doing well. We also need to have enough startup jobs that pay decent salaries so that people don’t have to go to big companies after their startup fails just to get a real salary.

      Reply
  2. Adam Avatar
    Adam

    I agree that most startups – and even later-stage companies – should give larger stock packages to A-grade talent. Great way for talented employees of failed startups to get back in the game and maintain an entrepreneurial mindset. Even if an entrepreneur has to go “work for someone else” – they will want to be able to participate in a big win.

    Reply
  3. jordanlshepherd Avatar
    jordanlshepherd

    Since most startup companies are lead by serial entrepreneurs, is there a good way to keep core talent with you for your next startup? Should you look for fresh telent for your new idea?

    Reply
  4. dmaportland Avatar
    dmaportland

    Reblogged this on DMA Portland.

    Reply
  5. Amir Dewani Avatar
    Amir Dewani

    Human resource is the best resource of any organization, provided it well cultivated, well equipped, well motivated, and well fed. Exploitation, wastage, leakage, and/or pilferage of this very expensive resource would be a moral crime. People die, retire, or take rest on attaining certain age levels, but experience never retires. Unfortunate are those who miss this point. It is not as much of recycling as it is of preserving and protecting human resource. Income inequality between the most highly paid and the lowest at the tail-end must be narrowed down. Presently nobody is thinking about this, and this is indeed the weakest point.

    Reply

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