I was meeting with a young entrepreneur this morning who launched his web 2.0 company in Durham. The company is still really early with 1,500 registered users.
Over coffee at Starbucks, he was bitching about how hard it is to compete with Google, Facebook, Yahoo, etc for development talent here in NC. His arguement was that they (west coast companies) are raising the cost for developers and a lot of the better developers are fleeing NC for the riches in Silicon Valley.
I had a really hard time understanding this. Let me explain:
1) The tech companies that are truly competing head to head with Google are the companies on the west coast where Google is right down the street. I spoke with one Silicon Valley CTO today and he said there was a drought of developers in Silicon Valley. He also felt it was harder to find developers on the west coast than it is on the east coast.
2) The great entrepreneurs, with the great ideas and the ones that are willing to part with the right amount of equity shouldn't have a hard time attracting development talent. There is a ton of tech talent here with the local universities (NC State, UNC and Duke) and larger companies like Cisco, Red Hat, IBM and SAS right in our backyard.
3) There is a huge cost of living advantage to being here in NC compared to Silicon Valley. The average cost in '07 for a house in Saratoga is $1.75m, Palo Alto is $1.65m and Mountain View is $950k. In fact, Silicon Valley Leadership Group calls Silicon Valley "one of the least affordable places to live" and the Raleigh area as one of the most affordable tech hubs in the country.
4) More importantly, the cost for development talent here in NC is a lot cheaper than Silicon Valley. What this means is that it can be cheaper to build a company here.
I am not saying that RTP crushes Silicon Valley or Boston with the development talent here. But what I am saying is that for folks that are here in NC and looking to staff up on the development side, they shouldn't be blaming companies in other regions for their misfortunes.
Not even close. Anybody who thinks that we don't have developers right here in the Triangle with a startup mentality, obviously wasn't at Chapel Hill Startup Weekend this weekend. We had a great group of people together putting together a new startup over the weekend.
http://workperch.wordpress.com
http://www.workperch.com
On a related note, anybody in the Triangle area who is interested in networking with other entrepreneurial minded types, check out
http://www.trianglestartupgroup.com
Posted by: Phillip Rhodes | November 04, 2007 at 06:10 PM
I agree with John - it's hard to hire programmers anywhere, especially programmers with the "Web 2.0" skillset. This is a function of demand more than region, though. The problem in this area is not lack of talent.
That's not to say RTP is perfect, however. The Web 2.0 model is built on loose collections of entrepreneur/developers, as compared to the more structured "firm" model of an IBM or Cisco. Because these Web 2.0 developers can't rely on their institutions as support structures, there needs to be greater community support.
We see this community suport in Silicon Valley/SF - there's a strong Web 2.0 culture that exists in real life and in the blogosphere. To this extent, I've run BarCamps and RTP 2.0 to bring people closer together. But these events only happen a few times a year, which is not often enough.
There are good signs that others are building the tech community in the triangle - DCampSouth and "Refresh the Triangle" are two great exampes, aside from BarCampRDU. While we might never have the Bay area culture here, more people are realizing that we're in charge of our own destiny...its up to us to connect the Triangle.
Posted by: Fred | November 01, 2007 at 08:28 AM
jason,
you should refer him to studentbusinesses.com. there are tons of great developers in your area on there who are still in school or recently graduated. it will prove to be an excellent resource for young entrepreneurs.
jeremy
Posted by: jeremy | October 31, 2007 at 07:27 PM
Hey J - hope you're doing well.
At PlayMotion, we specialize in a very niche field - computer vision. Resources and development can be challenging to come by, by the very nature of our business.
However, if someone is pushing a web 2.0 type of play, there is no excuse for crying about lack of talent.
Web 2.0 apps can be built and deployed in a very cost-effective manner. Why? Two reasons:
1) Maturity of technology (which has been discussed ad nauseum).
2) Abundance of talent within the marketplace.
Web 2.0 type plays are one example of where outsourcing/offshoring makes sense.
Any web 2.0 entrepreneur who is crying about finding talent probably has bigger problems to solve - named a leadership one. Doubly so if the venture is still embryonic, which less than 25K users.
My advice to the entrepreneur: stop whining and start executing. You are an entrepreneur for a reason - you solve problems. So go solve your problem. If you can't solve this simple problem, how can you be entrusted to solve the problem for the customer?
If a web 2.0 entrepreneur's model is one of "let's fill a room with a bunch of engineers to build a web site", that isn't something I'm likely going to get excited about from an investment standpoint.
My 2 cents ..
See you at CapConn in November :)
Cheers.
Scott
Posted by: Scott Burkett | October 31, 2007 at 09:12 AM
Where some see a problem, others see an opportunity...
Posted by: Jeremy Welch | October 31, 2007 at 01:57 AM
i've lived out here for almost 2 years now, and it's my opinion that the opportunities of living out here, surrounded by smart techie people all the time - the limitless networking opportunities - well, the east coast just cannot compete.
firms from outside SV will continue to succeed, but...
Posted by: Peter | October 31, 2007 at 12:45 AM
I remember asking Tim Huntley, co-founder and CEO of Ganymede Software, this question back in 1998 three years after Cisco opened its campus and had began hiring intensively. There was a lot of generalized whining because starting salaries for developers coming out of NC State had doubled overnight. Young companies were resorting to recruiting via billboards on the Beltline and Red Hat was marching toward its IPO.
When I asked Tim how he felt about Cisco driving up the cost and competition for developers he surprised me -- pointing out that Cisco was going to draw much more great talent into the area then it was going to suck up and that companies like Ganymede would be the beneficiaries of the influx. Besides, as a developer himself he didn't begrudge the talent getting its share of the reward -- they were, after all, the ones who were creating value in the company.
His attitude explains a lot about the excellent products Ganymede produced and success they enjoyed.
Posted by: Monica Doss | October 31, 2007 at 12:06 AM
I agree that it's not other companies in other regions we need to worry about. Warm weather is nice, but talent in any specific industry goes where there's an active, vibrant, and experienced community (seed/early stage investors and entrepreneurs) in the respective field, regardless of how they're compensated.
Right now the eco-system in the Triangle for incubating web2.0 or online media businesses is very nascent relative to other regions. Two few deals/entrepreneurs, too few early stage investors, and no real track record of success or experience in web2.0 across the board. Local talent simply doesn't have many tangible examples of friends who took risks and had it pay off.
Risk-takers don't go to work at Cisco, SAS and IBM...and I'd guess the risk-takers that started Red Hat left a long time ago. The local universities and the departments they invest in have been more focused on driving their talent to lower risk SBIR-related industries where the early risks are absorbed by our tax dollars. The good news is that seems to be changing.
I do agree entrepreneurs with real vision will attract talent and funding, but until the area generates a few web2.0 wins/exits, talent in general, regardless of cost of living or how they're compensated, will be much more attracted to go to, or stay in DC, NYC, Boston, SEA and SV. Only after they have kids will they move to the Triangle ;-)
Go PrepChamps!
Posted by: Tim Horan | October 30, 2007 at 11:12 PM
Jason...I totally agree with you. There is a ton of talent in this area and if you have a great idea, you really should not have that hard of a time attracting talent. As you know, PrepChamps has had numerous candidates contact us in reference to job opportunities. We actually ended up interviewing over 20 candidates for our Technical Project Management position. We have also had multiple candidates contact us in reference to our Developer positions that we have not even posted yet!
The key to our success is that we have aggressively networked into the entire community. Even though we are a very early stage company, we have a sound concept, business model and super team!
Not to knock other entrepreneurs, but the fact is you really should be able to hire super talent in this area. If you are building a business...you need to be able to sell the dream! That means you need to make sure that ALL of your employees have a stake in the game. I do not think this is a talent issue...I think it is a leadership issue.
Posted by: Dean Bundschu | October 30, 2007 at 10:19 PM
Hey Jason
Long time. How are you? I live in the valley so I know how hard it is to get good developers. Same in Bangalore OR Boston BTW.
The point I would agree with your entrepreneur though is that the Valley engineering talent is more "hungry", more "willing to take risk" and more "connected" with other folks so it takes much less time to get problems they run into resolved. As an example there's a PHP meetup group in SF: 315 people. Not all meet weekly, but very active community. Another note, webguild.com has over 20,000 web related talent JUST in the bay area. You cant beat those numbers.
Last point: More people graduating from other good schools prefer to come work at facebook, google etc. They are the hot and happening companies. I cant think of a too many (that's just me probably) hot companies outside of the bay area in Web 2.0 space.
Posted by: Mukund Mohan | October 30, 2007 at 08:34 PM