Investing in Austin, Investing in People

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There's been a bit of a blast of news about the Austin Technology Council (ATC) taking a delegation of Austin CEOs to Silicon Valley to recruit technical talent to Austin:

?These events are about Austin making a pretty loud statement in the Bay Area,? said Julie Huls, president, Austin Technology Council.? ?Texas is a New Economy State, and we have a killer combination to support it: high-paying tech jobs, fast-growing companies, a low cost of living, and a relaxed way of life.? Over 100 of our area CEOs were together in May at an ATC CEO Summit and one key call to action was to bring more tech talent to Austin.? We are proud to deliver on that idea in a couple weeks in San Francisco and Sunnyvale.?

Some of the best companies in Austin are represented in this trip - and some great CEOs for sure.? These are people that Austin has a lot to be thankful for.? I may not be sure that sending the CEOs en masse is the best way to recruit tech talent to Austin, but I certainly don't blame Austin CEOs for recruiting in other markets.? From my time at Trilogy and Lombardi, and now BP3, I know a thing or two about recruiting talent to a firm.? I think this event in the Bay Area is more about news cycle than actual recruiting.? Hoping to plant the seeds for the future.? Clearly there is a need for more skilled people in Austin:

Austin currently has several dozen technology companies hiring 40 or more new programmers each.

Integrating new talent into Austin is clearly good for the local economy and ecosystem.? I was part of one of these waves of immigration to Austin back in the mid-90's - and the imports are now the CEOs and hiring managers at literally dozens of local companies.? But the long term solution to this problem should be a mix of approaches - recruiting and retaining talent from universities, industry, and various locations inside and outside of Austin. Too many of the startups in Austin have stopped college recruiting and really developing their own talent - which is easy to understand when a company has a horizon to exit of less than four years. But it isn't just college recruiting - it is also hiring people with experience who have the potential to do more - and then challenging them to do it!? Don't just hire Ruby on Rails experts and developers - hire people that you believe can become Ruby on Rails experts.

The strategy we take at BP3 isn't to import talent - but to hire our talent where they live - so long as they're willing to travel to customer sites.? If they live in California, that's where we hire them and where they base out of.? If we hire them in Minneapolis, that's where they're based out of.? It is actually part of our goal to have geographic diversity, and it means that we can hire people that other companies can't touch as easily. But it has a bigger benefit for our clients-? as we add staff, we're more likely to be able to serve our customers with local staff rather than a team that has to travel to be there in person.? High touch, high value, we like to call it.

Vivek Wadhwa's article in the Washington Post was a brilliant assessment of the "talent shortage" in the USA - first by calling out the objectives of the President's Council on Jobs and Competitiveness:

The council is holding a series of meetings to find ways to fix a perceived national problem: an engineering shortage. Otellini and the council claim that such a shortage seriously threatens America?s ability to create jobs, and that the U.S. risks losing its innovation edge to China and India, which are producing a million engineers per year ? 12 times as many as the United States.

But next, by explaining what is wrong with this logic:

The graduation statistics most commonly touted then were: China graduates 600,000 per year, India, 350,000, and the U.S., 70,000. We found that, in 2004, when comparing apples with apples, the U.S. had graduated more engineers (roughly 140,000) than India had (roughly 120,000).

Wow.? Wadhwa's analyis just does not agree with conventional wisdom.? Wadhwa predicts that great numbers of engineers in India and China will face unemployment or jobs in fields unrelated to engineering.? This is where he cuts to the heart of it:

Then there is the question of whether there is a shortage of engineers in the United States. Salaries are the best indicator of shortages. In most engineering professions, salaries have not increased more than inflation over the past two decades. But in some specialized fields of software engineering in Silicon Valley and in professions such as petroleum engineering, there have been huge spikes.

So, there are shortages in a few critical areas, but overall there is not a shortage of engineering talent.? Again, this matches with the data that I've been seeing.? It also better reflects the proliferation of engineering-derivative majors in US universities.

If I were these local Austin CEOs, however, I'd also be shopping in other parts of the country outside of Silicon Valley and Austin, and I might also focus more time on universities - graduates are more likely to relocate and take a chance on a place like Austin.? But that requires a long-term strategy toward staffing that not all companies have.

I'm hoping that companies in Austin, and in general, will start taking the time to invest more in the people they've got, and hiring more people with potential, rather than just looking to find someone who has done it all before.

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