Bay Area Hiring: Stiff Competition for Mediocre Talent

I was speaking recently to someone who works at one of those famous Bay Area “unicorn” companies. She mentioned that the organization had recently opened a Seattle office, and I asked why. She mumbled for a while and finally came out with, “Because it’s just easier to hire better talent in Seattle.”

This confirmed something that I myself had thought since my 2013-2015 tenure in the Bay Area: Hiring and retaining people in the Bay Area is hard because there’s stiff competition for mediocre talent.

That’s not to say that all talent in the Bay Area is mediocre, but I found that in comparison with Boston and Seattle (the other two areas in which I’ve hired people), the talent pool seems shockingly mediocre. To make Bay Area hiring and retention even more difficult, it’s difficult to filter out mediocre candidates from the superstars.

Big company golden handcuffs

Your first problem with hiring in the Bay Area comes from the behemoth tech companies there. Companies like Google and Facebook have interesting problems to solve and will pay top talent exorbitant amounts of money to help solve them.

But, assuming that you’re solving interesting problems too, trying to stretch your funding or finances to cover engineering salaries that even come close to those of these cash-rich giants might tragically shorten your runway or shrink your profit margins.

So what do you do? You don’t try to recruit from the big companies. Or, if you do, you hope that you can find talent that falls in love with your company enough to take a giant pay cut. Don’t laugh -- it happens. I did just that when I went from Amazon to a seed-stage startup in San Francisco. Unfortunately, it doesn’t happen often, which shrinks your available talent pool by a couple of hundred thousand candidates who already work for or are interviewing with the big companies.

One way non-giants can attract good talent is to be the Next Big Thing. Earn a headline on TechCrunch, get featured on ProductHunt or get a VC to blog about how cool you are, and you’ll discover that employees become easier to find. And that works for a bit . . . until your shiny new employees discover that your company has its ups and downs, just like any other. Then along comes the next “next big thing” or big-company salary, and off they’ll go.

The Bay Area hype machine

When I first moved to the Bay Area, I had high expectations. After working in Boston and Seattle, I had finally made my way to the tech mecca. Walking into my coworking space in the Twitter building felt like entering the epicenter of cutting-edge energy. Everyone around me seemed to feel the same thing: There was magic here, and we were all a big part of it!

But, then, after a few months, I realized something a bit odd. Everyone I met was (in his or her own opinion) uniquely “special” in some way. Every salesperson I tried to recruit was the best on his or her team. Every speaker I heard was in the most demand for his or her specialty. Every startup founder had discovered the Next Big Thing.

And as I talked even more with these people, I realized that I had worked with better salespeople at AWS, had heard better speakers at conferences in Texas and had known founders in Boston who had actually founded something that became (for a little bit) the “ Next Big Thing.”

After my disillusionment wore off, I realized that in the Bay Area everyone had to be a rock star, because claiming to be anything less made them look relatively pathetic. All of this hyperbole about people and companies had built what I started calling the “Bay Area Hype Machine.” Once everything becomes “epic,” nothing less will do, so hype ends up everywhere.

Unfortunately, the hype skills of talent in the Bay Area have become so well-honed that they can overpower even those of us with a well-tuned BS meter. Which means that you don’t know whether you’re interviewing a real sales superstar or a hype superstar.

This signal-to-noise problem really threw me off at first. My carefully honed hiring instincts weren’t initially sharp enough to discern genuinely good talent from folks who talked a really good game but were only mediocre operators. And the result was that, percentage-wise, I made far fewer superstar hires in the Bay Area than I ever had in Boston or Seattle, all because of this hype machine.

Eventually, I realized that I had to get candidates to prove themselves more and sell themselves less, or I too would fall victim to the hype.

Advantages of Tier 2 metro areas

Annoyed by Bay Area hype, I moved back to Seattle. And since I’ve been here, I’ve made a few phenomenal hires, who, interestingly enough, didn’t sell themselves with as much hype as anyone did in the Bay Area. Tier 2 cities, in fact, have many advantages over the over-hyped, overly-competitive Bay Area when it comes to hiring and retaining talented staff:

1. You can siphon talent from the big guys.

Amazon has an amazing hiring engine; I worked with truly remarkable talent when I was there -- brilliant people who know how to get stuff done. Yet this Seattle-based company, in my opinion, doesn’t treat its employees as well as many of the Bay Area giants, which makes it relatively easy to pull great talent away. The company also doesn't quite pay those sky-high Bay Area big company salaries, so you can hire away from it without destroying your runway or profits.

2. Talent knows how to ship product.

There are a lot of great ideas in the Bay Area, but few of them come to fruition, even with a full customer base and actual revenue. As a result, many Bay Area people have no experience shipping real, production-ready products.

This isn’t the case in relatively venture capital-poor Boston, where most companies don’t have the luxury of spending a lot of time “pre-revenue.” As a result, when you do hire the talent, they know how to develop and market beyond minimum viable products.

3. You can pay a reasonable salary for a decent standard of living.

I thought I understood the expensive costs of living in Boston and Seattle, but I had no idea. In San Francisco, I worked with people who put up with vermin or insane roommate situations just so they could afford to live on startup salaries without a two-hour commute each way. In Seattle, you can live in a beautiful home in a good neighborhood and pay far, far less in mortgage or rent.

Given my experience, would I start a company in the Bay Area? Would I take advantage of that “magic” and easier access to VC money? Not if I wanted to hire good people who would stay long enough to help my company grow.

Instead, here in Seattle, I work with amazing people -- who came from Amazon, Boeing, Microsoft and other area startups. These people know how to ship product and live in vermin-free homes. So, yes, I can find really amazing people without the hype. No wonder so many Bay Area companies are opening offices in Seattle -- this beautiful city, where they can easily hire and retain amazing people.