Startup founders: Here’s how to convince people to join your company over the big tech giants

From left to right: Startup veteran and consultant Sharmilli Ghosh; Madrona Venture Group Partner Sudip Chakrabarti; Pioneer Square Labs Managing Director Julie Sandler; and Huntington Hill Ventures Managing Partner Sharon Richardson Howell. (GeekWire Photo / Taylor Soper)

In a lot of ways, it doesn’t make much sense to leave a high-paying job at a big tech company and join a scrappy little startup. You’ve got a fat paycheck; job security; excellent benefits; work-life balance; and an opportunity to work on game-changing technology.

So as a startup founder, how do you convince people to join your ship and help start the next Google or Microsoft or Amazon?

“You have to sell them on the experience they’re going to get,” Sudip Chakrabarti, partner at Madrona Venture Group, said during a panel discussion Thursday hosted by TiE Seattle at Create33 in Seattle. “Yes, you can go to Amazon. Or you can come to the startup and really own something holistically and really grow.”

Early-stage startups can’t compete on salary. It has to be about the mission and the opportunity.

“To be responsible for success and failure in the most acute of ways — there’s nothing like that at a big company,” said Julie Sandler, managing director at Pioneer Square Labs. “Some of the best rising stars at startups in our portfolio just embrace the adrenaline and the risk and the uncertainty and the ownership that goes along with that — ownership in every sense of the word.”

There’s also a difference between starting something from scratch — “you have to be somewhat irrational and crazy to do it,” Chakrabarti said — or joining a company that already has some momentum.

“When you’re joining a rocket ship that has all the potential in the world, a relatively untapped market, sheer opportunities and value creation for your customer — to own a big part of that business is a really exciting thing,” Sandler said. “It’s something that you won’t find at Amazon and Microsoft or companies that are further along.”

Seattle’s tech talent ranks among the world’s best. But many of the top engineers, product managers, marketers, and other workers end up at local corporations such as Amazon and Microsoft, or at one of the engineering outposts opened by Facebook, Google, Uber, Salesforce, and hundreds of other out-of-town tech companies.

Some theorize that the tech giants are sucking up would-be entrepreneurs, and ultimately hurting the region’s startup ecosystem. Seattle startups raised a record-high $3.59 billion last year but that still pales in comparison to other markets such as Silicon Valley, New York, Los Angeles, and Boston.

Sharon Richardson Howell, managing parter at Portland, Ore.-based Huntington Hill Ventures, said external factors such as cost-of-living can also impact nascent startups.

“I worry about things like the cost of housing in Seattle,” she said. “I wonder how much that funnel keeps up, because if you’re really relying on the fresh, young talent, it’s difficult to not lose that talent to places like Portland from Seattle because it’s really tough for them to get going. Living conditions are not great when you have to live with many people in an apartment.”

There are a number of groups in Seattle trying to pluck talent out of the big companies and get them into startup roles. Startup studios such as Pioneer Square Labs and Madrona Venture Labs, for example, incubate new ideas and match them with company builders.

A new program called Venture Out just launched this month and aims to be “the ultimate two-way door for founders working at large tech companies actively building their startup while still in their day job.”

“Seattle has more product and technical talent locked up in big companies than anywhere else in the world, and while we have the start of world class resources to help folks build or join a startup once they’ve made the leap out on their own, venturing out can still feel like a daunting one way door to folks,” Aviel Ginzburg, general partner at Founders’ Co-op and a mentor at Venture Out, said last month.

There are many folks bullish about the long-term potential of the Seattle startup scene — specifically, having the large companies act as a training ground for future entrepreneurs.

A group like Venture Out, for example, is betting that what happened with Microsoft will repeat itself with Amazon and other tech giants in the region. A recent GeekWire analysis showed that nearly 25 percent of CEOs leading startups on the GeekWire 200 — our index of top privately held tech startups in the Pacific Northwest — had previous experience at Microsoft, which was founded in 1975.

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