CEOs For Sale! Come and Get Your CEOs!

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I’ve heard from two sources close to the Digg CEO search that there were a glut of good candidates. That’s something companies always say, and I frankly found it hard to believe.

I don’t necessarily mean that as a knock on Digg. I was surprised there were a ton of “great” CEO candidates to run any company in the unsexy critical-mass-but-not-flavor-of-the-month category—period.

Both sources told me the same thing: The existence of a secondary market means that top talent is churning through startups faster than ever. While Digg’s eventual hire was Matt Williams formerly of old-man-of-the-Internet Amazon, sources told me that potential candidates were also coming from hot, pre-IPO Web darlings.

I’ve asked around and had a few entrepreneurs and VCs confirm the trend: The secondary market is upping the talent churn to levels not seen in the Valley since the late 1990s. Then, it was because companies were being started and going public within 18 months. Now it’s because a new Wild West asset class of secondary private stock trades are having a similar effect—with everyone in Silicon Valley’s new favorite substitute for the IPO.

I was particularly surprised to hear some entrepreneurs and VCs say they are getting senior management candidates from Zynga. Zynga?! Isn’t Zynga still newly hot enough to be the one doing the poaching? It bears noting that Zynga CEO Mark Pincus is a hard-driving entrepreneur, and some of those looking for other jobs may not be exactly missed, just as the revolving management door in the early days of Facebook wasn’t necessarily, shall we say, unwelcome.

Still, assuming this as widespread as I’m hearing, is this a good thing or a bad thing for the Valley? It depends on what you do here. If you’re looking to climb the corporate startup ladder, it’s great because you can respectably job hop and still cash out at a faster rate. If you’re good, or at least able to make people think you are good, you move up with each hop. But if you’re looking to build a company, the trend is brutal because the talent is churning too fast to, well, actually build a real company.

At a high level, there’s an argument that it makes the Valley’s greater ecosystem more mercenary and one that it makes it less mercenary. It’s more mercenary because startups attract more people who want a quick equity flip. Remember the scourge of blue-shirts-and-khakis in the late 1990s? No one wants that back, except maybe the Bubble Lounge. On the flipside (pun intended), at least the mercenaries have a way to get out—meaning those who stick around are those who care about the mission. And we’re not talking about an immediate flip—this new reality only holds for the companies hot enough to have a secondary market for their shares or a big deal like those being done by Elevation and DST. It’s by any measure, still a pretty contained scourge compared to 1999. But it’s also one that by its very definition includes the companies startups are most likely to want to poach from.

But one thing it does for sure is cement the Valley as the place to start a consumer Web company. It is apparently easier than ever to assemble a team if the hype, valuation and idea are right.



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