Creating More Entrepreneurs: It’s not big companies that are the problem, it’s leaving them.

Last month, Chris Dixon wrote a blog entry titled “Every time an engineer joins Google a startup dies“.  The general topic is why there aren’t more startups.  He believes it is a cultural problem, saying “As much as we like to think of our culture as being entrepreneurial, the reality is 99% of our top talent doesn’t seriously contemplate starting companies”.  I agree that there should be more emphasis on the startup as a career option, but at the same time I feel that many entrepreneurs are specifically inspired by the culture Chris is challenging.

If startups were more mainstream, there could be side effects.  Some entrepreneurs may never begin at a big company and be inspired to go off on their own.  The startup world would attract even more individuals who aren’t the right fit, such as those trying to make a quick buck (there are already enough of these folks today).  I liken it to living in Seattle: it is an absolutely beautiful place to live, but outsiders only hear about the rain.  If outsiders realized how beautiful it is in the summer, that the cost of living is very low, and that the rain really isn’t that bad (especially when compared to snow), the city could be over-run, and I probably wouldn’t want to live here any more.

There is a lack of respect for entrepreneurs working at large companies before working for a startup.  Chris says:

Whenever I see a brilliant kid decide to join Goldman Sachs, McKinsey, or Google, I think to myself: a startup just died, and as a result our world is a little less wealthy, innovative, and interesting.

I rarely disagree with Chris, but I believe this statement is out of line.  I think Chris himself worked for a financial firm before venturing into the startup world.  There’s an assumption that all entrepreneurs should go into the startup world right out of college.  That working for a large company is always bad.  I worked at a startup for 8 months after college, and it was a negative experience – I was overworked and underpaid.  When I moved to Microsoft, I learned every day – everything from online marketing to managing customers to running a business.  It’s fine to work for a large company, as long as you’re learning/benefiting.  Where the problem lies is people not realizing they can walk away.  It’s almost impossible to walk away from that kind of salary and comfort.

I believe much more than 99% of our top-talent in large companies seriously contemplates starting a company. When I gave notice at Microsoft, I couldn’t believe how many colleagues told me they were going to leave to found a startup – “soon”. Despite a desire to be an entrepreneur, they do not leave because of the risk and little support. They have too much to lose, and there is no equivalent to a halfway house available to them.

A startup does not die each time an engineer joins Google.  A startup dies each time an engineer wants to leave Google, but doesn’t because they have too much to lose.  Investors have traditionally focused on those with a successful track record, and programs like Y-combinator and TechStars have expanded to recent graduates. What’s missing is a focus on talented individuals working for large companies. This group is where the focus to increase the number of startups should be.