Tech companies pounce as allure

images-52When he started thinking about leaving Apple this year, Darren Haas briefly contemplated Uber Technologies, where many friends worked. Instead, the cloud-computing engineer pursued an opportunity he considered more exciting: General Electric.

Excitement and a century-old industrial company don’t usually mix in the minds of Silicon Valley talent. But Haas said hardcore challenges at GE, like keeping planes airborne and nations’ water systems flowing, sold him. Now, he pitches potential hires from late-stage startups on those same big projects, along with competitive compensation.

“You’re betting on a lottery ticket,” he said he tells prospects who like the idea of getting stock in a startup. “There’s lots of ups and downs. GE is stable.” Since he joined in June, he’s recruited several engineers from unicorns – startups valued at $US1 billion or more – a move he said would have been much harder last year when unicorns were riding high.

The typical trade-off between working at an established public company and a startup works like this: Young businesses generally can’t pay big salaries, but offer options that could make staff wealthy if everything works out. Older firms typically pay more, but you won’t become a multi-millionaire. Fading unicorn luster tips the scales in favour of steadier employers.

Fifteen months ago, online local search company Yelp said the “unicorn bubble” was hurting its numbers, including the cost of product development which rose three per centage points to 20 per cent of revenue.

“That’s just a function of compensation in the marketplace,” Geoff Donaker, Yelp’s Chief Operating Officer at the time said on an earnings call. “We’ll do what we can to kind of hold the dam on that whole thing and ride it out.”