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3/19/2014
09:06 AM
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Yahoo's 'Mission Accomplished' Moment: Talent Retention

Marissa Mayer and other tech employers should focus less on an aggressive acqui-hire strategy and more on moonshot engineering goals, current and former Yahoo employees say.

be able to evaluate that success until 18 months have passed.

So let me do some quick math. October 2012 + 18 months, carry the … Hey, wait. That's in two weeks!

Where are they now?

Stamped is the right test case. At the seven-minute mark of this Fortune interview with Mayer about her three biggest decisions as Yahoo CEO, she goes into the history of the deal. "Stamped was our first acquisition. A group of 10 people. Someone I'd known previously ... was running a great company. They were doing … 'Foursquare for things,' where you checked in and punched the things that you liked. Had a great run of it … a fair number of users but just really hadn't hit the tipping point that they wanted it to hit. And I said, 'You're a great group of 10 people. You know how to design mobile apps. You know how to build mobile apps.' Their app was beautifully designed. And I said, 'Would you mind ... you know, abandoning your app and coming here and working on something different?'"

Note that right after the words "abandoning your app" -- which is a profoundly sad statement -- Mayer flashes this quick smile that you should observe for yourself.

Mayer continued: "And you know that was a really hard decision for that team, but they ultimately decided that they would do it. They were like, 'We like working together. It is true that our application hasn't gone where it was supposed to go … but we're not going to be Facebook, Twitter, or Foursquare.' So they decided to stop what they were doing and came to Yahoo and built the mobile version of Yahoo Screen."

That last line blows me away. Yahoo took 10 creative, energized, super-talented risk-takers and asked them to port an online offering to mobile. And they paid through the nose for it: a damned port! It's the kind of coding and design that you can teach a kid out of school. That shouldn't just piss off the acqui-gineers. That should wake up the old-timers. And make the new new question their decision.

Talk about lacking imagination. It makes you wonder what Yahoo's version of the self-driving car would be. The self-conducting train? Or maybe the self-walking dog -- what the rest of us call "a dog."

Mockery aside, where is the Stamped team today? I found only three people on LinkedIn with Stamped in their profiles:

-- Robby Stein, co-founder and CEO of Stamped, is now the director of product management, Yahoo Mobile and Emerging Products.

-- Bart Stein, co-founder of Stamped, is now the co-founder and CEO of a stealth mode startup.

-- Paul Eastlund, VP of engineering at Stamped, left Yahoo in December and is working on something new.

Would Mayer or Goldman consider examples like those the solving of Yahoo's talent problem? Probably not.

Look, I get that most of what Goldman said was just him waving his pom-poms in a public forum. But with pom-poms that big, he might just as well have claimed that Mayer solved the P = NP problem.

Goldman and every Yahoo shareholder should be monitoring how long the talent from Mayer's 37 acquisitions remains at the company. Retention -- not just for her acqui-hires but for also every single Yahoo -- will be the strongest signal of the effectiveness of Mayer's ongoing (and incredibly difficult) cultural transformation. And the ultimate indicator of her success will be when, if ever, Yahoo lands on the Best Places to Work lists.

I doubt that Yahoo or any of the Big technology shops will ever stop acqui-hiring. That's fine, I suppose, not because of what it does for Yahoo shareholders but because of the signal it sends to the startup community. I'm not sure the entrepreneurial DNA cares about safety nets, but it's nice for the more-risk-averse engineers to know that one exists. Even if the process does cast and recast them as Bill Murray's character in Groundhog Day.

If the acqui-hire trend continues, though, we should create a new metric to replace the oft-used "cost per user" -- something like "cost per engineer." And companies should weight that cost by how hands-on the person is and then adjust it over time to reflect retention rates.

Mayer might also consider rethinking her moonshots to focus more on engineering goals. She has mentioned that she wants Yahoo "on every smartphone, every tablet, every day, for every Internet user." I don't know of any engineers who would get excited by that goal. Business people, yes. Analysts, absolutely. But engineers? Meh.

To quote one of the Yahoo employees I talked with -- and this sentiment came up over and over again: "They're hiring great people but not giving them projects that great people want to do." Mayer and every large tech employer need to light that fire. Because solving any big company's talent problem is only slightly less difficult than solving the P = NP problem.

For technology shops that care about attracting and retaining the best engineering talent, there's a direct correlation between those two challenges: Try to solve the impossible engineering problem and your top talent thanks you by staying.

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The author, a senior IT executive at one of the nation's largest banks, shares his experiences under the pseudonym Coverlet Meshing. He has spent the last two decades in the financial services sector, picking a fight with anyone who doesn't understand that banks are actually ... View Full Bio

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Lorna Garey
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Lorna Garey,
User Rank: Author
3/20/2014 | 9:27:37 AM
Re: Better employees than products?
Exactly - quick, dear reader, name ONE even mildly exciting Yahoo product or project. Betcha can't. And given that, how long will it be able to afford to acqui-hire?
Thomas Claburn
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Thomas Claburn,
User Rank: Author
3/19/2014 | 12:27:30 PM
Re: Bigger than Yahoo
I think there's an inherent problem in corporate growth. In large companies, it's difficult to insulate creative, boundary-pushing people from bureacracy. Once you grow beyond, say, 40 people, you move into playing revenue defense, which isn't interesting for those who want to break new ground. 
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
3/19/2014 | 11:49:15 AM
Better employees than products?
It's not surprising that Yahoo's acqui-hires, acqui-preneurs, and acqui-gineers have a hard time staying excited. Yahoo buys companies left and right, but it's been plodding along with a vague product line and negative reputation. The company needs great engineering projects and digital products to match its talented but restless workforce. But shouldn't talented people and great products be one in the same? Apparently not so much at Yahoo, and this implies dysfunction.
RobPreston
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RobPreston,
User Rank: Author
3/19/2014 | 10:08:14 AM
Bigger than Yahoo
Yahoo's an easy target, one that Coverlet illustrates well. But this problem is rampant among tech employers -- perhaps more so in IT organizations than tech vendors. People, especially the brightest people, want to make a difference. They're not just after a big paycheck and stable work. 
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