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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.

Great news, everyone: Marissa Mayer has fixed Yahoo's talent problem. Yay! Done. End of column.

Still here? It's probably because you're too busy to read the above link. Here's what the story, on business news site Quartz, says. Yahoo CFO Ken Goldman credits Mayer -- and the 37 acquisitions Yahoo has made since she joined the company as CEO in July 2012 -- with "changing the attitude and morale and the desire, if you will, to … attract new folks as well as to retain folks we have," he reportedly told a Morgan Stanley investor conference in San Francisco earlier this month. Goldman continued: "So I think -- I'm very confident. If you talk to anybody at Yahoo today you would find them, whether they've been here for a year or five years, they're very, very pleased with what they see in working at Yahoo. I'm absolutely, very confident in that relative to attrition, and our ability to hire all points to that."

Lucky for Goldman, I had a free afternoon last week, so I took his suggestion and called a bunch of current and former Yahoo employees. And sure enough, they all agreed with him. Yay! End of column.

No wait. They didn't agree.

In fact, based on those chats, I'd divide Yahoo employees into four camps:

1. The old-timers. Referred to by the next two camps as the "legacy employee problem" (as in "they're why we can't work from home anymore" and "they failed at managing their own products so now they're managing us"). When this group isn't napping or chewing their cud, they seem overly concerned with how much all the young bulls are getting, um, paid.

2. The acqui-preneurs. These are the aforementioned bulls. They're founders, usually of small, Series B companies, who were smart enough to understand that they couldn't get past their next stage of funding and saw Yahoo as a lucrative inflection point. They understand the importance of failing fast and were savvy enough to leverage their relationships to cash out while the gettin' was good. The people in this camp seem to be dreaming about leaving the day after they vest, what I affectionately call V+1 Day. And by serial entrepreneurship standards, they're the "left-behinds," the ones who didn't quit three months in to start another company.

3. The acqui-gineers. These are the most talented people by my estimation and, not surprisingly, the saddest of the bunch. They're sheep, really, having finally realized that the founders of their companies didn't actually sell a product or a technology or even users to Yahoo -- but rather, them. "Soylent Green is people!!!" Or more accurately, engineers. And remember, after all the venture capitalists take their portion of the spoils, the founders usually get 90% of the remaining proceeds. So the engineers get slightly less than squat.

[Here is another big question Meshing wants you to consider: Build Vs. Buy: A Dangerous Lie.]

Compounding that pain is the fact that most folks from this camp were recruited to the startup lifestyle from someplace Big and are horrified that their lives have come full circle. I imagine that their new corporate cubes each have a little red stapler and a Costco-sized vat of Zoloft.

4. The new new. These are employees who signed on during Mayer's tenure via conventional recruiting channels. I didn't chat with any of these folks, but my guess is that they're misadvised frenemies of existing employees. The exploratory phone call that they all made to get "inside info" probably played out like this:

Prospective employee: "Hey, I hear Yahoo is the third-highest-paying employer in the Valley. Anything I should worry about if I end up there?" Friend on the Inside: "Look, it's not Facebook or Google here, but at least they, um ... Hey, look -- a deer!"

Let me cut to the chase: If the people with whom I spoke shared any common thoughts -- any common culture -- it was 1) the near-universal questioning of Yahoo's acqui-hire strategy and 2) the desire for Yahoo to take on more substantive, moonshot engineering challenges. So to CFO Goldman's credit, my conversations "absolutely, very confidently" proved his point: They do hire a lot of smart people at Yahoo.

What's lost in the CFO's uber-positive spin is that Yahoo's biggest problem was never a lack of talent. It was, and perhaps still is, the lack of the kind of culture that retains great talent. And therein lies the problem with the company's metrics for evaluating success: Yahoo's 2013 annual report states that the number of people applying for jobs at the company doubled year over year, to more than 340,000. A better metric would be how many of Mayer's aqui-hires will have a tenure longer than V+1 or V+160. And given that Mayer's first acquisition, a company called Stamped, came aboard in October 2012, no one should

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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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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. 
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.
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?
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