Talent Torched on Tech?

Nick Cromydas 3 min read 20 Sep 2023

For the last 15+ years, people flocked to tech with promises of a faster pace, career growth, the ability to innovate and drive impact, and the overall prospect of wealth and prosperity.

But a pretty interesting phenomenon has been happening the last 12 months. For the first time since starting Hunt Club 7+ years ago, we’re seeing top-tier tech talent turning toward more traditional industries that not long ago, they would have called “sleepy,” “unimaginative,” or “boring.”

It’s not just people that have done the “startup shuffle” for 10-15 years (i.e. bounce from startup to startup without ever achieving a liquidity event). It’s also leaders who have had material private exits or significant wealth creation events through accruing restricted stock units (RSUs) YoY that grew in value insanely fast. This leads me to believe that the change happening is bigger and much more nuanced than what it seems on the surface. I’ll break it down.

Where’s the Talent Heading?

It used to be a rarity to see top tech talent consider large public companies outside of tech, mid-market businesses, or PE-backed startups across any stage or size 5-10 years ago. Today, the winds seem to have shifted.

We polled 50 tech leaders that fit at least one of the below criteria to learn more about how they’re thinking:

Achieved or was a part of an exit at a private startup.
Had been part of a successful IPO.
Was a part of a tech company for over 5+ years and saw share price appreciation of +200%.
Currently is or was a Vice President or higher.

The results were interesting:

Over 20% no longer wanted to pursue startups or “pure technology” companies at all.
50% would consider joining a larger public company outside of tech for the first time.
70% were evaluating PE-backed companies or small businesses for the first time.
80% would forego higher upsides and short-term perks for more secure compensation packages.
More than 50% would sell their private stock at a large discount if offered the opportunity.

Breaking down the why

The last decade has been tumultuous in tech with many ups, downs, lefts, and rights, and talent is starting to “vote themselves off the island,” and into new industries. Here’s why.

Part of this is likely due to the tenure and experience of the executives we spoke to. Many have 10-15 years left in their career and want to spend them in places where they can shuffle priorities and have more work-life balance.
Many are also realizing that it takes a very special company to produce a financial outcome that’s worth the volatility of a startup. While there’s some recency bias due to the extreme volatility of the last 3 years, more are seriously debating the value of tirelessly working towards a potential financial reward, only to likely burn out in the process.
Many industries are also changing leadership hands for the first time. The average age of newly appointed CEOs for S&P 500 companies dropped from 55.9 in 2021 to 52.8 in 2022, the largest YoY dip since 2000. Even small business owners are ready to move on. In fact, 55% are ready to retire and appoint a new leader. Each of these trends clear the way for great change, innovation, and work cultures that attract high impact tech talent into their environment.

My Take

The fight for talent is going to be even more complex as a pool of people that traditionally only “fished in one pond” start opening themselves up to new opportunities.

10 years ago, you’d never find a startup/growth-oriented tech executive considering a sharper PE environment due to the operational rigidity and lower outcome potential… That’s changing.

10 years ago, you wouldn’t see tech executives quit to start searching for funds to buy small businesses and cash flow them… I saw this happen 8 times in the last 3 months.

10 years ago, you wouldn’t see a startup exec with 3x successful exits go to a large public healthcare company to run innovation… It happened last month.

There is a convergence happening between the talent pool between tech, startups, large co’s and PE and should make for an interesting next 10 years.

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