Talented engineers are the lifeblood of software startups.
Unfortunately for Silicon Valley, talented engineers are in short supply and the competition for their services is fierce. Instead of competing with high salaries and expensive perks, we've seen many of our portfolio companies open engineering offices outside of the US.
While initially skeptical, I've come to appreciate the competitive advantage of a global talent pool. In order to help other startups that are thinking of hiring globally, I sat down with a handful of CEOs to learn more about their experiences.
The benefits of hiring globally
Not surprisingly, hiring engineering talent outside of the US is far more cost-effective. However, after you factor in overhead, management, and lost efficiencies due to geographic distance, the cost savings is often not worth the headache, particularly when your team is small.
The critical advantage to hiring global talent is that you can scale two to three times faster. If you tap into a good vein of engineers in a particular region, you might be able to hire 10-20 engineers in a month. It’s rare for a startup in Silicon Valley to hire quality talent at that speed, but it's more than feasible internationally.
CEOs frequently mentioned the reduced rate of turnover with global engineering teams. They are not constantly hounded by recruiters on LinkedIn…yet.
A number of CEOs pointed out that remote engineers are actually more productive than Silicon Valley engineers. The reasons cited were fewer distractions – most work from home, avoiding the onslaught of random work conversations – and certain cultural work patterns.
How to select a location
So where do you set up shop?
As any good real estate agent can tell you, location is everything. Every CEO gave the exact same advice: choose a location where you already know someone that you absolutely trust. You can find talented engineers almost anywhere, but it is critical to have the first person on the ground be someone you trust and someone that can recruit the best talent in that location.
Here are the top three location specific advantages cited by CEOs:
Certain governments subsidize startups in order to make their location more attractive. For example, Canada has the very generous SR&ED tax credit program which allows startups to earn up to 35% of qualified R&D expenditures.
24 hour support and monitoring
India, China and Southeast Asia are popular locations for many reasons, but in particular, CEOs mention how advantageous it is to have opposite time zones which allow for 24 hour support and IT monitoring.
Access to key markets
Western Europe and Ireland in particular are great first global offices because they create an easy foothold to launch a global sales team.
Closing the Distance
After hiring people you trust, the next most critical factor in determining your success with remote technical talent is how you implement work flows and processes to integrate your organization.
CEOs point to a number of collaboration tools including Zoom, Yammer, Skype, Hall and Hipchat. One popular setup uses Slack as the platform which ties into a variety of systems like JIRA for project management, Github for code, Heroku for deployment and Zendesk for customer service. Slack can be set up to receive automated notifications from these development tools. Using Slack as the central information repository is a slick way to keep everyone informed and up to date across geographies and time zones.
Every successful startup must have at least one unfair competitive advantage. Leveraging the global nature of technical talent provides a few: scale faster than the competition, retain your talent and reap the benefits of global locations.
With today’s modern collaboration and talent discovery tools, global talent is more accessible than ever and startups should more than eager to take advantage.
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