Sounds like an awful place to work. Treating your most valuable asset as a commodity? Let me know how that works out for you.
Sounds like they've already got their most valuable assets, the employees, where they need them the most (presumably on core product). Using contractors to fill the lower priority gaps doesn't seem so bad in that context.
However, I could see it becoming an issue if something that was previously considered non-core suddenly turned out to be critical (e.g after changing direction based on customer/market feedback)
I think Jessica Mah is misunderstanding the purpose of contractors to her and her business' detriment. Hiring contractors because the team isn't able to accomplish its tasks in a timely fashion is disastrous in the long run. What happens is that the contractors will write code in the most expedient fashion possible, without care for the long term harm to the code base. The team then sees an inexorable decline in its ability to iterate, which causes the business side to think that even more contractors are required. This self-reinforcing cycle inevitably leads to a codebase that's almost impossible to change or improve in any way; it leads to a place where moving a logo is a three week project (don't laugh, I've been there).
There is another way of approaching contracting that is more valuable for both the team and the contractor. Instead of thinking of the contractor as a hired gun whose sole responsibility is to finish a feature or fix a defect, the founder should think of the contractor as a teacher or a coach. Hire contractors when your team needs to learn a new skill or improve some aspect of their development cycle. Approaching contracting with this mindset ensures that each successive contractor hired improves, rather than degrades the team's skills. Otherwise, your team becomes trapped in a maze to which they don't know the exit, and you wonder why every new version seems to have fewer improvements and worse performance than the last.
EDIT: After further reflection, there is another way that contracting can improve the business in a sustainable fashion. I know of a few companies that practice "contract-to-hire". In other words, you're brought on as a contractor for a period of 6 months or so. During that 6 month period, you and the company have a chance to evaluate each other. At the end of that period, the company makes an offer to you if you've managed to prove yourself as a good fit for the company.
Jessica - I'm a YC founder too, and most people have strong opinions on this. (http://bit.ly/9uDFfe); Maybe, you should ask pg, what he thinks.
I understand that "war for talent" is a popular narrative, but you note that those writing about it are almost always journalists who aren't programmers themselves. Non-technical writers don't understand quality developers want something more than a paycheck: they want to work on challenging problems, with people who they can learn from and in a company that has a shot at making an impact on the world. If you want to hire quality people than you should take hiring (all steps: from employment branding to interviewing to closing) a top priority: give employees time to interview candidates (expect each engineer to interview at least two or three candidates each week), be willing to let a position go unfilled for a _long_ time until the right person is found.
In short, be ready to reply "we'd like to do Y, but either we must strip out a feature X from Y, spend more time working on it or transfer an engineer working on Z to work on Y". If you're working on a hard technical problem, then your investors and customers shouldn't have a problem with that. If you're not (and there's nothing wrong with that), change your hiring strategy appropriately e.g., if you're building CRM software, stop trying to go after TopCoder finalists and ex-Google Search Engineers and instead look for engineers who are interested in business and product design/development. The former aren't going to be interested in joining you (other than at an exorbitant rate) until you're ready to use their talent, the latter will help you build the business to the point where you will need their help scaling it.
To use a vulgar analogy, the strategy of hiring a contractors to "move faster" is analogous to a man having nine one night stands hoping to conceive a baby in a month ("because I can't find the right long-term partner, and nine months is too long to wait anyway"): it's wrong on many levels and will poison your culture. It's long been known (Brooks' Law) that adding more "bodies" to a project to a project that's at risk of being late will only make it more late. Creating a company full of dubious quality contractors (with no loyalty, no "fire in the belly" about the product) will make your company look toxic to engineers used to working at "talent brand" companies where engineers are passionate about what they're working on and are confident in their technical abilities.
The CEO's real job is to manage the managers ("no, we don't have the resources to ship X at time T"), and sell the company (including to prospective employees). The blog post doesn't read "wow, this is a company worth leaving or turning down an offer from {Google, Facebook, Microsoft, etc...} for!".
Isn't this the same as the generalists she recommends hiring?
Generally heavy complaints of "it's impossible to hire engineers" comes from a dissonance between engineers you're trying to hire and the engineers you actually need to hire (or at least the engineers that are interested in your product).
The guys who taught me retail management put extreme emphasis on training. Training and knowledge dissemination was a top priority for the management teams I worked with. Once I was managing my own stores, I adopted this world view and had great success.
Coming from this background I'm sometimes surprised there aren't more articles about improving the flow of knowledge and communication within organizations.
So what gives? I learn a lot of stuff on my own (as do most of my tech savvy friends), is that the way things work in tech? Or are training and communication just not discussed very often because they're seen as so elementary?
Your UNIX folks will informally organize themselves around the best people, regardless of the org chart you try to impose from above. Part of the job of being the senior person is mentoring the newer people. This is done informally, but fairly consistently across most places I've worked.
Absolutely.... If you can find someone who is _equally_ good at all of those. Very rarely (I personally have never) you will see someone _equally_ apt (and good) at both left (Writing programming logic, Solving tough technical problems etc. ) and right ( designing User Interactions, Doing business deals etc.) brained work. Humans are not programmed like that.
Sure there are people who can get by doing multiple domains, but they are rarely fit/enjoy/brilliant at all of them.
In programming, design is just as important as logic. Code not only needs to be functional, but it also needs to look good. A visually attractive codebase is much more maintainable due to the basic human response to beauty.
In design, logic is also just as important. When designing an interface, for example, you are constantly solving problems about how the user is going interact with the design. The process of getting there is exactly the same as solving a programming problem.
I think there is a lot of ebb and flow if you don't typecast yourself. As a young kid I was quite interested in the arts. I remember spending a lot of time drawing and honing my visual skills because that's what I enjoyed doing. As I got a little older, I became fascinated by logic problems, remember spending a lot of time learning how to program.
Interestingly, as it relates to this discussion, now that I have grown older still, I actually have become much more interested in business and is one of the reasons why I follow this website. While I've closed a few deals along the way, my business deal abilities definitely lag behind the aforementioned skill sets. That I chalk that up to being much less experienced, not because of any genetic hinderances, however.
It is of my opinion that the biggest limiting factor is time. I was, perhaps, lucky that I started young which afforded me more time to put focus on both design and programming. Whereas for someone else who started programming in college it becomes difficult to fit in time for other interests, such as learning design. I know I spend less time doing business type work than I would otherwise like to because my plate is already full with other jobs. Because of that I miss the opportunity to grow in that area.
There are people who really are good at everything; but those people are as useful as they are rare, which makes them expensive. Usually, if you want a generalist, you are right, you take a skill hit vs. paying the same money to a specialist with large weaknesses in other areas.
Also, I don't agree with the "just contract it out" philosophy. The problem you run into with contractors is that even if they're good, they don't have anything invested in what they produce. They don't have to live with it long-term.
I'm not saying that it's bad to hire contractors, only that you have to be careful with them. And I certainly don't think that it's a good idea to hire contractors because they're easier to find and fire than full-timers. In fact, many times it can be harder.
We also make sure all contrator code goes through code reviews, which takes up my time but ensures that no code enters our site that isn't up to our caliber of quality.
P.S. I'm an engineer (Rohan) who works at inDinero in case that wasn't obvious.
My age and relative lack of typical corporate experience may of course give me a bad vision of the market. Maybe most contractors are not working the way I do, which would make the advice Jessica gives a bad one. But even in this case, generalization may prevent you from working with interesting people.
Disclaimer: I'm working as a self employed engineer, mostly doing jobs with my team, and far from being someone "who would prefer a fulltime job but can't get one".
She writes that finding talent in silicon valley is like trying to find water in the sahara, but then a few sentences later says "We had a lot of talented people apply for full-time jobs, but they either lacked culture fit, or cost too much money."
Unfortunately, there's a lot left unsaid here, and it would help to hear something more specific. For example, what was "too much money"? What attributes contributed to a candidate's "lack of culture fit?"
