It really was hard to find flaws in Microsoft's stellar earnings report last week, the best stimulus package the Puget Sound region could...
It really was hard to find flaws in Microsoft’s stellar earnings report last week, the best stimulus package the Puget Sound region could hope for.
But Microsoft’s promise of growth and stability in the coming year may not do much for entrepreneurs such as Kabir Shahani. It could even make it harder for Shahani to recruit engineers to Appature, his year-old Seattle software startup.
This isn’t a crisis. If anything, it’s an embarrassment of riches. Companies big and small are doing well and still hiring around here.
What I’m wondering is how the changing economic situation will affect the recruiting war between startups like Appature and giants like Microsoft, Google and Amazon.com. My guess is it will start tilting in favor of the bigs.
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When the current cycle was winding up and startups proliferated, Microsoft was struggling to finish Windows Vista and sorting out its online strategy. Now the cycle’s winding down and Microsoft’s firing on all cylinders.
Shahani, 25, isn’t too concerned about a downturn because Appature found a profitable niche, selling online software used by health-care marketing managers.
“I think when you are serving the needs of your customers and you can put money in their pockets, those things don’t affect you,” he said.
He and Chris Hahn, 30, a former Microsoft Tablet PC developer, started the venture with less than $20,000, hashing it out over Hahn’s kitchen table. The company is profitable and expecting sales of $3 million to $5 million in year two.
Appature recently leased a floor in a downtown Seattle building. Its seven employees outgrew the borrowed conference room that serves as headquarters, and the company is hoping to hire eight more. It’s not easy, though.
For a development job, Shahani spent nearly two months narrowing a list of 40 candidates to two finalists. But one wanted to move to San Francisco and the other wasn’t ready to leave Microsoft.
Maybe I’m overstating the connection between Microsoft and startups.
Venture capitalist Matt McIlwain at Madrona Venture Group said startups are still “attracting the kind of people that have startup DNA.” He hasn’t yet seen economic concerns pulling them toward bigger companies.
“Not right now,” he said. “In three to six months, I could have a different answer for you.”
Seattle tech recruiter Jeff Hibbert isn’t seeing a shift toward bigger companies, especially with capital still flowing to startups. “But if you see a continued shake-up in the financial market, by the end of this year you will see that migration,” he said.
Meanwhile, Shahani is already figuring out how to position Appature to recruits with these concerns: “I don’t think of the term ‘startup’ as negative … but one of the things we do tell candidates is we offer candidates that security — you’re not going to come here and get a pink slip in six months.
“I would argue that you’re not that much less stable at a company like ours than you would be at a large company,” he explained. “Really, it comes down to revenue and need — if you’re doing good work and you’re adding value to the company and there’s revenue to support your role, your role will never be eliminated.”
There’s still a leap of faith involved, but Shahani may reel them in with his optimism.
“When you hire talent and you’ve got people like the people we have on our team already,” he said, “you can do anything you want.”
Brier Dudley’s column appears Mondays. Reach him at 206-515-5687