Small is the new big is the new small

Last week I was attending a seminar in which Getjar CEO and founder Ilja Laurs gave a presentation.

During his presentation, he compared the typical start-up company in Silicon Valley with the more traditional established business like Microsoft and nowadays also Google. According to Ilja Laurs, the start-up companies are winning the competition for talented people to the big firms, because they can offer higher salaries and better perspectives. The reason that small start-up firms can offer higher salaries is because of their prospect of fast increasing firm value which can be capitalised and partly spent on salaries. Big firms in general make small profits and don't increase their company value and cannot offer the same high salary. The future prospect of creating new 'world changing' technology, products or services is also more appealing than the prospect of making more of the same in the large firms. Small is the new big...

From a talk with some people in the former Innovation Platform in the Netherlands, I know that the people working their consider the "Big seven" companies in the Netherlands employ almost all talented scientific people in the Netherlands, which hurts the development of new technological based start-up companies, since they are unable to attract and attain talent. These large companies are able to attract talented people because of the high salaries, the variety of career opportunities within these firms and the prospect of working and collaborating on new advanced technological challenges and bringing new technological products to the world.

France is renowned for life-long employment for state-worker with good salary and working conditions. It is therefore not a surprise that many talented people choose a career in a state institutions after finishing one of the prestigious 'grandes écoles'. In Lithuania on the contrary, an average talented person would choose a career in business, and preferably start his or her own company.

In conclusion, it can be said that different circumstances in different countries and probably also different sectors determine the conditions for organisations to compete for talented people. The prospect any organisation can offer to people in terms of current and future salary are just as important as the values, working conditions and the image of the organisation and the sector it operates in. And finally, talent attracts more talent.