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The otherwise amazing book by Ben Horowitz (of Andreessen-Horowitz fame) called The Hard Thing About Hard Things has a chapter that basically lays out and encou
by bkeroack 12y ago
The otherwise amazing book by Ben Horowitz (of Andreessen-Horowitz fame) called The Hard Thing About Hard Things has a chapter that basically lays out and encourages this type of illegal behavior (called "Is It Okay to Hire People from Your Friend's Company?").
It literally recommends that companies maintain a "do not hire" (aka "do not poach") list of other organizations from which HR is forbidden from recruiting. It also recommends calling the CEO of the other company on the down-low to ask permission before extending an offer.
It really disgusted me when I read it. Such smart people doing such dumb things, and encouraging would-be CEOs to do the same.
- balls187 12y agoSeems taken out of context. Do not hire is different than do not poach. The wisdom I subscribe to is, if you have common investors, it's bad form to actively poach from portfolio companies. For companies that are later stage, it's bad form to poach key employee's from portfolio companies. Do Not Hire agreements between companies, however, seem unreasonable, except when there is clear cause for conflict of interest.
- bkeroack 12y agoThere is a difference between active poaching and simply getting a resume (or some other expression of interest) from somebody for an open position. a) If you get sent a resume in response to an open req and you reject them based solely on the current employer of the applicant being a "friendly company" ("do not hire" list), that is illegal and wrong. b) If you realize the applicant is from a "friendly company" and so you make a subtle threat along the lines of: "We are going to call your current employer to get a reference check before we decide to extend any offer, are you sure that's ok with you?" (also recommended in Horowitz's book), it's also wrong and unfair. I'm not a lawyer so I don't know if that is overtly illegal however.
- tptacek 12y agoIt is lawful to maintain a "do-not-hire" list of companies from which you disqualify candidates. It is possibly even lawful to do that with the intent of avoiding poaching and ill will. What's definitely not lawful is to conspire with the companies on that list to determine its makeup.
- argonaut 12y agoHow is that a subtle threat? That's not a threat at all. That's just being upfront about it. And if you don't like that you can tell them: "No that's not okay with me" and then walk away.
- undata 12y agoYour comment is spoken from a perspective that favors the investors... not the worker who is seeking better employment. Workers should be free to seek to improve their lives without old white men making back-room deals against them. In this regard the tech industry is no more progressive than any other, and that's incredibly disappointing. We're supposed to be such an intelligent bunch.
- alexqgb 12y agoNot convinced this helps the investors either, if the employee is staying within their broader portfolio of companies. Yes, he may cost a bit more, but presumably he's moving to do more valuable and / or productive work, so the uptick in salary should pay for itself several times over.
- cma 12y agoLet's say all he does is leverage your offer to get a raise at his current job. That raise comes out of investor dividends.
- codeonfire 12y agoLets say the price of electricity goes up. That comes out of investor dividends also.
- cma 12y agoI wasn't saying that he wouldn't be right to or they shouldn't pay market rates. I was just refuting the idea that an employee working at a company in a portfolio that interviews at another company in the same portfolio could only do so at a benefit to portfolio shareholders. That's really naive.
- balls187 12y agoYes, my comment favors investors, by way of favoring companies (and the potential return on investment), but it does not (in my opinion) hinder employees. I believe you misunderstood my point based on the following comment: > Workers should be free to seek to improve their lives without old white men making back-room deals against them I support the "Do Not Poach" rule. "Do Not Poach" does not prevent workers from seeking employment. It means, me as an employer, will not actively solicit employees of other companies if we have shared investors (given the size and complexity of the investments). "Do Not Hire" on the otherhand, seems to be what you are taking umbrage with, and I concur. Employees should (generally speaking) be allowed to seek employment opportunities without back-room deals preventing that.
- phaker 12y agoSeems taken out of context. In a [post] on his blog Horowitz describes a scenario in which a person currently employed at a company that is "important" to you comes in for an interview. The recommended course of action is to 1: block the hire, 2: inform said company about it. There are two things i just can't agree with at all: * The part about informing the current employer: about 50% of the time it will end with ruining the next few weeks or months of his/her life. I.e. getting them fired, with ruined prospects of getting the job they took the risk for. Note that at e.g. apple the standard procedure when they find out that an employee is looking for a job is to escort them out of the building right then and there. * Note it's not about "poaching", he explains thoroughly that it applies to people who ask for an interview on their own accord too. If you don't want to read the whole thing, at least read this gem: It is important to note that just about all of these kinds of policies violate the Right to Work laws in California. Specifically, if you block a hire based on this kind of policy and the employee loses their job and cannot find work, your company is liable for his wages. As a result, the business relationship with the other company must be extremely important for you to employ any kind of “hands off” policy. said blog [post]: http://www.bhorowitz.com/is_it_ok_to_hire_people_from_your_friend_s_company http://www.bhorowitz.com/is_it_ok_to_hire_people_from_your_f...
- 001sky 12y agoYou are taking it out of context, though. BH is basically talking about an issue that could kill your startup. Whether or not you like that reality, there is a real risk that the other company will retaliate for something they see as an adverse breech of trust. Note that logic: the problem is not with the company ben is advising. The issue is at the third part company. If that company decides to "go nuclear" and sever all ties because you poached/goaded or otherwise got involved in their "interal politics" (note: this is not a per-se issue of math/economics/money), bad things might happen to your firm. CEOs of startups have a fiduciary duty to avoid "bad things", and even that choice is a catch-22 (ie, two bad things...) you pick the worst-bad one. And that is what he is saying. In other words, he's talking about something that is a real-world problem. If you want to vent out about the issue, it really sits with the third part company. They are typically the one with all the power in the situation. Example: Startup A had 80% of its business tied to a single company, BigCo B. Like it or not, the CEO of startup A needs to avoid a situation where the CEO of BigCo B comes to the conclusion that he won't do business with A becaus of Politics (note: not economics). Whether or not poaching is politically sensitive (or offensive) and/or warrants this type of "nuclear" response, is a function of many thing. But none of that is BH's responsibility in the larger world. This dynamics is something that has played out for millenia from kings and queens and royal courts to how the predisent and Y combinator select their staff and senior leadership. At a certain level of the game, its all about trust. And polticial power is essentially a combination of trust and goodwill. And its easy to disolve and can reak havok on any company of any size when systemically undermined. So you need to pay attention to it. In other words, this is a much bigger issue. The tack of trying to shoot or lynch the messenger is sort of misplaced. Because the startup is the employer and may have a power asymmetry with a potential hire; but that startup is in itself subject to potential power assymetries at much higher levels. (This goes for pissing off BOD members, VCs, and Key clients alike...maybe it suck/isn't fair...etc... but the reality is you need to pick your battes as a small company. And picking fights with the consituents you need to help you build your biz is ~dysfunctional and needs to be understood as such.)
- balls187 12y agoI am really quite surprised at the number of downvotes to this has received. From +3 to now -4.
- mindcrime 12y agoIt really disgusted me when I read it. Such smart people doing such dumb things, and encouraging would-be CEOs to do the same. Wow, just wow. I'm reading that same book, but haven't gotten to that part yet. All I can say is... we (Fogbeam Labs) would never, ever, ever do something like this. When the day comes that we have money to hire employees, we are going with a strict policy of "We will poach anyone, anytime, from anywhere. If you want to keep your employees, treat them well enough that they won't want to leave".
- click170 12y agoPlease be sure to post on the HN Hiring page when you do start hiring. Your startup sounds like the kind that won't have trouble attracting people, myself included.
- argonaut 12y agoI did not find it especially disgusting. The specific approach Ben advocates is asking candidates at the interview stage whether they would be okay if you checked with their company. It is your choice whether to say yes or no. You have total latitude to walk away.
- codezero 12y agoOk, you can walk away, but that's not the point. The point is that if I want to get a better offer, and I seek that at another company, it's not fair to ask my current employer if they're willing to let me take that offer, because they may also not be willing to improve your compensation, so you end up stuck where you are just because your company wants you and you are skilled enough for other companies to want you too. All you are saying is that you are free from reprisal in that situation, OK, great, but that doesn't improve your compensation situation.
- bkeroack 12y agoIt's not just that, though. There is a really profound, fundamental mismatch in power between employers and employees: an employee depends upon the employer for the means of basic existence, while the employer does not have the same dependence on any given single employee. That disparity in power means that there must be very strong legal and social constraints on employers to make the labor market reasonably fair and equitable. Since essentially the only means the employee has at their disposal to better their situation is leaving or seeking better offers elsewhere, this fundamental right must be strongly protected. Employers can't have it both ways: laws that allow them to fire for any reason or no reason, set any level of compensation they choose (including cutting pay at any time for any reason) all in the name of the free labor market, but at the same time making secret backroom deals to limit compensation or employee attrition. It's either a free labor market or it isn't.
- dreamdu5t 12y agoYour definition of a "free labor market" is a contradiction in terms. A free labor market is one where people are free to exchange their labor (collusion), not one where a third party decides who gets to exchange what labor and for how much. Laws against hiring and pricing agreements are interventions in the market. Laws against hiring agreements are not consistent with a free market. There's nothing wrong with people (employers) making agreements with other people (employers) regarding the things they own (their money).
- dustingetz 12y agoif maintaining a positive relationship with another company is more valuable than the hire, (and when is this not the case?), obviously you will clear it with the other CEO first. I haven't read the book but you haven't quoted enough context to label this disgusting.
- electromagnetic 12y agoThere's a difference between 'do not poach' and 'do not hire'. A 'do not hire' list is in essence a Blacklist, which if employed between companies with overlapping skill sets (IE trying to block an engineer moving between Apple and Microsoft) then this is certainly disgusting. Poaching is the active targeting of employees of other companies, which when done in the umbrella of an investors holdings is bad form (don't bite the hand that feeds you). When done to another company is generally a bad idea if you expect to have to have amicable dealings with them (license patents, buy parts, etc). However, if they're a direct rival and there's no foreseeable reason to be on good terms with them, there is no reason to not poach their employees other than the reason you know you're not acquiring a loyal employee, but one loyal to the money. A 'do not hire' list is an attempt to blacklist anyone who essentially leaves whatever the umbrella is of its reach, which is an attempt to place a monetary cost on anyone trying to leave the corporate fold. It would be like a bartender breaking the legs of anyone trying to leave. Anyone else who was planning on leaving isn't going to, but they're certainly not going to be buying drinks and that's really going to drive down profits when the bar is at capacity and no one is drinking. There's a reason companies are employing "quitting" incentives, and that's for the very reason that happy employees are productive employees and the notion of one bad apple spoils the bushel.
- dustingetz 12y agoSo lets pretend I am a tech lead at a AcmeCo, I quit and start a startup, and an old teammate wants me to hire him. But he is an important employee at AcmeCo and my old CTO will be unable to replace him & his knowledge. I care about my relationship with AcmeCo & the CTO in particular, he is a potential client, we share ownership of some open source offerings, he still mentors me. How could I possibly take any action that damages this relationship?
- dreamdu5t 12y agoWhy is that disgusting? What's wrong with two people freely working together peacefully?
- CapitalistCartr 12y agoBecause when two people freely work together peacefully to break the law, it's called conspiracy. What is wrong with two people freely working together to burn a factory down? To collude to deny others the right of free association and free employment is just as wrong. The CEOs of major corporations that dominate an industry can have a disproportionate impact on an industry, so this is especially wrong.
- dreamdu5t 12y ago> What is wrong with two people freely working together to burn a factory down? I think this should be obvious, but burning a factory down is fundamentally different from hiring agreements, in that it is destruction of someone elses property. A hiring agreement does not involve the destruction or restriction of property, but laws against such agreements do. > To collude to deny others the right of free association and free employment is just as wrong. Hiring agreements do not deny anyone the right of free association or free employment. Employment is a free exchange between the employee and the employer. Not coming to an agreement (not offering you a job) in no way is a restriction of your right to make an agreement in the first place. If I don't want to work with you, that doesn't restrict your right to form an agreement with me or with someone else. > The CEOs of major corporations that dominate an industry can have a disproportionate impact on an industry I don't see how that's relevant to the fact that laws against hiring agreements are laws against free association.
- lmakeppleave 12y agoTake the argument to the extreme, is it OK for every employer in every industry to agree on wages and no-poach? What about on child labor? Minimum Wage? What about colluding on prices? Aren't these all the same infringement? The truth is sometimes society has to take away the rights of the few for the sake of the many. While I agree we tend to do it too often, you will be hard pressed to find many who agree with you on this matter. The fact is rules like this almost certainly make our economy more productive as a whole.
- jusben1369 12y agoI feel like you're selling it short here. He said "If you would be shocked and horrified if Company X hired several of your employees then you should not hire from them. This should be a very small list and require CEO sign off before happening" At the macro level what he's saying is you have to protect the overall health of your company. If one or two key hires from a competitor result in poisoning the inter company relationships then the negative outweighs the positive so don't do it. Or, at the very least, understand that your internal argument "well that employee was looking so they were lost anyways someone was going to get them" can create a much bigger problem for you down the road (if new employee X enjoys your company chances are she'll tell her friends at old company and HR will see inbound flow and create an unintended "raiding" scenario) I think he's guilty of trying to overly engineer management here and don't agree but he does have a logic around a really narrow use case.