Reno Marioni has held three jobs in the past five years -- as director of marketing at a now-defunct Java start-up called InfoScape, director of product marketing at Marimba and, now, founder of a start-up called Adventure Zone Network. Like most tech industry veterans, he's accustomed to switching jobs as readily as suits. But even as he's zigzagged across Silicon Valley, there has been one constant in his career: a woman named Deb Steiner.
Steiner is a recruiter at Rod Asher & Associates who first contacted Marioni nearly six years ago out of the blue to see if he was interested in a job -- one of a multitude of recruiters who would cold-call him to gauge his interest in new positions. But he developed a rapport with Steiner, and eventually her calls resulted in the job at InfoScape. They kept in touch, even as that job went sour. He's passed her name on to his friends and family -- Steiner helped Marioni's brother, Tony Swenson, get a finance job at a start-up called Niku -- and now that he's starting a company of his own, he plans to use her to fill his own executive ranks.
"Even when she knows I'm not looking for a job, she'll call me and tell me she has something interesting that's up my alley," says Marioni. "She's just out there watching out for me."
Marc Hedlund, founder of a start-up called Popular Power, has a similar tale. He was cold-called by a recruiter named Robin Reed while he was a director of engineering at Organic; that relationship -- which resulted in a job he loved, as head of the Internet division at Lucas Films -- has endured for over three years. Hedlund is using Reed to fill the ranks of his own company now. As he puts it, "It's not hard to find a job; but it's hard to find an interesting job. Finding someone to represent you, who has a familiarity with your interests, helps."
The landscape of the job marketplace in Silicon Valley has changed dramatically over the past few years. In the age of the Internet, not only do salaries rise in step with the increasing demand for talent -- and exciting new opportunities crop up almost daily -- but start-ups often fold or change their direction on a dime. With so much change swirling through the economy, savvy workers interested in their personal bottom line are wise to keep a recruiter or two in the Rolodex.
"Twelve years ago people believed that a recruiter calling into a company was a traitor. Today, people realize that the pact between employers and employees is broken. People used to have only two to three jobs in a career; that's changing. They need to watch out for their own interests," explains Nancy Albertini, founder of high-tech recruiting firm Taylor Winfield. "In the past, a company was in charge of your career. Today, you are in charge."
Recruiters, then, are brokering the changing relationship between employee and employer -- not only are in-demand employees looking for someone to represent their skills, but Net start-ups short on time and resources are desperate for someone to help them find that talent. The recruiters are getting both status and wealth as a result. As Albertini puts it, "The recruiting field is getting to be where agents have been for a long time. In Hollywood, agents are as big stars as the stars are."
Albertini breezes into a San Francisco restaurant, slightly breathless, coifed and polished in a modest, red power suit and pearls. A diamond the size of a beetle perches on her finger; she rifles through her Chanel purse for her keys. "I drove my husband's car, because it has built-in GPS," she explains, and worries out loud about leaving a $125,000 Mercedes in a public parking lot.
As the founder of Taylor Winfield, Albertini has spent 14 years placing executives in technology firms; in the past year alone, her company placed 40 executives at high-tech powerhouses such as EarthWeb, Ameritech and Monterey Systems. For her efforts, she receives the standard executive recruiter compensation -- a third of the annual salary and bonus of the new employee (if a highfalutin CEO can pull in a million-dollar salary, she pockets $300,000).
And, following the latest recruiting industry trend, she works exclusively with companies that also give her equity; she considers her recruiting firm a long-term "strategic partner" for venture-capital-backed pre-IPO companies. As Albertini puts it, "I have limited time and I only want to work with people I believe enough to invest in."
She talks about her methodology as her "intellectual property" and refers to her database of nearly 25,000 executives living all over the world -- 25,000 people with whom she says she has developed relationships and maintains regular contact. Albertini often works with venture capitalists who are building executive teams for new start-ups in their portfolios -- for each new search that she starts, she'll dig through her contact file and call 200 to 300 people, meeting a smaller number and eventually narrowing it down to around 10 candidates that she'll present to her clients.
"You need intuition: What is someone saying, and what do they really mean?" she says, explaining that her firm (composed primarily of women) prides itself on analysis and matching of personality types and needs. It's a skill, she says, that few companies boast on their own. "When you have to look at yourself, you have a blind side. The hiring process really needs objective perspective, a third party."
But the business has become more difficult, she says. Because of increasing demand, the number of potential candidates that she has to screen for each job has doubled. At the same time, the amount of time that clients allot for finding the appropriate person has halved -- the typical search takes three months minimum, but clients often want a polished exec in that leather chair within 30 days. The recruiters' work has as a result become more challenging -- most have increased their fees and now many, like Albertini, demand equity stakes in their clients' companies.
This has sparked a kind of gold rush within the recruiting industry itself, as new recruiting firms pop up every week to deal with the high-tech industry's insatiable demand for new start-ups and talent. Zach Simon, a director at the prestigious recruiting firm Christian & Timbers estimates that there are around 500 to 1,000 CEO searches being conducted at any one time in the Internet space; the number of experienced candidates is much smaller than the number of available positions. Qualified candidates are probably getting between five and 10 potential job calls a week, he says.
Add to this the Internet time crunch -- where companies are increasingly conceived, funded, built, launched and going public within a matter of months -- and you can understand why recruiters have become so critical. Who has time to hire anyone, let alone find and woo the very best?
According to executive recruiting firm Ray & Berendtson, there are more than 20,000 executive recruiting firms in the United States, generating more than $3 billion in revenues -- and that's just the companies on the lookout for the top brass. Even more firms are popping up to address other critical, but lesser-titled, employees -- programmers, engineers, technical writers and such -- and big Silicon Valley companies like Oracle and Cisco keep recruiters on staff.
Many firms, such as Taylor Winfield and Christian & Timbers, work solely on "retained searches," an exclusive relationship where a set fee is paid upfront; but others do "contingency searches," where multiple firms offer candidates to the client but are paid only if they provide the hire. This can result in a kind of industrywide scramble -- Hedlund and Marioni both talk about the "shysters" who have called them several times a week, desperate to get their warm bodies into a job. As Hedlund describes it, "Many times when I dealt with recruiters it was just, 'Are you a body and do you know Perl?'"
Mihail Lari, CEO of Electrifier.com, is looking for a new chief executive. His start-up, which promises "extreme shopping" for folks with fast Net connections, is in the process of raising $10 million in venture capital -- and Lari has decided that it's time to give up the reins to someone with a bit more experience.
The search for a new CEO is not going to be cheap. He's hired Christian & Timbers, which has been in hot demand since it landed Carly Fiorina at the helm of Hewlett Packard. The cost for this help, he knows, will be a hefty portion of his company's equity: "Recruiting fees are significant," Lari admits. "But if someone is helping us get to where we need to go, they deserve that equity. We want to make this a big success, and we can't do it on our own -- it's foolhardy to even think that."
Increasingly, entrepreneurs in Silicon Valley start-ups see executive recruiters as playing a prominent role. As the yentas of the industry, recruiters are setting up shop alongside the venture capitalist and the business incubator and the public relations firm as the latest "critical partner" to demand an entrepreneur's time (and equity). As most recruiters -- and many entrepreneurs, too -- will tell you, in this tight job market it's a bad idea to even consider hiring an executive without their assistance.
"Before you hire a search firm, sure, use your Rolodex," advises Zach Simon, the director at Christian & Timbers who is working on the Electrifier.com project. "However, because of the speed that the Net is moving -- with launching technology and building up the core development team and raising capital -- there's not enough time for a company to really spend finding these kinds of executives. ... We are the conduits and the matchmakers, the one who will develop those relationships."
Ted Ganchiff, who calls himself "Employee Number One" at his online radio start-up, GiveMeTalk.com, says that after his company received venture funding the phone calls from headhunters and recruiters started pouring in. Every day, he estimates, five or six headhunters were cold-calling him to offer technical and engineering staff -- for the "low" fee of 30 percent of the new employee's salary.
Although he's had some disastrous experiences with huckster recruiters who demanded exorbitant contracts for the talent they brokered, he says he is still turning to an executive recruiter to find sales and business development executives. He's willing to give up equity in his company to get the right person. And he shrugs, "We have done a fair amount of looking on our own; executives are difficult to find. It's very high demand."
But it isn't just a matter of finding a recruiter -- finding the "right" recruiter has become as critical as finding the "right" venture capitalist. A hot recruiter will bring in the top-tier candidates; the right recruiter can be a bigger draw, in fact, than the start-up and its product. Electrifier was so proud that it picked up the prestigious recruiting firm of Christian & Timbers that it issued a press release crowing about its coup. As Lari puts it, "Having someone like [Christian & Timbers] makes a big difference, because it shows candidates that you're serious about building a company. It's about credibility -- how do we differentiate ourselves from hundreds of other start-ups out there?"
Ganchiff, too, is hoping to work with a firm like Christian & Timbers. "There's a certain panache, a prestige quality level that goes with some of the high-level executive recruiters. You want to go with an established brand."
Of course, the danger is that you will spend a fortune on a prestigious recruiting firm and a new high-profile hire -- just to watch that executive walk away to the next great firm that sparks the executive's eye. After all, high-tech workers do switch jobs like suits.
Sunny Bates, who finds talent for companies like Excite, Priceline and Pathfinder at her 11-year-old recruiting firm, Sunny Bates Associates, says she sees too many candidates walk away from a job after a year or 18 months, thanks to a call from yet another recruiter. Or the venture capitalist that demanded that its start-up hire a specific CEO will suddenly switch business plans and want a new executive with different skills.
"There has never been a time when single individuals make such a difference -- we are living in the cult of the CEO as a celebrity. If you've got a good idea and a couple of interesting strategic alliances and you have a great manager with a good track record, everyone wants to throw money at you. It's the difference between a small company and a big multimillion-dollar company," explains Bates. "If you're good, you're effective, your phone will ring off the hook. And how long will it last? It's unclear."