If you think great companies don’t let their entrepreneurs leave…you’re totally wrong!
The Google Effect
Let’s start with this AngelList graph showing Google alumni creating new businesses for a $4.9 million average (each line is a startup having at least one Google alumni). Either Google is facing a terrible brain drain or this is just business as usual and more entrepreneurs being hired will make up for the ones leaving. In other words, the entrepreneurial input is equal to the entrepreneurial output and in the case of Google, it is relatively high: 1,390 alumni listed on AngelList / 47,756 Google employees = a ratio of 2.91%. Of course, using this ratio as an index has a lot of bias, but by looking at that ratio for 30+ large companies, it seems indeed that the most entrepreneurial corporations are not doing too bad! This ratio is not constant, which raises the obvious question: why would some corporations produce more entrepreneurs than others? The more entrepreneurs you have in an organization, the more fragile it is!
Yahoo: The Big Brain Drain…
Looking at this graph, it would seems that Yahoo might just be the most entrepreneurial company of my sample. This is the result of a dramatic drop between 2012 and 2013. Calculating this ratio using the mean of Yahoo employees for the past four years gives us 4.94%. That is high, but my explanation here is just pure brain drain.
Facebook: The entrepreneurial corporation
If I exclude Yahoo, we now see Facebook might just be the most entrepreneurial of all corporations. Just to be sure this is not another entrepreneurial brain drain, I’ve checked its employee headcount over the year. Hiring has been increasing constantly (and linearly) for the past years, therefore this is not a brain drain. Most likely, Facebook might just be a great magnet of entrepreneurial talent! In the next 20 years, we will see large corporations trying to be more entrepreneurial looking to become anti-fragile. Studying and comparing more accurately the entrepreneurial output and ratio of each corporation will allow us to make some predictions regarding their relative future instability. This is not something you can or should stop; this is just a universal force of nature. Don’t fight it, embrace it, and you might still be around in 25 years.
