As is the custom every Friday afternoon, the employees of Sunnyvale (Calif.)-based Interwoven Inc. troop into a cramped meeting room. Private Interwoven is a classic go-go startup: The 75-person outfit makes software to manage large Web sites, and it will add 50 employees this year as it streaks for critical mass and an initial public offering. So one routine is introducing new employees hired the previous week. CEO Martin Brauns grins as two new senior executives and a tech-support person finish their hellos. "O.K., now from the very, very new," says Brauns dramatically, "we move to the very, very old."
Brauns is awarding an anniversary gift to a grizzled old-timer who has reached an employment milestone, a tribute to corporate loyalty in the Internet Age. Product Manager Kevin Cochrane has been there three years.
Yes, the same age as the company. Cheers and applause accompany Cochrane's hop up to receive his dandy new laptop case embroidered with a golden "3". "This company is outstanding," says Cochrane, 26. "What makes it so great is the team."
I am scrutinizing faces for smirks. But nobody else seems to find the triumph the least bit thin. One reason: "Internet time is like dog years," says Kathleen Means, Interwoven's communications manager. She should know: She worked for three different high-tech companies last year. In Silicon Valley, it seems, Cochrane is a vet at a stage when most companies would still refer to an employee with his tenure as the "new guy."
Of all the relentless reminders of the fast pace of Silicon Valley, one of the most nerve-rattling is the rate at which employees jump jobs. Recruiting and retaining good people has always been a challenge for startups. Silicon Valley's turnover rate is almost 25%--double the national average. Companies are starting up, dropping out, changing direction, getting acquired, and snapping up rivals in the blink of a cursor these days. That gives the best and brightest options unimagined by previous generations.
"WE'RE HOT." Competition for good employees is so fierce, says Jim Breyer, a venture capitalist at Palo Alto's Accel Partners, that right now three of Accel's own startups are all recruiting the same person for an opening for vice-president of marketing. Indeed, creating incentives to hold on to key employees through the pressure-filled months and years before an IPO is critical. Brauns--himself a veteran of five high-tech companies, including, most recently, Informix Corp.--insists: "I don't worry about retention because I think we're doing everything right. We're hot. We're booming. We're on an IPO track."
But he's working hard to keep his team motivated, with anniversary recognitions just one trick in the bag. Of course, there are stock options and performance bonuses. Brauns also believes that a flat management structure empowers employees. He pencils in fun, too. The company's walls are decorated with huge canvases painted by different Interwoven employees as part of a team-building exercise.
It's clear that these employees are running hard. Some workers have even rigged up special partitions for their cubicles, behind which they're found sleeping in the mornings after writing code until the wee hours.
However intensely CEO Braun's charges are working these days, the reality is that at any darkening in the sky over Interwoven's IPO prospects, Internet Age jocks like Cochrane could find a new ride in a snap. It's hard to imagine how a 26-year-old international-relations major could enjoy so many options, but he has got a remarkable combination of talent and drive along with a hot market and a brand new Valley twist--the "E-boy's network."
FRAT PALS. First off, Cochrane seems like the kind of kid who actually turned a profit at his curbside lemonade stand. As an undergraduate at Stanford University, he knew he wanted to jump on the high-tech train. "All your friends are computer-science majors, and I knew I wanted to get in on a ground floor and define a market," he says. He tailored his education to study information flow as a driver of economic growth. As a junior, he worked as a summer intern at Microsoft Corp. Straight out of school he was employed for two years for the U.S. arm of London's LEK/Alcar Consulting Group, where among other duties he helped high-tech clients evaluate merger prospects.
He then sought advice from a few Kappa Alpha fraternity brothers--one of whom happened to be well-known Silicon Valley venture capitalist Tim Draper, now of Draper Fisher Jurvetson (DFJ). Cochrane says Draper "instilled the fire in me" and suggested that he call the founders launching Interwoven. Cochrane did--and in 1996 became employee No. 5.
The networking didn't stop there. During his stint at Microsoft, Cochrane formed an E-mail list of his far-flung frat brothers so they could keep in touch over the summer. He called the list "CurrentBro." Later, he split off the names of guys already out of school and created "SkankyBro" (frat speak for graduated brothers). And then it grew so big it became "LocalBro" for just Valley Kappa Alpha denizens. Today, Local Bro is 150 names strong and, for this crew, has replaced the secret handshake as fraternal glue: "My friends and I are constantly in touch," says Cochrane.
Cochrane swears, "I could never, ever leave [Interwoven]." But not because he doesn't have the chance. Daily. "A guy tried to hire me for two years, and I finally turned around and hired his brother, and I'm going to hire him, too," says Cochrane. "A friend of mine's company went belly-up, and within two days he'd joined a company run by a guy on the list." Add to Cochrane's band of E-bros the fast-growing list of formal online recruiting services and job postings--everything from valleyjobs.com to DFJ's own Web pages listing job openings within its portfolio companies--and you start to appreciate what Cochrane means when he swears that "it's a recruiting assault out there."
There is a cost to all this. Interwoven's employees are a particularly rah-rah bunch, although a few confide that the pace of work at the company is relentless. Vice-President for Engineering Jack Jia, for example, says he loves his job, loves his team, loves his company, but "I have a kid I don't get to see enough of." At 36, he's a veteran of Sun Microsystems Inc., Silicon Graphics Inc., and two other startups. But it'll be a long, hard Internet year before he qualifies for the golden "3" laptop case. Maybe that's a good thing: Too many of those things piling up, and there will be nowhere left to sleep.