I love to compete. In fact, there are lots of times when I love it a little too much - over the years there have been lots of times when I’ve taken my love for competition too far on an early morning bike ride or a late night card game, and unfortunately there have been several bonehead alpha male moments with my colleagues at SVB, too. Sorry guys!
But for the most part, competition is a good thing. While there are isolated instances of abuse, the fact is consistent and responsible competition produces a more balanced field of play and higher standard for all of the players. This is as true in business as it is in sports, as true in the market as it is on the field of play.
My favorite blog post of the year was when Ash Ashutosh, CEO of Actifio, welcomed EMC to the copy data management market and to "responsible competition". We should all embrace competition like this; we have our competitors and the competitive forces of a free market to thank, at least in part, for who we are and how successful we are.
So, this brings me to the issue of the day and the point of this blog post. We need to do away with the enforceability of non-competes in Massachusetts, and for all of us in the innovation economy, this is the moment to act. The Governor has put forth a good proposal that mirrors the legislation that has long been in place in California. We are at a point when our Massachusetts-based hyper growth tech and life science companies are growing quickly, going public and transitioning from fledging startups to major employers. Our sector is creating real value and building for the future - the freedom to recruit the talent they need is vital for keeping this going!
As a business person, I’m constantly thinking about employees, clients and shareholders. My philosophy is that you have to earn each of these three every single day. Unlike intellectual property and other corporate assets, there are no fences here: these three groups are free to walk and invest their time, energy, talent, networks, resources and capital elsewhere. You don’t have an enforceable right to any of them, so you set about every single day to earn their confidence and loyalty.
So, let’s take a leap of faith together. Most of the startups in our community are already on board with this. I know because I hear it all the time - “we just hired our new VP from XYZ company” which is inevitably another client of ours. Non-competes would abruptly halt this flow of talent, so it’s obvious that many startups have already abandoned them, notably at a time when our startup community is thriving.
Our goal now is to get our legislators and the bigger companies on board. EMC is a great example. I know it’s a scary thing for these big employers to give up the control that comes with enforcing non-competes, but the tides are changing and soon enough (if not already), this is going to affect the talent that big companies are able to hire and limit innovation within the broader ecosystem. Those are both bad outcomes for Massachusetts and for any tech company doing business here, regardless of size.
I’m including several links below including a recent Mike Troiano blog post on this subject as well as some research the Silicon Valley Bank has done on this and other employment related topics. Most importantly, there is a link to the New England Venture Capital Association to assist you in contacting your state legislators on this topic.
Let’s get this done, and keep innovating and COMPETING to our full potential in Massachusetts!
Mike Troiano blog post on non-competes
NEVCA link to get involved by contacting your legislators
Silicon Valley Bank 2013 Startup Outlook Report - a few employment related stats from the report:
- 87% are hiring
- 46% have at least one founder born outside the US
- 87% say it is somewhat or extremely challenging to find workers with the skills they need to grow the business
- 82% say STEM skills are the most critical job skills for their 2013 new hires