Brain drain may pull plug on development

The process of launching a start-up anywhere in the world is rife with challenges.

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The process of launching a start-up anywhere in the world is rife with challenges.

But entrepreneurs in the Middle East and North Africa who are looking to get a leg up in the future should keep their attention focused on holding on to their most talented workers.

In the United States, many angel investors and tech entrepreneurs warn of a coming talent war. Already, in some cases, certain enterprises are experiencing the impact of a skills drift.

As the number of individual start-ups based there has grown in recent years, the overall ability for each one to create a deeper suite of products or services has weakened. One of the problems at hand?

"The sheer dilution of talent," says David Tisch, who co-founded TechStars, which provides seed funding to businesses from venture capital firms and angel investors.

"The more companies there are, the less depth any company can build," adds Mr Tisch, who is now the managing partner of TheBoxGroup, an early-stage investment fund. Some companies have had some of their top talent poached by rivals.

"What I'm seeing across my portfolio is extreme competition for engineering talent - basically, if you can't prove your vision [or] model out quickly, your best people will leave and go elsewhere," says Bill Lee, an angel investor and founder of Twist, a mobile app start-up based in California. This dynamic, of course, makes it all the more crucial for a company's executives to keep a finger on the pulse of how satisfied their employees are.

"If you make a mistake now you can pretty much expect a lot of your talent to leave quickly," says Mr Lee. Decades ago, it used to be the case that many Americans would look to job security by seeking work at a large, well-known firm.

While that still occurs today, more people - particularly younger jobseekers - are looking to start-ups as a place to begin and nurture their careers.

Maynard Webb has witnessed this playing out in recent years as well as between 1999 and 2006, when he worked at eBay, first as the company's president of technology then eventually its chief operating officer.

"You weren't cool if you weren't going to a start-up," he says. "Even great places like Google, Facebook felt like settling."

He says more companies ought to focus on finding the right people up front.

"It's all about the talent they build on their team," says Mr Webb, who three years ago founded the seed capital firm, Webb Investment Network. Companies may also need to up their cool factor.

Yahoo, for one, seems to have succeeded at shifting its image to some degree of late with improved earnings and its acquisition of Tumblr.

"I'm not allowed to talk about Yahoo, where I sit on the board, but it was not very cool," says Mr Webb.

"If you're at a cool place people want to bring their friends and you can find people if you're growing and doing good stuff."