Can Developer Auction change recruiting?

01/04/13 00:00:00    

By Michael Mealling

As some of you know I am co-founder of Pipefish. Its kind of a social networking tool except that we're not connecting you with friends but with people who share your same taste in things. You'll probably never know some of them but together you'll be able to find stuff you care about.

As you can imagine we need user experience designers, mobile app and machine learning developers, Rails developers, etc. I need developers. One of the ones I had recently left Atlanta to take a job with a company in San Francisco called DeveloperAuction. Mike Mickiewicz, co-founder of 99designs and CEO of DeveloperAuction described the problem in a Forbes article:

Such is the sorry, frantic state of recruiting technical talent. “The demand for engineers far outstrips the supply,” says Matt Mickiewicz, the 29 year-old CEO of DeveloperAuction. “Good engineers are never unemployed and never seeking jobs.” The result is the Pete London experience: Any decent engineer gets hounded by packs of recruiters on a daily basis, meaning even tempting offers get lumped in with the spam.

What is striking is the salaries that developers are getting from the system. This is from Techcrunch:

During the first two-week long auction companies made $30 million worth of offers from companies like Quora and Dropbox. Our first story on the company garnered plenty of skepticism in the comments, but the most recent auction hit $78 million worth of bids according to co-founder Matt Mickiewicz.

The articles on this seem to suggest the idea is to help startups find developers. But the companies it lists as startups are Quora and Dropbox. Those are companies executing on a business model. They're not startups. DeveloperAuction seems to be focusing not on developers but on rock stars and unicorns. Working for a startup is an exercise in delayed gratification and risk. We don't pay market rates in salary. We offer stock options that some investors don't get.

Eventually DeveloperAuction will come to Atlanta. I can definitely see how DeveloperAuction will be good for developers, but is it going to drive up costs and expectations so much that it will exacerbate the problem for true startups? Thoughts?