So What If Tech Start-Ups Are Small? Their Job-Creation Impact Is Big
Last week's jobs report seems to throw cold water on the contention that tech entrepreneurs can solve America's employment woes. The Atlantic Wire used the report's data, which showed the most significant growth being in healthcare and education sectors, to dismiss social media startups as empty buzz rather than "a way to kickstart the economy."
The New York Times ran a front-page article on Friday arguing that tech companies' lean teams carry "worrisome ... implications for the American work force," pointing to a study by the Kauffman Foundation that new businesses in 2011 have almost as many employees as they did in 1999. Companies like Instagram aren't helping the argument. When it was acquired for $1 billion by Facebook, it only had 13 employees; even today it only has one employee for every 2.8 million users.
But is it really fair to evaluate tech startup's contribution to the workforce by looking at their employee rosters? To get the counterargument, Elli Sharef, who runs the tech start-up (and Y-Combinator alum) HireArt, which helps companies devise innovative ways to interview and assess skills of potential employees.
Sharef argues that it's misleading to say that, since tech startups tend to be small, they won't help the economic recovery. "It's true, no one in Silicon Valley is saying, I want to hire 3,000 people to fill my factory,'" she says. "But social media is creating all kinds of new employment opportunities." Many of the positions she fills at HireArt are for roles like Social Media Director or Google Ad Words Vendor Manager at more traditional companies, which would have never existed without these tech startups -- not to mention the myriad of entire businesses that are being started to build on these new tech platforms, according to a report in Yahoo. >>More here