Finding employees and building a roster of clients are top of mind for entrepreneurs, and changes in Philadelphia's talent landscape during the pandemic and a business community that is slow to embrace innovation could present challenges to founders, according to local startup CEO Bruce Marable.
Marable, co-founder of Philadelphia human resources tech firm Employee Cycle, raised the concerns during a recent panel discussion held as part of Philly Music Fest’s Tech Tour, an event series focused on the intersection of technology, startups and music. The discussion, moderated by Guru CEO Rick Nucci and also featuring musician Amir “The Bul Bey” Richardson, delved into the highlights and setbacks of building a business in the region.
The pipeline of graduates coming from local universities makes Greater Philadelphia a great spot for talent, but the shift to remote work for tech jobs has also made the search for local talent more competitive, Marable said. Massive tech firms are paying big bucks for new hires based in cities that are cheaper than their West Coast hubs.
An increasing number of tech jobs posted by companies based in San Francisco, San Diego, San Jose, Los Angeles and Seattle are being placed in metros like Philadelphia, according to The New York Times. In 2019, the share of job postings from West Coast tech companies in Philadelphia was 0.4%. That doubled to 0.8% in the period from September 2020 to August 2021. West Coast tech firms have increasingly been posting jobs in cities like Denver, Phoenix, Charlotte, Minneapolis and Raleigh.
“Every big company with more money than God is looking at the Phillys, the Denvers, the Memphises, the – name your small town that people can still point to on a map – and saying, 'Wait, you're not going be the $300,000 developer cost that I have in San Francisco? Oh, you're getting paid $150,000? Well, I'll just give you $225,000,'” Marable said. “'I’ll just give you a crazy bonus, plus equity, plus a Tesla.'”
Marable initially had a vision for a collaborative office for Employee Cycle, but the Covid-19 pandemic and the need for engineering talent shifted those plans. The startup now has a fully remote staff that is permitted to work from anywhere.
“You really have to get people sold and bought into the story of what you're doing, because you would never be able to compete from a cash standpoint,” Marable said.
Building a startup in Philadelphia also comes with its challenges in finding clients willing to take a chance on a new venture, he said.
When Marable talks with other Philadelphia-area founders, he asks them how many of their customers are based in the region. Some startups have a mostly hyperlocal customer base, thanks to contracts with large companies in the region, but plenty of founders he’s met tell him not to waste his time trying to get customers in Philadelphia.
Companies like law firms or accounting firms, which provide services that potential clients can more easily wrap their heads around, can leverage the Philadelphia community and win new clients, Marable said. But startups have significant headwinds — Marable said he knows far too many HR leaders in the region to not have more local clients.
“If you're doing something that I think is very cutting edge or innovative, or you're building some type of new product category, or doing something totally new where you actually have to educate the market on what you’re doing, then to me, Philly doesn't seem to be the best place for that,” he said.
