Fundamental attribution error and tech mercenaries

In social psychology, the fundamental attribution error (also known as correspondence bias or attribution effect) describes the tendency to overestimate the effect of disposition or personality and underestimate the effect of the situation in explaining social behavior. The fundamental attribution error is most visible when people explain the behavior of others. It does not explain interpretations of one's own behavior—where situational factors are more easily recognized and can thus be taken into consideration. This discrepancy between attributions for one's own behavior and for that of others is known as the actor–observer bias.

From Wikipedia. I've always heard fundamental attribution error used to describe people. But more and more, I believe it's applicable to companies as well.

That's not to say it isn't also still a problem when applied to people in technology. For example, a common belief is that tech workers in Silicon Valley are more mercenary than in other tech markets like Seattle or New York.

When I moved up to the Bay Area from Los Angeles in mid 2011, I was curious to experience this supposedly venal culture firsthand.

Having worked in all three of those markets over many years now (and also having been at Hulu for three and a half years in Los Angeles), I'm not so sure the people are more mercenary in Silicon Valley. Much of the short tenures in the Bay Area may be explainable by the environment rather than some intrinsic ruthlessness on the part of the people living in the area.

For one thing, the number of tech companies in Silicon Valley just dwarfs that in any of those other tech markets. Sure, fewer people left Amazon than I would have expected , but if you wanted to stay in Seattle, where else would you go? To Microsoft? Real Networks?

The number of startups in the Bay Area also exceeds that of any other tech market by a huge margin. Since startups have such a high failure rate, inevitably it drags down job tenures.

If you control for those two factors, would the Bay Area still rate as having a more mercenary culture? Someone with access to more data would seem to be able to answer this question quite easily (maybe LinkedIn has enough data to run such an analysis). My hypothesis, just based on my personal experience, is that the Bay Area's supposedly mercenary culture is just a technology version of the fundamental attribution error.

If you're operating outside of the Bay Area and feeling fairly secure with your workforce, though, beware. The world is changing, and the fight is coming to your doorstep. For one thing, LinkedIn and other such services have made it easier and easier for other companies all over the place to reach your employees with enticing offers. If you don't think every one of your employees is receiving multiple offers a week, if not per day, from recruiters and headhunters and LinkedIn, you may be living in the 90's.

Think you're safe because your employees don't want to relocate? More and more companies are going to where the people are, opening satellite offices in any market with a good base of talent. Shoppers in many states may not be the only ones lamenting the fact that they now must pay sales tax on Amazon purchases. Competitors are also feeling the hit as Amazon now has free reign to open offices in those states and staff them with abandon. There are three major Amazon offices in the Bay Area already, and they're recruiting aggressively. But the same thing is happening in Seattle, Amazon's home court; Facebook and Google, among others, have opened offices there. 

This is not to mention the fact that some of the best employees can choose to work from wherever they want. It's rare, but not as much as it once was. Almost every company I've worked at in my career now has some employees who work by themselves out of some random place. They're good enough, and the demand for their skills so far outstrips supply, that they spend most of their work year in a remote destination of their choice, maybe a home office in their hometown in North Dakota.

All of this is good news for employees, who now have more options as the liquidity and efficiency of the labor market surges. For employers, it's difficult to say whether it's a positive or negative thing. If you treat it as a zero-sum game versus employees, it must by definition be a negative if employees are gaining.

Within the tech sector, though, one might hypothesize that companies that can offer more cash benefit from being able to compete for employees anywhere. Startups who need compete on the uncertain benefits of stock options more than cash now must contend with the tech giants, if even if the startups locate in more remote markets. However, this might just filter out those who who are risk averse and who'd flee at the first sign of adversity.

I began this post as an examination of the myth of the Bay Area mercenary culture, but the larger theme may really be the reduction of labor arbitrage in the tech industry. By no means has it disappeared entirely, I am not advising you start your next startup in Kansas City. If Jeff Bezos were starting in today's environment, though, it's not a slam dunk that he'd still choose Seattle.