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09/20/2004: "Sabermetrics for startups"

The study of baseball statistics is called Sabermetrics

In bnoopy.typepad.com Joe Kraus (one of the founders of Excite) asks, "Has anyone done Sabermetrics for startups?"

Well, I don't have an answer just yet, but I'm thinking a lot about it. In general, I think that the technology people market overvalues certain VP-level jobs, typically in marketing and business development relative to these positions impact on a company's success (how often have you seen the "killer" VP of marketing get brought in with some huge salary and equity package to save a company and end up not having much effect?) On the other side, I think the market generally undervalues key engineering hires relative to their contributions.

Why does this happen? For a few reasons, I think. First, most CEOs are not technical (I'm not either). So, they tend to highly value the things they understand (marketing, business dev, sales) and undervalue the things they don't (engineering). Second, people are more attracted to people like themselves. Come from marketing and you'll probably pay more for marketing people. Third, and perhaps most importantly, is the fact that there are no identified fact-based metrics that help CEOs understand how to value engineers.