Dropcam CEO's Beef with Brogramming, Late Nights, and Free Dinners

Dropcam, a four-year-old startup in San Francisco, has never lost an employee. I’ll say that again so that you won’t think it’s a typo: no one who has taken a job at Dropcam has ever left.

It’s not that they’re being monitored everywhere they go. (The company makes Wi-Fi-enabled cameras for home video surveillance.) Rather, it’s that people just like to stay: Dropcam has hired 30 workers to date, and it’s never had to give a single going-away party. “I’m sure somebody will eventually need to move or leave for some other reason, but it hasn’t happened yet,” says co-founder and CEO Greg Duffy.

In a time of fierce competition for qualified engineers and salespeople, Silicon Valley executives spend an inordinate amount of time worrying about how to keep their best employees from jumping ship. How is it that Dropcam has escaped this problem?

It probably has something to do with the 26-year-old CEO’s views about the right way to build a company—which emphatically aren’t the views you’ll find at most startups around Silicon Valley. He thinks the lavish perks at many technology companies, especially the free on-campus meals, are a disguised form of mind control, designed to get employees to work 12- or 14-hour days.

That’s why there are no free dinners at Dropcam—around 6:00 pm the company shoos employees out the door to eat with their families. And here’s what else you won’t find at Dropcam: free services or products that trade on users’ attention or data to earn revenue; an engineering department full of young, single, childless males; and, according to Duffy, assholes of any description.

This corporate-culture discussion came up in the course of an interview about Dropcam’s home monitoring technology, which I wrote about in this April 5 column. Duffy’s views about work-life balance and keeping employees happy were so strong, and so contrary to the norm for Bay Area tech startups, that I wanted to save them for a separate piece.

Duffy is a bit of a wunderkind idealist. At age 13 he built a machine-learning program that won the Texas State Science Fair, which brought him a full scholarship to the University of Texas-Arlington. He interned at IBM and Microsoft, then started a VoIP-hardware company in Plano, TX, called NCF Technologies. As a principal software engineer at San Francisco e-mail startup Xobni, he created a search feature for Microsoft Outlook that the Wall Street Journal‘s Walt Mossberg called “much faster and better than Outlook’s own search.” Oh, and he flies helicopters on the side—real ones, not the remote-controlled kind.

Today Dropcam sells a $149 camera that people use mainly to watch their kids or pets when they’re away from home, and to catch the occasional burglar. The company has raised $18 million in venture funding from Accel Partners, Menlo Ventures, Bay Partners, and a flock of angel investors.

None of Duffy’s opinions about company-building are controversial in themselves. But in their totality they add up to a pretty strong indictment of Silicon Valley startup culture. So, without further ado, here’s the Dropcam playbook for 100 percent employee retention. These dictums are entirely in Duffy’s words, except for the headings, which are mine.

Make Stuff for Normal People 

“There are some common threads we try to weave through every Dropcam employee we hire. One is that we want people who understand that they are making a product for normal people, for their family and friends. So we often hire them because either they have their own kids, or they have kids in their extended families, or people who own homes, or people who live outside Silicon Valley.”

Don’t Hire Assholes

“Our number one hiring policy is our ‘no assholes‘ policy. I’ve found through my short time in the industry that there are lots of smart people in a place like Silicon Valley, and some of them are friendly, and some of the best people are not friendly and are not team players. Many companies hire them. We do not. We artificially restrict the number of people we can hire by hiring people that we think have good ethical fiber. And we think that goes to how we treat our customers.”

Make Something, Sell It For a Profit

“Our business model is very straightforward. I think if your business model is not straightforward, it veers into potentially being unethical, if you look at things that are quote-unquote ‘free.’ None of the people who work here want to work on something that works like that. They look at it as tricking the user, when [a company is] turning around and using some part of the user’s data to make revenue.

“I think part of our culture comes out of our business model. People are attracted to this idea of making a product and selling it to people for a profit. More and more, people are starting to think that other types of business models are bullshit.

“We style ourselves a little bit after companies like Apple. Over the past decade, they went from being something people laughed at to the top of the stock market by making physical products with software embedded in them. No startup was doing that [when Dropcam started out]. VCs were saying it’s too hard. Now even Microsoft makes hardware. So we think we are part of that resurgence. You can also look at companies like Fitbit and Nest. We know the folks who work there, and we all talk, because we feel like this is uncharted territory.”

Be Family-Friendly

“Probably one of the biggest things that separates us from other startups is that we actually are diverse. So, for instance, many startups in Silicon Valley, especially the ones I was familiar with, would only hire young, male programmers, people who didn’t have families and weren’t going to have kids in the next few years. We are coming up on our third Dropcam baby. These are kids born to their parents while they were working at Dropcam. We do maternity and paternity leave and all of the things that used to be things that only big, mature companies did. That has allowed us to hire from a bigger group of people than we would be able to if we were part of the brogrammer culture.

“We focus our benefits on the entire gamut of people who work at Dropcam. We often do events that are family-friendly—not just buying out a bar for a night like the average Silicon Valley startup. We are planning a big barbeque this year. You can still have a beer at a barbeque, but you can also bring some kids. I also run helicopter rides for everybody.”

Don’t Serve Free Dinner

“We try to put our money where our mouth is. We pay for breakfast and lunch but we don’t bring in dinner. Dinner would cost us nothing and would probably get people working for extra hours late at night. But again, it’s one of those things. When you have a person who can work anywhere they want to, and you say, ‘We bring in breakfast, lunch, and dinner,’ you are really trying to trick them. You are trying to get them to work until 10 pm or midnight every night.

“We bring in breakfast and lunch because we think it makes people more productive if they don’t have to go wait in line at restaurants in SoMa, which are crowded. But we don’t bring in dinner. We don’t make people work late. It’s a way to keep people from getting burned out.”

Happy, Rested Workers Are Productive Workers

“When you talk to the spouses of employees [who have changed jobs], they say they would rather find another job here [in the Bay Area] than have their spouse leave Dropcam and move, because it’s a kind of family. Not the weird, creepy kind of corporate family that makes you stay until midnight every night and forget your real family. It’s a different way to run a business, and it comes out of research.

“Did you know that Henry Ford did some research on the number of hours that creative workers can work before becoming marginally productive? It’s between 40 and 50 hours per week. Some startups try to play this game of saying, ‘We want you to work 80 or 90 hours, but only for a few years,’ and they sell the company, and the founders make a lot of money, and the employees make some, but then they’re like, ‘Why where we working that hard?’ Well, why don’t we just take some of that money and make it so you don’t have to be that productive? We want happy, healthy workers who have a good work-life balance.”

If You Must Flip the Company, Hold Out for A Billion Dollars

“We are not building the company to flip it. We have turned down many acquisition offers. Fundamentally, I think that most acquisitions are not good for employees. The average Silicon Valley acquisition is, in the end, in the tens of millions of dollars or less. Think of some of the networks that have been created by the most successful company exits—the PayPal acquisition was for more than a billion dollars. That’s almost like an IPO in terms of the value that’s created, and look what has come out of that: Elon Musk running SpaceX and Tesla, Peter Thiel running Clarium and Founders Fund, Luke Nosek running Halcyon Molecular.

“Dropcam will be successful if we can create a dynasty of people like that. But you can only do that by aiming for large exits. So that is something that is really important to me: making employees wealthy, versus selling out for something that would just make the founders millions.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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