Get on the Plane: Risk-taking and Opportunity in the Global Talent Economy

09/04/2020 7 min read
Erik Stettler
Erik Stettler Data scientist and venture capitalist who has invested in 50 global tech companies. He is the Chief Economist at Toptal.
Get on the Plane: Risk-taking and Opportunity in the Global Talent Economy
  • Why globally distributed teams are the next disruptive event
  • Why uncertain outcomes indicate you’re on the right life trajectory
  • Why executives have a fiduciary duty to convert changes in the global talent economy from risk into opportunity
  • Visit Staffing.com's homepage for more.

The most terrifying moment of my life occurred on Thursday, July 25, 2013, while boarding JetBlue Flight 1249 from Boston to Bogota. Coming only a few months after I completed business school, that day—and that flight—represented a new and uncertain beginning: I was about to launch my venture fund. My fund’s thesis was that talent is everywhere, but opportunity is not. The most exceptional opportunity of our time is to fix that. Doing so unlocks growth and innovation while positively impacting the world. My fund’s thesis marked the culmination of everything I’d learned about risk and reward. It also forced me to create the decision-making methodology that I’ve used ever since in the face of uncertainty.

This journey began more than 10 years ago when, during an internship, I had the extraordinary dumb luck of sitting down the hall from Dr. Nassim Taleb, the now leading philosopher and bestselling author on risk and reward (fitting, given how his philosophies explore the concept of “dumb luck”). At the time, Taleb was completing the book that would introduce the idea of black swans—rare, high-impact events that upend assumptions about how the world works. Hearing him speak about these ideas was akin to being struck by lightning. It set the stage for my focus on moments of extreme change in markets, businesses, and technology.

In my 20s, my job was to help the global financial community respond to black swan events like the subprime crisis. I witnessed the consequences of complacent systems concerned only with driving down the current stretch of road without considering what turns might be looming. The largest sectors of the global economy were desperate for fresh ideas and talent.

Developing a Global Talent Thesis

During this time, I came to know many entrepreneurs. I witnessed firsthand what happens when people build new offerings that tackle real problems, leveraging the internet to go global from day one. It dawned on me that watching small things get bigger was more fun than my day job (watching big things get smaller).

I also realized that many of these fascinating entrepreneurs had been born oceans away from New York City. America promises geographic opportunity, but the internet now allows that opportunity to be presented globally. Another, more constructive breed of a rare, high-impact event was happening—brilliant, global entrepreneurs transforming and creating industries against all odds. Plenty of venture funds were global in terms of foreign investments, but few (if any) were investing in globally distributed teams tackling global markets.

Every successful entrepreneur or executive I spoke with gave the same answer when asked to identify their most significant challenge: talent. New York had plenty of it, but the competition to recruit and retain was too fierce. Technology has the highest turnover rate of all US industries due to this imbalance of supply and demand. When coupled with the time and expense of recruiting talent, building a tech team seems like a Sisyphean task. Countless entrepreneurs told me horror stories about year-long recruitment hunts for one principal engineer from a Very Important Tech Company, only to have that company double the talent’s compensation, rendering outside advances futile. The vast majority of venture capital dollars were going toward New York’s pricey real estate and cost of living. If I was going to do a venture capital fund, I wanted to be financing talent, not New York real estate.

I decided to build a fund focusing specifically on the global talent thesis—I described it as a talent development company with an inhouse venture fund. I then took a two-year detour in business school to contemplate the specifics. Latin America would be my non-US base due to its proximity to the US. However, the thesis was decidedly global.

There’s Always a Return Flight: A Case for Risk-taking

It all sounded terrific until they announced pre-boarding three years later. It finally hit me—I was about to leave my home country with one suitcase of student debt and a still tragic proficiency in Spanish and Portuguese. I didn’t know who my partners or investors would be or where I would live in a week. The risks were massive. Even the potential case for success was still nebulous. All I had to do was turn around and walk out of the airport. There were plenty of promising opportunities much closer to home.

What finally convinced me to board was not a sudden, profound insight, it was the reminder that there would be return flights every day. The worst possible outcome was that I would spend the next few months trying and failing to get the idea off the ground. No company I would ever work for would hold that attempt against me (on the contrary, companies seek talent willing to embrace challenges and failure). I doubted my older self would look back on the effort with regret, even if it didn’t work out.

If I did wish to give it a shot... that was my plane. If I turned around and settled into a traditional job, another shot might not materialize. With any significant decision—for your career or your company—the outcome is uncertain. If it is certain, then you’re not thinking big enough. The liberating realization was that I didn’t need to know because I was approaching an opportunity with limited downside but unlimited potential upside.

Lessons from the Frontlines of the Talent Economy

Over subsequent years, I witnessed the transformative impact the global talent economy can have on individual lives, organizations—even entire countries.

I witnessed one young participant of my fund’s foundation walk home through some of the most dangerous areas of Medellin, Colombia, every night. He did this to save the two dollars we’d provided for bus fare—that was two more dollars in seed capital for his future company. He subsequently built a successful, globally distributed enterprise SaaS company for agile, remote teams.

I witnessed a multinational agricultural company decide it was, first and foremost, in the information business. It then deployed artificial intelligence and internet-of-things solutions alongside global talent, reinventing itself.

I witnessed globally distributed teams leave competitors in the dust due to their diversity of expertise, ideas, and larger technical bandwidth due to global recruiting.

I witnessed public servants address the underlying challenge of transforming their country’s economy—creating real economic opportunity for all those involved.

Not only did this validate my fundamental hypothesis—that a company with globally distributed talent could grow as quickly as its non-distributed competitors—in my experience, the former often grew much faster.

Here are the key lessons I learned during this time, experiences I emphasized to executives and investors:

  • The most valuable resource in foreign markets is talent. Talent is also the only resource that is irremovable. It grows stronger and multiplies the more you deploy it, due to both individual and group learning through meetups and mentoring groups. Talent is a cycle of abundance, not a battle for market share.
  • Opportunity is invaluable. Top-down theories on business in emerging markets begin with the question of what’s not yet in those markets, whether that be a product, business model, or infrastructure. Still, it’s dangerous to believe we’ve identified problems that are symptomatic of far deeper legal, historical, security-related, or even culturally-driven barriers. These are not the kinds of obstacles to test in a foreign country—I have plenty of scars in the shape of Latin American legal and financial infrastructures to attest to this. What these emerging markets don’t have (that you can provide) is opportunity. You’ll reap the greatest reward by doing so.

The key lessons I would emphasize to talent are similar:

  • Never let anyone tell you that you’re not ready to compete globally. All the great business and tech centers succeeded because of people like you. Now, you don’t even need to live there to play a part. Anyone who tells you otherwise is afraid you might succeed, not that you might fail.
  • Even if you never expect to work independently, the most important jobs of your life don’t exist yet. Oxford University researchers say 47% of jobs will disappear in the next 25 years. To that point, none of my friends with full-time jobs are in the same positions as they were a few years ago (by choice), and nearly all of them recognize the importance of multiple income streams.
  • You are the CEO of your career. You owe it to yourself to explore new opportunities and develop new skills. There are resources at your disposal that past talent never had. Get on the plane. There are always return flights.

Finally (for both parties), you cannot view the global talent economy as optional. If you’re an executive, you have a fiduciary duty to take advantage of the worldwide talent pool and convert the changes confronting us into opportunities rather than risks. In terms of personal career, you owe it to yourself and those who depend on you to think about opportunities globally. It’s your responsibility to keep your skills relevant so that when technology does inevitably change or replace your current role, you can realize something even better as a result.

Technological change and the hundreds of millions of people now realizing opportunities in the global talent economy are not forces that you can or should resist. By approaching these forces the right way, they can become the most significant thing to happen to your business and career. I’ve witnessed these opportunities in the most unexpected places. One day in the not-too-distant future, the next global generation—too long dismissed as separate from the global economy or “charity cases”—may solve the most pressing problems confronting our time.

Erik Stettler
Erik Stettler Data scientist and venture capitalist who has invested in 50 global tech companies. He is the Chief Economist at Toptal.