The Talent Loop


Gresham’s Law applied to Talent Markets makes it so that you are either growing (and attracting Good Talent) or decaying (and pushing Good Talent out).

Talent follows talent of a similar caliber, and when Good Talent is concentrated on a single geo area, money and opportunities gravitate towards that point as well.

This dynamic is self perpetuating – money and opportunities follow Talent, and more Talent follow the increased capital and opportunities. This can be better characterized as a loop, or more specifically, the Talent Loop.

The fastest growing products are better represented as a system of loops, not funnels. Loops are closed systems where the inputs through some process generates more of an output that can be reinvested in the input. There are growth loops that serve different value creation including new users, returning users, defensibility, or efficiency. - Reforge

Below is an example of a Talent Loop applied to a city.

  • Great Talent moves to a city and start or join a company
  • Great Talent attracts other talent via word of mouth, and a city's social capital grows
  • Capital flows to that city because of the increased talent density and brand awareness
  • Opportunities (capital, serendipity, higher pay) increase as talent, so more Talent flows to the city.

Talent Loops have two characteristics:

  1. They work at multiple levels. A city is just an example, but it can be applied to specific organizations or neighbourhoods.
  2. They work both ways. Inversely, when Good Talent starts moving elsewhere, Gresham’s Law is applied: the bad drives out the good, which spirals down an entire organization (or Talent Market) until nothing but bad apples remain.