Free food helps Internet startups compete for workers

SAN FRANCISCO -- The shout of "lunch is ready" jolted nearly the entire staff of Zynga from their desks and into the Internet startup's kitchen, where they piled ahi, marinated flank steak and stir-fried soba noodles onto their plates.

Not bad for a free lunch. In fact, this San Francisco company offers free meals to employees every day -- in keeping with what has become a widespread perk in the online industry.

To help build team spirit and entice employees to work longer, many Internet companies put food on the table for their troops. No doubt the largesse helps them to stay competitive in recruiting against Google Inc., which has offered its employees the free-meal perk for years and is credited with popularizing the phenomenon across Silicon Valley.

"This feels to me like it's becoming the standard," said Mark Pincus, chief executive of Zynga, a San Francisco maker of online games.

He gave employees a taste of the good life after moving his business in January from his living room to an office building he owns. The meals -- cereal for breakfast, plus a more elaborate lunch and dinner -- are a reward for his employees, who work more intensely at his startup than they would at other jobs, he said.

After a few months of greasy takeout, Pincus decided to recruit some in-house chefs by walking down the street to the California Culinary Academy and calling out to the students standing outside: "Does anyone want a job?"

The three chefs, who juggle cooking and their classes, operate out of Zynga's kitchen.

Pincus said he considered charging employees for their meals, perhaps $8 to $10 per day, but decided against it. The meals, he said, have paid off enough by creating a better team spirit.

Of course, giving workers an all-you-can-eat is hardly cheap. Executives say the bill is several thousand dollars per employee per year, a significant cost for many startups that raises the question of whether they're returning to the excess that contributed to the dot-com collapse eight years ago.

Arvind Rajan, vice president of people operations at Palo Alto's LinkedIn, a social network for professionals, said his company instituted free meals in 2006, only after it got on solid financial footing. But even then, he sometimes raises his eyebrows at the cost of feeding 300 employees daily, saying "sometimes we look at the numbers and gulp a little bit."

Because there's no room for a kitchen, meals at LinkedIn are usually catered or employees are asked to make their own sandwiches from the provided ingredients. To make sure people like what's being served, the company has a team that tries out sushi vendors and surveys colleagues about whether there are enough vegetables on the menu.

Google and its multiple free cafeterias didn't loom large in LinkedIn's decision to offer the free food, Rajan said. Although Google has set a high standard in terms of benefits, he said, no one is going to join his or any other company just "because they have more kinds of soft-serve ice cream."

Indeed, employees are more attracted by the prospect of being challenged on the job and working among the best of the best, said Kevin Freedman, chief financial officer for Slide, a San Francisco company that makes applications for online social networks. Granted, salaries, stock options and vacation time also play a big role.

Slide orders takeout dinners for employees from nearby restaurants so, as Freedman put it, they don't have to worry about getting home early for a meal. As for lunch, he said the staff prefers to go out to the dozens of nearby restaurants, even if it means paying their own bill.

"One night we bring in Indian, another night Thai," said Freedman, who said the company sometimes gets a discount from the restaurants from buying in bulk for 80 people.

Free meals are a perk that predates the Internet industry.

But now, they mark a sharp contrast to the spendthrift ways of many companies in a difficult economy. Although many firms have cut jobs and benefits, the technology industry has been largely immune, at least so far.

Andrew Trader, vice president of business development, said over his plate that he sometimes invites prospective recruits to lunch, hoping that they'll be impressed.

"I don't oversell the point," he said. "I let the food speak for itself."

E-mail Verne Kopytoff at vkopytoff(at)sfchronicle.com.

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)