We're not in disagreement, note I explicitly did not say "the industry as a whole", and I added the qualifier "competent technical leadership". There's a lot packed into those three words, and without it you'll steadily bleed your best talent.
Micro-managing, non-technical leadership is the failure mode you're pointing out, and it's definitely the worst of all worlds, far worse than any failure mode at a FAANG. But on the other hand there is also parochial leadership who knows what they don't know and how to trust talent. Those environments can actually be fine for technical people. Granted, they won't necessarily get exposed to the exchange of ideas and mentorship from FAANG, but that's not a deal breaker in the modern internet age, and autodidactism has its place in furthering the state of the art by side-stepping social convergence to "best practices".
And on the flip side, I agree FAANG people are "sharper than average", but there are also headwinds to retaining the best talent. One is that you have to have a tolerance for moving slow, jumping through hoops, and generally dealing with a whole class of friction which many high performing engineers consider bullshit. Some will suck it up and deal with it to get the fat comp packages, but there is now an entire generation of <35 engineers who have had expectations set on comp levels based on a decade+ bull run of tech stocks which I suspect is unlikely to repeat over the next decade. There's also the appeal of working on classes of large problems that is only available at the biggest tech companies, but the actual interesting work is much fewer than the number of engineers. The majority are just dealing with incidental complexity and requirements of scale itself which can definitely occupy the mind, but may lead to an itch for more tangible impact.
Finally I will say there's a middle-ground between FAANG-style interviews and "throwing darts at a stack of resumes". If you are a small to mid-size company without the brand appeal and top-of-the-funnel recruiting volume of a FAANG, then you are absolutely shooting yourself in the foot by cargo-culting the FAANG approach. You know what the alternative is? Have qualified people do traditional interviews, going deep enough to get a gut feeling on their technical competence. Of course you'll get some Type I errors here, so then you have to actually pay attention to what they're doing once they start working. If they are not able to ramp and be productive in a reasonable amount of time, then you have to let them go (or at least pivot them into a position where they don't do damage). Big companies can't do that because there's enough chaos, lazy managers, and HR legal fears that Type II errors are a material risk. In summary, FAANG approach is solving for specific circumstances that most companies don't have, and it leaves a lot of talent on the table which is an arbitrage opportunity for companies willing to do the hard work to think about their recruiting strategy from first principles.
Micro-managing, non-technical leadership is the failure mode you're pointing out, and it's definitely the worst of all worlds, far worse than any failure mode at a FAANG. But on the other hand there is also parochial leadership who knows what they don't know and how to trust talent. Those environments can actually be fine for technical people. Granted, they won't necessarily get exposed to the exchange of ideas and mentorship from FAANG, but that's not a deal breaker in the modern internet age, and autodidactism has its place in furthering the state of the art by side-stepping social convergence to "best practices".
And on the flip side, I agree FAANG people are "sharper than average", but there are also headwinds to retaining the best talent. One is that you have to have a tolerance for moving slow, jumping through hoops, and generally dealing with a whole class of friction which many high performing engineers consider bullshit. Some will suck it up and deal with it to get the fat comp packages, but there is now an entire generation of <35 engineers who have had expectations set on comp levels based on a decade+ bull run of tech stocks which I suspect is unlikely to repeat over the next decade. There's also the appeal of working on classes of large problems that is only available at the biggest tech companies, but the actual interesting work is much fewer than the number of engineers. The majority are just dealing with incidental complexity and requirements of scale itself which can definitely occupy the mind, but may lead to an itch for more tangible impact.
Finally I will say there's a middle-ground between FAANG-style interviews and "throwing darts at a stack of resumes". If you are a small to mid-size company without the brand appeal and top-of-the-funnel recruiting volume of a FAANG, then you are absolutely shooting yourself in the foot by cargo-culting the FAANG approach. You know what the alternative is? Have qualified people do traditional interviews, going deep enough to get a gut feeling on their technical competence. Of course you'll get some Type I errors here, so then you have to actually pay attention to what they're doing once they start working. If they are not able to ramp and be productive in a reasonable amount of time, then you have to let them go (or at least pivot them into a position where they don't do damage). Big companies can't do that because there's enough chaos, lazy managers, and HR legal fears that Type II errors are a material risk. In summary, FAANG approach is solving for specific circumstances that most companies don't have, and it leaves a lot of talent on the table which is an arbitrage opportunity for companies willing to do the hard work to think about their recruiting strategy from first principles.