This has always been case long before Google. Interestingly, this has never prevented new startups to born and compete. When Google was shaping up, they didn’t went after hiring people in established companies. They went after people who no one knew but they can tell that they were phenomenal talent. This hidden talent, the underdogs, are always floating around and wasting away. All successful startups builds off of them. Before Google, Jeff Dean and Sanjay Gemawat were two nobody working in D.E.C. Labs, not some highly paid Principal Engineer at Yahoo or Microsoft.
The single most important skill of a startup founder is to identify these underdogs and convince them to basically work for free. There is always tantalizing similarity between how one person raised small but highly talented armies in ancient time and went onto defeat large established kingdoms.