4 ms·

The company had 22 employees as of earlier this year, and it has been in the process of laying off all but what is expected to be around 3 of its st

The company had 22 employees as of earlier this year, and it has been in the process of laying off all but what is expected to be around 3 of its staff. Normally, when I hear the words "layoff" and "restructure", I think 15% of the company, not 'basically everyone.' That's a bummer, and I expect this won't be the last time we hear this story this year. I hope the frontend engineers making $75,000-$125,000[1] for a shot at one day accumulating up to 1% of Gumroad decide to pursue market wages at the next company they join :-\ The economics of startups rarely offer a worthwhile return to those who choose to play the game. For what it's worth, this is something I've found out the hard way. [1] https://web.archive.org/web/20130516103241/https://angel.co/gumroad https://web.archive.org/web/20130516103241/https://angel.co/...

rokhayakebe 11y ago
This never made sense to me. A startup should pay you more because if you are capable, you are giving up a lot. If you want to be part of something revolutionary as an early employee, I suggest a better plan. Go talk to your employer about starting something small inside the already big and solid company. Negotiate the equity and terms before getting started. If your company is too big and complex to get this going, then simply cut your hours and work part time on your product with someone else. 1% to 3% is just way too small for someone who is capable. A gal who loves this game and spends 10 years working at different startups can end up loosing $500k to a couple of millions considering she could get paid very well at big co. Note: Capable is the keyword here.
- cookiecaper 11y ago
  >This never made sense to me There's a lot of naive people that will allow their trust to be exploited if there's a carrot dangled in their face. Now it makes sense. Most investors will flat refuse to invest in a startup that pays anything more than low-mid-range salaries. Contrary to your theory that the greater risk should be rewarded with a greater tangible wage, I've personally seen investors pass on companies because the founder(s) wanted a 100k salary, even though it represented a 40% haircut in wage for the founder(s). While the investors don't want you to think it, and do a lot to try to stop it from being thunk, Silicon Valley and tech culture make a lot more sense when you just realize that wealthy, seasoned investors are exploiting naive, just-out-of-college young adults as practically free labor, primarily compensating them in idealism and empty promises instead of dollars.
serpentor 11y ago
$75,000 isn't market wages for a developer?
- aaronbrethorst 11y ago
  Not in SF, where the median rent is now $4,225/month, or $50,700/year. Realistically, you can't even expect to take home $50,700 on a gross income of $75k. http://blog.sfgate.com/ontheblock/2015/06/02/san-franciscos-median-rent-hits-a-ridiculous-4225/ http://blog.sfgate.com/ontheblock/2015/06/02/san-franciscos-...
  - pen2l 11y ago
    I've been thinking about this lately. Why doesn't Google or Facebook just pack up one day and go to... say, Detroit? Buy a shitload of property there, and tell all their workers that in the course of the next 5 years they want to have presence in two places: this new place in Detroit, and the old place in the Valley. Whoever wants to stay in the valley can stay... and whoever wants to move to Detroit can come move to Detroit. Same pay. It would win a lot of good will... and it makes sense. The engineers making $150k will actually live what living on $150k is supposed to feel like. It'll jumpstart the hell out of Detroit... etc. etc. Not necessarily Detroit (I just chose to say Detroit because property there is so much down the shit that you can buy a sizable portion of the city for a good few million).
    - deftnerd 11y ago
      There is a long history of Company Towns in the United States. At their peak in the first half of the 1900's, about 3% of the population lived in one. At the time, it was seen by the industrialists as a way to raise their workers into the middle class. "Paternalism was considered by many nineteenth-century businessmen as a moral responsibility, or often a religious obligation, which would advance society whilst furthering their own business interests. Accordingly, the company town offered a unique opportunity to achieve such ends." "Although economically successful, company towns sometimes failed politically due to a lack of elected officials and municipally owned services. Accordingly, workers often had no say in local affairs and therefore, felt dictated. Ultimately, this political climate caused resentment amongst workers and resulted in many residents eventually losing long-term affection for their towns." Perhaps it is time for a new company town concept being pushed by one of the big tech firms. Apple, Microsoft, Facebook, or Google might be able to pull it off. It could also be a test bed for their new technologies. [*] Quoted paragraphs lifted from https://en.wikipedia.org/wiki/Company_town https://en.wikipedia.org/wiki/Company_town
onewaystreet 11y ago
That's from 2013. No way they were paying sub $100k today.
- aaronbrethorst 11y ago
  How about middle of 2014, then? "$95k-$125k" https://web.archive.org/web/20140707172338/https://angel.co/gumroad https://web.archive.org/web/20140707172338/https://angel.co/...
- mynameishere 11y ago
  There's a "hiring" post on the front page right now offering sub $100k for front end developers and others. It's in Oakland though.

rokhayakebe 11y ago

This never made sense to me. A startup should pay you more because if you are capable, you are giving up a lot. If you want to be part of something revolutionary as an early employee, I suggest a better plan. Go talk to your employer about starting something small inside the already big and solid company. Negotiate the equity and terms before getting started. If your company is too big and complex to get this going, then simply cut your hours and work part time on your product with someone else. 1% to 3% is just way too small for someone who is capable. A gal who loves this game and spends 10 years working at different startups can end up loosing $500k to a couple of millions considering she could get paid very well at big co. Note: Capable is the keyword here.

cookiecaper 11y ago
>This never made sense to me There's a lot of naive people that will allow their trust to be exploited if there's a carrot dangled in their face. Now it makes sense. Most investors will flat refuse to invest in a startup that pays anything more than low-mid-range salaries. Contrary to your theory that the greater risk should be rewarded with a greater tangible wage, I've personally seen investors pass on companies because the founder(s) wanted a 100k salary, even though it represented a 40% haircut in wage for the founder(s). While the investors don't want you to think it, and do a lot to try to stop it from being thunk, Silicon Valley and tech culture make a lot more sense when you just realize that wealthy, seasoned investors are exploiting naive, just-out-of-college young adults as practically free labor, primarily compensating them in idealism and empty promises instead of dollars.

serpentor 11y ago

$75,000 isn't market wages for a developer?

aaronbrethorst 11y ago
Not in SF, where the median rent is now $4,225/month, or $50,700/year. Realistically, you can't even expect to take home $50,700 on a gross income of $75k. http://blog.sfgate.com/ontheblock/2015/06/02/san-franciscos-median-rent-hits-a-ridiculous-4225/ http://blog.sfgate.com/ontheblock/2015/06/02/san-franciscos-...
- pen2l 11y ago
  I've been thinking about this lately. Why doesn't Google or Facebook just pack up one day and go to... say, Detroit? Buy a shitload of property there, and tell all their workers that in the course of the next 5 years they want to have presence in two places: this new place in Detroit, and the old place in the Valley. Whoever wants to stay in the valley can stay... and whoever wants to move to Detroit can come move to Detroit. Same pay. It would win a lot of good will... and it makes sense. The engineers making $150k will actually live what living on $150k is supposed to feel like. It'll jumpstart the hell out of Detroit... etc. etc. Not necessarily Detroit (I just chose to say Detroit because property there is so much down the shit that you can buy a sizable portion of the city for a good few million).
  - deftnerd 11y ago
    There is a long history of Company Towns in the United States. At their peak in the first half of the 1900's, about 3% of the population lived in one. At the time, it was seen by the industrialists as a way to raise their workers into the middle class. "Paternalism was considered by many nineteenth-century businessmen as a moral responsibility, or often a religious obligation, which would advance society whilst furthering their own business interests. Accordingly, the company town offered a unique opportunity to achieve such ends." "Although economically successful, company towns sometimes failed politically due to a lack of elected officials and municipally owned services. Accordingly, workers often had no say in local affairs and therefore, felt dictated. Ultimately, this political climate caused resentment amongst workers and resulted in many residents eventually losing long-term affection for their towns." Perhaps it is time for a new company town concept being pushed by one of the big tech firms. Apple, Microsoft, Facebook, or Google might be able to pull it off. It could also be a test bed for their new technologies. [*] Quoted paragraphs lifted from https://en.wikipedia.org/wiki/Company_town https://en.wikipedia.org/wiki/Company_town

onewaystreet 11y ago

That's from 2013. No way they were paying sub $100k today.

aaronbrethorst 11y ago
How about middle of 2014, then? "$95k-$125k" https://web.archive.org/web/20140707172338/https://angel.co/gumroad https://web.archive.org/web/20140707172338/https://angel.co/...
mynameishere 11y ago
There's a "hiring" post on the front page right now offering sub $100k for front end developers and others. It's in Oakland though.