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Big Tech Company Salaries Are Hurting Startups

183 points by alain94040 10y ago

faitswulff 10y ago
Well, Hacker News seems to be hurting this website, so here's Google's cached version: https://webcache.googleusercontent.com/search?q=cache:RD5ZRWKCqcAJ:thestartupconference.com/2017/03/25/the-350k-google-salary-is-hurting-startups/+&cd=1&hl=en&ct=clnk&gl=us https://webcache.googleusercontent.com/search?q=cache:RD5ZRW...
- HenryBemis 10y ago
  The definition if Irony!!! Google is hurting us, so use a system by Google to read how Google is bad for (some) business(-es) which you could not read if Google didn't exist, while at the same time this article wouldn't exist if Google didn't exist! (and right about now I'm watching myself looking at me seeing me)
  - samkellett 10y ago
    that isnt ironic
    - jessaustin 10y ago
      There are lots of Alanis Morissette fans on HN.
lloydde 10y ago
Why doesn't the article explore starting up in different geographies? Also, the most interesting questions are: * How much of the pool are employed by those companies? * How does the largest segment of employers pay? What percentage of top talent do they employee. I'd bet there is a larger percentage of top talent at top talent at other companies. Many, many people don't want to work at mega companies. Also, many, many people, particularly the best, are motivated, like startups, by challenge themselves, working on something important to them using tools they enjoy, people they enjoy working with and most importantly external factors and how work relates to their own life.
- st3v3r 10y ago
  "Why doesn't the article explore starting up in different geographies?" Honestly, because most VCs are insanely lazy, and have no interest in traveling anywhere outside the Bay Area to do stuff.
chomp 10y ago
Then hire remote? Don't found in SV? This article makes it seem like startups want something valuable for a cheap price, which is unlikely.
bla2 10y ago
Sounds like the market is telling startups that early engineers are worth more than 0.1% of stock options.
- thedevil 10y ago
  I had more of a financial background before becoming a software engineer. I was shocked when I found out "equity" given to early engineers is so puny. Why would someone work long hours for low pay with higher risk for 0.1% of high-risk small business?
  - falsedan 10y ago
    Because: they're fresh out of college and haven't met anyone burned by an IPO/bubble burst & realised how that could be them.
    - heurist 10y ago
      Because being underutilized in a large company is unfulfilling. Because being a staff engineer in a large company gets you no closer to running your own business. Because you want to learn technology that you cannot yet compete for. Because options outside of large companies are limited, especially if you are unable to take large immediate financial risks.
      - falsedan 10y ago
        Why not: work for a large company that can do both? Pay reasonably well with low-risk, and let you grow your technology skills + contacts? A: those companies aren't cool & won't make you a millionaire by 35 on stock options (whereas a startup might)
        heurist 10y ago
        Personally, because I don't like being told what to do :) If I don't have a significant amount of control I shut down, become depressed, anxious that I'm wasting my life, etc. I'm also wary of being taken advantage of. If I'm going to spend half or more my waking hours working I want to be reaping the profits. I need freedom. I've been directing product at a seed stage startup to get my bearings in the small business world but now I'm feeling antsy because I am starting to think I could be doing better on my own while having more control over my time, the products I build, the money those products earn, etc.
notliketherest 10y ago
Absolutely 100% spot on. We don't even interview Googlers anymore for this very reason. They literally think a "pay cut" means 300k+.
- mankyd 10y ago
  Are you suggesting that you want to be paid less on principle?
  - seanmcdirmid 10y ago
    I think parent is just suggesting that they are priced out of that market, which is completely true. People are reading more nuanced views into this, but they aren't supported from the comment.
- mosselman 10y ago
  What else would you call it? Are you jealous? I know I wouldn't mind earning 350k. It isn't as if I'd move anywhere for Google to start earning that, at least not right now, but to be honest, if you are going to earn 300k less that WOULD be a pretty big pay cut.
- upquark 10y ago
  Is this slave mentality or what? If I make 350k+, and a startup is telling me I should take their 150k base + worthless options deal, or else I've "pigeonholed myself in the current role" (actual quote), I think they're just being stupid and unrealistic.
  - uberwach 10y ago
    Are these the same bullshitters that one finds in the "recruiter" population? "Slave mentality" is a term I often use as well.
krschultz 10y ago
If you are a startup and are trying to compete head to head with Google / FB / Amazon / Apple / Microsoft for the same people, you are going to have a really hard time recruiting. But there are plenty of great engineers that don't want to work at those companies for various reasons. There are plenty of great engineers that want to work remotely and don't have that option at the large companies. There are also plenty of inexperienced engineers with high potential that can't yet get hired at those companies and can be great additions to your startup. Do what you can to find and recruit those people.
- znq 10y ago
  Very true. For both of our companies [1][2] we pay a fair salary plus a quarterly bonus on top of that based on what we can give (based on the company's quarterly profit results). We also offer remote retreats (so far Cape Town, Thailand, Martinique, Spain and Skiing in the Alps) and the biggest contributor to everyone's satisfaction is that we let everyone work from where ever they want and as much as they want as long as it is planned properly. The result: we've had a couple of employees who received job offers from companies like Apple, Google and Facebook. But after going to the interview process and talking to other employees there they've all (with the exception of one) decided to stay with us, with a significantly lower salary, but a lot more freedom and work-life balance. Not saying that we've a better offer than Google & co, but saying that our offer is different than theirs and there are enough people out there who care more about other things than just money. [1] https://mobilejazz.com https://mobilejazz.com [2] https://bugfender.com https://bugfender.com EDIT: formatting
  - charleslmunger 10y ago
    Out of curiosity, what makes your salary "fair", if it results in an offer that's significantly lower than BigCo? How do you decide what's fair?
    - chillydawg 10y ago
      Both sides are happy with it?
hashkb 10y ago
I don't think the average engineer with 5 years of experience makes 250k; not even in the top 10%. And startups DO pay that much, it's just reserved for powerful exec hires. Just pay more if you want the best engineers. Asking for a world where top talent works for less money is stupid.
- throwaway40483 10y ago
  Hey. CEO here. So you're telling me if I raise salaries I might hire better engineers? Hmm, wonder if there are any theories about this relationship.
  - runT1ME 10y ago
    No, you need to raise compensation. If someone is worth 250k at Google, they may work for your company for 150k if they get 600k worth of options paid out over four years at a reasonable valuation.
    - mavelikara 10y ago
      A 400K investment over 4 years to earn something worth 600K over the same period which will be liquid after another 4 years - does not sound very compelling to me. If it were 600K/year, yes, that's attractive.
  - pm90 10y ago
    Your best strategy would be not to have a fixed salary, but a range of salary which you can afford with your outlay, and then seen what the potential hire can be enticed with. That way you know immediately if the candidate is too expensive for you. Just randomly increasing everyone's salary may not be very helpful.
- likpok 10y ago
  The average engineer at google with 5 years of experience makes at least 250K. To put it bluntly: I'm pretty sure the average cash compensation (that is, disregarding RSUs entirely, which is likely at least another 100k/yr) is going to push 200K. The same is substantially true of the main competitors to Google (Amazon, Facebook, Microsoft).
eknight15 10y ago
It's about location. Google salaries in Boulder, CO are not that high.
- soreasan 10y ago
  What are Google salaries in Colorado like?
  - joshuamorton 10y ago
    Lower than in Bay/NYC, but still good, partially offset by the lower state tax rate, and (signing) RSUs aren't any lower than in the Bay, which means that take home pay for someone in Colorado after rent can be higher.
- jboggan 10y ago
  Boulder isn't that bad, isn't it only a 10-30% cut off base salary? The good strat is to get hired in MTV and then transfer to Boulder, your GSUs will still stay the same size. The better strat is to get hired in Zurich and then transfer, even bigger bonus!
mdani 10y ago
The article assumes that most of the engineers at that experience level are hired by Gooogle/Facebook etc, but it is simply not the case. The acceptance rates are quite low and there are plenty of 5-10 year experienced engineers who would be willing to work for startups at $130k.
ozi 10y ago
This article is basically arguing that farm teams should be able to afford pro athletes... Having engineers who "perform in the top 10%" is a nice-to-have, not a requirement for startup success.
- snarf21 10y ago
  I agree but the problem is also the money. A lot of the VCs want to talk about how many ex GOOG and FB engineers who graduated from MIT that they have building their next unicorn. They don't have the same story talking about three state school graduates from Kansas who may be just as talented and have a better product. They also never want to fly to Kansas, like ever. I've lived through this working at a startup in central PA. We were in discussions to be acquired by several of the top 10 west coast tech companies and having to have an office in PA and come here killed all but one deal. Some Director of X doesn't want to fly to Philly and take an hour train to visit the team. This is despite the fact that costs here are like 30% and there is plenty of reasonable talent.
  - 0xCMP 10y ago
    So in this case, location does matter. Even if it's because others are lazy. /noted
  - jessaustin 10y ago
    Very few people fly to Kansas. There isn't really a major airport in the state.
    - tutufan 10y ago
      Technically true, though everyone on this board thinks Kansas City is in Kansas...
      - deleted 10y ago
        [deleted]
      - emodendroket 10y ago
creaghpatr 10y ago
I'm old enough to remember when the big 5 colluded to keep salaries low...
- matt_wulfeck 10y ago
  Which is funny, because reading the comments seems to be suggesting they're colluding to keep salaries high in order to squash startups!
madamelic 10y ago
Optimizing for compensation is a silly idea at an engineer's salary. I am a whole lot happier in a small company that pays me a reasonable salary and is fun than a huge company where I have to play politics and jump through hoops on command. EDIT: Plus I get a lot more responsibility and exposure to everything involved so that I am better equipped to strike out on my own.
- seattle_spring 10y ago
  It's not silly for everyone. You can retire way quicker on $300-400k than you can with $120-160k. Not everyone wants to work an extra 10-30 years.
  - jdbernard 10y ago
    Especially when a lot of people worry about being employable as an older developer. Makes sense to make enough money to be independent earlier.
korzun 10y ago
I hate posts of this nature. There are no hard facts; it's a collection of thoughts communicated as 'facts' via a blog post. Plenty of Google engineers become start-up co/founders. If you are good at what you do, the start-ups will magically find money for you. If the a start-up is an equity-heavy sweatshop. You don't have to make $200K to know who is taking advantage of you.
douche 10y ago
Maybe starting a company in an area consumed by rampant cost-of-living and salary inflation isn't the smartest idea. Besides, your Uber for Cats startup probably doesn't need GoogSoftppleBookazon-grade engineers to slam together a mobile app and some CRUD services.
monkmartinez 10y ago
I am naive... however, some opinions... If the startup is truly revolutionary|innovative, shouldn't we see VC's pounding down the doors to give them money? If they have money, shouldn't they spend that on their personnel (assuming they are not manufacturing robots or something) if we are talking software? Seems to me that startups want to have their cake and eat it too. If you have money to pay, then pay competitive wages. If you don't, offer equity. If you have something worth a shit, people will want to work for your startup. The next facebook, unless it is the next facebook, isn't going to sell a lot of people. I look at the YC list of startups and shake my head... most of them don't make much sense. They might be winners, but I would ask for a large paycheck instead of equity for most of them.
- heurist 10y ago
  No, VCs are fallible and don't always recognize opportunity. They may not trust that it can be delivered. They might be hedging their bets for whatever reason. Having a good product is no guarantee of significant funding. Most startups, even potential game-changers, only have a limited amount of cash on hand and need to make it stretch as far as possible. You're thinking about the unicorn case which is so rare as to be a joke.
  - st3v3r 10y ago
    I also have a limited amount of cash, and thus I need to work where I can maximize my compensation.
- eldavido 10y ago
  There's a limit to how much a company can raise pre-product/pre-traction. It hinges a lot on the team and whether they've had a big exit. Keep in mind, most early-stage funding is done by angels who "work for themselves", not VCs -- real, true VCs work for their limited partners (investors) and if a deal goes south, there can be a lot of "how the hell did this get funded" blowback that can be career-limiting. So as much as I like to think VC can change, their incentives do make it a bit difficult.
inputcoffee 10y ago
Here are some options, but notice how controversial they are: 1. Employ younger, inexperienced people and train them 2. Import immigrant developers 3. Hire people in different geographies As an alternative, why not: 1. Hire older workers 2. Hire the unemployed American workers 3. Hire in America? Well, because it costs more? Does it? I don't know, I am just trying to open up the conversation here. Edit: made language more neutral
- throwaway2016a 10y ago
  We have had high success with #1.
  - alexc05 10y ago
    now are you referring to #1 (younger + training) or #1 (older)?
    - throwaway2016a 10y ago
      Younger + training. We've tried the latter too but have not been even remotely as successful. The job requires some mental elasticity and they older developers we tried it with were a bit too set in their ways. It didn't make sense given the market since at least here older developers are pretty well employed so the salary is still high. But I am more than willing to try it again.
- WalterSear 10y ago
  Yes, it costs more.
  - inputcoffee 10y ago
    So then the two optional responses are: 1. If the startup doesn't have the money to pay more, what should it do? 2. If a startup decides not to opt for any of the options, and the competitors do, what should it do? -- Note: the competitor can be in India, for example.
throwaway2016a 10y ago
I work at a startup that isn't profitable yet so our salaries are very low... - Our typical junior makes $50 - 60k - A typical mid makes $65 - 75k - Seniors (including CTO) make $90 - 110k In greater Boston. It is VERY difficult to hire at those rates. We had someone come in interviewing for a senior that I would place as a mid (generously...) and he accepted another offer for $150k. At our scale he would be making $75k at MOST. It takes us 6 months to find a single hire. But I'm not bitter at Google. I think the market is valuing the workforce fairly. Which means... - We are probably priced out of the market - We should / do offer higher percentages equity - We need to hire the people who the Googles of the world won't hire and train and mentor them That last one works really well. We hired a few people that couldn't get jobs elsewhere that after two years with us left for a job that pays over twice more but they wouldn't have been able to land without our training and mentorship. We actually congratulate and celebrate those people even though we are VERY sad to see them go.
- comstock 10y ago
  Increasing equity is great, but in general my view is that increased equity does two things: 1. It compensates for the increased risk of working for a startup (you don't have as much runway as google, might fail to raise your next round). 2. It gives the employee a stake in the company, and aligns their interests with making the company successful. I.e. Not just doing whatever they're told, failing to raise potential issues because "it's not their job". It doesn't really compensate for reduced pay in my opinion.
  - throwaway2016a 10y ago
    I actually agree with you. I am in disagreement with our CEO on that one. But unfortunately it's all we can afford to give so at least it is something. I have had a number of heart to hearts with devs to make sure their expectations on stock options are set right.
    - pbecotte 10y ago
      This statement makes no sense. If you feel that the company doesn't pay enough, there are two possibilities. 1. You get paid way more then your teams rate, proving the CEO is not being truthful (there is more money if people negotiate hard enough) 2. You are also underpaid and are doing yourself a disservice by staying
boulos 10y ago
(Disclosure: I work at Google) I describe the ability to hire as being a U-shaped curve: new grads (whether undergrad or grad school) or people that don't actually need to work anymore. Google's high pay actually means that for senior folks, they're getting closer to the right end of the curve! (But also, that they'd most likely be a founder unless they believe so strongly in your idea that they must see it happen). As bla2 says below: the reality is that .1% is a pretty low equity offer, and while engineers aren't naturally greedy we can do math. A person just out of school might not care, but you shouldn't begrudge folks that say "Umm, the expected value of this offer is pretty bad compared to my current situation". You can offer them something else (work that matters!), but I feel like everyone knows that employee equity is still too skewed towards founders and investors.
logicallee 10y ago
On the other hand it means that anyone with that salary can easily (no sacrifices of any kind) take a salary of $0 for two years, for equity alone, if the right idea and team comes along. So here's a question: does that happen? For a hint as to the answer, consider the existence of the word xoogler.
- humanrebar 10y ago
  That's called being a partner, right?
  - logicallee 10y ago
    Yes, cofounder. (That is exactly what my comment was about - sorry I wasn't clearer.)
yesimahuman 10y ago
These moments feel like validation for sticking to our guns and not relocating to the valley. From what I hear from our coastal investors, hiring engineers is a major major problem in their portfolio and it's only getting worse. Frankly, we don't struggle to hire engineers.
RomanPushkin 10y ago
One of my friends was rejected while interviewing for some SV startups. But was not rejected by Google. Now he works in Google. Startups should re-think how they're interviewing people. Seems like they suffer more from broken interview process, not Google salaries.
- tdumitrescu 10y ago
  But when everyone on HN is constantly complaining about how the Google interview is ridiculous and shouldn't be emulated by startups, this sounds like a perfectly acceptable outcome. Skills needed for successful startup engineering vs Google engineering are not the same.
awalton 10y ago
The "Google compensation package" (not Salary) is making it a realistic option for Google employees to buy homes in the Bay Area after a few years of work. (Unfortunately thereafter, the RSU pyramid makes it really hard to leave Google, since you'd be giving up a virtual fortune, shimmering off in the distance like a mirage...) Your startups... aren't doing any of that. Most of them pay shit-all for equity and salary, even for early engineers, even for senior-level employees. On top of that, most of them fail, leaving engineers with worthless stock and a hole in their bank account balances. I'm sorry, this is a simple game of economics - if you want those engineers, you need to give them more in their package. Deal with it.
- tonfa 10y ago
  > Unfortunately thereafter, the RSU pyramid makes it really hard to leave Google, since you'd be giving up a virtual fortune, shimmering off in the distance like a mirage... Never understood that argument, how is it different from your base salary, isn't it a similar mirage? Per year you get XX USD in RSUs vesting, you don't have to consider granted RSUs as being "yours".
  - joshuamorton 10y ago
    It is about 80% an instance of the sunk cost fallacy, but RSU payout is based on past performance, so higher performing employees will be granted more RSUs. That means that if you got a 10% RSU bonus over average due to performance, you'd be losing out on a portion of your compensation for your past work. Also there's something to be said for "the mirage I know is better than the mirage I don't know". Although in general I'd agree, if you're capable of performing well at one of the big guys, you can probably go to any of them, and get a starting bonus to offset your "losses".
  - awalton 10y ago
    > Never understood that argument, how is it different from your base salary, isn't it a similar mirage? Per year you get XX USD in RSUs vesting, you don't have to consider granted RSUs as being "yours". If you can/do get an offer that replaces your outstanding RSUs and you're willing to move on, then none of this really matters - you are going to move on and the whole conversation is moot. However, RSUs are typically based on looking back at previous work, not forward like a salary. If you did a ton of work at the beginning of your career and earned a huge stack of RSUs, you've sunk a cost... but one that is easily recoverable simply by waiting. Even if your output drops. The biggest problem is that people are very often more productive and energetic in this field at the beginning of their careers, so much so that big companies don't even want to touch older people - built-in Silicon Valley ageism. And that's its own whole can of worms... So after a few years when their productivity begins to slide and their life priorities change, they get married and have kids and buy cars and homes and pay for private schools... and getting a new job becomes more difficult by virtue of ageism and the sheer volume of outstanding RSUs a company would have to offer you making you a very unattractive candidate, people find they literally cannot tolerate the risk of moving on. I've heard stories of people willing to accept fates such as being "roofed" (see Hooli on Silicon Valley) for months at a time looking for a new position internally while learning to be a world class barista in the employee lounge, simply because by sitting on their ass and doing nothing, they can afford to buy a house next year, but they can't find a new job because nobody is willing to give them the half a million they feel is owned to them as what is essentially back pay. It becomes a working pension, albeit one where the end goal isn't funding retirement, it's the freedom to move on. This is so common a phenomenon it has a name: Golden Handcuffs. So yeah, some percentage sunk cost, some percentage risk tolerance, some percentage boredom tolerance.
alistproducer2 10y ago
Don't start companies in places where the prevailing rates are in the 6 figures unless you have the cash to afford it. The idea that software engineering is a "talent" strikes me as wrong. Knowledge of algorithms and data structure is attainable by anyone willing to put in the time to read a book. Hire people, incentivise them to learn what's important to the success of your company. Pay them to practice their new skills. Being congenitally "smart" is not the only path to being useful and innovative in a company. Being curious, willing to learn, and having a company that knows how to steer its workforce is.
- thraway2016 10y ago
  > Knowledge of algorithms and data structure is attainable by anyone willing to put in the time to read a book Cognitive limits do exist. Hardwired g-factor correlates like working memory will ultimately limit any one individual's capacity for understanding the above. I do agree with your larger point, though. SF/NYC/Boston are not the only places one can find high-IQ individuals motivated to learn and build things.
  - alistproducer2 10y ago
    I'm not so sure one needs to be high-IQ to be proficient. Outside of pure CS research, there's nothing in practical software engineering that requires much more than average to slightly above average intelligence to comprehend. the main thing you need is a person that is genuinely curious.
jmcdiesel 10y ago
Flip the argument the other way. Startups want to underpay for talent. Google isn't overpaying... the big companies aren't overpaying, the startups are under paying. Being a startup isn't an excuse, and you're asking people to take less pay to work at a place that has a decent chance (compared to established places) of going under. You're asking engineers to take on more risk for less pay. If you aren't funded enough to pay your engineers what they deserve, you aren't funded enough to hire more... end of story.
johngalt 10y ago
First off don't bother trying to outbid google/facebook/amazon. Instead look to the good engineers that they can't hire. Large companies can afford to put a large list of requirements down and throw out anyone who doesn't check all the boxes. Zero in on a frivolous requirement that the bigco's commonly use to reject good candidates and target those engineers. Secondly the real elephant in the room is equity. The path between early employee in successful startup and payday is narrower than ever and filled gotchas. There is a reason we tell startup employees to treat equity as worthless. Bluntly it's a 'tragedy of the commons' type problem. Individually each startup will have large incentives to keep all the dollars at the top while constantly delaying any possible payday for early employees. Collectively trust in equity grants has collapsed to zero. It doesn't matter if you individually are a good startup, because an engineer isn't going to gamble away a 300k salary on the off chance that this time it is different. You also can't simply solve this problem by saying: "engineers should have known X about Equity". No thanks, instead I'll take the cushy big-co job with benefits, reasonable schedule, and cash on the barrel today. Sounds easier than trusting that I've found all the ways I could get screwed by professional business people who do this every day.
canistr 10y ago
The other problem is that with so many startups nowadays, none of them offer a compelling enough vision or mission that would entice someone away from the Google/Facebook/Microsoft's of the world. A lot of them are either still working on their product-market fit in a niche field or they are hire front-end devs for some CRUD analytics tools. I'd much rather go work at a non-profit, NGO, or government-based organization where there's a better mission statement or something you're doing for moral reasons. If you're a startup who can't hire but you're still doing whiteboarding problems to screen candidates, you're doing the equivalent of using vanity metrics.
- umeshunni 10y ago
  > none of them offer a compelling enough vision Bingo! You could get 0.1% equity and low pay to work on yet another food delivery or social photo chat app or you could work at M/G/F/A/A for $200k+RSUs and at least know you have competent co-workers and management.
watertom 10y ago
The biggest thing hurting startups is the fact that big companies provide health care. Having Businesses provide health care, IMHO, is the biggest issues facing job growth in the U.S. Having been on the ground floor of 3 startups, the biggest issues wasn't salary it was health care, the only people that you can recruit are those young enough not to care, either because they are single or they don't have children. If you want to hire experienced employees the roadblock will be health care. I've lost more people than I can count due to health care issues. Big businesses actually like to provide health care, they bitch and moan, but if they didn't want to provide it they would drop it. Big business controls the job market by providing health care, it limits employee's freedom to change jobs and start companies. Business provided health care also makes our products and services more expensive decreasing our ability to compete globally.
- ghaff 10y ago
  Which is part of a reasonable benefits package. So you're arguing that, in addition to underpaying base comp, they also want to bypass a competitive benefits package--but that may not be obvious to young people who don't think they need insurance.
  - emcq 10y ago
    I think the parent is trying to make the case that startups by nature can't provide competitive healthcare, which hurts the economy when small business can't attract top people. It's much different than a 401k, free meals, foosball table, vacation policy, etc, in that once you experience a major health problem you are compromising your health or face prohibitive costs if you are on a mediocre healthcare plan.
    - st3v3r 10y ago
      Does it, though? That's like saying it hurts the economy because I can't afford a Ferrari.
    - ghaff 10y ago
      They're trying to make that case. Healthcare plans (for the time being) are available outside of employers but are not inexpensive. If the company can't either provide a plan or pay employees enough to buy a plan on their own, they're simply providing inadequate compensation. I've worked for smaller companies in the IT industry and salaries haven't been Google level but I've always had a decent benefits package, including healthcare.
gtrubetskoy 10y ago
Traditionally, startups had the advantage of compensating with equity/options that in time would be worth a lot of money. But ever since the laws passed after the dot-com bust equity is mostly worthless unless you're one of the founders or investors. That IMHO is the real problem here, not the big company salaries.
deleted 10y ago
[deleted]
allenleein 10y ago
It’s actually like the golden age of Wall Street. The companies here are collecting the smartest people in the world to improve their Ad click rate and camera filter. The talent also believe they are making the world better place but the truth is just few people care about the REAL problem in the REAL wold.
jasode 10y ago
The way the article frames the $350k competitive salary as a "problem" for startups is backwards. If you're a businessman, you build a business that works with the prevailing pricing that's out there. That includes prices for everything such as raw materials, office rent, AWS/GCP cloud costs, government taxes & fees, and yes, high programmer salaries. Complaining that your startup is "hurt" because AWS egress transfer fees are too high, or office sq footage $ is too high, or programmers cost $350k is counterproductive. To think like a businessman, one has to turn that around: how do I build a more valuable business that can pay the high costs of the San Fran office and the $350k salary? E.g., Jeff Bezos in 1994 isn't going to handicap himself because Microsoft was paying $100k salaries. Google in 1998 can't blame the difficult recruiting on Cisco and Sun Microsystems paying $100k salaries. Either build up value in the business and/or include the high programmer salaries in the numbers when you ask VCs for money. The other option, as other sibling comments noted, is to attract programmers who will work at a discount. Brian Acton & Jan Koum applied to Facebook and were rejected.[1] They are obviously not the worst programmers in the world and many of their caliber won't get $350k from Facebook/Google. See if you can hire overlooked programmers like them. Some will also work for a discount because they value the startup's equity or other intangibles. A startup entrepreneur has to hustle and make compelling propositions to these programmers. [1] https://en.wikipedia.org/wiki/WhatsApp#2009.E2.80.932014 https://en.wikipedia.org/wiki/WhatsApp#2009.E2.80.932014
- pm90 10y ago
  I agree with most of your comment. One thing to note though is the whole scandal where Steve Jobs colluded with other firms into a non-poaching kind of agreement, essentially distorting the market. So that is a possible outcome as well.
  - ConfuciusSay02 10y ago
    If it weren't for the relentless attack on wages via wage fixing cartels, visa abuses, outsourcing, etc. we would likely be seeing the very top engineers making close to $1M per year. Far from that "hurting startups" it would be a benefit to all tech workers as wages would rise across the board. This framing of "hurting startups" is a euphemism for "hurting investors" or "hurting the wealthy". It's roughly the same complaint as when they claim that there are "tech worker shortages". They want to pay employees pennies on the dollar, full stop.
deedubaya 10y ago
Every founding team wants the _best_ engineers to build their CRUD app. Maybe top talent is a requirement for some startups, but most won't make it or break because they've got the very best engineers. Or even the next tier down. Or even one tier below. The vast majority of startups need a few engineers (usually only one) who have been around the block and know what pitfalls to avoid. The bulk of the team should be mid or junior level to do the grunt work.
deleted 10y ago
[deleted]
tootall 10y ago
Speaking of big tech company salaries, here's a very fresh data point: https://news.ycombinator.com/item?id=13985376 https://news.ycombinator.com/item?id=13985376 Sorry for the shameless plug, feel free to downvote if not appropriate!
aphextron 10y ago
There are a million different factors where startups are at a disadvantage to big tech companies. That's the whole point of a startup. Of course you can't compete on salaries. But if you're smart you'll find that startups have many advantages in recruiting that the big companies don't. Namely self determination and recognition - the two most coveted workplace qualities of any good hacker.
crdb 10y ago
Alternative hypothesis: these salaries are helping startups. It is fantastic that someone not born into wealth and connections can pay off their debt in record time, then save enough to cover financial security and take a few risks, such as quitting the well paying job to bootstrap a company before your twenties are over. And if the venture goes pear shaped, there are plenty of high paying jobs to catch up with the rat race. I've heard of $170k starting salaries in the Valley last year, admittedly for the best students from MIT or Stanford. But on that money, or even half of it, you do not need to hot bunk to put a serious amount away, and give yourself the time to develop the product or convince a decent technical person to join you. And you won't be (as much) at the mercy of investors or clients.
mixmastamyk 10y ago
As long as startups refuse to hire unless they find a young white/asian guy who's good on the spot/whiteboard with trivia questions you'll have a hard time hiring---google or not. I've twenty years experience and couldn't get hired last year, so gave up and joined a freelancer site. Getting lots of work now, no questions asked, and guess what? Five star reviews, and work from home. I'm not interested in games and prefer to get work done.
- asah 10y ago
  nice!!!
st3v3r 10y ago
Maybe startups, instead of going for the lavish offices, should put more of that VC money into salaries and health benefits. Or try to offer a better work/life balance. This entitled idea that startup founders have that they can pay shit wages and work people to death needs to go.
surfmike 10y ago
Another problem is the cost of housing. Even if you want to join a startup in the Bay Area, it's hard enough to pay the rent/mortgage on a big tech salary, let alone a startup salary.
jboggan 10y ago
I'm leaving Google this week to start my own company again. The prospect of eventually sitting on the other side of the table and competing with these big companies used to bother me but I've realized that the personalities I'm looking for don't flourish at Google, and vice versa. Google engineers (those that stay past the first vesting event) tend to be very risk averse, even for engineers. I'm not talking about technical risk and skill but I mean career and life risk. There are relatively few motorcyclists and skydivers. On our last team Vegas trip I kept track of how much everyone was gambling as a proxy for their risk appetite and decided that Googlers like a sure thing, not a risky payout down the road. My point is, you may want Google's talent bar (who doesn't?) but you aren't truly competing for the same people. Give me some smart pirates and a fast ship.
- madamelic 10y ago
  >On our last team Vegas trip I kept track of how much everyone was gambling as a proxy for their risk appetite Yikes. Gambling is just a dumb idea in general (it is literally designed to make you lose money)... unless you are gambling with other's money. ;) There is a diff between "With enough work, this risky thing could work out" and "With enough luck, this risky thing could work out if I stop while I am ahead"
  - 727374 10y ago
    > Yikes. Gambling is just a dumb idea in general Or, a thrilling and potentially expensive form of entertainment. I don't feel it's dumb when I lose $200 at the blackjack table when I'm in Vegas for a bachelor party.
  - yomly 10y ago
    Statistical events tend to be lumpy. If you've ever experienced firsthand the act of winning a reasonable amount of money gambling, you'll realize the draw is more than trying to just beat the system.
  - jboggan 10y ago
    Can I refer you before I leave?
JDiculous 10y ago
Solutions 1. Hire candidates that these big companies overlook, or that aren't interested in experience-blind trivia style data structures & algorithms interviews 2. Hire in locations where the cost of living is low 3. Allow your engineers the freedom and flexibility to work remotely. A side effect of this is that it opens up your candidate pool outside of your geographic confines and allows you to accomplish #2 4. Shorten your work week, or even remove the mandated work week altogether. To most this probably sounds blasphemous, but engineering is the type of work that doesn't have to be confined to a M-F 9-5 schedule. 5. Increase equity (0.1% is an absolute joke for most startups) Hiring remotely is the easiest way to compete with fat corporate compensation packages. I would gladly take a pay cut if it meant being able to forgo my $2k/month rent in NYC and digital nomad around Europe and Southeast Asia.
root_axis 10y ago
In my view, this complaint is just one step above an acquaintance who claims to have an amazing idea, and all you have to do as an engineer is make it into a reality and then we'll be super rich Oh... but you can't really pay me that much (or at all), but once this idea comes to fruition, I'll be so glad I invested all my time and energy. This is what I hear when a startup can't pay a competitive salary. If you can't offer to pay a competitive wage, you shouldn't be in the business (or you really do have an amazing idea, and the engineers are willing to take that bet based on merit or based on trust the founder has previously established)
- mikestew 10y ago
  In my view, this complaint is just one step above an acquaintance who claims to have an amazing idea, and all you have to do as an engineer is make it into a reality and then we'll be super rich No, this view is exactly the same as the folks that crawl out of the woodwork back in 2010 when they find out you write iOS apps: you build my idea, and we can split the profits. The fact that a startup throws some token amount of money at you doesn't change the formula. Can't afford a million dollar CNC milling machine? Then you don't get to make widgets. Can't afford the going rate for a software developer? Then you don't get to make shitty throwaway apps for profit. The difference is that the milling machine vendors will tell you to pound sound when you whine that you can't afford it, whereas there's always a doey-eyed college grad ready to believe they're going to get rich writing the front-end for "Uber, only for cats".
anonymoose111 10y ago
One of the reasons Google and other top companies pay so many engineers high salaries is to prevent said engineers working on startups. Other comments mention that PhDs are doing trivial and insignificant work at Google -- why? Because Google doesn't want them working on new startups.
TeeWEE 10y ago
Wow we are really getting underpaid here in Europe (Amsterdam). Max salaries for Seniors is really around 70k per year. Without an extra bonus.
- uberwach 10y ago
  Same here in Berlin, I got an offer with 75k p.a. as Sr. DS. I mean one could cite the living costs, but then one also has to compare the different taxation / social welfare models. $350k+/year sounds huge, I would actually switch to Google for that amount (ofc. knowing what a senior/lead role encompasses).
- humanrebar 10y ago
  Dunno if it makes up all the difference, but in U.S. vernacular, salaries are given pre-tax.
vojant 10y ago
I ma co-founder of London based startup and salary was one of the reasons I decided to build dev team in Poland. East Europe is great resource for smart software engineers asking for 50% of what we would have to pay in London (and London is still 50% behind SF). I am surprised why so little startups are looking for remote employees.
TeeWEE 10y ago
What is the net income over a 150k salary in San Fransisco?
- owyn 10y ago
  In California/SF the net take-home is about 8k/month on that salary. Average 1 bedroom rent is about $3000. Knock down another ~1000 per month for average things like a car, parking, phone, internet etc and your spendable take home is about half the actual paycheck. Congrats, you're really making $50k a year!
  - dllthomas 10y ago
    You mean, you're saving $50k/year, minus what you spend on fun. And yeah, congrats! That's quite a bit better than most people.
mathattack 10y ago
The idea that VC-funded startups should pay the same cash salaries as big companies is a sign of hot markets. It happened in 1999 as well. In reality, startups should pay less because they give equity, allow more freedom and creation, and have less stupid corporate rules. It's not for everyone, but that's the tradeoff. Generally when you're borrowing from VCs who expect a 30-50% return on their equity, it's a bad idea to pay too much cash. (It's like paying salaries on a credit card - the lender may be willing, but they still want to get paid back) When it does become equal, it's a sign of froth. To get the benefits of a startup without any downside runs up against, "There's no such thing as a free lunch."
- logicfiction 10y ago
  That would be entirely true if equity were handled the same way as it was in 1999. To be fair, I wasn't there to know for sure and can only base this off what I've read. As I understand it equity has changed, almost in the opposite direction of the "free lunch" equation. Equity values are frequently hidden from employees to mask how low value they are, VCs now figured out how to ratchet and protect themselves at the expense of the rank-and-file options holders, and so forth.
- st3v3r 10y ago
  Why should VCs get a 30-50% return on what they put in, but engineers don't get a 30-50% return on the salary they sacrificed to actually do the damn work of the startup?
  - mathattack 10y ago
    I agree - which is why startup employees get equity.
    - st3v3r 10y ago
      Except that equity is worth nowhere near the equity that VCs get, and in the majority of cases does not represent a reasonable return over the opportunity cost of taking the higher salary instead.
brilliantcode 10y ago
There's no way six digit salaries are going to be sustainable in the near future. This kind of money is possible because of low interest capital going around but when the rates inevitably rise and capital dries up, it's going to be hard for companies to pay someone $350,000 USD /year doing the work someone in Vancouver, BC can do for $100,000 CAD /year. I recall during the dot com bubble people justified a six digit figure for knowing HTML.
calcsam 10y ago
If startups want to compete effectively for talent with big companies, they need to communicate more effectively about the value of their equity (and in many cases, give more). I built a site that helps startups do this: http://www.optionvalue.io/ http://www.optionvalue.io/
Animats 10y ago
Startups should be paying more than established companies. The odds of success are low, the hours are worse, the benefits are worse, and the odds that the job will disappear within two or three years are high. Seldom is the equity worth much unless you're in the first few employees.
georgeecollins 10y ago
I see a problem where companies are looking for the magic wand of the "hero engineer". For example, a manager at a small company asks me if I can refer someone with the following qualifications: excellent technical proficiency in many areas, front end and back end, great communicator, great leader, has a design vision, experienced in obscure areas.. etc. Come on! Even the people I know who meet these qualifications are often not all they are cracked up to be. What happened to training people? What happened to looking for role players. In my career I have seen good teams accomplish great things with no geniuses.
dbg31415 10y ago
Man, every startup at SXSW was bitching about this. I think it's an easy fix... 1) Startups need to pay more than they want to. If you want a talented engineer, they aren't free. I see a lot of startups offering WAY low salaries and then getting frustrated they can't find devs... it's basic supply and demand. Budget accordingly and stop making business plans that involve finding devs for lower-than-market-rates. 2) Hire more junior people, build a process to mentor them. Recognize that they will leave after a year or two... 3) Hire freelancers to augment where needed. 4) Hire remote workers who live in cheaper locations -- realistically these days the only hard part about managing a distributed team is when they are in dramatically different time zones. 5) Work smart... a stitch in time saves nine, measure twice cut once... hire good product managers, UX designers, and QA people to help keep your project momentum going. Devs building prototypes that you just want to changeup as soon as it's launched... those are the most expensive wireframes you'll ever build... you're not only saddled with the dev cost, but tech debt to make changes. Prototype to keep costs down. 6) Cut other costs... Get rid of your office, for starters.
- humanrebar 10y ago
  > ...realistically these days the only hard part about managing a distributed team is when they are in dramatically different time zones Well, there are cultural issues. You need to write things down more to work remotely effectively and lots of people don't like to read or write.
  - dbg31415 10y ago
    Think about every issue in your current backlog. What's the real reason it's in there, and not in the done pile? I'd willing to bet the root issue is lack of documented scope leading to a lack of ability to estimate which leads to a lack of ability to prioritize... Writing and reading are important; I wouldn't let people get away with half-baking requirements even if I worked right alongside them... always be kind to your future self and document.
  - emodendroket 10y ago
    I think those are going to be less than insuperable if you want to hire people in, like, Montana.
tylerfoster 10y ago
Isn't that kind of the goal? They get the talent that could build great companies on their own, and if that talent is interested in the same areas they are, they lower the risk that talent will end up building successfully competition. If the markets are worth winning, the difference of a $50K * team size doesn't really matter in the big picture. At the same time, by driving up the ante, if an area they're not paying attention to does get traction, to get to a successful exit there's a higher likelihood that the startups will need VC capital only the likes of Google Ventures and similar corporate venturing funds can provide. Seems like a solid strategy to me.
iblaine 10y ago
I like the to see startups be pressured into offering higher compensation. Startups take advantage of engineers by over promising and under delivering.
kozikow 10y ago
My solution: business and executives in Bay Area, engineering in Poland. Syncing: I have to wake very early every day, but it's a small sacrifice in the grand scheme of things. "Remote, office not required" book have a case study of 37signals with two founders in Europe in USA. European moves his day forward, USA wakes up very early, at least 4 hours of overlap a day is enough. Relocation: If you open European subsidiary, you can long term relocate people to USA on L1 if necessary. How to find good people: It helped that I studied in Warsaw before relocating to Bay Area and I know some good people who stayed in Poland due to personal reasons.
ctocoder 10y ago
Give employees more ownership faster of the company. A billion dollars is a lot and enough to spread around
wdr1 10y ago
So Startups need to pay more? Either in cash or equity? I don't see the problem.
emodendroket 10y ago
Oh boo hoo. Companies pay these kind of salaries because they can extract significantly more value from the work than what they are paying.
borplk 10y ago
Are we supposed to cry for the capitalists now? That's your free market. Enjoy the ride.
- oceanghost 10y ago
  Haven't you heard? There's a shortage of STEM workers.
krystiangw 10y ago
Seems that startups are paying above average if you check some stats: https://jobsquery.it/stats/data.projectIndustry/startup https://jobsquery.it/stats/data.projectIndustry/startup

183 points by alain94040 10y ago

Well, Hacker News seems to be hurting this website, so here's Google's cached version: https://webcache.googleusercontent.com/search?q=cache:RD5ZRWKCqcAJ:thestartupconference.com/2017/03/25/the-350k-google-salary-is-hurting-startups/+&cd=1&hl=en&ct=clnk&gl=us https://webcache.googleusercontent.com/search?q=cache:RD5ZRW...

HenryBemis 10y ago
The definition if Irony!!! Google is hurting us, so use a system by Google to read how Google is bad for (some) business(-es) which you could not read if Google didn't exist, while at the same time this article wouldn't exist if Google didn't exist! (and right about now I'm watching myself looking at me seeing me)
- samkellett 10y ago
  that isnt ironic
  - jessaustin 10y ago
    There are lots of Alanis Morissette fans on HN.

lloydde 10y ago

Why doesn't the article explore starting up in different geographies? Also, the most interesting questions are: * How much of the pool are employed by those companies? * How does the largest segment of employers pay? What percentage of top talent do they employee. I'd bet there is a larger percentage of top talent at top talent at other companies. Many, many people don't want to work at mega companies. Also, many, many people, particularly the best, are motivated, like startups, by challenge themselves, working on something important to them using tools they enjoy, people they enjoy working with and most importantly external factors and how work relates to their own life.

st3v3r 10y ago
"Why doesn't the article explore starting up in different geographies?" Honestly, because most VCs are insanely lazy, and have no interest in traveling anywhere outside the Bay Area to do stuff.

chomp 10y ago

Then hire remote? Don't found in SV? This article makes it seem like startups want something valuable for a cheap price, which is unlikely.

bla2 10y ago

Sounds like the market is telling startups that early engineers are worth more than 0.1% of stock options.

thedevil 10y ago
I had more of a financial background before becoming a software engineer. I was shocked when I found out "equity" given to early engineers is so puny. Why would someone work long hours for low pay with higher risk for 0.1% of high-risk small business?
- falsedan 10y ago
  Because: they're fresh out of college and haven't met anyone burned by an IPO/bubble burst & realised how that could be them.
  - heurist 10y ago
    Because being underutilized in a large company is unfulfilling. Because being a staff engineer in a large company gets you no closer to running your own business. Because you want to learn technology that you cannot yet compete for. Because options outside of large companies are limited, especially if you are unable to take large immediate financial risks.
    - falsedan 10y ago
      Why not: work for a large company that can do both? Pay reasonably well with low-risk, and let you grow your technology skills + contacts? A: those companies aren't cool & won't make you a millionaire by 35 on stock options (whereas a startup might)
      - heurist 10y ago
        Personally, because I don't like being told what to do :) If I don't have a significant amount of control I shut down, become depressed, anxious that I'm wasting my life, etc. I'm also wary of being taken advantage of. If I'm going to spend half or more my waking hours working I want to be reaping the profits. I need freedom. I've been directing product at a seed stage startup to get my bearings in the small business world but now I'm feeling antsy because I am starting to think I could be doing better on my own while having more control over my time, the products I build, the money those products earn, etc.

notliketherest 10y ago

Absolutely 100% spot on. We don't even interview Googlers anymore for this very reason. They literally think a "pay cut" means 300k+.

mankyd 10y ago
Are you suggesting that you want to be paid less on principle?
- seanmcdirmid 10y ago
  I think parent is just suggesting that they are priced out of that market, which is completely true. People are reading more nuanced views into this, but they aren't supported from the comment.
mosselman 10y ago
What else would you call it? Are you jealous? I know I wouldn't mind earning 350k. It isn't as if I'd move anywhere for Google to start earning that, at least not right now, but to be honest, if you are going to earn 300k less that WOULD be a pretty big pay cut.
upquark 10y ago
Is this slave mentality or what? If I make 350k+, and a startup is telling me I should take their 150k base + worthless options deal, or else I've "pigeonholed myself in the current role" (actual quote), I think they're just being stupid and unrealistic.
- uberwach 10y ago
  Are these the same bullshitters that one finds in the "recruiter" population? "Slave mentality" is a term I often use as well.

krschultz 10y ago

If you are a startup and are trying to compete head to head with Google / FB / Amazon / Apple / Microsoft for the same people, you are going to have a really hard time recruiting. But there are plenty of great engineers that don't want to work at those companies for various reasons. There are plenty of great engineers that want to work remotely and don't have that option at the large companies. There are also plenty of inexperienced engineers with high potential that can't yet get hired at those companies and can be great additions to your startup. Do what you can to find and recruit those people.

znq 10y ago
Very true. For both of our companies [1][2] we pay a fair salary plus a quarterly bonus on top of that based on what we can give (based on the company's quarterly profit results). We also offer remote retreats (so far Cape Town, Thailand, Martinique, Spain and Skiing in the Alps) and the biggest contributor to everyone's satisfaction is that we let everyone work from where ever they want and as much as they want as long as it is planned properly. The result: we've had a couple of employees who received job offers from companies like Apple, Google and Facebook. But after going to the interview process and talking to other employees there they've all (with the exception of one) decided to stay with us, with a significantly lower salary, but a lot more freedom and work-life balance. Not saying that we've a better offer than Google & co, but saying that our offer is different than theirs and there are enough people out there who care more about other things than just money. [1] https://mobilejazz.com https://mobilejazz.com [2] https://bugfender.com https://bugfender.com EDIT: formatting
- charleslmunger 10y ago
  Out of curiosity, what makes your salary "fair", if it results in an offer that's significantly lower than BigCo? How do you decide what's fair?
  - chillydawg 10y ago
    Both sides are happy with it?

hashkb 10y ago

I don't think the average engineer with 5 years of experience makes 250k; not even in the top 10%. And startups DO pay that much, it's just reserved for powerful exec hires. Just pay more if you want the best engineers. Asking for a world where top talent works for less money is stupid.

throwaway40483 10y ago
Hey. CEO here. So you're telling me if I raise salaries I might hire better engineers? Hmm, wonder if there are any theories about this relationship.
- runT1ME 10y ago
  No, you need to raise compensation. If someone is worth 250k at Google, they may work for your company for 150k if they get 600k worth of options paid out over four years at a reasonable valuation.
  - mavelikara 10y ago
    A 400K investment over 4 years to earn something worth 600K over the same period which will be liquid after another 4 years - does not sound very compelling to me. If it were 600K/year, yes, that's attractive.
- pm90 10y ago
  Your best strategy would be not to have a fixed salary, but a range of salary which you can afford with your outlay, and then seen what the potential hire can be enticed with. That way you know immediately if the candidate is too expensive for you. Just randomly increasing everyone's salary may not be very helpful.
likpok 10y ago
The average engineer at google with 5 years of experience makes at least 250K. To put it bluntly: I'm pretty sure the average cash compensation (that is, disregarding RSUs entirely, which is likely at least another 100k/yr) is going to push 200K. The same is substantially true of the main competitors to Google (Amazon, Facebook, Microsoft).

eknight15 10y ago

It's about location. Google salaries in Boulder, CO are not that high.

soreasan 10y ago
What are Google salaries in Colorado like?
- joshuamorton 10y ago
  Lower than in Bay/NYC, but still good, partially offset by the lower state tax rate, and (signing) RSUs aren't any lower than in the Bay, which means that take home pay for someone in Colorado after rent can be higher.
jboggan 10y ago
Boulder isn't that bad, isn't it only a 10-30% cut off base salary? The good strat is to get hired in MTV and then transfer to Boulder, your GSUs will still stay the same size. The better strat is to get hired in Zurich and then transfer, even bigger bonus!

mdani 10y ago

The article assumes that most of the engineers at that experience level are hired by Gooogle/Facebook etc, but it is simply not the case. The acceptance rates are quite low and there are plenty of 5-10 year experienced engineers who would be willing to work for startups at $130k.

ozi 10y ago

This article is basically arguing that farm teams should be able to afford pro athletes... Having engineers who "perform in the top 10%" is a nice-to-have, not a requirement for startup success.

snarf21 10y ago
I agree but the problem is also the money. A lot of the VCs want to talk about how many ex GOOG and FB engineers who graduated from MIT that they have building their next unicorn. They don't have the same story talking about three state school graduates from Kansas who may be just as talented and have a better product. They also never want to fly to Kansas, like ever. I've lived through this working at a startup in central PA. We were in discussions to be acquired by several of the top 10 west coast tech companies and having to have an office in PA and come here killed all but one deal. Some Director of X doesn't want to fly to Philly and take an hour train to visit the team. This is despite the fact that costs here are like 30% and there is plenty of reasonable talent.
- 0xCMP 10y ago
  So in this case, location does matter. Even if it's because others are lazy. /noted
- jessaustin 10y ago
  Very few people fly to Kansas. There isn't really a major airport in the state.
  - tutufan 10y ago
    Technically true, though everyone on this board thinks Kansas City is in Kansas...
    - deleted 10y ago
      [deleted]
    - emodendroket 10y ago

creaghpatr 10y ago

I'm old enough to remember when the big 5 colluded to keep salaries low...

matt_wulfeck 10y ago
Which is funny, because reading the comments seems to be suggesting they're colluding to keep salaries high in order to squash startups!

madamelic 10y ago

Optimizing for compensation is a silly idea at an engineer's salary. I am a whole lot happier in a small company that pays me a reasonable salary and is fun than a huge company where I have to play politics and jump through hoops on command. EDIT: Plus I get a lot more responsibility and exposure to everything involved so that I am better equipped to strike out on my own.

seattle_spring 10y ago
It's not silly for everyone. You can retire way quicker on $300-400k than you can with $120-160k. Not everyone wants to work an extra 10-30 years.
- jdbernard 10y ago
  Especially when a lot of people worry about being employable as an older developer. Makes sense to make enough money to be independent earlier.

korzun 10y ago

I hate posts of this nature. There are no hard facts; it's a collection of thoughts communicated as 'facts' via a blog post. Plenty of Google engineers become start-up co/founders. If you are good at what you do, the start-ups will magically find money for you. If the a start-up is an equity-heavy sweatshop. You don't have to make $200K to know who is taking advantage of you.

douche 10y ago

Maybe starting a company in an area consumed by rampant cost-of-living and salary inflation isn't the smartest idea. Besides, your Uber for Cats startup probably doesn't need GoogSoftppleBookazon-grade engineers to slam together a mobile app and some CRUD services.

monkmartinez 10y ago

I am naive... however, some opinions... If the startup is truly revolutionary|innovative, shouldn't we see VC's pounding down the doors to give them money? If they have money, shouldn't they spend that on their personnel (assuming they are not manufacturing robots or something) if we are talking software? Seems to me that startups want to have their cake and eat it too. If you have money to pay, then pay competitive wages. If you don't, offer equity. If you have something worth a shit, people will want to work for your startup. The next facebook, unless it is the next facebook, isn't going to sell a lot of people. I look at the YC list of startups and shake my head... most of them don't make much sense. They might be winners, but I would ask for a large paycheck instead of equity for most of them.

heurist 10y ago
No, VCs are fallible and don't always recognize opportunity. They may not trust that it can be delivered. They might be hedging their bets for whatever reason. Having a good product is no guarantee of significant funding. Most startups, even potential game-changers, only have a limited amount of cash on hand and need to make it stretch as far as possible. You're thinking about the unicorn case which is so rare as to be a joke.
- st3v3r 10y ago
  I also have a limited amount of cash, and thus I need to work where I can maximize my compensation.
eldavido 10y ago
There's a limit to how much a company can raise pre-product/pre-traction. It hinges a lot on the team and whether they've had a big exit. Keep in mind, most early-stage funding is done by angels who "work for themselves", not VCs -- real, true VCs work for their limited partners (investors) and if a deal goes south, there can be a lot of "how the hell did this get funded" blowback that can be career-limiting. So as much as I like to think VC can change, their incentives do make it a bit difficult.

inputcoffee 10y ago

Here are some options, but notice how controversial they are: 1. Employ younger, inexperienced people and train them 2. Import immigrant developers 3. Hire people in different geographies As an alternative, why not: 1. Hire older workers 2. Hire the unemployed American workers 3. Hire in America? Well, because it costs more? Does it? I don't know, I am just trying to open up the conversation here. Edit: made language more neutral

throwaway2016a 10y ago
We have had high success with #1.
- alexc05 10y ago
  now are you referring to #1 (younger + training) or #1 (older)?
  - throwaway2016a 10y ago
    Younger + training. We've tried the latter too but have not been even remotely as successful. The job requires some mental elasticity and they older developers we tried it with were a bit too set in their ways. It didn't make sense given the market since at least here older developers are pretty well employed so the salary is still high. But I am more than willing to try it again.
WalterSear 10y ago
Yes, it costs more.
- inputcoffee 10y ago
  So then the two optional responses are: 1. If the startup doesn't have the money to pay more, what should it do? 2. If a startup decides not to opt for any of the options, and the competitors do, what should it do? -- Note: the competitor can be in India, for example.

throwaway2016a 10y ago

I work at a startup that isn't profitable yet so our salaries are very low... - Our typical junior makes $50 - 60k - A typical mid makes $65 - 75k - Seniors (including CTO) make $90 - 110k In greater Boston. It is VERY difficult to hire at those rates. We had someone come in interviewing for a senior that I would place as a mid (generously...) and he accepted another offer for $150k. At our scale he would be making $75k at MOST. It takes us 6 months to find a single hire. But I'm not bitter at Google. I think the market is valuing the workforce fairly. Which means... - We are probably priced out of the market - We should / do offer higher percentages equity - We need to hire the people who the Googles of the world won't hire and train and mentor them That last one works really well. We hired a few people that couldn't get jobs elsewhere that after two years with us left for a job that pays over twice more but they wouldn't have been able to land without our training and mentorship. We actually congratulate and celebrate those people even though we are VERY sad to see them go.

comstock 10y ago
Increasing equity is great, but in general my view is that increased equity does two things: 1. It compensates for the increased risk of working for a startup (you don't have as much runway as google, might fail to raise your next round). 2. It gives the employee a stake in the company, and aligns their interests with making the company successful. I.e. Not just doing whatever they're told, failing to raise potential issues because "it's not their job". It doesn't really compensate for reduced pay in my opinion.
- throwaway2016a 10y ago
  I actually agree with you. I am in disagreement with our CEO on that one. But unfortunately it's all we can afford to give so at least it is something. I have had a number of heart to hearts with devs to make sure their expectations on stock options are set right.
  - pbecotte 10y ago
    This statement makes no sense. If you feel that the company doesn't pay enough, there are two possibilities. 1. You get paid way more then your teams rate, proving the CEO is not being truthful (there is more money if people negotiate hard enough) 2. You are also underpaid and are doing yourself a disservice by staying

boulos 10y ago

(Disclosure: I work at Google) I describe the ability to hire as being a U-shaped curve: new grads (whether undergrad or grad school) or people that don't actually need to work anymore. Google's high pay actually means that for senior folks, they're getting closer to the right end of the curve! (But also, that they'd most likely be a founder unless they believe so strongly in your idea that they must see it happen). As bla2 says below: the reality is that .1% is a pretty low equity offer, and while engineers aren't naturally greedy we can do math. A person just out of school might not care, but you shouldn't begrudge folks that say "Umm, the expected value of this offer is pretty bad compared to my current situation". You can offer them something else (work that matters!), but I feel like everyone knows that employee equity is still too skewed towards founders and investors.

logicallee 10y ago

On the other hand it means that anyone with that salary can easily (no sacrifices of any kind) take a salary of $0 for two years, for equity alone, if the right idea and team comes along. So here's a question: does that happen? For a hint as to the answer, consider the existence of the word xoogler.

humanrebar 10y ago
That's called being a partner, right?
- logicallee 10y ago
  Yes, cofounder. (That is exactly what my comment was about - sorry I wasn't clearer.)

yesimahuman 10y ago

These moments feel like validation for sticking to our guns and not relocating to the valley. From what I hear from our coastal investors, hiring engineers is a major major problem in their portfolio and it's only getting worse. Frankly, we don't struggle to hire engineers.

RomanPushkin 10y ago

One of my friends was rejected while interviewing for some SV startups. But was not rejected by Google. Now he works in Google. Startups should re-think how they're interviewing people. Seems like they suffer more from broken interview process, not Google salaries.

tdumitrescu 10y ago
But when everyone on HN is constantly complaining about how the Google interview is ridiculous and shouldn't be emulated by startups, this sounds like a perfectly acceptable outcome. Skills needed for successful startup engineering vs Google engineering are not the same.

awalton 10y ago

The "Google compensation package" (not Salary) is making it a realistic option for Google employees to buy homes in the Bay Area after a few years of work. (Unfortunately thereafter, the RSU pyramid makes it really hard to leave Google, since you'd be giving up a virtual fortune, shimmering off in the distance like a mirage...) Your startups... aren't doing any of that. Most of them pay shit-all for equity and salary, even for early engineers, even for senior-level employees. On top of that, most of them fail, leaving engineers with worthless stock and a hole in their bank account balances. I'm sorry, this is a simple game of economics - if you want those engineers, you need to give them more in their package. Deal with it.

tonfa 10y ago
> Unfortunately thereafter, the RSU pyramid makes it really hard to leave Google, since you'd be giving up a virtual fortune, shimmering off in the distance like a mirage... Never understood that argument, how is it different from your base salary, isn't it a similar mirage? Per year you get XX USD in RSUs vesting, you don't have to consider granted RSUs as being "yours".
- joshuamorton 10y ago
  It is about 80% an instance of the sunk cost fallacy, but RSU payout is based on past performance, so higher performing employees will be granted more RSUs. That means that if you got a 10% RSU bonus over average due to performance, you'd be losing out on a portion of your compensation for your past work. Also there's something to be said for "the mirage I know is better than the mirage I don't know". Although in general I'd agree, if you're capable of performing well at one of the big guys, you can probably go to any of them, and get a starting bonus to offset your "losses".
- awalton 10y ago
  > Never understood that argument, how is it different from your base salary, isn't it a similar mirage? Per year you get XX USD in RSUs vesting, you don't have to consider granted RSUs as being "yours". If you can/do get an offer that replaces your outstanding RSUs and you're willing to move on, then none of this really matters - you are going to move on and the whole conversation is moot. However, RSUs are typically based on looking back at previous work, not forward like a salary. If you did a ton of work at the beginning of your career and earned a huge stack of RSUs, you've sunk a cost... but one that is easily recoverable simply by waiting. Even if your output drops. The biggest problem is that people are very often more productive and energetic in this field at the beginning of their careers, so much so that big companies don't even want to touch older people - built-in Silicon Valley ageism. And that's its own whole can of worms... So after a few years when their productivity begins to slide and their life priorities change, they get married and have kids and buy cars and homes and pay for private schools... and getting a new job becomes more difficult by virtue of ageism and the sheer volume of outstanding RSUs a company would have to offer you making you a very unattractive candidate, people find they literally cannot tolerate the risk of moving on. I've heard stories of people willing to accept fates such as being "roofed" (see Hooli on Silicon Valley) for months at a time looking for a new position internally while learning to be a world class barista in the employee lounge, simply because by sitting on their ass and doing nothing, they can afford to buy a house next year, but they can't find a new job because nobody is willing to give them the half a million they feel is owned to them as what is essentially back pay. It becomes a working pension, albeit one where the end goal isn't funding retirement, it's the freedom to move on. This is so common a phenomenon it has a name: Golden Handcuffs. So yeah, some percentage sunk cost, some percentage risk tolerance, some percentage boredom tolerance.

alistproducer2 10y ago

Don't start companies in places where the prevailing rates are in the 6 figures unless you have the cash to afford it. The idea that software engineering is a "talent" strikes me as wrong. Knowledge of algorithms and data structure is attainable by anyone willing to put in the time to read a book. Hire people, incentivise them to learn what's important to the success of your company. Pay them to practice their new skills. Being congenitally "smart" is not the only path to being useful and innovative in a company. Being curious, willing to learn, and having a company that knows how to steer its workforce is.

thraway2016 10y ago
> Knowledge of algorithms and data structure is attainable by anyone willing to put in the time to read a book Cognitive limits do exist. Hardwired g-factor correlates like working memory will ultimately limit any one individual's capacity for understanding the above. I do agree with your larger point, though. SF/NYC/Boston are not the only places one can find high-IQ individuals motivated to learn and build things.
- alistproducer2 10y ago
  I'm not so sure one needs to be high-IQ to be proficient. Outside of pure CS research, there's nothing in practical software engineering that requires much more than average to slightly above average intelligence to comprehend. the main thing you need is a person that is genuinely curious.

jmcdiesel 10y ago

Flip the argument the other way. Startups want to underpay for talent. Google isn't overpaying... the big companies aren't overpaying, the startups are under paying. Being a startup isn't an excuse, and you're asking people to take less pay to work at a place that has a decent chance (compared to established places) of going under. You're asking engineers to take on more risk for less pay. If you aren't funded enough to pay your engineers what they deserve, you aren't funded enough to hire more... end of story.

johngalt 10y ago

First off don't bother trying to outbid google/facebook/amazon. Instead look to the good engineers that they can't hire. Large companies can afford to put a large list of requirements down and throw out anyone who doesn't check all the boxes. Zero in on a frivolous requirement that the bigco's commonly use to reject good candidates and target those engineers. Secondly the real elephant in the room is equity. The path between early employee in successful startup and payday is narrower than ever and filled gotchas. There is a reason we tell startup employees to treat equity as worthless. Bluntly it's a 'tragedy of the commons' type problem. Individually each startup will have large incentives to keep all the dollars at the top while constantly delaying any possible payday for early employees. Collectively trust in equity grants has collapsed to zero. It doesn't matter if you individually are a good startup, because an engineer isn't going to gamble away a 300k salary on the off chance that this time it is different. You also can't simply solve this problem by saying: "engineers should have known X about Equity". No thanks, instead I'll take the cushy big-co job with benefits, reasonable schedule, and cash on the barrel today. Sounds easier than trusting that I've found all the ways I could get screwed by professional business people who do this every day.

canistr 10y ago

The other problem is that with so many startups nowadays, none of them offer a compelling enough vision or mission that would entice someone away from the Google/Facebook/Microsoft's of the world. A lot of them are either still working on their product-market fit in a niche field or they are hire front-end devs for some CRUD analytics tools. I'd much rather go work at a non-profit, NGO, or government-based organization where there's a better mission statement or something you're doing for moral reasons. If you're a startup who can't hire but you're still doing whiteboarding problems to screen candidates, you're doing the equivalent of using vanity metrics.

umeshunni 10y ago
> none of them offer a compelling enough vision Bingo! You could get 0.1% equity and low pay to work on yet another food delivery or social photo chat app or you could work at M/G/F/A/A for $200k+RSUs and at least know you have competent co-workers and management.

watertom 10y ago

The biggest thing hurting startups is the fact that big companies provide health care. Having Businesses provide health care, IMHO, is the biggest issues facing job growth in the U.S. Having been on the ground floor of 3 startups, the biggest issues wasn't salary it was health care, the only people that you can recruit are those young enough not to care, either because they are single or they don't have children. If you want to hire experienced employees the roadblock will be health care. I've lost more people than I can count due to health care issues. Big businesses actually like to provide health care, they bitch and moan, but if they didn't want to provide it they would drop it. Big business controls the job market by providing health care, it limits employee's freedom to change jobs and start companies. Business provided health care also makes our products and services more expensive decreasing our ability to compete globally.

ghaff 10y ago
Which is part of a reasonable benefits package. So you're arguing that, in addition to underpaying base comp, they also want to bypass a competitive benefits package--but that may not be obvious to young people who don't think they need insurance.
- emcq 10y ago
  I think the parent is trying to make the case that startups by nature can't provide competitive healthcare, which hurts the economy when small business can't attract top people. It's much different than a 401k, free meals, foosball table, vacation policy, etc, in that once you experience a major health problem you are compromising your health or face prohibitive costs if you are on a mediocre healthcare plan.
  - st3v3r 10y ago
    Does it, though? That's like saying it hurts the economy because I can't afford a Ferrari.
  - ghaff 10y ago
    They're trying to make that case. Healthcare plans (for the time being) are available outside of employers but are not inexpensive. If the company can't either provide a plan or pay employees enough to buy a plan on their own, they're simply providing inadequate compensation. I've worked for smaller companies in the IT industry and salaries haven't been Google level but I've always had a decent benefits package, including healthcare.

gtrubetskoy 10y ago

Traditionally, startups had the advantage of compensating with equity/options that in time would be worth a lot of money. But ever since the laws passed after the dot-com bust equity is mostly worthless unless you're one of the founders or investors. That IMHO is the real problem here, not the big company salaries.

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allenleein 10y ago

It’s actually like the golden age of Wall Street. The companies here are collecting the smartest people in the world to improve their Ad click rate and camera filter. The talent also believe they are making the world better place but the truth is just few people care about the REAL problem in the REAL wold.

jasode 10y ago

The way the article frames the $350k competitive salary as a "problem" for startups is backwards. If you're a businessman, you build a business that works with the prevailing pricing that's out there. That includes prices for everything such as raw materials, office rent, AWS/GCP cloud costs, government taxes & fees, and yes, high programmer salaries. Complaining that your startup is "hurt" because AWS egress transfer fees are too high, or office sq footage $ is too high, or programmers cost $350k is counterproductive. To think like a businessman, one has to turn that around: how do I build a more valuable business that can pay the high costs of the San Fran office and the $350k salary? E.g., Jeff Bezos in 1994 isn't going to handicap himself because Microsoft was paying $100k salaries. Google in 1998 can't blame the difficult recruiting on Cisco and Sun Microsystems paying $100k salaries. Either build up value in the business and/or include the high programmer salaries in the numbers when you ask VCs for money. The other option, as other sibling comments noted, is to attract programmers who will work at a discount. Brian Acton & Jan Koum applied to Facebook and were rejected.[1] They are obviously not the worst programmers in the world and many of their caliber won't get $350k from Facebook/Google. See if you can hire overlooked programmers like them. Some will also work for a discount because they value the startup's equity or other intangibles. A startup entrepreneur has to hustle and make compelling propositions to these programmers. [1] https://en.wikipedia.org/wiki/WhatsApp#2009.E2.80.932014 https://en.wikipedia.org/wiki/WhatsApp#2009.E2.80.932014

pm90 10y ago
I agree with most of your comment. One thing to note though is the whole scandal where Steve Jobs colluded with other firms into a non-poaching kind of agreement, essentially distorting the market. So that is a possible outcome as well.
- ConfuciusSay02 10y ago
  If it weren't for the relentless attack on wages via wage fixing cartels, visa abuses, outsourcing, etc. we would likely be seeing the very top engineers making close to $1M per year. Far from that "hurting startups" it would be a benefit to all tech workers as wages would rise across the board. This framing of "hurting startups" is a euphemism for "hurting investors" or "hurting the wealthy". It's roughly the same complaint as when they claim that there are "tech worker shortages". They want to pay employees pennies on the dollar, full stop.

deedubaya 10y ago

Every founding team wants the _best_ engineers to build their CRUD app. Maybe top talent is a requirement for some startups, but most won't make it or break because they've got the very best engineers. Or even the next tier down. Or even one tier below. The vast majority of startups need a few engineers (usually only one) who have been around the block and know what pitfalls to avoid. The bulk of the team should be mid or junior level to do the grunt work.

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tootall 10y ago

Speaking of big tech company salaries, here's a very fresh data point: https://news.ycombinator.com/item?id=13985376 https://news.ycombinator.com/item?id=13985376 Sorry for the shameless plug, feel free to downvote if not appropriate!

aphextron 10y ago

There are a million different factors where startups are at a disadvantage to big tech companies. That's the whole point of a startup. Of course you can't compete on salaries. But if you're smart you'll find that startups have many advantages in recruiting that the big companies don't. Namely self determination and recognition - the two most coveted workplace qualities of any good hacker.

crdb 10y ago

Alternative hypothesis: these salaries are helping startups. It is fantastic that someone not born into wealth and connections can pay off their debt in record time, then save enough to cover financial security and take a few risks, such as quitting the well paying job to bootstrap a company before your twenties are over. And if the venture goes pear shaped, there are plenty of high paying jobs to catch up with the rat race. I've heard of $170k starting salaries in the Valley last year, admittedly for the best students from MIT or Stanford. But on that money, or even half of it, you do not need to hot bunk to put a serious amount away, and give yourself the time to develop the product or convince a decent technical person to join you. And you won't be (as much) at the mercy of investors or clients.

mixmastamyk 10y ago

As long as startups refuse to hire unless they find a young white/asian guy who's good on the spot/whiteboard with trivia questions you'll have a hard time hiring---google or not. I've twenty years experience and couldn't get hired last year, so gave up and joined a freelancer site. Getting lots of work now, no questions asked, and guess what? Five star reviews, and work from home. I'm not interested in games and prefer to get work done.

asah 10y ago
nice!!!

st3v3r 10y ago

Maybe startups, instead of going for the lavish offices, should put more of that VC money into salaries and health benefits. Or try to offer a better work/life balance. This entitled idea that startup founders have that they can pay shit wages and work people to death needs to go.

surfmike 10y ago

Another problem is the cost of housing. Even if you want to join a startup in the Bay Area, it's hard enough to pay the rent/mortgage on a big tech salary, let alone a startup salary.

jboggan 10y ago

I'm leaving Google this week to start my own company again. The prospect of eventually sitting on the other side of the table and competing with these big companies used to bother me but I've realized that the personalities I'm looking for don't flourish at Google, and vice versa. Google engineers (those that stay past the first vesting event) tend to be very risk averse, even for engineers. I'm not talking about technical risk and skill but I mean career and life risk. There are relatively few motorcyclists and skydivers. On our last team Vegas trip I kept track of how much everyone was gambling as a proxy for their risk appetite and decided that Googlers like a sure thing, not a risky payout down the road. My point is, you may want Google's talent bar (who doesn't?) but you aren't truly competing for the same people. Give me some smart pirates and a fast ship.

madamelic 10y ago
>On our last team Vegas trip I kept track of how much everyone was gambling as a proxy for their risk appetite Yikes. Gambling is just a dumb idea in general (it is literally designed to make you lose money)... unless you are gambling with other's money. ;) There is a diff between "With enough work, this risky thing could work out" and "With enough luck, this risky thing could work out if I stop while I am ahead"
- 727374 10y ago
  > Yikes. Gambling is just a dumb idea in general Or, a thrilling and potentially expensive form of entertainment. I don't feel it's dumb when I lose $200 at the blackjack table when I'm in Vegas for a bachelor party.
- yomly 10y ago
  Statistical events tend to be lumpy. If you've ever experienced firsthand the act of winning a reasonable amount of money gambling, you'll realize the draw is more than trying to just beat the system.
- jboggan 10y ago
  Can I refer you before I leave?

JDiculous 10y ago

Solutions 1. Hire candidates that these big companies overlook, or that aren't interested in experience-blind trivia style data structures & algorithms interviews 2. Hire in locations where the cost of living is low 3. Allow your engineers the freedom and flexibility to work remotely. A side effect of this is that it opens up your candidate pool outside of your geographic confines and allows you to accomplish #2 4. Shorten your work week, or even remove the mandated work week altogether. To most this probably sounds blasphemous, but engineering is the type of work that doesn't have to be confined to a M-F 9-5 schedule. 5. Increase equity (0.1% is an absolute joke for most startups) Hiring remotely is the easiest way to compete with fat corporate compensation packages. I would gladly take a pay cut if it meant being able to forgo my $2k/month rent in NYC and digital nomad around Europe and Southeast Asia.

root_axis 10y ago

In my view, this complaint is just one step above an acquaintance who claims to have an amazing idea, and all you have to do as an engineer is make it into a reality and then we'll be super rich Oh... but you can't really pay me that much (or at all), but once this idea comes to fruition, I'll be so glad I invested all my time and energy. This is what I hear when a startup can't pay a competitive salary. If you can't offer to pay a competitive wage, you shouldn't be in the business (or you really do have an amazing idea, and the engineers are willing to take that bet based on merit or based on trust the founder has previously established)

mikestew 10y ago
In my view, this complaint is just one step above an acquaintance who claims to have an amazing idea, and all you have to do as an engineer is make it into a reality and then we'll be super rich No, this view is exactly the same as the folks that crawl out of the woodwork back in 2010 when they find out you write iOS apps: you build my idea, and we can split the profits. The fact that a startup throws some token amount of money at you doesn't change the formula. Can't afford a million dollar CNC milling machine? Then you don't get to make widgets. Can't afford the going rate for a software developer? Then you don't get to make shitty throwaway apps for profit. The difference is that the milling machine vendors will tell you to pound sound when you whine that you can't afford it, whereas there's always a doey-eyed college grad ready to believe they're going to get rich writing the front-end for "Uber, only for cats".

anonymoose111 10y ago

One of the reasons Google and other top companies pay so many engineers high salaries is to prevent said engineers working on startups. Other comments mention that PhDs are doing trivial and insignificant work at Google -- why? Because Google doesn't want them working on new startups.

TeeWEE 10y ago

Wow we are really getting underpaid here in Europe (Amsterdam). Max salaries for Seniors is really around 70k per year. Without an extra bonus.

uberwach 10y ago
Same here in Berlin, I got an offer with 75k p.a. as Sr. DS. I mean one could cite the living costs, but then one also has to compare the different taxation / social welfare models. $350k+/year sounds huge, I would actually switch to Google for that amount (ofc. knowing what a senior/lead role encompasses).
humanrebar 10y ago
Dunno if it makes up all the difference, but in U.S. vernacular, salaries are given pre-tax.

vojant 10y ago

I ma co-founder of London based startup and salary was one of the reasons I decided to build dev team in Poland. East Europe is great resource for smart software engineers asking for 50% of what we would have to pay in London (and London is still 50% behind SF). I am surprised why so little startups are looking for remote employees.

TeeWEE 10y ago

What is the net income over a 150k salary in San Fransisco?

owyn 10y ago
In California/SF the net take-home is about 8k/month on that salary. Average 1 bedroom rent is about $3000. Knock down another ~1000 per month for average things like a car, parking, phone, internet etc and your spendable take home is about half the actual paycheck. Congrats, you're really making $50k a year!
- dllthomas 10y ago
  You mean, you're saving $50k/year, minus what you spend on fun. And yeah, congrats! That's quite a bit better than most people.

mathattack 10y ago

The idea that VC-funded startups should pay the same cash salaries as big companies is a sign of hot markets. It happened in 1999 as well. In reality, startups should pay less because they give equity, allow more freedom and creation, and have less stupid corporate rules. It's not for everyone, but that's the tradeoff. Generally when you're borrowing from VCs who expect a 30-50% return on their equity, it's a bad idea to pay too much cash. (It's like paying salaries on a credit card - the lender may be willing, but they still want to get paid back) When it does become equal, it's a sign of froth. To get the benefits of a startup without any downside runs up against, "There's no such thing as a free lunch."

logicfiction 10y ago
That would be entirely true if equity were handled the same way as it was in 1999. To be fair, I wasn't there to know for sure and can only base this off what I've read. As I understand it equity has changed, almost in the opposite direction of the "free lunch" equation. Equity values are frequently hidden from employees to mask how low value they are, VCs now figured out how to ratchet and protect themselves at the expense of the rank-and-file options holders, and so forth.
st3v3r 10y ago
Why should VCs get a 30-50% return on what they put in, but engineers don't get a 30-50% return on the salary they sacrificed to actually do the damn work of the startup?
- mathattack 10y ago
  I agree - which is why startup employees get equity.
  - st3v3r 10y ago
    Except that equity is worth nowhere near the equity that VCs get, and in the majority of cases does not represent a reasonable return over the opportunity cost of taking the higher salary instead.

brilliantcode 10y ago

There's no way six digit salaries are going to be sustainable in the near future. This kind of money is possible because of low interest capital going around but when the rates inevitably rise and capital dries up, it's going to be hard for companies to pay someone $350,000 USD /year doing the work someone in Vancouver, BC can do for $100,000 CAD /year. I recall during the dot com bubble people justified a six digit figure for knowing HTML.

calcsam 10y ago

If startups want to compete effectively for talent with big companies, they need to communicate more effectively about the value of their equity (and in many cases, give more). I built a site that helps startups do this: http://www.optionvalue.io/ http://www.optionvalue.io/

Animats 10y ago

Startups should be paying more than established companies. The odds of success are low, the hours are worse, the benefits are worse, and the odds that the job will disappear within two or three years are high. Seldom is the equity worth much unless you're in the first few employees.

georgeecollins 10y ago

I see a problem where companies are looking for the magic wand of the "hero engineer". For example, a manager at a small company asks me if I can refer someone with the following qualifications: excellent technical proficiency in many areas, front end and back end, great communicator, great leader, has a design vision, experienced in obscure areas.. etc. Come on! Even the people I know who meet these qualifications are often not all they are cracked up to be. What happened to training people? What happened to looking for role players. In my career I have seen good teams accomplish great things with no geniuses.

dbg31415 10y ago

Man, every startup at SXSW was bitching about this. I think it's an easy fix... 1) Startups need to pay more than they want to. If you want a talented engineer, they aren't free. I see a lot of startups offering WAY low salaries and then getting frustrated they can't find devs... it's basic supply and demand. Budget accordingly and stop making business plans that involve finding devs for lower-than-market-rates. 2) Hire more junior people, build a process to mentor them. Recognize that they will leave after a year or two... 3) Hire freelancers to augment where needed. 4) Hire remote workers who live in cheaper locations -- realistically these days the only hard part about managing a distributed team is when they are in dramatically different time zones. 5) Work smart... a stitch in time saves nine, measure twice cut once... hire good product managers, UX designers, and QA people to help keep your project momentum going. Devs building prototypes that you just want to changeup as soon as it's launched... those are the most expensive wireframes you'll ever build... you're not only saddled with the dev cost, but tech debt to make changes. Prototype to keep costs down. 6) Cut other costs... Get rid of your office, for starters.

humanrebar 10y ago
> ...realistically these days the only hard part about managing a distributed team is when they are in dramatically different time zones Well, there are cultural issues. You need to write things down more to work remotely effectively and lots of people don't like to read or write.
- dbg31415 10y ago
  Think about every issue in your current backlog. What's the real reason it's in there, and not in the done pile? I'd willing to bet the root issue is lack of documented scope leading to a lack of ability to estimate which leads to a lack of ability to prioritize... Writing and reading are important; I wouldn't let people get away with half-baking requirements even if I worked right alongside them... always be kind to your future self and document.
- emodendroket 10y ago
  I think those are going to be less than insuperable if you want to hire people in, like, Montana.

tylerfoster 10y ago

Isn't that kind of the goal? They get the talent that could build great companies on their own, and if that talent is interested in the same areas they are, they lower the risk that talent will end up building successfully competition. If the markets are worth winning, the difference of a $50K * team size doesn't really matter in the big picture. At the same time, by driving up the ante, if an area they're not paying attention to does get traction, to get to a successful exit there's a higher likelihood that the startups will need VC capital only the likes of Google Ventures and similar corporate venturing funds can provide. Seems like a solid strategy to me.

iblaine 10y ago

I like the to see startups be pressured into offering higher compensation. Startups take advantage of engineers by over promising and under delivering.

kozikow 10y ago

My solution: business and executives in Bay Area, engineering in Poland. Syncing: I have to wake very early every day, but it's a small sacrifice in the grand scheme of things. "Remote, office not required" book have a case study of 37signals with two founders in Europe in USA. European moves his day forward, USA wakes up very early, at least 4 hours of overlap a day is enough. Relocation: If you open European subsidiary, you can long term relocate people to USA on L1 if necessary. How to find good people: It helped that I studied in Warsaw before relocating to Bay Area and I know some good people who stayed in Poland due to personal reasons.

ctocoder 10y ago

Give employees more ownership faster of the company. A billion dollars is a lot and enough to spread around

wdr1 10y ago

So Startups need to pay more? Either in cash or equity? I don't see the problem.

emodendroket 10y ago

Oh boo hoo. Companies pay these kind of salaries because they can extract significantly more value from the work than what they are paying.

borplk 10y ago

Are we supposed to cry for the capitalists now? That's your free market. Enjoy the ride.

oceanghost 10y ago
Haven't you heard? There's a shortage of STEM workers.

krystiangw 10y ago

Seems that startups are paying above average if you check some stats: https://jobsquery.it/stats/data.projectIndustry/startup https://jobsquery.it/stats/data.projectIndustry/startup