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It's probably mistaken to say that 10% of the software engineering workforce could become millionaires within 3.3 years if {condition}, for all values of condit

It's probably mistaken to say that 10% of the software engineering workforce could become millionaires within 3.3 years if {condition}, for all values of condition ruling out survivorship bias. Also $300k total comp translates to $450k fully-loaded cost to the employer, meaning you can only hire four of those engineers before you burn through $2M funding per year. Are you sure that's worth it?

ryanwaggoner 9y ago
It's probably mistaken to say that 10% of the software engineering workforce could become millionaires within 3.3 years if {condition}, for all values of condition ruling out survivorship bias. Have you ever earned $300k in a HCOL? Because I have (NYC) and you're doing very well if you get to save $100k of that. If you're single, by default you lose $120k to taxes, so then you need to keep your budget under $6700 / month. Which isn't really that hard, but most don't. Granted, tax-advantaged retirement savings and other things can change the math here, but my point is that it would take more like 8-10 years (depending on market growth), not 3.3. And my point wasn't that 10% of engineers are doing that, but just that they are capable of getting that kind of job with some effort. If all 10% of them tried, that would push the market down, so I'm really just talking capability, not whether 10% of devs could all be simultaneously making that. Finally, I'd like to see a breakdown of the $300k to $450k number. The premium that employers pay to get to fully-loaded cost isn't a fixed percentage, it goes down as comp rises. So yes, it might cost $120k fully loaded to employ an $80k engineer ($40k on top of their salary), but why does it cost $150k for someone making more?) The cost for office space and healthcare are two of the biggest costs of employing someone, and they're relatively fixed, right? $450k might be realistic, just seems high to me.
- sillysaurus3 9y ago
  And my point wasn't that 10% of engineers are doing that, but just that they are capable of getting that kind of job with some effort. If all 10% of them tried, that would push the market down, so I'm really just talking capability, not whether 10% of devs could all be simultaneously making that There's an old Feynman quote: "All the time you're saying to yourself, 'I could do that, but I won't' -- which is just another way of saying that you can't." I used to feel the same way as you. But actions are all that matter, not beliefs. It was materially impactful to let go of the notion that "people could if they tried" and flip to "some do, some don't, and if they don't, they won't until proven otherwise." It turns out to be a handy general rule about people, not just this one scenario. You might be right about total comp. But $350k vs $450k is rather quibbling: the main cost to the employer is a $350k burn rate. And in Buffer's situation, it's all about averages, not outliers. If you're hiring 10 engineers, being more generous than Buffer's salaries seems like a mistake. After all, Buffer is proof that the market will bear these. I think what's happening is that Buffer is one of the few companies willing to publish the data, so suddenly everyone is watching and analyzing them. But these kinds of tough decisions are routine. It's very important to avoid http://www.paulgraham.com/pinch.html http://www.paulgraham.com/pinch.html as a company. The company has to focus on not dying, since that's the way to win. On the other hand, it's worrisome that there are no outliers at all. A fair market should look closer to a J curve rather than an even distribution. But everyone will just need to get used to the idea that some engineers will make $300k and others $100k. That is fair, because that $100k engineer could not easily get a non-$100k job, or else they would have done so. (Conversely, that's why the $300k engineer is making $300k: because they put effort into making sure they can get another one if they need to.) That seems to explain your reaction pretty well, right? You balked because you're one of those $300k engineers that has a lot of options. Most don't. EDIT: Actually, the distribution of engineering salaries seems pretty good: http://www.wolframalpha.com/input/?i=96917++101331+106709+106709+111314+111571+112981+119876+121314+125981+127314+133696+135602+149215+156234+167557+176715+181510+195361 http://www.wolframalpha.com/input/?i=96917++101331+106709+10... https://i.imgur.com/RLxLGzi.png https://i.imgur.com/RLxLGzi.png There aren't any outliers, but it's not linear, which is a good sign.
  - ryanwaggoner 9y ago
    So much to analyze here, but I would just say one thing: I think that the majority of devs in the US don't know or believe that there are tens of thousands of their peers making 2x - 5x as much as them. I routinely see people here on HN essentially refuse to believe that there are devs in SF getting $300k to $500k at Google/Apple/Amazon/Facebook/etc. So maybe it's more that they don't know it's an option as opposed to not being able or willing to do so?

It's probably mistaken to say that 10% of the software engineering workforce could become millionaires within 3.3 years if {condition}, for all values of condition ruling out survivorship bias. Also $300k total comp translates to $450k fully-loaded cost to the employer, meaning you can only hire four of those engineers before you burn through $2M funding per year. Are you sure that's worth it?

ryanwaggoner 9y ago

It's probably mistaken to say that 10% of the software engineering workforce could become millionaires within 3.3 years if {condition}, for all values of condition ruling out survivorship bias. Have you ever earned $300k in a HCOL? Because I have (NYC) and you're doing very well if you get to save $100k of that. If you're single, by default you lose $120k to taxes, so then you need to keep your budget under $6700 / month. Which isn't really that hard, but most don't. Granted, tax-advantaged retirement savings and other things can change the math here, but my point is that it would take more like 8-10 years (depending on market growth), not 3.3. And my point wasn't that 10% of engineers are doing that, but just that they are capable of getting that kind of job with some effort. If all 10% of them tried, that would push the market down, so I'm really just talking capability, not whether 10% of devs could all be simultaneously making that. Finally, I'd like to see a breakdown of the $300k to $450k number. The premium that employers pay to get to fully-loaded cost isn't a fixed percentage, it goes down as comp rises. So yes, it might cost $120k fully loaded to employ an $80k engineer ($40k on top of their salary), but why does it cost $150k for someone making more?) The cost for office space and healthcare are two of the biggest costs of employing someone, and they're relatively fixed, right? $450k might be realistic, just seems high to me.

sillysaurus3 9y ago
And my point wasn't that 10% of engineers are doing that, but just that they are capable of getting that kind of job with some effort. If all 10% of them tried, that would push the market down, so I'm really just talking capability, not whether 10% of devs could all be simultaneously making that There's an old Feynman quote: "All the time you're saying to yourself, 'I could do that, but I won't' -- which is just another way of saying that you can't." I used to feel the same way as you. But actions are all that matter, not beliefs. It was materially impactful to let go of the notion that "people could if they tried" and flip to "some do, some don't, and if they don't, they won't until proven otherwise." It turns out to be a handy general rule about people, not just this one scenario. You might be right about total comp. But $350k vs $450k is rather quibbling: the main cost to the employer is a $350k burn rate. And in Buffer's situation, it's all about averages, not outliers. If you're hiring 10 engineers, being more generous than Buffer's salaries seems like a mistake. After all, Buffer is proof that the market will bear these. I think what's happening is that Buffer is one of the few companies willing to publish the data, so suddenly everyone is watching and analyzing them. But these kinds of tough decisions are routine. It's very important to avoid http://www.paulgraham.com/pinch.html http://www.paulgraham.com/pinch.html as a company. The company has to focus on not dying, since that's the way to win. On the other hand, it's worrisome that there are no outliers at all. A fair market should look closer to a J curve rather than an even distribution. But everyone will just need to get used to the idea that some engineers will make $300k and others $100k. That is fair, because that $100k engineer could not easily get a non-$100k job, or else they would have done so. (Conversely, that's why the $300k engineer is making $300k: because they put effort into making sure they can get another one if they need to.) That seems to explain your reaction pretty well, right? You balked because you're one of those $300k engineers that has a lot of options. Most don't. EDIT: Actually, the distribution of engineering salaries seems pretty good: http://www.wolframalpha.com/input/?i=96917++101331+106709+106709+111314+111571+112981+119876+121314+125981+127314+133696+135602+149215+156234+167557+176715+181510+195361 http://www.wolframalpha.com/input/?i=96917++101331+106709+10... https://i.imgur.com/RLxLGzi.png https://i.imgur.com/RLxLGzi.png There aren't any outliers, but it's not linear, which is a good sign.
- ryanwaggoner 9y ago
  So much to analyze here, but I would just say one thing: I think that the majority of devs in the US don't know or believe that there are tens of thousands of their peers making 2x - 5x as much as them. I routinely see people here on HN essentially refuse to believe that there are devs in SF getting $300k to $500k at Google/Apple/Amazon/Facebook/etc. So maybe it's more that they don't know it's an option as opposed to not being able or willing to do so?