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Maybe engineers are more replaceable than founders? That would explain why founders walk away with a lot more cash and credit. After all, there are a lot of goo

by _cs2017_ 8y ago

Maybe engineers are more replaceable than founders? That would explain why founders walk away with a lot more cash and credit. After all, there are a lot of good engineers who probably would do a good job as an early employee. And relatively few people who have the vision, motivation, and skill to create a successful company. That said, I sometimes feel that being a successful founder has less to do with skill and more with being at the right place at the right time. Would be interested to see what others think.

fitpolar 8y ago
I agree, especially on your last point. Even when I think of my own career highs and lows, most of the highs has to do with lucking out with being given a chance or opportunity. By contrast, most of the lows has to with being denied a chance or opportunity. Of course you have to take advantage of any opportunity and work hard for it to pay off. But being lucky enough to be in the RPART is, huge!
Joeri 8y ago
I get the sense that with the right set of employees all a founder has to do to be successful is not to run in the way. One might argue that in that case they were so brilliant at hiring they deserve the payout. Anyway, who is to say where the line is drawn between founders and employees re: who contributes most? As long as both sides know what they’re getting in to nobody is taken advantage of.
earthscienceman 8y ago
This is such a laughably unprovable claim. "Few people who have the vision, motivation, and skill" is equivalent to saying "few startups succeed". It's just a truthism. It's equally likely that few companies are lucky enough to have a talented and motivated team of engineers. Finding someone who thinks they have it all and will be the next big billionaire is easy. Finding a group of people who know what work needs to be done and can put their nose to the grindstone to match the "vision motivation and skill" is the hard part. Just look to google, the holy grail of tech visionaries. No one doubts that Page and Brin have vision/motivation/skill but they readily admit that their initial team of engineers is what carried them and they rewarded them like it. What you're advocating probably feels good for the ego though... everyone loves imagining having demi-god-like status. For me it's always interesting to look at what people are fighting for. "The founder deserves 100 million, not 80 million, pay the engineers less!" At the end of the day it's just greed.
abc_lisper 8y ago
Hear hear all you young uns. This is what happens when you work your ass off for someone at low cost. Never ever work for less than you are worth. Your income minus stock should always be par or above with the market.
krageon 8y ago
As an engineer of middling competence (I don't do poorly, but there are people smarter than me), I think you're wrong. The reason engineers receive less than they're worth by and large is because A. they cannot negotiate very well and B. they do not know their own worth. If you combine these two with some idealism, which is the only real reason you'd work for a startup (high-risk, low-reward work - if it's not for ideals you have no reason to do it), you get a prime exploitative opportunity for any employer.
- _cs2017_ 8y ago
  Suppose getting a good engineer would contribute $2 million / year profit to a company. That company would offer a higher salary than the going market rate, and thus steal engineers from competing employers (in fact, that's exactly what FB, Google, LinkedIn, etc. do: you can ask them to match or beat the other company's offer). Since regardless of how badly engineers negotiate, they would still be attracted by a higher offer. Then other companies would also offer higher salaries, to avoid missing out in hiring. This cycle won't stop until compensation gets to a good fraction of that $2m/year; say, $500-800k/year or so, leaving room for overhead (office rental, benefits, etc.) and profits. The fact that it doesn't happen tells me that me that most engineers probably aren't worth $2m/year to companies. I do agree with your last point: engineers are often idealists and/or they have very strong preferences about what they want / don't want to work on. So they may often be willing to give up much better comp in order to satisfy such preferences. That's why startups get away with paying maybe half of what large corporations pay. Still that's not nearly enough to explain the gap between engineer and executive compensation.

fitpolar 8y ago

I agree, especially on your last point. Even when I think of my own career highs and lows, most of the highs has to do with lucking out with being given a chance or opportunity. By contrast, most of the lows has to with being denied a chance or opportunity. Of course you have to take advantage of any opportunity and work hard for it to pay off. But being lucky enough to be in the RPART is, huge!

Joeri 8y ago

I get the sense that with the right set of employees all a founder has to do to be successful is not to run in the way. One might argue that in that case they were so brilliant at hiring they deserve the payout. Anyway, who is to say where the line is drawn between founders and employees re: who contributes most? As long as both sides know what they’re getting in to nobody is taken advantage of.

earthscienceman 8y ago

This is such a laughably unprovable claim. "Few people who have the vision, motivation, and skill" is equivalent to saying "few startups succeed". It's just a truthism. It's equally likely that few companies are lucky enough to have a talented and motivated team of engineers. Finding someone who thinks they have it all and will be the next big billionaire is easy. Finding a group of people who know what work needs to be done and can put their nose to the grindstone to match the "vision motivation and skill" is the hard part. Just look to google, the holy grail of tech visionaries. No one doubts that Page and Brin have vision/motivation/skill but they readily admit that their initial team of engineers is what carried them and they rewarded them like it. What you're advocating probably feels good for the ego though... everyone loves imagining having demi-god-like status. For me it's always interesting to look at what people are fighting for. "The founder deserves 100 million, not 80 million, pay the engineers less!" At the end of the day it's just greed.

abc_lisper 8y ago

Hear hear all you young uns. This is what happens when you work your ass off for someone at low cost. Never ever work for less than you are worth. Your income minus stock should always be par or above with the market.

krageon 8y ago

As an engineer of middling competence (I don't do poorly, but there are people smarter than me), I think you're wrong. The reason engineers receive less than they're worth by and large is because A. they cannot negotiate very well and B. they do not know their own worth. If you combine these two with some idealism, which is the only real reason you'd work for a startup (high-risk, low-reward work - if it's not for ideals you have no reason to do it), you get a prime exploitative opportunity for any employer.

_cs2017_ 8y ago
Suppose getting a good engineer would contribute $2 million / year profit to a company. That company would offer a higher salary than the going market rate, and thus steal engineers from competing employers (in fact, that's exactly what FB, Google, LinkedIn, etc. do: you can ask them to match or beat the other company's offer). Since regardless of how badly engineers negotiate, they would still be attracted by a higher offer. Then other companies would also offer higher salaries, to avoid missing out in hiring. This cycle won't stop until compensation gets to a good fraction of that $2m/year; say, $500-800k/year or so, leaving room for overhead (office rental, benefits, etc.) and profits. The fact that it doesn't happen tells me that me that most engineers probably aren't worth $2m/year to companies. I do agree with your last point: engineers are often idealists and/or they have very strong preferences about what they want / don't want to work on. So they may often be willing to give up much better comp in order to satisfy such preferences. That's why startups get away with paying maybe half of what large corporations pay. Still that's not nearly enough to explain the gap between engineer and executive compensation.