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Why we built our core engineering team outside of the SF Bay Area
- Technologix 8y agoCan't agree more. Hiring in Silicon Valley for early-stage startups now is impossible. Total Compensation numbers for software engineering is skyrocketing and you'll never be able to compete with FAANG companies. Sad reality but expected.
- toomuchtodo 8y agoIt's sad if you're a founder or a VC, but not sad if you're an engineer. "Total Compensation numbers for software engineering is skyrocketing" is a very good thing for the folks who grind every day.
- abreckle 8y agoNot necessarily true, i know entry level engineers earning well above $100k in the Bay Area who are barely getting by because they are paying $5-$6/mo in rent alone which is post-tax.
- deleted 8y ago[deleted]
- futureastronaut 8y agoUnless these entry level engineers have families, there's no good reason to be paying $5-6k a month for rent, you can easily find a decent place of your own for under $4k, even $3k if you're patient.
- organsnyder 8y agoAs someone living in the Midwest, those numbers are mind-boggling.
- izzydata 8y agoMy 1200sqft 2 bedroom townhouse in the suburbs of Kansas City costs me $800 a month. My families 6 bedroom 5 bathroom 3 story behemoth with a pool cost $4000 a month. The thought of paying $6000 a month for what they offer you in the Bay is depressing.
- asynchronous13 8y agoYeah, as a new transplants to the bay area it is mind-boggling. $1500/mo per person in a roommate situation is common. That said, my take-home pay more than made up for the rent increase. The cost for a family type living situation is truly mind-boggling.
- derp_dee_derp 8y agoyeah. I live in Minneapolis, am charging 67/hour (roughly 140k/year pre tax) and my rent is 1200/month. my total monthly expenses are roughly 3500/month so I am able to save almost 50% of my post tax income.
- keithnz 8y agoas someone living in New Zealand, it is very mind-boggling numbers, we'd be 1000 -> 2000 range for housing. and the USD salaries would put you in the very very top earners of the population. Though sourcing enough devs here would be tricky for anything beyond 10 people if you actually wanted to outsource to NZ.
- dbattaglia 8y agoI live in NYC, in a nice one bedroom apartment, and I find those numbers mind-boggling. Not that my rent is cheap by any means but its closer to $3000 than $6000.
- mesozoic 8y agoSo they have a comparative entry level job standard of living. I've found that even the top paying companies when adjusting for cost of living pay similarly to top paying companies in lower expense parts of the country.
- Alexbouaziz1 8y ago"For each engineer that we hired in the Bay Area, we could have hired 10–15 outside of it. Everyone has heard of 10x engineers, but what they don't tell you is that the Bay Area doesn't have a monopoly on them." This really surprised me, thought it was a big gap, but not this big
- sokoloff 8y agoTo be clear, this is SFBay Area vs India, not SFBA vs Midwest. We have excellent engineers in India (and other locations in the world); it's not nearly as easy or quick to build high-performing teams in India, but it's absolutely doable.
- leesec 8y agoThere are excellent engineers in the Midwest too.
- nostrademons 8y agoBut the salary differential between top engineer in the Bay Area vs. top engineer in the Midwest is more like 2-3x than 10-15x.
- pageandrew 8y agoOK, it's not 2-3x. Especially if we're talking salary. Salary for a top individual contributor engineer in the Bay Area (full stack), outside of specific skillsets like ML/AI, will top out around $200k. Midwest, someone with the same skillset would probably make $125-150k.
- nostrademons 8y agoTotal comp in Bay Area is often around $300-400K. That includes generous equity though, so may not be relevant when talking about startup salary affordability.
- jdlshore 8y agoI was hoping for a thoughtful article about a US company's experiences with offshore development. What I got was a very thinly veiled advertisement and business case for Bridge Academy. Originally I thought it was an offshore staffing firm, but having looked at their site I can't tell what it's supposed to be. I think it's an offshore staffing firm that's ashamed of admitting it's an offshore staffing firm, with the twist that the candidates pay, once hired, rather than the hiring companies. In exchange, they get some sort of nebulously defined training and mentoring for an undefined price. Oh, and the mentors get a commission when candidates are placed. Top it off with a blockchain-focused curriculum and a list of blockchain-obsessed hiring companies and it all feels... naïve, I guess would be the right word. Young. Enthusiastic.
- jjeaff 8y agoOf all the different projects to outsource for, something block chain related, specifically crypto coin related would be the very last.
- azemda 8y agoWhy?
- jjeaff 8y agoBecause is someone sneaks in a backdoor or otherwise tries to make off with a bunch of crypto, good luck extraditing an overseas worker to get the money back. You have to trust your employees, but at least it's a little more difficult to skip out on justice when you are in the same country as your employees.
- ratling 8y agoI wouldn't build greenfield in India (I've had to deal with the quality coming out of there on numerous occasions) but I also wouldn't build greenfield in SanFran. It's less the cost to me and more the turnover. I as a worker have every incentive to take a position in SanFran to get to SanFran and get established (outside of the money). I also then have every incentive to leave as soon as possible for one of the Big 5 since it's gold on my resume (even if I don't stay there more than a year or two).
- doctorpangloss 8y ago>But who will build this Bridge? With Blah Academy, we have formalized our blah for blah blah blah Of course, when you hire an engineer in the Bay Area, it's practical to avoid the fucking middleman.
- deleted 8y ago[deleted]
- freeopinion 8y agoI'd take a 60% pay cut to not work in SFBA. Maybe there are 10x-calibre folks in SFBA. But they cost 5-20x. Some companies have recognized that 5x-calibre employees at 1-2x payscale is better than 5-10x-calibre employees at 5-20x payscale. They offer better standard of living outside SFBA.
- himynameisdom 8y agoThis is the core theme behind why Drive Capital threw down roots in Columbus, Ohio. The talent is there, and they're beginning to see the fruits of their patient investment.
- rangersanger 8y agoCome to Salt Lake City. We even have absurd branding to lure you "silicon slopes!" There are a few SF organizations with satellite offices here. I've worked for one, have friends working for others. It's a pretty decent arrangement. You can get a team setup here for the cost of a single employee in the bay (especially when you factor in real estate.) Hell, maybe more. Shit, some of us will take pay cuts to avoid working for the Domo's of the Provo Valley. Don't have to deal with time zone issues, and when shit hits the fan it's an hour and a half flight. I've flown to SF and back, same day multiple times.
- phaedryx 8y agoI love the local tech community here (general SLC area) and I've talked to enough SF -> SLC immigrants that I never want to work in Silicon Valley.
- jeremydeanlakey 8y agoI was about to say the same. I bet you can have your pick of the top senior engineers for 120K (most devs whose salary I've heard make less than 100K). And you'd probably get loyalty too - a lot of them don't want to go anywhere.
- robertcorey 8y agoWhat about the LDS influence. I'd be worried about moving here to start a family.
- gotocake 8y agoOutside of a few issues there isn’t much influence, unless you’re in the church. One nice thing about Mormons is that at least outside of a missionary context abroad, they take “no” for an answer with grace. I wouldn’t want to join their club, but I like them as neighbors. Their cooking can be a little uninspiring, but the hospitality and friendliness is world class. SLC is also a gorgeous part of the world, if you like to hike or climb it’s one of the best. The city itself is also not exclusively Mormon, although it’s not NYC levels or diverse either. I’d recommend a visit to see if you like it.
- languagehacker 8y agoThis is a pretty disingenuous comparison, but a great way to advertise your business. I'm sure everyone involved will gets exactly what they pay for.
- rvivek 8y agoWe have a distributed team in India & Silicon Valley. The market in India has changed dramatically from what’s being portrayed here. A strong VP, engg candidate is about $200k, a new grad is at least $30k and it rises rapidly as you get more senior. There are stock options on top of this. Why is this happening? (a) Lot of companies are opening up offices in India and willing to pay higher to set up the team quickly; (b) The VC finding scenario is as crazy as it exists in Silicon Valley. SoftBank is a global firm :) It’s not as straightforward to build a 10x engineering team in India. Sure, it’s probably cheaper than Bay Area but you need to consider the overall cost of communication, speed of process, especially for a startup.
- spac 8y agoThis article made me think immediately of the mythical month man. From my rather uninformed perspective - I never tried hiring in India - it would be very hard to actually screen and select well, while quantity alone is not necessarily a good thing. Edit: fixed punctuation
- fmajid 8y agoBy all means build a team outside the Bay Area, there's plenty of talent elsewhere but the assumption you will get the same talent in India for specialized disciplines like machine learning (as opposed to generic web dev or other commoditized skills) shows this company was built by hucksters with no idea about technology, and not a little contempt for engineers.
- balls187 8y agoIf you're an engineer in India with skills that mirror those of American engineers, why would you settle for a significantly lower pay? The best Indian engineers I've worked with all made their way over to the US OR knew how much they were worth and set their rates SLIGHTLY below US salaries.
- paxy 8y agoTop Indian talent did go to the US by default, but that peaked ~10 years ago. Nowadays there is enough opportunity in India - and the US immigration process is bad enough - that most people I know just don't bother. The visa backlog is almost entirely made up of the tech equivalent of minimum wage workers, all sponsored by Infosys/TCS and other consulting firms. And the "SLIGHTLY below US salaries" part is an exaggeration. Top talent in India is still at most a third of the high-end Silicon Valley rate.
- scrumbledober 8y agomost of America is significantly below the high-end of Silicon Valley rate.
- paxy 8y agoYes but the article is about the latter.
- returnInfinity 8y agoTop talent is still going at 1/3.
- g3rv4 8y agough, as a developer from a remote country that’s been working for 10+ years for US companies I run as fast as possible from companies like this one. If I provide the same value as US engineers, why should I make less than US engineers? Fortunately, I’ve been able to make my case. I hope these Indian engineers realize they’re making 1/15th what they should.
- PenguinCoder 8y agoCan you elaborate on the methods you've used to "make my case" for getting paid fairly, as a remote (and Indian??) engineer?
- g3rv4 8y agoI’m not Indian (I’m Uruguayan). There were two times where I more than doubled my pay. At one point I was 1 month into a contract and I got an offer from a previous client doubling what I was getting. I used that to make my case and we figured a schedule for me to make 2x my rate. Then, I was bored and started playing with Asterisk and Twilio. I built an integration before there were docs on how to do it, I blogged about it and people started contacting me offering me to do it for them. For each client I asked for more money. I started at 35/h and doubled it every time somebody contacted me. One of those clients offered me a 40 hours/week contract. They got acquired and I was a key member working 60+ hours per week. The new company wanted me to sign a long term contract and... to sign it I asked for even more money! since I’d be giving up opportunities to work with other clients. Once you start making more money it’s easier to get the job because... you’re already being paid that. Obviously, you need to deliver according to the expectations, but luckily that wasn’t an issue for me.
- zavi 8y agoSalaries are determined by supply & demand, not by how engineers feel, what they "realize", or what they create in terms of value.
- g3rv4 8y agoat a macro level? sure. At a micro level, had I been convinced that my pay was fair (it was enough to cover my needs and save) and not asked for more, I’d be making upwork money.
- thorwasdfasdf 8y agoI remember back in the 2000s there was a huge fear of work being outsourced to India. It makes sense: since you can get engineers for 10 times less cost. But these fears never really materialized. there was still so much hiring in the bay area for the last 20 years. Certainly low-margin businesses that need to compete will be hiring in India. That's probably why you don't see many web development body shops in the bay area. But, for monopoly businesses like google or facebook, the cost of labor doesn't really matter much for them.
- PopeDotNinja 8y agoAfter struggling to hire top-notch engineers in the bay area as salaries started to spiral beyond reason, we decided to conduct a radical experiment in trying to train overseas developer talent on our tech stack before hiring them. TL;DR -- They have rebranded unpaid internships.
- opportune 8y agoEven worse, they did for people likely much poorer than the average unpaid intern in the US and the main value proposition was probably them dangling visas