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Ask HN: Why are startups all offering 140k base?

• seattle_spring 7y ago
  140k at a startup does roughly map to mid-level (L4) Google engineer in terms of YOE. No startup with only 10-100 employees is going to offer a Google comp. I'm not saying it's OK, but that's reality. If a startup offered 200k worth of options at their current valuation, they'd probably run out of stock in a few weeks. They have to bank on employees being OK hoping that the stock will appreciate considerably. I know conventional wisdom says to not share your current salary, but in your case I would consider sharing your previous 196k base before they can give a low 140k number. Edit: > Is there some thought leader going around in the startup space that is pushing a "140k should be enough for anyone" story? Probably not, but I suspect they're all pulling from the same "market analysis" surveys that probably all say that an L4 at a company of size 10-100 makes between X and Y. They probably all target the 50th or 60th percentile, and then make you the offer assuming you'll negotiate upward 10-15k.
  • confusedapp 7y ago
    Thank you for the market pricing info. I don't even want 200k worth of options. I want cash bonuses from delivering the features that sign profitable customers with a speed that my bosses think is improbable. I am happy to be paid out of the money that I went out and brought in, but every company I have talked to is incredibly allergic to any suggestion that I be paid real money for the value I deliver. Each time I have offered to take the low base offered but with 0 options and a cash bonus system based on directly attributable sales, the company comes back with not a culture fit and declines to proceed. I am freelancing right now while I look for a job and find it very frustrating to work as a contractor selling turnkey business problem solutions to startups (complete apps, setup CI, sso, add permissions to existing app) and have them not even negotiate quotes for day rate of 1.6k, but then when I offer to focus exclusively on a single business as an employee then suddenly they can only see 1/3rd the value in the same work! I feel stuck where as an employee I am viewed as a replaceable cog who is not worth the extra time to even think about giving out bonuses, while as a brand new contractor I am not yet proven/connected enough to consistently fill the pipeline.
    • notahacker 7y ago
      Startups expect to pay a lot more for freelancers at the same skill level as their staff because (i) the freelancers reasonably ask for more because they don't get perks and do get dropped after a week and spend a few days after that looking for work and (ii) they don't have to pay the freelancers for the days they don't need the extra/specialist help, which is probably most of the year. It's a lot more worthwhile negotiating a starting salary that other employees might expect to match and will be the starting point for five years of pay rises than trying to round a 10 day contract down by a few hundred dollars. Unless you have a specialist skillset which is very much geared towards finding new ways of bringing in revenue it's also not exactly surprising they're not keen on the "I want cash bonuses for sales" approach, particularly if you're insisting on that instead of options which signal a long term interest in the company and don't shorten their runway (and yes, they probably overvalue their options as well). Especially if they don't know you were valued at 196k in salary terms in your last job and think you're being odd rather than trying to be flexible.
    • taurath 7y ago
      > I am happy to be paid out of the money that I went out and brought in, but every company I have talked to is incredibly allergic to any suggestion that I be paid real money for the value I deliver. Thats the wrong attitude, generally. You are a replaceable cog - just because you wrote a billing system that takes in millions a year doesn't mean you get the cut of those millions - the value isn't from the billing system, the value is from what the company provides, and unless thats billing systems then you're not going to get a cut. You're selling what is a commodity and asking to be paid as a specialist.
    • rajacombinator 7y ago
      It’s generally not easy or feasible to directly attribute incremental revenue to work done by a single developer. Even if it were feasible doing so implies a certain degree of adversarial relationship between the employee and employer. “Who watches the attributors” essentially. This should be fairly obvious - try to devise a realistic system by which they could allocate a revenue share for you. I doubt you’ll be able to come up with a reasonable one. Ultimately, if you can consistently pull in contract work at 1.6k/day, you should probably continue doing that.
• deleted 7y ago
  [deleted]
  • confusedapp 7y ago
    That was my suspicion. Color me very surprised if YC's bookface site for founders does not have a offers tab where founders can post that they made an offer to a specific person by name, with a nice timeline view of the candidate's counter offers. The same feature might also have a The Work Number API integration that lets founders see the salary history, credit score, and estimated bank balances (thanks fintechs) of each candidate as well.
• e1g 7y ago
  $140k base is within the market band for a "good-but-not-great" Generic Engineer outside of FANG. "Say who?". Says the market -as long as businesses can place butts into seats at this rate, the price is right. Companies complain about the lack of talent like people complain about rent - I too want a better piece for less money, it's true. > Is there some though leader going around in the startup space that is pushing a "140k should be enough for anyone" story? Imagine a super lean startup with a handful of people. Engineer wants $200k, her manager reasonably expects a premium on that, and the CTO/CEO is one level higher. Now it costs $1M/yr for 3 people's fully loaded comp and a closet at WeWork. Yes, Google & co can pay this and more because 1) their main challenge is how to build warehouses fast enough to store all that incoming cash and 2) they don't pay people to work there, they pay people to not work at competitors or start their own thing. Elsewhere, this comp strategy is commercial suicide, unless you're building logistic apps for the cartel or doing gambling, which is about the same thing. From another angle, there are silverback VCs saying their CEOs should not be paid more than $150k. Jungle rules take over, and it's quite understandable that people two levels below shouldn't have salaries higher than the head of the troops. > How can I possibly be worth the exactly same amount across each of my different skills to different business models in different niches? What that Generic Engineer does is about as interesting as what a generic accountant does - i.e. not at all, and will change in 2-3 years anyway. Frontend/backend/ops use different acronyms, but engineers will engineer. For example, look at people involved in the revenue pipeline: pre-sales, post-sales, customer success, relationship manager, account executive, etc. These are all totally unique snowflake special roles until you take half a step back and hey from here I can barely tell them apart from marketing or customer service folks. > I am happy to be paid out of the money that I went out and brought in, but every company I have talked to is incredibly allergic to any suggestion that I be paid real money for the value I deliver The process of writing software is among the trivial parts of building a software startup. Development work is rarely connected to cashflows, and should not be incentivized as a rev-share based on specific feature/module. How much $$ is it worth to do CI/CD, or SSO? No one would do that work. Even if there was a feature requested by a big client, how much of that money should go to the UX person, QA person, sys admin, lawyer who reviewed the contracts, sales person who negotiated the deal, the property manage who keeps the roof over your head etc. Firms exist as a way to removing transaction costs among these professionals, who create more value together than independently. Suggesting you 'deserve' X% is a signal that you may undervalue contributions from professions other than your own and that feeds the default "bad culture fit" world view. > when I offer to focus exclusively on a single business as an employee then suddenly they can only see 1/3rd the value in the same work! "I love you, but we let's stay friends" means she doesn't love you. If you have a relationship with existing clients, know they business, and they decline you offers to get more serious for <50% TCO, this is a big red flag. Maybe they don't have the money etc, but more likely they do not see value in the work which should be fascinating to dissect and understand, before re-packaging yourself to strangers.
• askafriend 7y ago
  It's not a conspiracy. It's at least partly paid market research. https://radford.aon.com/surveys/pre-ipo-compensation-survey https://radford.aon.com/surveys/pre-ipo-compensation-survey
• macando 7y ago
  - In SV. - Knows how business operates. - Track record of delivering turnkey solutions. - Can bootstrap with own freelancing cash. Time for you to start your own company.
• taurath 7y ago
  140k base for FAANGs allow them to get a few new hire suckers, and also keep the press and glassdoor away from what they're really paying people. It also depresses wages as other companies latch onto the 140k number and engineers going into FAANGs will ask for less. Most of the money is in RSUs. Just avoid companies that aren't paying you enough - you can work your ass off and be doing wonderful new fancy specialized work and still make 50% of the prevailing wage, because the company won't pay more.