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First of all, the fact that any SWE you don't employ can start their own business, is just a boosting factor to SWE wage. The key reason companies can and do p

First of all, the fact that any SWE you don't employ can start their own business, is just a boosting factor to SWE wage. The key reason companies can and do pay SWEs relatively well is that these SWEs generate large profits for them. That's the "opportunity cost" GP mentioned: yes, you'd have to pay the SWE $400k, but the cost of not employing them is several times that in lost profit. Moreover, I'm not really seeing how the barrier of entry is going to increase substantially. In fact, it will probably decrease. As software eats the world, there will be more and more "pure software" work, which means your only toolset is your knowledge. SWEs with large amounts of specialized knowledge and skills will increasingly be able to compete in these areas (security is a pretty good example). It doesn't have to be your typical company with a logo, brand, and office space - we're talking about consultancies and virtual businesses.

chiph 7y ago
The places I've worked have had revenue-per-employee in the $200-300k range. That's total employees, not just developers (so, sales, accounting, HR, as well). Doing some rough math, it's been more like $15-25mm per developer.
- NeverFade 7y ago
  Yes, it's the same for FAANG as well. If you just divide total revenue by total headcount, you already get seven figure numbers. But if you divide revenue by the engineers who generate it, you get a big multiple of that.
  - rev_null 7y ago
    If you divide the total revenue by the number of HR employees, you will also get a much larger number. (Total revenue / total number of employees) will always be less than (total revenue / subset of employees). This is not a very good metric.
    - NeverFade 7y ago
      In a company like Facebook, who is directly responsible for the revenue? And who is working support roles? If you laid off 90% of HR, how will that affect revenue? What about laying off 90% of the engineers?
    - chiph 7y ago
      HR, Accounting, etc. aren't directly revenue-producing. You could make a good argument that Sales headcount should be included, though.
      - yibg 7y ago
        Divide by number of product managers then, even higher per headcount.

chiph 7y ago

The places I've worked have had revenue-per-employee in the $200-300k range. That's total employees, not just developers (so, sales, accounting, HR, as well). Doing some rough math, it's been more like $15-25mm per developer.

NeverFade 7y ago
Yes, it's the same for FAANG as well. If you just divide total revenue by total headcount, you already get seven figure numbers. But if you divide revenue by the engineers who generate it, you get a big multiple of that.
- rev_null 7y ago
  If you divide the total revenue by the number of HR employees, you will also get a much larger number. (Total revenue / total number of employees) will always be less than (total revenue / subset of employees). This is not a very good metric.
  - NeverFade 7y ago
    In a company like Facebook, who is directly responsible for the revenue? And who is working support roles? If you laid off 90% of HR, how will that affect revenue? What about laying off 90% of the engineers?
  - chiph 7y ago
    HR, Accounting, etc. aren't directly revenue-producing. You could make a good argument that Sales headcount should be included, though.
    - yibg 7y ago
      Divide by number of product managers then, even higher per headcount.