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Not all companies need $500k engineers or can afford them. An optimization at Netflix that improves performance by 1% may save them millions of dollars. The sam

by Aunche 6y ago

Not all companies need $500k engineers or can afford them. An optimization at Netflix that improves performance by 1% may save them millions of dollars. The same optimization at a medium-size company may only save them a few thousand. Also, it's much more difficult to quantify the impact of a software engineer compared to investment bankers and consultants. The latter two are directly making money for the firm.

deleted 6y ago
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game_the0ry 6y ago
> Also, it's much more difficult to quantify the impact of a software engineer compared to investment bankers and consultants. The latter two are directly making money for the firm. Yes, it is difficult, but possible. Here's quick and dirty analysis - consider Sears, Walmart, and Amazon: - Amazon pays its engineers near top of market - $1.5T market cap. - Walmart has a pretty good engineering culture. They acquired a tech company to start Walmart Labs for data science stuff and they even have popular open source software (Hapi.js) - they're the largest company by revenue and $370B market cap. - Ever been to Sears.com? Me neither - largest retailer in 1980 to bankrupt in 2018, stock price at $0.23 and $94M market cap. I deduce that investment in software engineers == higher stock price.
- reaperducer 6y ago
  I deduce that investment in software engineers == higher stock price. Easy to do when you cherry-pick three companies. Run your analysis on 10,000 companies large and small and you might have something.
  - WrtCdEvrydy 6y ago
    I wonder if we looked at stock price / developers. Would it prove or disprove this statemenet?
  - game_the0ry 6y ago
    > Easy to do when you cherry-pick three companies. * Netflix vs Blockbuster * Uber / Lyft vs taxi cabs * Airbnb vs hotels * Blogs vs print media * Youtube /Instagram vs TV * porn tube sites vs porn studios I could keep going. I've also tried the corollary - companies that are successful while cutting cost in tech, but I can't think of any successful companies that are cutting investment in tech.
- Aunche 6y ago
  I meant quantifying an individual's impact. For i-banking that's easy. The more money an i-banker the raise, the better they are. There isn't a simple metric you can use for software engineering. Some terrible developers write a lot of code. Some amazing developers barely write any code. Of course there is still meaningful signal you can use to differentiate developers, but it's going to be fuzzy. I-banking and consulting increase wages for their employees by firing everyone who doesn't meet a certain bar. In addition to creating a toxic work environment, this practice isn't possible with only fuzzy signals.
Tainnor 6y ago
I mean, "treating your employees better" doesn't necessarily always mean "paying them more". For one, giving good employees more autonomy and decision power, treating people like adults, focusing on their career development, etc., goes a long way too.
atq2119 6y ago
> it's much more difficult to quantify the impact of a software engineer compared to investment bankers and consultants. This depends to an incredible degree on what kind of "consultant" you're talking about. For the traditional "strategic consulting" type consultants it seems basically as impossible to quantify as for software developers, or rely most other people working in large companies.
svachalek 6y ago
I think as an employer you need to know when you have such an engineer, though, or be prepared to lose them. I’d personally disagree with the cost effectiveness argument though. Unless your engineering work really cannot benefit from more skill (and as often as I’ve heard management think their work is relatively simple, in practice I’ve rarely seen it) then you’d have to replace a highly skilled engineer with a small team that would likely cost more than $500k. Packing your engineering firepower into as few bodies as possible is a highly cost efficient strategy, as most of the successful techs know. On the other hand, a small team is less vulnerable to getting hit by a bus or hired out.

by Aunche 6y ago

deleted 6y ago

[deleted]

game_the0ry 6y ago

> Also, it's much more difficult to quantify the impact of a software engineer compared to investment bankers and consultants. The latter two are directly making money for the firm. Yes, it is difficult, but possible. Here's quick and dirty analysis - consider Sears, Walmart, and Amazon: - Amazon pays its engineers near top of market - $1.5T market cap. - Walmart has a pretty good engineering culture. They acquired a tech company to start Walmart Labs for data science stuff and they even have popular open source software (Hapi.js) - they're the largest company by revenue and $370B market cap. - Ever been to Sears.com? Me neither - largest retailer in 1980 to bankrupt in 2018, stock price at $0.23 and $94M market cap. I deduce that investment in software engineers == higher stock price.

reaperducer 6y ago
I deduce that investment in software engineers == higher stock price. Easy to do when you cherry-pick three companies. Run your analysis on 10,000 companies large and small and you might have something.
- WrtCdEvrydy 6y ago
  I wonder if we looked at stock price / developers. Would it prove or disprove this statemenet?
- game_the0ry 6y ago
  > Easy to do when you cherry-pick three companies. * Netflix vs Blockbuster * Uber / Lyft vs taxi cabs * Airbnb vs hotels * Blogs vs print media * Youtube /Instagram vs TV * porn tube sites vs porn studios I could keep going. I've also tried the corollary - companies that are successful while cutting cost in tech, but I can't think of any successful companies that are cutting investment in tech.
Aunche 6y ago
I meant quantifying an individual's impact. For i-banking that's easy. The more money an i-banker the raise, the better they are. There isn't a simple metric you can use for software engineering. Some terrible developers write a lot of code. Some amazing developers barely write any code. Of course there is still meaningful signal you can use to differentiate developers, but it's going to be fuzzy. I-banking and consulting increase wages for their employees by firing everyone who doesn't meet a certain bar. In addition to creating a toxic work environment, this practice isn't possible with only fuzzy signals.

Tainnor 6y ago

I mean, "treating your employees better" doesn't necessarily always mean "paying them more". For one, giving good employees more autonomy and decision power, treating people like adults, focusing on their career development, etc., goes a long way too.

atq2119 6y ago

> it's much more difficult to quantify the impact of a software engineer compared to investment bankers and consultants. This depends to an incredible degree on what kind of "consultant" you're talking about. For the traditional "strategic consulting" type consultants it seems basically as impossible to quantify as for software developers, or rely most other people working in large companies.

svachalek 6y ago

I think as an employer you need to know when you have such an engineer, though, or be prepared to lose them. I’d personally disagree with the cost effectiveness argument though. Unless your engineering work really cannot benefit from more skill (and as often as I’ve heard management think their work is relatively simple, in practice I’ve rarely seen it) then you’d have to replace a highly skilled engineer with a small team that would likely cost more than $500k. Packing your engineering firepower into as few bodies as possible is a highly cost efficient strategy, as most of the successful techs know. On the other hand, a small team is less vulnerable to getting hit by a bus or hired out.