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> not to mention hiring everyone at 10X the salary a startup can afford to pay. This is how a functioning talent market works. It isn't unfair to the startup t

> not to mention hiring everyone at 10X the salary a startup can afford to pay. This is how a functioning talent market works. It isn't unfair to the startup that big companies pay more, it's unfair to the startup employees that the startup isn't paying more. I'd argue that if a startup can't pay market rate for the employees it wants (be it cash or equity) then it wasn't properly funded in the first place.

Ericson2314 6y ago
Yes, but if we equalize the tech industry on the company level, startups will be able to pay more, and a lack of monopsony around high-level programmer talent will further drive up wages. Unless FAANG is unionized or something, the trust-busted alternative of the status quo is definitely better for labor.
- umeshunni 6y ago
  > startups will be able to pay more The OP's proposal is that startups should be able to pay less and hire talent, if it wasn't for those pesky FAANGs driving everyone's wages up. If only they were able to pay less would VCs have been able to keep even more for themselves, I mean, would the market have been more equitable (?@!@)
  - Ericson2314 6y ago
    Well if that's what OP is saying they are wrong. Don't look at the market from the perspective of the one of the participants, look at it as a whole. And don't try to evaluate something like anti-trust in a marginal way, when the effects are so numerous. Better to take a more stateless / path-independent approach and just find the new equilibrium, for the first rough-cut analysis. From those perspectives, higher Gini coefficient clearly means lower median, etc. From your other comment it looks like you agree with my conclusions, at least.
- srtjstjsj 6y ago
  More competition would mean lower prices for consumers, paying more employees building redundant products, and less money per employee for salary.
  - Ericson2314 6y ago
    But we're talking about breaking up vertical monopolies. That doesn't necessarily create more redundancy.
peteradio 6y ago
There is also the end-user to consider. Big fat salaries for engineers to create shitty/sheisty marketing/ads while squashing real innovation is not a net-benefit to society. There has to be some medium.
cblconfederate 6y ago
By that standard, Putin's russia is a "functioning talent market" since it's a corrupt oligopoly. Or the CCP. "If they have not ties to the party, they shouldnt have tried to compete". It's functionally equivalent. If you want a functioning market, you don't want an oligopoly
- diab0lic 6y ago
  That's a huge stretch so that you could pull two boogeymen into the conversation and stand them next to my argument. The big tech companies may have undesirable effects on the world but paying individuals too much isn't one of them. Literally the only complaint is that other owners can't hire for under market rate? Who cares?
  - cblconfederate 6y ago
    Thats not what i m objecting to, but the idea that having huge salaries is enough to call a market "good". It's not. Anyway, we all have our biases, and i do understand you work for a FAANG.
    - diab0lic 6y ago
      I do work for a FAANG company and bear that bias, yes. I haven't always worked at a FAANG company though -- before I did I appreciated the upward pressure FAANG companies were putting on salaries. I took another look at your comment I replied to, I must have glossed over the "If they have not ties to the party, they shouldnt have tried to compete" part. I apologize. I want to be clear that I'm not suggesting these companies shouldn't compete, I'm glad for all of the employers we have in tech. What I am suggesting is that they pay the price the market for that talent is currently willing to bear and if that results in less concentrated ownership for the ones that eventually do come to dominate the industry I won't be losing any sleep. For those that think current giants are "unbeatable" -- current FAANG companies were tiny and irrelevant 20 years ago and the industry was dominated by a different set of "unbeatable" giants.
      - 6y ago
rmrfstar 6y ago
Look into the phrase "dumping". Uber and Lyft are allowed to run permanent losses because they have privileged access to cheap capital. If you have a better platform but you actually need to turn a profit, your ship is sunk before you leave the harbor. And a lot of the people earning "10x" at the RAMJAC companies would almost certainly earn more in equity appreciation in a competitive market. This era is bizarre. All the free market rhetoric from the 1980s is being recycled to defend central planning that is now totally cool because the central planner has a corporate charter.
- dantheman 6y ago
  Central planning is about risk and force; if someone want to take a risk with their own money then it's not central planning. In fact that there are many different companies in the transportation market: byrd, lyft, uber, taxis, spacex, tesla, nikola, cruise, boring company, etc... Shows it's not centrally planned.
- srtjstjsj 6y ago
  > If you have a better platform but you actually need to turn a profit, your ship is sunk before you leave the harbor. Why wouldn't a VC fund this amazing platform? > Uber and Lyft Wait, why does Lyft exist if Uber's funding prevents any competitor from existing?
  - rmrfstar 6y ago
    VC's won't fund anything in Big Tech's "kill zone", and bootstrapped projects need profits to sustain themselves. It is very difficult to turn a profit while facing a competitor that can run perpetual losses. I find the "kill zone" theory plausible and supported by available evidence [1,2,3]. Others (a large consulting firm) disagree [4]. [1] https://www.aei.org/economics/incumbents-vs-startups-the-case-that-big-tech-is-squashing-small-tech/ https://www.aei.org/economics/incumbents-vs-startups-the-cas... [2] https://www.dallasfed.org/-/media/Documents/research/events/2018/18ted-haltiwanger.pdf https://www.dallasfed.org/-/media/Documents/research/events/... [3] https://www.wsj.com/articles/facebooks-destroy-modemyth-or-reality-11596068322 https://www.wsj.com/articles/facebooks-destroy-modemyth-or-r... [4] https://www.aei.org/economics/a-new-analysis-takes-a-shot-at-the-idea-big-tech-has-created-a-kill-zone-for-startups/ https://www.aei.org/economics/a-new-analysis-takes-a-shot-at...

Ericson2314 6y ago

Yes, but if we equalize the tech industry on the company level, startups will be able to pay more, and a lack of monopsony around high-level programmer talent will further drive up wages. Unless FAANG is unionized or something, the trust-busted alternative of the status quo is definitely better for labor.

umeshunni 6y ago
> startups will be able to pay more The OP's proposal is that startups should be able to pay less and hire talent, if it wasn't for those pesky FAANGs driving everyone's wages up. If only they were able to pay less would VCs have been able to keep even more for themselves, I mean, would the market have been more equitable (?@!@)
- Ericson2314 6y ago
  Well if that's what OP is saying they are wrong. Don't look at the market from the perspective of the one of the participants, look at it as a whole. And don't try to evaluate something like anti-trust in a marginal way, when the effects are so numerous. Better to take a more stateless / path-independent approach and just find the new equilibrium, for the first rough-cut analysis. From those perspectives, higher Gini coefficient clearly means lower median, etc. From your other comment it looks like you agree with my conclusions, at least.
srtjstjsj 6y ago
More competition would mean lower prices for consumers, paying more employees building redundant products, and less money per employee for salary.
- Ericson2314 6y ago
  But we're talking about breaking up vertical monopolies. That doesn't necessarily create more redundancy.

peteradio 6y ago

There is also the end-user to consider. Big fat salaries for engineers to create shitty/sheisty marketing/ads while squashing real innovation is not a net-benefit to society. There has to be some medium.

cblconfederate 6y ago

By that standard, Putin's russia is a "functioning talent market" since it's a corrupt oligopoly. Or the CCP. "If they have not ties to the party, they shouldnt have tried to compete". It's functionally equivalent. If you want a functioning market, you don't want an oligopoly

diab0lic 6y ago
That's a huge stretch so that you could pull two boogeymen into the conversation and stand them next to my argument. The big tech companies may have undesirable effects on the world but paying individuals too much isn't one of them. Literally the only complaint is that other owners can't hire for under market rate? Who cares?
- cblconfederate 6y ago
  Thats not what i m objecting to, but the idea that having huge salaries is enough to call a market "good". It's not. Anyway, we all have our biases, and i do understand you work for a FAANG.
  - diab0lic 6y ago
    I do work for a FAANG company and bear that bias, yes. I haven't always worked at a FAANG company though -- before I did I appreciated the upward pressure FAANG companies were putting on salaries. I took another look at your comment I replied to, I must have glossed over the "If they have not ties to the party, they shouldnt have tried to compete" part. I apologize. I want to be clear that I'm not suggesting these companies shouldn't compete, I'm glad for all of the employers we have in tech. What I am suggesting is that they pay the price the market for that talent is currently willing to bear and if that results in less concentrated ownership for the ones that eventually do come to dominate the industry I won't be losing any sleep. For those that think current giants are "unbeatable" -- current FAANG companies were tiny and irrelevant 20 years ago and the industry was dominated by a different set of "unbeatable" giants.
    - 6y ago

rmrfstar 6y ago

Look into the phrase "dumping". Uber and Lyft are allowed to run permanent losses because they have privileged access to cheap capital. If you have a better platform but you actually need to turn a profit, your ship is sunk before you leave the harbor. And a lot of the people earning "10x" at the RAMJAC companies would almost certainly earn more in equity appreciation in a competitive market. This era is bizarre. All the free market rhetoric from the 1980s is being recycled to defend central planning that is now totally cool because the central planner has a corporate charter.

dantheman 6y ago
Central planning is about risk and force; if someone want to take a risk with their own money then it's not central planning. In fact that there are many different companies in the transportation market: byrd, lyft, uber, taxis, spacex, tesla, nikola, cruise, boring company, etc... Shows it's not centrally planned.
srtjstjsj 6y ago
> If you have a better platform but you actually need to turn a profit, your ship is sunk before you leave the harbor. Why wouldn't a VC fund this amazing platform? > Uber and Lyft Wait, why does Lyft exist if Uber's funding prevents any competitor from existing?
- rmrfstar 6y ago
  VC's won't fund anything in Big Tech's "kill zone", and bootstrapped projects need profits to sustain themselves. It is very difficult to turn a profit while facing a competitor that can run perpetual losses. I find the "kill zone" theory plausible and supported by available evidence [1,2,3]. Others (a large consulting firm) disagree [4]. [1] https://www.aei.org/economics/incumbents-vs-startups-the-case-that-big-tech-is-squashing-small-tech/ https://www.aei.org/economics/incumbents-vs-startups-the-cas... [2] https://www.dallasfed.org/-/media/Documents/research/events/2018/18ted-haltiwanger.pdf https://www.dallasfed.org/-/media/Documents/research/events/... [3] https://www.wsj.com/articles/facebooks-destroy-modemyth-or-reality-11596068322 https://www.wsj.com/articles/facebooks-destroy-modemyth-or-r... [4] https://www.aei.org/economics/a-new-analysis-takes-a-shot-at-the-idea-big-tech-has-created-a-kill-zone-for-startups/ https://www.aei.org/economics/a-new-analysis-takes-a-shot-at...