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I find two things to disagree with in this article. First is the premise that equally high compensation is offered elsewhere in each industry. I don't know abo
by notacoward 6y ago
I find two things to disagree with in this article. First is the premise that equally high compensation is offered elsewhere in each industry. I don't know about finance or consulting, but at least for FAANG it doesn't seem to be true. Second is the overlooked explanation that it's headroom - not prestige - that accounts for the difference.
I'll provide an example that illustrates both points: me. When I went from Red Hat to Facebook, my already-pretty-good total compensation jumped by almost 50% - more considering how each company's stock performed during the relevant vesting periods. I'm pretty sure there were others around me who had been promoted from fresh-out to my nominal level in a quarter to a half the time it had taken me to build my career. Some of them were quite likely making even more than me despite their narrow experience and resulting unsuitability for the same role anywhere else (a topic for another time).
If my salary curve was a race car, theirs was a rocket ship. The FAANG compensation premium to start fresh out of college might be smaller, but the potential growth over the next several years is much greater than elsewhere in tech ... and yes, recruiters do use that as a lure. Given the uncertainty (and compensation inequity) at startups, working at a FAANG is the most likely route to early wealth for most techies.
Of course, you can also get rich early if you get to put FAANG on your resume and parlay that into an early-employee job at a startup that later hits it big. That's prestige at work but, looking at the attrition/retention rates at FAANG, it seems to be the less common route and therefore I'd guess it's the less common motive.
- centimeter 6y agoI find it surprising that people still consider FAANG prestigious, given that these companies collectively have probably 1-200,000 engineers in their employ. Even if they managed to perfectly select for the cream of the crop (they don't), that still has to be like 10-20% of all programmers/engineers in the US. Being top 20% isn't that impressive, and in reality they're probably mostly hiring from the top 30-40%.
- whimsicalism 6y agoTop 20% of one of the most intellectually challenging jobs in America, also if you exclude Amazon it is not 20%.
- smabie 6y agoI really wouldn't consider most programming to be intellectually challenging. Certainly, most FAANG devs don't feel challenged in the least bit.
- akhilcacharya 6y agoExclude Amazon? What?
- yitianjian 6y agoBig size, low barrier to entry (especially at SDE-1 level) Source: work at Amazon
- akhilcacharya 6y agoI'm also an SDE1 at Amazon and find this extremely insulting, what the hell man
- whimsicalism 6y ago> find this extremely insulting, what the hell man I find it somewhat astonishing that you would be extremely insulted by the exclusion of your employer from some arbitrary acronym. It's well known that Amazon hiring standards are the lowest of FAANG, just like G's hiring standards are lower than N (as a whole). That doesn't mean that everyone who is an SDE1 at Amazon is less talented than everyone who is an L3 at Google, it's just different means.
- tudelo 6y agoYeah, that's something that I have been a bit confused on too. People talk about how hard it is and the "prestige", but there are 20k+ other engineers who did the same thing (at your company alone!). It's really not all that impressive.
- lotsofpulp 6y agoThe relevant metric would be the ratio of how many got the position to how many wanted it.
- centimeter 6y agoNot really - that would inflate how impressive it is, because the bottom, say, 80% of the talent pool applies to avg 100 companies whereas the top 20% applies to avg 5 companies, so the number of talented applicants to a given company is very small. Just because you hire top 1% of people who apply to your company doesn't mean you hire top 1% of devs (even if your company is getting the best average applicants).
- scarmig 6y agoThere are amorphous borders between programmer, developer, and software engineer, but there are roughly ~4 million "programmers/engineers" in the USA. So call it ~5%?
- tudelo 6y agoI personally would consider top 5 percent of any task to be the low bar of proficiency, so even that doesn't seem super impressive to me. But damn, the jobs pay well and wlb can be great (or terrible). I guess the weird part is that the process of getting hired is so different than the day to day work.
- dodobirdlord 6y ago> I personally would consider top 5 percent of any task to be the low bar of proficiency, so even that doesn't seem super impressive to me. Top 5% among paid professionals is your low bar of proficiency?
- dustingetz 6y agothey're hiring the 40%-15% band. Top top band does not sling java for a living. Maybe there are some top programmers in the R&D orgs in areas like ML where the startup/resource costs are out of reach of an indie
- yitianjian 6y agoI would keep in mind that FAANG likely has a much higher percentage of international students and workers, which skews things a bit. It's definitely taking the top talent from all over the world, versus your small web shop in Cleveland, Ohio, hiring whoever it can get.
- throwaway713 6y agoYou’re looking at the wrong pool of potential employees. On my team of ~40 people, I am the only one who was born in the U.S. They hire from all over the world and will pay what’s necessary to import top talent from other countries. Also, 200,000 sounds way too high for total number of technical positions at these companies. There are a very large number of people working non-technical jobs there as well.
- ackbar03 6y agoIn general though from what I read on hn I get the impression that it sucks to be an early employee at most startups, especially early stage. From what I've read a lot of compensation seems to be in equity and not cash, and unless it takes off like faang, you end up severely ubderpaid relative to what you could be making
- notacoward 6y ago> it sucks to be an early employee at most startups Absolutely. I worked at ten, with employee numbers from single digits up to about fifty. As we all know, most startups fail. Even among those that succeed, few employees avoid all of the traps that founders and VCs create for them (e.g. dilution and special share classes) to get more than a modest payout at the exit. For most, even that "big payout" might not match the year-after-year premium they could have gotten by working and climbing the ladder at one of the already-big tech companies. As one point of evidence, my two semi-successful exits did help me retire earlier and in more comfort than I otherwise might have. I'm grateful for that. OTOH, my three and a half undistinguished years at Facebook helped more.
- gumby 6y ago> I get the impression that it sucks to be an early employee at most startups, Depends what you want. I had a guy work for us at my first startup: he was employee #6 and once we got to about 13 or 15 he decided it was time to move on. I was surprised, but he felt the business was just too big for him. And indeed I've looked at his career over the ensuing years and he's worked for some amazing companies...always just for a year or so and always when they were very tiny. Sometimes I noticed he'd worked with the same people, so he wasn't leaving because he was a poor performer (we missed him) but simply because that's what he liked.
- unishark 6y agoYou're basically saying the equity is too low. Any decent exit would make the founders and investors a lot of money. If they wanted to motivate employees to make that happen, equity needs to be good enough to make the employee a lot too. Instead it tends to be much closer to a token amount to check the box, taking advantage of the fact that you can't easily assess its value.
- wayoutthere 6y agoI work in consulting, and I’d say the top-end in consulting is still higher and much more of a safe bet. It’s not uncommon for people in consulting to be making $500k-$1m annually by the age of 40. If you’re a partner, compensation can be significantly higher than that; in the $2M-20M range. I think there was a golden era of startups capturing value from the old guard, but that era is largely over IMO. All of those tech darlings are hiring consultants to help build corporate functions and product strategy — turns out there is significant value in knowing how to manage a company of 30,000+ employees and revenues in the hundreds of billions of dollars. Even a fraction of a percent gain in efficiency translates to enormous sums, which the consultants capture some percentage of in fees. As the unicorns continue to evolve into mature enterprises, more of that value will shift into the consulting / finance realm. If I were graduating in 2020, I would not go into tech as an engineer if my goal was to get wealthy. It’s still a great career and you’ll be able to live a very comfortable life regardless, but if building wealth is your goal you need to follow the prestige (aka political power).
- whimsicalism 6y agoFor the typical Harvard student, tech is better paying than consulting unless you are an extraordinarily successful consultant. > It’s not uncommon for people in consulting to be making $500k-$1m annually by the age of 40 This is not "uncommon" in FANG either (just take a look at the salary charts), and if anything can be reached earlier. > there was a golden era of startups capturing value from the old guard, but that era is largely over IMO If I could take a bet against this, I would. That value capture is only going to increase.
- scarmig 6y ago> If I could take a bet against this, I would Can't you, by starting or (much less favorably) joining a startup?
- whimsicalism 6y agoBetting on technology capturing value in general over "jack-of-all-trades" consultancy vs. betting on one particular startup capturing value.
- deleted 6y ago[deleted]
- lotsofpulp 6y agoI don’t know why the article’s author thinks prestige is about anything other than money/power (for the population as a whole). People would rather work at FAANG than Stripe because FAANG will get you a lot more pay and connections. And people know that, so they will value people from FAANG for it. But it comes from the root fact that FAANG makes a ton of net income per employee, same as some finance/consulting firms, and that net income is more attributable to you specifically, rather than say someone at General Mills.
- whimsicalism 6y ago> People would rather work at FAANG than Stripe because FAANG will get you a lot more pay and connections Pshh what? You work at FANG and think this?
- albacur 6y agoI think Stripe is one of the few bad examples they could have picked to compare against FAANG. Among late-stage startups, it seems highly regarded and its employees' options are likely to hold real value in the not-so-distant future. But generally I think the OP is correct: working for FAANG has made many, many people far more money over the past decade than they would have otherwise made on average in a startup. I suspect that eventually the tide will turn, as it always does. The companies will get middle-manager bloat, MBAs and accountants start pinching pennies, systems get dragged down in technical debt, and more nimble competitors eventually outcompete. But we're not there yet.
- ffggvv 6y agoyou’re comparing fang to average startup. instead you should compare fang to top tier startup. as that’s the choice people who get fang offers make... in almost all examples i can think of, the top tier startup pays more. furthermore before they were fang companies, google was the top tier startup and IBM was the equivalent to FANG.
- 6y ago
- formercoder 6y agoI work in finance. The “Goldman discount” is well known. People will accept lower comp for that brand on their resume. Otherwise, the places you can really make the most money are at small private firms without public shareholders. There are so many cash machines out there with very little public scrutiny.
- smabie 6y agoI work in HFT and my experience is like yours: the most well known firms pay the least. Right now I'm at a very small prop firm as a partner and compensation is much greater than I would have gotten at Jane St, Citadel, etc. Generally people only seek at prestigious firms like Goldman early in their career and switch over to more obscure but lucrative opportunities: prop firms, pe, hf, etc.
- npip99 6y agoWait a second, am I missing out right now? I have an opportunity at Jane Street, but I haven't been exposed to any of the other small name firms. Where do I look to find the higher paying jobs?
- smabie 6y agoIf you're early in your career, then you should probably just take the Jane St opportunity. They are very well respected and it looks very good on your resume. If you're later in your career, you should have enough contacts and know enough people to get in the door at a small firm. If you don't know their name, you'll have a hard time getting in. These kinds of places don't post job openings on indeed. You kind of have to know someone.
- rhizome 6y agoOne of the first things you might notice in some of the job ads for those firms: instead of "Compensation: competitive salary, 0.0x% equity," you'll start seeing phrases like "extremely high compensation." Then you'll start really feeling like you're not in Kansas. In this vein, the tech industry screws its employees as far as their share of revenue-per-employee goes. Apple makes 10x per employee what Jane St. does, and I doubt the small firms achieve the difference.