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I think what's also missing from the equation here is the fact that part of the reason which startup compensation is not competitive is because FAANG salaries h

by skohan 5y ago

I think what's also missing from the equation here is the fact that part of the reason which startup compensation is not competitive is because FAANG salaries have been set in such a way to attract talent which might otherwise go to startups.

BeFlatXIII 5y ago
How true to do suspect the following hypothesis is: FAANG overpays for top talent they do not need purely to keep it out of the hands of startups and competitors who do have a present concrete need for the top-shelf talent pool?
- skohan 5y ago
  I don't know to what extent that's an explicit strategy, but I would find it plausible to imagine that FAANG could spend a lot less on engineering - both in terms of salaries and head count - to keep their current velocity on product development, but they see a strategic interest in controlling that talent pool which they have an opportunity to exploit via capital advantage.
- ariwilson 5y ago
  The other side of this is mentioned in the OP - at scale, if you get top talent for $$$ and can squeeze 1% more revenue out of your products, it's still worth your time.
StandardFuture 5y ago
This seems to inherently assume a strong correlation between "talented" and "risk-averse". A startup is potentially far more valuable than working at a FAANG, especially so if you are a founder. So, why ever work for anything other than your own company? And, even if the "talent" takes a job at FAANG, what stops them from having a 2-year turnover rate where they make some money and then go risk starting their own company, and if that fails then just go back to making a steady paycheck? The FAANG strategy for hiring talent seems to be something along the lines of: "Sure, not all talent will be risk-averse, but a (large) percentage of talent will be, and we can grab those risk-averse talented people with higher-salaries than smaller companies." In other words: if you are not a founder, relatively high-equity early employee, or a FAANG employee then you are game-theoretically either second-tier talent, really hate FAANG companies, and/or you are not actually aiming high enough.

by skohan 5y ago

BeFlatXIII 5y ago

How true to do suspect the following hypothesis is: FAANG overpays for top talent they do not need purely to keep it out of the hands of startups and competitors who do have a present concrete need for the top-shelf talent pool?

skohan 5y ago
I don't know to what extent that's an explicit strategy, but I would find it plausible to imagine that FAANG could spend a lot less on engineering - both in terms of salaries and head count - to keep their current velocity on product development, but they see a strategic interest in controlling that talent pool which they have an opportunity to exploit via capital advantage.
ariwilson 5y ago
The other side of this is mentioned in the OP - at scale, if you get top talent for $$$ and can squeeze 1% more revenue out of your products, it's still worth your time.

StandardFuture 5y ago

This seems to inherently assume a strong correlation between "talented" and "risk-averse". A startup is potentially far more valuable than working at a FAANG, especially so if you are a founder. So, why ever work for anything other than your own company? And, even if the "talent" takes a job at FAANG, what stops them from having a 2-year turnover rate where they make some money and then go risk starting their own company, and if that fails then just go back to making a steady paycheck? The FAANG strategy for hiring talent seems to be something along the lines of: "Sure, not all talent will be risk-averse, but a (large) percentage of talent will be, and we can grab those risk-averse talented people with higher-salaries than smaller companies." In other words: if you are not a founder, relatively high-equity early employee, or a FAANG employee then you are game-theoretically either second-tier talent, really hate FAANG companies, and/or you are not actually aiming high enough.