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Congrats! HN is always saying that working for a FAANG is better money than working for a startup even if it IPOs, so my question to you is: How did your emplo

Congrats! HN is always saying that working for a FAANG is better money than working for a startup even if it IPOs, so my question to you is: How did your employees make out during the IPO? Is the prevailing HN wisdom correct? Did your average developer employee that stuck it through with you on your journey end up with more or less than what they would have made working at FAANG?

deleted 5y ago
[deleted]
flashgordon 5y ago
So a slightly different take on this question is what is the highest "employee #" you would want to be under to make more money (in total including comp and level growth) than as a FAANG engineer over the last 9 years? PS: Definitely a huge congrats on this journey and outcome.
sskates 5y ago
I'm going to try to answer the question without divulging how anyone individually did. I took a look at the initial 4 year option grants for the first 10 engineers (this doesn't count refreshers or other follow on grants). The average value at $50/share (yesterday's opening price) is just over $10M. The group varied in experience from just out of school to a few years working when they joined. I feel we were a good deal more generous than the median company: https://amplitude.com/blog/employee-equity-is-broken-heres-our-fix https://amplitude.com/blog/employee-equity-is-broken-heres-o... Someone on the FAANG side can figure out what the apples to apples comparison is. There's no question that in 90% of cases FAANG compensation is way better. If you are optimizing for how to make the most money over a few years you should absolutely choose FAANG. The real benefit of startups comes from other forms. If you asked that group of 10 I think they'd respond that being an early engineer at a start that IPOs gives you way more career capital and long term earning potential than FAANG.
- caseyf7 5y ago
  While joining a FAANG in the past was most likely the richest path, that may not be true today.
  - gkop 5y ago
    Extended exercise options tilt my scales back to start ups.
  - pm90 5y ago
    Doesn’t this depend on yoe? Startups could certainly match faangs for early career engineers but the more experienced folks are likely going to get unmatchable offers. Not everyone cares about the money though. After a certain point you get tired of politics and process and just want to build things. A successful startup culture seems like a win win.
  - Hermitian909 5y ago
    For the actual top tier of compensation in tech (out of FAANG only Netflix is a part of that band) I think it still is. This year I've seen multiple engineers get ~500k offers for 4-6 yoe with no particular specialty, just general competence. High end of Staff appears bumping into the million dollar range once bonuses come around at some of these places.
    - moneywoes 5y ago
      Are these only in SF? What sort of companies
  - swyx 5y ago
    Here's the classic post on the FAANG vs startups debate, for the uninitiated https://startupljackson.com/post/135800367395/how-to-get-rich-in-tech-guaranteed https://startupljackson.com/post/135800367395/how-to-get-ric... >If you want to get rich, your best bet on a risk-adjusted basis is to join a profitable and growing public company. Google for short. Make $200-500k all-in a year, work hard and move up a level every 3-5 years, sell options as they vest (in case you joined Enron), and retire at 60, rich. This plan works every time.
- oakfr 5y ago
  While I am happy for your company and for your first 10 employees (congrats, really), I am not sure that looking at their return teaches us much. Joining a fresh startup as employee #10 (or less) is somewhat of a gamble (even at YC). The following data would put things in perspective: 1. How do the average first 10 employees of a YC startup do? 2. How did the following cohorts in your company do? I am not trying to be negative here, but trying to put things in perspective. Congrats again!
  - sskates 5y ago
    To be clear, it's the first 10 engineers, a very different group from the first 10 employees. No question that the economics of FAANG is way better than an average YC company. That's an easy one. I don't have the data, but the economic outcome is easily 2-5x, maybe more. Following cohorts of engineers are a fraction of what I outlined so the economics are different. It's too hard for me to do the work to get an exact calculation, but probably the next cohort of 10 engineers is something like 1/2 that, and then subsequent ones are down to 1/3 or 1/4. They're joining years later and so taking on much less risk at that point.
    - oakfr 5y ago
      Thank you for your reply. Makes sense. By the way, thank you for running this AMA and answering all the questions with so much clarity and transparency. What an example!
  - farmerstan 5y ago
    To put things in perspective, in 1999 I joined a company that ipo’ed in 1997. The company’s first admin assistant made enough from the ipo to buy a vineyard in Napa valley. I was employee 40 at a YC company and after exit I made 5 figures whereas the founders made high 8 figures. YC definitely teaches the founders to keep a higher percentage of equity for themselves and distribute less to employees.
  - saranormous 5y ago
    startups aren’t a game of averages. the averages are definitely worse than the FAANGs. choosing well (and getting lucky) are paths to “definitely better.” It also depends on what your professional goals are (growth, leadership, impact, fun, next opportunities) assuming they are not only monetary.

deleted 5y ago

[deleted]

flashgordon 5y ago

So a slightly different take on this question is what is the highest "employee #" you would want to be under to make more money (in total including comp and level growth) than as a FAANG engineer over the last 9 years? PS: Definitely a huge congrats on this journey and outcome.

sskates 5y ago

I'm going to try to answer the question without divulging how anyone individually did. I took a look at the initial 4 year option grants for the first 10 engineers (this doesn't count refreshers or other follow on grants). The average value at $50/share (yesterday's opening price) is just over $10M. The group varied in experience from just out of school to a few years working when they joined. I feel we were a good deal more generous than the median company: https://amplitude.com/blog/employee-equity-is-broken-heres-our-fix https://amplitude.com/blog/employee-equity-is-broken-heres-o... Someone on the FAANG side can figure out what the apples to apples comparison is. There's no question that in 90% of cases FAANG compensation is way better. If you are optimizing for how to make the most money over a few years you should absolutely choose FAANG. The real benefit of startups comes from other forms. If you asked that group of 10 I think they'd respond that being an early engineer at a start that IPOs gives you way more career capital and long term earning potential than FAANG.

caseyf7 5y ago
While joining a FAANG in the past was most likely the richest path, that may not be true today.
- gkop 5y ago
  Extended exercise options tilt my scales back to start ups.
- pm90 5y ago
  Doesn’t this depend on yoe? Startups could certainly match faangs for early career engineers but the more experienced folks are likely going to get unmatchable offers. Not everyone cares about the money though. After a certain point you get tired of politics and process and just want to build things. A successful startup culture seems like a win win.
- Hermitian909 5y ago
  For the actual top tier of compensation in tech (out of FAANG only Netflix is a part of that band) I think it still is. This year I've seen multiple engineers get ~500k offers for 4-6 yoe with no particular specialty, just general competence. High end of Staff appears bumping into the million dollar range once bonuses come around at some of these places.
  - moneywoes 5y ago
    Are these only in SF? What sort of companies
- swyx 5y ago
  Here's the classic post on the FAANG vs startups debate, for the uninitiated https://startupljackson.com/post/135800367395/how-to-get-rich-in-tech-guaranteed https://startupljackson.com/post/135800367395/how-to-get-ric... >If you want to get rich, your best bet on a risk-adjusted basis is to join a profitable and growing public company. Google for short. Make $200-500k all-in a year, work hard and move up a level every 3-5 years, sell options as they vest (in case you joined Enron), and retire at 60, rich. This plan works every time.
oakfr 5y ago
While I am happy for your company and for your first 10 employees (congrats, really), I am not sure that looking at their return teaches us much. Joining a fresh startup as employee #10 (or less) is somewhat of a gamble (even at YC). The following data would put things in perspective: 1. How do the average first 10 employees of a YC startup do? 2. How did the following cohorts in your company do? I am not trying to be negative here, but trying to put things in perspective. Congrats again!
- sskates 5y ago
  To be clear, it's the first 10 engineers, a very different group from the first 10 employees. No question that the economics of FAANG is way better than an average YC company. That's an easy one. I don't have the data, but the economic outcome is easily 2-5x, maybe more. Following cohorts of engineers are a fraction of what I outlined so the economics are different. It's too hard for me to do the work to get an exact calculation, but probably the next cohort of 10 engineers is something like 1/2 that, and then subsequent ones are down to 1/3 or 1/4. They're joining years later and so taking on much less risk at that point.
  - oakfr 5y ago
    Thank you for your reply. Makes sense. By the way, thank you for running this AMA and answering all the questions with so much clarity and transparency. What an example!
- farmerstan 5y ago
  To put things in perspective, in 1999 I joined a company that ipo’ed in 1997. The company’s first admin assistant made enough from the ipo to buy a vineyard in Napa valley. I was employee 40 at a YC company and after exit I made 5 figures whereas the founders made high 8 figures. YC definitely teaches the founders to keep a higher percentage of equity for themselves and distribute less to employees.
- saranormous 5y ago
  startups aren’t a game of averages. the averages are definitely worse than the FAANGs. choosing well (and getting lucky) are paths to “definitely better.” It also depends on what your professional goals are (growth, leadership, impact, fun, next opportunities) assuming they are not only monetary.