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> But engineer compensation has been larger pushed up by the FAANG companies which are highly profitable. If you go back and re-read this is exactly my point.

> But engineer compensation has been larger pushed up by the FAANG companies which are highly profitable. If you go back and re-read this is exactly my point. Google, Facebook, Amazon have structural advantages that make them more profitable than the majority of useful services ever could be, much of which is based on the unregulated and morally questionable use of massive amounts of user behavior data. This sucks the oxygen out of the room for startups who could provide an honest product for an honest price, but might not be able to get the economies of scale to pay $500k per senior engineer. In other skilled labor professions $100k-$200k is considered well compensated, and that creates a larger sweet spot which enabled more diversity of services. With software + internet the potential for near-zero-marginal-cost global scaling push everything towards a winner-take all mentality, and so small shops providing diverse and higher quality niche products get squeezed for talent. Again, I have benefitted personally from this dynamic, but I'm also old enough to be saddened at the unfulfilled promise of lower software build and distribution costs that we envisioned at the blossoming of the web and the release of Microsoft's iron grip on software profitability in the late 90s.

closeparen 4y ago
The median annual wage for software developers in the US is $120k and the 90th percentile is $168k. https://www.bls.gov/oes/current/oes151252.htm https://www.bls.gov/oes/current/oes151252.htm
- justahuman74 4y ago
  That surprising to me (perhaps due to bay area bubble), how do I hire people at that rate? Is it entirely about the location? Are the skill set expectations different?
  - nostrademons 4y ago
    You can do a lot better than that internationally. When I was in the startup founder world my peers were paying their developers about $30K/year, and getting decent (but not great) talent in Thailand, Vietnam, India, Eastern Europe, etc. The downsides are that all your employees are a.) remote b.) not great English speakers and c.) generally mediocre developers, and this all has negative impact on developer velocity and the caliber of features you can ship. If you're chasing a niche this is often a great trade-off, because it can make your business profitable even at revenue levels that can't support a big-company product. If you're chasing the next big thing this is usually a stupid idea, because somebody's going to raise $50M, hire top-quality ex-FANGs at half a million each, put them in a room together, and win the market before you can ship your first couple features.
  - closeparen 4y ago
    I think you will find a lot of these people doing embedded, desktop, or enterprise intranet stuff rather than slick web/mobile products or massively scalable backend APIs. Using dated and uncool stacks. Dated and uncool practices. Windows centric. Hiring more about years of experience with particular framework versions than LeetCode or system design interviews. Two perrenial favorite pieces on this website include Dark Matter Developers [0] and We Only Hire The Trendiest [1]. [0] https://www.hanselman.com/blog/dark-matter-developers-the-unseen-99 https://www.hanselman.com/blog/dark-matter-developers-the-un... [1] https://danluu.com/programmer-moneyball/ https://danluu.com/programmer-moneyball/
- ithkuil 4y ago
  GP said "senior", which can be interpreted either literally (as in the title "senior software engineer") or more broadly as software engineers with elevated seniority. Some data for "senior software engineer" in the US indicate: "The middle 57% of Senior Software Engineers makes between $117,200 and $203,000, with the top 86% making $375,000" https://www.comparably.com/salaries/salaries-for-senior-software-engineer https://www.comparably.com/salaries/salaries-for-senior-soft... "The middle 57% of Staff Software Engineers makes between $107,389 and $262,186, with the top 86% making $572,331." Since levels/titles are truly comparable across companies (nor across time), it's very hard to get a true sense of what those numbers even mean. But I think it's fair to say that you shouldn't expect a median nation-wide "software engineer" salary to match the expectations of the "right person you really want to hire for your position but you can't find".
mike_hearn 4y ago
Amazon was break even for a long time on the retail segment, and nobody argues that AWS is profitable due to "unregulated and morally questionable use of massive amounts of user behavior data". Amazon's profits come from the fact that so many companies are willing to pay drastically more for AWS than for standard colocation services, even if they're mostly just using compute, disk, network and databases. "the unfulfilled promise of lower software build and distribution costs that we envisioned at the blossoming of the web and the release of Microsoft's iron grip on software profitability in the late 90s." Is it unfulfilled? Many of us don't use Windows these days, which is a nice improvement for those who choose other platforms, and the web/cloud has driven build and distribution costs much lower. When was the last time a software startup had to sink money into the logistics of CD burning and boxed retail deals?

closeparen 4y ago

The median annual wage for software developers in the US is $120k and the 90th percentile is $168k. https://www.bls.gov/oes/current/oes151252.htm https://www.bls.gov/oes/current/oes151252.htm

justahuman74 4y ago
That surprising to me (perhaps due to bay area bubble), how do I hire people at that rate? Is it entirely about the location? Are the skill set expectations different?
- nostrademons 4y ago
  You can do a lot better than that internationally. When I was in the startup founder world my peers were paying their developers about $30K/year, and getting decent (but not great) talent in Thailand, Vietnam, India, Eastern Europe, etc. The downsides are that all your employees are a.) remote b.) not great English speakers and c.) generally mediocre developers, and this all has negative impact on developer velocity and the caliber of features you can ship. If you're chasing a niche this is often a great trade-off, because it can make your business profitable even at revenue levels that can't support a big-company product. If you're chasing the next big thing this is usually a stupid idea, because somebody's going to raise $50M, hire top-quality ex-FANGs at half a million each, put them in a room together, and win the market before you can ship your first couple features.
- closeparen 4y ago
  I think you will find a lot of these people doing embedded, desktop, or enterprise intranet stuff rather than slick web/mobile products or massively scalable backend APIs. Using dated and uncool stacks. Dated and uncool practices. Windows centric. Hiring more about years of experience with particular framework versions than LeetCode or system design interviews. Two perrenial favorite pieces on this website include Dark Matter Developers [0] and We Only Hire The Trendiest [1]. [0] https://www.hanselman.com/blog/dark-matter-developers-the-unseen-99 https://www.hanselman.com/blog/dark-matter-developers-the-un... [1] https://danluu.com/programmer-moneyball/ https://danluu.com/programmer-moneyball/
ithkuil 4y ago
GP said "senior", which can be interpreted either literally (as in the title "senior software engineer") or more broadly as software engineers with elevated seniority. Some data for "senior software engineer" in the US indicate: "The middle 57% of Senior Software Engineers makes between $117,200 and $203,000, with the top 86% making $375,000" https://www.comparably.com/salaries/salaries-for-senior-software-engineer https://www.comparably.com/salaries/salaries-for-senior-soft... "The middle 57% of Staff Software Engineers makes between $107,389 and $262,186, with the top 86% making $572,331." Since levels/titles are truly comparable across companies (nor across time), it's very hard to get a true sense of what those numbers even mean. But I think it's fair to say that you shouldn't expect a median nation-wide "software engineer" salary to match the expectations of the "right person you really want to hire for your position but you can't find".

mike_hearn 4y ago

Amazon was break even for a long time on the retail segment, and nobody argues that AWS is profitable due to "unregulated and morally questionable use of massive amounts of user behavior data". Amazon's profits come from the fact that so many companies are willing to pay drastically more for AWS than for standard colocation services, even if they're mostly just using compute, disk, network and databases. "the unfulfilled promise of lower software build and distribution costs that we envisioned at the blossoming of the web and the release of Microsoft's iron grip on software profitability in the late 90s." Is it unfulfilled? Many of us don't use Windows these days, which is a nice improvement for those who choose other platforms, and the web/cloud has driven build and distribution costs much lower. When was the last time a software startup had to sink money into the logistics of CD burning and boxed retail deals?