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> And it's on the whole asphyxiating the industry. My understanding was that asphyxiating the industry was always the plan. For those who worked in industry p

> And it's on the whole asphyxiating the industry. My understanding was that asphyxiating the industry was always the plan. For those who worked in industry pre-2008, one of the major drivers that allowed new startups to be so disruptive was that startups could very often compete with the then major tech companies on compensation. If there was a difference in pay, it was usually minor and could easily be made up for by better quality of life and a nice promotion in title. Once Google and Facebook started growing it's clear they realized that every talented engineer on the market is a potential threat. As time has moved on the gap in pay between startup and FAANG and now startup and any company offering RSUs is just too large for startups to compete for talent. I generally prefer startups to large companies, but can't find a single startup offering comp even remotely close to what I have in my current role. Unless I started to absolutely hate my current position, and found a startup that had essentially my dream role, there's no way I would seriously consider a switch. My suspicion is that as funding for startups starts to dry up as money becomes more expensive, we'll see large, high paying tech companies start to let go of more staff and start driving comp down. When the market cools Google and similar companies asphyxiation strategy will have been completed. Startups starved of talent and finally starved of dollars will be no threat, that means they can safely reduce labor costs while maintaining market dominance.

cmrdporcupine 4y ago
Yes, I mean, I came to Google through an acquisition (of an adtech company) and it was pretty clear to me that the goal of the whole process was a) make your company go away and stop your customers from using you instead of us and b) get as much of your talent out of the job market as possible. They totally didn't care about our product or the productivity of the employees they brought in. They let us sit and twiddle our thumbs and "rest and vest" for at least a year, after making a big show for the DOJ about how this aquisition wasn't an anti-competitive move ([1]) And I hung around there moving protobufs around and fixing the odd bug for 10 years but getting paid stupid money to not go and do anything for anybody else or keep on top of industry trends etc. (Not claiming I'm some shit hot engineer, just speaking for my personal situation) I don't think most people who are 'organically' hired into Google see it this way because for them it's a thing they seek out, a life goal they pursued. For me it was always in the back of my mind. Which is one of the reasons I eventually had to leave despite it putting my family in a more precarious financial situation. It wasn't a place I was ever going to find meaning in my work or feel like I fit in. Re: startups and compensation one major thing that has changed since 20 years ago is that it is simply not possible to become wealthy (like "I can afford going to retire wealthy" or "I can now afford to seed my own startup wealthy") out of the equity package that a startup will offer unless you're the cofounders or a founding employee. The packages they'll offer will be a fraction of a % of equity, which if you're really really lucky will turn into a few hundred thousand in an exit after busting your ass for a few years. From a strictly financial POV there's no reason to choose working at a startup over a FAANG. Most will simply not offer anything to make it worth the risk. You should only choose to do it for lifestyle or enjoyment reasons, really. (That said, I'm working for a startup again right now.) [1] https://www.washingtonpost.com/business/economy/source-justice-will-approve-googles-admeld-acquisition/2011/12/02/gIQAH8cyKO_story.html https://www.washingtonpost.com/business/economy/source-justi...
- itstomkent 4y ago
  It's kind of insane that on the one hand we have folks playing lip service to "anyone can learn to code" and on the other, decent developers being so rare that to hire one you need to offer compensation equal to winning a minor lottery for just 2-4 years worth of work. I wonder how much more software would get written if it didn't cost $250-500K/yr for a single developer.
  - kragen 4y ago
    Anyone can learn to read and write, but Stephen King and J.K. Rowling still make bank.
  - BlargMcLarg 4y ago
    You're projecting a very specific SV bubble. More than enough decent developers exist outside of it, willing to work for a fraction. It's the fat profits and the big boys' eagerness to poach talent that got us this far, which subsequently inflated the QoL in these tech hubs, in turn creating the current standard.
    - jshen 4y ago
      There are not more than enough decent developers.
    - Firmwarrior 4y ago
      Yeah, on the other hand, I'm pretty sure that I or most silicon valley coders making 250k+ can singlehandedly outperform a dozen "decent developers" by pretty much any metric you can pick. I'm not saying we're smarter or innately better, but coding is a tradeskill and the masters of the trade are almost all here. I'm interested to see how much this changes over the next decade, though, since a lot of people have scattered across the globe thanks to remote work finally catching on.
      - est31 4y ago
        I seriously doubt that. Developing things is the same thing all around the globe. Just because you have worked five years building react apps in silicon valley (and from what I can tell, 250k total comp is reachable at that experience level) does not make you more skilled at building react apps than someone who also built react apps, say, in Barcelona. But you probably make 5 times as much, if not more. That's not because you are more skilled but because your company makes way more money, or is expected to make more money and thus gets funding from rich people. The company makes way more money because of a lot of reasons, e.g. like access to the enormous US single market which is way bigger and more homogenic than the EU single market, or any other market out there except for maybe the chinese one, as well as historic reasons that turned SV into the western world's digital innovation center, and thus turned a lot of funding attention into SV.
ghaff 4y ago
It's not just startups. If someone wants to and can get an offer from one of the richer big tech companies (FAANG isn't really the right acronym as Microsoft at least is also in the mix) and is just going to go with the best offer, just about no one is going to be able to compete--at least in the US. I've heard plenty of stories of companies not even trying to match offers.
- cmrdporcupine 4y ago
  Yes in my job hunt over the last 6 months basically the first thing I have had to say to potential employers is: "No, I'm not expecting to match what I was getting at Google." Pretty sure that a lot of places I simply didn't hear back from was because they didn't expect to be able to even come close on comp. And I've had other Xoogler friends who applied for places, got promising initial results, and then insanely low offers (like 1/3rd or less of Google comp). I'll do 2/3rds or even 1/2 for the right job, but not 1/4 or 1/3rd. Now, part of that is the domestic market (Ontario Canada) has been underpaying SWEs for years and getting away with it, since most of the good talent flees south after graduation anyways. But part of it is that FAANG compensation is just far more than anybody else could ever afford.
  - TulliusCicero 4y ago
    > But part of it is that FAANG compensation is just far more than anybody else could ever afford. I don't think this is true. I've had friends getting comparable comp offers at HBO and NatGeo, for example. And of course it's been known for some time that successful startups like Uber, Lyft, Airbnb, Dropbox, etc. were doing comparable offers. Once a company decides to really compete digitally, and that they can leverage economies of scale properly there, it suddenly makes sense to compete for the same class of engineer that can work at Google, Meta, etc.
- sbierwagen 4y ago
  >FAANG isn't really the right acronym as Microsoft at least is also in the mix Microsoft, Apple, Google, Amazon: MAGA
shreyshnaccount 4y ago
but this ends the dominance cycle, making it possible for startups to hire talented devs again, even if for lesser comp. doesn't it?
- rnk 4y ago
  Until/unless faang salaries & hiring come back. This doesn't mean all fangs aren't paying. We just don't know.
spamizbad 4y ago
If you're only talking about salaries, I feel like even pre-2008 most big software companies always paid better than startups. It was stuff like RSUs and cash bonuses; which came AFTER the IPOs, that REALLY tipped the scales and made it difficult for startups to compete. Startups themselves never responded with more generous stock options; in fact, compared to the 90s, some became stingier.
- cmrdporcupine 4y ago
  Yes, as I said elsewhere the equity portion in startups is decidedly non-competitive for anybody but founders. "tldr options" @ https://equity.ltse.com/calculators/tldr-stock-options https://equity.ltse.com/calculators/tldr-stock-options is an eye-opener to see just how meh the packages offered are.
  - ilikehurdles 4y ago
    I think a lot of candidates (speaking for myself here) just don’t care too much to negotiate equity at privately held companies. Given the highly unlikely probability that a company I work for will have a successful exit at all, let alone while I am either employed or hold exercised stock options, it’s all Monopoly money to me. Benefits, salary, and bonuses is the only compensation I negotiate and judge a company on. All the other stuff is just lottery tickets. Meaning, startup or no, I’m expecting to be paid what I ask. levels.fyi shows that my pay+bonus at my startup for my role matches FAANG compensation so I’m happy with it.
    - cmrdporcupine 4y ago
      Yeah, I mean, this is my take, too. I have worked for places that offered equity a few times. It did turn into something once (Google bought my employer). But the actual equity conversion was minor in quantity compared to the rest of my Google TC. There's no way out of "serfdom" other than starting your own company. I don't think this is healthy. The incentives are not there for engineers in startups to really put themselves out there.
ideamotor 4y ago
That sounds correct since this is exactly their product business model.
ROTMetro 4y ago
Way back in the day my Borland friends told me about Microsoft doing this to Borland. Supposedly parked a limo across the street from the building at lunch and hired people whether Microsoft had work for them or not.
tytso 4y ago
I work at Google so my perspective is to be biased, but that's not what I see. I work on infrastructure, and so a few years back, when I proposed a major project, I had to demonstrate how it would save *many* times the fully loaded cost of the engineers on the team, by reducing the Storage TCO for all of Google (for example). It was not enough for the project to "break even" --- the benefits had to do more than just exceed the "nominal" SWE cost. It had to be multiple times the cost of the SWE's, to account for the opportunity cost of those SWE's --- SWE's are a constrained resource, which is why a project needs to save $$$ (or increase profits) by many multiples the fully loaded SWE cost. (That project has since been completed, successfully, and I got a promotion to Sr Staff Engineer out of it.) The reason why SWE's are a constrained resource is becaused finding good SWE's is non-trivial. As a TL, I don't want to waste my precious approved headcount on people who just want to rest and vest, or people who believe in the crazy talk of only needing to work 30 minutes each day. I'm trying to find highly motivated, smart, and talented SWE's who can also be team players. And if they need to have domain expertise (say, be proficient kernel engineers), it's super-duper difficult. So I don't see any indication of people getting hired just to starve statups of talented engineers. We need every single talented engineer we can get for the projects that we want to accomplish. And in the time when we may need to slow down our growth, it may mean that we will need to slow, or shut down some projects. That may suck, especially if it's a project that we had invested a lot of passion into. But it's certainly no reason to panic. Slowing down growth is not the same as layoffs, and there is no shortage of work for us to do.
- deleted 4y ago
  [deleted]
- saagarjha 4y ago
  > As a TL, I don't want to waste my precious approved headcount on people who just want to rest and vest, or people who believe in the crazy talk of only needing to work 30 minutes each day. And yet these people exist and get hired, even at Google. Perhaps not on your team, but they’re definitely there.
  - sbierwagen 4y ago
coding123 4y ago
That's the plan for all industries and competition. It's a little weird to see it for employment pricing, but that makes sense too. Years ago my town had a bunch of lumber yards where you can get market rate lumber. Home Depot moved in and provided way lower than market rate lumber until all of the independent lumber yards went out of business in the area. Then they raised the price above market rate and that's that. Everyone hates them for that but we all shop there.
- Applejinx 4y ago
  Absolutely. I've come to believe that this is the nature of money i.e. an abstraction for power. Power is meaningless unless you're hurting somebody: otherwise, what even is the point? Money is abstracted power. For this reason, ANYWHERE you are seeing accumulations of vast amounts of money, somebody or something is being hurt. In this case it appears to be that the whole 'make 500k as a dev' thing, which has always seemed weird to me, turns out to be 'FAANG is trying to control all access to devs worth having, after which they can starve the market and do whatever they want'. It comes down to power, always. You'll note that the open source devs upon which their internet relies, upon which so much rests, are NOT making 500k as devs. If you're doing something worth doing and it's not harming but helping, you are not getting paid. If you're getting paid in a big way, you're doing something that enables harming somebody, whether it's people or a more abstracted thing like a market. The wealthy FAANG folks are part of a situation where an employment market is being harmed, and that's why the money is there for them. It's a weapon. Otherwise it would not be there.
  - rnk 4y ago
    I don't think it's that simple. Google needs devs, it's a competitive market. Controlling or limiting the dev supply is definitely a benefit for big tech, but it's a separate benefit. I think competitive pressure on salaries is the top forcing function.
    - Firmwarrior 4y ago
      Google & friends have a business where they can turn a $500k engineer into $2M+ in revenue I think that's really the bottom line here. They aren't overpaying to starve out the industry, although I'm sure they're perfectly happy to benefit from that indirectly
chrisseaton 4y ago
If that’s the case why have they always had such astronomically high hiring bars? I’d they wanted to deny anyone else talented engineers why would they reject so many?
ljw1001 4y ago
> Once Google and Facebook started growing it's clear they realized that every talented engineer on the market is a potential threat. You could count on one hand the number of startups that are serious threats to either. And when one arises, they can pretty much just buy the company, as Facebook has done repeatedly. They hardly need to be concerned with individual engineers, and even if they were, the idea that they could hire them all is pretty far-fetched
- doteseth 4y ago
  You don't have to hire all of them, You just have to raise the market rate and raise everyone's expectations. That's all. The more money you got, the more you can manipulate the market. Its the inefficiencies of the first price auction.
subsubzero 4y ago
This is a very prescient idea, if so it would be a way to control the job market in a way that was not blatantly illegal - ala Steve Jobs and Google and a few others refusing to hire from each other to keep wages down. One issue I have with this is that google in particular pays alot less than it used to compared to industry(fangish companies), a friend of mine left to go there and his pay has somewhat stagnated where mine has gone up, up, up. An alternate explanation is that managers in tech crave headcount, they want to feel important and to have their projects and teams very well staffed. During the past year they may have gotten excessive with hiring and now you see the end results which are hiring freezes, rescinded offers and small layoffs across the industry.
WWLink 4y ago
So the argument I see proposed again, again, and again here on HN, is that companies are paying programmers too much money and they should all agree to offer <$100k or something. Are you guys all bitter business owners?
dls2016 4y ago
> Once Google and Facebook started growing it's clear they realized that every talented engineer on the market is a potential threat. https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L... Remember that Google and Apple were caught trying to control the employment marketplace. Keep 'em happy, but not too happy!
nobleach 4y ago
I _might_ be able to find comparable salary, but I sure won't find the other benefits of working for my employer. The 401k match, the on site clinic with a doctor that I really like, etc... those things do add up.
TimPC 4y ago
Start-ups don’t have to pay Google or FB size comp to attract people who like to work in start-ups but my feeling is that if they want to compete for the senior end of the talent pool they are going to have a hard time. Most start-ups are offering what I call below-mortgage compensation. Simply put to not be house poor your mortgage is supposed to be 30% of your pre-tax income. You can calculate what a typical mortgage on a property looks like and extrapolate the payment but $90,000 USD is pretty reasonable in the Bay Area. That takes $300,000 USD/year to not be house poor. As long as start-ups continue to treat unsellable equity as sellable RSUs and offer similar base to google they get almost no one who needs to pay a mortgage. And I’m willing to bet a fair number of start-ups have failed from being too junior in engineering.
- cmrdporcupine 4y ago
  I can't help but feel that this is by design by VCs. Rip through younger talent and see what shakes out. You can polish the turd later. You're not looking for beautiful gemstones in most startups. You're just mostly throwing things against the wall to see what sticks, and it's later generations of devs who come in and deal with the tech debt. Jokes on them, though, my mortgage is almost paid off, so I can work for less than I was. I'm the old guy working with all the young people at the startup. I can almost feel their eyes rolling into the back of their heads when I start going on about "back in the 90s"...
sangnoir 4y ago
> As time has moved on the gap in pay between startup and FAANG and now startup and any company offering RSUs is just too large for startups to compete for talent. My reading is that founders and VCs got greedier (or they were always this greedy, but the reality distortion field has since failed). Back in the day, working at a startup appeared to offer a plausible path to life-altering wealth to employees with stock options - these days, the cat is out of the bag: dilution by endless funding rounds, no route to IPO, preferred stock fuckery, and a countless other ways of being screwed over by information and/or power asymmetry.

cmrdporcupine 4y ago

Yes, I mean, I came to Google through an acquisition (of an adtech company) and it was pretty clear to me that the goal of the whole process was a) make your company go away and stop your customers from using you instead of us and b) get as much of your talent out of the job market as possible. They totally didn't care about our product or the productivity of the employees they brought in. They let us sit and twiddle our thumbs and "rest and vest" for at least a year, after making a big show for the DOJ about how this aquisition wasn't an anti-competitive move ([1]) And I hung around there moving protobufs around and fixing the odd bug for 10 years but getting paid stupid money to not go and do anything for anybody else or keep on top of industry trends etc. (Not claiming I'm some shit hot engineer, just speaking for my personal situation) I don't think most people who are 'organically' hired into Google see it this way because for them it's a thing they seek out, a life goal they pursued. For me it was always in the back of my mind. Which is one of the reasons I eventually had to leave despite it putting my family in a more precarious financial situation. It wasn't a place I was ever going to find meaning in my work or feel like I fit in. Re: startups and compensation one major thing that has changed since 20 years ago is that it is simply not possible to become wealthy (like "I can afford going to retire wealthy" or "I can now afford to seed my own startup wealthy") out of the equity package that a startup will offer unless you're the cofounders or a founding employee. The packages they'll offer will be a fraction of a % of equity, which if you're really really lucky will turn into a few hundred thousand in an exit after busting your ass for a few years. From a strictly financial POV there's no reason to choose working at a startup over a FAANG. Most will simply not offer anything to make it worth the risk. You should only choose to do it for lifestyle or enjoyment reasons, really. (That said, I'm working for a startup again right now.) [1] https://www.washingtonpost.com/business/economy/source-justice-will-approve-googles-admeld-acquisition/2011/12/02/gIQAH8cyKO_story.html https://www.washingtonpost.com/business/economy/source-justi...

itstomkent 4y ago
It's kind of insane that on the one hand we have folks playing lip service to "anyone can learn to code" and on the other, decent developers being so rare that to hire one you need to offer compensation equal to winning a minor lottery for just 2-4 years worth of work. I wonder how much more software would get written if it didn't cost $250-500K/yr for a single developer.
- kragen 4y ago
  Anyone can learn to read and write, but Stephen King and J.K. Rowling still make bank.
- BlargMcLarg 4y ago
  You're projecting a very specific SV bubble. More than enough decent developers exist outside of it, willing to work for a fraction. It's the fat profits and the big boys' eagerness to poach talent that got us this far, which subsequently inflated the QoL in these tech hubs, in turn creating the current standard.
  - jshen 4y ago
    There are not more than enough decent developers.
  - Firmwarrior 4y ago
    Yeah, on the other hand, I'm pretty sure that I or most silicon valley coders making 250k+ can singlehandedly outperform a dozen "decent developers" by pretty much any metric you can pick. I'm not saying we're smarter or innately better, but coding is a tradeskill and the masters of the trade are almost all here. I'm interested to see how much this changes over the next decade, though, since a lot of people have scattered across the globe thanks to remote work finally catching on.
    - est31 4y ago
      I seriously doubt that. Developing things is the same thing all around the globe. Just because you have worked five years building react apps in silicon valley (and from what I can tell, 250k total comp is reachable at that experience level) does not make you more skilled at building react apps than someone who also built react apps, say, in Barcelona. But you probably make 5 times as much, if not more. That's not because you are more skilled but because your company makes way more money, or is expected to make more money and thus gets funding from rich people. The company makes way more money because of a lot of reasons, e.g. like access to the enormous US single market which is way bigger and more homogenic than the EU single market, or any other market out there except for maybe the chinese one, as well as historic reasons that turned SV into the western world's digital innovation center, and thus turned a lot of funding attention into SV.

ghaff 4y ago

It's not just startups. If someone wants to and can get an offer from one of the richer big tech companies (FAANG isn't really the right acronym as Microsoft at least is also in the mix) and is just going to go with the best offer, just about no one is going to be able to compete--at least in the US. I've heard plenty of stories of companies not even trying to match offers.

cmrdporcupine 4y ago
Yes in my job hunt over the last 6 months basically the first thing I have had to say to potential employers is: "No, I'm not expecting to match what I was getting at Google." Pretty sure that a lot of places I simply didn't hear back from was because they didn't expect to be able to even come close on comp. And I've had other Xoogler friends who applied for places, got promising initial results, and then insanely low offers (like 1/3rd or less of Google comp). I'll do 2/3rds or even 1/2 for the right job, but not 1/4 or 1/3rd. Now, part of that is the domestic market (Ontario Canada) has been underpaying SWEs for years and getting away with it, since most of the good talent flees south after graduation anyways. But part of it is that FAANG compensation is just far more than anybody else could ever afford.
- TulliusCicero 4y ago
  > But part of it is that FAANG compensation is just far more than anybody else could ever afford. I don't think this is true. I've had friends getting comparable comp offers at HBO and NatGeo, for example. And of course it's been known for some time that successful startups like Uber, Lyft, Airbnb, Dropbox, etc. were doing comparable offers. Once a company decides to really compete digitally, and that they can leverage economies of scale properly there, it suddenly makes sense to compete for the same class of engineer that can work at Google, Meta, etc.
sbierwagen 4y ago
>FAANG isn't really the right acronym as Microsoft at least is also in the mix Microsoft, Apple, Google, Amazon: MAGA

shreyshnaccount 4y ago

but this ends the dominance cycle, making it possible for startups to hire talented devs again, even if for lesser comp. doesn't it?

rnk 4y ago
Until/unless faang salaries & hiring come back. This doesn't mean all fangs aren't paying. We just don't know.

spamizbad 4y ago

If you're only talking about salaries, I feel like even pre-2008 most big software companies always paid better than startups. It was stuff like RSUs and cash bonuses; which came AFTER the IPOs, that REALLY tipped the scales and made it difficult for startups to compete. Startups themselves never responded with more generous stock options; in fact, compared to the 90s, some became stingier.

cmrdporcupine 4y ago
Yes, as I said elsewhere the equity portion in startups is decidedly non-competitive for anybody but founders. "tldr options" @ https://equity.ltse.com/calculators/tldr-stock-options https://equity.ltse.com/calculators/tldr-stock-options is an eye-opener to see just how meh the packages offered are.
- ilikehurdles 4y ago
  I think a lot of candidates (speaking for myself here) just don’t care too much to negotiate equity at privately held companies. Given the highly unlikely probability that a company I work for will have a successful exit at all, let alone while I am either employed or hold exercised stock options, it’s all Monopoly money to me. Benefits, salary, and bonuses is the only compensation I negotiate and judge a company on. All the other stuff is just lottery tickets. Meaning, startup or no, I’m expecting to be paid what I ask. levels.fyi shows that my pay+bonus at my startup for my role matches FAANG compensation so I’m happy with it.
  - cmrdporcupine 4y ago
    Yeah, I mean, this is my take, too. I have worked for places that offered equity a few times. It did turn into something once (Google bought my employer). But the actual equity conversion was minor in quantity compared to the rest of my Google TC. There's no way out of "serfdom" other than starting your own company. I don't think this is healthy. The incentives are not there for engineers in startups to really put themselves out there.

ideamotor 4y ago

That sounds correct since this is exactly their product business model.

ROTMetro 4y ago

Way back in the day my Borland friends told me about Microsoft doing this to Borland. Supposedly parked a limo across the street from the building at lunch and hired people whether Microsoft had work for them or not.

tytso 4y ago

I work at Google so my perspective is to be biased, but that's not what I see. I work on infrastructure, and so a few years back, when I proposed a major project, I had to demonstrate how it would save *many* times the fully loaded cost of the engineers on the team, by reducing the Storage TCO for all of Google (for example). It was not enough for the project to "break even" --- the benefits had to do more than just exceed the "nominal" SWE cost. It had to be multiple times the cost of the SWE's, to account for the opportunity cost of those SWE's --- SWE's are a constrained resource, which is why a project needs to save $$$ (or increase profits) by many multiples the fully loaded SWE cost. (That project has since been completed, successfully, and I got a promotion to Sr Staff Engineer out of it.) The reason why SWE's are a constrained resource is becaused finding good SWE's is non-trivial. As a TL, I don't want to waste my precious approved headcount on people who just want to rest and vest, or people who believe in the crazy talk of only needing to work 30 minutes each day. I'm trying to find highly motivated, smart, and talented SWE's who can also be team players. And if they need to have domain expertise (say, be proficient kernel engineers), it's super-duper difficult. So I don't see any indication of people getting hired just to starve statups of talented engineers. We need every single talented engineer we can get for the projects that we want to accomplish. And in the time when we may need to slow down our growth, it may mean that we will need to slow, or shut down some projects. That may suck, especially if it's a project that we had invested a lot of passion into. But it's certainly no reason to panic. Slowing down growth is not the same as layoffs, and there is no shortage of work for us to do.

deleted 4y ago
[deleted]
saagarjha 4y ago
> As a TL, I don't want to waste my precious approved headcount on people who just want to rest and vest, or people who believe in the crazy talk of only needing to work 30 minutes each day. And yet these people exist and get hired, even at Google. Perhaps not on your team, but they’re definitely there.
- sbierwagen 4y ago

coding123 4y ago

That's the plan for all industries and competition. It's a little weird to see it for employment pricing, but that makes sense too. Years ago my town had a bunch of lumber yards where you can get market rate lumber. Home Depot moved in and provided way lower than market rate lumber until all of the independent lumber yards went out of business in the area. Then they raised the price above market rate and that's that. Everyone hates them for that but we all shop there.

Applejinx 4y ago
Absolutely. I've come to believe that this is the nature of money i.e. an abstraction for power. Power is meaningless unless you're hurting somebody: otherwise, what even is the point? Money is abstracted power. For this reason, ANYWHERE you are seeing accumulations of vast amounts of money, somebody or something is being hurt. In this case it appears to be that the whole 'make 500k as a dev' thing, which has always seemed weird to me, turns out to be 'FAANG is trying to control all access to devs worth having, after which they can starve the market and do whatever they want'. It comes down to power, always. You'll note that the open source devs upon which their internet relies, upon which so much rests, are NOT making 500k as devs. If you're doing something worth doing and it's not harming but helping, you are not getting paid. If you're getting paid in a big way, you're doing something that enables harming somebody, whether it's people or a more abstracted thing like a market. The wealthy FAANG folks are part of a situation where an employment market is being harmed, and that's why the money is there for them. It's a weapon. Otherwise it would not be there.
- rnk 4y ago
  I don't think it's that simple. Google needs devs, it's a competitive market. Controlling or limiting the dev supply is definitely a benefit for big tech, but it's a separate benefit. I think competitive pressure on salaries is the top forcing function.
  - Firmwarrior 4y ago
    Google & friends have a business where they can turn a $500k engineer into $2M+ in revenue I think that's really the bottom line here. They aren't overpaying to starve out the industry, although I'm sure they're perfectly happy to benefit from that indirectly

chrisseaton 4y ago

If that’s the case why have they always had such astronomically high hiring bars? I’d they wanted to deny anyone else talented engineers why would they reject so many?

ljw1001 4y ago

> Once Google and Facebook started growing it's clear they realized that every talented engineer on the market is a potential threat. You could count on one hand the number of startups that are serious threats to either. And when one arises, they can pretty much just buy the company, as Facebook has done repeatedly. They hardly need to be concerned with individual engineers, and even if they were, the idea that they could hire them all is pretty far-fetched

doteseth 4y ago
You don't have to hire all of them, You just have to raise the market rate and raise everyone's expectations. That's all. The more money you got, the more you can manipulate the market. Its the inefficiencies of the first price auction.

subsubzero 4y ago

This is a very prescient idea, if so it would be a way to control the job market in a way that was not blatantly illegal - ala Steve Jobs and Google and a few others refusing to hire from each other to keep wages down. One issue I have with this is that google in particular pays alot less than it used to compared to industry(fangish companies), a friend of mine left to go there and his pay has somewhat stagnated where mine has gone up, up, up. An alternate explanation is that managers in tech crave headcount, they want to feel important and to have their projects and teams very well staffed. During the past year they may have gotten excessive with hiring and now you see the end results which are hiring freezes, rescinded offers and small layoffs across the industry.

WWLink 4y ago

So the argument I see proposed again, again, and again here on HN, is that companies are paying programmers too much money and they should all agree to offer <$100k or something. Are you guys all bitter business owners?

dls2016 4y ago

> Once Google and Facebook started growing it's clear they realized that every talented engineer on the market is a potential threat. https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L... Remember that Google and Apple were caught trying to control the employment marketplace. Keep 'em happy, but not too happy!

nobleach 4y ago

I _might_ be able to find comparable salary, but I sure won't find the other benefits of working for my employer. The 401k match, the on site clinic with a doctor that I really like, etc... those things do add up.

TimPC 4y ago

Start-ups don’t have to pay Google or FB size comp to attract people who like to work in start-ups but my feeling is that if they want to compete for the senior end of the talent pool they are going to have a hard time. Most start-ups are offering what I call below-mortgage compensation. Simply put to not be house poor your mortgage is supposed to be 30% of your pre-tax income. You can calculate what a typical mortgage on a property looks like and extrapolate the payment but $90,000 USD is pretty reasonable in the Bay Area. That takes $300,000 USD/year to not be house poor. As long as start-ups continue to treat unsellable equity as sellable RSUs and offer similar base to google they get almost no one who needs to pay a mortgage. And I’m willing to bet a fair number of start-ups have failed from being too junior in engineering.

cmrdporcupine 4y ago
I can't help but feel that this is by design by VCs. Rip through younger talent and see what shakes out. You can polish the turd later. You're not looking for beautiful gemstones in most startups. You're just mostly throwing things against the wall to see what sticks, and it's later generations of devs who come in and deal with the tech debt. Jokes on them, though, my mortgage is almost paid off, so I can work for less than I was. I'm the old guy working with all the young people at the startup. I can almost feel their eyes rolling into the back of their heads when I start going on about "back in the 90s"...

sangnoir 4y ago

> As time has moved on the gap in pay between startup and FAANG and now startup and any company offering RSUs is just too large for startups to compete for talent. My reading is that founders and VCs got greedier (or they were always this greedy, but the reality distortion field has since failed). Back in the day, working at a startup appeared to offer a plausible path to life-altering wealth to employees with stock options - these days, the cat is out of the bag: dilution by endless funding rounds, no route to IPO, preferred stock fuckery, and a countless other ways of being screwed over by information and/or power asymmetry.