4 ms·

I don't think he is completely wrong but I think this is just another (higher-end) instance of the age-old tradition of companies saying it is too difficult to

I don't think he is completely wrong but I think this is just another (higher-end) instance of the age-old tradition of companies saying it is too difficult to find engineers while being unwilling to pay fair value for said engineers. To be clear, I know that Facebook does pay quite well by industry standards (offset somewhat by the bay area cost of living) for top talent, but if this situation is causing them an issue then what they are paying (or offering in general -- money isn't always the only thing) still isn't enough.

nestlequ1k 15y ago
There's a certain type of personality (very prevalent in the valley) who won't work for a big company like facebook, twitter, or google for any amount of money. I would imagine these types of people make up the majority of the YC class. Maybe they'll get bought via a talent acquisition but as soon as their golden handcuffs are off, they are out doing their own thing again. The reason they allow themselves to get bought via talent acquisition is to be able to easily raise money in the future. I think Sean Parker is reacting to these types of people. I think the misconception is that the increased funding sources is what is driving these people. I would suggest that they were always there, but 5 years ago they were just living poor and working their ass off to build a startup (usually unsuccessfully). I do believe I'm part of this group. There's no amount of money that would compel me to take a corporate job. Sometimes money isn't what matters.
- rick888 15y ago
  I'm part of this group too. It's less about money and more about freedom to me. The freedom to work on what I choose and the near complete control I get over my own destiny. No matter how good it is at a company like Facebook or Google, there will always be a point where they make you realize they have control over you. Whether it's working on a project you hate, ridiculous corporate policies, or having to kiss the ass of your manager. I've done it all for the past 15 years at a few different companies and I finally just got sick of it.
- lansing 15y ago
  You claim that this class of people won't work for a "big company" for "any amount of money," yet in the next breath you admit that they will work for those companies in the context of a "talent acquisition." What is a "talent acquisition" if not an alternate mode of compensation to persuade individuals to "take a corporate job" who previously considered themselves above such positions? Yeah, it sounds more impressive to tell people "we got bought by X" instead of "I took a job with X," but either way they've "gone corporate." You're still dealing with the same endless HR meetings, PHBs, "culture," etc, as all the other "drones." Yes, a good number of such "acquisition hires" leave after earn-out is complete, typically two to four years. This is actually a fairly lengthy of time for any high-value employee to hold any position in the valley these days, startup or not.
  - mnutt 15y ago
    He gives a fairly reasonable explanation in the next sentence: The reason they allow themselves to get bought via talent acquisition is to be able to easily raise money in the future.
    - lansing 15y ago
      That is still ignoring the fact that these individuals were in fact willing to take a corporate job, when their price was met. Maybe that price included the ego boost that comes with being part of an acquisition ("they really wanted me!"), or the "pedigree" that one plans to parlay into future opportunities. Regarding the latter point, it seems that "key players" at "prominent companies" don't have too much trouble getting funding for startups when they move on, regardless of whether they were "talent acquisitions" or not. Speaking from experience, when my previous employer got acquired by a megacorp, nobody was saying "I really don't want to work for megacorp, but maybe I will have an easier time getting funding later." No. It all came down to dollars and cents in the here and now, and the only people who turned down the earn-out offers (less than 10%) were those who had better options available.
  - nikcub 15y ago
    Exiting a company as soon as you can after a talent acquisition to go on and become an entrepreneur again is very very very common. Most recently I can think of Arrington, Levchin, Nguyen. I would even guess that the majority of founders who are acquired by Google, Yahoo etc. leave in the first 12 months. It is either to get the first run on the board, or to give a startup that would otherwise fail a graceful exit - but these people are entrepreneurs and do not fit into large companies. Sean Parker should be asking what is Facebook doing to attract these types of people, not bitch about these people not wanting to join and blaming free-market funding, of all things.
jseliger 15y ago
"offset somewhat by the bay area cost of living" This is a much bigger problem than many people realize; Ryan Avent discusses it in his ebook The Gated City (http://www.amazon.com/Gated-City-Kindle-Single-ebook/dp/B005KGATLO?ie=UTF8&tag=thstsst-20&linkCode=as2&camp=1789&creative=390957 http://www.amazon.com/Gated-City-Kindle-Single-ebook/dp/B005...) and on this Econtalk podcast: http://www.econtalk.org/archives/2011/10/avent_on_cities.html http://www.econtalk.org/archives/2011/10/avent_on_cities.htm... . Basically, housing costs in Silicon Valley are eating up all the salary increases tech companies are offering. Avent describes how, in the 1990s when the unemployment rate in the Valley was effectively zero and lots of people who'd read "Learn HTML in 24 Hours" were getting jobs, people still weren't flocking to the area because the cost of housing is so high. Anyone who wants to address extremely high tech salaries needs to be very interested in housing and urban policy.
- lsc 15y ago
  Hm. See, I don't think paying twice as much for a place to sleep is that big of a deal for a younger Engineer. I mean, if you are a young single person, so you pay a grand for a studio rather than $500 in some flyover state. or $600 for a room rather than $300. Not really a big deal when your salary starts at $80K/year. As you get older and want to buy a house and have a family? Eh, during the bubble, it was a problem. Five hundred grand for a 1bdroom condo? crazy. But these days? rents might be high, but you can get a small 3bdroom house for $300-$350K in a very safe area. By that point in your life, an Engineer's salary is going to be at least 1/3rd of that, which seems like a pretty reasonable ratio of salary to house. I mean, yeah, if you can take a 20% paycut to live in a flyover state where you can get something giant and nice for $100K, that might look like a good deal on the face of it, but the thing is, here in the valley? there is a multitude of employers to choose from. If you are in idaho and your employer shuts down or you want to quit? likely you are going to have to move. There's a huge advantage to the employee of having many potential employers within easy commute distance. so yeah; personally? I don't think it's a big deal for Engineers.
  - Empedocles99 15y ago
    "you can get a small 3bdroom house for $300-$350K in a very safe area" I'm curious where that is? In my area, the only house I saw for sale in that price range was a 1 bedroom house literally behind a strip joint.
sliverstorm 15y ago
You seem to be adopting the point of view that whatever pay is required to attract an engineer is the right pay. But what about when that pay eclipses the engineer's marginal value-add to the company? I think it not unreasonable to speak up if you feel there is a short-sighted market force overvaluing a resource. Imagine you are a farmer, and the value of grain falls below the cost to produce it. Do you accept what The Market has decided, and continue growing grain for a loss?
- jbjohns 15y ago
  No. You realize the market no longer values your product enough to pay for it, so you drop it and move to something else. When enough farmers do that the price will come up again. If a software company can't get enough value out of software developers to make it worthwhile then either they need to find a way to charge more or maybe the market doesn't see the need for them to exist. Whatever pay is required to attract engineers is the right price. The only question is; is your idea good enough to still be profitable given the price floor?

nestlequ1k 15y ago

There's a certain type of personality (very prevalent in the valley) who won't work for a big company like facebook, twitter, or google for any amount of money. I would imagine these types of people make up the majority of the YC class. Maybe they'll get bought via a talent acquisition but as soon as their golden handcuffs are off, they are out doing their own thing again. The reason they allow themselves to get bought via talent acquisition is to be able to easily raise money in the future. I think Sean Parker is reacting to these types of people. I think the misconception is that the increased funding sources is what is driving these people. I would suggest that they were always there, but 5 years ago they were just living poor and working their ass off to build a startup (usually unsuccessfully). I do believe I'm part of this group. There's no amount of money that would compel me to take a corporate job. Sometimes money isn't what matters.

rick888 15y ago
I'm part of this group too. It's less about money and more about freedom to me. The freedom to work on what I choose and the near complete control I get over my own destiny. No matter how good it is at a company like Facebook or Google, there will always be a point where they make you realize they have control over you. Whether it's working on a project you hate, ridiculous corporate policies, or having to kiss the ass of your manager. I've done it all for the past 15 years at a few different companies and I finally just got sick of it.
lansing 15y ago
You claim that this class of people won't work for a "big company" for "any amount of money," yet in the next breath you admit that they will work for those companies in the context of a "talent acquisition." What is a "talent acquisition" if not an alternate mode of compensation to persuade individuals to "take a corporate job" who previously considered themselves above such positions? Yeah, it sounds more impressive to tell people "we got bought by X" instead of "I took a job with X," but either way they've "gone corporate." You're still dealing with the same endless HR meetings, PHBs, "culture," etc, as all the other "drones." Yes, a good number of such "acquisition hires" leave after earn-out is complete, typically two to four years. This is actually a fairly lengthy of time for any high-value employee to hold any position in the valley these days, startup or not.
- mnutt 15y ago
  He gives a fairly reasonable explanation in the next sentence: The reason they allow themselves to get bought via talent acquisition is to be able to easily raise money in the future.
  - lansing 15y ago
    That is still ignoring the fact that these individuals were in fact willing to take a corporate job, when their price was met. Maybe that price included the ego boost that comes with being part of an acquisition ("they really wanted me!"), or the "pedigree" that one plans to parlay into future opportunities. Regarding the latter point, it seems that "key players" at "prominent companies" don't have too much trouble getting funding for startups when they move on, regardless of whether they were "talent acquisitions" or not. Speaking from experience, when my previous employer got acquired by a megacorp, nobody was saying "I really don't want to work for megacorp, but maybe I will have an easier time getting funding later." No. It all came down to dollars and cents in the here and now, and the only people who turned down the earn-out offers (less than 10%) were those who had better options available.
- nikcub 15y ago
  Exiting a company as soon as you can after a talent acquisition to go on and become an entrepreneur again is very very very common. Most recently I can think of Arrington, Levchin, Nguyen. I would even guess that the majority of founders who are acquired by Google, Yahoo etc. leave in the first 12 months. It is either to get the first run on the board, or to give a startup that would otherwise fail a graceful exit - but these people are entrepreneurs and do not fit into large companies. Sean Parker should be asking what is Facebook doing to attract these types of people, not bitch about these people not wanting to join and blaming free-market funding, of all things.

jseliger 15y ago

"offset somewhat by the bay area cost of living" This is a much bigger problem than many people realize; Ryan Avent discusses it in his ebook The Gated City (http://www.amazon.com/Gated-City-Kindle-Single-ebook/dp/B005KGATLO?ie=UTF8&tag=thstsst-20&linkCode=as2&camp=1789&creative=390957 http://www.amazon.com/Gated-City-Kindle-Single-ebook/dp/B005...) and on this Econtalk podcast: http://www.econtalk.org/archives/2011/10/avent_on_cities.html http://www.econtalk.org/archives/2011/10/avent_on_cities.htm... . Basically, housing costs in Silicon Valley are eating up all the salary increases tech companies are offering. Avent describes how, in the 1990s when the unemployment rate in the Valley was effectively zero and lots of people who'd read "Learn HTML in 24 Hours" were getting jobs, people still weren't flocking to the area because the cost of housing is so high. Anyone who wants to address extremely high tech salaries needs to be very interested in housing and urban policy.

lsc 15y ago
Hm. See, I don't think paying twice as much for a place to sleep is that big of a deal for a younger Engineer. I mean, if you are a young single person, so you pay a grand for a studio rather than $500 in some flyover state. or $600 for a room rather than $300. Not really a big deal when your salary starts at $80K/year. As you get older and want to buy a house and have a family? Eh, during the bubble, it was a problem. Five hundred grand for a 1bdroom condo? crazy. But these days? rents might be high, but you can get a small 3bdroom house for $300-$350K in a very safe area. By that point in your life, an Engineer's salary is going to be at least 1/3rd of that, which seems like a pretty reasonable ratio of salary to house. I mean, yeah, if you can take a 20% paycut to live in a flyover state where you can get something giant and nice for $100K, that might look like a good deal on the face of it, but the thing is, here in the valley? there is a multitude of employers to choose from. If you are in idaho and your employer shuts down or you want to quit? likely you are going to have to move. There's a huge advantage to the employee of having many potential employers within easy commute distance. so yeah; personally? I don't think it's a big deal for Engineers.
- Empedocles99 15y ago
  "you can get a small 3bdroom house for $300-$350K in a very safe area" I'm curious where that is? In my area, the only house I saw for sale in that price range was a 1 bedroom house literally behind a strip joint.

sliverstorm 15y ago

You seem to be adopting the point of view that whatever pay is required to attract an engineer is the right pay. But what about when that pay eclipses the engineer's marginal value-add to the company? I think it not unreasonable to speak up if you feel there is a short-sighted market force overvaluing a resource. Imagine you are a farmer, and the value of grain falls below the cost to produce it. Do you accept what The Market has decided, and continue growing grain for a loss?

jbjohns 15y ago
No. You realize the market no longer values your product enough to pay for it, so you drop it and move to something else. When enough farmers do that the price will come up again. If a software company can't get enough value out of software developers to make it worthwhile then either they need to find a way to charge more or maybe the market doesn't see the need for them to exist. Whatever pay is required to attract engineers is the right price. The only question is; is your idea good enough to still be profitable given the price floor?