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>>There's always someone willing to pay you more than you're worth. After several years with a company it's likely that they're going to pay you what you're wor

>>There's always someone willing to pay you more than you're worth. After several years with a company it's likely that they're going to pay you what you're worth, but not what some other company thinks you're worth. >is total loser thinking. No, actually. When I finally quit my employee-day-job, I told them I'd do more work for them as a consultant. At 2x my previous hourly rate. They said yes, and I've gotten that rate several times since then as well from unrelated companies. >a half-decent programmer is worth $500k+ easily I would argue about what "half-decent" means, but generally think you're right that $500k for a good programmer would be a reasonable value. And by good I mean close to the 10x-25x end of the spectrum. [1] I would describe someone in the 2-5x range as "half-decent" myself, and someone in that range is probably worth closer to $160k/year, tops. Someone at the top end of the productivity scale is faster, yes, but also produces better code, can debug that code more quickly, and can solve some problems that a "half-decent" programmer will simply never complete adequately. [1] http://www.devtopics.com/programmer-productivity-the-tenfinity-factor/ http://www.devtopics.com/programmer-productivity-the-tenfini...

nostrademons 13y ago
"I'd do more work for them as a consultant. At 2x my previous hourly rate." Well, this is largely because overhead for employee positions can often run 2x salary. As an employee, you get benefits, health insurance, perks, job security (of sorts), and you're not "on the clock" the whole time - most companies do not expect that employees are actively working 8 hours a day, they expect they're getting 4-5 hours of focused useful work and the rest is lunch breaks, watercooler talk, impromptu discussions, administrative stuff like e-mail, and idle diversions like Hacker News and Facebook. As a consultant, you're only supposed to bill for the time you're actively working, and all the rest is your own time. It's quite possible that as a consultant with 2x your hourly rate you're costing the company less than you did as an employee. When I've had friends that have converted from consultant to employee at the same company, the rule of thumb is 1000x hourly for annual salary, even though there're 2000 hours in a work-year. The difference is because of overhead, and the differing accounting for time.
- SomeCallMeTim 13y ago
  Very true. But under the new regime, I was able to also work on my own personal projects the rest of the time. A big win for me.
  - nostrademons 13y ago
    Then it's not really that they were paying you less than you were worth, it's that there was an alternate business arrangement that was a win-win for everybody. :-)
michaelochurch 13y ago
I actually have tried to measure the "10x" factor and I've come up with the scale here: http://michaelochurch.wordpress.com/2013/04/22/gervais-macleod-23-the-shodan-programmer/ http://michaelochurch.wordpress.com/2013/04/22/gervais-macle... The reality, though, is that the value ratio between a 2.0 and 1.0 is anywhere from 1-plus-epsilon [0] to 100; usually 3 to 10. Most people would say that 2.0 is the "10x", so someone like me is actually a 6-7x. However, it's context dependent. With a hard problem and limited or no legacy, it can be 20-100. [0] Actually, it might be sub-1, when one considers that a 2.0-level programmer would probably be miserable doing junior-level work. Still, I think it's a fair call to say that even the 3-4x are worth $200k per year. Why? If you treat them very well, you can turn them into 10x-ers and you'll only have to give them ~10% raises as long as you keep giving them interesting problems. People have forgotten that mentoring of untapped talent is a huge arbitrage. Yes, some of them leave. But if the ones who stay are worth millions to you and half do, you're still going to come out ahead. If I were running a tech company, I'd pay guys like Peter Norvig $2 million per year and my juniors $150-200k and just have the Norvig-level guys (and gals) mentor them. Some would jump to Facebook and Google to double up their salary, but I'd make a huge profit margin on the ones who stayed.
- SomeCallMeTim 13y ago
  If you could double a $150-200k salary at Google, then maybe I should have considered interviewing there. I've been invited more than once, but didn't really want the corporate environment. I would claim to be a 2+ programmer myself. You don't need to believe me, of course, but based on your descriptions of the various ranks, I believe I would qualify. And yes, I do want to get into a position where I'm mentoring junior developers, but so far it's been sufficient too just handle all the programming myself. Writing all the code for both the client and the server gets old after a while, though, even if it means that everything works really well, even on low-end commodity hardware. So yes, I think I will be following your suggestion and hiring a junior developer soon. At least if my Kickstarter (not yet live) funds.
derefr 13y ago
> I would argue about what "half-decent" means, but generally think you're right that $500k for a good programmer would be a reasonable value. And by good I mean close to the 10x-25x end of the spectrum. [1] I think the right measure of a programmer's worth is "the amount they'd get acqui-hired for if they made a product that caught some large company's attention." (Which really isn't that hard, these days, if that's what you set out to do.) By this measure, even the most crap programmer is worth $500k.
- michaelochurch 13y ago
  I think the right measure of a programmer's worth is "the amount they'd get acqui-hired for if they made a product that caught some large company's attention." [...] By this measure, even the most crap programmer is worth $500k. To me, this just proves that most programmers are stuck on dead-end make-work (see: http://michaelochurch.wordpress.com/2013/01/01/fourth-quadrant-work/ http://michaelochurch.wordpress.com/2013/01/01/fourth-quadra... ) of very low yield. Acq-hires are a sign of advanced trust sparsity. Enough bozos have gotten in (and bozo management is a more common culprit in this regard than bozo engineers) that the company has lost faith in its ability to find talent at the bottom. That might be a problem with its people; more often, it means that the middle-management filter keeps out light both ways. Employees don't know what's worth working on; people at the top don't know who the good employees (if any are still around, and once this happens many have left) are. A mediocre programmer that the company trusts is worth $500,000++ per year. An untrusted programmer is worth zero (actually, I'd argue, negative once they realize that the organization will never trust them) and put on low-yield busy-work or sent on wild goose chases (maintenance projects that won't work, "make it work exactly like the old system, but <X>" projects) and generally loaded with crap work to test reliability. Most companies, because developer salaries are so low in comparison to what we're worth (if trusted), feel like that's an excuse to hire 5x the number of people they actually plan on trusting. The problem is that good people are the first ones to leave when given crappy, obviously evaluative, work.
  - lgieron 13y ago
    > A mediocre programmer that the company trusts is worth $500,000++ per year I disagree with that number as an absolute statement. Most companies just aren't as insanely profitable as Google, Microsoft etc. (for whom this number might very well be true).

nostrademons 13y ago

"I'd do more work for them as a consultant. At 2x my previous hourly rate." Well, this is largely because overhead for employee positions can often run 2x salary. As an employee, you get benefits, health insurance, perks, job security (of sorts), and you're not "on the clock" the whole time - most companies do not expect that employees are actively working 8 hours a day, they expect they're getting 4-5 hours of focused useful work and the rest is lunch breaks, watercooler talk, impromptu discussions, administrative stuff like e-mail, and idle diversions like Hacker News and Facebook. As a consultant, you're only supposed to bill for the time you're actively working, and all the rest is your own time. It's quite possible that as a consultant with 2x your hourly rate you're costing the company less than you did as an employee. When I've had friends that have converted from consultant to employee at the same company, the rule of thumb is 1000x hourly for annual salary, even though there're 2000 hours in a work-year. The difference is because of overhead, and the differing accounting for time.

SomeCallMeTim 13y ago
Very true. But under the new regime, I was able to also work on my own personal projects the rest of the time. A big win for me.
- nostrademons 13y ago
  Then it's not really that they were paying you less than you were worth, it's that there was an alternate business arrangement that was a win-win for everybody. :-)

michaelochurch 13y ago

I actually have tried to measure the "10x" factor and I've come up with the scale here: http://michaelochurch.wordpress.com/2013/04/22/gervais-macleod-23-the-shodan-programmer/ http://michaelochurch.wordpress.com/2013/04/22/gervais-macle... The reality, though, is that the value ratio between a 2.0 and 1.0 is anywhere from 1-plus-epsilon [0] to 100; usually 3 to 10. Most people would say that 2.0 is the "10x", so someone like me is actually a 6-7x. However, it's context dependent. With a hard problem and limited or no legacy, it can be 20-100. [0] Actually, it might be sub-1, when one considers that a 2.0-level programmer would probably be miserable doing junior-level work. Still, I think it's a fair call to say that even the 3-4x are worth $200k per year. Why? If you treat them very well, you can turn them into 10x-ers and you'll only have to give them ~10% raises as long as you keep giving them interesting problems. People have forgotten that mentoring of untapped talent is a huge arbitrage. Yes, some of them leave. But if the ones who stay are worth millions to you and half do, you're still going to come out ahead. If I were running a tech company, I'd pay guys like Peter Norvig $2 million per year and my juniors $150-200k and just have the Norvig-level guys (and gals) mentor them. Some would jump to Facebook and Google to double up their salary, but I'd make a huge profit margin on the ones who stayed.

SomeCallMeTim 13y ago
If you could double a $150-200k salary at Google, then maybe I should have considered interviewing there. I've been invited more than once, but didn't really want the corporate environment. I would claim to be a 2+ programmer myself. You don't need to believe me, of course, but based on your descriptions of the various ranks, I believe I would qualify. And yes, I do want to get into a position where I'm mentoring junior developers, but so far it's been sufficient too just handle all the programming myself. Writing all the code for both the client and the server gets old after a while, though, even if it means that everything works really well, even on low-end commodity hardware. So yes, I think I will be following your suggestion and hiring a junior developer soon. At least if my Kickstarter (not yet live) funds.

derefr 13y ago

> I would argue about what "half-decent" means, but generally think you're right that $500k for a good programmer would be a reasonable value. And by good I mean close to the 10x-25x end of the spectrum. [1] I think the right measure of a programmer's worth is "the amount they'd get acqui-hired for if they made a product that caught some large company's attention." (Which really isn't that hard, these days, if that's what you set out to do.) By this measure, even the most crap programmer is worth $500k.

michaelochurch 13y ago
I think the right measure of a programmer's worth is "the amount they'd get acqui-hired for if they made a product that caught some large company's attention." [...] By this measure, even the most crap programmer is worth $500k. To me, this just proves that most programmers are stuck on dead-end make-work (see: http://michaelochurch.wordpress.com/2013/01/01/fourth-quadrant-work/ http://michaelochurch.wordpress.com/2013/01/01/fourth-quadra... ) of very low yield. Acq-hires are a sign of advanced trust sparsity. Enough bozos have gotten in (and bozo management is a more common culprit in this regard than bozo engineers) that the company has lost faith in its ability to find talent at the bottom. That might be a problem with its people; more often, it means that the middle-management filter keeps out light both ways. Employees don't know what's worth working on; people at the top don't know who the good employees (if any are still around, and once this happens many have left) are. A mediocre programmer that the company trusts is worth $500,000++ per year. An untrusted programmer is worth zero (actually, I'd argue, negative once they realize that the organization will never trust them) and put on low-yield busy-work or sent on wild goose chases (maintenance projects that won't work, "make it work exactly like the old system, but <X>" projects) and generally loaded with crap work to test reliability. Most companies, because developer salaries are so low in comparison to what we're worth (if trusted), feel like that's an excuse to hire 5x the number of people they actually plan on trusting. The problem is that good people are the first ones to leave when given crappy, obviously evaluative, work.
- lgieron 13y ago
  > A mediocre programmer that the company trusts is worth $500,000++ per year I disagree with that number as an absolute statement. Most companies just aren't as insanely profitable as Google, Microsoft etc. (for whom this number might very well be true).