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An employee granted 7bp is presumably also making market cash comp. So are most founders (who don't take any real risk, because they benefit from a private wel

An employee granted 7bp is presumably also making market cash comp. So are most founders (who don't take any real risk, because they benefit from a private welfare network/safety net; otherwise they aren't getting introduced to VCs) and investors. Most founders pay themselves market salaries post-A, and VCs never take a break from their $500k++ per year. Bootstrapping is a different conversation, but in VC-istan you take more risk as an engineer (who might be fired w/out severance and have his career ruined by a short-tempered 23-year-old founder) than as a founder (who might have to pay himself "only" an engineer salary for a few years).

tptacek 13y ago
Is your argument about what fair comp for a developer is, or are you instead trying to poke holes in the mythologizing of company founders? If it's the latter, I disagree but don't care enough to argue. If it's the former, nothing you're saying makes any sense. What the owner of the company makes has nothing to do with what you should make. What you should make is a function of the market and nothing else. To see why, simply think of any well-run firm whose owner inherited the company. By your logic, every employee there should be better compensated than the owner. If you're here to relitigate all of capitalism, that's fine too; we won't agree, but I also won't waste my time debating.
- alextingle 13y ago
  You seem to have something to say, but rather than saying it, you've taken the time to typed out a great screed full of gems like "I disagree but don't care enough to argue".
  - tptacek 13y ago
    I care enough to argue about how to evaluate developer compensation because that is a practical issue, and one where misperceptions can harm employees and employers. I do not care enough about capitalism to litigate it on a message board.
nfm 13y ago
Is that the typical case? In Australia, although there's definitely a lot less VC money going around, I believe VC funded founders typically pay something closer to a stipend than an engineering salary. That seems pretty practical to me too - most founders don't need a 150k salary to get by, and you can make a million dollars go a lot further if you choose to pay yourself half that amount.
lsc 13y ago
>Bootstrapping is a different conversation, but in VC-istan you take more risk as an engineer (who might be fired w/out severance and have his career ruined by a short-tempered 23-year-old founder) than as a founder (who might have to pay himself "only" an engineer salary for a few years). Huh. I thought that companies with the 23-year-old CTOs (and startups that don't just hire the founder's buddies in general) tend to hire young and inexperienced. Generally speaking, it's considered fair to pay the inexperienced less. I thought all this talk of "rockstar ninja" was for the inexperienced. I mean, sure, experienced folks do have a tendancy to act like primadonnas, they usually are not proud of it. It's something we all fight. Note, I'm not insulting the companies that just hire the founder's buddies... those companies tend to be where you see the top talent. That's the thing, it's almost impossible to get good people "cold" if you just hire a recruiter. But if your founder is a mid-career industry notable? they will not only know who is good, but they will be able to attract those good people.
- minimaxir 13y ago
  New college graduates in CS that startups love to hire aren't necessarily inexperienced: many people I know who recently graduated from CMU worked at Facebook and/or Google for internships.
  - lsc 13y ago
    >New college graduates in CS that startups love to hire aren't necessarily inexperienced: many people I know who recently graduated from CMU worked at Facebook and/or Google for internships. Generally, for me to call you 'experienced' you've got to have 5-10 years of experience. Not just a summer internship. Don't get me wrong, certainly the internships are valuable. A company is almost always going to choose the kid out of college who has worked at google during the summer over the kid out of college who took summers off. You might even play them into counting month-for-month as experience, but having a summer job while in college is vastly different from having half a decade in the trenches.
- jes5199 13y ago
  In the Bay Area, it's not unusual for 22-year-olds CS graduates to be making more than $80k/year, even at VC-funded places. Maybe that's "less" than what experienced developers can make, but it's just crazy-high for the country on average.
trevelyan 13y ago
Michael, I know from reading your posts over the years that you have been screwed over as an employee, but I wonder if your perspective is skewed by that experience. Realistically, if people want market-clearing salaries there aren't exactly a huge pool of companies that can afford to hire them. You're basically looking at series A by default, and the founders who can grow businesses to that level are quite rare. It may be that investors/founders can't tell the difference between luck and skill, so that compensation gets unhinged from what is rationally in the long-term interests of the company. But if employees are really that much better at assessing the difference shouldn't their rational choice be working for a riskier business where they can get meaningful equity? Or just starting their own company?

tptacek 13y ago

Is your argument about what fair comp for a developer is, or are you instead trying to poke holes in the mythologizing of company founders? If it's the latter, I disagree but don't care enough to argue. If it's the former, nothing you're saying makes any sense. What the owner of the company makes has nothing to do with what you should make. What you should make is a function of the market and nothing else. To see why, simply think of any well-run firm whose owner inherited the company. By your logic, every employee there should be better compensated than the owner. If you're here to relitigate all of capitalism, that's fine too; we won't agree, but I also won't waste my time debating.

alextingle 13y ago
You seem to have something to say, but rather than saying it, you've taken the time to typed out a great screed full of gems like "I disagree but don't care enough to argue".
- tptacek 13y ago
  I care enough to argue about how to evaluate developer compensation because that is a practical issue, and one where misperceptions can harm employees and employers. I do not care enough about capitalism to litigate it on a message board.

nfm 13y ago

Is that the typical case? In Australia, although there's definitely a lot less VC money going around, I believe VC funded founders typically pay something closer to a stipend than an engineering salary. That seems pretty practical to me too - most founders don't need a 150k salary to get by, and you can make a million dollars go a lot further if you choose to pay yourself half that amount.

lsc 13y ago

>Bootstrapping is a different conversation, but in VC-istan you take more risk as an engineer (who might be fired w/out severance and have his career ruined by a short-tempered 23-year-old founder) than as a founder (who might have to pay himself "only" an engineer salary for a few years). Huh. I thought that companies with the 23-year-old CTOs (and startups that don't just hire the founder's buddies in general) tend to hire young and inexperienced. Generally speaking, it's considered fair to pay the inexperienced less. I thought all this talk of "rockstar ninja" was for the inexperienced. I mean, sure, experienced folks do have a tendancy to act like primadonnas, they usually are not proud of it. It's something we all fight. Note, I'm not insulting the companies that just hire the founder's buddies... those companies tend to be where you see the top talent. That's the thing, it's almost impossible to get good people "cold" if you just hire a recruiter. But if your founder is a mid-career industry notable? they will not only know who is good, but they will be able to attract those good people.

minimaxir 13y ago
New college graduates in CS that startups love to hire aren't necessarily inexperienced: many people I know who recently graduated from CMU worked at Facebook and/or Google for internships.
- lsc 13y ago
  >New college graduates in CS that startups love to hire aren't necessarily inexperienced: many people I know who recently graduated from CMU worked at Facebook and/or Google for internships. Generally, for me to call you 'experienced' you've got to have 5-10 years of experience. Not just a summer internship. Don't get me wrong, certainly the internships are valuable. A company is almost always going to choose the kid out of college who has worked at google during the summer over the kid out of college who took summers off. You might even play them into counting month-for-month as experience, but having a summer job while in college is vastly different from having half a decade in the trenches.
jes5199 13y ago
In the Bay Area, it's not unusual for 22-year-olds CS graduates to be making more than $80k/year, even at VC-funded places. Maybe that's "less" than what experienced developers can make, but it's just crazy-high for the country on average.

trevelyan 13y ago

Michael, I know from reading your posts over the years that you have been screwed over as an employee, but I wonder if your perspective is skewed by that experience. Realistically, if people want market-clearing salaries there aren't exactly a huge pool of companies that can afford to hire them. You're basically looking at series A by default, and the founders who can grow businesses to that level are quite rare. It may be that investors/founders can't tell the difference between luck and skill, so that compensation gets unhinged from what is rationally in the long-term interests of the company. But if employees are really that much better at assessing the difference shouldn't their rational choice be working for a riskier business where they can get meaningful equity? Or just starting their own company?