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Aline, this is a fantastic article. I agree with many of the points in principle, but I don't agree with the outcome. I believe a model where candidates pay 3r

Aline, this is a fantastic article. I agree with many of the points in principle, but I don't agree with the outcome. I believe a model where candidates pay 3rd parties for precise jobhunting help is economically rational, and can work - it's effectively what we're doing at http://offerletter.io http://offerletter.io. Here's where you and I diverge: 1) Yes, engineers and other in-demand workers have ready access to jobs. I remember when I was looking for a good engineering job out of Amazon, I was basically spammed nonstop by virtually every party on the planet. 2) But the opportunity cost for poor job selection is enormously high. The difference between choosing between a good startup on good terms, and a less-good startup on less-good terms, can literally mean the difference between retiring 20 years early having your work used by millions of people, and just puddling around for a few years with, say, the occasional PyCon lightning talk for visibility. At http://offerletter.io http://offerletter.io , we are doing precisely this - we are getting paid by engineers, designers and PMs for value added - in this case, during the negotiation process. Our team of Advisors guides candidates on the "last-mile" of offer selection and negotiation in exchange for a cut of the increase. It makes too much sense - there's massive information asymmetry during the process, companies are full of shit, and many people outside of "the club" - however you choose to define it - just don't know what they're worth, or how to get it. While we can't justify charging the $10k-$30k that recruiters make, the incentives are still incredibly strong for us to do what we do. And of course there's the ethical and human component, which is very strong - I tried more traditional recruiting for a while and just raw selling of companies is so tiring. I like helping people first - all of the Advisors do.

leeny 12y ago
I'm not sure we're actually disagreeing. OfferLetter.io works precisely because you're focused on the negotiation part. There, your incentives are aligned (it's always in your interest and the candidate's to get them more money). And there, it makes sense to pay you because you're only paying if you do end up with a higher cash salary. If you were to branch out into helping people find jobs, I don't think it would work. All of a sudden, you'd always be incentivized to find people cash-rich, equity-poor positions, largely limiting the pool. Money is important, but at the end of the day, it's just one of many factors. It just happens to be the most easily quantifiable one. Moreover, if we ignore this disincentive for a moment, if you were to branch out into end-to-end job search (rather than just the negotiation part), you'd quickly become frustrated because for a lot more effort, i.e. everything before the negotiation, you'd be getting much less money than you would if you just struck a deal with the company side o the market instead.
- mallyvai 12y ago
  If we're talking about incentive alignment being the primary driver, I personally don't believe it's impossible to justify taking an equity cut, if possible and reasonable (10-20%), with the mutual understanding that the outcome is going to be much better if we help with the beginning of the process. Building a reputation for being really awesome would be challenging - people would want to know that it's worth the fee. Two other big blockers: 1) Multiple levels of taxation 2) Startups will be wary of having random third parties on their cap table There's probably other stuff too. But I don't think it's impossible, just very hard. There are other ethical concerns from this side as well - hollywood talent agents don't always have the best persona. It's part of why we're avoiding the "Agent" moniker at http://offerletter.io http://offerletter.io and branding ourselves as Advisors instead. This is a long ways off, of course - there's a lot of work to be done even in at the narrow step of the funnel we're targeting right now.
  - terramars 12y ago
    re: #2, that's why god invented derivatives. contrary to popular belief, you CAN write derivatives on your private stock options - the derivatives will just also be worth nothing if the engineer leaves early / company folds / etc. and they will be a tax nightmare even if you take early exercise and handle everything correctly. i'd LOVE to see someone pull this off successfully though.
    - mallyvai 12y ago
      This is a great point. If you have more detail or insight about how we might go about this (or precedent around it) , definitely let me know!
nrmitchi 12y ago
Thank you for this! I was literally having this exact conversation 2 days ago with the same 'last mile' approach. I'm glad someone's already doing this.
- mallyvai 12y ago
  :-) Drop me a line if you want to chat or discuss further! Would be great to know what you guys were considering (mallyvai at offerletter.io) - or just tweet at me - @mallyvai .
tarr11 12y ago
I could see this model work really well by focusing on a specific set of larger tech companies - ie, Google, FB, Twitter. I like that your incentives are aligned with employees, and not split (in the way that recruiters are) You'd be able to amass some key intelligence on how to negotiate with various hiring managers and departments over time. Right now, this is tribal knowledge. However, I'm not sure most of the value prop is not covered by a combination of sites like Glassdoor and PayScale, and a set of articles that guide you on how to do salary negotiations effectively.
- mallyvai 12y ago
  GlassDoor and PayScale are great for general statistical research and "ballpark" analysis of offer information. But they're way less valid for the startup world, since equity grants are so wonky depending on stage, etc. Even within big companies, there is a ton of variance in terms of which orgs may be more or less generous, etc. tl;dr they are no good at saying what you should earn. Also, there is definitely a ton of salary and negotiation "advice" out there. But many of the people we work with, already tried reading it or talking to friends, etc. There is an enormous amount of stress and pressure at the last-mile, and a few essays in no way compare to someone with institutionalized knowledge actively working with you over Skype, coffee, or on the phone. One of the first ideas I had in the space was a better Glassdoor of sorts. I discarded it quickly. http://offerletter.io http://offerletter.io is, fundamentally, very different.
incision 12y ago
I think you're spot on. >"1) Yes, engineers and other in-demand workers have ready access to jobs. I remember when I was looking for a good engineering job out of Amazon, I was basically spammed nonstop by virtually every party on the planet." Do you think that might say more about the social proof of working for Amazon than the market for engineers in general? Certainly the job market for engineers is great, the market for good engineering jobs, not so much. Having been successfully vetted by a big name certainly impresses me as a golden ticket to the good floor. >"2) But the opportunity cost for poor job selection is enormously high." I could not agree more.
lquist 12y ago
One data point, so take with a grain of salt, but somebody I know very well used offerletter.io and ended up severely underpaid (should have received ~$15k more).
- mallyvai 12y ago
  Hey lquist - very sorry to hear about this. Can you encourage this person to reach out to me, or connect us directly? Can look into it ASAP. mallyvai at offerletter.io . Also would be great to hear (at a a high level, without disclosing anything confidential) - why you (or they) might have felt this person was underpaid.

leeny 12y ago

I'm not sure we're actually disagreeing. OfferLetter.io works precisely because you're focused on the negotiation part. There, your incentives are aligned (it's always in your interest and the candidate's to get them more money). And there, it makes sense to pay you because you're only paying if you do end up with a higher cash salary. If you were to branch out into helping people find jobs, I don't think it would work. All of a sudden, you'd always be incentivized to find people cash-rich, equity-poor positions, largely limiting the pool. Money is important, but at the end of the day, it's just one of many factors. It just happens to be the most easily quantifiable one. Moreover, if we ignore this disincentive for a moment, if you were to branch out into end-to-end job search (rather than just the negotiation part), you'd quickly become frustrated because for a lot more effort, i.e. everything before the negotiation, you'd be getting much less money than you would if you just struck a deal with the company side o the market instead.

mallyvai 12y ago
If we're talking about incentive alignment being the primary driver, I personally don't believe it's impossible to justify taking an equity cut, if possible and reasonable (10-20%), with the mutual understanding that the outcome is going to be much better if we help with the beginning of the process. Building a reputation for being really awesome would be challenging - people would want to know that it's worth the fee. Two other big blockers: 1) Multiple levels of taxation 2) Startups will be wary of having random third parties on their cap table There's probably other stuff too. But I don't think it's impossible, just very hard. There are other ethical concerns from this side as well - hollywood talent agents don't always have the best persona. It's part of why we're avoiding the "Agent" moniker at http://offerletter.io http://offerletter.io and branding ourselves as Advisors instead. This is a long ways off, of course - there's a lot of work to be done even in at the narrow step of the funnel we're targeting right now.
- terramars 12y ago
  re: #2, that's why god invented derivatives. contrary to popular belief, you CAN write derivatives on your private stock options - the derivatives will just also be worth nothing if the engineer leaves early / company folds / etc. and they will be a tax nightmare even if you take early exercise and handle everything correctly. i'd LOVE to see someone pull this off successfully though.
  - mallyvai 12y ago
    This is a great point. If you have more detail or insight about how we might go about this (or precedent around it) , definitely let me know!

nrmitchi 12y ago

Thank you for this! I was literally having this exact conversation 2 days ago with the same 'last mile' approach. I'm glad someone's already doing this.

mallyvai 12y ago
:-) Drop me a line if you want to chat or discuss further! Would be great to know what you guys were considering (mallyvai at offerletter.io) - or just tweet at me - @mallyvai .

tarr11 12y ago

I could see this model work really well by focusing on a specific set of larger tech companies - ie, Google, FB, Twitter. I like that your incentives are aligned with employees, and not split (in the way that recruiters are) You'd be able to amass some key intelligence on how to negotiate with various hiring managers and departments over time. Right now, this is tribal knowledge. However, I'm not sure most of the value prop is not covered by a combination of sites like Glassdoor and PayScale, and a set of articles that guide you on how to do salary negotiations effectively.

mallyvai 12y ago
GlassDoor and PayScale are great for general statistical research and "ballpark" analysis of offer information. But they're way less valid for the startup world, since equity grants are so wonky depending on stage, etc. Even within big companies, there is a ton of variance in terms of which orgs may be more or less generous, etc. tl;dr they are no good at saying what you should earn. Also, there is definitely a ton of salary and negotiation "advice" out there. But many of the people we work with, already tried reading it or talking to friends, etc. There is an enormous amount of stress and pressure at the last-mile, and a few essays in no way compare to someone with institutionalized knowledge actively working with you over Skype, coffee, or on the phone. One of the first ideas I had in the space was a better Glassdoor of sorts. I discarded it quickly. http://offerletter.io http://offerletter.io is, fundamentally, very different.

incision 12y ago

I think you're spot on. >"1) Yes, engineers and other in-demand workers have ready access to jobs. I remember when I was looking for a good engineering job out of Amazon, I was basically spammed nonstop by virtually every party on the planet." Do you think that might say more about the social proof of working for Amazon than the market for engineers in general? Certainly the job market for engineers is great, the market for good engineering jobs, not so much. Having been successfully vetted by a big name certainly impresses me as a golden ticket to the good floor. >"2) But the opportunity cost for poor job selection is enormously high." I could not agree more.

lquist 12y ago

One data point, so take with a grain of salt, but somebody I know very well used offerletter.io and ended up severely underpaid (should have received ~$15k more).

mallyvai 12y ago
Hey lquist - very sorry to hear about this. Can you encourage this person to reach out to me, or connect us directly? Can look into it ASAP. mallyvai at offerletter.io . Also would be great to hear (at a a high level, without disclosing anything confidential) - why you (or they) might have felt this person was underpaid.