How to Hire Your First Engineer • Hacker News Board

Re: How to Hire Your First Engineer

#111

Post by heurist » Wed, Aug 22, 2018, 5:30 AM UTC

ummonk wrote: post #98

mful wrote: post #60

Anyone else getting a little tired of the immediate reduction of any conversation around early-stage startup job opportunities to "comp vs FAANG"? As someone who spent the last 5 years in early stage startups, before recently accepting a FAANG offer, I'm starting to realize folks who only think about comp probably aren't good fits for startups. Here are a few quick reasons to take less comp at a super early stage sta…

>Anyone else getting a little tired of the immediate reduction of any conversation around early-stage startup job opportunities to "comp vs FAANG"? The difference is so big, that I hope it continues to get repeated, until we start seeing a fairer distribution of equity. >- You will develop a wide breadth of skills you simply can't develop at FAANG, as you will be involved in product meetings, business strategy conver…

They are stingy with equity because it's easy to make a bad hire and then be unable to fix the cap table. I do think there should be a better balance, though, and agree that they can be quite stingy even with those who turn out to be good hires.

I feel being first engineer at a startup gave me the skills to found my own company and make a living on my own terms, which is ultimately what I want from life. Being super rich isn't too important to me as long as I feel I have broken out of the mold and am on a path to greater personal and creative freedom. I honestly wanted to kill myself after a few years at a well-liked, growing 1000 person company. It was too confining and I was too distant from the real world. I can't imagine ever being happy at a FAANG Corp, even if the work is initially interesting. The weight of layers of managers above always becomes unbearably heavy for me, especially since I naturally struggle against authority.

Re: How to Hire Your First Engineer

#112

Post by solatic » Wed, Aug 22, 2018, 6:08 AM UTC

localhost3000 wrote: post #78

stemuk wrote: post #34

Earlier quoted context omitted.

Even if you pay your #1 employee at market rate he is taking huge risks and should be compensated accordingly. Working at an early stage company often comes with huge job insecurity, loss of medical benefits more mature companies might be able to offer (better insurance etc.) and a possible kink in your CV (3 years at Microsoft look much better than spending 3 years at an unsuccessful company that eventually shut dow…

lol @ startups with no engineers yet paying “market rate”... they will maybe pay market rate within their stage band i.e. compared to other SV seed-stage startups, but this will still be way below the liquid total comp at a post IPO tech company. At this point in the tech cycle the math is so out of whack in favor of big co that I can’t with a straight face recommend to anyone that they join a seed startup as an earl…

Yeah but those exceptions are pretty big. The hiring pipelines at FAANG are so over-tuned for false negatives that there are plenty of engineers who are good enough to work at a FAANG for FAANG-level compensation yet are not actually getting offers from FAANG companies. They're on the market for (market minus FAANG)-rate compensation.

Then you have to remember that FAANG companies are large enterprises, by definition, and that comes with a lot of overhead - design by committee, politicking between middle-management fiefdoms, not being a part of the conversation when irrefutable directives are issued by executives four levels above you, varying levels of paperwork and documentation that are necessary in large organizations. That's soul-sucking for a lot of people, and those people will exclude themselves from FAANG-level compensation, and are on the market for (market minus FAANG)-rate compensation.

The real reason why a lot of founders can't hire at market rate compensation is that any early employee, even if you're paying them market rate, needs to buy into your vision just as much as you do. The upside for early employees, even more than potential compensation, is in being a strong influence, including at relatively senior levels, as the company grows. If, as an IC, you find yourself being recruited by somebody who you think is a strong and experienced leader, selling a product that you personally think is important, then you grab the bull by the horns and get on. If somebody who rambles and can't make eye contact asks you to join to build out Uber-for-pidgeons, it doesn't really matter how much compensation is being offered; you're going to walk away.

Re: How to Hire Your First Engineer

#113

Post by zorpner » Wed, Aug 22, 2018, 6:46 AM UTC

brianwawok wrote: post #67

zorpner wrote: post #53

Earlier quoted context omitted.

Depends on pay, right? If you are offering employee #1 market pay, why would you give them 10% equity? Because this is how you get good people. If you want to offer them what they could get by working someplace else, they may as well work someplace else (likely without the hours, stress, or potential instability of a startup).

Maybe, maybe not. Startups offer a lot of non-financial benefits over working at the big established companies. 1) Looser culture. Less likely to have a dress code or an attendance policy. 2) Less meetings, more coding. For someone that wants to get stuff done, way more to do in a startup. 3) Sense of purpose. A huge part of life satisfaction is doing something that actually matters. WAY easier to do this when you ar…

Sense of purpose. A huge part of life satisfaction is doing something that actually matters.

Truly, and it's changed my life for the better.

I'm unclear, however, on the relevance of this statement to the extant startup scene -- ref: the latest YC class, for example.

Re: How to Hire Your First Engineer

#114

Post by ummonk » Wed, Aug 22, 2018, 6:48 AM UTC

heurist wrote: post #111

ummonk wrote: post #98

Earlier quoted context omitted.

>Anyone else getting a little tired of the immediate reduction of any conversation around early-stage startup job opportunities to "comp vs FAANG"? The difference is so big, that I hope it continues to get repeated, until we start seeing a fairer distribution of equity. >- You will develop a wide breadth of skills you simply can't develop at FAANG, as you will be involved in product meetings, business strategy conver…

They are stingy with equity because it's easy to make a bad hire and then be unable to fix the cap table. I do think there should be a better balance, though, and agree that they can be quite stingy even with those who turn out to be good hires. I feel being first engineer at a startup gave me the skills to found my own company and make a living on my own terms, which is ultimately what I want from life. Being super…

Well, while large companies are moving towards immediate vesting, startups continue to have 1 year vesting cliffs, so they have plenty of time to fix the cap table after a bad hire.

Re: How to Hire Your First Engineer

#115

Post by angersock » Wed, Aug 22, 2018, 7:28 AM UTC

brianwawok wrote: post #30

jazzychad wrote: post #25

These are good points for finding your first engineer, but here is a tip for helping close your dream hire: offer more equity. Your first eng hire will shoulder nearly all of the technical burden soon after as the founders transition into more of the non-technical roles (sales, outreach, recruiting, fundraising, business strategy). The amount of blood, sweat, and tears poured in by the first eng hire is somewhat less…

Depends on pay, right? If you are offering employee #1 market pay, why would you give them 10% equity? That is potentially millions of dollars for not taking a risk. I have been on both sides of this, and have thoughts. What do you think is fair for employee #1 making at or near market rate?

5-20% depending on how much you're using their expertise.

If you offer tiny or no equity, they have no incentive to align for growth. Also, founders are usually way less useful than the people they hire.

Re: How to Hire Your First Engineer

#116

Post by angersock » Wed, Aug 22, 2018, 7:31 AM UTC

h4b4n3r0 wrote: post #57

stemuk wrote: post #52

Earlier quoted context omitted.

> many startups have decent health insurance About what kind of startup are we talking here? When we discuss #1 engineer compensation we are most likely talking about a very early stage company that likely lacks a profound company structure and employee benefits program. So I would assume that #1 engineers will most likely not be greeted with a good health insurance on the employer side.

I was employee #1 at a startup. Right out of the gate our medical was better than Google’s. Having been exposed to the financial side of things, the cost difference between shitty and decent insurance for employees was inconsequential in the overall cost of doing business.

I was engineering hire #1, and we had no insurance and pay was half market rate, but at least the founders were incompetent and abusive depending on the day.

Re: How to Hire Your First Engineer

#117

Post by angersock » Wed, Aug 22, 2018, 7:33 AM UTC

brianwawok wrote: post #67

zorpner wrote: post #53

Earlier quoted context omitted.

Depends on pay, right? If you are offering employee #1 market pay, why would you give them 10% equity? Because this is how you get good people. If you want to offer them what they could get by working someplace else, they may as well work someplace else (likely without the hours, stress, or potential instability of a startup).

Maybe, maybe not. Startups offer a lot of non-financial benefits over working at the big established companies. 1) Looser culture. Less likely to have a dress code or an attendance policy. 2) Less meetings, more coding. For someone that wants to get stuff done, way more to do in a startup. 3) Sense of purpose. A huge part of life satisfaction is doing something that actually matters. WAY easier to do this when you ar…

The sense of purpose is defeated if you realize you're really just generating value for founders who will never let you get a fair piece of the pie.

Re: How to Hire Your First Engineer

#118

Post by hello_moto » Wed, Aug 22, 2018, 7:59 AM UTC

solatic wrote: post #112

localhost3000 wrote: post #78

Earlier quoted context omitted.

lol @ startups with no engineers yet paying “market rate”... they will maybe pay market rate within their stage band i.e. compared to other SV seed-stage startups, but this will still be way below the liquid total comp at a post IPO tech company. At this point in the tech cycle the math is so out of whack in favor of big co that I can’t with a straight face recommend to anyone that they join a seed startup as an earl…

Yeah but those exceptions are pretty big. The hiring pipelines at FAANG are so over-tuned for false negatives that there are plenty of engineers who are good enough to work at a FAANG for FAANG-level compensation yet are not actually getting offers from FAANG companies. They're on the market for (market minus FAANG)-rate compensation. Then you have to remember that FAANG companies are large enterprises, by definition…

>The hiring pipelines at FAANG are so over-tuned for false negatives that there are plenty of engineers who are good enough to work at a FAANG for FAANG-level compensation yet are not actually getting offers from FAANG companies.

What happen is that these people will keep trying until they get in. They will focus only in one thing and one thing only: FAANG.

> That's soul-sucking for a lot of people, and those people will exclude themselves from FAANG-level compensation, and are on the market for (market minus FAANG)-rate compensation.

I find things have changed a lot where housing dictates personal career choices lately. It sucks to not be able to buy your own property. I don't care what people strategy is (be it work 4-5 years for FAANG and move midwest or whatnot).

Re: How to Hire Your First Engineer

#119

Post by hello_moto » Wed, Aug 22, 2018, 8:00 AM UTC

brianwawok wrote: post #87

localhost3000 wrote: post #78

Earlier quoted context omitted.

lol @ startups with no engineers yet paying “market rate”... they will maybe pay market rate within their stage band i.e. compared to other SV seed-stage startups, but this will still be way below the liquid total comp at a post IPO tech company. At this point in the tech cycle the math is so out of whack in favor of big co that I can’t with a straight face recommend to anyone that they join a seed startup as an earl…

You realize not all startups are in SV? You realize not all job markets have developer jobs paying 400k?

> You realize not all startups are in SV?

Absolutely. Having said that, I won't join non-SV startups. Why? very simple: the chance of hitting the jackpot is significantly higher in SV.

> You realize not all job markets have developer jobs paying 400k?

For sure, but why would I joined non-SV startups getting paid peanuts while I can join a more established company and get paid double (base, stock, bonus, health benefit).

I felt that First Engineer is a sucker if you don't get compensated well enough (be it way more equity than the typical 0.5-1% or something else).

At the end of the day, I'd choose to maximise my career: be it joining a startup to gain experience knowing the whole stack or joining large enterprise for better career-path and compensation.

I don't join startups to "Change the World" or to "Hit the jackpot with 0.5-1% equity".

Re: How to Hire Your First Engineer

#120

Post by adrianN » Wed, Aug 22, 2018, 8:31 AM UTC

solatic wrote: post #112

localhost3000 wrote: post #78

Earlier quoted context omitted.

lol @ startups with no engineers yet paying “market rate”... they will maybe pay market rate within their stage band i.e. compared to other SV seed-stage startups, but this will still be way below the liquid total comp at a post IPO tech company. At this point in the tech cycle the math is so out of whack in favor of big co that I can’t with a straight face recommend to anyone that they join a seed startup as an earl…

Yeah but those exceptions are pretty big. The hiring pipelines at FAANG are so over-tuned for false negatives that there are plenty of engineers who are good enough to work at a FAANG for FAANG-level compensation yet are not actually getting offers from FAANG companies. They're on the market for (market minus FAANG)-rate compensation. Then you have to remember that FAANG companies are large enterprises, by definition…

There are many companies that offer pretty good pay and great job security outside FAANG. Try Microsoft, Oracle, Siemens, Airbus, SAP or one of the million medium sized companies whose name you've never heard of unless you're in the same line of business.