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The tech sector teardown is more catharsis than crisis

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Re: The tech sector teardown is more catharsis than crisis

#61

Post by Infinitesimus »

lupire wrote: post #58
neill wrote: post #56

Earlier quoted context omitted.

The issue they are raising is specifically that, $380k standardized salary band, what role is this? That number seems unsustainable.

And they gave that number out before they assessed candidate level. But maybe that was recruiting BS as the pay for the max plausible level.

380 isn't even close to the max possible level. If this was an Engineering role, that a mid level salary.

Your past experience can be a proxy for the role and level you're targeted for and thus, the comp target.

Re: The tech sector teardown is more catharsis than crisis

#63

Post by Nextgrid »

plaidfuji wrote: post #9

My biggest question behind all of this is how interconnected is the tech bubble, and how self-perpetuating will a downturn be? The venture-backed startups that I’ve worked at have themselves utilized tools built by other venture-backed startups. It seems like there’s an entire cottage industry of SaaS tools designed to make it easier to scale up small companies. What will the effect of a startup downturn be on compan…

I definitely think there's an advertising bubble and it's popping.

Lots of startups' "business model" is "growth and engagement" - pump up user and "engagement" numbers and VCs will throw money at you, and maybe you even get a bigger sucker that outright buys you out. Spend all that money on advertising & marketing to keep these "engagement" numbers going up, all while having no actual product users pay for.

This in turn means there are other startups that specialize in providing advertising/marketing services. For example, there are dozens of startups out there who try to reinvent push notifications, even though in practice they make a lot of tasks harder in exchange of features most probably will never need. Those are overvalued and are only propped up by the aforementioned companies' VC money being spent on them to keep the "engagement" coming. Same with analytics which are used by these companies to measure (with dubious degrees of accuracy) the "engagement", which become less necessary if you have a profitable product and the main analytic becomes "how much $$$ has landed in my bank account today?".

Once the music stops, all of that crap will come crashing down.

Re: The tech sector teardown is more catharsis than crisis

#64

Post by bombcar »

lupire wrote: post #58
neill wrote: post #56

Earlier quoted context omitted.

The issue they are raising is specifically that, $380k standardized salary band, what role is this? That number seems unsustainable.

And they gave that number out before they assessed candidate level. But maybe that was recruiting BS as the pay for the max plausible level.

It also lets the candidates talk about it even if they aren’t extended an offer - someone they mention it to might be the candidate the company is looking for.

Re: The tech sector teardown is more catharsis than crisis

#65

Post by boringg »

SemanticStrengh wrote: post #10

The only reason there is a recession is because people believe there is a recession

The Fed is hitting the breaks on demand in order to slow down inflation. If they slow the demand side too fast then we enter a recession, if they manage to do a soft landing the pull back demand enough that supply can catch up bringing inflation back down to a 2% range with many a small downturn or short recession.

The goal is too slow down the aggregate demand in the market - whether or not we believe that it is a recession is irrelevant. Money will get more expensive, companies will be more shrewd on their spend & hiring. Whether the economy contracts and enters a technical recession - doesn't really matter - there are actual physical realities to the world and we can't just will our way into a bull or out of a bear market as nice as that sounds.

Re: The tech sector teardown is more catharsis than crisis

#66

Post by kriro »

I think the market is just normalizing. The overall climate was pretty insane. Free money (interest rates), stimulus money etc. I found it pretty fascinating that during a time that was pretty tough overall (global pandemic + supply chain issues) the stock market was basically saying we are in a golden age. That felt "wrong" to me but if I had acted on it, I'd be broke now because the market certainly outperformed my wildest expectations.

As a value investor at heart, I still cannot rationally fathom some valuations (Tesla >100 PE). However, most tech companies seem pretty solid fundamentally and not close to .com bubble times. I cannot speak for crypto since I live in a bubble were I ignore it completely.

Re: The tech sector teardown is more catharsis than crisis

#67

Post by neill »

htormey wrote: post #59
neill wrote: post #56

Earlier quoted context omitted.

The issue they are raising is specifically that, $380k standardized salary band, what role is this? That number seems unsustainable.

No. This is well paid but not out of the ordinary for someone working at a top tier tech company in NYC/SF Bay Area. Think Facebook, Apple, etc. see https://www.levels.fyi/ for levels and comparison. Some of those companies are doing hiring freezes right now but many are not. Salary bands are adjusted within the USA by zones where NYC/SF/Seattle are zone 1, zone 2 is 90% of base, zone 3 is 85%. With equity component…

This is extremely out of the ordinary- Levels.fyi lists a salary of $224,000 for a Staff level SWE at Google

Re: The tech sector teardown is more catharsis than crisis

#68

Post by rco8786 »

neill wrote: post #56
htormey wrote: post #50

Earlier quoted context omitted.

I work at coinbase. We have standardized salary bands, this is just the salary at your level (comp plus equity, not sure if bonus is included). They are letting you know this up front to not waste your time. One other thing that’s worth noting is that each year they give you a new equity grant. That grant I believe is priced based on the stock price over a period of 30 days in the first quarter. Handy for limiting yo…

The issue they are raising is specifically that, $380k standardized salary band, what role is this? That number seems unsustainable.

Why? Because it’s higher than you’re used to seeing? You don’t even know what role that person was applying for. Is your position that 380k is just “too high”, period?

That number (or higher) has been the norm at a huge swath of stable and profitable tech companies for a decade+.

I am making an assumption that 380 is total comp and not base salary. I don’t believe that Coinbase is paying 380 base salary for any non-executive position.

Re: The tech sector teardown is more catharsis than crisis

#69

Post by bombcar »

ctvo wrote: post #46
nemo44x wrote: post #39

Earlier quoted context omitted.

I think a month ago was a totally different time than today. I know of a few companies that froze most hiring (including in cases where an offer was about to go out) temporarily with the last couple weeks. Of course I haven’t sampled every company. Just a very sudden defensive position springing up more and more.

Meta very publicly announced a hiring slowdown, Netflix is introducing levels and slowing down hiring, Coinbase is slowing down hiring, etc.. Even with the above names slowing down hiring, I would guess big tech uses this opportunity to stockpile even more engineers to come out of this stronger. I don't see the competition for engineers that can pass those interviews slowing down. Startups? Yes, the cohort that raise…

Twitter is in a freeze, so combined that puts a lot of slowdown into the market.

There may be smaller/other companies running to pick up the crème of the crop before the music stops, however.

Re: The tech sector teardown is more catharsis than crisis

#70

Post by wutbrodo »

crate_barre wrote: post #62

Someone needs to explain to me why our tech companies are so tied to interest rates. Are VCs borrowing with home mortgage equity??

When interest rates are low, there's a lot more money sloshing around in search of better return, instead of just comfortably getting a high, low-risk return. When more money sloshes around, higher-risk investments like VCs get more money.
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