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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

#231

Post by saltcured »

sorry_outta_gas wrote: post #137
UncleOxidant wrote: post #129

Earlier quoted context omitted.

It's kind of telling that "after 2015" (so 7 years) is considered a whole new generation of people in tech.

Pretty much, that's the time horizon for entry-senior in a lot of places

I wonder, what's the age/tenure distribution like in FAANGs these days?

I vaguely recall a factoid from a recruiter during a round of interviewing at Google about 15 years ago, where some crazy percentage of the current employees had been fresh-from-college hires in the last 2-3 years. I understood there was some churn in the valley, but could not quite imagine how many were fresh hires from school versus more senior folks on their next stint.

Re: The tech sector teardown is more catharsis than crisis

#232

Post by mountainriver »

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.

Nope this would be a standard band at staff+ level swe at a successful company

Re: The tech sector teardown is more catharsis than crisis

#233

Post by UncleMeat »

arcticbull wrote: post #193
UncleMeat wrote: post #192

Earlier quoted context omitted.

Okay if the stock price more than doubles in two years then yeah you can end up making a lot of money. This is why it is foolish to use vest price rather than grant price when discussing compensation. It isn't actionable information. And Google wasn't giving $880k sign-on equity grants for L6 in 2019. You can't use todays numbers for past cases. And then you are choosing a peak pay before it drops dramatically after…

> So yes, there are people at loads of companies who make way more money than advertised because the stock ballooned. But this is a completely useless way of analyzing compensation. I couldn't disagree more. If half your total compensation is derived from stock, then you better be looking at yourself not just as an employee but as an investor . And part of that means making projections.

The point is that it isn't repeatable. Saying "oh I made bank investing in Tesla" is not useful information for another person making a decision now. Similarly, "Google stock went up dramatically between 2018 and early 2022 is not useful information for somebody who has offers in hand today from various corporations because they have absolutely no way of predicting future stock growth.

Re: The tech sector teardown is more catharsis than crisis

#234

Post by weatherlite »

DebtDeflation wrote: post #89
BoxOfRain wrote: post #85

Earlier quoted context omitted.

What advice would you give to people who've not been in the tech industry during a recession yet?

1) Save money (get your expenses under control) 2) Keep some of your portfolio liquid 3) Prepare to hunker down at your current job for awhile (lose the job hopping mindset for the time being if you have it) On the other hand, consider that the time immediately after a recession passes can be a great time to do something new, start a business, etc. as you will be getting in early on the next business cycle.

> 3) Prepare to hunker down at your current job for awhile (lose the job hopping mindset for the time being if you have it)

I just got a pretty good offer and I don't know what to do - I am a bit worried I will be the first to be downsized if things go south. The company seems to be doing well and has IPO'ed so there's that. On the other hand no one can guarantee that my current startup won't struggle in the coming year or two.

Re: The tech sector teardown is more catharsis than crisis

#235

Post by [deleted] »

DebtDeflation wrote: post #33
RandomLensman wrote: post #8

Earlier quoted context omitted.

Not sure that follows. If (big "if") interest rates go up a lot, then a lot of investors might not reach for VC or PE to enhance their returns at even close to current allocation (and growth would be heavily discounted). Look at how the telecoms industry looks now compared to the heights of 2003 or so.

>If (big "if") interest rates go up a lot It's not a "big if" at all. Zero nominal rates and negative real rates are an anomaly in economic history over the last few centuries. Rates are headed higher, much higher. The Fed has been holding off in the hope that inflation would be "transitory" but it's now been a year and a half of >7% CPI increases with no sign of abating.

[deleted]

Re: The tech sector teardown is more catharsis than crisis

#236

Post by weatherlite »

RandomLensman wrote: post #47
DebtDeflation wrote: post #33

Earlier quoted context omitted.

>If (big "if") interest rates go up a lot It's not a "big if" at all. Zero nominal rates and negative real rates are an anomaly in economic history over the last few centuries. Rates are headed higher, much higher. The Fed has been holding off in the hope that inflation would be "transitory" but it's now been a year and a half of >7% CPI increases with no sign of abating.

Agreed on the long history. I'd still argue there is sizable "if" as one way to reduce government debt would be to use inflation (just like in the 1950s). So while rates will go up, the question is how much they will go up and if the level they reach will be high enough to cause substantial portfolio reallocations.

Agreed. It's not only government debt - everyone is indebted (people, businesses) at a historical high. How much can you raise interest rate without crushing them I don't know. On the other hand how much can you let inflation go up without crushing the working class and emerging markets indebted in USD? It's an impossible situation.

Re: The tech sector teardown is more catharsis than crisis

#237

Post by weatherlite »

refurb wrote: post #96
RandomLensman wrote: post #8

Earlier quoted context omitted.

Not sure that follows. If (big "if") interest rates go up a lot, then a lot of investors might not reach for VC or PE to enhance their returns at even close to current allocation (and growth would be heavily discounted). Look at how the telecoms industry looks now compared to the heights of 2003 or so.

If interest rates go up and inflation stays high then real returns stay low. I don’t see VC/PE investment dropping as a percent of investments since it’s a unique high risk/high return investment than 5% bonds can’t match.

Beating 5% can become harder and harder when everyone is running away from risk, its not always rational if you're in a tech recession.

Re: The tech sector teardown is more catharsis than crisis

#238

Post by arcticbull »

UncleMeat wrote: post #233
arcticbull wrote: post #193

Earlier quoted context omitted.

> So yes, there are people at loads of companies who make way more money than advertised because the stock ballooned. But this is a completely useless way of analyzing compensation. I couldn't disagree more. If half your total compensation is derived from stock, then you better be looking at yourself not just as an employee but as an investor . And part of that means making projections.

The point is that it isn't repeatable. Saying "oh I made bank investing in Tesla" is not useful information for another person making a decision now. Similarly, "Google stock went up dramatically between 2018 and early 2022 is not useful information for somebody who has offers in hand today from various corporations because they have absolutely no way of predicting future stock growth.

It's not about assuming that past performance equals future performance. With that attitude, nobody should invest in anything.

It's about bringing an investor mindset. Do your own analysis, make your own projections. It's literally half your paycheck, you owe it to yourself. It won't perform the same, sure, but your job as an investor is to analyze the quality of that investment. Will it go up or down? How much?

Whatever you vest is ordinary income. It's your compensation. Just because it's not fixed in advance doesn't mean it's not total comp! Don't pretend otherwise! :)

Re: The tech sector teardown is more catharsis than crisis

#239

Post by blululu »

gsibble wrote: post #189
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??

A lot of this is because VCs are in bed with the media, especially tech news sites. They've been publicly and loudly unhappy with the prices of rounds for several years now. They raised an enormous amount of capital over the last few years that they are expected to deploy as soon as possible. This is all coordinated with a drop in public markets and, yes, somewhat of a tech bubble, to force valuations down and make t…

I think the VC who runs this site wrote an essay about this tactic a while ago: http://www.paulgraham.com/submarine.html

Re: The tech sector teardown is more catharsis than crisis

#240

Post by throwaway_goog »

UncleMeat wrote: post #167
arcticbull wrote: post #159

Earlier quoted context omitted.

levels.fyi shows $498,910 in total compensation for a staff level SWE at Google. Different companies compensate using a different blend of cash and equity. At a public company like Google, it's all liquid. Similarly, an E6 at Facebook gets $576,886. These are also roughly speaking first-year salaries. You can expect a refresh grant equal to 1/4 of a new-hire equity grant each year vesting over 4 years, plus a staff-l…

> After 3-4 years in a staff role you can easily be making $1-2M/yr. Refreshes exist but this is a total lie. I'm staff at Google. Nobody at L6 is making $1M in annual compensation, even if they have their sign-on equity and three refreshes. Let alone $2M.

L6 @ Google, personal AGI last year (not counting capital gains or spouse's income) was just over $900K. You forget the massive stock-price appreciation between 2020 and the end of 2021. If you were granted $400K/year in stock compensation in March 2020 it was worth over $1M/year in Dec 2021.
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