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I really wonder what 'average' means in this context since the average venture backed startup is a total failure. I imagine there's also a huge disparity between the salaries of executives at companies across the seed->A round->B round->...->IPO spectrum as well.
Just ask.
If you offer too little compensation, you may not attract the talent that you need to be successful. It depends on their circumstances. There are smart people who'll work for low salaries if there are genuine reasons to do so, but not many of them. Most of us can't afford to work for free anymore. But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation…
Your points are tangentially related to a question I've floated around in my head for years: when is a startup not a startup? There's the income/profit metric (if a company is paying its CEO $200k+ and has several $150k+ engineers, they're obviously selling a significant amount of something ) Or there's the acquisition metric (our goal is to be bought, and we haven't been bought, so we're a startup)
When a tech startup runs well, it's constrained open allocation. People can't just go off and "do whatever" but if the work is important to the business, anyone gets to step up and do it. There's no fighting over "headcount" or jockeying for plum projects. There is the work that needs to be done and as long as (a) people work on things that are relevant to the business, (b) people take enough of an ownership mentality to do the difficult or unpleasant stuff that's comes along with the good, they remain in good standing.
Once you have closed allocation, you're definitely not a startup.
Earlier quoted context omitted.
I thought the same thing (with a gasp as a CTO myself :)) But I'm going to assume this article references companies where the Technology department is more of a cost center than primary operations. For example a SaaS company that basically just has sales/marketing and technology/operations, the CTO is also acting as the COO, so I think you could attribute the COO salary to that of the CTO in a SaaS or high-tech start…
Developers/CTO tend not to ask for high salaries. Hence they get paid less. (Then they broke and go insane from the perceived injustice, see that other article recently...)
-may hold for upper level management, but VERY unlikely this holds for rank and file employees.
No solution was offered here. This generic advice could be applied to anything: "in order to solve XYZ, ask some of your peers and perhaps try some products whose stated purpose is to solve XYZ".
That VP of Sales number looks low. The article does say "salary," so it may technically be correct, but I'm sure total cash comp (not including options) is higher.
Yeah, at many B2B product or marketing companies, I assume the sales folks are heavily compensated based on commission while the CEO and founders are getting more equity (but possibly lower pay than a lot of the sales people).
IMO (and while I can't speak to the management side of it), this displays a horrifying misunderstanding of the mindset of the technical people you want to hire and pay well.
As an experienced and driven programmer, you hire me and pay me well so that my only concern regarding work is how awesome I can make the product I am working on. My name is attached to that code and that product, I need it to be as good as I can make it within the other constraints you've placed upon me. You can only fuck this up by paying me too little (because then I start to wonder how I am valued and whether or not I am wasting my time with a company that doesn't value me enough), not by paying me too much.
Granted, not every programmer is like this, but the ones you want to hire are.
No solution was offered here. This generic advice could be applied to anything: "in order to solve XYZ, ask some of your peers and perhaps try some products whose stated purpose is to solve XYZ".
im not smart enough to come up with a solution, that's what the HN community is for. The purpose of the piece was to shine light on a problem (lack of transparency in salaries at VC backed companies)
big co salary = startup salary + #shares * (stock price - option strike price).
EDIT: diving one level deeper, perhaps a company needs two valuations: one for investors buying the stock (market driven), and an internal one that employees are likely to accept. The two numbers should be the same, but during bubbles there might need to be a gap between them.
"But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation to maximize long-term value for shareholders." IMO (and while I can't speak to the management side of it), this displays a horrifying misunderstanding of the mindset of the technical people you want to hire and pay well. As an experienced and driven programmer, you hire me and pay me well so that…