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Big Tech Company Salaries Are Hurting Startups

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Re: Big Tech Company Salaries Are Hurting Startups

#21

Post by throwaway2016a »

I work at a startup that isn't profitable yet so our salaries are very low...

- Our typical junior makes $50 - 60k

- A typical mid makes $65 - 75k

- Seniors (including CTO) make $90 - 110k

In greater Boston.

It is VERY difficult to hire at those rates. We had someone come in interviewing for a senior that I would place as a mid (generously...) and he accepted another offer for $150k. At our scale he would be making $75k at MOST.

It takes us 6 months to find a single hire.

But I'm not bitter at Google. I think the market is valuing the workforce fairly. Which means...

- We are probably priced out of the market

- We should / do offer higher percentages equity

- We need to hire the people who the Googles of the world won't hire and train and mentor them

That last one works really well. We hired a few people that couldn't get jobs elsewhere that after two years with us left for a job that pays over twice more but they wouldn't have been able to land without our training and mentorship. We actually congratulate and celebrate those people even though we are VERY sad to see them go.

Re: Big Tech Company Salaries Are Hurting Startups

#23

Post by boulos »

(Disclosure: I work at Google)

I describe the ability to hire as being a U-shaped curve: new grads (whether undergrad or grad school) or people that don't actually need to work anymore. Google's high pay actually means that for senior folks, they're getting closer to the right end of the curve! (But also, that they'd most likely be a founder unless they believe so strongly in your idea that they must see it happen).

As bla2 says below: the reality is that .1% is a pretty low equity offer, and while engineers aren't naturally greedy we can do math. A person just out of school might not care, but you shouldn't begrudge folks that say "Umm, the expected value of this offer is pretty bad compared to my current situation". You can offer them something else (work that matters!), but I feel like everyone knows that employee equity is still too skewed towards founders and investors.

Re: Big Tech Company Salaries Are Hurting Startups

#24

Post by logicallee »

On the other hand it means that anyone with that salary can easily (no sacrifices of any kind) take a salary of $0 for two years, for equity alone, if the right idea and team comes along.

So here's a question: does that happen?

For a hint as to the answer, consider the existence of the word xoogler.

Re: Big Tech Company Salaries Are Hurting Startups

#25

Post by throwaway2016a »

inputcoffee wrote: post #20

Here are some options, but notice how controversial they are: 1. Employ younger, inexperienced people and train them 2. Import immigrant developers 3. Hire people in different geographies As an alternative, why not: 1. Hire older workers 2. Hire the unemployed American workers 3. Hire in America? Well, because it costs more? Does it? I don't know, I am just trying to open up the conversation here. Edit: made language…

We have had high success with #1.

Re: Big Tech Company Salaries Are Hurting Startups

#26

Post by Retric »

Arizhel wrote: post #19
krschultz wrote: post #7

If you are a startup and are trying to compete head to head with Google / FB / Amazon / Apple / Microsoft for the same people, you are going to have a really hard time recruiting. But there are plenty of great engineers that don't want to work at those companies for various reasons. There are plenty of great engineers that want to work remotely and don't have that option at the large companies. There are also plenty…

>But there are plenty of great engineers that don't want to work at those companies for various reasons. There are plenty of great engineers that want to work remotely and don't have that option at the large companies. They don't have that option at startups either, because the startups all want people who'll be at the office 18 hours a day with "team spirit". I think this article is useless. Startups are only for pe…

The odds of getting a six figure payout at a startup is lower than the odds of getting a six figure annual salary at bigco. Which dramatically changes the math.

The real startup appeal is you don't need to be great or play the game, you just need to be lucky.

Re: Big Tech Company Salaries Are Hurting Startups

#27

Post by zerr »

krschultz wrote: post #7

If you are a startup and are trying to compete head to head with Google / FB / Amazon / Apple / Microsoft for the same people, you are going to have a really hard time recruiting. But there are plenty of great engineers that don't want to work at those companies for various reasons. There are plenty of great engineers that want to work remotely and don't have that option at the large companies. There are also plenty…

As well as mid-career engineers who don't have a time nor willingness to prepare for CS-riddle based interviews.

Re: Big Tech Company Salaries Are Hurting Startups

#28

Post by comstock »

throwaway2016a wrote: post #21

I work at a startup that isn't profitable yet so our salaries are very low... - Our typical junior makes $50 - 60k - A typical mid makes $65 - 75k - Seniors (including CTO) make $90 - 110k In greater Boston. It is VERY difficult to hire at those rates. We had someone come in interviewing for a senior that I would place as a mid (generously...) and he accepted another offer for $150k. At our scale he would be making $…

Increasing equity is great, but in general my view is that increased equity does two things:

1. It compensates for the increased risk of working for a startup (you don't have as much runway as google, might fail to raise your next round). 2. It gives the employee a stake in the company, and aligns their interests with making the company successful. I.e. Not just doing whatever they're told, failing to raise potential issues because "it's not their job".

It doesn't really compensate for reduced pay in my opinion.

Re: Big Tech Company Salaries Are Hurting Startups

#29

Post by desireco42 »

Arizhel wrote: post #19
krschultz wrote: post #7

If you are a startup and are trying to compete head to head with Google / FB / Amazon / Apple / Microsoft for the same people, you are going to have a really hard time recruiting. But there are plenty of great engineers that don't want to work at those companies for various reasons. There are plenty of great engineers that want to work remotely and don't have that option at the large companies. There are also plenty…

>But there are plenty of great engineers that don't want to work at those companies for various reasons. There are plenty of great engineers that want to work remotely and don't have that option at the large companies. They don't have that option at startups either, because the startups all want people who'll be at the office 18 hours a day with "team spirit". I think this article is useless. Startups are only for pe…

I am copying this to Evernote because you pretty much described everything that is wrong with startups.

Now, to be fair, there are good things as well, but they are more rare. 37 Signals comes to mind as innovative company that is doing things just right. They never wanted to even be associated with startup world.

Re: Big Tech Company Salaries Are Hurting Startups

#30

Post by snarf21 »

ozi wrote: post #11

This article is basically arguing that farm teams should be able to afford pro athletes... Having engineers who "perform in the top 10%" is a nice-to-have, not a requirement for startup success.

I agree but the problem is also the money. A lot of the VCs want to talk about how many ex GOOG and FB engineers who graduated from MIT that they have building their next unicorn. They don't have the same story talking about three state school graduates from Kansas who may be just as talented and have a better product. They also never want to fly to Kansas, like ever.

I've lived through this working at a startup in central PA. We were in discussions to be acquired by several of the top 10 west coast tech companies and having to have an office in PA and come here killed all but one deal. Some Director of X doesn't want to fly to Philly and take an hour train to visit the team. This is despite the fact that costs here are like 30% and there is plenty of reasonable talent.

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