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Big Tech Company Salaries Are Hurting Startups

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Re: Big Tech Company Salaries Are Hurting Startups

#251

Post by mring33621 »

nugget wrote: post #247
mring33621 wrote: post #241

Earlier quoted context omitted.

I used a very simple model for my estimate: 5 years to exit * 20K yr opp cost = 100K total opp cost I think my payback should be twice my total opp cost, so I want 200K at exit 1% chance of exit at 600M valuation after those 5 years I would expect my initial equity to be diluted to 50% of original value. Hence, I want 6.7% equity at the beginning of the 5 years. Note that, IMHO, I am being very conservative in calcul…

Alternatively you could have accrued the salary deficit as convertible debt that would roll into the next funding round, at a discount -- which is a bit more anchored than estimating a 1% chance of exit at $600M valuation (if you were serious about wanting the job, which it sounds like you mostly weren't).

Thank you for the suggestion! I'm not new to the idea of non-salary, future compensation but it is very new to me personally.

Re: Big Tech Company Salaries Are Hurting Startups

#252

Post by humanrebar »

dbg31415 wrote: post #226

Man, every startup at SXSW was bitching about this. I think it's an easy fix... 1) Startups need to pay more than they want to. If you want a talented engineer, they aren't free. I see a lot of startups offering WAY low salaries and then getting frustrated they can't find devs... it's basic supply and demand. Budget accordingly and stop making business plans that involve finding devs for lower-than-market-rates. 2) H…

> ...realistically these days the only hard part about managing a distributed team is when they are in dramatically different time zones

Well, there are cultural issues. You need to write things down more to work remotely effectively and lots of people don't like to read or write.

Re: Big Tech Company Salaries Are Hurting Startups

#253

Post by humanrebar »

logicallee wrote: post #24

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.

That's called being a partner, right?

Re: Big Tech Company Salaries Are Hurting Startups

#255

Post by alasdair_ »

fancy_pantser wrote: post #235
zerr wrote: post #27

Earlier quoted context omitted.

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

It's really insulting that the exact same interview steps and questions are being handed to all levels of applicants. If you want to see a different screening process that focuses on the skills you've acquired (technical and soft) and not just trivia and knowledge of one exact stack, you'd have to move on to a management or exec position. Those that stay developers will find themselves sharing their screen while lite…

I have no problem with a five minute check to make sure that I'm not just flat out lying when I claim to be able to code. There are a surprising amount of "senior architect" types that can talk all day but can't write very simple code.

I'm never doing another hour-long whiteboard interview again in my life however. The whole process has become so gamified now that most new entrants have practiced the exact types of questions asked hundreds of times. I'm not interesting in spending a month of my life doing that any more and I no longer need to.

The whole SAT-prep feel of the interview process now is tiresome.

Re: Big Tech Company Salaries Are Hurting Startups

#256

Post by alasdair_ »

fancy_pantser wrote: post #235
zerr wrote: post #27

Earlier quoted context omitted.

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

It's really insulting that the exact same interview steps and questions are being handed to all levels of applicants. If you want to see a different screening process that focuses on the skills you've acquired (technical and soft) and not just trivia and knowledge of one exact stack, you'd have to move on to a management or exec position. Those that stay developers will find themselves sharing their screen while lite…

I have no problem with a five minute check to make sure that I'm not just flat out lying when I claim to be able to code. There are a surprising amount of "senior architect" types that can talk all day but can't write very simple code.

I'm never doing another hour-long whiteboard interview again in my life however. The whole process has become so gamified now that most new entrants have practiced the exact types of questions asked hundreds of times. I'm not interesting in spending a month of my life doing that any more and I no longer need to.

The whole SAT-prep feel of the interview process now is tiresome.

Re: Big Tech Company Salaries Are Hurting Startups

#257

Post by user5994461 »

znq wrote: post #164
thesmallestcat wrote: post #140

Earlier quoted context omitted.

The problem is there's no way to know how true the promises are. What do "flex hours" mean to them? Is it conditional, if so, on what? How far does their trust really go? Compensation doesn't have this problem. You can't offer me $160k and then pay me $120k six months down the road. I mean, you can, but not with a straight face. The soft benefits you described are one CTO/manager/investor change, or engineer bus acci…

Totally agree. A lot of it is based on trust and a future that no one can predict nor guarantee. We're a small company of 20 (in my opinion) great people and we just have a different relationship with our employees than most other business owners. While I totally get that the future is always uncertain, I think past actions of myself and our management team (which also includes employees) speak a lot for how we are p…

> I think past actions of myself and our management team (which also includes employees) speak a lot for how we are probably gonna do things in the future

In my experience it doesn't.

Soon the company is too big to known everyone, new managements and leaders emerge, whether you want it or not.

There are a lot of people joining in a growing startup. They will outnumber the current employees quickly and shift the current culture with them. Startups change in all aspects, very fast

Re: Big Tech Company Salaries Are Hurting Startups

#258

Post by user5994461 »

thr0waway1239 wrote: post #58
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…

Also, almost certainly, you don't want to hire engineers after they end up working at one of the tech giants, and the more experienced they are the worse. Having had the unfortunate experience of working along side some of the 'veterans' of one of these tech giants, it was a little disconcerting how easily they would form cliques based on perceived 'proven vs unproven' folks - if you hadn't worked at one of the tech…

I have the exact opposite experience from you.

Re: Big Tech Company Salaries Are Hurting Startups

#259

Post by genericpseudo »

znq wrote: post #164
thesmallestcat wrote: post #140

Earlier quoted context omitted.

The problem is there's no way to know how true the promises are. What do "flex hours" mean to them? Is it conditional, if so, on what? How far does their trust really go? Compensation doesn't have this problem. You can't offer me $160k and then pay me $120k six months down the road. I mean, you can, but not with a straight face. The soft benefits you described are one CTO/manager/investor change, or engineer bus acci…

Totally agree. A lot of it is based on trust and a future that no one can predict nor guarantee. We're a small company of 20 (in my opinion) great people and we just have a different relationship with our employees than most other business owners. While I totally get that the future is always uncertain, I think past actions of myself and our management team (which also includes employees) speak a lot for how we are p…

> We're a small company of 20 (in my opinion) great people and we just have a different relationship with our employees than most other business owners.

If that's not embodied in contract then it's, regrettably, close to worthless. Companies change, managers change, leadership changes, philosophy changes, contracts only change when they're renegotiated.

Re: Big Tech Company Salaries Are Hurting Startups

#260

Post by alpha_squared »

mring33621 wrote: post #241
alpha_squared wrote: post #201

Earlier quoted context omitted.

> ...found that I would want about 7% equity, in order to be interested. They said no, of course. You wanted 7% equity to make up for 20k? That seems a little excessive...

I used a very simple model for my estimate: 5 years to exit * 20K yr opp cost = 100K total opp cost I think my payback should be twice my total opp cost, so I want 200K at exit 1% chance of exit at 600M valuation after those 5 years I would expect my initial equity to be diluted to 50% of original value. Hence, I want 6.7% equity at the beginning of the 5 years. Note that, IMHO, I am being very conservative in calcul…

> 1% chance of exit at 600M valuation after those 5 years

Ah, I see, I wouldn't have taken that into account since I'm not sure it quite works out that way. It seems you've intertwined probability with opportunity cost, is that correct?

EDIT: Thanks for the breakdown, by the way! I really appreciate the insight.

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