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Big Tech Company Salaries Are Hurting Startups

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Re: Big Tech Company Salaries Are Hurting Startups

#281

Post by throwaway2016a »

am8 wrote: post #275
holydude wrote: post #244

Earlier quoted context omitted.

Then I guess you are targeting the wrong pool of candidates. Do the candidates know how much can you pay (ranges?). It often happens that I as a candidate have to go through several rounds just to learn that they can't afford me.

So what Modulo is there to catch people out. If you were a front end developer do you really need this? The fact employers will reject based on a test that is fashionable just because a few coding blogs said so doesn't mean they can't provide value. What about their past work or qualifications? Cocky. Sounds like a clique i'd want to avoid at all costs.

I can't tell if you're being serious or trolling but using modulus in front-end is not all that uncommon. Especially when doing reporting or animation.

For years the only way to do zebra striped tables was that way.

Also, I never said...

1. We were taking about front-end.

2. We reject solely based on it. I just used it as an example of a type of question.

In fact we've hired candidates who didn't know what modulo was because when they encountered it they were able to reason through it.

Furthermore... this candidate failed far easier questions that that. I used FizzBuzz as the "hardest" question.

Does not knowing Fizz Buzz mean you won't be productive? No. But it is probably a good indicator you aren't commanding of $150k a year this guy got hired for.

Re: Big Tech Company Salaries Are Hurting Startups

#282

Post by logicfiction »

mathattack wrote: post #175

The idea that VC-funded startups should pay the same cash salaries as big companies is a sign of hot markets. It happened in 1999 as well. In reality, startups should pay less because they give equity, allow more freedom and creation, and have less stupid corporate rules. It's not for everyone, but that's the tradeoff. Generally when you're borrowing from VCs who expect a 30-50% return on their equity, it's a bad ide…

That would be entirely true if equity were handled the same way as it was in 1999. To be fair, I wasn't there to know for sure and can only base this off what I've read. As I understand it equity has changed, almost in the opposite direction of the "free lunch" equation. Equity values are frequently hidden from employees to mask how low value they are, VCs now figured out how to ratchet and protect themselves at the expense of the rank-and-file options holders, and so forth.

Re: Big Tech Company Salaries Are Hurting Startups

#283

Post by memmcgee »

ConfuciusSay02 wrote: post #185
pm90 wrote: post #111

Earlier quoted context omitted.

I agree with most of your comment. One thing to note though is the whole scandal where Steve Jobs colluded with other firms into a non-poaching kind of agreement, essentially distorting the market. So that is a possible outcome as well.

If it weren't for the relentless attack on wages via wage fixing cartels, visa abuses, outsourcing, etc. we would likely be seeing the very top engineers making close to $1M per year. Far from that "hurting startups" it would be a benefit to all tech workers as wages would rise across the board. This framing of "hurting startups" is a euphemism for "hurting investors" or "hurting the wealthy". It's roughly the same c…

I would say that it's kind of the opposite. Having high developer costs means that you need investors in order to scale. This helps investors because it means if you want to succeed, you need to get investors, which they can use to their advantage to get more desirable terms for them and their rich friends.

Re: Big Tech Company Salaries Are Hurting Startups

#284

Post by mavelikara »

runT1ME wrote: post #249
throwaway40483 wrote: post #57

Earlier quoted context omitted.

Hey. CEO here. So you're telling me if I raise salaries I might hire better engineers? Hmm, wonder if there are any theories about this relationship.

No, you need to raise compensation . If someone is worth 250k at Google, they may work for your company for 150k if they get 600k worth of options paid out over four years at a reasonable valuation.

A 400K investment over 4 years to earn something worth 600K over the same period which will be liquid after another 4 years - does not sound very compelling to me. If it were 600K/year, yes, that's attractive.

Re: Big Tech Company Salaries Are Hurting Startups

#285

Post by am8 »

throwaway2016a wrote: post #281
am8 wrote: post #275

Earlier quoted context omitted.

So what Modulo is there to catch people out. If you were a front end developer do you really need this? The fact employers will reject based on a test that is fashionable just because a few coding blogs said so doesn't mean they can't provide value. What about their past work or qualifications? Cocky. Sounds like a clique i'd want to avoid at all costs.

I can't tell if you're being serious or trolling but using modulus in front-end is not all that uncommon. Especially when doing reporting or animation. For years the only way to do zebra striped tables was that way. Also, I never said... 1. We were taking about front-end. 2. We reject solely based on it. I just used it as an example of a type of question. In fact we've hired candidates who didn't know what modulo was…

I said Front end as an example could apply to most developer jobs really.

Anyway, this guy you placed as a "lower mid", this is your judgement, how do you know it's correct? Did other people say the same? Perhaps he didn't have the skills you were looking for but was good at other things. Saying the other company didn't do their diligence is easy but is that really what happened?

If you are hiring developers and placing them as lower, mid, lead etc. you are going to get flak anyway as you're just jailing them and hiring a load of people who only agree with what you think.

You're going to get people who are good at developing software who don't care about math(s) or machine learning, give them 2 seconds and Google and they can answer your Modulo question.

Is it not about the willingness and enthusiasm to learn? Or do they have to go through "hard" tests to prove they can work out some academic nonsense they are never going to need to use. To prove themselves to the frat. I'd argue a lot of really clever people good at the hardcore Computer science and data analysis type subjects aren't always as good at writing decent code.

Re: Big Tech Company Salaries Are Hurting Startups

#286

Post by falsedan »

heurist wrote: post #122
falsedan wrote: post #116

Earlier quoted context omitted.

Why not: work for a large company that can do both? Pay reasonably well with low-risk, and let you grow your technology skills + contacts? A: those companies aren't cool & won't make you a millionaire by 35 on stock options (whereas a startup might)

Personally, because I don't like being told what to do :) If I don't have a significant amount of control I shut down, become depressed, anxious that I'm wasting my life, etc. I'm also wary of being taken advantage of. If I'm going to spend half or more my waking hours working I want to be reaping the profits. I need freedom. I've been directing product at a seed stage startup to get my bearings in the small business…

Pitch to some VCs then.

Re: Big Tech Company Salaries Are Hurting Startups

#287

Post by ScottBurson »

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…

Seems like the key number here is the 1% chance of exit. If you really think the odds are that bad -- and I'm not saying you're wrong! -- then there isn't an offer they can make you that you'll take. They'd have to convince you that the odds are at least 5%, and probably higher, before there's a basis for a deal.

Averaged over all startups, of course, 1% is a reasonable estimate (might even be high). So another way to put this is, a savvy top developer just isn't going to join an average startup, period. They'll have to be persuaded that the opportunity is an extraordinary one. The bulk of startups will have to make do with less-experienced developers. This is why pretty much every startup now needs a technical co-founder.

Re: Big Tech Company Salaries Are Hurting Startups

#288

Post by rpmcmurphy »

mateo411 wrote: post #272
rpmcmurphy wrote: post #243

Earlier quoted context omitted.

My experience has been that options have negative value. I learned this the hard way when I exercised options from a firm that has since gone sideways. I ended up with a $40,000 tax bill on stock that is worthless. Nowadays I only look at companies that can offer RSUs. Until the re-write the tax code to stop taxing people on fictional gains, options are crap, especially with companies remaining private far longer tha…

Can you write off the $40,000 loss?

I can apply it against future gains, but its complicated. Since I was never able to sell the stock, the gain is entirely fictional, which is why ISOs suck so badly.

Re: Big Tech Company Salaries Are Hurting Startups

#289

Post by st3v3r »

mathattack wrote: post #175

The idea that VC-funded startups should pay the same cash salaries as big companies is a sign of hot markets. It happened in 1999 as well. In reality, startups should pay less because they give equity, allow more freedom and creation, and have less stupid corporate rules. It's not for everyone, but that's the tradeoff. Generally when you're borrowing from VCs who expect a 30-50% return on their equity, it's a bad ide…

Why should VCs get a 30-50% return on what they put in, but engineers don't get a 30-50% return on the salary they sacrificed to actually do the damn work of the startup?
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