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On Becoming a VP of Engineering pt. 2

honeycomb.io

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Re: On Becoming a VP of Engineering pt. 2

#41

Post by kylequest »

Aurornis wrote: post #9

This series of blog posts have had some really great insights. However, they’ve also left me feeling uneasy for reasons I couldn’t really put my finger on. It finally clicked when I read the section justifying the company's low compensation: > Industry data shows that Honeycomb is about average in this as a series D startup, not an outlier. I have friends who are line managers at larger companies who take home more t…

You are oversimplifying it picking comp as a single/only dimension. There's so much more to being in a startup. That's ok. For some people maximizing current comp is the most important thing. Others have a more long term game where working at a startup with lower comp opens up new opportunities later on (even if the startup equity doesn't work out). For other people it's about feeling alive... What's the point of higher comp at a big company if you hate your life (or, in a less extreme case, where you just don't feel fulfilled or satisfied)...

Re: On Becoming a VP of Engineering pt. 2

#43

Post by bcantrill »

Aside from what others have observed about this being extraordinarily bureaucratic for such a small company, there are big chunks that are missing. This is a VP of Engineering; where is the engineering in here?! As a technical leader, one might not necessarily have line code responsibilities, but you absolutely have technical responsibilities to the team and to the company. For example, there is always a tension between rigor and urgency in engineering ; it is the responsibility of engineering leadership to navigate that tension! e.g.: An engineer insists on stopping ship because of a critical bug, but there is an important customer at the other end to make a contractual deadline; what is to be done? It falls on the CEO to bear responsibility for that decision -- and for engineering leadership to make or inform that decision. Either way, it is the VP of Engineering who is in the hot seat -- not for OKRs or performance management or other FAANG middle management cosplay, but for making tough, technically informed decisions.

That is but one technical piece that is missing here; there are in fact many. Technologists who aspire to leadership: please focus on leadership, not middle management!

Re: On Becoming a VP of Engineering pt. 2

#44

Post by qqtt »

dalyons wrote: post #24
nickstinemates wrote: post #16

Earlier quoted context omitted.

What is left unsaid: working at a startup at an executive level typically involves whole percentages of equity in the company. If honeycomb continues to succeed and there's some sort of exit or liquidation (which can happen in series D, E rounds for select individuals like executives) then I am sure the total comp is not "about average" but instead much greater than average.

Yeah for executive positions like VP the vast majority of the comp is in stock. At a bigco that will be liquid, at a startup it won’t, hence the difference in “market rate”. But the startup equity is theoretically worth much more, it’s a huge risk but you have to on some level believe the valuation, or you wouldn’t take the job.

> the startup equity is theoretically

But there is nothing theoretical about start up equity in companies that have raised money. They have a very clear valuation, and especially Series D, that valuation will already be pretty mature.

AirBNB did a Series D with a valuation at 10.5 billion in 2014. They are currently around 91.66 billion market cap. That is a nice 900% return, but that's not a completely different ballpark than other LargeCo's (Apple had about 800% return, Amazon 700%, Meta 500%) - the question is, do you really think your Series D start up is going to be as successful as AirBNB (which is among the top 100 biggest American companies by market cap).

The point is, there is really nothing "theoretical" about the value of those start up shares - they have a well determined value, and for many start ups, even the appreciation of those shares between Series D and IPO can be less than the appreciation they would have gotten from LargeCo shares with top of market compensation and potentially even bigger dollar value equity stakes.

Re: On Becoming a VP of Engineering pt. 2

#45

Post by kortilla »

compiler-guy wrote: post #14
mylons wrote: post #11

how is honeycomb a startup? why are 7+ year old companies with hundreds of employees considered a startup?

They aren't public, so they get lumped in with the startups. A more accurate description is probably "privately held".

Nah, the distinction is different. Startup usually means, not profitable or barely profitable and focused on growth.

A taco truck is not a startup. It’s tiny and private.

Cargill is not a startup. It’s massive and private.

Re: On Becoming a VP of Engineering pt. 2

#46

Post by [deleted] »

bcantrill wrote: post #43

Aside from what others have observed about this being extraordinarily bureaucratic for such a small company, there are big chunks that are missing. This is a VP of Engineering; where is the engineering in here?! As a technical leader, one might not necessarily have line code responsibilities, but you absolutely have technical responsibilities to the team and to the company. For example, there is always a tension betw…

[deleted]

Re: On Becoming a VP of Engineering pt. 2

#47

Post by calderwoodra »

bcantrill wrote: post #43

Aside from what others have observed about this being extraordinarily bureaucratic for such a small company, there are big chunks that are missing. This is a VP of Engineering; where is the engineering in here?! As a technical leader, one might not necessarily have line code responsibilities, but you absolutely have technical responsibilities to the team and to the company. For example, there is always a tension betw…

From part 1 they mentioned that "Directors run the company", meaning VP is where the engineering stops, and that strategy of the engineering org and alignment with other orgs is their job.

Re: On Becoming a VP of Engineering pt. 2

#49

Post by eximius »

qqtt wrote: post #44
dalyons wrote: post #24

Earlier quoted context omitted.

Yeah for executive positions like VP the vast majority of the comp is in stock. At a bigco that will be liquid, at a startup it won’t, hence the difference in “market rate”. But the startup equity is theoretically worth much more, it’s a huge risk but you have to on some level believe the valuation, or you wouldn’t take the job.

> the startup equity is theoretically But there is nothing theoretical about start up equity in companies that have raised money. They have a very clear valuation, and especially Series D, that valuation will already be pretty mature. AirBNB did a Series D with a valuation at 10.5 billion in 2014. They are currently around 91.66 billion market cap. That is a nice 900% return, but that's not a completely different bal…

No, it's all theoretical until it becomes liquid.

Re: On Becoming a VP of Engineering pt. 2

#50

Post by lizthegrey »

Aurornis wrote: post #19
hayd wrote: post #13

Earlier quoted context omitted.

They should definitely renegotiate ("complain") if they're not being paid a fair market rate... Comparing "relative to the world median" is just absurd, the comparison can only be to others in similar roles/locations. Is she $200k, $400k, or more? Potentially line managers in big companies could be earning more than any of those numbers.

I was thinking more about all of the employees at the company who aren’t VP level and are paid significantly less than this. When a company espouses “about average” compensation as one of their core principles while simultaneously espousing excellence in everything else, there’s a mismatch.

We're paid decent enough for SF bay startup salaries. Worldwide, regardless of where we live/work. This works out quite advantageously for having a distributed workforce, and means many folks earn very top of market for where they happen to live (if there is even a tech market where they live!)

Also, salary bands are transparent both to employees and applicants.

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