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Comment by aaronbrethorst | Hacker News Reader

    The company had 22 employees as of earlier
    this year, and it has been in the process
    of laying off all but what is expected to
    be around 3 of its staff.

Normally, when I hear the words "layoff" and "restructure", I think 15% of the company, not 'basically everyone.' That's a bummer, and I expect this won't be the last time we hear this story this year.

I hope the frontend engineers making $75,000-$125,000[1] for a shot at one day accumulating up to 1% of Gumroad decide to pursue market wages at the next company they join :-\ The economics of startups rarely offer a worthwhile return to those who choose to play the game. For what it's worth, this is something I've found out the hard way.

[1] https://web.archive.org/web/20130516103241/https://angel.co/...

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This never made sense to me. A startup should pay you more because if you are capable, you are giving up a lot.

If you want to be part of something revolutionary as an early employee, I suggest a better plan. Go talk to your employer about starting something small inside the already big and solid company. Negotiate the equity and terms before getting started.

If your company is too big and complex to get this going, then simply cut your hours and work part time on your product with someone else. 1% to 3% is just way too small for someone who is capable.

A gal who loves this game and spends 10 years working at different startups can end up loosing $500k to a couple of millions considering she could get paid very well at big co.

Note: Capable is the keyword here.

>This never made sense to me

There's a lot of naive people that will allow their trust to be exploited if there's a carrot dangled in their face. Now it makes sense.

Most investors will flat refuse to invest in a startup that pays anything more than low-mid-range salaries. Contrary to your theory that the greater risk should be rewarded with a greater tangible wage, I've personally seen investors pass on companies because the founder(s) wanted a 100k salary, even though it represented a 40% haircut in wage for the founder(s).

While the investors don't want you to think it, and do a lot to try to stop it from being thunk, Silicon Valley and tech culture make a lot more sense when you just realize that wealthy, seasoned investors are exploiting naive, just-out-of-college young adults as practically free labor, primarily compensating them in idealism and empty promises instead of dollars.

That's from 2013. No way they were paying sub $100k today.

How about middle of 2014, then? "$95k-$125k"

https://web.archive.org/web/20140707172338/https://angel.co/...

There's a "hiring" post on the front page right now offering sub $100k for front end developers and others. It's in Oakland though.

$75,000 isn't market wages for a developer?

Not in SF, where the median rent is now $4,225/month, or $50,700/year. Realistically, you can't even expect to take home $50,700 on a gross income of $75k.

http://blog.sfgate.com/ontheblock/2015/06/02/san-franciscos-...

I've been thinking about this lately.

Why doesn't Google or Facebook just pack up one day and go to... say, Detroit? Buy a shitload of property there, and tell all their workers that in the course of the next 5 years they want to have presence in two places: this new place in Detroit, and the old place in the Valley. Whoever wants to stay in the valley can stay... and whoever wants to move to Detroit can come move to Detroit. Same pay.

It would win a lot of good will... and it makes sense. The engineers making $150k will actually live what living on $150k is supposed to feel like. It'll jumpstart the hell out of Detroit... etc. etc. Not necessarily Detroit (I just chose to say Detroit because property there is so much down the shit that you can buy a sizable portion of the city for a good few million).

There is a long history of Company Towns in the United States. At their peak in the first half of the 1900's, about 3% of the population lived in one.

At the time, it was seen by the industrialists as a way to raise their workers into the middle class. "Paternalism was considered by many nineteenth-century businessmen as a moral responsibility, or often a religious obligation, which would advance society whilst furthering their own business interests. Accordingly, the company town offered a unique opportunity to achieve such ends."

"Although economically successful, company towns sometimes failed politically due to a lack of elected officials and municipally owned services. Accordingly, workers often had no say in local affairs and therefore, felt dictated. Ultimately, this political climate caused resentment amongst workers and resulted in many residents eventually losing long-term affection for their towns."

Perhaps it is time for a new company town concept being pushed by one of the big tech firms. Apple, Microsoft, Facebook, or Google might be able to pull it off. It could also be a test bed for their new technologies.

[*] Quoted paragraphs lifted from https://en.wikipedia.org/wiki/Company_town

Because money alone isn't enough; you need good schools, roads, and other public services.

Which follow when you send in the money. Not because throwing more cash at something is a magic fix, but because people that are capable of earning more money won't accept less.

Yes, but for the typical sort of talent that Apple, Google, Facebook, etc. want to hire, you need those things first.

Also, while those companies could start a long-term investment in an area, it's not something that could be done in a year or two, and ultimately they could only influence the process.

You need relatively successful leadership in that community to start to ensure those things happen -- the money alone isn't enough.

Because the Bay Area has a lot more attractions than tech jobs.

One reason is because Detroit has 24x7 winter -- in the Bay Area it's a 4 hour drive to winter so you only experience it when (and if) you want to.

Well, Google and Facebook are both extremely profitable, so the wages they are paying their employees aren't hurting them at all.

1) Facebook or Google already have offices in Seattle, Los Angeles, Austin and other lower-priced locales.

2) The moving scenario works great for single people with no attachments, less so for married people with non-Facebook and non-Google spouses, even less so for such married people living in a school district they like.

3) Even with a single non-attached engineer, how many are company men dreaming about retiring from the same company they work for nowadays? How many are just using Facebook/Google as springboard for their "next step", be it a switch to another large company, fast-growing startup or doing your own startup?

4) If you're not independently wealthy, you want to hedge your bets. Being let go of an engineering job in the Valley is probably less onerous than being laid off from software engineering field in Detroit, as far as job searches, networking, and sacrifices one has to make.

Do you mean Portland? It's a short flight from SF, in the same timezone, and has a huge software culture.

But even Portlanders are now complaining about the tech industry taking over and driving up rent.

Yikes! I thought NYC was bad.

...and yeah, I was thinking more in terms of national averages, not specific metropolitan areas.

Is it actually that bad? SF rents are certainly not low, but if you check Craigslist/PadMapper, it would seem difficult to pay $4k, let alone that being the median.

That number is for all apartments (http://blog.sfgate.com/ontheblock/2015/06/02/san-franciscos-...). So this lumps in studios, 1 BRs, 2BRs etc. When you consider that it is (slightly) less crazy. However the median rent for a 1BR is still $3,530 (http://sf.curbed.com/archives/2015/09/03/san_franciscos_medi...).

More anecdotally it is basically impossible to get a studio for less than $2k or a 1BR for less than $2.5k-$3k. I pay ~$1700 but have 1 bedroom in a 4BR apartment. If you are willing to live with roommates rent can start to become "reasonable" (assuming a $100k+ salary), but you're kind of screwed in SF proper if you want to be on your own and pay less than $2k.

That's ridiculous. You're talking about the kind of money I paid in mortgage repayments for a 2 bedroom house 12km outside of Canberra, Australia.

The prices go down 12km outside of SF too. (Not to that level, but still)

But comparing Canberra to SF isn't fair. Compare it to Sydney. It's $2k here easily a month for a 2 bed place to rent, depending on the suburb.

I pay about USD$2,400 a month for a 650 square foot 1 bedroom in downtown'ish Seattle. I envy your AUS$2,000 2 bedroom :)

Your post suggests you must be single, probably living either with your parents or with roommates. Perhaps 75k works if you are in the above two situations, but not otherwise. Consider that 75k, after taxes will be 50k. Assume you are saving zero for IRA/401k, you still have other costs -- healthcare premiums, car/bus/train fees, etc. Oh, and food. Doctor co-pays, dental co-pays.

Now if you are married with kids: 1. Hospital co-pays, premiums, co-insurance, $45 drug co-pays, everything comes to about $5k/yr if you are just moderately sick. 2. You cant live with roommates, you actually need your own home. Can you imagine raising a family with roommates? 3. You def need a car, possibly two.

Forget about saving up for a house, most will be $1m+

Some people will say -- "oh, you are married, now you have two incomes" -- sure, until you have kids. Then most of your second income goes to child-care, and in the early years, you will pay MORE for childcare than you earn!

Yeah, but divide that rent rate by 8 roommates ...

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