Hacker News Reader

Comment by dsacco | Hacker News Reader

I admire Buffer for being so transparent with their salaries, but I don't think I would ever decide to work for a company that mandated it.

In my (admittedly limited) experience, mandating salary transparency tends to increase the salaries of low performers and reduce the salaries of high performers. It usually eliminates the potential for negotiating raises and poses difficult questions about paying some employees more than others in the same band.

Case in point: according to Buffer's salary calculator[1], a "master" (their highest rank) backend developer living in San Francisco and optimizing for salary over equity would earn about $155,000/year. I can't think of any definition of "master" developer that could be competitive for. Friends of mine at AmaGooBookSoft and even other startups have earned nearly double that for being merely "senior" (L5).

[1]: https://buffer.com/salary?r=1&l=10&e=3&q=1

View on HN

The $155k salary might be due to the transparency, but could it also be due to a simple inability to pay developers $300k+? That's well over double the CEO's salary. I think it's clear they simply don't have the revenue and cash reserves to pay developers that kind of money. I suspect you'll find this to be true at a lot of smaller startups that rely on actually making money instead of fundraising.

Also, Buffer is entirely remote. I bet many people are willing to take a big pay cut if they don't have to commute to an office building every day (and of course, other people like office life -- but remote positions are rare, so it's normal that they're more "expensive" for employees who really want them).

Also, if you're working remotely from a more affordable location you may not need as much salary in order to live a very comfortable life.

I think our expectations are skewed by the crippling cost of living in SF, New York, London, etc.

Buffer actually adjusts the salary based on location, so this is (at least partially) taken into account.

The salary is peanuts compared to what that CEO gets compensated.

The latest model I have seen showed founders making about one-third of top-level employees.

In take-home income right? They still have sizeable ownership of the company and vesting.

Yes, they are willing to forego significant salary because they will control most of the profits.

You mean "hypothetical profits". There's a distinct possibility of there being no profits at all.

High risk, high reward.

Profits? You must be joking.

They recently took around $3m off the table if I recall correctly.

It was $2m in 2014

It's definitely a great business case study. Most people don't get exposed to this kind of stuff.

> earned nearly double that for being merely "senior"

Not as a base salary. No way. They earn that, but ~50% comes from equity.

What's the difference? Equity in a public company is cash. You can even lock in what your RSUs will be worth when they vest with some options contracts.

Because it's apples to oranges. You take a larger chunk of illiquid stocks/options at a private company in exchange for the risk that it won't go public one day. That's an active tradeoff people are making whether they know it or not, so you can't compare salaries at a private company and illiquid equity to salaries + liquid equity at a public company.

So if I enter a casino with 100 bucks set on betting on number 23, it means I actually own 1000 bucks? (or whatever that gives you?) Giving stock on a public company you can sell the moment that vests is valuable. Owning stock on a private company that you can't sell, can't probably cash in unless they IPO, etc is not.

Yes that is the description of an illiquid potential future asset and a liquid current asset. both things that were addressed in my above comment.

I think you're going to get perfectly good developers for $150,000. Are you going to get twice as good ones if you pay twice that, or just greedy ones? Have transparency and let someone else pay the darlings. You'll still get your work done.

This exact "greed" rhetoric is what helps businesses keep dev salaries down. You don't get greedy people for that much, you get smart business people (they know their worth and charge for it).

I do not understand devs who justify low salaries this way.

Why make 50% of your potential?

What do I have to sacrifice to earn 100% more money? There's a lot more money in doing harm than doing good, and I will gladly take less money to do good.

In this case, you maybe don't have to sacrifice much at all. There are plenty of good reasons to go work at a large software organization, e.g. stability, and most startups will work you harder for less tangible benefit.

Exactly. If you are just greedy then programming is not the right field. Much more reliable to make a boatload of cash through other means if that's all you care about.

I think you're misunderstanding what he is saying.

I'm not justifying low salaries; i'm saying that $155,000 is plenty.

"plenty" by what metric? It seems to be less than market rate (for good experienced developers). What other metric should we use?

Some people may be willing to take less pay in order to have more control/freedom in a small startup, rather than just being a cog in the machine at Google or Microsoft.

$155k is already pretty obscene, let alone double.

Around here, $50k entry and $90k 10y+ senior for developers is fairly standard.

Salaries in the San Francisco Bay Area are very high compared to the rest of the world due to high housing costs and extreme demand for engineers. $155k is average for 5-10 years of experience at a non-startup. You can certainly go much higher or lower depending on the company, your experience and your negotiation skills.

I'm comparing to Southern California; I doubt the Bay Area has 65% higher cost of living.

I'm not sure if it does or doesn't, but the salary of $155k is normal in the SF area.

Check out AngelList's salary tool: https://angel.co/salaries . Median salary for 'Developer' is about $120k. More for a backend developer.

GlassDoor gives an average salary of $120k for the same area: https://www.glassdoor.com/Salaries/san-francisco-engineer-sa...

Cost of living is at least that much higher. Compare rent in San Diego (say, clairemont) vs Rent on the peninsula at equivalent house size. Easily 100% more.

> extreme demand for engineers

Where is "around here", Europe? Because anywhere in the U.S. is going to have a higher starting salary than $50k.

Reply on news.ycombinator.com