Most SF programmers are overpaid
random.david.ulevitch.com
random.david.ulevitch.com
The key piece of the argument is: "I get frustrated when an inexperienced candidate looks at a 200 person company against my 25 person company, says they will pay $10K more and takes that job because I won’t match their offer. That’s frustrating, because I know, as many others do, that the basis for the decision is wrong. I can’t say if it’s right or wrong, but it’s certainly being made based on bad metrics."
That sounds a lot more like 'inexperienced developers are accepting jobs to get a little more money while I'm offering them a lot more equity.'
To make a rather cynical counter-argument, one might say that these inexperienced candidates are actually being quite savvy, and taking a much more sure bet (a very well-financed company that's offering more money right now) instead of taking the riskier one that they think has worse odds of panning out.
My real beef is that inexperienced candidates make their decisions based on incomplete understanding of the metrics and not knowing the metrics that really matter.
As to your counter-point, empirical evidence argues against that. $150K/yr today that lasts six months is worse than $100K/yr that lasts a year (and often the delta is much smaller). People also often forget that usually one month of not taking home a paycheck is greater than the delta between offers. But as with everything, ymmv.
Did you mean "metric" in the sense of measurable quantities or in the sense of "things that matter"? While they very hard to quantify (and thus aren't "metrics" in the true sense of the word), I am pretty sure I am not alone when I say that peers, autonomy, challenging work and capacity for continued learning and technical growth are more important than monetary benefits.
I am just saying that in 2010, every startup claims to offer those benefits. In fact every startup I've worked at since 1998 has claimed to offer those benefits. And from what I know, you can even get those benefits at huge companies like Google.
So really you still have to compete with compensation, or else have a project that the person REALLY wants to work on.
My problem with the article is that the author is assuming that the engineer is too naive to truly understand tradeoff between salary and the "startup benefits." The founder has a lot of emotional attachment to his startup. The engineering hire does not - perhaps he's the one with the more rational viewpoint.
There's a difference between saying you do and actually doing it. No one will say "no, you don't have autonomy -- we don't hire top talent so we have to micromanage; we work very strict fixed hours; you'll be writing CRUD screens for sales people" (I've seen companies claim flexible hours in that "you're have come strictly at 9, but you can leave at 5, you don't have to come in at 8 or stay till 6!").
A start-up can say many things, but e.g., if one place is doing very routine database driven webapps and the other is actually solving far more interesting problems (makes systems software vs. "yet another website", or if they're a web site writing their own search stack and other interesting infrastructure, or does serious machine learning development, leads open source projects, etc...) it's pretty obvious. Plenty start-ups also hire PHP script kiddies (while talking about hiring "rock stars") and other assorted bozos (because they have a project to finish by a specific deadline), while others are more rigorous than Google (from what I heard, Kosmix is one such example).
Google is a large company and obviously there are many boring but business crucial jobs to do there. Nonetheless, at least now, they're fairly explicit what area you'll be working on (e.g., systems programming vs. application programming, sometimes even down to a specific team). Free food and drinks are nice, but that's not why I would still (if I were looking for job) apply there, knowing well others likely give better salaries and fancier titles; the long interview process is a discouragement when other companies are extremely aggressive about getting you to sign an offer, but it has changed now.
So at offer-time, there are very few concrete facts that you know for sure about the company. One is your compensation package. Another is the product that you'll be working on. A third are the investors backing the company.
Not much to go on. The OP is asking prospective employees to consider the intangibles when making their decision. And yes, ultimately the intangibles are more important to job satisfaction. But they don't know the intangibles yet - they know what the OP says the intangibles will be. And every other company that they interview with says the same thing. They can be forgiven for discounting a few promises from a wild-eyed entrepreneur and making decisions based on the facts they have in hand, right?
FWIW, I applied to Google and ended up accepting their offer mostly because I asked around, several of my friends knew Google employees, and virtually nobody had anything bad to say about the company. Even people who were no longer there thought it was generally a nice place, it just wasn't right for them at their particular stage in their career. That's the kind of word-of-mouth that can make or break hiring for a startup. If you want people to join you for your intangibles, make sure that they hear it from your employees, not from you.
In a sense yes, it's hit or miss. I agree with you that knowing people who work in a place is very important, as you're going to get a far more fair picture out of them (e.g., they're more likely to give a truthful picture of the hours worked, legacy technologies used, etc...). Generally, it's also a lot easier to get an interview (for a core position) if you're going through a referral rather than by sending out your resume or responding to a recruiter.
You can also judge the quality of the team and interesting-ness of their work by talking to the engineers, discussing the projects they work on and if there's open source work, reading their code.
Yes, it's hard to get a complete picture of the intangibles, but it's still a bad idea to base the entire decision solely on a single number.
Read this: http://ea-spouse.livejournal.com/274.html
Lots of people have that environment but then get compensated a lot more to deal with it (unlike EA).
Go ask folks you know who have been in the workforce for a decade, they will most assuredly tell you that the different between $100K and $110K is $0. Even the difference between $100K and like $140K is still fairly marginal when you compare it to the other things you may or may not be giving up. I mention a bunch of those things to consider in my post.
Why do you work at a startup then? You could make so much more money at a bigger and more established company.
I would always encourage someone being offered 3x their salary to take that. You'd be stupid not to take that, almost everything else being equal.
I'm talking about the people who see a $10K difference and think it's material in the scheme of things. If you're only focus is money, then fine, an extra $833 before taxes per month might move the needle. For the vast majority of people, that's not a sound way to make decisions on where you spend the majority of your time.
ps, no clue why news.yc won't let me reply this deep in the thread, some limit or something. Maybe because I'm OP.
$833 * 12 is almost $10K a year, it isn't trivial, especially if you have student loan payments to make. I just think all web startups offer about the same thing these days: free beverages! a web site! work 10 hours a day and LOVE IT! we are cool guys with t-shirts! we all work packed into a rented loft in soma! .25% of the company! you can use emacs or vi, we don't care! pick your tools! experience! foosball! you aren't working at microsoft!
It all sort of merges together. So the only thing you can really compete with is the coolness of your project and the pay. If people are choosing higher pay elsewhere, maybe your project isn't really that cool.
People put a lot of stock in company life and such, but these things are hard to tell until you take the job and start working for a while.
Also, when you first start earning your own money, it can be all about the money. Maybe you should start looking at older candidates?
Maybe you should highlight in the interview process (if you do an interview with them) the potential in regards to equity, so on and so forth?
I'd still want to hire than engineer though. But when they decline, I'd rather them not tell me it's because the other offer was $10K higher. I'd rather they tell me they see more room for personal growth, more interesting technology, etc. There are reasons to decline, and that's okay -- but $10K is a really stupid one.
A great engineer is not expected to know how their impact
on a 25 person company will be different than a 200
person company. Moreover a great engineer may not yet
know that not having that impact may be a really
important loss to them.(your 10k point is entirely valid, of course.)
When you are hiring an experienced developer, do you ask what they were making at their last job? Of course you don't, that would be hypocritical.
However, other employers do ask what your previous salary was so they obviously place some value on salary as a metric. It's only reasonable for inexperienced candidates to go for the larger salary because they know it will be used as metric that will effect their income for many years to come.
I sometimes do ask what people were making, but you're right, it doesn't matter. I already know what I want to offer.
Other factors are often also a combination of these: working hours is a function of autonomy and ability to work from home (or come in and leave at times when there's no traffic) can mitigate a bad commute.
Under no circumstances, however, do I say engineers should be underpaid: the salary shouldn't impose a burden, it should allow you to (when living within your means) save towards retirement (without counting on winning the IPO sweepstakes), towards your family, towards (if you're inclined that way) a mortgage (1). However, pretty much every offer I've had matched those criteria very well. Decisions had to be made by other parameters.
Shares are a very complex topic: while it's important that employees be a share holder (tying your own financial success to the company's), the number of options, the strike price and even the stated equity percentage are often meaningless when stated _without a context_. There's different kinds of liquidity, there's reverse splits, follow on funding rounds, different types of stock, different vesting agreements. Just because someone told you "you have 0.25% of the company stock", it doesn't imply that you'll be a millionaire if they sell at a $400 mm valuation.
Work is where you're spending the majority of your waking hours. While an eager recruiter may tell you "what's the worry, just spend two years here and then we'll have an exit and you'll be rich!", it's a tremendous decision (especially if you're enthusiastic and passionate about your field of work, as most on HN are) that can't be boiled down to any single number.
(1) One exception here is for fresh graduates. Public, prestigious technology companies do occasionally [edit: added occasionally, per a comment] underpay them (much more so, in practice, than funded startups: there are established procedures and formulas for determining salaries) and the pay off (in terms of skills learned, confidence gained, exposure to smart and experienced colleagues) is often worth it if you pick the right team and the right project.