It does seem asinine. Although frankly I can't think of many ways that seem much better. Do you always just give everyone on your team the exact same bonus?
In fact I'd argue, if there were no financial incentives, most HNers wouldn't do startups. I know everyone likes to say they do it to change the world and the passion of something or other. But in reality I've yet to see many founders take a $50k salary only (but keeping voting power) despite the profits of the company.
* Formal periodic performance reviews
* Scheduled bonuses based on "job performance"
* Ranking of employees (this is the old GE performance management paradigm; "up or out!")
One of the reasons you don't see many founders take a $50k/yr salary is that very few of them are truly confident of success. I once heard an aphorism, "don't trust a founder who won't put their own money into the company." It's a little pointed and unrealistic, but you get the idea. In an industry driven by a mythology of becoming the next big thing (parallels to the equally one-in-a-million mindset in the music industry), no founder can afford, professionally and with regard to reputation, to treat themselves as anything but a foregone success, and that attitude requires "competitive compensation." This means they want to be paid as much as other unsure founders.
The "low-salary superboss" is a product of already-successful companies.
The thing is that there's a huge number of talented people out there who will put in extra hours because the work is interesting, or they feel that if they don't, they're letting the team down.
In fact, the really really talented developers seem to care less about money (after a nice base-line), and more about the work / team. Or, other obsessive (and useful) qualities make them unable to say no to work, etc.
So, who would a company prefer to hire? Obviously, the qualified person who would work for free, because it's their passion.
Interestingly, $150k/yr is a lot more than I've ever made, but that's neither here nor there.
If there were no other financial incentives, absolutely. I have no problem saying, "No" to work. I bust my butt doing 100 hour weeks so that you can ship Mario Halo World and make $500M opening weekend, I deserve to be compensated. Even if I love the work, I can spend that 60 hours per week that you're not paying me to work on something else I love.
It's one thing to be RMS and working on your lifes passion for free. It's another thing to, as an employer, expect to ask someone to forego tucking their son in for the next 6 months, because you need to make $200M, but will not compensate them at all. I don't doubt there's people that will volunteer to do it out of some sense of passion or loyalty, but it won't be me.
I know what I'm worth.
Also it appears you do game development. Unless you become a rockstar or do the next Angry Birds as a solo dev, you'll tend to get paid less than the industry average -- at least that's how it has been historically.
Actually, I can't really stand working for other people, so I'm doing a startup. Now I work almost all the time I'm awake, and I make 0 dollars. Hmm.
So, what city do you live in? Does your employer have <10, <100, <1000, <10k, or 10k+ employees? Or, are you a contractor?
EDIT> I should point out that the highest-paying jobs I've seen advertised for non-management devs in Toronto are around 100k. Architects are like 120k. Then again, a detached house in town, near a subway stop is under 400k.
The listed salaries in ads are just for where to start negotiations at :-)
In any case, if your start up does well, but not so well that you can retire like Brin & Page (exit w/ say $3-5M) you'll find that higher paying offers tend to come a fair bit easier.
I couldn't tell from your page (or I just missed it), what does your start up do?
I'm developing an online, subscription-based game for PC and Mac.
> I used to be a consultant... if you've never done it I recommend all devs to spend some time doing it.
The problem I see with consulting is that to be really good, you need to care more about the client's project than your own stuff (or at least act that way). This is a problem for me, since (non-retirement) money is not a significant motivator.
This is also true of customers, of course, but there's a bit more leeway and leverage there.
> The listed salaries in ads are just for where to start negotiations at :-)
Very true.
> In any case, if your start up does well, but not so well that you can retire like Brin & Page (exit w/ say $3-5M) you'll find that higher paying offers tend to come a fair bit easier.
Interesting. When I reach that range, I won't be accepting offers -- I'll semi-retire. I'd probably work at building a personal submarine like Nautilus UC3 ($200k), doing AI research, building robots and making art.
You mention SF and Seattle. For comparison, in Toronto, you can get a beautiful house in an elite uptown neighbourhood on the subway line, starting at around $650k. If you move to the 'burbs, the size/price ratio just improves (but why would you want to live in the 'burbs :)
Her view is that the purpose of companies is to grow.
His view was that the purpose of companies was to serve a social purpose. The purpose of Google is so that people can find information. The purpose of Microsoft is so that people can use their computers. The purpose of Merck is to keep people healthy.
I like this viewpoint a whole lot better than Milton Friedman's corruption ("the purpose of a corporation is to increase shareholder value"), where an abstract measuring stick necessary to ensure corporate accountability somehow became the whole principle that society was organized around.
To me, that seems a lot more fair than implicitly believing all members of a team are of equal levels of skill, productivity, etc.
It does not follow that the way to do that is a rigid, formal cycle of performance reviews and ranking.
Here's why: 1. Some managers (of sub-par mind you) teams scored whole their team as "excelent" - as to compensate for lack of company success. Then when the MGMT figured that out - they implemented ratio - thus again hitting the team with many excelent overachievers, etc... 2. Myself personally am often transfered from f-ed up project to a f-ed up project (since I have the ability to mostly turn them around or help to mitigate the damage) thus ensuring that I will never be compensated for the level of effort necessary to turn around a f-up.
This system just makes me sick - because I want to compete but I don't want for my collegues to suffer because of it - currently it just encourages teamicide. So this kind of scheme appears to demotivate over-achievers more than it motivates under-achievers.