Why we built our core engineering team outside of the SF Bay Area | Hacker News Reader

Why we built our core engineering team outside of the SF Bay Area

medium.com

71 pointsabreckle65 comments

I was hoping for a thoughtful article about a US company's experiences with offshore development.

What I got was a very thinly veiled advertisement and business case for Bridge Academy. Originally I thought it was an offshore staffing firm, but having looked at their site I can't tell what it's supposed to be.

I think it's an offshore staffing firm that's ashamed of admitting it's an offshore staffing firm, with the twist that the candidates pay, once hired, rather than the hiring companies. In exchange, they get some sort of nebulously defined training and mentoring for an undefined price. Oh, and the mentors get a commission when candidates are placed.

Top it off with a blockchain-focused curriculum and a list of blockchain-obsessed hiring companies and it all feels... naïve, I guess would be the right word. Young. Enthusiastic.

Of all the different projects to outsource for, something block chain related, specifically crypto coin related would be the very last.

Why?

Because is someone sneaks in a backdoor or otherwise tries to make off with a bunch of crypto, good luck extraditing an overseas worker to get the money back. You have to trust your employees, but at least it's a little more difficult to skip out on justice when you are in the same country as your employees.

I wouldn't build greenfield in India (I've had to deal with the quality coming out of there on numerous occasions) but I also wouldn't build greenfield in SanFran.

It's less the cost to me and more the turnover. I as a worker have every incentive to take a position in SanFran to get to SanFran and get established (outside of the money). I also then have every incentive to leave as soon as possible for one of the Big 5 since it's gold on my resume (even if I don't stay there more than a year or two).

Come to Salt Lake City. We even have absurd branding to lure you "silicon slopes!"

There are a few SF organizations with satellite offices here. I've worked for one, have friends working for others. It's a pretty decent arrangement. You can get a team setup here for the cost of a single employee in the bay (especially when you factor in real estate.) Hell, maybe more. Shit, some of us will take pay cuts to avoid working for the Domo's of the Provo Valley. Don't have to deal with time zone issues, and when shit hits the fan it's an hour and a half flight. I've flown to SF and back, same day multiple times.

I love the local tech community here (general SLC area) and I've talked to enough SF -> SLC immigrants that I never want to work in Silicon Valley.

I was about to say the same. I bet you can have your pick of the top senior engineers for 120K (most devs whose salary I've heard make less than 100K). And you'd probably get loyalty too - a lot of them don't want to go anywhere.

What about the LDS influence. I'd be worried about moving here to start a family.

Outside of a few issues there isn’t much influence, unless you’re in the church. One nice thing about Mormons is that at least outside of a missionary context abroad, they take “no” for an answer with grace. I wouldn’t want to join their club, but I like them as neighbors. Their cooking can be a little uninspiring, but the hospitality and friendliness is world class. SLC is also a gorgeous part of the world, if you like to hike or climb it’s one of the best. The city itself is also not exclusively Mormon, although it’s not NYC levels or diverse either. I’d recommend a visit to see if you like it.

"The Liquor laws of Utah regulate the selling and purchasing of alcohol in the United States state of Utah and are some of the most restrictive in the United States."

https://en.wikipedia.org/wiki/Alcohol_laws_of_Utah

Mormons account for nearly 90 percent of state Legislature https://www.apnews.com/286983987f484cb182fba9334c52a617

Utah is America's worst state for women's equality in 2018, study shows https://kutv.com/news/local/utah-is-americas-worst-state-for...

Yep, if you’re a big drinker Utah can be a little rough, although personally when I was there on business I never had a problem. From my perspective as a non-religious person and a non-Christian I also don’t find Mormonism any stranger than other sects of Christianity either, but again if they make you uncomfortable Utah is to be avoided as a place to live. As for the last point, I suppose it could be for some very broad definitions of equality.

Your link references this survey: https://wallethub.com/edu/best-and-worst-states-for-women-eq...

I don’t find it massively convincing, but YMMV.

To call that ranking an "equality" survey is misleading. It measures average salary, executive positions, political office, and educational attainment. But that proves nothing on whether women are treated equally or given equal rights or are treated fairly in the workplace.

The fact is, many, many LDS women choose to be full time mothers and homemakers. There are much fewer women in the workforce because of this. LDS women are much less likely to work full time and they choose not to take on demanding positions because it has been their dream to raise a family and be with their kids. This also results in many choosing to do less schooling. If your dream is to raise a family, getting your master's degree is probably not going to be necessary for that. Especially if you are already started on that family before you finish your undergrad.

In other words, using the criteria of this survey, the only way to make women more "equal" in Utah, would be to force them to do things they don't want to do.

Now, there might be issues in the workplace where women are not treated well or where they are paid less for the same job (to a worse degree than the rest of the U.S.) but nothing in that survey indicates that.

Equality doesn't stop at the workplace. You are saying the home life of people is extremely unequal and gender-biased.

So let's force those women into the workplace??

If more women would prefer to stay home and raise children, does that mean they are not equal? I do not think so. They are doing the more noble thing. And apparently, a much higher percentage of women than men, want to stay home.

My point in referencing isn't to judge whether the situation is good, bad, or indifferent.

And it may well be that women there are making these choices freely--I'm not in any position to judge.

But the point is that the culture in Utah is driven in large measure by the significant Mormon influence. Indeed, women may well be choosing to stay home because of that Mormon influence.

All fine and good--if that's what people want to do, more power to them--I'm not going to judge.

But this culture does seep out into the broader Utah culture, and denying that (as the post I was originally responding to does), is making an error.

Many, many people can't stand the influence LDS has on culture, alcohol, nightlife, sexuality, dating, etc. It's huge there.

Also, no one talks about it but the smog is absolutely out of control.

I live a bit south, so not so bad here, but a fair point. Wintertime + smog is a real bummer.

Apparently "LDS" is out, "Church of Jesus Christ" is the new name. They are even abandoning the LDS.org TLD

Rebrands are fun! I wish them the best.

Don't forget on commercial real estate.

We have a distributed team in India & Silicon Valley. The market in India has changed dramatically from what’s being portrayed here. A strong VP, engg candidate is about $200k, a new grad is at least $30k and it rises rapidly as you get more senior. There are stock options on top of this.

Why is this happening? (a) Lot of companies are opening up offices in India and willing to pay higher to set up the team quickly; (b) The VC finding scenario is as crazy as it exists in Silicon Valley. SoftBank is a global firm :)

It’s not as straightforward to build a 10x engineering team in India. Sure, it’s probably cheaper than Bay Area but you need to consider the overall cost of communication, speed of process, especially for a startup.

If you're an engineer in India with skills that mirror those of American engineers, why would you settle for a significantly lower pay?

The best Indian engineers I've worked with all made their way over to the US OR knew how much they were worth and set their rates SLIGHTLY below US salaries.

Top Indian talent did go to the US by default, but that peaked ~10 years ago. Nowadays there is enough opportunity in India - and the US immigration process is bad enough - that most people I know just don't bother. The visa backlog is almost entirely made up of the tech equivalent of minimum wage workers, all sponsored by Infosys/TCS and other consulting firms.

And the "SLIGHTLY below US salaries" part is an exaggeration. Top talent in India is still at most a third of the high-end Silicon Valley rate.

most of America is significantly below the high-end of Silicon Valley rate.

Yes but the article is about the latter.

Top talent is still going at 1/3.

ugh, as a developer from a remote country that’s been working for 10+ years for US companies I run as fast as possible from companies like this one.

If I provide the same value as US engineers, why should I make less than US engineers?

Fortunately, I’ve been able to make my case. I hope these Indian engineers realize they’re making 1/15th what they should.

Can you elaborate on the methods you've used to "make my case" for getting paid fairly, as a remote (and Indian??) engineer?

I’m not Indian (I’m Uruguayan).

There were two times where I more than doubled my pay. At one point I was 1 month into a contract and I got an offer from a previous client doubling what I was getting. I used that to make my case and we figured a schedule for me to make 2x my rate.

Then, I was bored and started playing with Asterisk and Twilio. I built an integration before there were docs on how to do it, I blogged about it and people started contacting me offering me to do it for them.

For each client I asked for more money. I started at 35/h and doubled it every time somebody contacted me.

One of those clients offered me a 40 hours/week contract. They got acquired and I was a key member working 60+ hours per week.

The new company wanted me to sign a long term contract and... to sign it I asked for even more money! since I’d be giving up opportunities to work with other clients.

Once you start making more money it’s easier to get the job because... you’re already being paid that. Obviously, you need to deliver according to the expectations, but luckily that wasn’t an issue for me.

Salaries are determined by supply & demand, not by how engineers feel, what they "realize", or what they create in terms of value.

at a macro level? sure. At a micro level, had I been convinced that my pay was fair (it was enough to cover my needs and save) and not asked for more, I’d be making upwork money.

Can't agree more. Hiring in Silicon Valley for early-stage startups now is impossible. Total Compensation numbers for software engineering is skyrocketing and you'll never be able to compete with FAANG companies. Sad reality but expected.

It's sad if you're a founder or a VC, but not sad if you're an engineer. "Total Compensation numbers for software engineering is skyrocketing" is a very good thing for the folks who grind every day.

Not necessarily true, i know entry level engineers earning well above $100k in the Bay Area who are barely getting by because they are paying $5-$6/mo in rent alone which is post-tax.

Unless these entry level engineers have families, there's no good reason to be paying $5-6k a month for rent, you can easily find a decent place of your own for under $4k, even $3k if you're patient.

As someone living in the Midwest, those numbers are mind-boggling.

My 1200sqft 2 bedroom townhouse in the suburbs of Kansas City costs me $800 a month. My families 6 bedroom 5 bathroom 3 story behemoth with a pool cost $4000 a month. The thought of paying $6000 a month for what they offer you in the Bay is depressing.

Yeah, as a new transplants to the bay area it is mind-boggling. $1500/mo per person in a roommate situation is common. That said, my take-home pay more than made up for the rent increase. The cost for a family type living situation is truly mind-boggling.

yeah. I live in Minneapolis, am charging 67/hour (roughly 140k/year pre tax) and my rent is 1200/month.

my total monthly expenses are roughly 3500/month so I am able to save almost 50% of my post tax income.

as someone living in New Zealand, it is very mind-boggling numbers, we'd be 1000 -> 2000 range for housing.

and the USD salaries would put you in the very very top earners of the population. Though sourcing enough devs here would be tricky for anything beyond 10 people if you actually wanted to outsource to NZ.

I live in NYC, in a nice one bedroom apartment, and I find those numbers mind-boggling. Not that my rent is cheap by any means but its closer to $3000 than $6000.

So they have a comparative entry level job standard of living. I've found that even the top paying companies when adjusting for cost of living pay similarly to top paying companies in lower expense parts of the country.

By all means build a team outside the Bay Area, there's plenty of talent elsewhere but the assumption you will get the same talent in India for specialized disciplines like machine learning (as opposed to generic web dev or other commoditized skills) shows this company was built by hucksters with no idea about technology, and not a little contempt for engineers.

"For each engineer that we hired in the Bay Area, we could have hired 10–15 outside of it. Everyone has heard of 10x engineers, but what they don't tell you is that the Bay Area doesn't have a monopoly on them." This really surprised me, thought it was a big gap, but not this big

To be clear, this is SFBay Area vs India, not SFBA vs Midwest. We have excellent engineers in India (and other locations in the world); it's not nearly as easy or quick to build high-performing teams in India, but it's absolutely doable.

There are excellent engineers in the Midwest too.

But the salary differential between top engineer in the Bay Area vs. top engineer in the Midwest is more like 2-3x than 10-15x.

OK, it's not 2-3x. Especially if we're talking salary.

Salary for a top individual contributor engineer in the Bay Area (full stack), outside of specific skillsets like ML/AI, will top out around $200k.

Midwest, someone with the same skillset would probably make $125-150k.

Total comp in Bay Area is often around $300-400K. That includes generous equity though, so may not be relevant when talking about startup salary affordability.

Often? Seems like $150-200k is closer to the norm.

For FAANG I'm pretty sure it's in the $300-400K range. If you include all tech jobs (including startups and old-line jobs at eg. IBM, HP, Oracle, National Semiconductor, etc.) I could see it averaging out to $150-200K, but only because the previous-generation companies don't give equity and equity in many startups is worthless. The flip side of this is that if you pick the right startup (AirBnB, Lyft, Uber, Stripe, etc. when they were startups), your equity is worth millions.

this is not true for TC at all, case in point see levels.fyi. $200k is basically one level above a new grad at some of the higher paying, well known companies

I was referring to salary.

I'm looking at Levels.fyi and at Google you only start to break $200k salary at L6 (Staff Engineer).

I’d say smaller than that. Working in Pittsburgh there are plenty of folks netting Bay Area comp packages (180K+ base salaries, 100K+ stock grants, big bonuses, etc). I don’t think the point of opening a Midwest office is cheaper engineers, but the ability to tap into local expertise cocentrations (robotics and AI/ML in the case of PGH).

Those are rather lower than what I would expect to pay for top India-based talent (however, I don’t buy on the open market), but not too many sigmas out of expectation. More like five or six devs once you factor in both US salary and benefit load factors, or perhaps two to four devs doing particularly high-value work such as AI/ML.

Having said that, you have to include your on-site management (people and project), various other cost drivers (taxi or car costs, for example), domestic PMO and architecture oversight, and accept your delivery-days overage due to timezone and distance factors. In addition, those latter factors, plus a few regional-culture aspects, tend to result in needing more people (devs, supervisors, etc.) per function point than a pure colocated dev team. (Whereas a Mexico or LATAM team, while more expensive per developer, tends to be more agile for US-based projects due to timezone if nothing else.)

Cheaper? Per developer, absolutely. Solid development chops? Sure. An unalloyed win? Not without its caveats, but definitely worth exploring.

This is a pretty disingenuous comparison, but a great way to advertise your business. I'm sure everyone involved will gets exactly what they pay for.

This article made me think immediately of the mythical month man. From my rather uninformed perspective - I never tried hiring in India - it would be very hard to actually screen and select well, while quantity alone is not necessarily a good thing.

Edit: fixed punctuation

>But who will build this Bridge? With Blah Academy, we have formalized our blah for blah blah blah

Of course, when you hire an engineer in the Bay Area, it's practical to avoid the fucking middleman.

I'd take a 60% pay cut to not work in SFBA.

Maybe there are 10x-calibre folks in SFBA. But they cost 5-20x.

Some companies have recognized that 5x-calibre employees at 1-2x payscale is better than 5-10x-calibre employees at 5-20x payscale. They offer better standard of living outside SFBA.

This is the core theme behind why Drive Capital threw down roots in Columbus, Ohio. The talent is there, and they're beginning to see the fruits of their patient investment.

I remember back in the 2000s there was a huge fear of work being outsourced to India. It makes sense: since you can get engineers for 10 times less cost. But these fears never really materialized. there was still so much hiring in the bay area for the last 20 years.

Certainly low-margin businesses that need to compete will be hiring in India. That's probably why you don't see many web development body shops in the bay area. But, for monopoly businesses like google or facebook, the cost of labor doesn't really matter much for them.

After struggling to hire top-notch engineers in the bay area as salaries started to spiral beyond reason, we decided to conduct a radical experiment in trying to train overseas developer talent on our tech stack before hiring them.

TL;DR -- They have rebranded unpaid internships.

Even worse, they did for people likely much poorer than the average unpaid intern in the US and the main value proposition was probably them dangling visas

Reply on news.ycombinator.com