Google has a problem retaining great engineers? Bullcrap. | Hacker News Reader

Google has a problem retaining great engineers? Bullcrap.

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88 pointszachbeane54 comments

"...the value Google is getting out of my work is worth many multiples of my total compensation. And that’s a position that every engineer should strive for, since that’s how you can be confident that you will remain gainfully employed."

As an entrepreneur, something about this statement bothers me... something about all the value I create getting skimmed off the top and taken away by someone else. Yeah, that's probably it.

But if you just want to do neat engineering work, then, sure, I get it.

On the flip side, much of the value you are able to create may come as the result of the infrastructure and colleagues provided to you by that same "someone else". Seems particularly true at a place like Google.

When you work for yourself, you get to keep 100% (minus taxes) of (probably) a smaller number; whether that is best for you depends on your personality.

Even so, if you're a top performer, you end up subsidizing the paychecks of a lot of people.

Subsidizing is such a loaded word. Your comment is an example of the pie fallacy. Yes, your colleagues may get a bigger paycheck because you're a top engineer. But that doesn't necessarily imply that the additional money they get is "taken" from you.

And obviously, doing a startup is no guarantee that your returns will be better.

Is it really a pie fallacy?

Here's what I really mean by subsidizing, in context, and you can decide if it fits, or if I am suggesting something else...

If you buy into the idea that a developer, for example, can be 10x more productive than another, which I do (and I'm not one of the 10x guys at all), then you tend to think that those people should be paid a heap more than the average IT guy... but in fact, they are bound by the same corporate salary ranges as everyone else on the team... so you end up with the delta between the bottom guy and the most productive guy is at most 70K.

Therefore, thanks primarily to the top performers, our overall team performs well and everyone benefits similarly... but they really shouldn't benefit similarly since the amount of value creation is wildly different from developer to developer.

so that developer decides to try his hand doing his own startup and quickly realizes that the market generally rewards those that are best at marketing and not those that are best at writing code 10x faster than the average.

The problem of being super productive is that the organization can't exactly support it.

Just because you are 10 or 100 times more productive doesn't mean the company can sell 10 or 100 times more.

And guess what - we need those lesser mortals so we can keep doing the fun stuff.

Look at it this way: A and B can be freelancers and gain at most 100K yearly, or they can work for C, where they commonly create wealth for C in amount of 1000K; C pays them 150K each (and keeps the rest, 1000K-150K-150K=700K).

Economically, it would make sense for A and B to work for C, since they gain 50K more. Economically it makes sense for C to hire them since together they create wealth, and the 700K that C gets to keep is a reward for his willingness to risk hiring them and managing them into a productive team etc.

If A and B would like the risk, they could start pairing themselves together and attempt to create wealth independently. But they could fail. 10% chance of a 1000K is still just 100K on average (it just has an interesting distribution of the payout). The difference up to 1000K is a payout to C for the risk they took in growing their business up to the current level of scalability. (otherwise other companies would pay more for the value that A and B provide)

If A and B care only about technology and are risk adverse, the economy doesn't award them more than the 150K which they are already getting. For such people, creating wealth of 1000K for the companies where they work is not a result of their behaviour, but a reward for the founders that took the risks and had the vision to create organizations allowing that.

How much of your startup is subsidized by all the open source software that many engineers work on for free?

Your subsidy argument cuts both ways.

Neither society nor the enterprise are zero-sum games, and that kind of thinking seems to imply that they are.

If you're a top performer, unless the place you are at is losing money you aren't subsidising anyone's paycheck - I assume that the people skimming the cream off your contribution do exactly the same to every employee and anyone that isn't contributing (the value of) at least their own salary (should) would be shown the door.

I suspect it gets diverted to senior management (founders?) and shareholders. Given we are commenting on this at ycombinator.com, I don't have a problem with it, since I'm hoping to end up in either or both categories at some point.

I agree with your comment, but would like to point out that this is almost always the case.

As an example, I used to work at a SaaS company, and we generated more value for our customers than we charged in fees. Well, duh, otherwise they wouldn't be our customers for long.

Same goes for every lasting business model: your cut <= your value generated.

Though I suppose it depends on the definition of value, something seems somewhat wrong about this maxim, otherwise there wouldn't be abhorrent anger at certain business models.

For example, Payday lenders.

The problem with loan sharks is not that others create more value for them than the borrowers necessarily keep for themselves — that could be said of all loans. The problem with loan sharks is that they prey on the weak in a way that is not just suboptimal, but outright harmful.

"Same goes for every lasting business model: your cut <= your value generated."

Not if you sell weight loss pills, or run a demand media style content farm, or do cash for gold, or ...

Sadly the amount of money you make is rarely a function of the value you create. How much money has linus torvalds made vs the value he's created compared to someone like jason CalAcanis?

fyi: it's CalAcanis.

In his defense, I have noticed on various podcasts that that A seems to get slurred in speech quite a lot.

Good catch. I do listen to a lot of those podcasts, more than I read his name.

As an entrepreneur, something about this statement bothers me... something about all the value I create getting skimmed off the top and taken away by someone else. Yeah, that's probably it.

If your small, righ-risk start-up earns $300,000 in profit in one year, paying the CEO a $90,000 stipend doesn't seem unreasonably low, does it? Most of those profits are probably best invested into other parts of the company.

Sure, you might still own that value in terms of stock, but that is high-risk stock as opposed to a company like Google, whose stock is much more stable. (And Google's internal investments include nap rooms and such).

Presumably you've read Marx then: http://en.wikipedia.org/wiki/Surplus_value

But really that's the point of any kind of organization, even capitalism - specialization allows a group of people to create more value than 1 person alone.

I certainly didn't mean that I think these gaps shouldn't exist at all, but rather that I am spurred to move up the value chain and have a chance at taking a greater %... as opposed to just getting to play with neat technology.

The fallacy comes from the assumption that the added value depends solely on you, and disregarding the context. The author mentions himself that his tweaks to the Linux kernel and ext4 filesystem could have saved Google millions, but only due to the enormous number of machines they have. It doesn't mean that an average startup would get the same benefits from his work in this area.

But that's not really what's happening.

A skilled engineer who focuses solely on engineering will produce much better work than a skilled engineer that also has to focus on /marketing /sales /investors /accounting /facilities /IT /management /HR

Either a small fish in a big pond or a big fish in a small pond.

Edit: Also consider that you may be a person that can produce a lot of value specialized, but practically no value when juggling all the above items. You'll find that if you can produce a lot of value at any level then you can negotiate from a position of power.

Note that an engineer at a startup doesn't necessarily need to focus on anything other than engineering. If your startup has 2-3 people, then sure, everyone's gotta wear multiple hats; in a startup with 10-20 people, specialization makes sense, and probably wouldn't be that different from a big company.

(One big difference, however, is that even if you're doing only engineering work, a big company will probably give you more time to think long-term; at a (competently-run) startup, you're more likely to be focused on short-term, tactical, quick-and-dirty work.)

With a name like johngalt I would think you'd be supporting his argument ;)

Atlas Shrugged is a fun fantasy, but in reality there are many different valuable specialties. It's all too easy to dismiss anyone that doesn't do what you do as worthless.

That said I do agree that a very small number of people in any organization are responsible for the lion's share of the productivity and are inadequately compensated for that.

I'm not really arguing against these points at all.

What I mean by my comment is that, as an entrepreneur, when I detect high marginal return on a given activity, I want to find ways of extracting more value from the situation for myself (profit seeking), rather than just getting a paycheck (profit taking).

All that value getting skimmed off and given to someone else is a lost opportunity, especially when you're working for someone else, as there are rarely ways to insert yourself at a higher point in the value chain.

There is something important that you miss here. He's generating lots of value, sure. But it is value that can only be generated because his employer already has a lot of existing infrastructure to benefit. He couldn't as easily generate that much value on his own. And therefore being an entrepreneur isn't necessarily that attractive to him.

Life is often like that. As an entrepreneur you should seek to understand and respect people who make that choice, not look down on it. Because after all your hope is to eventually hire people who are like him. If you sneer at smart people who are happy to generate excess value, they will notice and won't want to do that for you.

Thanks, you're absolutely right.

My intention wasn't to detract from his means of self-fulfillment, but perhaps that is what I have done.

Look at it as an entrepreneur: if your customers are getting in value received some large multiple of the price they are paying you, is that not a good thing?

  They are about business model discovery.  
  So if you are fundamentally a technologist 
  at heart, whose heart sings when you’re 
  making a better file system, or fixing a 
  kernel bug, you’re not going to be happy 
  at a startup.

There are plenty of storage startups in Silicon Valley that would be happy to pay someone to do filesystem work.

Web 2.0 startups are not the only game in town. There are plenty of other companies at which to do serious engineering work.

Of course, but why go to those if you can do the same work at Google and actually be sure they'll be able to pay you more then you need to life comfortably.

Because at least at the startup you have the possibility, however remote, of getting FU money and never having to answer to anybody you don't like, ever again.

And besides, if you're that good, you don't really have any worries about getting paid what you're worth.

The whole FU money is mostly a fallacy. If you really love filesystem hacking, and you live in Silicon Valley and are really good at it, you already never have to answer to anybody you don't like, ever again. If you don't like your boss, you can quit, and do this 50 times if you want.

And people shouldn't work for a "possibility, however remote." That's called playing the lottery and is generally foolish.

Okay, so Google has a problem retaining the subset of great engineers who're also entrepreneurial.

That's still a problem.

Where does the author say that?

He is claiming that the startup life is for people interested in entrepreneurship, not technology. If their attrition rate truly hasn't moved at all, then I don't see how one can say there is a problem retaining any subset of people.

The author didn't say that, I said that.

We'd need more data, but obviously the attrition rate could remain constant for the whole while changing for some of its parts. Perhaps Google has gotten better at retaining non-entrepreneurial engineering talent, while getting worse at retaining entrepreneurial engineering talent.

Perhaps Google has gotten better at retaining non-entrepreneurial engineering talent, while getting worse at retaining entrepreneurial engineering talent.

But you aren't really basing any of this on any facts or even statements by involved parties, are you? This is just theorizing that maybe their rate is worse in some spots. Maybe their rate is even better among this last category. What is the point of idle speculation like this?

It is very possible, I agree.

I have often wondered why some companies (even mature ones) actively recruit entrepreneurially-minded folks. It just seems to me that they would create trouble for you once they realize you aren't acting like a market internally, and are only willing to pay labor-market rates (except in discreet circumstances).

The people going from Google to Facebook aren't necessarily entrepreneurial, they're just trying to hit the IPO lottery at another big company.

FTA: "A startup is totally the wrong place for me."

There are startups out there that depend on superior engineering for their living. Off the top of my head, this guy would do very well at Heroku, Dropbox, RethinkDB, Clustrix and FlightCaster.

From the perspective of working on file systems, I don't see a viable way to innovate and monetize. I completely see the OP point of view, from his perspective. I disagree with the conclusion though.

It is true that a lot of the big startups aren't innovating in technology. They are innovating in the business model space. But that doesn't mean you can't create some innovative technology to build a startup around it.

In Sweden, Google has aquired Marratech and Global IP Solutions. Both are all about hardcore codec innovation, not business model discovery. Google was licensing tech from GIPS long before they aquired it. If big companies are where heavy tech is developed, aquisitions like those would never happen.

NB. Another Google aquisition from Sweden was Trendalyzer, Hans Rosling's visualization technology famous from his TED talk, making Sweden the country with most Google aquisitions in Europe, Middle-East and Africa.

It's a tie with Germany (allPAY,bruNET,Neven Vision Germany )

Ok, so let's make it per capita :)

Google, like almost any other company of sufficient size, has a problem retaining great engineers who prefer smaller companies. Those preferences are not about the false dichotomy between "engineers" and "entrepreneurs". Mr. Ts'o enjoys a job in an established company where he can be paid well, work only on specific technical problems, work reasonable hours, etc. That's a fine choice, and the right one for many. It is, however, still exactly that: a job. People who start companies are not often looking for another job. Mr. Ts'o should be thankful that is so. Had Larry and Sergey taken his advice the company for which he works would not exist.

The following sentence is very not true and quite misleading:

> Similarly, you don’t work on great technology at a startup. .. They are about business model discovery...

If that is true, then why do technology startups exist at all? Isn't discovering business model very much connected to discovering new technologies (new, more efficient ways to solve problems)? In other words, if a technology startup is not planning to invent something, then it not should probably exist in the first place.

It is true there are some Web 2.0 startups which are not about technology at all, but these startups are anyway not looking for great engineers.

I emphatically disagree. At least for most "technology startups".

Technology startups are just startups that require technology to operate. I've worked at some successful ones. And they really were about finding the right business model. We needed good technology people and there were fun technical problems. But really they were about finding business models that fully used the technology, and not about the technology itself.

That said, there are some real technology startups. They look rather different. For instance I know employee #7 at SpaceX. There is no question that that company is really about the technology.

Reading the article title I immediately thought of those leaving Google for Facebook. This IS happening. They're doing it to catch the FB IPO.

OP mentions this topic but mostly talks about his view, which I get. On the other hand, I've spoken with plenty of ex-Google employees who've left because Google is getting so large and has so many 20% projects that it no longer feels so entrepreneurial being at Google and so they leave. These are employees that don't care about a business model and just want to see their projects see the light of day.

So, Google has a problem retaining great engineers? Sure, it doesn't apply to OP, but that doesn't mean it's bullcrap.

I find this article misleading, Google certainly does not have problem retaining talents joining early stage startups. Those talents probably joined Google pre-IPO and funding their own startups now. The problem for the late Googlers is that they and their uncles all want to join the multi-billions dollar pre-IPO "company". And yes, their scale is big enough and affect millions, and the up side is, one day they can move on to be entrepreneurs.

Not everyone who participates in an IPO makes millions you know. Especially those who join in the later stages of a startup's lifecycle, the combined effects of (a) dilution, and (b) increasing stock valuation means the lottery payout diminishes very steeply. And in the case of Facebook, where there have been a lot more opportunities for stock to be sold pre-IPO, that means there are more opportunities for the stock valuation to be established. This has impacts for what the company can offer as far as stock options are concerned, which influences the upside opportunity.

Furthermore, given the huge amount of attention and hype about How Facebooks Success Is Assured, a lot of the "pop" in valuation that took place pre-IPO has probably already taken place. People who expect that Facebook will have its valuation (its market cap is currently estimated at $41 billion; Apple is $219 billion; IBM is $157 billion; Dell is $22 billion) "pop" by another 10x post-IPO will probably be sadly disappointed. And if you don't get that "pop", those stock options won't be worth all that much.

Which is one of the reasons I really don't believe the stories of $3.5m and $6m retention offers. It would simply be insane to make such offers, because the payout for someone jumping from Google to Facebook at this point, roughly a year before when people are guessing Facebook will IPO, are nowhere near that large (after stock reserved for the 5 stages of VC investment, and the founder's stock, and stock already issued to other employees, not to mention the shares that you know, need to actually be sold to the public, the number of options that could be granted per employee won't be that high). And, I'm pretty confident Google isn't insane. Furthermore, if Google was doing this, it would be bleedingly obvious on the quarterly 10Q statements it has to file with the SEC. So if you really think this is real, try doing some digging in the 10Q's 2-3 months from now.

Since Theodore brought this up: "(And those stories about Google paying $3.5 million and $7 million to keep an engineer from defecting to Facebook? As far as I know, total bull. I bet it’s something made up by some Facebook recruiter who needed to explain how she let a live prospect get away. :-)"

I'm pretty sure it's real. Someone who either posts on here or who is frequently submitted -- I think piaw, or something like that? -- is an early Google ops person. Anyway, on piaw's blog, he or she mentioned that he or she had personally spoken to a G employee who got a counteroffer within 20% of the 3.5MM. So perhaps Theodore should be a little less sure of himself. Sorry for being vague, my memory is a little hazy, but I've read this in the last 2 weeks.

Also, he's doing something much closer to pure infrastructure work, so of course fewer -- but not zero -- web startups will be interested. That being said, I think it highly unlikely there are no jobs in SF / valley for highly experienced linux kernel file system devs.

Edit: link I referred to above http://piaw.blogspot.com/2010/11/counter-offer-conundrum.htm...

"People asked me yesterday if the Techcrunch $3.5M story was true. I said it was believable, because while I wasn't involved in negotiating that particular counter-offer, I had some role in assisting someone land a counter-offer within 20% of that number some time back."

Of course it's true, I read it on the internet!

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