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Comment by minimaxir | Hacker News Reader

Link to original post: https://www.refinery29.com/en-us/six-figure-paycheck-data-sc... (Edit: URL fixed)

The real question is that $125k as a Senior Data Analyst in NYC seems low.

> I have this creative side, which comes in handy when thinking through challenging problems, but there is only so much creativity that I can use when in data analysis.

This I disagree with; in data analysis/science, there's more than way to highlight/analyze a problem, and more than one way to solve it. In my experience, the best solutions are often the craziest.

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>in data analysis/science, there's more than way to highlight/analyze a problem, and more than one way to solve it. In my experience, the best solutions are often the craziest.

I strongly disagree. I have hired, mentored, and/or managed 20+ data scientists and analysts over my career; in my experience the ones who come up with "crazy"/creative solutions are often the least effective in the long run. This is especially true on the product analytics side, where there are 5 ways to shoot yourself in the foot in non-obvious and subtle ways. The best analysts I've worked with follow fairly regimented best practices around the way they analyze problems and present solutions. By its very nature, non-standard solutions are more error-prone and harder to explain, which breaks institutional trust in the analyst.

That said, there is plenty of room for analysts to grow into more creative fields like machine learning or product management, but I don't think the person being interviewed falls in one of these categories.

To clarify, simpler/standard solutions are better, no disagreement there. But real world data is not very polite.

> I am now working at a tech startup

This would explain the salary

Is there an equity component in addition to the base salary?

Yes, from the interview on the topic of compensation negotiations:

"My current company couldn't give me more in signing bonus but gave me more in equity."

Yes, it’s 4500 stock options worth $0 each. Pretty generous. Other startups of that size are lucky to get you 1500 stock options at $0 each.

It really doesnt matter whether the startup gives you 4500, 1500, or 45000, or a million. You are being given the numerator without knowing the denominator, so it is all worth zero until you get to see the Cap Table. Most startups wont let you see the Cap Table.

Even if you saw the Cap Table, there is still a lot of uncertainty, tons of illiquidity, and a long horizon.

Options are nice, but they are not cash and do not belong in the same conversation as salary.

I feel like you didn't actually read/understand his comment. He stated they were worth $0, implying that it doesn't matter how many they give; they're still worth $0. It was cheekily pointing out how worthless stock options in a pre-IPO startup are.

Why would stock options be worthless just because a company is pre-IPO?

I assume it is a joke about how almost all startup stock options end up being worthless.

Specifically what I said was that they are worthless until you get to see the cap table (which most startups will not show you.)

Stocks are shares in a company. Imagine you have a box with money in it. And I tell you you get 4500 parts of this box. But I dont tell you how many parts there are total -- you see the numerator but not the denominator. In that situation it is impossible to discern the value of your 4500 parts since you dont know how many ways the money gets split.

It gets trickier, because cap tables also have liquidity preferences. So you can have 4500 parts of the box. And another person can have 4500 parts, but their 4500 might be worth a whole lot more than your 4500 because there are different classes of stocks. It isn't uncommon to have one class paid first, in whole or 1.x greater than whole before the next class gets paid. https://en.wikipedia.org/wiki/Liquidation_preference

Oh, then there is the actual business -- there is tons of business risk. Even if the business does well, it may be in the red and the future of the company (and worth of your shares) are dependent on successive rounds of funding and their implied valuation. You get a down-round and you might be wiped out. https://www.investopedia.com/terms/d/downround.asp

Even if everything gets well, depending on the classes of shares of decision-makers, you can end up in a situation where the founders/board might have an incentive to sell at just an amount where they make out well but employees get wiped out. Case: https://www.nytimes.com/2015/12/27/technology/when-a-unicorn...

Or Levandowski's side startup where the company got sold for just enough for Levandowski to make out golden https://www.wired.com/story/god-is-a-bot-and-anthony-levando...

The Net-Net of all this is: stock options are not worthless, their worth is based on a formula with a dozen+ variables, almost none of which you know the values/ranges/distributions for -- and a formula where many combinations of theoretical inputs result in zero value.

They're worthless pre-IPO because of the allocations in the cap table...

He was also differentiating between 1500 and 4500 options, which suggested he didnt value them at zero.

Certainly startup equity is a) a risk and b) sometimes hard to quantify in real dollar terms. But if the startup is successful, equity value is very real and should not be ignored or swept aside. My advice: Don't join a startup unless you believe in its growth potential and your compensation package includes equity. Without the equity and the potential that comes with it, there is little reason to join a startup. You might as well just go with an established company instead.

Your financial advice is solid. However I hate Big Co politics (it’s caused me mental health issues in the past) and I enjoy being able to be a generalist. Of course some people thrive in highly politicized environments or enjoy being specialists, so in that case, a Big Co makes perfect sense.

Politics exist no matter where you are; it's the art of convincing other people that they also want to do the thing you want to do. Improving your political skills will make you a better engineer because an engineer without influence isn't getting much done. For what it's worth "show don't tell" is one of the basic tenets of politics.

> You are being given the numerator without knowing the denominator, so it is all worth zero until you get to see the Cap Table. Most startups wont let you see the Cap Table.

Every single time I've accepted a job at a startup that offered ISO stock options, I knew # of shares outstanding (the denominator), terms of all funding rounds, strike price, exit strategy, total amount of money raised, who the major investors are on the cap table, etc.

The jobs were at startups funded by the best investors in the world and high caliber founders who valued transparency. One went on to become a unicorn, and the other is an extremely early seed stage company where I work now.

If a startup isn't willing to give you information beyond # of options granted, then that is a red flag in my book. Not all startups are like that.

Why would you join taking compensation not knowing it’s value? In my experience companies will always tell you some mix of shares outstanding, current fair market value and sometimes even the valuation for the next venture stage (I don’t see why as an employee you need to see the cap table). While predicting the future is impossible, this information helps to assign a non-zero value to the options.

> Options are nice, but they are not cash and do not belong in the same conversation as salary.

Also, options are usually tied to continued employment. If you leave the company, you will need to exercise your options within a certain amount of time (often, 3 months). This can easily be an outlay of (tens of) thousands of dollars. It depends on the number of options and the exercise price, which is set at time of the option grant based on the then-current 409b valuation of company shares.

So at that point you are left with a choice: spend a lot of money to exercise your options and buy a bunch of illiquid common stock, which may or may not be worth something someday. Or, just walk away from the options then and there.

>"I analyze data on a day-to-day basis, which means building dashboards or writing code to summarize various datasets. I usually partner up with teams across the company to solve different problems. That sometimes means defining metrics, creating visualizations to see changes over time, or making sense of the large datasets that we have."

Sounds like mostly dashboarding, data viz, and simple analysis, so I actually thought it was kinda high. Perfect for senior maybe.

It might depend on what they're doing. A data analyst could be doing math heavy ML/AI or more report design/generation type tasks.

That's true; I parsed the job title as Senior Data Scientist before rechecking.

Interesting view, I'm curious about what you mean when you write, "In my experience, the best solutions are often the craziest." Do you mean having unique mindsets/strategies in approaching problems? Can you explain more about "craziest" types of solutions?

Yes. One thing I dislike about data science/data analysis MOOCs is that they imply that there is a best way / one way to solve a given problem with a given dataset. The real world is much more messy (data cleaning, data pipelining, data normalization, etc.), and on the statistics side, solutions to problems often come from the weirdest places (in my case, it's often where there's a hole in the data).

Really? $125k doesn't seem low to me based on experience. Also, just looked on Payscale and it says Senior Data Analyst (with 6 years experience) salary range was $63-113k.

I run a SaaS analytics product company in NYC. I help refer data analysts and data scientists to my customers. Sharp analysts can command $140k base with about 3 years of experience right now.

Just because they can, doesn't mean it's average or to be expected.

I think a lot of people on here (and Blind) constantly say everyone is underpaid. It might be trying to help educate people they can be paid more. But it's usually framed in a way most people find insulting.

Only 5% of laborers in cities like LA and NYC make over $200k a year. That number is a bit higher in The Bay. Only about 12-15% of people make over $125k.

Again, it's nice to know that you can do better. But it's also nice to give yourself a pat on the back sometimes. $125k is decidedly NOT bad by any standards.

Thank you so, so much for pointing this out. I am so tired of basically everybody believing they are under-paid by making $120k+ It puts out the wrong expectations. Most people under-estimate, what kind of life they can live with $60-80k anyways.

Some people underestimate the options and freedom (including being ready for the effects of recession/ageism in the industry) that living on $60k with a $200k salary can provide.

How do you pay for $200k level taxes on a $60k salary? I make low six figures and pay an effective tax rate of about 35%. You’d only have about $5k left over for living expenses for the year...

Assuming this was a legitimate misunderstanding:

- they earn a $200k salary

- their living expenses match those of a person living with a $60k salary and presumably spending everything they earn after tax (in response to “what kind of life they can live with $60-80k”)

Does that make sense?

Yeah, I had kind of assumed they were advocating putting $140k in the bank and living off the $60k.

What are the "wrong expectations" put out?

I'm not going to lower my expectations for myself or for people in my field who have valuable skills just for you to feel better about yourself.

It’s a very common HN trope: go to any thread where tech salaries are mentioned and you’ll find someone whose sister’s boyfriend’s roommate makes $400k at Facebook, so therefore that’s a normal, expected salary for all tech workers. Point out actual publicly available data like Glassdoor or Salary.com and you’ll get a whole bunch of nit picks about their methodology or the fact that they report base salary only, etc.

Yes, there are likely outlier employees at outlier companies making huge comp but those have to be at least 2 to 3 standard deviations right of the average.

> Point out actual publicly available data like Glassdoor or Salary.com and you’ll get a whole bunch of nit picks about their methodology or the fact that they report base salary only, etc.

So you don't have a counter argument is what you're saying? The truth is those site are insanely flawed and if that's what you're using to form your basis for negotiation then you're at a disadvantage period.

Compensation is often base + bonus + equity. For sufficiently senior positions, the equity component can be almost as much as the base salary. If the equity is liquid, then why is that not relevant?

FYI new grads at any of the big tech companies are bringing in close to ~$200k in total compensation their first year. It's not just someone's sister's cousin. It's a majority of engineering new grads who work at any of the BigCos which employ A LOT of people and are constantly hiring.

Unfortunately, due to a lack of public data, these discussions always devolve into anecdote battles. I would love to see actual data that shows these huge salaries as average. It would really help my next salary negotiation! I’ve been in tech for over 20 years and so far, “Hacker News says we should make $400K” hasn’t really worked with recruiters yet.

Those salaries are prevalent pretty much only at "big" tech companies (FAANG) in the Bay Area.

Even in the Bay Area the 50th percentile base salary for a relatively junior hire is closer to $100k than $150k. Add in bonus and equity and some might top out around $140k-$150k total compensation. That's in the Bay Area specifically. Most other places TC is going to top out just above $100k--high salaries are uncommon outside of tech hubs and the Bay Area itself is on the high end even in that group.

I think you’re reading into it a bit too much. The comment you’re responding to is just a simple statement that with xyz skill your market rate is n dollars. There’s nothing there about how you should feel about it

Market rate seems to vary widely for programming jobs (less familiar with data science, but it's probably similar), as sone companies can afford to pay a lot more than others, and some developers are willing to accept a lot less than others. And this is often independent of skill levels.

Average? No. Expected? Yes.

Technologists systemically undervalue themselves. Partly because the barrier to entry to software/analysts is so low, and most people are pretty bad. It's also because interviewing is such a time-consuming task that most people only look at 1-3 offers when getting a new job.

If you look in comment history you'll see a few references to me paying engineers/data scientists/data analysts $400 to spend an afternoon with me solving a real world problem. If I felt like you were someone I would work with, I personally introduce you to the head of a team at a companies that I know pays great money and has a great team, and you're fast tracked to the final interview (mostly culture and talking tech. No bullshit).

I always knew what the position paid, and the candidates would always sell themselves 10-20% of what they could get (I obviously helped them get the most they could).

Just because the market is skewed with a lot of bad candidates and poor negotiators doesn't mean the market price is accurate. We can all do better.

Data Analyst is not the same thing as a Data Scientist.

Not even close. But ugh, it is sort of getting there as far as what inflated titles are being offered/used. Going to be as watered down as today's "DBA" vs 20 years ago "DBA" at this rate.

Here's what bothers me.

When I see Data Science in industry, it means an analyst. When I see Data Science in academia, I see Michael Jordan and Alex Smola. I think this is the core disconnect.

True. The comment I responded to specifically referred to Senior Data Analyst.

Apologies, not entirely clear that the post is taken from somewhere/ how to get to the original post. Don't think I can update the URL the submission points to :|

Thanks, we've updated the link from https://finance.yahoo.com/news/im-data-scientist-making-125k....

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