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Comment by georgeburdell | Hacker News Reader

FAANG pay has gone through the roof while startup pay has not. I am not a software engineer, but I still work in a field rife with startups. I don’t even work at a FAANG, but I do work for the industry leader in my field and I’m making a safe $250k annually after 5 years.

I have gotten a few startup offers just to test the waters and I’m generally being offered $175k + $50k-$100k in stock options. Sounds OK if you expect the stock to grow 100X, but the problem is that even Series A funding these days pushes valuations into 8 or 9 figures. In my field, the total market is 10 figures. The valuations are going up so steeply that anyone but founders or employee 1 will be better off on the FAANG hampster wheel

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I think you've hit the nail on the head as to what's causing this.

1: FAANG companies have had a great decade in terms of stock prices which means employee options are enormous in terms of dollar value (even if salaries aren't huge on their own necessarily).

2: VCs are pumping much more money into the ecosystem, which destroys the equity play for employees. When companies are raising $100m Series C rounds, it changes the cap table in a brutal way. Cap tables ultimately add up to 100% which means someone has to be diluted.

> FAANG pay has gone through the roof while startup pay has not

That's because FAANGs have been profitable and startups haven't, in general.

There's no rule of the universe saying startups have to be unprofitable.

A profitable startup can, in fact, pay through the roof.

Once again, I assert that the valuations are rising too high, too quickly, and so even if you are optimistic about profitability, you won't see a return that's worth leaving your golden beanbag chair at a FAANG. Why would I join a startup after an 8-9 figure Series A valuation for a 10-figure market? And yet, that's what my options were in my industry.

> A profitable startup can, in fact, pay through the roof.

But most startups don't become profitable, most startups fail.

IMO, you should basically assume that any stock options a startup offers you are worth zero. Decide if you want the offer based on the base pay and how interesting/stimulating the work is.

Sure. Upon re-reading my comment I wasn't very clear. What I meant was along the lines of: the past decade VCs have convinced startups that they don't need to be profitable for many years. That's a pretty recent aberration. It took Google less than 3 years to become profitable, for instance.

I think the argument is less between "startups" and "tech giants" and more between "profitable companies" and "unprofitable companies". Profitable companies can also grow quickly, after all.

It's a bit sad how the rest of the world don't put such reward for dev jobs.Even here, in London,I'd need to be a quant to pull such a salary.

The rest of the US does not pull such salaries. That's pretty exclusive Silicon Valley / Seattle.

You can easily make $100-$120k in Houston and that’s still much higher than London salaries. I had offers for $135k in Connecticut, offers for $90k in Kansas City.. still vastly better than London and the rent is a hell of a lot cheaper.

£90k is around benchmark senior dev pay in London (band I'd say is £80k to £95k). I make a bunch more than that.

London is a global city though and you'll always feel somewhat poor in this town unless you can compete with various foreign kleptocrats using it as a land bank, and that takes 8+ digits wealth.

Dude, $135k base in Montreal. Pay is localized but not that localized.

And NYC. Finance IT management jobs at the senior levels pay a solid 3-500, senior devs 200+, with some sort of bonus structure being common. Then there are increasingly tech companies (something that used be pretty rare even 10 years ago), and for the tired, there are university and hospital IT jobs.

However, rent is through the roof, on par with San Francisco. And a city with its own set of challenges.

From what I hear and read, Seattle seems like one of the best bangs for the buck. As for myself, the lack of sunlight would make me want to live in London (at least I can fly two hours and see the Sun).

London is an expensive town, so I'm sorry to hear that.

But for others -- dont be too jealous, because a lot of that high salary is just a rent premium and ends up with landowners. Great if you are a landowner, but otherwise, you're mostly breaking even after taxes and rent unless the markets riso to make your stock grant in the money. (and well, if all the math is on stock anyway, you can work anywhere and just buy some options on FAANG and be done with it, which is what I do.)

There are cases where you can do well (e.g., live with 2+ roommates in a tiny apt like some friends do.) -- but then, it isn't a sustainable thing.

> because a lot of that high salary is just a rent premium and ends up with landowners.

And London has cheaper rent?

Right that point broke down pretty quickly. Rent in London is more expensive than most of the United States.

I found pay-salary ratio worked best in Toronto provided you don't expect to own a home in the city.

That is why the post started off with "London is an expensive town, so I'm sorry to hear that. But for others --"

Some cities are not rational. The best game to play when you have irrational rules is to not play. That is why the post was directed "To others: "

London and NYC are not rational cities. To some extent, also Vancouver. Some of these cities are places where foreign cash comes to be parked in, often empty, apartments. They raise prices for everyone and ruin market dynamics. SF/Bay Area is irrational in a sense because you are competing on a time spectrum -- a rational job for someone who purchased a house in 2004 is an irrational job for someone who needs to rent at 2019 rates.

Yup, Vancouver can be more expensive than LA, with way lower average salaries.

$250k is new grad salary these days.

It's also why I'm so sad all the time!

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