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baby

At the same time how can smaller companies compete with large companies if they can’t match salaries?

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When you can't compete on salary, you can compete on other axes. Not just financially (equity/etc), but also:

- flexible schedules

- autonomy + impact

- interesting work

- culture (respect, appreciation... etc)

It's not hard for me to imagine an environment where I'd love to work despite giving up a lot of salary. Hell, I'm not unique—just look at how many incredibly skilled people choose research careers over far more lucrative industry jobs.

And yet, I don't see many startups that seem serious about this. If you want to compete for great engineers, choose some of the things I outlined, actually commit to maintaining them and figure out how to demonstrate this (show, not just tell).

I still wonder why startups don’t offer more flexible work. If anything, my time in a startup was significantly less flexible than at a bigco, where I had a much bigger team to cover my shifts.

It could be something as simple as a 4 day workweek. Or even 4x 10 hour days. Instead startups are a place where people are expected to put in 60 hour weeks!

Likely because people believe they'd happily give up salary for more flexible work, but really wouldn't, and so you'd not get any employees if you didn't pay high salaries and offered more flexible hours and some culture benefits.

I think Tikhon's point about figuring out how to show that you're offering the benefit is key.

If my salary is $200k, it's clear what that means, and I can be pretty confident that there won't be weird social games to get me to actually accept less this pay period. (There's an argument that income tax is an example of this, but that doesn't vary in unpredictable ways between positions.)

Don't forget equity. That's probably where startups have the biggest advantage over large corps.

Well, they have to compete on some front. If they can't exceed Google on salary + risk-discounted equity + benefits + flexibility + employee-desire-for-company then it is economically efficient that they do not get people.

Huge equity stakes. Huge. Not "align incentives" level stakes. "Google's chef has $26 million" stakes.

How do you express that as a percentage in equity? Also, it really seems pointless, because as they take on more funding guess whose “huge stake” gets diluted.

And that's a risk that founders need to take into account -- that by diluting their early engineers' equity, they're risking losing those engineers.

got an offer to be the 20th employee or something in a startup as a senior engineer, and they offered me 0.01% of equity or something. I thought that was ridiculously low.

EDIT: Of course my whole calculation was wrong.

Well, it first seemed low to me as well.

But 0.01% of one million is ten thousand, which doesn't sound that bad. One million also seems low for a successful company. The same offer would give you ten billion at apple.

Disclaimer: I am not good at math and I don't understand stocks, equity etc. So maybe I am completely wrong.

> But 0.01% of one million is ten thousand

1,000,000 USD * (0.01 / 100) = 100 USD, not 10,000 USD. The company would have to be worth 100M USD for 0.01% to be worth 10,000 USD.

> Disclaimer: I am not good at math [...]

Indeed ;-) But don't worry, many a great engineer has made worse mistakes when it comes to shifting the decimal point.

Ah damn, you see, that's how incapable I am with maths :D I just calculated one million * 0.01 and thought that'll be it. Thanks for correcting me, seems like 0.01 isn't that much after all.

Fortunately my job does not require math skills, so at least I am no danger to society :D

I would bet that most companies vastly overestimate their initial engineering requirements and thus their talent requirements. A past job had a strong interest in scalability when the software serviced maybe a 20-30 (admittedly high value) people an hour. Even their loftiest ambitions maybe put use into the hundreds or low 1000 an hour.

Yet most engineers were hired with the goal of making it "scalable" when most of the work was frontend anyway.

If they can't compete, what are you suggesting be done? Some workers just have to sacrifice themselves and work for less, out of fairness?

Feel free to do that if you think it is the right thing to do.

They might not need to. I couldn’t pass an interview at Google. But I’m an average worker and most companies just need average workers.

Honestly, for certain jobs, you would be almost crazy not to work at a big company right now. FB/Google at el can offer salaries that are multiple-x of those at startup. If money is what you are after, it just makes a lot of sense to work there and squirrel away the cash.

In fact, there are probably only two things that startups can offer that big companies cannot:

(1) A product that when successful it will change everything, think Google/Facebook/SpaceX material. This is good because it puts employees in a position to "change the word," while also potentially getting paid in the long run.

(2) Flexibility and room for the mind to work. No useless meeting, no endless discussions to cover one's ass, no set hours or obscure HR policies. Just hard work and a ridiculously challenging mission.

Outside of that, why would you work at a startup?

Equity.

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