Comment by Dove | Hacker News Reader

Comment by Dove | Hacker News Reader

I found this fascinatingly counterintuitive.

I would normally expect that a broader market leads to lower prices for commodity goods. If I can only buy candy from the vendor at the movie theater, I expect to pay a higher price than if I can buy it from all the stores in the region, which I expect to be higher again than if I can import it from anywhere in the world. The reverse is true for developers? The companies with global reach instead pay the most?

And then it occurred to me that the efforts of good developers scale.

If I imagine a widget that makes a company 10% more efficient, a small lemonade stand might be willing to pay $20 for it, while a large company might find a price in tens of millions to be a bargain. Developers are more like this. Not only developers, mind you, but automation scales to the size of the problem almost for free!

If you give a good developer a hard problem and scale it across global markets, the return for that developer being good absolutely dwarfs any reasonable salary on a human scale. Therefore, it makes sense that for companies solving a certain class of problems, in markets above a certain size, that any reasonable salary is a bargain if it improves the quality of the developers the company can attract. I suppose the idea that software scales is the intuition upon which this site was founded in the first place.

I appreciate that the analysis in the article is good and much more complex than this. I just enjoyed the unexpected observation, and it left me feeling confident about my place in the world. There are never enough talented people to solve all the problems that need them, and if there ever is so much talent that I have trouble finding a job -- well, that's a world I'd like to live in anyway.

By this logic, the best deal for a good developer will almost always be to start a company

That is indeed always the best deal for every developer who wants to be an entrepreneur. But it's not for everyone - some people just want to code.

Getting contracts is a different skillset.

I suppose that is true, if you reason narrowly.

There is another force in play: the degree to which support makes the individual more powerful. I am much closer to my full potential as a problem solver when surrounded by effective management/facilities/IT/legal/differently-specialized-peers/enough-people-to-work-on-truly-large-systems than when I go it alone. Having spent significant time both as a freelancer and in mind bogglingly huge corporations, the corp lifestyle has its drawbacks for sure -- but I myself find the benefits of support and large problems to dramatically outweigh the drawbacks of politics and lack of freedom. Your mileage may vary, of course. Shoot, my mileage has varied over the course of a career. Still, the intuition seems solid: you aren't going to be solving Google-datacenter or Amazon-logistics levels of problems with your personal startup calendar app. At least, not usually, not for a while.

If there is a minimum size market which can maximize the impact of a good developer, I suspect there might be a minimum size company, too.

Exactly this

Small teams with a big support behind are optimal (I think)

Two guys in a garage sounds exciting but in reality it's kinda inefficient (less so with all the SaaS stuff today, but still)

I believe the optimal company size is related to the recency of disruptive technology. At the outset of a novel, disruptive process the scrappy startup jumps ahead: the actual advantage comes from not needing to take the same approach and use the same kind of team structure because they're going to leverage the new process. They have to build everything anew, but so does everyone else, so moving on the problem with political solutions in mind can waste most of your resources. Speed, experimentation and risk-taking is favored. This phase can launch a lot of careers, and software has seen it repeatedly, though not as much recently. Startups within the SV model spent most of the past decade mostly working on marketing-heavy concepts with a dash of tech, and I think this is turning just now based on recent hiring threads.

When dealing with a mature process the support team is fleshed out and specialized; high performers have been filtered through the events of previous market cycles, and are now optimized into upholding a political role within the org. To a nominal degree everything the mature org does matters more because it's bigger in every respect, but the opportunities presented to ICs deal increasingly with maintaining infrastructure already being used, rather than leveraging infrastructure towards a novel experiment. Someone has to do both, of course, or else you don't get advancements. But you are going to feel more powerful within the big org, and you usually get compensated better.

Only if the developer is capable of finding a business product that can be automated at scale. Nobody suggested that part was trivial.

Once you have a business with that problem, then developers are worth significant money.

A good developer actually sort of needs other people to make this happen, though. Unless the good developer is also good at business, marketing, and at a lot of other things that are easy to take for granted. While those facilitating roles are to some extent more replaceable, they are still quite necessary to allow the good developer to work their magic.

While polymath geniuses that excel in many different areas definitely do exist, they're a lot more rare than those who merely excel in one or two areas.

Depends on what you define as a "company".

For the last decade contracting/freelancing has been paying consistently the salary in the upper ranges discussed in the above article, from my experience living in the NL.

Taking a regular job, unless for big companies like booking etc. described in this articles, for most devs here would mean taking a pay cut up to 50% if not more compared to contracting.

So yeah even if you want to get a steady job with tax cuts you get being a freelancer you can work half a year in the NL and in the end easily make more then a full year being employed.

So in the end most of us have our own little lemon stands, because it just makes more sense.

Agreed. But one thing I learned working at a FAANG is that being a brilliant developer doesn’t necessarily make you an entrepreneurial risk taker. there may even be an inverse relationship, from what I experienced. One reason could be that they just want to code, and don’t want the distractions necessary to running a company.

No, by that logic the worst deal for a good developer is to start a company. You can ignore that logic and find other types of reasoning for why starting a company is a good thing, but OPs entire point is that a good developer is only valuable within a large organization due to scale. If a good developer starts their own company then their scale is effectively zero, meaning the value of their skillset with respect to their own company is next to nothing.

You can provide a service - as a company - to a large corporation and get paid for the scale though. An employee solves the problem at scale and gets a fraction of the value

No, because as the first comment pointed out, the multiplier is more valuable is the market size is larger. A developer starting their own company is multiplying a small amount, if anything. They would be better served working for a large company that can benefit more from the multiplying. Even if you only receive a fraction of the benefit you bring, you will still earn more than you would on your own.

Not every good engineer is going to be best suited for maximal growth for their particular career by starting a company.

First of all, risk adjusted reward/liquidity almost always favors just doing really, really well as an engineer -> engineering leader at a FAANG or a tier or two down. You'd have to really knock it out of the park with a company you start for it to be financially better for you than simply building and riding out a great career at a FAANG.

Second, many parts about starting and running a company run in different directions or even directly counter to the kind of fulfillment you can achieve by being a good engineer at a strong engineering organization. This is probably the much more important point. If running a company well is something that truly makes you happy -- happier than all the other things you could be doing, and you can stomach the intense resource investment it takes to become successful, then it's worth it.

But that's rarely the case. If you ask a lot of people who run companies who are more on the honest/humble side of things why they run companies, they'll tell you the same thing: "I'm not very successful at working for other people." That's not just them being humble. There's a lot of truth to that. And the other side of that truth, is that for people who are a little better at doing that, there's an enormous amount of very well compensated and highly intellectually stimulating work that can be done in the world of big tech.

For most if not all of the best engineers I know, they have great deals at great companies being well compensated ICs and player-coaches. Why start your own company when you could just walk in making a guaranteed low to mid 7 figures TC with the same level of autonomy at a sure thing?

Being a good developer is almost completely disjunct from being good at growing a company.

Unfortunately us devs are really good in starting companies that sound smart, but have low real-world usage. Successful companies generally speaking are rarely high-tech.

I'd like to point out that FAANG high salary in US is cost of engaging brilliant minds who otherwise might work on competing products.

For example, FAANG in India pays 10x local salary of an average dev in India. A guy with skills who who makes 5x-10x local salary in India will not be available on freelance market simply because he neither is going to paid well for the time spent there vs social recognition for the efforts he gets working for better companies.

In Europe, it's much difficult to start a company and people aren't of typical mindset to jump start a company into global dominance.

This isn't the case in US, here any guy with a garage shop thinks he can spin a dominant business only targetting US market.

And how many people in US complete their college etc? So the competition among skilled people isn't intense as its in US.

You do not even need a collage degree to make good money in US but in Europe or India you absolutely need.

So there's less noise in employment market for developer in US and funding is easily available to quick start competition.

Most companies believe their most likely competitor will be from hot tech hubs in US (and history tells you same)

In US, it's like a guy who is on trajectory to build spaceship is being paid high to cut grass for Google, so that he can be distracted during his prime.

> In Europe, it's much difficult to start a company and people aren't of typical mindset to jump start a company into global dominance.

This is such a tired meme. It’s _orders of magnitude_ easier to start at company in a lot of European countries compared to the US.

Creation process is in a lot of cases filling in a web form, paying €100 and waiting a week or two (yes, yes, in know it not like that everywhere).

Furthermore, your health care is not tied to your employer which makes starting a company a lot less risky.

Is it easier to start a company poised for world dominance? No idea, but I do know it’s easier to start a small, sustainable business.

It’s certainly not easy to start a company posied for world dominance when a lot of local laws and culture prevent you from working your employees to the bone.

The average workweek in the Netherlands is 28 hours a week. You may shift this if you are a startup, but culture is certainly something that affects your propensity to generate unicorns.

Not sure if you’re presenting not being able to work your employee to the bone as something positive or something negative :)

It's not about starting company - in the literal sense as you write, because this is just an entry at some register somewhere.

Depending on the EU country, the experience may be nerve wrecking and some institutions treat you as a criminal for dearing to start your own business (typically in Eastern Europe). There is a lot of crabs in the bucket mentality from the communist times.

Then you have extremely complex legislation that is full of traps. Oh you forgot to send that form declaring something you thought irrelevant and nobody told you about? Here is the fine for you.

I know a couple of people who ended up with life changing financial troubles because their accountant messed something up, and not because their business was going bad.

Then you get the cliques and corruption in the cities. Your business is doing very well and you forgot to buy a dinner to a local politician? Too bad you would have learned his nephew has exactly the same business idea as yours. Month later your business is swarmed by all sorts of inspections from various government bodies. You can't do business and your customers think something is up with you and they no longer come. You end up having mental health problems and closing the business with debt.

Six months later your former clients call you to say that politicians nephew runs exactly the same business as you had in the office building you had rented. Politician's nephew offers you a job and you take it, because you are in debt.

This is how things work in Europe.

> You do not even need a collage degree to make good money in US but in Europe or India you absolutely need.

I'm in Europe and don't have a college degree. A recruiter asked me about it once, they were very quick to reply that my lack of degree was not a problem.

> The reverse is true for developers? The companies with global reach instead pay the most?

> And then it occurred to me that the efforts of good developers scale.

There's nothing special about developers here. Large employers always pay more than small ones, for every job. Shelf stockers at Walmart get paid more than shelf stockers at other nearby stores. There's no scaling there.

Broadly speaking, productivity is higher for workers in large employers.

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