How to Not Get Screwed over as a Software Engineer [video]
ycombinator.com
ycombinator.com
This is the true risk of startups, and, if you're looking to maximize your earnings, it's best to either join a big tech company or start your own startup owning most of the equity, perhaps as a side hustle while you grow it enough to be profitable.
But getting "founding engineer" level equity on the order of 0.5% (before dilution!) seems to basically be a scam, where you're working 2x the amount for lower salaries than the market, all while having some nebulous carrot dangling in front of you for a reward that may never come, most likely, or even if it does, the value is so small as to not make up even on a per-hour basis the amount you spent working at the startup.
The founding engineer role at 0.5% is not meant to be a role to retire on, but a stepping stone to those bigger roles.
by whom?
The title itself is mostly a lie.
That said, if someone is the type who pays attention and learns what is going on, being close enough to see certainly helps.
Yes, in the small % of cases the company is very successful, the founders will gain more, but it's disingenuous to not consider the risk.
Startups are not a risk-adjusted way to maximize earning potential for nearly anybody --- not even VCs! VC returns overall typically are less than S&P500.
For example I was watching a documentary and got curious about theglobe founders — one was the son of Valley business type and the other was the grandson of the founder of Nestle.
Many engineers come from more pedestrian roots, and need money to make rent if the company folds, while the founders can accept “stipend” money because they have cash flow guarantees (probably estate tax avoidant annual gifts) and possible even jobs from family connections.
A. start with two million !
But it seems to have worked out OK for him.
Andreessen has made a lot more money since then, but JWZ got to build up many aspects of something cool that he cared about, and also occasionally still write some code on the side.
0.5% at an early stage with below market compensation, no refreshers with future rounds, negligible comp increase with future rounds, and below-market salary is indeed a scam. A lot of startups are happy to operate this way.
On the other hand, getting 0.5% equity in addition to market rate salary (or adjusted to market rate as soon as funding comes in) with refreshers on each raise to offset dilution and reasonable work life balance can be a very good deal.
I’ve worked for both types of startups. The first type quickly loses their best talent as they figure out they’re getting the short end of the stick. The second type can build a happy founding engineering team that grows with the company and wants to stay for the long term.
Fortunately, the internet has made it harder for companies to get away with the bad deal, below market rate, terrible WLB arrangement that was so common at startups a decade ago. Some people still get trapped by bad deals. Usually when you look at those companies giving bad deals it’s a small group of older founders managing a group of early 20s college grads who don’t yet know better.
Getting 15% is only really possible as a cofounder or if you’re joining as the only engineer before they have money to pay anyone. I assume that’s why you said “sweat equity agreement”.
There can only be 100% total, so giving everyone from cofounders and the engineering team 15% would max out at 6 parties total, assuming no investors and the remainder goes to a pittance of an option pool for new hires. Unless you never plan to grow the company the math just doesn’t work.
If you joined pre-money and took pure equity as compensation while building the company from scratch then you’re more traditionally called a co-founder.
One can be very dedicated on a 9-to-5 schedule. Just because you value WLB doesn't mean you are in a 'clock-in-clock-out' mentality. People have lives outside of work, may be even hobbies. The idea that a startup owns your life needs to die, stat. That is an extremely toxic line of thinking.
Google will pay a senior engineer 200k base and 250k in liquid stock a year for 450k TC. That stock is also incredibly low risk.
If a startup paying market means 450k cash, absolutely there’s no need for equity. But if it means matching the 200k base then obviously you’re screwed with no equity. And I’m theory it should be a lot of equity given the much higher risk premium.
You are getting equity either way, both are likely to appreciate, but one is likely to be more liquid. So you're trading liquidity for a higher return.
More than half of all startups fail within the first 10 years. They’re not just less liquid, they never experience a liquidity event at all. That equity is effectively $0.
The odds of any given big company going bust are dramatically lower than that. Their equity might depreciate but it’ll at least be worth something.
From my experience, the group of people seeking FAANG jobs or prestigious roles at big companies doesn’t have all that much overlap with the group of people who like to build early stage startups.
Some people really liking going into a huge machine of a company, doing a lot of meetings and planning documents and consensus-building, playing the office politics game, and working with huge teams where everyone gets a narrowly defined slice of responsibility that they’ll be evaluated on 12 months from now in their performance review. These people usually struggle at startups and leave anyway.
Other people can’t stand anything resembling big company operations and won’t be working for FAANG or Series D behemoths for very long even if they’re making $400K or more.
This is why you’ll see companies like Oxide Semiconductor pay $200K, accept only the best candidates, and still have people lining up to apply.
If the only thing that matters to someone is cash, moving to a Tier 1 city and joining FAANG to play the game is just what you do. Just don’t be surprised when you find yourself surrounded by other people who care primarily about playing the game to maximize their comp, because they’re doing the same thing.
Mostly summarized into: "Joining at Series C may give you an ideal combination of risk and reward. Series C startups had the highest weighted growth in our analysis, followed by Series B and A."
1. They choose startups from 2014-2015. Valuations were (a) more reasonable then and (b) we've just been through one of the biggest bull markets of tech stocks in the past decades. 2. That taking the "Mean Valuation Growth" over that time period is meaningless if (a) there hasn't been a liquidity event and (b) if the mean is weighted by outliers (which it always is).
Portfolio / VC strategy is a bet on power laws. We, as employees, don't have that opportunity. That means we've got to be deliberate about who we join to try to hit a power law outcome.
Am I crazy here?
If they only give you 90 days to buy your options when you leave the company, don't bother working there. Its a scam.
I'm currently on my fourth because it's good experience and I needed a job after being laid off from a larger company. I'm a exec and have a decent amount of options and the company has customers and a path to profitability, but I'm still not counting on those options being worth anything.
Of my previous 3 startups. 2 were acquired and one is still chugging along and making a small profit with no exit plans. Total value of my stock was the aforementioned negative number.
Join startups for the experience, not for the paper money.
The facts are:
1) Tech startups usually need a bunch of good engineers
2) Investors and founders want these engineers for as little money as possible, as almost every owner-labor relationship in history has gone
3) Stock options have mystique from once-in-a-lifetime companies like Google but are overall very complex financial instruments
4) Many engineers are a combination of poorly informed about these complexities and easily impressionable to be “sold” that these options are a good idea.
The end result is a massive amount of effort expended to hoodwink engineers on this topic. The existence of the term “founding engineer” is exhibit 1, they are an employee and could simply be called software engineer, the term was invented to add the mystique (and workload) of a founder to what’s just a regular employee without founder equity.
Exhibit 2 is this idea that being a founding engineer is a path to being a founder , this gets repeated ad nauseum despite being easily disproven by 5 minutes on linked, a slim percentage of hot startup founders had previously been “founding engineers” . Of course some startup experience might be useful but just as often you’re the code monkey hired precisely so that the actual founders have more time to do the founder stuff you’re not doing and therefore not learning.
YC is basically a VC firm so it’s like taking Exxon Mobiles PR about climate change risk at face value. There’s a huge potential for bias. And even by VC firm standards YC has been shown to be exceptionally employee- hostile in their communications to founders and the behavior of their portfolio companies.
Once again, people ask “what would a union do” and once again, here’s an answer. It could hire lawyers with a collective budget to review startup option terms and make them less likely to screw over early employees. Because the lawyers that the VCs hire are working to protect the VCs, not you. And the blog posts they publish on employee equity are written to serve their interests, not yours.
Basically, VCs optimize for many small bets, ie investing in many, many companies where only one needs to hit it big in order to recoup the investment cost, while startups focus only on their own success, so it's in the VCs' best interest to sell the dream of working on or at a startup, thereby increasing VCs' own success without necessarily materially affecting the success of the startup itself.
Which article? The two sentences below the video pointing you to watch the episode, did I miss something?
I've done five startups now and my conclusion is I'll only consider joining a startup at two points:
In the beginning, when the share valuation is less than a penny. The valuation is low, do an early exercise of all shares up front and file an 83b. Now, as you vest, you actually own the shares. So you can leave the company in the future and keep all your so-far vested shares.
Or, late in the startup cycle when the company is already well-known and very clearly on the IPO path.
Anywhere between these points is not worth it. The valuation will be too high to early exercise so may lose everything but the probability of success will be too low to take the risk.
Also, wasn't there a scandal a few years ago of a startup that promised that and later canceled? So would have to see the contractual wording carefully.
Anyway, I think if you ever do talk to a mid stage startup, you should tell them this is what it would take to convince you. More people demanding it will likely cause the market to move.
The stress was unbelievable the entire time. I even quit once but stupidly came back, and they kept throwing Monopoly money at me which was going to make me a millionaire, supposedly. I believed them, sunk cost fallacy and all, but eventually the owner got sick of it, sold it, and my position was diluted almost into oblivion.
Maybe a shrewder person would have seen it coming, but I worked with several very smart and successful people and we all got taken on it. If things are bad and they start throwing Hail Marys at you to keep you around, I dunno man, it’s probably not worth it.
I think the actual takeaway here is that people who go to work at startups should be far more discerning about the company they are working for than when they are getting paid in liquid stock.
I think early employees should also be willing to bail early if it's not growing at a rate that justifies the stake they get.
I wonder how sensitive the HN crowd is to the specific % number here. Do you think 1% is a meaningfully better amount of equity for employee #6 (assuming this is the first non-founder)? Does front-loading vesting (eg, 35, 35, 20, 10) change your thoughts at all?
The founders are the ones that will be in the room when things like share dilution etc. are discussed. The employees (likely) will not.
The people in the room decide:
a) Who can cash out when b) Who gets diluted and by how much
If you're not in the room, you get no say.
Companies do generally want to disincentivize employees from cashing out for a while since it lets them maintain a very low 409a valuation for common stock so that they can issue options with low strike prices (which is good for employees), but generally secondary markets do exist for companies that are doing well.
But yes, fundamentally, employees and other small shareholders do not get to make the decisions about company fundraising, either in startups or big companies. The lack of control doesn't make these companies bad investments.
e.g. Founders raise, selling off some of their shares as part of the raise. Everyone else has an illiquid asset, Founders can negotiate a payout.
The major shareholders can authorise issuance of new shares, different classes of shares, issue new shares with anti-dilution clauses. You're correct though, it's easier to value shares with a secondary market.
There are lots of schemes that an unscrupulous founder has at their disposal, so one has to be their own advocate and value their shares appropriately.
Even when founders control the board, the company has to sign binding documents with investors that govern what can be done, and the investors have a lot of leverage to ensure that the terms do not allow wiggle room for founders to screw them over.
No major investor is going to agree to anti-dilution terms for founders, and you better believe they are not going to give additional grants to founders for the sake of it.
Founders will definitely cash out some stock if they can, but generally it is a small part of their total holdings at fundraising time (e.g. 5% of their holdings per round) since that is both meaningful downside protection for them and not so much that investors believe the founders are no longer aligned. This is definitely a real benefit, but I don't think most employees would be moved by being able to sell 5%/round.
Either all or a vast majority of founder stock is still common stock alongside employees though, so they're generally fairly aligned with employees IMO.
Which is all to say; I think it is actually pretty tricky for a founder to create an outcome that makes themselves disproportionately rich beyond what the ownership%/strike price combo should imply and I don't think founders can generally turn a given % of a company into meaningfully more money than an employee can if there is any sort of liquidity event.
There are situations (acquihires, recapitalizations, etc) where founders get bigger forward looking grants for themselves than employees, but I think this is less about the stock itself and more about what they can convince investors/acquirers about the forward looking value they provide and are generally all symptomatic of a startup that is failing in some way.
A prime example is deep learning. The people getting all the credit are the AI researchers. Now I am not trying to discredit them. But a huge part of what made the recent training of large models possible are all the other advances. All the dedicated PyTorch/C++/CUDA/MPI code that is written just to be able to scale on a HPC cluster, for example. Those people are handsomely rewarded, but they aren't getting the Chief AI scientist recognition, despite it probably being just as hard if not harder to write all the optimized code to enable and facilitate LLMs in the first place.
Before I got into deep learning I was into numerics. Numerics people get typical SWE salaries, but they aren't getting FANNG level salaries, even though their code is powering the simulations across whole industries that ultimately enable many of them to operate at all.
Now I am sure somebody will debate me on the "getting screwed" part, but it sure feels as if, the ones who use a technical library and build an application on top of it, get the recognition both for their own work and also get part of the recognition that should due-fully be bestowed on the author of the library.
But maybe this is how the entirety of society works, but one should still be conscious of this phenomenon. If we all stand on the shoulders of giants, then maybe we should also name the giants in the acknowledgements section.
If the under the hood line engineers aren’t getting wild compensation for products they built generating wild compensation for the engineers/researchers working on the end product, yes that is a fair point.
If it’s these engineers not getting the recognition of Chief AI scientist and so on, that’s misguided I think. There is nothing worse than working under a technical SME who doesn’t know leadership, and also “product,” broadly defined.
I’ve worked on both sides of the issue and org leadership is a defined skill set the same way optimized code is. Unless the backend engineers display that leadership ability, their closeness to the internals of the technology doesn’t justify them running how the technology gets deployed.
It is the same as if you found a startup. During the ideation sessions with whatever VC buys into you, there is 5% discussion of tech, or better yet - checkbox the product mvp works. 95% who are you going to sell this to and have you spoken to them? Different skills.
When tech is a business, the tech knowledge starts to matter less, or is only a portion of the picture. The individuals that grasp that do well, SWEs who ignore this don’t IMO.
The authors of "Attention is all you need" got all the recognition. The people who worked on scaling deep learning models to huge clusters got no recognition. But both were just as instrumental to the ultimate success of LLMs.
- Really hard or really easy things can generate the same revenue
- Chief of X can screw up the leadership with hard or easy products if they can’t lead and explain to external audiences
- external audiences deal with a million things to be an audience to. It’s wishing on a dream that that audience will dig into “well who actually built this” vs moving on to w/e other thing is trying to capture their attention.
Put that together, recognition comes from glueing things and people together successfully, explaining how it works to outside world/clients, and steering the product away from an optimized elegant solution to w/e people will actually use.
Ever since tech stopped being academic/open source and got revenue linked to it, “thems the rules.”
Speaking of SWE survival guides, engineers often seem to ignore, hate, or argue this topic always, and meanwhile the smaller set of engineers who get on board with this (ugly, yes) reality tend to do well.
There are several examples of people who got lucky with infrastructure or more technical engineering, but it is not because of their perceived role or something superficial.
If there are 100 possible research directions and only 1 proves successful. The people who travel along the other 99 get no recognition, despite expending the same effort and despite their contribution being just as important.
Is it your supposition that the only reason the person who went down the successful path did so purely because they watched everyone else fail? That seems highly unfair to the successful person.
you'll need to give a more strict definition of the word better before this can be a useful conversation.
And one could similarly ask for a definition of success. But the ecact interpretation of the definitions would depend upon the context.
What's trying to be implied here is that the failure of others informed the success of the one and what I'm pointing out is that's not a given.
It also might be that the successful one had better judgement and that it _wasn't_ luck.
My point is that the current political narrative is strongly that people who are successful are lucky and there's nothing logical about that stance.
Such is life.
I mean, if the release had happened and there had been technical issues you would have gotten called out and raked over the coals. But conversely, when the release was technically flawless but the business side tanked then no one is held responsible.
What frustrates me even more is when the non-technical people are acting like they want your input. They are actively soliciting feedback and even talking about empowerment but all of the critical decisions are being made behind closed doors. It is clear they know that any sane and technically competent senior contributor needs agency so they try their best to provide an illusion since they want to keep the actual control. I can even understand it. Their investors demand a prominent VP of sales or marketing and that VP demands their own agency as a requirement to work at the startup. There is only so much control to give out and the technical guy is the one shut out.
One of their points relating to how you know things are working really hit me. If you have fair equity and you have a seat at the table and things are still not working, then maybe you are the problem. But on the other side, if the founders are not giving you a seat at the table even when you are making it clear that you require it then maybe they don't respect you. I believe that it is a mistake to believe that merely working harder will earn that respect.
this is what it means to be low on the totem pole.
Those higher on the totem pole is not going to be willing to change their position, just so that someone lower can climb. They would need to either be higher, or get some alternative compensation.
This has been the human condition since time memorial!
> I believe that it is a mistake to believe that merely working harder will earn that respect.
<bingo>
You must be a principal level developer -- it is a role driven with the highest degree of cynicism and empathy, which you comment is gushing with.
So they have to go out and recruit the best of the best that they can in those disciplines. I can't fault them for doing what is necessary. They even sent a bunch of the engineering staff (including me) to growth marketing courses. But now you have 1 new VP of Sales with 20+ years of experience, 1 new VP of Growth fresh out of some hot startup and the same dozen engineers. When ideas are being pitched on what to do to increase growth, and when engineering time is being portioned out to implement those ideas, consistently we were spending our time and resources on the ideas of those VPs.
I don't envy the position of the founders in many ways. They have severely limited resources and they somehow have to try to keep everyone happy. And even if I am a technically strong and reliable engineer, they needed to give that control to the areas in their company that were most in need. And those new VP level folks demanded that control. I do wish they had just been a bit more honest about it.
My frustration is that when you bring in people at that VP level, they need to be held to the same accountability as the engineers would be. And even when I saw that they were failing and making bad decisions (and were frankly asleep at the wheel in some cases), I felt shut out of avenues to apply leverage. It became clear that the decisions and opinions of those marketing and sales folks were being held to a different standard than the input from the engineering team.
Always been worth it. If you're focused on tech, make sure you've hired the right people to review your NDA's, startup contract, new home purchase, or workout routine.
Don't risk millions on a startup IPO / house / loved one without dropping a few hundred on a second/third opinion. You've got the money. Don't cheap out on important things when you could have an all-star team backing you.
Since most engineers don't hire lawyers, it may be easier to find a lawyer that does this for Firm Z, to pull people from competing firms A - Y.
In either case, ideally they will have had to go to arbitration and/or court against the original employer.
This person will know what to look for in masses of boilerplate to help you zero in on and fix the 10 words here and there that can change not just your comp but your career options.
Expect from $300 - $750 / hr, depending on the size role you're lawyering, which tends to indicate the amount of legalese, traps, and foot guns at play.
https://news.ycombinator.com/item?id=38111370
It's an old video of a lecture Mike Monteiro (and his lawyer) did.
Kinda speaks to this.
It's exactly what they're talking about in the linked video - you think you're joining as a valued partner, but you're clearly just a cog in the wheel.
I've spent my fair share of getting injured through lifting and each time I've bounced back because a video that a PT has shared has a patient with the same exact issue as me.
I wonder how many injuries I could've avoided if I actually set up a session haha.
- Lead engineer works 100 hour weeks to keep the company running for a below-market salary and 0.05% equity while the founders and product/sales leads constantly sell shares on the secondary market, buy fancy toys and travel the world.
- Technical cofounder gets a 3% equity because the "business guy" came up with the idea and deserves the other 97%.
- Early engineers are offered seemingly good equity but end up with lower class shares that are first to be diluted away, and an exit below some magic number thought up by founders/VCs earns them nothing because preferred shares get first dibs.
The startup game is probably not right for you as a software engineer if you don't have a "type A" personality and aren't willing to have uncomfortable conversations and fight to get your fair share. Otherwise you are just a resource to be exploited.
I’m curious of your take on these tests
MBTI is astrology for nerds.
Not sure why this stuff lives on but it seems to be a meaningless way of classifying people
I'm not quite sure what your comparison does. If you build a company fundamentally built on the work of good drivers or cleaners, yeah perhaps you should give them equity.
If you just contract that work out once in a while for a company that doesn't have these jobs at its core, then probably don't.
But also, most drivers, cleaners, and (to a lesser degree) repairman can be more easily replaced. The former two in particular don't require any special skills normal people don't already have to possess. And where skills come into play, we're still not looking at 4+ years of college required type of skills. Hence, there's not as much supply of engineers as there is for repairmen. And the roles you describe do not fundamentally create anything. Engineers, in particular early engineers in a startup actually design, construct, operate, and maintain 80% of what is actually generating value. Other roles supporting them also deserve a piece of the pie but questioning why engineers should get equity at all and someone having an idea and the funds to kickstart a company should get all seems odd.
The reason you work at a startup is because you
1. seek to start a company in the future and want to index on the mistakes of the startup you work at
2. want to grow in responsibility/ leadership because you're bored at BigTech
3. want to learn more and apply the learnings, hopefully also experiencing the exhilaration that comes from hockey stick growth
The advice to my younger self would be to ignore startup equity if you're an employee for all practical purposes. The only concrete indicator that equity signals is the trust your founders have in you.
tl;dr only capitalists - the existing 1% - have an odds-on shot at startup success
By the VC definition of "startup," which is not universal. This is why I advocate for bootstrapping on the side until the revenue exceeds your salary. Pieter Levels famously did so and many others are also generating $10k or $20k+ MRR and living well. They can always sell that cashflowing asset for a 5x multiple and enter the HNWI territory, or they can simply keep the company on the backburner while they do other stuff.
Back during the dotcom days, most employees, from secretaries to engineers, got extremely rich from options when the company IPOed. These days, in order to make a life-changing amount of money at a YC startup as an employee, the company needs to exit/IPO at over $5 billion in order to make about $1 million. I was at a YC company for 4.5 years as an early engineer, and I ended up with less than $100,000 from my options. I would have made 10x that had I taken a FAANG offer with considerably less work and risk.
https://www.ycombinator.com/blog/filter-by-equity-at-yc-star....
I myself had an offer from a YC company years ago that had some layoffs but essentially outperformed and raised a big Series D/E/F this year. Had I gone with the YC company, my equity even in their big raise would have been about $100k. And no guarantee I could have realized any or all of that gain in the raise.
YC could be up-front and give this actual data in the video. Instead it’s primarily a specious talk show segment about how YC wants you the IC to think they’re on your side.
I just don't understand who's signing a contract for 0.02% equity in a startup. How does this happen?
Let me put this again since it's so important: IN BUSINESS DON'T ASSUME ANYTHING.
Also, I think it’s a mistake to talk about exploitation and blame when your startup is not working. Honestly, most startups don’t work out and it’s not really anybody’s fault. It’s kind of the default.
- 1. Go to workatastartup [0], click on "Has equity range" and maybe "Company Stage: Seed".
- 2. Say "Ohh...FFS", go back to linkedin say "FFS" and throw your hands in the air.
- 3 ...
- 4. Do not collect 200 do not pass go. No F.PROFIT.
Ideally, there's a canonical YC bible that everyone knows about and consults, whether or not doing YC. Which says things like "equal equity" for the founders, what's the current best thinking on deals should be for founding engineers, early hires, interns, etc.
Avoid people having to piece together and reconcile conflicting information from various other materials and messaging, from YC and elsewhere.
It could become accepted fair and reasonable practices, if it hits those well. Which could break with some things YC has done in the past, then reconsidered. Maybe it could have such a ring of truth that people accept it despite YC's potential biases/conflicts.
Somewhat like we go to levels.fyi to see what to expect from a FAANG, we could go to the YC bible to see what what to expect from a startup (or to do in a startup that we found).
(I'm thinking of YC for this, since they have the influence, and considerable track record of earning trust.)
2. Avoid accumulating legal encumbrances at large firms... overly broad NDAs, contracts, and Patent/Copyright obligations can get nasty. You may be signing things long after you leave a firm for zero pay, get fired to claw away equity 2 months before IPO after a 10 year career, or incur dozens of term revisions over years slowly bleeding off contract value. In general, many countries also interpret the identical contract differently depending where it was signed. Example: In Canada anything you build while working at a firm can be claimed by said firm unless explicitly excluded in your contract, and in the USA it is generally implicit that any IP unrelated to company operations is your own. Most employees will roll over like a dead wale, as they likely don’t have enough capital to fight a legal battle. One may think they know better as they ignore #1, but they are provably wrong.
3. Avoid predatory VCs if possible. Ask yourself what these people actually bring to your firm, if they think you are gullible enough to table personal assets, or if a one time top up was worth 34% of your firm. If it is just working capital from a douche in a cheap suite... than seriously reconsider your growth plan. Example: You are small and thirsty… and never saw what share dilution does to founders. Again, talk with your own legal/finance people before agreeing to anything.
4. Make sure someone doesn’t swap paper stacks on you before signing, or give you a old unedited “wish-list” version as a copy. Professional cons span all professions, know card tricks, and people still do ethically dubious things when relatively small sums are involved.
5. Everything is always pleasant in the beginning, but if the legal paperwork is sloppy... things can get very ugly later. Part of being honest and candid up front... is putting into writing what peoples expected obligations are to each other and the firm. Example: Large rapid revenue growth has torn friends and families apart... as even a $100m can drive some people to recreate a history that never actually happened.
6. Most techs at Startups have 6 jobs, and being smug ain't one of them. Some advice for business ops.. stay in your lane, as you are also not as mission critical as people may have suggested.
7. YMMV, ask several random people… each bring differing perspectives. Everyone I respect initially disagrees with my opinions a first... can take a few years to reach consensus for the truly smart.
Have a wonderful day, and build something awesome =)
1. Transfer to a TPM/QA Manager role at somewhere like Amazon or Microsoft. Bar is much lower to get into this role.
2. Get hired into a higher level than you could in a SWE role.
3. Transfer within the company to being an SDM
4. Now you are one level higher, in a management role, that would have taken you 5+ years of grinding and some luck to get into.
5. Spend a few years in this role, switch to other big co, makikg 400-500k+ while bossing around engineers much smarter than you.
^This path is how people are doing it. Never take equity in a startup, never grind away as a mid level engineer, fighting with ten other engineers for one promotion.
Edit:
Adding one point to this, if you found a company with a non technical CEO, and the company sees some success, all the focus will be on the CEO. The CTO role is highly replaceable, and there is a massive power shift that occurs once there is traction with a "finished" product. The CEO, especially in B2B Saas, is the face of the company. So the CEO can sit on his hands the whole time the product is developed, but then does reap huge gains. There's no easy answer, as many engineers do not have the soft skills for the role. But arguably, they could run these businesses themselves.
Find engineering/product first companies. Big tech ain't it any longer.
Now they are just large advertising platforms that do something to attract users and user data.
I think under similar logic, if you want to work for those companies for comp/prof development, it’s probably whatever next money printer is building out.
IMO this is probably AI, next-gen adtech that keeps the technology going post-GDPR etc (platform plays like FAANG or great user enumeration companies in the open ecosystem, although a lack of a non-obvious adtech product might limit the growth and prestigious of these types) maybe some top cybersecurity vendors if the problems get worse and regulations get serious, maybe defense tech (second gen ones following what Palantir did).
My personal preference and risk appetite takes me to successful small public companies or well-funded startups.
If I don't have a risk appetite, I'd go government or boring F500 companies that are starving for engineers.
Wherever I go, I am very particular about the mission and that I get along with the team and manager. The less the bureaucracy, the more likely I am to enjoy working for them.
But there is no way I will work for big tech with their miserable processes, culture and exploitative management. I am here to work, not to constantly walk on eggshells for BS rules.
TPMs, due to their role, work across orgs and interface more with leadership so they do seem to get a lot more visibility/exposure than normal ICs and do seem to get promoted into leadership positions more easily. My wife is less technical and is looking for a career change and last year I literally suggested this path for her.
(you can argue separately that this isn't as important which I might agree with on a case by case basis in that I've seen really strong leaders who are less technical who make up for in various ways but it's not the common case).
Or in my case get PIP’d from Amazon with a nice severance and found a much less stressful job within three weeks at a smaller company. My hearts always been at smaller companies and I knew from the minute I virtually walked into AWS I wanted to go back to smaller companies.
I was actually just interviewing someone for a position for a green field project where I’m leading the backend parts across teams. I needed to be able to “fire and forget” an assignment where the requirements weren’t clear and there will probably be a lot of XYProblems.
I need them to talk to the vendor/customer, come up with a game plan, research the technology and present their idea to the team. I want them to know how to talk to developers, technical directors who don’t want to get into the weeds and non technical people.
After they have done the research - especially about a technology I don’t know - I want to lean on them to teach me and for me to be able to go to for advice.
I’ve given the thumbs up plenty of times for team members and now dotted line reports that impressed me by giving me “imposters syndrome”.
TPM here. More cross-org work: Yes. Interface more with leadership: Yes. Visibility/exposure: Yes. Easier promotions? Nope. Not in my experience.
There are fewer of us, therefore our org chart trees don't grow as fast as engineers' trees, therefore there are fewer opportunities to add a layer and move into it as a manager.
How much smarter than you are they if you've taken an effective shortcut to getting paid significantly more while doing a lot less work? Working harder, taking all the stress, and earning less doesn't sound that smart.
If you're so smart, why aren't you rich? If you're so smart, why aren't you happy?The poster above you; they're the one who made an implicit claim about the value of software developers' work. You're welcome to disagree. Do you think everyone is paid fairly?
Punishing people for believing in their work is called "exploitation".
Yes.
Personally, I think they're all underpaid. But I don't set their wages. Society does that by agreeing a level of tax people are happy with, and then spending that money on public employee's wages. Collectively society has agreed to pay those people as little as possible. That's the important thing in any wage negotiation - you have to understand where the money is coming from, because ultimately that's who gets to decide the maximum limit of one side of the bargaining process.
So in the case of teachers you have an individual teacher's pay being an agreement between that person and how much Joe Random wants to pay in tax. Teachers are always going to lose out on that one.
The answer is either to educate the public about the value of public wealth (eg why higher taxes are actually better for society in many ways), or to privatise the education system. Neither works well on a national level.
That's not a solution because the people in power materially gain by feigning ignorance.
> Teachers are always going to lose out on that one.
How can you openly admit that the incentives don't work and still defend them?
> Punishing people for believing in their work is called "exploitation".
What is the relevance of this?
Being smart and how much you make aren't related. There are researchers working at universities in Europe being paid miserable salaries and yet making incredible discoveries (like medical ones) and these are incredibly smart people.
Meanwhile there are people with only a few neurons connecting raking in millions on "only fans".
And, no, the later aren't smarter than the former.
What else could anyone want?
Heck, today i saw Sepp Hochreiter sitting in the tram on his way to uni. He could do anything in the world, yet he chooses to live the european academic life.
Think about it, who's funding these researchers you're celebrating?
I'd argue being smart is linked to money. You don't need to spend all your time exploiting the markets if you're smart, but just enough to build a resource pool that can enable your endeavors. People work with what they got - in your latter example, they're selling their body. If academics were functionally smart, then it's a simple task for them to be able to exploit and win against a capitalist market.
I find it deeply troubling that so many people conflate “being smart” with “min-maxing labor and earning”. It reflects the strange belief that the best people are the best capitalists.
I take issue with the thesis that money is crystallized virtue where more of one is more of the other.
I suppose it is what people need to believe, however. Good luck with that, I guess?
And they're veeeery vocal other people trying to get something for nothing.
There are smart people burdened with a moral compass, which forces them to "do the right thing" which might be pursuing their passion or contributing to society.
Then there are smart people who are happen to exploit social structures to get ahead. Those becomes the sociopath CEOs and such.
There are also plenty of not particularly smart people who figure out how to get ahead exploiting social structures.
Theres also plenty of smart people, whos intelligence is restricted to their area of expertise. Technical knowledge doesnt transfer to strong political skills
Doesn't make the smart people who actually have a consciousness to answer to less smart than the rest
This is not about smartness, but about willingness for ass-kissing and ability of to play political games. This is not associated with intelligence, but with dark triad traits. Quite some smart people look through all this, but are incapable of changing the situation.
SWE: Software Engineer
SDM: Software Development Manager
All the various "PMs" at companies I've worked for have done largely the same jobs that are some mix of managing the project and figuring out new features for the product.
This sounds off to me. Even if the CEO isn't a technical engineer literally working on the code, they are ultimately accountable for getting engineers and designers to build the right product. Building the right product is massively hard. Usually, it takes several wrong takes to get it right. 90% of startups fail.
When an engineer is hired post-traction, they may not see all the scars and dead bodies of those failed attempts. It may seem easy to manage if the product is already a hit, because when there is true PMF it's hard to mess up.
But that's like those stories about how the military in WW2 thought they should be adding armor to the areas of the plane that had holes after sorties. That was totally wrong; the real problem would have been to add the armor to the areas of the plane without holes, because *those planes crashed and were never recovered.* In other words, what "seems easy to sit on the hands" is survivorship bias, and ignores the brutal reality of struggle that any founder will be able to relate with. Assuming that "engineers could run these businesses themselves" indicates a very incomplete understanding of what is involved with actually building and running a business.
Sales is about navigating conversations to match someone's problem to a solution. Product is about navigating conversations to understand problems and figure out what the solution should be in the first place.
I do know one CEO who is "the engineer". They're in a bit of a weird market, and it seems to be working. I rather expect he'll move to a CTO role once they're actually in production, though, when the focus becomes growth.
You haven't had to have meetings with a CEO before, have you?
I've never seen someone on the TPM ladder directly manage SWEs at google. Microsoft is different, the whole place is a shit show.
Very possible i'm wrong though.
PMs are often the same, although the position can have value if there's clear expectations and enough sales/customer complexity to warrant it.
OK, that was harsh. But not always far from the truth!
The pattern is identical in other industries and even in academia. Professors are supposed to be technical staff, but in reality most have become middle-managers bossing around scientists much smarter than them (paraphrasing the OP). Plus, they usually claim all credit for any breakthrough.
As a European, I think the US industry is much more innovative because this is less of a problem. It is still an issue, but at least technical people get some recognition.
But the situation is improving somewhat. At least that’s my impression. Like a drunk that has hit rock bottom we’re on our way to recovery. :)
> 2. Get hired into a higher level than you could in a SWE role.
It's also a part of the reason why at least historically there is such an insane hate for managers in hacker culture.
The political savviness so scorned by the in-the-trenches coder might actually be communication, capacity for broader context, strategic foresight, emotional intelligence to debug and optimise teams, among the many other skills required to execute a product/project beyond programming. And good leads will pluck coders showing these skills out of the engineering corps and set them on a TPM track.
Perhaps it is only rarely the case. But it seems fair to observe that it is gentler on the ego to cast these rare and hard-earned skills as “playing the game”, PM mumbled-jumbo, etc.
At the same time, operators in bad faith tend to deploy just these skills, and a bad experience can incline one to wash their hands of it all and crave the rough diamonds of the cave…
Honestly that’s not bad advice though. I did something like you recommended. A recruiter from Amazon Retail reached out to me about applying for an SDE position in mid 2020. I wasn’t about to sell my big house in the burbs of Atlanta that I just had built in 2016 to work at Amazon in Seattle “when Covid lifted”. Besides I hadn’t had to do a coding interview - ever. As an enterprise CRUD developer who knew AWS, had a network and knew how to talk to people.
After I kept talking to her, she suggested I apply for a remote role at AWS ProServe specializing in app dev + cloud. There was no coding interview.
I’m far from naive. I was 46 at the time on my 7th job and new from reputation and second hand experience that eventually Amazon is going to Amazon.
I was well prepared when I got Amazoned.
I like most of this comment, but this I always think this perspective completely misses the point.
No matter how technical your role is, working with other people is always going to be the most important part of your job. No matter how technically talented you are, your ability to deliver value to an organisation is going to be strictly bottlenecked by your ability to work with others.
This is especially true for leadership roles, where success or failure in the job is almost entirely decided by people skills.
You can have a technical founder who understands the product perfectly, and the understands the market perfectly, and has a brilliant strategic vision. But if they can’t lead people effectively, if they can’t represent the business to the public, if they can’t develop trust among the customers, then they have basically none of the skills required to run the business.
I think this is almost always false. And I say this as someone who has worked with many startups, and who has been both a lead engineer and a CTO.
I have seen so many startups fail because either:
1. They cannot talk to customers, or
2. They cannot close deals.
It is absolutely shocking how many startups have put in 3 years of heroic engineering effort, but still don't even know the job title of the person who would make the actual decision to buy their software.
But if you have a non-technical CEO who can convince 10 potential customers to sign a non-binding letter of intent, then you're in the game. Take that a competent investor and they'll find you a CTO.
1. Climb to highest rung that is readily handed out on IC ladder
2. Agree to take on more leadership/management tasks, or even go full-time. (Impact, amirite)
3. After a few years: job hop elsewhere, using your combined tech and management experience
4. Enter at staff/principal, skipping the sometimes brutal process of getting there directly from IC.
Like the OP, this exploits the fact that the highest leverage you have is entering an org
I had the same painful conversation with my boss that a lot of us have had: Became the top subject matter expert on my growing team, team grew to the point where my boss needed to insert a few managers under him, pitched myself for it and ultimately he hired outside the team because he needed someone who had already been a manager. This exact thing has happened in my last three companies.
Very few companies actually have pure IC roles that are truly parallel (in comp and prestige) with the people management ladder.
Hope your luck changes on this front.
Can you clarify this? They don't have soft skills? (And perhaps lacking in biz skills, e.g., working understanding of marketing?) But still they can run the company?
My experience has been different. Technology is relatively the easy part. People? On the other hand? People - leading, managing, marketing to them, etc. - is 10x more difficult. Human behavior is a complicated system. It's not something you can throw a couple of engineers at and poof! X weeks later you have a semi-perfect solution.