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Comment by Swizec | Hacker News Reader

Company valuations are based on N(engineers). It is said that hiring a full-time engineer increases your valuation by $1M.

And it only costs about 10% of that per year to pay the engineer. Winning.

Basically, there's no incentive to give raises to current engineers because when your company doesn't care about profits or expenses, but about getting and maintaining investment and stock value, it doesn't matter how expensive it is to train new people and how ineffective they are. As long as they are just effective enough to maintain a N(user) growth, you're good.

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> It is said that hiring a full-time engineer increases your valuation by $1M.

I won't dispute that this is said, but every once in a while I get the sense people saying these things should double check which column of their balance sheet these things belong on.

yes but when we're talking about the real world where maintaining N(user) growth translates into designing, implementing, and maintaining complex systems, it can be fatal to simply view engineers as a commodity that can be discarded or replaced on a whim...

Your argument failed once you said "yes but" — when valuation is a function of number of employees, adding fine-grained nuance and deeper levels of consideration just won't happen.

If companies want the best, yes they should do all you said. If companies are just trying to grow grow grow, they can probably do better with an approach of 1,000 coder monkeys instead of 10 expert systems builders.

Plus, no reasonable company is going to pay the 10 expert people the equivalent of the 100 coder monkey duties they are actually performing. That would be what... a salary of $10 million to $20 million per expert employee per year. Yes, you are worth that much, but the market finds true-value untenable. We'd rather let companies keep hundreds of billions in spare cash than paying it out to employees who are allowing such hoards of wealth to be, well, hoarded.

> Plus, no reasonable company is going to pay the 10 expert people the equivalent of the 100 coder monkey duties they are actually performing. That would be what... a salary of $10 million to $20 million per expert employee per year. Yes, you are worth that much, but the market finds true-value untenable. We'd rather let companies keep hundreds of billions in spare cash than paying it out to employees who are allowing such hoards of wealth to be, well, hoarded.

Companies do do that. It's called an acquihire. It happens when an expert starts a startup that develops a technology that a bigger company needs. This bigger company then buys said startup for the sole purpose of hiring said expert.

They don't care about the user base or the interface or the company as a whole. They just want the expert to continue developing the technology they're an expert at, but do it for the big company instead of themselves.

It's called an acquihire.

Exactly. Wasn't the original question about how to get a raise at the same company though?

The option of "quit, give up all your security, hope to make something amazing, then get acqui-hired" isn't a tried and true path to just getting a raise.

We see people at Google taking that path all the time. Work at Google -> Quit -> Create new company with the same work you were doing inside of Google -> Get acquired by Google.

Cisco is famous for encouraging that tactic too. Lots of serial quit-acquirhire-vest-quit-acquihire loops going around. It's easy once you have the connections in place to drop out and instantly be established as legitimate again.

Yes, the original post was about getting a normal raise. But if you want to be paid as much as 100 code monkeys, an acquihire or other large stock sale event is your only option.

With extraordinary rewards, come extraordinary risks.

But the bigger point of this comment thread is that you can get raise jumps with practically zero risk as an engineer right now by switching jobs. As an engineer right now you can switch jobs without a single day of unemployment. Just do interviews as a side-project, then when you get hired somewhere else, quit your current job.

Bam.

But companies are likely to lose the engineers that they aren't giving raises because of the same effect at other companies, so then it's a wash even under the N(engineers) valuation model, and I once again fail to see the rationality of it.

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