Ask HN: What up with these startup salaries? | Hacker News Reader

Ask HN: What up with these startup salaries?

421 pointswhiddershins416 comments

I would have commented directly on the posts, but the YC startup job postings don't allow comments.

I see job postings for a couple of startups here and they are offering approximately between $60k and $110k and 0.5-1% equity for what appear to be significant positions - mobile or full stack developers, director of marketing, etc.

Is this really the going rate? If so, my mind is boggled. I was under the impression there is competition for great employees in Silicon Valley.

Here in NYC, if I wanted to be very competitive to hire into any vital position with rare skills, I would anticipate a floor on pay of $125k. I don't care if that's a designer or a developer or a marketer or what ... I just mean anyone working full time who has a good head on their shoulders and some rare skills.

And 0.5-1% equity wouldn't move the needle much. I mean, if you have a 5 person company and you bring someone in and give them 1% equity, what is their equity relative to the person sitting next to them? IMHO It's a joke. Their ownership is purely symbolic, in a relative sense, and it's a symbol of how little they own relative to a founder.

Am I completely insane? I would love to understand the logic here, I am not so much criticizing as trying to know more about the dynamic and the industry culture/standards.

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My experience with equity:

$20K into a startup, which was sold to midrangeSoftwareCompany, which was in turn sold to Oracle. Wound up with 17 shares of Oracle, worth about $2000 at the time.

Another experience: $2K of "hell, I'm leaving so why not buy the shares I vested in". Eight years later the company is wildly successful (public and valued at $1B). I call them up, and my shares are worthless through some stock shenanigans.

A third: $5K investment turned into $21K. Yay. I guess I almost broke even on the Silly Valley slot machine.

Lastly: I did much, MUCH better with options and other stock-related stuff at a couple of large companies, spread out over 16 years. It's not unreasonable to make a few million on these in the course of your career.

Get a good salary. Don't trade a good salary for equity, because in general it's a bad deal and you're just going to get screwed.

If you're good and you take a low salary for the "developer class" equity that I've seen, take a hard look and see if you're getting anything else worthwhile (an education in technologies you wouldn't be using otherwise, good contacts, a possibility you'd be identified as a principal "must have" in an acquisition, with incentives to match, etc). Otherwise you're being taken advantage of.

I don't have as much personal experience (only one colossal flop, $4k invested + ~20% lower salary), but I've got enough experience in the industry to have come up with this hard and fast rule: If you didn't found the company and aren't getting 10%+, equity is meaningless. If they insist you take equity ("Don't you have faith that we'll be successful?"), you can offer to knock off 1% of what you would have expected in annual salary without it (even that is arguably too much). Otherwise it's absolutely not worth it.

Companies love trying to get you to take a 5-40% pay cut because "It's a startup" and "we'll give you equity". Total BS. You will be better off spending an hour every week minding your money in other ways, with your appropriate salary.

To be fair, I've talked to people in some companies that try this that quite simply do not understand how options work. It is ignorance, not malice, that causes their odd behaviors (not that the end result is any better).

My usual bargaining gambit is to ask how much salary they will give me over the vesting period to buy back the options. If nothing else this puts a price floor on how much the options are worth to the company.

"Don't you have faith that we'll be successful?"

To which the answer is: "The success of this company will depend much more on management's strategies and the vagaries of the market than on the code that I write. Besides, you're not sharing your financials and other private business information with me, so I have no basis for guessing whether the company will be successful or what the value of the equity you're offering me will be. And in any case, I need to be able to pay my rent and other expenses regardless of whether the company is successful or not. So I'm expecting to receive a competitive salary."

Likely response to that is "Not a team player."

And you're better off not being there.

It blows my mind when friends accept offers and I ask "did you get any equity?" and they say "yeah" to which I reply "how much?" and they give some figure that is meaningless without a cap table, and when pressed further I learn that they have never seen the cap table.

A good rule of thumb is any start-up options has to potentially be 2-5x better than I would get at a FSTE 100 (DOW 30 in the USA)

BTW British telecoms latest share save 5 years maxed out at £200 a month - just came out at £100k effectively tax free.

Actually you would be better off coding something yourself in your spare time and giving it away for free. As soon as you can get recognition or an audience you are building some intrinsic value that will pay itself out some day.

A huge percentage of stock options expire worthless (one common assumption is that 90% of options bring no value to the holder).

That's offset by the fact that a meaningful fraction of the 10% that have value to the holder can sometimes generate life changing wealth.

To me, substitution of stock options for cash is a function of how much financial risk you want to take or can afford.

If you have fewer financial obligations (eg. unmarried, no mortgage, no kids, no or low debt) and want to take a risk at a company by taking options in lieu of cash, do so.

If, on the other hand, you have financial obligations (any of the Big Financial Four above), it's probably better to get a salary that keeps your nose above water, take the token sign on equity they offer and then earn more shares by being awesome.

In any case, it's wise to objectively evaluate the value of your equity every six months or so. If it seems to you that it's got a lot of value, try to get more (ways to get more include being awesome and asking). If you think it's not worth much on two consecutive bi-annual reviews, see if there's another place where you could get a better deal.

It's no one's job to manage your career but yours.

I don't suspect most people have any problem with worthless options. Quite the opposite, those are easy to deal with. What most people have a problem with is the requirement to exercise the options for real money when leaving a company before there is any proof that they are worth anything.

Seems to me that if a person is leaving a company for a different opportunity, they're making a clear comment on their perceived future value of the company.

That is, who would leave Google in 2002? Dell in 1993? Facebook in 2006?

In my opinion, the best stock exercises are cashless, one time events, paying full short term capital gains. Those trades represent almost no risk to the exerciser (exercisor?) and are pure financial upside.

I wonder how options stack up against just getting a higher salary, gathering all the extra money and taking it to the casino for one big spin?

This is an excellent suggestion. Alternatively, you could invest the extra money in stocks, which have a somewhat better average return.

Equity in the form of options is usually worthless. Even in the off chance that the company is wildly successful, your options will only be meaningful if you got them early enough to have a ton of them or a ridiculously low strike price. I've worked places where the total number of options offered to new employees (vesting over 5 years) were fewer than what the early employees and founders vested (and exercised) WEEKLY.

RSUs tend to be better because, unless your company goes out of business, they're usually at least worth _something_ when they finally vest. One thing about stock, however, is that after they're all vested, you're effectively seeing a decrease in your overall compensation. An RSU package that fully vests after 4 years incentivizes you to start looking for a new job after 4 years.

When I get an offer that contains options, I usually mentally value it at $0 and THEN consider whether the salary still seems competitive.

EDIT: I generally value _options_ at zero.

I also LOVE kasey_junk's strategy below of asking companies what they'd hypothetically offer in cash instead of equity. That's pretty much guaranteed to make the company get real about how they value their equity. I remember once negotiating ~$5K more in base salary to "give up" what OMG COULD TURN INTO MILLIONS OF DOLLARS IN OPTIONS!!!! The company eventually went bust and sold for pennies on the dollar.

At any stage company? Valuing options at $0 at a seed company is a lot more reasonable than at a company actually making money or is growing rapidly.

It's a rule of thumb to keep my gambling addicted brain from getting carried away. Mentally treating options as $0 helps me focus on expected value and to ignore the tiny sliver of probability that would result in a huge jackpot.

You usually get "refresh" RSU grants if you do well, so I don't think you should value it at zero.

The "usually" part, and "if you do well" part means there is some risk but if companies like you they will make sure you have a lot of RSUs vesting years from now.

>I remember once negotiating ~$5K more in base salary to "give up" what OMG COULD TURN INTO MILLIONS OF DOLLARS IN OPTIONS!!!! The company eventually went bust and sold for pennies on the dollar.

Without knowing any details whatsoever, couldn't someone say the company went bust because it didn't align incentives, hiring people who insisted on $5K more so they had nothing riding on the company, and did not end up with any incentive to make it succeed?

If someone hypothetically did say that, what would our response be?

The incentive for an employee is his/her salary and to do their job well.

They have very low effect on the success of the company other than doing their job well.

>They have very low effect on the success of the company other than doing their job well.

By 'they' did you mean engineers at tech startups? They have a huge effect on the success of the company and options-based incentives directly cause vastly greater alignment and output.

Do engineers really have that big an impact on the success of the company? Their salaries and ownership share certainly don't reflect that, in my opinion.

absolutely!

(in general the shares reflect engineers' preferences, as they do require a certain level of salary and don't want to take as big risks as the founders. founders would be happy to give them more share and less salary! they have a huge impact on success.)

Maybe the correct incentive structure is to give the employees a meaningful percent of shares given that someone would choose $5K towards base salary over whatever pitiful shares the offered.

In this case, I'd say that wasn't what happened. As is the case in many (most?) start up failures, my take on it was that it happened largely due to circumstances outside of the company's control. The founders were awesome folks, and did everything they could to make things work. I don't think it was a problem of "alignment" at all--if the company went under we would not have jobs. That's pretty solid incentive to me. A couple of stock options (with a low probability of ever begin worth something) is not going to change that calculus.

On the other hand, it could show that the owner's don't really believe in the future success of the company. If they really think the options will be worth millions of dollars, why wouldn't the owners just pay the $5000/yr more and keep the millions for themselves? That sounds like a great deal for them...unless they really don't believe that will happen.

Saying RSUs tend to be better is potentially true (at least a higher expected value) since they are likely to be issued by public companies rather than early stage companies.

If you're doing well and the company is sensible they will continue to offer you additions equity grants so there isn't that incentive to leave as your compensation falls. This post describes the "evergreen" aspect to granting equity: http://firstround.com/article/the-right-way-to-grant-equity-...

Wait, you bought $2K worth of shares, the company is successful, and the shares are worth nothing? How!?

It's not directly relevant to me as I don't have options, but I suddenly feel like I don't understand stock again.

I would like to hear the GP's story, but if you've seen The Social Network then you have a reference point for how this could happen (separate classes of stock, dilution protections, etc.).

Basically it works like this: If your options become very valuable, the people on the other side of the table are no longer the friendly technical founders that you know and love. Instead, they're replaced by calm, professional capitalists and attorneys, whose sole raison d'etre is to separate you from "your" claim to their assets by many convoluted and entirely legal tricks, all of which feel profoundly unjust to the common man.

They are specialists; they do this all day, every day, and since you are just an unsophisticated code monkey, it's vaguely like playing one-on-one basketball with Lebron. So unless you have something their bosses really want (perhaps domain knowledge of the business) you almost invariably end up with pennies and fake smiles.

That's exactly right.

"Sorry, it's the red options that have worth, all of those blue options were devalued in [some arcane legal event] and are worthless now."

I've thought about talking to a lawyer, but I'm guessing that what they did was totally legal, on the order of selling the company's assets to a company of the same name for a dollar in hand, or something like that, with some kind of structure to keep the major investors happy.

There are laws requiring major shareholders to protect the interests of minority shareholders for this exact reason. It may be worth talking to that lawyer.

Interesting. The email I got from their stock administrator read:

> As a result of a transaction in 2001 that created CompanyName Acquisition Corporation, now named CompanyName, Inc., all equity interests in the predecessor companies were extinguished.

I guess I'll talk to a lawyer. They were sold for $3.5B, so that might be an interesting up-side.

Wow, I hope you write about what you find out. The situations like that I've heard of, and admittedly that's mostly from following the press, is that the old shares are traded for shares in the new entity. If minority owners aren't protected, it's a crack in the foundation of silicon valley.

But is this 'legal' even if the employee didn't sign anything to change the previously agreed upon arrangement (options)??

As with every legal question the answer is "sometimes." But typically, yes it is legal. See the comment below that basically allows the "extinguishing" of options under certain restructuring.

The most recent way I found out was the offer letter that spoke of my grant said "on board approval." A year later, they had never gotten board approval. I was long gone, but another year later and my old colleagues had finally gotten their grant. Preventing board approval for a long time is a nice way to extend the 1-year cliff. Even better, my email to the controller and then to the CFO was completely ignored. That is what really set off my spidey-sense. IMHO, if the officers aren't willing to acknowledge my questions in email, they have legal reasons for not having anything recorded.

Oh, and they were recently acquired by BAE for a lot of money. The officers made a killing, but my friends made around 4-figures. I have no idea what they did to get board approval but it feels like they rejiggered things to dilute everyone else.

One common example is the case of employees who have left and a company that is acquired. The acquiring company often has an incentive to take part of the bucket of cash and stock allocated to the purchase and shift it to retention bonuses, screwing former employees who exercised their options.

The path to liquidity is not always straight up and to the right. Some funding rounds can drastically revalue prior shares through reverse splits. This can make your 1% stake magically turn into a 0.05% stake in a single funding round. Even if they don't reverse split, funding rounds issue new shares which is dilutive if you do not also get an additional grant. Once you leave a company, your precious few shares get diluted and reverse split with all the funding rounds between your departure and the liquidity (IPO or acquisition) event.

So how do you protect yourself against this? Is there something you can put in the initial contract to prevent reverse splitting in the future?

There are so many ways to screw you, that your best protection is a management team you trust.

I'd argue that the best protection is the advice of a lawyer, and not to mix trust with financial matters. History is strewn with tales of people who trusted other people with their money.

> I'd argue that the best protection is the advice of a lawyer

That advice turns into: "You could fight this and possibly win, but it would take a year and it would cost more than you'd get back." I get what you are saying. You definitely can't really "trust" anyone, but there are so many ways to legally screw you that I'm not sure you can trust protection using a lawyer.

Does that just happen with stock options or normal stocks as well? It would seem that if there are 100 shares and I have 1, then it should be worth 1% of the company no matter how successful it becomes. I can understand how options might be subject to tinkering, but if stocks are as well then the whole thing sounds like a racket.

I just mean that the idea of dilution suggests to me that the original company has been dissolved and reconstituted somehow. That sounds like something seriously in need of regulation...

>> "then the whole thing sounds like a racket."

Yup, that's it exactly.

This doesn't sound like what happened in the case here, but dilution can happen due to reasonable funding rounds. If you own 1 share out of 100 and then the company decides to go to some investors and raise $10 million, they might give those investors 50 shares, meaning the company now has 150 shares, the new investors own a third of the company, and you own 2/3 of a percent of the company instead of 1 percent. Where this gets messy is if shenanigans are used to dilute particular shareholders (e.g., after some event you now own 0.001% and someone else's portion is unchanged) or other such things.

Edit: I should add that even publicly traded companies do this, issuing more shares and diluting current shareholders to raise capital.

What were the specifics of the stock shenanigans?

I have been a full time contract programmer since 2001 and at that time I was 22 years old. I have always worked hourly and delivered software per the clients requirements.

The last 2-3 years I have made more money than I have ever made and it was coded 100% remote (from Hawaii). I had one meeting at the clients place. Made somewhere around 180K and this was me full time with a part time developer subcontracted out which didn't actually bring in much additional revenue < 10%. It did bring throughput.

As of about a month ago I was let go as the top developer in the Saas company because I was deemed too expensive by the board. I am pretty sure the CTO didn't want to give up me as a resource.

All of a sudden I have realized that overseas developers have become a priority and it is my feeling that as an hourly developer my days are limited in making $80-$100/hr (corp 2 corp contract).

It is my feeling that I have 2 possible directions. 1) Start an outsourced overseas development company and use my 'Software Architect" title (which is so funny to me because architect is thrown around so much in software) and manage resources overseas. 2) Start selling software on a per usage basis or in some value add model. I believe both of them are solid bets however #2 takes more commitment.

At this point I think the reason salaries are topping off is because of the global market. That is just my take from being in the industry. Thank you.

Interesting story. I had a similar one, but I was traveling while I did contract work and ended up meeting an array of these overseas guys. The best contract devs rarely end up in the outsourcing factories that would be hired by companies like your client; they're independent. Some friends and I set up a co-op last year; I bring in a lot of US work on commission.

Interesting to know. Causes me to second guess the overseas development company options but I still wonder if being the solutions architect / US based agent to PM and sell the work perhaps I can capitalize. Eg. If I charge $40/hr for my work and sell the outsourced hours at $40/hr with a $30/hr cost basis I could run a team of 4 dev's and still make a decent hourly rate. I always thought I would find some efficiency in this model by reusing software libraries but that has never panned out.

You can probably charge like $60/hr for the architect time.

Co-op sounds interesting. I would surely like to apply. Do you have a website?

I think the offshore glory days are already slipping away. We have South American partners who are charging nearly the same rates as us.

Some of our offshore guys in India earn more than we do.

Thoughtworks are expensive though...

Is that true? I'm living in West Europe and it's pretty hard to find decent 50k+ jobs, even with a University degree and years of experience. Where are those remote jobs?

Move around, saying "West Europe" means almost nothing. You could be in Spain where your salary would max at ~40K € or you could be in the UK, where I'd expect a recent university graduate to start on £30-35K.

That isn't necessarily pay, it's bill rate for offshore partners. I have no idea what their overheads are and how much trickles down to their programmer's pockets.

Have you tried London?

I have the same feeling, I did have a lot of fun as a consultant. I am trying to find my way around it, if you have some good ideas, feel free to ping me, I would love to hear it.

I ran into this issue couple of years and have been iterating on a model, that seems to be working. If you're interested in hearing more about it, ping me please. My email is in my profile.

Have you considered diversifying your skills? Mobile and big data, for example, are areas with lot more demand than there is supply.

Based on personal experience and observation of some startups around here this is the dynamic that I've seen and what could be happening:

- startup gets some funding, but not a lot, and needs (more) developers

- startup founders think they can find good developers at rates that are similar to those of 'regular' developers outside the Silicon Valley / HN bubble / web development scene. Possibly because these founders are non-technical and mostly have experience in bigger, more 'boring' companies where developers aren't 'essential' (or don't seem to be), or groomed inside the company and happy with lower salaries.

- startup finds out that nobody will take the jobs at the offered salaries

- startup decides to be more creative and - if they're very lucky - find:

    1. competent, usually remote developers who are willing to work for much less than the going rate in home country  
    2. oblivious developers or developers just out of college who have no clue how much they can make

Unfortunately, what I suspect often happens is that they end up hiring subpar developers who just want to get paid an acceptable salary and know nothing about their potential value in their field, or developers who are under-qualified for the specific challenges that many startups face (web-based, mobile apps, rapid development, need for independence and taking initiative because it's chaotic).

And the founders of these companies, if they're not technical, might never quite realize that in the end they're probably wasting more money because the codebase is terrible.

While I would never argue that the only competent developers are those in the 'SV/HN/web bubble', I do think it makes sense that there's a correlation between developers who are oblivious to their value and the rest of their field, and developers who are still stuck in older, less efficient approaches to many startup's problems.

Pay your developers well!

"they're probably wasting more money because the codebase is terrible."

A terrible code base that serves customers is better than a beautiful codebase that goes unused. I think your criteria is expressed poorly. Perhaps you meant that bad developers are unable to produce code that serves customers well? Add in, a terrible product. (Product != codebase)

I do agree that a product that functions on bad code is better than no product at all. If there where very terrible design decisions made in the beginning. This could have a very negative impact as the business starts to add customers.

A terrible codebase will _eventually_ fail to serve customers for a few different reasons. Scalability is huge and may be very difficult to find performance problems and fix. maintenance time, and time to add new features are places where a terrible codebase will eventually impact a customer.

Scalability is overrated :-)

Ability to add new features without breaking things is nice. Uptime is nice.

Many products do just fine with a few thousand occasional users, but too many developers think that they are building the next Amazon or something, and overcomplicate things to death for performance reasons.

Most of the time spent is in debugging/maintaining.

Terrible code base says that the value per customers is decresaing while customers increases because your costs (of software QA) are eating your margins.

Ugly codebase that does not scale with increasing efficiency for instance.

Remember low OPEXes always beat KPEX (investment)

People focus on features in software as the only value, I think it is the recuring costs per feature that should be the value.

For instance storing digitalized book is plain stupid. The first book printed is still there because paper/ink are cost efficient in terms of recurring costs for their value of keeping information whereas servers/software ... will doom data to an end because of reccuring costs that don't scale.

That's a good point, and I agree that I expressed my criteria poorly.

When I'm saying 'the codebase is terrible', I'm talking about front-end code for a web app that is a convoluted mess of jQuery written by someone who is clearly not used to writing javascript, and quite possibly a bad developer even in the language they are comfortable with.

Even if they're decent at whatever their primary language and 'domain' is, the front-end side of things is such a mess that it noticeably impacts performance and the ability to work on the app well before even the MVP is done.

I've worked with front-end apps (and even websites) that were multi-megabyte monstrosities that loaded multiple versions of jQuery, hacks upon hacks to make things work, and not even the simplest of optimizations (lazy-loading images, 'browser-side' caching, etc).

I've worked with jQuery-only front-end apps that took more than a month to build, did only the most basic of things, and were almost impossible for me as a contractor to work with. I would rewrite the whole thing in either Backbone or some variation on the react/flux approach in, at most, two days, and be able to get the in-house developer up to speed in another one to two days if they were capable and, perhaps more importantly, willing and remotely curious.

In part this has been due to the current speed of development in browser technologies and frameworks/libraries, and in part it's just part of working with in-house developers who have no love for their job or have other things that they prioritize (35+ with kids, understandable!).

Usually this level of horror only presented itself in older, more established companies with 'legacy devs', but I've seen similar issues with (web) startups that hired without knowledge of the domain.

So, to be clear: getting the job done is the priority. I've worked on Backbone projects where I would've loved to use the latest and greatest, but happily worked with stuff that I would consider, in front-end-hacker-news-hipster terms, old-fashioned. And I've come to realize that if you have clever developers with curiosity, you can get a 'front-end app' done that isn't pretty, but works well. But too often, especially in the 'cheaper' startups with little founder-level technical know-how of the domain (front-end), I've seen things go very, very wrong.

Personally I think this idea of a terrible codebase that still presents a wonderful user experience is an urban legend. In 20 years I have never seen it. I've seen plenty of terrible codebases that limp along, with the staff constantly fielding bug reports from unhappy users. But never one with happy users that just happens to be ugly under the covers.

This. A hundred times.

As a university student who is soon going to graduate, how do I find out what I'm really worth?

The unpopular answer? Get a job at an established company that isn't a startup.

That'll give you the best idea of your market value. You don't need to take the position, and if the bureaucracy of an enterprise gig isn't your thing, then maybe you shouldn't, but that'll give you the best float test for what it is that you're actually worth, with which you can parlay into knowledge for salary negotiations elsewhere.

Knowing that Oracle would pay you is great for evaluating whether or not it's worth a $30k difference in salary to not have to worry about a business casual dress code, corporate politics and a rigid command structure.

Not knowing the difference in pay, it's harder to evaluate whether or not it's worthwhile.

If I wanted to go work for a startup, how do I find them? Usually when I go job hunting, startups are more difficult for me to find because using my university resources only leads me to big companies (i.e. Google, Apple, Cisco, ...)

If you're in the valley, networking. I can hardly pick up lunch at a Specialtys without running into startuppers that are trying to solve interesting problems.

If you're not in the area, it gets substantially harder. Some random sources.

https://news.ycombinator.com/jobs

AngelList: https://angel.co/jobs

StartupHire: http://www.startuphire.com/

For your local area, I'd look at who is sponsoring the tech events (e.g. you local Ruby/JS/iOS/etc meetup). For instance in Portland that quickly gets me New Relic, Urban Airship, and maybe a dozen other names. You can also see if there is a local tech magazine/newsletter, and read a few issues. If you're looking for younger companies, look at the class list of the last few years of local accelerator programs.

If you're looking for remote work, you could start with the list of YC companies. Or just go with any young companies whose products or blog posts or people you admire.

It's better to start with the companies you want to work for, and check their own jobs pages (or ask someone who works there), than to start with aggregated job boards, which are really a wasteland.

There is a lot of value in working for a bit with one of the big players, and seeing first-hand what a well-established code-base looks like, the big day-to-day problems of maintenance, and have people checking your work in ways that you might not get at a small startup where the quantity/quality tradeoff is at a different place.

Many of the old-school Caribbean pirates were in the navy first, after all...

Many of the large SV companies place many bets.

You could walk into Cisco, VMware, EMC, Pivotal, etc. etc. and find yourself working with close to cutting edge tools, hard problems, etc - BUT have a stable salary, perks, training courses, huge amount of corporate resources to lean on and learn with.

AngelList is probably your best bet for startup jobs: https://angel.co/jobs

Don't rely on your university for advancing your career. I've basically never seen a university career department with good connections or any knowledge of tech at all.

(Also, shameless plug, but we're hiring in NYC: https://angel.co/cafe/jobs)

Found my current job through a monthly Who's Hiring thread on HN. Check this site: http://hnhiring.com/

One way would be to try to get an offer from one of the big players - Google, FB, Amazon, etc - even if you don't want to work for them. They all pay about the same starting, and since they're so visible they set the market, especially for recent grads. Of course, their numbers are also inflated with the cost of living in the Bay, so scale accordingly if you don't live there.

> Of course, their numbers are also inflated with the cost of living in the Bay, so scale accordingly if you don't live there.

Only if your job offer is in the Bay Area. Some of these companies have branches in smaller cities where the cost of living (and consequently pay) is lower.

I would say if you have to ask the question your probably worth about the average starting salary. Perhaps a better question is where can I work so that I can be paid to learn cutting edge software. Eg. React JS or something cool like that. Don't take a job to write SQL Server 2005 SSIS tasks or maintain win forms apps etc. What your worth is also based on peoples perceptions of you which is also reflected in your confidence. Eg. I just graduated however my strongest skills are my quick ability to pick up new technologies and I have a natural ability to develop well structured code and so I strongly believe I am worth a better rate. Etc.

In Silicon Valley, my startup offers over the past two years have ranged from $160-250K with 0.5-0.75% equity.

Here is the best writeup on startups I've ever read:

http://www.geocities.ws/drhenke/startupmemo.htm

I expect to hear how tone deaf and pessimistic the above advice is, and said pessimism will lead to this post being downvoted, but I have found it most helpful. It meshes with my own philosophy that the only startups I'd choose over a well paying BigCo position are ones that offer a founder's position with 5+% equity. Risk should be proportional to reward.

To put this into perspective, a friend of mine was the 20th or so employee at a startup that was eventually purchased after dying and coming back to life over a decade or so. In exchange for a decade of his life and going without compensation for nearly a year, he got ~$400K. A nitwit co-worker who had 50x his equity in the original incarnation that died and who had nothing to do with its resurrection and its eventual purchase got ~$20M on the basis of having a 3-letter title in that original startup. Don't end up like my friend.

The advice here and in your link are very well thought out. I have too founded 2 companies, 1 died - 1 under $10M. I have a penchant for the work in startups - but without a significant stake, it's hard to quantify putting in the hours at a significantly reduced rate.

Thank you for the link to the memo. I'm looking at joining a startup after a decade in enterprise and am doing my research. Where would one find the details to the questions in the financing section (burn rate, money in bank, valuation in next financing)? I was able to pick info on funding rounds from crunchbase, # of employees from Co. site but that's the most I've got. Any pointers will be helpful.

You can always ask.

If you want to do the math your self, for most companies the cost is predominantly determined by salaries. If you can figure out the number and positions of employees, you should be able to estimate it fairly accurate.

Figuring out how much they make on the top line is slightly harder, but you can usually estimate it if you can find out how many users they have (which is often not very secret) and if you can guess at how much they make per user (usually roughly the same figure across an industry - so again, not overly secret)

If you make your calculations up front, you will know which variables you are least confident about and can try to pry about them at an interview.

I've had a few unsuccessful negotiations with series B startups who balk at paying market rate even though they have piles of cash. I believe it often comes down the the fact that they have grown headcount relatively slowly at the same time market rates for competent developers have risen quickly.

The veteran engineers from the company's earlier days are often true-believers in the company/product, and probably joined for below-market at a time when market rates were lower. As a result the comp structure at these companies gets into a really weird state where a new market-rate junior hire cost about as much or more than the seasoned technical staff they already have on payroll.

That's a tough pill for companies to swallow, and even if you do manage to hire you'll have a mutiny on your hands if you don't do something quickly to close the 40+% gap between the comp your existing employees are getting and the market.

That's why companies who have raised any serious funding in B-round or later or have revenues to justify it ought to raise early engineers' salaries to bring them (closer) to marker rate on a continuous basis. There is no good reason not to do that.

That's true, this can happen. At Mixpanel, we proactively true people up throughout the year, each year. It's not that hard of a pill to swallow when you weigh the decision of that person leaving vs paying them $10-20K more.

This is the real insight that to few companies understand. Possibly because of relative lack of experience of management and/or HR department.

If you're in SF and your rent is rising by 10% p/a then your salary needs to be keeping track unless you already have FU money.

Or you work a couple of years to get a little vested, then jump ship using your unvested equity as a bargaining chip in your next negotiation "I'd be leaving so much on the table..."

I guess that there's a reason that the average tenure is ~2 years

This mindset with the "top developers getting paid grad rates" type deal doesn't last very long when the company gets serious and actually needs to hire good people.

If the top devs are getting screwed you're just as likely to have an exodus as a mutiny.

In Silicon Valley though they have pool tables and dart boards and a refrigerator full of munchies. Also it doesn't get cold so it is a lot easier to live outside than it is in NYC.

Real companies in SV do pay real money but for the average startup it is the 22 yr old who has no experience that hopes the 19 yr old working for him doesn't realize he is faking it before he makes it. They are not going to get a good marketing director at that price but they can find one who doesn't think he needs health insurance.

Biased by my own experience and I can't speak to the average, but there are certainly plenty of small companies with pool tables, dart boards, and stocked refrigerators in NYC. Having seasons is preferable for many people. For the people who don't like the seasons, they are usually comforted by the infinite cultural novelty that is crammed within these streets. Both are nice places, but I'm pretty skeptical that anyone is paying less there "because it's nicer".

I'd argue the opposite. Cost of living is higher because it's nicer, aka the "sun tax". Startups therefore have to pay more because it's nicer.

busts out the Korzybski - any time you get Aristotelian with equivalences you almost certainly step in a pile of truthless crap, so let's become a little more respectful of language. Housing and rental prices roughly approximate demand. "nicer" differs from demand by virtue of passing through the filters of averaging and composition with myriad factors, which an individual may never fully comprehend. Preference often significantly differs from average. Complexity accomodates deviation. NYC far exceeds the complexity of the bay area, thus accommodating a far greater range of deviation from any such single metric :P

I believe he was being facetious - seemingly flashy perks are very commonly used a substitute for actual money, and it works stunningly well. 5k in catering and laundry will shave 20k off an entry level salary more often than it should.

Also it doesn't get cold so it is a lot easier to live outside than it is in NYC.

Just reminds me of people sleeping in their cars in Silicon Valley. I still absolutely cannot believe that people do it, but to each their own I suppose...

In New York, people have given up on equity. I hear this time and again in the NYC tech scene - building a company is hard in NYC because people don't believe equity is worth anything because of the bullshit that happened in the first bubble. In New York especially, there were a lot of shenanigans with equity in 99/00 bubble/crash era where companies got sold and employees got nothing because of liquidation preferences and other things. The eco-system has not regained its trust and the mythos of worthless equity persists.

Your point about "what is that compared to the person next to you" reflects this: you're thinking about equity relative to others as important, vs. the odds that 1% turns into various amounts of money. YC companies get soft landings/acquihires at a high rate and also often become worth a lot. 1% equity in a YC company you believe in is equity worth having. (key words: you believe in).

What is the average exit for a YC company, and how many years will that early employee need to work to keep their payout? Saying it's worth having is pretty vague.

1% equity in a company that exits for $10M or less probably isn't worth having. Since many companies exit for $10M or less, that means getting 1% equity usually isn't worthwhile.

1% equity in a $10M exit would net you $100k. Given a four year vesting schedule, that's $25k/yr. Since you're working for a startup, your salary might very well be much less than $25k/yr of what you're normally worth at other companies. Aggressively negotiating your salary at a non-startup company can get you that much and then some.

So it's about whether you believe the company will make a >$10M exit, knowing that most companies die and many exit for $10M or less.

It's also about other factors. For example, whether you get paid depends on liquidation preferences, and how much you get paid depends on dilution and taxes.

Also cost of living. I've heard that decent apartments in SF can go for $3k. (Zillow seems to confirm that many apartments are around $3k.) Compared to a $1,500 apartment in a place with reasonable cost of living, that's an extra $18k/yr that you'll need to pay just to live there. Actually, that's $18k/yr of post-tax salary, so more like $36k/yr of salary.

Not to mention that you'll probably have to pay for those options at a strike price equivalent to a valuation of $3M+. You only make money on the difference. You'd end up with a sub-100k pay day.

That's where the options vs RSUS comes in. There's a high chance of RSU at early stage start ups

Can you explain this further? I'm not familiar with those terms?

>The main difference between an RSU and a stock option is that the former may result in a direct cash outlay, whereas, in the latter case, you get shares. Of course, if you have a stock option you can choose to turn the stock into cash when you receive the option. If you have an RSU, depending on the agreement, you may not be able to receive stock, as the company may restrict you to receiving cash.

via: http://finance.zacks.com/stock-options-vs-rsus-3356.html

I'm more familiar with RSU's, but my layman's understanding is:

RSU is a direct grant of shares, not dissimilar from a cash bonus.

Stock options are the opportunity to purchase shares at a set price, which as I understand it will be lower than market value. If stock price remains stable, you have essentially been granted the difference between the market price and the set price.

The huge caveat to that is that most option contracts require an outlay of cash at exercise time and RSU's typically don't.

If that exercise point is at an IPO or other exit event, it is largely irrelevant because the deal itself will typically finance the conversion of the options to stock. If you quit or get fired on the other hand, you are on the hook for the money to exercise the options. That is on top of your lowered salary and your vesting time period, in order to get any value out of the options you have to give the company you are leaving for one reason or another, real actual cash.

A sub $10m exit is rare in YC portfolio.

http://upstart.bizjournals.com/companies/hatched/2013/12/16/...

"The tally of 42 companies means about 6.7 percent of all Y Combinator-funded companies have hit the $40 million figure so far"

A sub-10M exit might be rare, but sub-10M exit + failures together migth not be rare at all.

So's an over $10m exit.

As a rule of thumb, you should cut that 1% equity in half for such calculations, due to future dilution, liquidation preference on exit, etc.

Looking at the list: http://yclist.com There are not so much YC companies that have exits. Having equity in bigger ones like airbnb, dropbox or stripe is worth peanuts until they either go public or get acquired

YC company or not, taking a lot of equity for a lower salary it's still a gamble. At the end it's a matter of you believing the team you're joining can make it big or not.

That list is not accurate for what it's worth - several notable exits missing (justin.tv a huge one). Also bear in mind the data you're missing on that is how fast the "dead" startups died. Startups that died quickly didn't have a big impact on the employees lost opportunity cost.

There's a pretty good market for non-public equity these days.

Unless I am a severe outlier I'd take that with a giant bit of skepticism. I've never had an options agreement that didn't require company approval to sell & I've never seen that given except for specific restructuring reasons.

Most billion dollar companies can be traded without much difficulty. I've done 3 txns.

> YC company or not, taking a lot of equity for a lower salary it's still a gamble. At the end it's a matter of you believing the team you're joining can make it big or not.

Thanks to Second Market this is no longer true.

> The eco-system has not regained its trust and the mythos of worthless equity persists.

That would be because the ecosystem hasn't given any reason for developers to trust it and the equity is, in fact, largely worthless.

All I have to contribute is that I agree. As someone trying to hire engineers, I genuinely don't understand how companies can get away with such paltry offers.

Probably the most ludicrous to me is Buffer's ridiculously low pay: https://open.bufferapp.com/introducing-open-salaries-at-buff...

I'm offering a minimum of $125k with significant equity in a well-positioned company, but I rarely see good engineers interviewing. Yet somehow these other companies are building engineering teams for way less.

Ultimately, I think it comes to developers way over-valuing hype. Appearing on Hacker News regularly, or showing up in Techcrunch a lot, or getting funded by YC, can apparently provide an automatic $50k bonus on all salaries you offer.

In Buffer's defense they are all remote and they seem to have rather sane cost of living factors built in.

I don't know if that's much of a defense.

Even in SF (an "A" location), they seem to be paying below market: https://docs.google.com/spreadsheet/ccc?key=0AgrWVeoG5divdE8...

There is visibly less competition for remote workers because fewer companies hire that way, so yeah, that could explain lower salaries at least in part.

Interesting to see that engineer's get paid less than content and happiness heros.

The blame for that rests with the senior engineers and not the graduate or middle level ones...

"Hype" could just be a confounding variable - a side effect of just generally being an attractive place to work at. Perhaps they aren't over-valuing hype per se, but instead valuing companies they think will be successful. Many companies that will succeed happen to have a lot of hype (although obviously hype isn't the best indicator).

I was an untested front end developer and took a position for around 60k without equity in NYC. Later it got bumped up to 72k still no equity (though I largely feel like equity is a "too good to be true"). I've since become a full stack developer (dev ops to front end, etc.) and increasingly more frustrated with my pay. Have taken on a lot of responsibility and a lot of my choices re. tech stack have made me the de facto person to come to with questions.

I interviewed at a big company and they told me that regardless of what happened I should be out there trying to make more (I didn't tell them how much I made, I only said that at a small startup with very little funding, I would be afraid that my compensation might reflect negatively on my abilities and that I didn't feel comfortable disclosing it).

Super grateful that they took a chance on me. Really happy that I got a chance to earn my stripes and was trusted enough to dig into and shape the infrastructure, but I've been thinking about jumping ship mostly for money. I feel like I should bring it up, but I have the distinct feeling there isn't any more money (they share the financial info from time to time).

I thought I'd just share some anecdotal info from my time on the ground. I put my email in the profile and would love some advice if anyone has some (it's a throwaway account).

>Super grateful that they took a chance on me. Really happy that I got a chance to earn my stripes and was trusted enough to dig into and shape the infrastructure, but I've been thinking about jumping ship mostly for money. I feel like I should bring it up, but I have the distinct feeling there isn't any more money (they share the financial info from time to time).

I think this is one of the more useful comments here; companies offering $60K/yr are looking for the untested, the brand new and the long-term unemployed. People that need a chance.

I mean, no judgement; those people need jobs, too. And sometimes, sometimes you can find someone really good in one of those categories. There's a huge difference between a not so good and a really good developer, so you can sometimes do well as a company hiring from that pool, but you are shutting yourself off from all the good people that are proven, so it's a lot more work to find good people.

fullstacknyc:

My advice to you? Ask for more money, in a non-confrontational way. Leave out the "or I leave" bit.

Regardless of the answer, spend some time interviewing around. If you can get a 30%+ raise, and you almost certainly can, well, I'd switch jobs, personally. If nothing else, it feels good to know you can.

Thank you very much. I totally agree that these kinds of jobs are needed. I knew I could develop professionally, I just needed someone to let me.

Thankfully, I've grown to feel that I'm actually pretty good at this stuff, but as someone who came into the field through the side door, knew it might be hard to convince someone I could be.

While for the past year and a half the compensation has been a bit low, the experiences have been worth their weight in gold.

For NYC rates? It wouldn't be un-fathomable to get a 100% pay raise, especially after a few years of experience and some sort of solid track record.

I was in a similar position about two years ago; was hired by BigCo far below market rates and quickly excelled as one of their best devs on a 200+ contract. Long story short, their corporate policies hampered my career progress, I left after a few years and got a 100% pay increase, better benefits and options from a company who saw the value.

Just stay away from many of the other BigCo's as they tend to have a policy of lifetime wage suppression, and was shocked to hear of the relatively common policy of never giving more than ~15% over the new hire's last pay.

is telling your employer what you got paid at your last job a NYC thing? It's not something asked by reputable companies in California.

OP here: Couldn't see the post because I have noproc set, but wow - front page and many awesome comments.

I wanted to clarify a couple of (perhaps erroneous) assumptions in my original question:

- I see many comments comparing these salaries to recent grads hired by i.e. Google, but I didn't intend to use the words "skilled" and "talented" interchangeably. Recent grads aren't usually as effective as people with experience, and salaries tend to reflect that. I can see many reasons why a founder might be interested in hiring someone with little to no experience, but the job postings didn't specifically say "junior" in them.

- I see many comments referencing the realities of what is affordable. Yet some of these startups are advertising more than one job opening. Therefore, it would appear they are considering hiring three people instead of one person for 3x the salary. My question is informed by real world experience and written material: advice, essays and quotes including obvious and much repeated ones by Paul Graham, Peter Thiel, and Bill Gates which emphasize the concept that great employees are magnitudes more effective than good ones. Every knowledge-industry employer I've talked to agrees. Much startup advice emphasizes how bad it is to grow your team too quickly, and how a low performing employee hurts far more than a high performing employee helps. Given some of the companies are hiring for multiple positions, this could imply the salaries are considered competitive, and paying more wouldn't get a better employee.

The reality with your second point is that it is very hard to know for sure which engineer will be 10x better due to your interview process. Great people aren't just great technically, they also are great humans too (who can mentor, collaborate, be humble, and see the forest from the trees). Often you don't find out later until 3-6 months into a working relationship. I think you're placing a lot of weight on the initial offer because many smart companies will issue huge stock grants and salary bumps for their best employees to retain them. And I would argue that I know this to be the case because I chase a lot these continuously, long employed people each day that have incredible golden hand-cuffs.

This is totally understandable, because in many ways programming is a "market for lemons": good programmers disappear off the market, there is a high chance you'll hire a bad one, and there is severe information asymmetry because it's so hard to tell how someone will perform.

But if it's true that good employees wind up in golden handcuffs, companies should advertise that! It's been several years since I've seen a salary that is competitive with freelancing, but if a company had a published plan about performance-based raises and could point to some happy employees who could verify that theory aligns with practice, I'd be more willing to consider their offer. Conventional wisdom is the opposite: the only way to get a decent raise is to leave. One obstacle to using high raises to attract talent is that a company would have to be more transparent about what salaries everyone is earning.

I think you have to judge if you've been a top 10% team member in the past and are capable of being one in the future. If you're not, this is unlikely to happen to you. The reality is, most companies do this. And as a company gets larger, they get this down to a science. The calculus here is pretty simple because the company (whether you're a startup or Google) is very incentivized to retain it's top-tier talent who can go and work anywhere they want.

No company will promise you millions of dollars in long-term incentivized compensation (whether that's a stock option or a RSU) because it's highly dependent on the output of the individual and circumstance. I do think you can safely assume this is happening all around you (like I said: I meet many people who we cannot get) but they may not be publicizing it on forums like HackerNews (I am not sure many people find it kosher to boast that they made a lot of money as opposed to people who have been burned).

To be constructive though, I think prospective employees could ask the following set of questions to figure this out:

- Are there people in your company that are making above $X dollars a year in total compensation (options + salary)? I'd like to know what's possible if I worked hard and made a huge contribution.

- If I worked very hard and killed it, what kind of total compensation could I expect down the road? How is it split between long-term incentives like options and salary?

- What's an example of a project that someone did an amazing job on that changed the trajectory of the company? Was this rewarded? (Does the company have projects that they valued and has acknowledged that it made a difference?)

- How long has the most tenured Engineer in the company been at the company? What about the 2nd most tenured? 3rd? (This can tell you if the company has talent at the company they believe is top-tier and if they value them presumably because they are incentivized to stay)

I am sure there are other questions you could ask but these were just the ones at the top of my head that I feel would be pretty convincing.

These seem like great questions, thank you! Perhaps next time I get a chance I'll try them out. :-)

Let me start off with, I agree with you, the salaries and equity seem a bit low. $125k is a bit high though, a few of my friends who went straight to Google out of college only have a salary of $95k - $125k. However...

1) Funds are limited, yes that's not a lot of money, but I have several friends who went to work at startups because they enjoyed the atmosphere.

2) A fair number of people accepting those job positions have zero experience and/or dropped out of college.

3) Some of the people who join startups at those wages are based out of other countries, where those salaries are massive. I know two people who are working remotely for starups in that fashion and they love it.

4) 1% equity is very, and YC is pushing to increase that. However, if it wasn't working they wouldn't/couldn't do it.

Google total compensation is far, far better than the average startup given the same base.

Agreed. Anecdotal example one year out of school (not me but a friend): 120k base plus 15% bonus plus 300 RSUs over 4 years means total comp is in the 170k range.

Furthermore, depending on a number of factors, $60k is not a legal wage for a salaried software engineer in California. The minimum for an exempt employee as of 1 Jan 2015 is now $41.27 hourly, $7,165.12 per month, or an annual salary of not less than $85,981.40 for full time, overtime exempt employment [1].

Let me say that again for anyone working in CA in software as a salaried, overtime exempt employee:

If you make less than $85,981.40 a year and cannot collect overtime, your employer is not paying you a legal wage in California. You should do some research and consider contacting a labor lawyer.

Edit: [1] https://www.dir.ca.gov/dlse/LC515-5.pdf

> I would love to understand the logic here

I actually don't think this is unreasonable. Even if you are employee #5, you probably didn't work on the product for a couple years without paying yourself, pay 30k+ out of pocket for a patent, designers, and other initial expenses, raise the money to hire employees, etc.

At most startups, even if they are successful, there still isn't enough money to make everyone super wealthy. So I think it's reasonable that the bulk of the equity goes to the folks who took the most risk, and everyone else gets a decent salary, a reasonable work week, enough equity to be worth a nice bonus if the company is sold, and ownership over whatever side projects they create. Now if the company really was started two weeks ago and you're getting paid dramatically under market then that's a completely different story, but a lot of times even the earliest employees are only seeing the tip of the iceberg.

I think this is an error in thinking. If the company goes under, everyone is out of a job, not just the founders. The "risk" here is completely overstated for the founding members versus early employees. And the "CEOs can only fail a couple of times" is laughable anecdote. This isn't Baghdad, it's a startup. The risk is about equal for everyone involved.

Probably two things going on.

1. The "significant positions" are relative to the size of the company. Startup X's director of marketing /= Twitter's director of marketing. So the competence needs aren't the same and as a result the salary reflects that.

2.Funding levels aren't there to offer higher salaries.

There is no good answer to either of these.

I see stupid comments on here all the time like, "Well if you can't pay me 200k a year with unlimited vacation and healthcare and a 401k then you aren't ready for those positions." Fine, go work for Google and don't worry about startup jobs, that shouldn't prevent Startup X for trying to fill that position with those skills.

People also need a reality check. 110k is double the median salary for California [1], so if you are getting those offers anywhere else than SF you are making out like a bandit.

Their ownership is purely symbolic, in a relative sense, and it's a symbol of how little they own relative to a founder.

This is naiive. An employees risk is several magnitudes less than the founders across many factors. That said, some of the first employees get shafted on equity/pay and I think that is worth addressing, but again it is based on market rates. The other thing you can choose is to go work for a employee owned company if you choose.

[1]http://www.npr.org/blogs/money/2012/07/16/156688596/what-ame...

If someone works for a start up at lower rates, and very little equity, then they also carry a lot of risk. The pay-difference amounts to an investment, whose profit entirely depends on the value of the equity, which is close to 0 in most cases.

Agreed, which is why I stated as such. Determining equity/pay balance for employees is very difficult in the very early stages. This is why we lean towards the high side for pay vs equity because it is immediately tangible.

I think it is largely dependent on the hire what this ratio should be and shouldn't be a formula - despite what "the industry" says. At the end of the day it's whatever the individuals think is fair.

The biggest risk is not getting retirement started at all or matching 401k.

>110k is double the median salary for California

This is irrelevant to the discussion. Startups aren't hiring cashiers and fry cooks. Engineers make more than the median.

Right, double seems totally reasonable for your median dev with a couple years experience.

Right, double seems totally reasonable for your median dev with a couple years experience.

Well fortunately we don't have to decide salaries based on what a founder's self-serving definition of "totally reasonable" is. Instead, we have a well functioning market that finds efficient salaries.

(That is, when large tech companies aren't colluding to artificially lower salaries through illegal no-poaching agreements).

Well fortunately we don't have to decide salaries based on what a founder's self-serving definition of "totally reasonable" is

Except that's not the case. Those numbers are what the market is signaling and apparently the OP doesn't like it. That's my point.

The OP is saying, the market isn't offering enough. I say, well apparently it is otherwise it would be higher. So it much be good enough for most people.

I think you might be making the classic mistake of thinking the market is equal to what people advertise on the Internet. As I've heard a million times on Pawn Stars, "Anyone can ask for anything on the Internet. What are they selling for?"

I work in Delaware and $110k per year salary for software engineers would be an average salary for someone with some experience. According to a cost of living calculator, someone making $110k per year in Wilmington, DE would need to make $170k per year in San Francisco for the same standard of living.

San Francisco has the "sun tax" which means that salaries don't keep up with the cost of living. Its climate is much more pleasant than Delaware so people are willing to sacrifice financially to live there. That results in a lower ratio of average salary to cost of living.

There's no accounting for taste... If anything I would say Delaware's climate is better. Sure they get an occasional snow, but it actually gets warm enough in summer to wear shorts, and they don't have so much fog...

Also when it's sunny many people like to go to the beach and swim in the ocean. For water temps above 62 F, don't go to SF.

Reasonable or not, that's market salary for engineers where I live, roughly double the median salary across all jobs. It matters less what you think is reasonable and more what competing companies are willing to pay me.

It matters less what you think is reasonable and more what competing companies are willing to pay me.

Right, and apparently it's $60-110K, which is my point.

That's what startups are willing to pay. It's not competitive when considering non-startup work opportunities, which is OP's point.

It's not competitive when considering non-startup work opportunities

You seem to think these are different markets - it's the same. If people are choosing them then apparently it is competitive. It may just not be what people think they should be making.

Developers should actually expect lower wages because there are more market entrants. The whole push for everyone to learn to code, almost 100% pushed for by developers, would have exactly that effect. This is why I think it's silly when the dev community pushes back on organizing as though it's going to stay a sellers market forever - especially as they push the idea (rightfully so) that being a developer/engineer is a great job and drive people into the market.

I like that my wages are high, but I don't like that lots of other people don't have good economic options. If my wages go down because more people learn to code and it becomes less of a sellers market, I'd consider that a good outcome.

Organizing to keep new coders out would just help existing coders relative to everyone else, and as a whole we're a group that's relatively well off.

No, I think there is one unified market. It's startup owners who think there are two markets and try to get away with paying so much less than what's competitive.

This is, by the way, why they're having such trouble filling these positions. You can't just see what salaries are offered and say "that's the market salary." Companies actually offering the market salary don't have the level of hiring difficulties that startups paying $75k in SF do.

I think the OPs point is that the median salary of CA is totally irrelevant to the discussion and framing it against that is rather myopic. A mechanic working in a car shop doesn't produce the same economic value an engineer working at the "next big Facebook startup" does. There's a reason there was a lawsuit against fixing wages for these companies.[0]

[0] - http://time.com/76655/google-apple-settle-wage-fixing-lawsui...

A mechanic working in a car shop doesn't produce the same economic value an engineer working at the "next big Facebook startup" does

Talk about myopic. Apply your calculus in year 2000 and you'll see the folly there. That is insulting to everyone else making lower wages and assumes that "value" is accurately assigned.

You telling me a Nurse or teacher provides less value than a dev working for a Startup that dispatches food quicker? Please make that argument for me because this idea is what is wrong with SV.

He said "economic value", which is much easier to quantify than the subjective value you seem to be evaluating.

A teacher teaches a class of 30. An engineer at an education startup will create a product that teaches millions over its existence.

A first-grade teacher provides role models for students, talks to parents, connects kids with social services, talks now and then to child protection, might make sure her students have coats in the winter, etc. An education startup creates a product that might provide information and feedback for the millions of people who get to use it in its existence.

Don't get me wrong: I'm working on such products now. I love it. I don't have to deal with discipline problems or students' home lives. It's a different job and the products are not comparable.

The median salary for registered nurses in San Francisco is $127k[1], so no they aren't saying that.

[1] http://money.usnews.com/careers/best-jobs/registered-nurse/s...

From your link:

The average salary of a registered nurse working in San Francisco is $127,670

Average is often very different than median, but your point is taken. Regardless, my point stands that developers across the board provide more value than basically any other profession is shaky.

Average is often very different than median...

If we were talking about CEO pay or some other value that doesn't have an effective upper bound, average would be meaningless. But we're talking about salary for RNs. There aren't many RNs making more than $250k, so you wouldn't expect the average to be too far from the median.

It's not strictly value to society. It's not a measure of personal worth, either.

It's how much profit your work generates for the company.

> You telling me a Nurse or teacher provides less value than a dev working for a Startup that dispatches food quicker? Please make that argument for me because this idea is what is wrong with SV.

Leverage. Its all about leverage. The more people you affect, the greater the value.

Salary isn't related to some abstract "value" of a job

I wrote about how to research labor statistics on salary here: http://www.greenwave-solutions.com/getting-labor-data-about-...

SV median salary for software development jobs (loosely defined) was about $122k in 2014. SF was about $110.

The cost of living in california also varies widely!

"An employees risk is several magnitudes less than the founders across many factors. "

I read often about founder risk, but I think it is overstated for non-bootstrapped companies. If you are a founder of a funded company, you get a salary the same as everyone else. In that case, what exactly is your "magnitudes greater" risk?

>If you are a founder of a funded company, you get a salary the same as everyone else.

Depends on the stage from what I have seen. Most of the other founders I know, including myself, take 10-15% less salary than many of the employees. Also once funded, investors will expect founders will take a haircut for a while.

Agreed. Most founders I know (in SV) take $50-80k in the first 1-2 years.

10-15% less salary does not equal "several magnitudes" more risk. To my mind, for a funded company, the risk is the same for founders and employees. The worst that can happen for both is unemployment.

First, you're ignoring all the risk a founder has already taken just to get to a funded state.

Second, many times(always?) a founder has personal savings wrapped up in the company.

Third, an employee can always just quit and find a new job. The founder is much more tightly bound to his/her company because of obligations to investors, other employees, clients, etc. To say that "the worst case scenario" for both is unemployment is true, but you're ignoring many other factors that make it far more likely for the founder to be stuck going down with the ship while employee walks away Scott free.

How many of those factors are purely emotional/psychological/imagined ones?

One trick to figure it out is to imagine founder being hit by bus: who will be hurt? Will family be hurt (besides losing the founder himself)? Employees? Clients? Investors? Anyone else?

Well, one funded startup I know pays founders 250% of the typical engineer's pay. But it is a wildly successful enterprise though (to say the least).

The risk is on future rounds as these aren't guaranteed. The founders will be the ones to take the lowest salaries when cash gets low and possibly float the company on their own savings. Two very successful companies I'm familiar with (both with billion dollar exits) saw the founders max out their credit cards through the lean times. Not all success stories are just a straight line up and to the right -- those are the just the exceptions that get the most attention.

Founders shouldn't take on personal credit risk in order to do a startup. Even pg says not to do it.

>Founders shouldn't take on personal credit risk in order to do a startup.

Only in the Silicon Valley bubble, where everyone is all about "other people's money", would someone actually believe this. Back in the real world, entrepreneurship involves personal credit risk. You don't get anything for free.

But not open-ended liability that's the point of a Joint Stock company you might ante up some capital but not so much as to bankrupt you.

Those who drink alcohol shouldn't become alcoholics. However, it's a risk. It's easy to say that a founder shouldn't go into debt to keep their dream afloat and protect their employees, but the reality of it is very hard. If it weren't a risk, pg wouldn't have written about it. Going back to the original question, a founder reaching into their own pocket might not involve acquiring debt, but rather cutting their own salary. When faced with making a payroll, the founder(s) are likely simply not to pay themselves to get through a cash squeeze.

It's because most companies start before they are getting funded and before there is funding for the company the founders quite often put a lot of work into the company for no compensation. Sometimes they even put their savings into the company.

It definitely varies. We started our corp entity in 2011 and founders didn't take a salary till 2014. Needless to say, I have a lot of credit card miles.

Adding to this, founders have more information than employees, reducing their uncertainties.

I often see people refer to employee/founder risk as a reason for for employee's getting less stock in the early days, but I think this is the wrong way to think about it. As an employee or a founder, your risk in working at a startup is very low. Both of you experience some degree of opportunity cost, but you're mostly "risking" the possibility of having to go work at a significantly higher base salary with more benefits, perks, and possibly the same expected value in terms of stock. So, what gives?

The answer is that we don't pay people based on risk. Fire fighters truly have a high risk job, yet they typically earn less than many skilled white collar jobs. Rightly or wrongly, we pay people roughly according to their economic output, and probably not even their fully captured economic output (see: teachers).

The reason people use this risk language when it comes to startups is because there's a place where there _is_ some economic risk being experienced, and these people talk about "de-risking" the business all the time: investors. Investors are risking capital, typically all of it, for the chance of an outsized return. As a company de-risks, meaning as it becomes more of an actual business vs a business model search engine, the return an investor might expect for their money is naturally reduced (from 100X to 10X to 2-3X over the course of funding a 'typical' SV startup).

Founders often put capital into a business as well, in the form of maxed out credit cards, deferred salary, and sometimes actual bootstrap $$$. Their monetary contribution is typically quite a bit smaller than an investor's, though, so why do they get such a huge share of the ownership? Again, it comes down to economic value. A founder is producing a huge amount of economic value simply by taking an idea and turning it into a real thing that people can evaluate, invest in, work for, etc. An employee isn't creating nearly as much value, although I think it's pretty obvious that the first employee at a YC startup is probably creating more than %.01 of the value in the company so an offer like that isn't fair.

I do find it fascinating that so much of the investment language of risk gets used when speaking about employees. I think some of this is just lazy thinking, but it's also partly psychological -- you want employees to feel like investors vs having them feel like contractors, for instance. And honestly, if a company gets really big, an employee with 1% stake in a company is still filthy rich, even if the guy he had beer with the whole way is now going to Davos on his private jet.

I don't know about the bay area, but fire fighters can make over $80,000 a year in Portland, OR[1], which isn't so bad

I agree with the point that we don't pay people based on the risk though, as I worked at arguably one of the most dangerous jobs in the U.S. (pizza delivery in a top-5 violent crime rate cities) for years, making far less than a fire fighter.

[1]http://www.portlandoregon.gov/bhr/article/462925

I don't think that's the case. It is appropriate to think and speak in terms of risk for employees. Consider the contrary case: self employment. I don't mean founders here, but freelancers, consultants, bootstrappers etc. They really are paid by the amount of value they produce, or as close to it as we can determine via the market. Success as a freelancer depends on being able to produce a large amount of value and being able to capture as much of it as possible. There's an incredible range here, from getting $0.03 to do human-OCR on Mechanical Turk to Hillary-Clinton-style $300,000 speaking engagements. It's highly variable over time as well. Freelancers are constantly looking for new clients, and badgering existing clients to actually pay them. They also have to be prepared to have dry-spells where they're not earning at all. In other words, it's risky.

Given that backdrop, the value that employers offer to employees is reduction of risk. Employees are not exposed to the downside risks of the market, nor do they participate in the upside when the business does well. Employees do risk losing their job, but that risk is generally pretty low.

Startups, though, offer less risk reduction than more established companies. Some of this is intentional, to align incentives and select for employees comfortable with the big-risk-big-reward reality of a startup. Some of it comes from the inherent instability of startups. Chances that a startup employee will abruptly lose her job, or not get paid for work already done is much higher employees of established companies. Even the "big reward" scenarios tend toward instability—for example, "Good news, we being acquired by Google! Now we all have to move to Mountain View."

Because of this, evaluating a job offer from a startup has to involve an assessment of the risk it involves. A portion of compensation is usually equity, and that equity is of completely unknown value, compared to say, RSUs as Facebook. The job being offered is inherently temporary, since the company will either fail, be acquired or transform into a completely different company within a few years. It's less risk than freelancing, but much more risk than working at a big company.

> 110k is double the median salary for California

Bay Area is not California. You can rent for less than $1K in Sacramento, and life is cheaper there. But generally you can't live in Sacramento and work in SF.

TODO: find out the median salary for Bay Area

I've worked with at least two people who commuted in from out past Sacramento (1 from Elk Grove and 1 from Lincoln).

They tended to remote when they could, but also stayed with family or motels in the near east bay certain weeknights.

That also didn't include the people who flew into SFO every Monday morning from home 1000+ miles away. They always won the "how awful my commute was" game.

On the 0.5-1% equity, here is an old post by Venturehacks/Angellist outlining the early stage (series A) option pool shuffle: http://venturehacks.com/articles/option-pool-shuffle

So while the table lists 0.5-1% for early stage lead engineer, it might be bigger for team of 3, 5 or 10 people in seed stage.

"To allocate the option pool from the hiring plan, use these current ranges for option grants in Silicon Valley:

Title Range (%) CEO 5 – 10 COO 2 – 5 VP 1 – 2 Independent Board Member 1 Director 0.4 – 1.25 Lead Engineer 0.5 – 1 5+ years experience Engineer 0.33 – 0.66 Manager or Junior Engineer 0.2 – 0.33 These are rough ranges – not bell curves – for new hires once a company has raised its Series A."

I'm a mid to top tier programmer in the bay area. I got into a pre series A startup for 90k a year (on a W9 rather than a W2 so -20% after taxes and computing no vacation or sick days) + .1% equity per month to make an iPhone app. I had two co-workers who were sub par. They left the company. I'm currently taking over the rest of the programming (backend/web stuff).

The system I'm inheriting is pretty bad. Security holes, bad EC2 setup and the web front end is unmaintainable.

I can handle the work but the time required to fix everything is significant and I feel underpaid. I got promoted to VP of engineering but my pay and amount of stock I get didn't increase.

We're in the middle of raising series A. We are strapped for cash until series A is completed.

I'm meeting with my CEO soon and would like to talk about a significant pay increase as well as more equity. I don't want to seem like a jerk and say I want at least $175k per year as well as .2% equity per month now or i'm gone since we're in the middle of raising series A and I'm the only programmer. I also don't want to keep kicking the can down the road.

How do I go about asking for fair compensation? How much money and equity would you guys ask for? Anyone have any ideas like get 120k now and after series A raise it up to 175k?

Little more about myself. Came from a top 15 CS program, placed in a couple programming competitions, was part of a company that previously exited as a back end dev, been programming for 17 years and I'd I've been at start-ups since I graduated in 2007.

My solution : act like a even big time jerk, justa reasonable one looking after your self-interest and double your equity demand and make it iron clad so you are not shortchanged after the fund raise.

there will be negotiations to dial down your demands invariably and you can keep your "jerk" like demands as the absolute floor...

What I find the easiest is if you are not dealing directly with the CEO or person approving the raise. In that case you can just let your supervisor know you need that rate to stay on board.

If you are dealing with the CEO or person approving the raise and you feel the need to justify yourself I would keep it short and simple like "In order for me to move forward in this position my salary has to be at $175K". There really isn't much else to say. Just like 50 Cent - you must to be able to walk away - and that is your power. You 100% should ask for the raise or leave. Don't get caught up with letting OPP affect you. OPP = Other peoples problems. For example the CEO is a f#ck up for a large variety of reasons so he gets you believing they are in the middle of "raising series A" or whatever else bullshit that you have no control over therefore has nothing to do with you. It's all about you mo fo. His problem is actually more like he is "in the middle of raising series A and is about to lose a top developer who knows the code base". Don't worry if the CEO is worth his weight he will solve that problem.

Catch my drift? You only live once my friend - DO NOT LEAVE MONEY ON THE TABLE.

I'm sorry, but I simply don't see how asking for what you're worth can be considered acting like a jerk. It's your life and you need/want what you need/want. If they can't afford you, that is not your problem!!!

Try to phrase your worth from the perspective of the cost to replace you. Jumping from $90k to $175k is a hard pill for any CEO to swallow. Are you replaceable by some new $120k developer or are you really VPE and they would have to hire a senior manager and a couple coders to fill your shoes? How many people are you managing?

Remember, you CEO is going to have to explain your raise, or termination, to the board. What story would be easiest to deliver?

Anyone know what the equivalent standards are for the UK?

Perspective: the average gross salary here is between £25-30k or around $46k max. $125k or £80k is senior staff pay in most organisations.

Even among general engineering positions (not necessarily coding), a 'good' salary here is £35-40k. From what Google tells me it looks like wages top out at around £50k for experienced devs.

Outside startup in the UK, experienced developers outside London get 40-60K, with very talented ones getting more. However, plenty of decent experienced developers also get less than that. Salaries are pretty random when it comes down to it.

In my network, I also see fresh graduates getting hired on anything from 18K to 35K, and I'm thinking of one who just settled for 18K after a 6 month job hunt and one interview who I'd rate among the better ones.

I only know London, but senior people get more than £50k. It is slightly confused by finance, which pays much more, and people who contract - lots of companies pay little for permanent staff but pay £500 a day for long term contractors, which makes no sense, as if they upped their permanent rates they could hire good people instead.

This is for established companies rather than startups, right?

My experience here has been the same - as a good developer with several years experience, it wasn't hard finding offers at 65k from big tech firms (plus substantial but slow-vesting stock in one case). I spoke to a couple of startups, and they didn't want to pay that much, but I would guess that they could have done 55k. If I went contracting, I think I'd be looking for 550-600 a day.

It makes some sense.

Overhead of a permanent employee in UK is pretty high. I've heard estimates as high as 50% of base salary, maybe more. On top of that are the usual perks, 3 months notice, and an onerous process to get you fired. Once permie, you're basically guaranteed employment unless your company goes broke.

Compare that to the contractor. There is virtually no overhead for the company. They claim VAT, and expense your rate. And it's very easy to get rid of you, or hire you. A company can ramp up and ramp down as the need arises for new projects - which has a lot of appeal.

It's interesting for me coming from the U.S.. I think it's largely a result of the regulation. An at-will permanent employee system, like in the US, seems to benefit in-demand professions a lot more than the UK/EU regulated system.

The 50% is not direct per staff costs, it includes all overheads like office space. Direct costs are more like 15%. Almost all contracts are 1 month notice. Getting rid of people is not hard, have been through the process a few times, you just need to know what to do.

. An at-will permanent employee system

Hi can you explain what you mean - great post but dont quite understand your last paragraph...

Many Americans have almost no job security, you can be sacked at any time without a reason.

I'm only aware of it through HN etc; so I'll just point you to Wikipedia: http://en.wikipedia.org/wiki/At-will_employment

Take it from me in the UK It's not hard to fire some one "for cause" don't believe all you read in the Daily Mail.

And the NHS helps flexibility as there is no down side to working for a start up if you or your family have health issues.

IR 35 really hit contractors hard in the It industry so you cant do most IT contracts as a personal company - you have to go for an Umbrella company

Also bonuses. They can easily be salary in London.

There are several reasons contracting is a popular route in the UK for techies:

1. Tax advantages, the 13.8% employer's payroll tax is avoided by be being employed as a contractor and taking your income as a dividend.

2. Tech career ladders are pretty specific to the tech industry and London just doesn't have the medium and large tech companies you see in Silicon Valley. So you hit the ceiling pretty fast and in order to be valued for your skills you pretty much have to become a contractor. This is not so different to working in tech in a non-tech organisation in the US.

3. The National Health Service means you and your family are not reliant on your employer for health insurance. Individual health insurance is super expensive in the USA. Most people I know who contract in the US have health insurance through their spouse's employer.

I ended up moving to CA because of the career opportunities. I'd probably be better off contracting in the finance world in London, but most of that work just isn't very interesting.

In the City, good skills 5-10 years of experience yields you something around GBP 70-100k base + some bonus (0-60k depending on how good the year was).

Thanks, that's really useful to know — I'll be looking for a new job very soon, and I'm massively out of touch with what's normal.

I've 6 years experience at a scientific charity, but I only get paid £35k. It's interesting work, but since December I've been in a "team" of one — not fun. Pay is very inflexible — £70k is more than my manager's manager is paid.

Remember that working in The City also means you'll need to sell your soul. I started off there and hated everything - work-life balance, the culture, the work - some seem to enjoy the money but to me it's not worth it.

Well it might come as a shock but some the "worst" employers are charities, notorious for bullying and stress at work.

Btw this is direct from a course I had to do on handling serious work place issues ie ones that would end up in court.

Getting a job in the City requires you have a job in the City.

There are two normal routes into the City if you don't have an amazing CV - knowing someone, or working for a non-City firm on City projects (e.g. Accenture, KPMG, or many of the 100s of smaller financial services specialist companies.)

Also note, not all City jobs are created equal, and many are worse than typical London IT jobs, with only marginally better pay and significantly larger expectations on hours, out of hours work, etc.

Another random datapoint, recently interviewed at a couple well-funded startups in London, got offers around £70k for senior developer (not lead) positions. I have ~6 years experience, all startups, and am not a rockstar.

It is surprisingly hard to figure out your value in the UK tech scene. I suggest looking for tech-oriented companies with healthy balance sheets and asking for as high a number as you can without blushing and see what happens.

$60K seems low to you, but it's infinitely better than the deal those startups would have offered before getting into YC. Before YC, it's "please join us for equity, we have no cash to pay salary at all". 5% of equity with $0 is a deal that very few people can afford to take. With $60K, at least you are getting some protection. If it becomes intenable after 6 months, you can always quit.

There are multiple price points available for people to join the startup life, so it's a good thing. Of course startups would love to pay much more, but when all you have raised is $150K, you can't offer huge salaries to many people.

As a junior developer, coming from a decade or so in IT, I would actually take the $60k/yr gig, in NYC, if it were the right company and with established opportunities to negotiate pay increases. Other companies might pay more, but if I can get the right skills/mentoring and get up to that pay in a year or two, I can take the short-term financial hit.

My favorite offer was $0 + less than 1%, while another place was offering 140k. The guy got irritated when I showed the math on how this was a poor offer.

It takes a certain amount of balls to ask someone to work for free. Hell, I'm not even sure how that would be legal - especially in NYC.

That said, I see folks in New York doing this sort of thing all the time, just mostly in creative fields.

AngelList has a page where you can explore startup salary data and filter by location (and other things): http://angel.co/salaries

Full disclosure: I work at AngelList.

I hope someone from AngelList read this comment: I live in NYC and was job hunting about a year ago because I wanted to move on after four years at my previous company. I am currently employed at a new startup and very satisfied with my current compensation.

I spent a lot of time on AngelList jobs page looking for companies aligned with my interests and I finally interviewed at two of them. When we got to the salary negotiation stage, their pay scale were nothing close to what was advertised on their AngelList jobs page. I also have to say, that I don't care about equity (I've had some disappointments before regarding equity). I ended up at a different company that I found on Stack Overflow Careers. (I don't have any affiliation with SO)

I don't know if someone else has had the same experience with AngelList companies, but I think they advertise high salaries only to get more visibility and a better ranking on search results. I don't know if there is a way for AngelList to control this, maybe allowing candidates and employees to add reviews about the interview process could be an idea.

Hi there, I run AngelList Talent. I'm really sorry to hear about your bad experience.

Our guidelines require companies to list fair and accurate compensation [1]. We receive and act upon candidates' reports of bad company behavior -- from unprofessionalism to salaries not matching the ranges they've posted -- every day. Many companies who get reported are banned from using the service. And to help combat this specific problem, I've recently (in the last month) made our job posting form much more explicit about our rules around compensation and recruiters.

Your suggestion that we accept reviews from candidates and employees is a good one -- it's on our to-do list for the next quarter. I think it'll go a long way towards solving this problem.

We can't catch every job or every bad actor -- there are about 17,000 active listings on the site right now, with many more posted each day. But we're working to improve the experience for both sides, and we rely both on algorithms and reports from users like you to make that happen.

I'd really like to hear more about your specific situation. If you care to share, ping me at dave@angel.co -- I'm based in NYC and have a vested interest in making sure our marketplace operates well here.

Thanks for your time and for bringing this to our attention.

[1] angel.co/help/talent#rules

At one time around DC, for mostly US DoD and NASA work, there was a shortage of people good in math and software. So, once in two weeks I went on seven interviews and got five offers.

At one point I was making in annual salary six times what a high end new Camaro cost. Now that would be ballpark $240,000, and jobs were plentiful.

That's something like the situation when companies really want good employees.

Net, so far Silicon Valley doesn't really want good employees. Neither do NYC or Boston. Not yet.

Throwaway for obvious reasons, though you might figure out who I am if you know me personally.

For early stage startups, I was being told 100k + 1% was standard in NYC. This was by several places, or you could just go look at AngelList where they often explicitly list it.

I ended up getting rejected by tons of NYC late-stage startups (Percolate, Recombine, Betterment, YCharts, Digital Ocean, SquareSpace, Airtime), and I'm 90% sure that compensation expectations were a big reason, since I usually got past the tech screen but things broke down once we started talking compensation. I also got knocked out by some tech screens because they are crapshoots, and when I do 15 code screens I'm bound to make a few mistakes.

The market is in a weird spot, tons of companies desperately want engineers but they are freaked out by how fast salaries are climbing. They really don't want to go into bidding wars over people, and they really don't want to give new hires more then current hires and then be forced to give their entire engineering staff raises. Based on some conversations, I think they actually expect salaries to go back down but I think they are delusional, I hear an incredible amount of companies that are planning on ramping up hiring. Now granted if I could reliably predict macroeconomic trends I wouldn't need to work for someone else, so I'm just guessing. I do think there might be an "app"/"big data" bubble but there are so many traditional businesses ramping up on software hiring for things like ecommerce, logistics, and operations.

Companies will say they can't find talent and will pay whatever (i.e. pg), but it's bullshit, cost is still an enormous factor and they are working hard to keep it down via information asymmetry, bait-and-switch tactics (had several companies tell me one number on Hired and then go significantly lower in person), immigration lobbying, etc. De Blasio just signed some "tech talent pipeline" thing, which is pretty ridiculous given how many places rejected me.

If talent was really short, they wouldn't make people with 8 years of experience and a portfolio explain the difference between a linked list and array over the phone, they would be upfront about salary numbers (and actually show up with that number rather than one that was 10k lower) etc etc.

There is a ton of VC money out there and a lot of companies still think it's 2009 and they can get people cheap, a lot of average engineers are now VP of Engineering at some random startup with no team, and still thinking they can fill out that team with people making less than them. In reality, you have to pay me _more_ to take a lower role, not less like they expect.

Also this is unrelated to salary but I got rejected by tons of places for seemingly no reason, when it's not compensation expectations I think it's a general sense of elitism and "we have a high bar", "we need false negatives". It's idiotic to do that then complain you can't find people but they all do, I think they take a sick pride in rejecting people and feeling selective, even if it hurts them. I'm pretty sure if you are a qualified heart surgeon, most places looking for heart surgeons will hire you, but if you are a qualified engineer you go through an insane interview process and no matter how good you are, 70% of the time you get rejected for some bullshit false negative reason. Feel incredibly lucky I snagged that Google offer.

There is not tech talent shortage, it's 100% about cost. Meanwhile, in-house counsel with comparable experience can easily swing 160k base, the VCs and the CEOs pay themselves well, etc etc. They still view engineers as rank-and-file bitches who are at the bottom of the totem pole and whose salary must be kept low.

/rant

you should turn is into a post on medium, then share here lol

Not sure how Google will feel about it so I'm going to lay low and commit some code for them before I stir up any trouble.

But your comments are very positive about google.

I wonder... is there a widely know list (even if small) of what companies don't do this? If it's even possible to determine that sort of thing, it'd be valuable to share and make glaringly public. Even if it has no influence on the head-in-the-clouds startup leaders that play that game, it would at least be valuable for job seekers to have some assurance of who isn't wasting their time.

Like OP said, AngelList gives ranges for salary and equity.

Trello (like FogCreek and StackOverflow) has a very regimented salary process that Joel Spolsky has talked about publicly here: http://www.inc.com/magazine/20090401/how-hard-could-it-be-em...

There are a few elements of it:

1. There is a set salary table based on objective factors (e.g. years of full-time, professional programming experience). Your salary is 100% determined by that table and isn't negotiable.

2. The table gets updated every year for market factors. Everyone gets a raise if the market moves. You get raises by progressing through the table's objective criteria.

disclaimer: I am an engineer at Trello and we're hiring: https://trello.com/jobs

I have had a lot of visibility of developer salaries in previous positions (ran development and hired devs at 3 startups) and I spent a year as a developer evangelist (in recruiting). I found the Trello offer in line with my expectations of salary.

Great point about the psychology of rejecting people and companies feeling the need to reject good candidates to "have a high bar." There is also something to be said for these companies demanding a vague passion for their product (or for you to fake it) rather than understanding it is a job and presumably the candidate is a professional.

> I'm pretty sure if you are a qualified heart surgeon, most places looking for heart surgeons will hire you, but if you are a qualified engineer you go through an insane interview process and no matter how good you are, 70% of the time you get rejected for some bullshit false negative reason.

Well, the obvious difference is that someone who is a heart surgeon has had about 16 years of general education and about 12 years of specialised education and has a certificate that proves that other doctors and heart surgeons believe that s/he can do the job EDIT: and can be sued for any mistake s/he makes... someone who is an engineer has a laptop (there's no such thing as a "qualified" engineer, IMO).

Uhh, I have a computer science degree with departmental honor, from a top 20 US school, I've been hired by companies with difficult interviews, I have a side project with users that I shared the source code with employers with, an active Stack Overflow with a lot of good answers, strong references, etc. I'm not a dude with a laptop. And I was asking for 125k.

My friendly advice as a former hiring manage for a startup, purely based on the details you posted here about your job search experience. Huge caveat: you know all the details and I only go by a post on the Internet, so I'm likely to be wrong.

The tone of your messages make you sound a little bit demanding, or difficult to work with. You may have voiced strong opinions during those interviews. When you say that a startup will make you come back several times, it's a sign that they like you, but have a concern that they are trying to figure out. My guess (again, just a wild guess), is that you were technically very strong, but had possibly a bit of an attitude. That would explain the startups behavior. The main two reasons a startup would hesitate to hire a good engineer is either they are asking for too much money, or the candidate seems inflexible.

Again, I'm likely to be completely off.

No, one internal employee did state that as the reason. I have very strong references from every direct manager I've ever had. I am not difficult to work with unless you can't deal with having your opinions challenged. Unless Google retracts my offer based on this post I plan to work there for a long time so your advice is irrelevant. Its just disingenuous for startups to say they can't find talent when they mean they can't find cheap, meek, timid talent.

My experience has been similar to yours but in the Valley, and I have a strong set of GitHub contributions as well on top of a clearly sharply skyrocketing work profile chock full of engineering accomplishments & roles.

It is frustrating that startups do not want to pay anywhere close to what reflects what that quality of engineering may entail. Companies like Google will pay $100k more than what typical startups will pay for quality senior engineers as far as I can tell, and that too is even a bit of a bargain. Increased responsibilities do not justify a shortfall of that much when it means it is close to 33-50% of a potential candidate's salary that is chopped off for them.

> The tone of your messages make you sound a little bit demanding, or difficult to work with.

Strongly disagree. OP clearly knew exactly what he was looking for and actually got it. It's the startups that wasted time on interviewing him but didn't make their hire that clearly lost out.

I don't doubt that some of those companies could have perceived an attitude problem, but that's a huge reason not to work for those companies. They're looking for serfs, not collaborators.

When I interview a senior dev, I deliberately test to see if they will contradict/debate me on something technical. If they won't, they're not really senior or they're just yes-men who won't call out my mistakes and make the organization better.

Everybody talks a big game about giving employees responsibility and autonomy, but many lack the guts to follow through and hire smart people who have actual spines and opinions.

This was the sense I got too.

I have over 25 years programming, have invented, marketed,and sold several products, have run teams, have significant IP on github, and I get treated like somebody with no experience with a BS resume.

Sure, I should get over myself, but I end up exhausted, we spend the day doing these stupid things instead of talking about what the job is and what I can do to help, and so on. Not to mention that I cannot remember the last time I had to delete a node from a red black time (grad school?), but I'm expected to be entirely fluent at that and potentially dozens of other things that I don't do, but no one can be arsed to ask me about the stuff I have done, because it's not relevant or something.

And, oh, give up 50K+ in salary because options.

I just went through a long period of job hunting (thankfully now employed) and this post rings 100% true, especially the part about being rejected for inexplicable reasons. The "gotcha" question about Fourier transforms that you last worked with for half a semester in college 10 years ago? That question cannot possibly be a serious qualifier for a full stack dev position. Instead, i suspect it's meant to either (a) make the interviewer look smart to their (possibly nontechnical) startup founder bosses and (b) provide cover for rejecting you for some other reason that can't be spoken out loud, like "cultural fit".

I think you're right. They set salaries low and the bar insanely high, reject a bunch of candidates to make themselves feel like they can be the next Google, then ultimately settle on a lucky person who just happens to be there as they've gotten acutely desperate and given up hope of finding a mythical 10x engineer.

Sometimes people haven hidden agendas - they want to bring their friend in and want to show they had dozens of interviews and could not find anyone.

I was at a Fortune 1000 company and we interviewed one guy. He answered every technical question flawlessly. He was personable. The lead turned him down. I argued it since he was the best we had seen. He said "I don't think he'd appreciate it if we called him at 3AM to do some work". This was the reason to not hire him, since no other rational reason could be given. The position wound up being filled by his friend, whose skill set was way below the interviewed guy, and who ambled in at 10:30-11:00 AM every day.

Asking questions about undergrad topics is a way to sneak ageism under the radar. Companies who do this should be named and shamed.

I think startups have become too much of an industry unto themselves, and they are developing their own versions of many of the same issues that the big companies of the past inflicted on themselves. They are living on the (fading) memory of how well startup employees did 15-30 years ago.

When I saw a really positive reaction to YC posting a template sales agreement the other day, that's a signal that it has jumped the shark. Venture companies are supposed to be taking big risks, but it's a big deal to have a "best practices" based sales form? Sounds like when my big enterprise CIO looks for validation from Gartner, etc for any decision making.

I worked at a late stage startup in the dotbomb days and walked away with a decent equity position that based on the "best practices" discussed today would have been somewhere between 75-90% lower. If you look at total lifetime compensation, my decision to work for the government is financially much smarter than one of these startups. Salary is the midpoint between startup and a bank, but benefits are very rich. Add in the future value of pension & benefits, and it is a bad deal to leave unless I was a co-founder.

It's pretty funny because everyone told me that big companies like Google are bureaucratic and slow, while the startups are fast and nimble. In reality, I was interviewing for 8 weeks and places were asking me to come back for second and third on-sites. Google was the last company that I on-sited with, the only company that let me skip a phone screen, had incredibly professional and responsive recruiters, and told me they were preparing an offer a week after the on-site and had the offer a week after that. The interview was interesting and had creative questions. Even though I had no competing offers to show them, they still crushed the offers I was asking for and didn't get. When I expressed interest in Product (even though I was interviewing for an engineering role), other companies told me that engineers are not involved in product decisions, Google told me the opposite and had a few interviews questions where we talked about product. Yet the VC startups are still complaining that we go to Google for the free lunch.

How much do you get paid now ? Thanks for your insightfull post.

Also were you asked about linked lists / trees during your google interview? Did you have to write code on a white board?

Not comfortable sharing specific numbers, but check out Glassdoor for a range. The key to Google offers is realizing the value of target bonuses and restricted stock units. Typically a startup will offer you Common Incentive Stock Options. When they vest, you have to buy the shares out of pocket and pay capital gains on the difference in valuation, even though you have no means of selling them unless the company exits. The company can also exit via a sale, in which case if the sale is too low common stockholders get screwed (and they might do it intentionally to screw over ex-employees and grant retention bonuses to current employees instead). The reason for this is because "investors are putting up money" and therefore deserve preferred stock, even though they are asking you to take a significant salary cut for those common stock and that salary cut represents a far bigger portion of your income than the investment represents the VC's portfolio. Look up Liquidation Preference for more information on this.

Google gives you restricted stock units which you can sell immediately upon vesting (or hold onto one of the hottest stocks of the last decade). No need to pay any money out of pocket and risk getting burned, you can only make money.

As far as the Google interview, there is a massive amount of information about it which the Google recruiter will provide, but check out Glassdoor interview questions, Cracking the Coding Interview, and Steve Yegge's "Get that job at Google" post.

Linked-lists/trees are absolutely fundamental data structures so of course you should know them. Every single engineering interview at Google _requires_ a coding question, so yes there was whiteboard coding in every interview. I would highly recommend buying a whiteboard and practicing at home because things like space management and hand-writing matter.

A lot of the industry has copied the Google interview one way or the other so you might as well study for it even if you don't get the job.

> Google gives you restricted stock units which you can sell immediately upon vesting

But you have to pay taxes on those RSUs at the moment of grant (if you do an 83(c) election), or at the moment of vest (if you didn't). How does Google or anyone else work around that? Do they also give a tax-covering bonus with the vesting?

There is no 83(c) election. At the moment of vesting the amount is considered regular income (no RSU * market price on that day) and you pay taxes on that. A portion of shares is withheld and sold to cover taxes but you may owe more. When you sell you pay capital gains tax on the difference, short or long depending on how long you kept it. There is no work around, you just keep in mind taxes when calculating your grant worth.

So, it's just a bonus denominated in shares instead of USD. Is there any difference whatsoever to getting it in USD and buying it on the open market at the same day?

From your description, sounds like the only difference would be fees (instead of Google issuing shares, selling them, getting money, giving money to employee, who then buys Google shares) - but surely there's some other advantage?

I understand your point of view - these numbers do not make much sense to me at all - I'd imagine any good engineer would understand his value in the current market and look to maximise his return. But I imagine these people are following the trends they see in other posts, and also hoping that other factors of the job (company, mission, people, coding environment) add weight to their opportunity.

The biggest irk I have with a number of these posts is indeed the equity offering. Whilst I can't comment, or be correct on all the companies, most of them seem quite early stage. I would expect them to offer a larger amount of equity (higher pcg). This to a lot of early stage hires can be a big a motivator. If the company offers a large chunk then it shows a commitment to that person that they value their contribution and see them as critical in the success of the company.

You have taken the words right out of my mouth! I, too, would like to understand the reasons. I just read the Chariot Lead Designer post with dismay. (https://angel.co/chariot/jobs/45415-lead-designer) Now, the other comments are interesting, but speculative or general to the point of not providing applicable knowledge. I will come back to see if anyone who set these terms will tell us their reasoning. My interest is practical. I have been thinking about compensation lately in case I have the good fortune to: 1) get into YC S15 and 2) survive and 3) need to hire. Also, I mentor designers and so am a sponge for compensation data and explanations.

I just read the Chariot Lead Designer post with dismay.

In my opinion, the only person that takes that job is someone without a current job who is getting desperate.

They'll work there for however long it takes them to get a better job and then leave them abruptly.

60-90k in San Francisco? Can you even make it in SF with that salary?

You might be able to get by with 90k, assuming you're frugal, though given the rents today, it would be wise to live outside the city. 60k would be a pretty crappy existence in SF these days.

60k is what an experienced teacher makes.

Who do you want to teach your children? Would you want them to live in your community?

I would want them to make a decent wage (much more than 60k in SF) for their hard, essential work. Whether they live in the "community" or not is irrelevant (except for their commute, in which case, yes). It won't lead to better education or a better experience for the children.

I did it for 2 years. I had a studio apartment in Hayes Valley (no roommates). It's definitely doable.

Can you clarify what's so bad about that job posting? Just the salary range or something else?

The salary range is the standout. That price range is in line with a junior agency position (read: someone who makes banner ads) in this area. Run of the mill lead design positions are typically in the 120-175 range at a small-med org.

Beyond that, no one piece is particularly offensive, but the post overall paints the picture that they're trying to hire an entry level, mostly visual designer and then put this person in charge of a significant part of their product, in what should be research-driven role with a senior title.

This happens often, because engineering driven companies don't always know what to look for and demand from a high level design hire, in the same way that lots of cube farm companies are bad at vetting developers. The problem is that for this sum, they're not going to attract the kind of candidates that know about that, know what the position should actually be, and who will realign the company in a sensible direction. They're going to end up with an entry level candidate who delivers what's asked for without knowing what's needed, and the world will have one more mediocre product to show for it.

NYC is tough. You're competing against a lot of finance companies for talent. Developers are used to a higher base salary than $125k and a yearly cash bonus. People value stock a lot less because it's not part of the typical comp package and they haven't seen the rewards it can generate like they've seen in the Valley.

Personally, I doubt companies in the Valley are getting very good developers for $60-$110k salary and 0.5%-1% equity. Why would any smart developer do that when they can go to a later stage VC company that has a lot larger chance of success and get market salary + 0.1% equity.

In NY, at least for a developer Google and Facebook have to compete against banks and hedge funds for talent. In my experience, Google can pretty well go toe-to-toe with them if they desire. So that finance offers higher compensation, means Google also has to offer higher compensation.

Now some speculation, if Google is offering higher compensation than they otherwise would, so will other companies competing for the same talent.

Even if you only think they are fiercely competing at the high-end of the market, I would believe there is some trickle down to the mid-range, which when then also go down to the lower end.

You are right, YC companies are under-market in the straight line terms of salary and equity. My theory is that many people are willing to work for YC companies for less money in the early days. Why?

1. Lower risk (wether perceived or otherwise)

2. Better mobility ("I was hire #2 at prestigious YC company XYZ")

3. Better personal networking ("Hey founder, can you put me in touch with XYZ at YC company Foo")

Note - As many people point out, the same engineer who would work at a YC startup would make much less than going to Google/FB, etc. This is a pretty well known fact.

I personally prefer to partner per project. I think I should make it an acronym, PPP.

Giving away 30% of the project's net income for the lifetime of the project makes a developer more invested, and is better than giving away 2% of your company. The $$ comes quicker for the developer, and you as a company take on less risk. Vesting company options with a cliff can really screw a developer. Vesting equity in a particular app or project makes the incentives align correctly.

Never heard of this before, but it makes sense. Does it work well for you in practice? Are you not worrie your product is made a loss leader, driving your share to zero?

No we aren't. Consider this: your company could be producing more products than it currently is. You have tons of ideas but not enough resources to do them all. With PPP, the cost of a developer now becomes just attracting and onboarding them. What are the chances a given project will succeed? They are less than 30%. So, the expected value of this strategy vs paying for the developer is positive, especially if you don't have the $ to spend on all kinds of projects and see what works.

So you can certainly justify it for projects that you wouldn't have otherwise undertaken. The projects that you have to develop for sure, are another story. And then there is everything in between. This is just a great way to structure those deals fairly and align incentives instead of trying to optimize your own share. If the project fails, then you lost nothing. If the project succeeds -- and the developer is more incentivized that it will -- then you get a partner with whom you are both interested in increasing the revenue.

We've done it with our apps and have been happy with the results. It works especially well with startups without a huge budget, but a platform and technology that can be used by many people. We've actually open sourced our platform, and in the future plan to do an entire accelerator program around this concept. In our situation we have a few more things:

* We have a clause that if the developer leaves and we spend X amount (at our discretion) on the app, then 30% of X is coming out of the money due to them, with the proviso that they won't ever get less than 10% in any given month. And of course they get 30% only if they launch version 1.0 of the product, and complete all the deliverables.

* We have a quarter million monthly active users, so the developer is interested in working with us vs stealing our idea and going solo. Because if they launch through us and we handle all the QA, production, launch etc. then we can get their app a big userbase from day 1. They are as happy as we are to give 30% to Apple for taking care of all the sales, fulfillment, credit card processing etc.

Is there a time out on the deal? Or is the 30% perpetual?

We have it perpetual. Don't know if that's good or bad, since that would require going all the way to the end... but that's what we've chosen. You can try your own way.

I did some research on salary/equity grants last year and published a blog post on the subject. The dataset was most Silicon Valley job postings on AngelList (at that time). Based on my data, $60k salary is very much on the low end (i.e. 10th percentile of salaries). .5-1% equity may or may not be low-end -- it definitely depends on company size. That said, you will almost never see >1% equity once you get past the first few hires (except for VP roles).

Post link: http://codingvc.com/analyzing-angellist-job-postings-part-2-...

Edit: You are right that compensation is generally lower than for non-startups. To be fair, a lot of people look beyond compensation when pursuing startup jobs. They're looking for more ownership, less bureaucracy, a chance to learn, a chance to form very deep personal and professional relationships, and so on. And of course, there is the equity lottery ticket (which usually doesn't end up being worth very much..)

Even 0.5-1% is at the higher end if you join early. And 100K at a startup is probably for the well funded ones. If you join later even at 50 person startup, the equity goes down to 0.0015. Everyone believes their startup is the next FB. With that small of a percentage ownership, you'll only make money if it's a $1B exit. Otherwise all employees get screwed. Lost opportunity costs, lost physical/mental health but I guess gained good experience and scratch the startup itch. Honestly at this point, the VC's have fully gamed the system to work it in their favor and employees are commodities. If you hear any thing else it's a lie.

Incase, you wanted to compare base wages at companies, I've created salarytalk.org to publish base wages at companies in USA based on jobtitle/location/state. While you don't have total compensation, adding 20-30% to base wage is often close enough. This data is from US department of labor for foregin labor, which is a significant part of the employee base, so the data is highly accurate.

Where are you seeing these numbers from? What stage of startup? If Uber offered you 1% equity and $60k/year you'd have to be an idiot to turn them down at this stage. If an unfunded just-an-idea startup did, you'd never take it.

Basically: you can't evaluate equity in a vacuum. It's entirely company-and-stage-of-growth-dependent. Those offers might be awesome or terrible.

In New York City I was just offered a job at a startup, as a senior engineer. The company is small (only 5 people) but they have many customers, they are profitable, and it is fairly certain they are going to be successful. They had, for years, offered sysadmin services to companies in New York City, but during that time they built a meta-framework on top of Chef, a framework that allows the automation of a fantastic range of sysadmin tasks, and now they've built a GUI on top of it, so less talented people can do a wide range of tasks.

They plan to grow for 5 years and then sell for something between $25 to $100 million, depending on how much growth they get.

I was offered $90,000 and 1% of the company. This is a startup where the risks are fairly low, considering that they already have customers who love them, and they are cash flow positive, and they are growing quickly.

For a risky startup, I would have asked for 4%.

$90k for a senior engineer in NYC is comical. I hope you countered or didn't take it. You can make 3x that amount at Bloomberg or somewhere similar.

$90k is not good, especially for 1% in a 5 person firm. However, I wouldn't throw around numbers like $270k as if any developer off the street makes that in New York City. No firm, especially Bloomberg, is going to pay someone new to finance that.

> it is fairly certain they are going to be successful

Anyone here ever heard that one before?

$90k in NYC is a pittance. You can make that much as an Uber Driver [1]. Making any less than $200k in NYC pretty much guarantees roommates. If you're single, no kids, no plan to have kids, no plan to get married or aren't already married and have no student loans. Well then yeah, take the risk on half your worth. If not, I highly recommend looking into a reputable company with reputable market rate salaries.

1. http://www.businessinsider.com/uber-drivers-salary-90000-201...

I don't know if you're trolling, but it's not easy to find a $200k salary in NYC. Where are all of these companies with "reputable market rate salaries"? Can you name five of them? I'll apply today.

http://www.glassdoor.com/Salaries/new-york-city-software-eng...

No I'm not trolling. Glassdoor, angelist, etc. are poor indicators of compensation. You shouldn't base what you make from what someone else self-reports as their salary on the internet. But to address your point, here are a few that are approaching and or exceeding $200k in just salary (all exceed $200k after bonuses).

- http://www.glassdoor.com/Salary/Google-Staff-Software-Engine...

- http://www.glassdoor.com/Salary/Google-Sales-Manager-New-Yor...

- http://www.glassdoor.com/Salary/Google-Software-Engineer-IV-...

- http://www.glassdoor.com/Salary/Google-Staff-Site-Reliabilit...

And those are just at Google. If you think those are high then I'd recommend checking out some of the financial giants employing quants on wall street.

Okay, so Google, and financial quant jobs that require a specialized degree.

Those are for the more senior engineer grades at Google - the average engineer isn't making that much.

"Making any less than $200k in NYC pretty much guarantees roommates."

That's complete bullshit.

Indeed. You can get a pretty decent 1-bedroom for under 2k/mo, in one of the better neighborhoods of Manhattan.

What? Where in Manhattan can you get a 1BR for under $2k/mo? Are you talking about Harlem?

If we're talking about decent neighborhoods in Manhattan, even the shittiest studio on the 5th floor of a walkup will go for at least $2k/mo.

If you go through some crappy broker and take what they say at face value, then maybe. I found a bunch this summer in gramercy/flatiron, 1 bedrooms all, even on the ground floor.

Wow that's awesome. What websites or other resources did you use to find those apartments? My lease ends this year and I was considering moving to Gramercy/Flatiron.

The best way is still to stroll the neighborhood and look for signs. Although you can also look at sites like renthop.com they are mostly broker listings. In either case look up the building owner and negotiate with them directly. You can get a much, much better deal this way. The broker market in NYC is retarded and they are incentivized to get as high of a price as possible in addition to the exorbitant fees.

A pittance? That's a bit of an exaggeration. NYC isn't quite as expensive as you're making it out to be. And the Uber driver pay numbers were debunked [1]. I know people living on their own in NYC with far less than $200k income.

But yes, she could certainly make more money elsewhere.

1. https://medium.com/@felixsalmon/how-well-uberx-pays-part-2-c...

EDIT: and FYI the median income in NYC is $51k per http://project.wnyc.org/median-income-nabes/

This place isn't on 55th Street, is it?

You're going to work for a company that built a framework on top of another framework, in an industry where framework life span is about 6 months and you don't see that as risky?

1% (assuming no dilution) of $100M exit is $1M. Assuming you should be making around $200K for a senior position in NYC, subtract $90K and you're out $110K a year for your equity.

Multiply 5 years till the exit and that's $550K you've forgone for your $1M exit. If you adjust for risk (i.e. the company doesn't sell for $100M or completely collapses) this is a terrible investment.

If you were to take the $550K you would have made had your salary been in line and invested it in fairly safe vehicles you could come out just the same with much less risk.

Depending on the specific position and language in use, $110k might be reasonable for an SV job. $60k is non-top tier college grad salary. There is definitely competition for great software engineers, but what most people assume is you throw a rock and you'll hit a great software engineer in SV. That's just not the case. There are lots of very good engineers, but a much smaller pool of great engineers.

We all hear the stories about companies paying ridiculous salaries in Silicon Valley but bear in mind Glassdoor pegs the average engineering salary around $110k for SV. The guy from Google who was in the news a year or so ago because he was earning ~$3 million a year had done something special to get there.

The guys earning the big bucks have proven track records and expertise that commands a high salary. I agree with other people here that you shouldn't take a pay cut for equity, but don't be surprised when you see lots of job postings around $100k.

Also consider that there are a lot of startups that raise 6 figure seed rounds and under $10 mil Series A that you don't hear about, compared to the (mostly over) hyped startups that raise millions in seed and tens of millions in Series A. They literally can't afford to pay people enormous salaries.

Are there really SV dev salaries as low as $60k? That struck me as a bit low coming out of school even in Chicago, and I did not go to a "top-tier" school ("flagship" but nothing special state school).

Similarly, I turned down $60k to start in DC, and my school was probably worse for engineering than yours.

$60 is typically how much offshore folks get paid so I can't imagine any local devs making that little.

We pay our junior engineers $90k at my company in the Valley.

This is because you are looking at startups. These are products that no one is sure will work, and the company is trying to get a product to market as quickly and cheaply as possible.

The codebase doesn't have to look great and the product doesn't have to be perfect. The question is: is there a market for this thing? Why pay more than you have to just to get the MVP out the door? This isn't cynical, this is how it works.

Once the product is proven, then you can bring in a second group of people to take it from V1 -> V2. Since this is HN, no one really talks about what happens once a company moves beyond startup, but there is a second market of developers that are brought in once a product is proven and needs to reach the next level of maturation. A lot of people reading this post are in this market right now: there are companies which you can hire that will help you re-architect your code, architecture, development process, devops, etc.

It used to be a lot harder to get a job at a company as an unproven developer. Now there are a lot more options. If you have a lot of experience and you are thinking of entering the startup market, you should look at starting your own company.

The problem is a dearth of technical talent.

We need to let in more technical workers to address this issue.

Or maybe get better at finding and attracting all the talent that already exists in the US. A lot of people won't go near a SV startup with a 10 ft pole.

Yup. Once and never again. Even as remote.

Maybe I've been trolled, but ... if technical talent is scarce, wouldn't salaries be higher, based on basic economics? I don't see how flooding the market with more technical workers will increase salaries.

Yes. It's a joke: VCs (to include PG) claim that talent is scarce because it is in their self interest to lobby for measures that would increase the talent pool and decrease salaries. They will continue to make this claim no matter what the market says about how scarce talent actually is. carsongross is mocking their fib for transparently contradicting basic economics.

Shouldn't a lack of talent mean that existing talent should be paid more?

You would think, but management can often have difficulty seeing how macro trends affect them. From their perspective, they shouldn't have to pay more for the same and adding new staff at higher pay than old staff seems unfair.

My previous job had difficulty finding talented engineers, party due to comparatively low salary offers. When I and two others left our team of 8 and two more made it known they were actively looking because we saw all trends outside our office, it became clearer to management. Only when 3/8ths of their staff left did they make major changes to their existing packages. And even then, pay is significantly below market. (Though they have the best time off and fringe benefits in town.)

I think the problem is an abundance of math skills. After all, as so many startup engineer blog posts have said, you don't really need math to write web applications.

We need to replace the math courses in a CS degree with something more useful. Maybe some classes on Javascript, NoSQL, and whiteboard coding.

There should be plenty of room for "theoretical" CS courses and practical software engineering courses.

Really? I mean math is something irreplaceable in CS. It would be replaceable if it was something like "web apps development" degree.

I'm hoping the parent is making a joke by riffing on the absurd technical requirements demanded by startups for working on what amounts to a glorified CRUD webapp. The math heavy analysis that a CS degree provides just isn't necessary for, oh, 95% of programming jobs. The people who design the systems for reliability or process "big data" at huge companies with real scaling issues (Google, Facebook) need to have such training.

On the other hand, these companies do need talent who never the less have skills that are rleatively rare. They shouldn't need to pay engineers the $200k+ salaries of big companies, but expecting to get median quality engineering without paying more than $110k/yr is as ridiculous as a non-degreed "webdev" expecting $180k/yr because he can slap some customizations on bootstrap and poke around a Ruby codebase.

It depends. If you have a large enough team on a project that you can shield someone from math oriented and efficiency sensitive tasks as well as the planning in place to do it then the math heavy analysis isn't needed. Many start-ups have teams of 1-2 working on entire web apps and need everyone to be able to take on any task. Many people without the math background end up writing n^3 solutions to O(n) problems in code that gets executed at high frequency. The core value of those math skills isn't their explicit use, it's the training the brain gets in writing efficient algorithms and having knowledge of how hard certain problems are. Even in CRUD apps I've often seen requirements that are equivalent to NP-hard problems on large data sets, and I've been able to discuss the efficiency tradeoffs allowing the business team to redesign features when they weren't happy with performance. Without the math background, we'd see build it, put it in production and when the data gets large enough cry about performance and lose users waiting forever for a page to load.

The last piece is in many start-ups I've seen the programming team will own or co-own Analytics because of a lack of statistics skills on the business team. Again with a small team not having a solid math and stats background has huge implications on the data analysis portion of roles.

Rather than altering CS which is a good course we should really look at creating an alternative for people who are going to be actual programmers and not computer scientists.

For many (including myself) what we do is nearer to been builders than civil engineers and beyond a basic grounding time would be better spent on the other skills that make up a good developer.

Absolutely wrong. You don't need a ton of math to wire up a house, so should electrical engineers stop taking math clases? Of course not, you'd be an idiot to hire an electrical engineer for that job. Likewise, if you're just cranking out CSS and javascript, you probably want somebody with a tech degree or a code camp certificate, not a CS degree.

Aside from that, what the heck would you teach in a course on NoSQL? The theoretical underpinnings of key/value mapping? Proper denormalization of data? I'm honestly curious here.

Note to self: sarcasm on the Internet usually doesn't work.

I'm not serious. The primary thrust hat people who have taken the math required by an undergraduate computer science or engineering degree can probably see at a glance that the typical startup salary offer is shit. Thus, I sarcastically suggested we should remove math from the CS curriculum in order to make graduates less able to understand this.[1]

I did so in a way that was also supposed to caricature the "programming doesn't need math" crowd, but apparently I came off as a member of the crowd. I was hoping that my sarcasm would be indicated by throwing in "whiteboard coding" as something a degree should cover. That so many people thought what I intended to be caricature was serious worries me.

[1] Hence the reason I said "abundance of math skills"; potential candidates know too much to be suckered.

I don't think you need to shoe-horn your agenda into this question.

Sarcasm, guys.

Considering I got offers of $65K, $83K and $95K fresh out of college this year, I would say they aren't looking for experienced developers.

In what cities?

Boise, Idaho; Fort Collins, CO; Madison, WI respectively

IMHO the publicly listed salaries are usually BS. For one reason or another, they feel compelled to list something regarding salary, but they also don't want to "show their hand", so they list a humble level of comp.

But in reality, when you're in a salary-negotiation with any of those companies, the comp-level listed in their hiring ad goes right out the window.

The culture here is higher risk and geared towards building the next unicorn companies. That is why equity plays such a significant role.

> Their ownership is purely symbolic, in a relative sense

You're downplaying the significance of a 0.5-1% stake. 1% of the next Facebook would definitely not be purely symbolic. Late stage VC investments are lucky to get a few percentage points in a company; this is the only opportunity in the company's life where a non-c-level employee could get that kind of a stake.

It is a lot less than what founders get, but if you don't like that you can always try your hand at being a founder yourself.

There are of course countless anecdotes that can be told about how someone's equity stake didn't amount to much. Because the majority don't. But we are geared towards trying to be a part of something that is truly very big and world changing, and that is riskier.

but its not going to be 1% at that stage, its going to have far far more dilution as you raise more money.

True but my point still stands even if there is dilution. 0.5% of Facebook would still be worth a billion dollars. Even at a company that's 1/100th as successful as Facebook that's a $10M stake.

"1% of the next Facebook would definitely not be purely symbolic."

But what percentage of companies are going to be the next Google or Facebook or Apple? Companies that make their founders billionaires and their employees millionaires are very, very rare. If you were an early employee of any of these companies, you probably couldn't have predicted how big these companies would be today.

There are also exits along they way via acquisitions that can produce good outcomes. But overall yes, it's true that it's quite rare for a startup engineer to become a multi-millionaire based on a few years work early in their career.

However it does happen and it's an opportunity uniquely available in the startup sector.

The great thing is you have a choice. You can go work for an established company and make $150k+ or a startup that you believe in and would have fun at and maybe have a shot at really big money 5-10 years from now. Up to you.

A $125K floor-rate in the SF-bay area sounds about right. The competition for developers hasn't let up, and many startups ($10M+ in funding) are using cash as a weapon.

This IMO represents the biggest threat to early-stage startups out of YC or other incubators. Anything less than $100K is not a liveable salary in San Francisco.

There are a number of details to understand that explain the salary / equity.

The first thing is the range. More jr. candidates are on the lower end of both salary and equity. Yet relatively close to market rates. More sr. candidates are on the higher end of range and usually have to decide if they value equity or salary more, for the final compensation package.

The second thing is the type of start ups that offer this level of compensation: early stage / seed-funded. These are not Uber, AirBnb, Dropbox, Pinterest, etc. especially given that many companies that post on HN are graduates of YC, these guys have their first major investment to work with post-demo day. They aren't working with $25-50-100 million. They have $1-2 million to make the most out of. This limits the ability to pay market rate. Yet allows for engineers to be on the ground floor of a potentially a huge opportunity (or not).

Third thing is the equity...and a bit of a reality check. The founders came up with an idea, worked on it for quite a while, with $0 salary, applied to and got into YC, raised (in all absolutes) a large amount of money (you try getting someone to give you $1 million), gave up some of the equity for that funding, and you want what, 10%? 20%? What sounds fair? Unless you're the first engineer, with a background of leadership that will make you qualified to lead the growing team, 1% is extremely fair. If the company is truly successful, you're looking to make over $1 million. Even if you're underpaid by $50k, that's 20-years worth of difference, which you'll see in under 5 years. Of course there's no guarantee, but that's business.

The other question to ask is are you getting options or RSUs - huge difference.

And finally, the low salaries are typically brought up to market rate after series A (the first big round). This round is usually raised with 0-2 years of the seed round. So you take a risk of $50Kx2 and stand to make $50x20.

That doesn't sound that crazy.

> If the company is truly successful, you're looking to make over $1 million. Even if you're underpaid by $50k, that's 20-years worth of difference, which you'll see in under 5 years.

You can't evaluate the "equity" part of compensation like that. The chances of that happening are very low, and you're most likely to get diluted further. E.g. the chances of >$100M exit are 10% (which is a huge overestimate), it takes 5 years, and you get diluted 50% (so you end up with 0.5% of the company): you get $1M, which is $200K per year, with a probability of 10%, so the expected value is $20K. Sure, the exit might be an order (or two) of magnitude higher, but the chances of that happening drop even more rapidly.

Of course, you might be risk-loving, accept the equity not for the expected value, but for the variance, but then again, I don't think it's (usually) worth it.

I agree that the risk is high and isn't for everyone.

The risk is high for a very low return. A best case of $20k? That difference is very small for a very large risk, and the pay cut from an established company it obviously not worth it.

No, $20K is the expected value. Best case is $500K or $100K/year (for a $100M exit).

It's not even a question of risk tolerance.

If you're willing to lose $100k, that's your risk tolerance. Some of the bets you can make with that $100k are much stupider than others, based on expected value. If you just want the thrill of high variance, buy lottery tickets.

To put it another way: VCs take risks too, but they spend all their professional efforts trying to figure out which risks are worth it. If you can get the same terms that they get, then you at least have some validation that the terms aren't deliberately screwing you. Forgone salary is just dollars, same as the money the VCs put in, and just as useful to the company. If you're going to forgo $250k in salary over five years, you should expect to end up with equity equivalent to somebody who put that in as cash over the same time period. If you end up with less equity, or less senior equity, you're probably getting screwed.

If the engineer does an excellent job, proves his value to the company, etc., he should be able to push for more shares as the shares get diluted, right?

It is not $50x20. It is $50 x 20 x percent-chance-of-amazing-exit. The 20 is a variable too. For the 20 multiplier, you are seeking the billion dollar valuation. This takes, usually, around 7 years and happens to the top 1% of start ups.

$50x2 compared to $50x20x0.01 is more realistic. An employee's chance at equity is offset by the opportunity to gain experience.

I was approximating of course. Yet the $50x20 is a $100 million valuation, not $1 billion ($1 million is 1% of $100 million, not $1,000 million). This isn't that unheard of.

And definitely agree with experience and knowledge that benefits a career for the future.

RSU: http://www.investopedia.com/terms/r/restricted-stock-unit.as...

Hi, I'm italian. I had a "good" chance with an italian startupper based in SF, I worked from home in Italy while waiting for my visa. Never seen it. I had a contract for 4.2k$/month plus stock options but he said that he could not send more than 3k$/month in italy to avoid IRS checks, so I agreed to get 1.2k$/month in sign in bonuses when I'd have been in San Francisco. My salary began to be late after may (I billed June in November), my visa was never ready... and in November I broke up. I just said him to fk off losing my 28k$ credit just because this "good person" said me that I WAS A ROBBERY because I did not give him an algorithm. The fact was simple: he did not payed for that algorithm, it should have been done in December. I did a lot of other works till that moment, like: tutoring juniors, managing comunication with frontend team and backend development with SF resources (during italian night), I did releases and saved his ass when some SF guy did some mistakes! So by the end, he payed a Senior Software Engineer the great amount of 18k$/year. I was getting mad, so better say a "fk u" than going crazy. He proposed to pay me a small amount of money to get an agreement where I declared to never speak bad about him... he was a fool! I'll never agree with that. My idea is simple now: MONEY NOW! WORDS LATER! Don't get fooled by these people. Shares are not going to make you rich in the 99.8% of the cases! I passed a year listening to stories about our successful future, about milionaire investments that he never got and about how beautiful would have become my life in silicon valley... this kind of people is made by great liars... trust them only if they give you warranties and expirations to refund you (I bet nobody will never give that to you because "it's a startup")! I got no contracts, I got no money, my ceo was a "good italian" entrepreneur in silicon valley, the same "good italian" as our politicians: they speak good, they act bad... I will never trust someone like him again. I will just start a procedure for an international fraud just to do my citizen duty. Take care and be warned!

There's two problems with the startup salaries.

1) They really do want someone that cheap. But as an Engineer we know the Cheap comes out Expensive; so if you respect yourself you should know better not to apply.

2) Really it's a different location. You could(2014, don't know if this is still true) find a DevOps employee for 220k for intermediate/experienced level. If he flies to NY his starting Salary is about 300k

Additionally; we have a surge of _disruptive_ capitalism. I have seen a company try and drive down the salary for a job in the area; they get what they pay for.

Respect yourself and when your gut says this job is a Lemon; either ask for more or tap out.

This is so true. I've been interviewing for summer internships with various startups in NYC/SF. I'm not a fresh graduate. I have over three years of quite relevant work-experience. The consistent opinion of all the start-ups are that they treat their interns as full-time employees in terms of responsibility, ownership, etc. It's only during compensation that they start talking about risk, start-up status, etc. If you really want to treat us like full-time employees, you should consider paying the interns like full-time employees as well.

A) Working in startups is more interesting/fun (If you can have fun being stressed out) than most companies. A lot of people will compromise compensation for fun.

B) The benefits of income have diminishing returns (Very scientifically through the tax system, but also because you mostly only become able to buy things lower on your priority list.)

C) Lots of people make do under 60k, software engineers are mostly able to make do as well as them. (A couple of exceptions for engineers who live in very expensive cities, have a lot of student loans, or are likely to burn out quickly)

Have you considered it is a negotiating tactic on the part of the company? If they listed starting salaries at $140k that puts a floor on any salary negotiation with a prospective candidate. Where as if they open ridiculously low then come up 20% above the job add number in the initial offer the candidate might think "wow they really want me" count themselves lucky and accept that thinking they got a good deal. It could also be meant to target candidates outside the Bay area where 60-110k might be a decent salary.

However, if they advertise a ridiculously low salary, they risk being ignored by most competent developers.

Maybe compensation is more negotiable than it seems? Or people are willing to lower their rates to associate with the YC brand? Maybe they treat it more like an internship in preparation for starting their own company? Perhaps work conditions are so great that it doesn't feel like work at all. Finally, startups might be willing to take a chance on applicants lacking credentials.

Just guessing here. We would need to ask someone who accepted an offer and they might be, understandably, reluctant to discuss it in public.

"I would anticipate a floor on pay of $125k. I don't care if that's a designer or a developer or a marketer or what"

We surveyed 250 vc-backed startups who raised more than $2,319,116,164 and found that it's much, much more complex than $125K for everyone.

If you are interested, you can get the report at http://ventureassembly.huddlemetrics.com/get

Again, disclaimer: I'm part of the founding team.

I worked at a startup that was bought by google and my options weren't worth anything. Strike price has to be pretty low for things to turn out well for you.

Depending on where you are and the size/stage of the startup, those numbers seem roughly in the right ballpark. To compare, check out the salary resources[1] and equity resources[2], which have calculators and tables that show you typical numbers.

  [1] http://www.hello-startup.net/resources/salary/
  [2] http://www.hello-startup.net/resources/equity/

One of the things I've noticed in the NY market is that you're competing against the financial giants, who offer correspondingly huge salaries, and who tend to churn through people very quickly.

If you want to lure someone to your company, you have to compete a lot more on salary than you might have to in SF; in the back of their mind they're comparing you against the big bucks they could make down the street.

Is $125k decent in NYC for a vital position? It seems low after adjusting for living expenses. I'm guessing you are factoring in equity as well.

$60k and 0.5% for engineer ar employee #5 sounds low. But you're missing that YC companies are attractive employers and a lot of people are motivated as much or more on what they are working on and with who. And that a reasonable case can be made that YC equity is more highly valued than non-YC equity. Also, it's likely that $60-80k salaries are temporary reductions pending funding.

All of this boils down to one word : GREED. Most people starting startup in bubble by definition greedy. They are not there to change the world per se, like Elon Musk. They want to have more equity when they sell the company. Period.

I believe first 5 people in the company should be given double digit equity.

Elon Musk is able to do what he does largely because he made himself rich off a startup. If you want to be Elon Musk, you have to be rich.

Even PayPal was bootstrapped partly with what he made off a previous startup.

http://www.usatoday.com/story/money/personalfinance/2015/01/...

I don't really know the market that well, but I've had trouble securing more than $85K as a full stack developer. It seems in Southern California that the max pay for that kind of position isn't much more than $100k.

Every time I've been offered options / equity in lieu of higher salary, I've taken the higher salary instead and ended up better off.

Some people don't want to play the odds game and would rather just have the money to use now.

<s> Let's also talk about the incredibly short shrift founders get who are bootstrapping pre-product.

Why do I need to complete a product and make sales, get funding, before I can pay myself a salary? Building a company require resources. I have to eat and pay rent. But my company, without resources, can't pay me, even if I'm 100% of its labor pool, being a solo founder/CEO (on the startup I'm referring to - there's another I'm involved with with a cofounder);

No salary. Why can't I just write a SMALL check to myself, why do I need either investment or sales to do this? Can't the money just NOT have to come from somewhere? This is rather unfair, I hope people here will agree.

The only way I see out is building massive value. Unlike your example, where you get 1% while having a six-figure salary and chance to learn to do it all and become a millionaire on your own next, I am not even earning 5 figures.

how is this fair? Maybe I shouldn't be doing a startuuuuuuu -oh, I see what your problem is :) :) :)

</s>

Seriously. Why do you want to work for a startup if you don't want to end up with 1% of a $100M company, while receiving six figures for the privilege (i.e. someone is paying you, six figures, to play the lottery; and being highly technical and having direct effect in your role, you both have asymmetric information and can build the lotterys' RNG yourself, e.g. by building the best product on the market and protecting that status.) Finally you get to learn everything it takes to found your own startup and receive funding later.

there are a million BigCorp's that compete without regard for startup aignment or risk/reward. what makes you want to work for a startup anyway, given what you've described? Wouldn't you be a better match for Microsoft or Google?

honest questions here and a perspective from the other side - someone with a large founding appetite rather than salary requirement.

The odds are hilariously against your startup being a $100MM company. They are not hilariously against your company being shitty, exploitative, and--my favorite--promising to prepare J. Random Engineer to "found their own startup" while instead leeching their free time and their weekends for your dream of socialmobilelocal.

And let's be very clear about something: "making six figures" does not mean you are not being exploited. The magnitude of that exploitation certainly differs from that of economic underclasses, but the attitude does not. And I am mostly out of startups these days because of the attitudes expressed in your post. I cheer for a bubble, because it'll wash some of the toxicity out--and you espouse a lot of it.

the odds are hilariously against ycombinator picking 716 startups and having those companies end up with a combined valuation of $30 billion, an average of $41 million, including only current rounds that have already closed.[1]

but it's a fact, and statistically relevant.

if you have an allergy to hilarious facts, you probably should stop learning about startups, because there is a lot more where that came from.

[1] http://blog.ycombinator.com/yc-portfolio-stats

One problem, though. You are confusing current valuations based on what price investors are willing to provide additional funding at, with the liquidity/exit valuation (IPO, acquisition, bankruptcy) which in many cases may be 0 or close to 0, if the company does not find any takers and runs out of money.

Given that 125k is apparently "low", and barely liveable in Silicon Valley, can someone please break down the costs for me? Even at a rent of $2-3k, you'd have ridiculous amounts of money left.

Given that the median home price is over $1 million if you want to own a home you're going to be paying closer to $4k/month for a mortgage. After taxes that 125k is closer to 90k take home and once you put away more of that for retirement/savings you're looking at only $2k/month to pay all the bills and pay for food. For a single 22 year old it's no problem, but for someone trying to raise a family and support others it will be scraping by.

Well, there seems to be no limit to the price of housing then, $4k is ridiculous. Whenever I see these Silicon Valley salaries I can't help to be envious, but I guess I underestimate the costs...

A house is something you can sell. If you need to pay a lot of money to service a big mortgage, that doesn't mean you're worse off than someone paid slightly less somewhere where housing is cheaper. Depending on how much your loan costs you (and property taxes, and everything else), you're still potentially coming out ahead.

Rent is a deadweight loss. OTOH, the cost of a loan combined with the risk of relying on property as your primary lifetime investment may make it worth it.

I see this viewpoint expressed way too often on HN by people who should know better. Mortgages are not all upside. See http://www.nytimes.com/interactive/2014/upshot/buy-rent-calc...

I know mortgages are not all upside. Mortgages do have another effect, not taken into account often enough: they are a forced savings mechanism.

(I rent, BTW.)

Orrrr you could do what normal people do and set up your direct deposit to put a certain percentage into a savings account. Taking on a mortgage because you don't have self-control sounds disastrous. Also, what happens when you need to dip into this "savings account"? Refinance your house?

I grew up in the Bay Area and that sounds about right. To live comfortably while raising a family in a South Bay suburb you pretty much need both parents making six figure salaries.

I took an easy corporate job with middle to low salary, and the equity bonus I get is whatever I manage to create with my saved time and energy. Anyone else chose this path?

Yea it's unreal. Startups are looking for "rock stars" to work 50+ hrs/week for entry-level salaries and pathetic amounts of equity. No thanks.

Right exactly which raises the point - why work at a start up if you will not hit it rich like it was 1999? The short answer is to work with really smart people who will teach you what you need to know to become them.

Always reminds me of this: https://news.ycombinator.com/item?id=2949323

I am sort of new to the whole startup scene. How much should I value equity if the company is only a year old?

Is there a formula or some better way I can gauge it's worth?

If you're talented with a strong, provable track record you can negotiate 150-180k easily. With that, though, expect equity < 1% which is normal.

Basically, people are full of shit and trying to cheat you. Generally their businesses fail in a competitive environment.

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Cost of living is much less here in SV vs NYC. Still, what you're seeing is a joke. I wouldn't take such a job.

In Silicon Valley developers are gods, in NYC wall street bankers are gods.

(Bearing in mind this is not from the Valley POV, but I recognize a lot of the same dynamics here in Singapore)

Psychologically:

The founder is stuck between a rock and a hard place. With limited cash to work with (seed rounds are tiny here), that extra 10-20% could translate into 10x that in revenue if used on say, Google ads instead of your salary. On the other hand, equity is also scarce; the founder has just given up 6+ months of his life and career and taken enormous risks to start the business, it's starting to take off at last (hence the hiring ads), he got some funding closed after months of negotiation, so he considers that his equity stake was "earned" and a newcomer "series A/B employee", even at early stage, should go earn theirs as well. There's often not much equity left anyway, not enough for control even after a seed round, so founders often don't have that much to give up.

More cynically, this often leads amongst less technical founders and management to the "let's hire young, cheap guys, they work harder too, these experienced guys have ridiculous expectations". I've stopped counting the number of times I heard that (sitting on the management side, advising other companies, etc.). Just last quarter, it was a major angel investor who told my client in his advisory meeting "you should get some unpaid interns from universities to do QA, and offer the best ones a paid internship". Just last week, a colleague who wants to start his own thing refused my offer to introduce him to experienced engineers I've enjoyed working with, because he'd rather "go for cheap people who'll work for free initially".

(As an aside, this fear is misplaced. I know of at least two CTOs who worked for "free" for 3-6 months until either revenue or funding happened; the second was in his 40s and had 3 kids...)

The investors are a significant source of pressure. Not to say they all do this, but a lot of the more "MBA" types consider headcount a KPI to be optimized, so they push you subtly or overtly to reduce salary, hire cheaper people, negotiate harder, and so on. Think of it as reducing the cost of buying out of the money options (from their point of view). One HNWI who I once considered a friend stopped talking to me after I pitched him an idea, he offered me seed funding on the condition I take no salary until revenue, and I declined (having better options). For some reason, that made him very angry... It's considered a key business skill amongst those people to get "cheap" talent and a failure of your management skills if you do not. This is even more the case when your choice of tech stack and management style encourages wild growth in the engineering department (think Rocket Internet companies with dev teams in the hundreds) and where that 25-50% discount on market rate translates in quite substantial savings.

Finally, both from investors and founders, comes the idea of "hedging". Why don't a lot of startups use Haskell or Lisps? Not because they can't find talent (there's plenty) but because it's a lot harder negotiating with a Haskeller with 10 years experience and a PhD, even with the "Haskell discount" priced in (they will take less money to work in a more interesting stack) than with a fresh grad from a local university with some basic understanding of RoR or Django and hopes they will become the next Zuckerberg. This makes the latter a lot more replaceable, and investors don't want their companies hostage to the tech talent.

The rest is really stuff that is somewhat right. It IS nicer psychologically for certain personalities (mine included) to have more responsibility, less bureaucracy, a friendly and slightly hipster work environment, a younger set of colleagues full of hope and energy, and a fast feedback loop (it's easy to become indispensable and add a lot of value everywhere in a startup). It IS somewhat true that you will gain experience - if only seeing what not to do - that will be very valuable once you start your own thing, and that spending a couple years on a reduced salary hopping a couple of 10-100 employee startup jobs can be a better use of your time as a future founder than doing AI research at Google.

Repeat after me: not all startups are created equal.

I completely agree with you :) there.

It seems like all the positions you mention, at least for developers, are looking to hire junior developers with that salary (though they may not realize it themselves). In my limited experience with NYC jobs, the salaries tend to be a bit lower than SF or Silicon Valley, despite the equal to greater cost of living. For senior positions in the Bay Area doing web development and such, I see salaries in the $140-$175 area, with most being around $140-$160k. Actually, these numbers haven't really changed in the past four years or so, which makes the discussions about salary inflation puzzling to me. I'm sure you can get more at Google and such, but these are the typical offers and ranges I've seen at various companies, most of them startups of some sort. NYC should be on par. There might be more companies that don't want to go as high, but there will be plenty of companies that do in both cities.

There is no shortage of tech workers, but companies seem to have trouble finding qualified ones anyway. What puzzles me about this, is why a company would refuse to hire someone they really want because of salary, yet settle for someone that they're not that impressed with simply to save $10k or so a year.

EDIT: Note that I ignored the equity completely in this case as it's really irrelevant (generally worth nothing).

That's a good point you are making. There seems to be a congnitive disconnect when employer says that they are looking for 10x engineers, but then not willing to pay them even 10K extra. In my opinion, and experience with hiring engineers, the 10x'ers are definitely worth the extra salary and a lot more!

It's almost at the point where the combination of 10X, standard 'senior' developer role and salary is a contradiction in terms. There are some highly talented developers doing very senior roles on teams, some founding their own businesses and a large number doing contract work. Very few 10X'ers value themselves at below 2x and almost no companies have structures that allow them to play double an average developer salary for talent.

SF cost of living crossed over to being higher than NYC five or six years ago. I'm from NYC and remember going to SF in 2007 and things were noticeably more expensive then. That's part of the reason that salaries in SF are a fair bit higher.

Well it really depends if by NYC you refer to the whole of NYC or to Manhattan. I think you're right when comparing to the whole of NYC, but since most jobs are in Manhattan, and Manhattan is still more expensive than SF, then it doesn't make sense that jobs in Manhattan are not paying as well.

Young people don't really want to live in Manhattan anymore though and neither do young families. Brooklyn is way too hip and Manhattan isn't enough space.

Everyday expenses, like food, are still quite a bit cheaper in Manhattan than SF. Even if it's just an issue of tax rates.

Confirming that Manhattan is both much cheaper or more expensive... depending on how you live.

Manhattan, with their rent control laws, has one of the most bi-modal distributions of cost of living, probably in the world.

Doesn't really make sense when people talk about Manhattan as if there's only one way to live there. Tons of people still live the broke artist lifestyle there for very cheap -- although you'll have to be willing to have apartment mates and technically bend a few laws.

Agreed. I'm profoundly lucky to have the rent controlled apartment in Manhattan that I can live in by myself (moving back there very soon).

I just can't do roommates anymore at my age and I can't do that lifestyle much more either. If I didn't have this available I think I'd be looking for work in the midwest or south instead. That lifestyle is just necessity though, not really a "broke artist" thing anymore.

New York's bohemian culture (and it was probably the last city to really have one) packed up and moved on a long time ago: In the late 80s/early 90s or after 9/11, depending on who you ask. What we've seen since is really just a poor facsimile.

I think NYC has better public transport like London - making commuting feasible.

eg I work a 500m from St Pauls on the banks of the Thames but I don't live in the City its self.

But the NYC subway renders that far less important. I have always worked in Manhattan, and never lived there. The level to which the subways open up the city cannot be underestimated (but investment in the subways can, and is, always undervalued)

I've never seen base salaries in the Bay Area at $140-$160k. It's more along the lines of $120k-140k on average for well known companies. The ones you've never heard of barely crack $120K.

You should try looking at larger companies. I've seen salaries above $200k in the south bay for mid-level programmers.

Most of the well known companies in SF are not necessarily tech companies. They make small apps, games, or websites. Some of the companies include Zynga, Twitter, Salesforce, PG&E, Firefox and many of them do not offer $200K for mid-level programmers. Those are for leads or Managers.

Just did a quick search for Twitter for example and it's listed at only $112,760.

Well, now you know they exist and that you can ask for much more. Source: multiple offers in the bay area. I believe the highest salaries are near Mountain View and that part of the valley, where you could possibly get nearer to 200k.

Yes, my comment was for SF and not South Bay where Facebook, Google, etc are.

$140k is very typical in the Valley from what I have seen. SF salaries seem to be $20k less, for far more hassle (increased rent, poor commute, etc.).

The reason YC companies are offering salaries like that is because people accept them.

If people didn't accept them, they would offer higher salaries. They'd have to.

And if people are accepting those salaries, then that's fundamentally what the position is worth.

Why would they offer more money? There's no such thing as a salary floor for a position. There's a salary floor for a specific developer. It's based entirely on what that developer is willing to accept.

I completely agree with your market forces answer to the salary compensation numbers. So it's not interesting why YC companies are offering salaries like that, rather its more interesting to wonder why they are willing to accept the developers salaries like that filter for.

The developers who would accept those salaries either are a) worth less than the median salary b) don't know their value in the industry c) are naive about the true value of the equity part of the compensation or d) are happy to not maximize their earnings.

All of those filters seem to bias towards inexperienced developers without others who rely on their income (ie young developers from relatively financially stable backgrounds) or those who have no other choices.

So that seems to imply one or more of the following:

- software is the first craft ever where experience does not improve performance.

- writing good software is not important.

- neither is long term team cohesion, as that is very difficult to maintain in the face of chronic underpayment.

So the most likely thing this implies, is that the successes YC companies are shooting for on not predicated on writing long term sustainable good software. Again, there is nothing wrong with that. But I worry that when that isn't explicit it has negative ramifications in environments where writing good software is important for success. If people confuse success as a YC company with success at writing good software they may take the wrong lessons away.

Before you start your own first startup you wold do well to work for someone else's. Learn on their mistakes, on their dime, make connections while you can. It's far more expensive to do it all on your own dime.

The point is: are those who accept those salaries good enough? The first hires at a startup that does something technically challenging can be very important for the startup success.

Perhaps they are good enough for the stage the company is in. Not all startups need highly-skilled developers when all they're doing is build CRUD apps.

>The reason YC companies are offering salaries like that is because people accept them.

But they've also been claiming that they're not getting enough qualified applicants and positions are going unfilled, which suggests that either there truly are not enough engineers to go around, or these salaries aren't high enough to attract them.

If someone accepts a position for less than their worth, that's a market inefficiency, not what the position is actually worth.

"I'm only getting paid $100.000 per year and it's so low, boohoo"

Jesus.

I live in the netherlands, which is a first world country with a very high cost of living, and the average senior developer here only gets paid half that money. If you earn more than that you belong to the 1% most earning people on earth. Have some perspective please instead of whining about how bad you have it.

This is the dumbest comment I've seen on HN this year.

Even if he were in the top 1% (which he isn't), why shouldn't he strive to earn more and become top 0.1%?

Just because developers in your country can't negotiate better salaries, doesn't mean the rest of us should suck it up and only eat the breadcrumbs offered.

His comment was offhand, but was rooted in truth. Wake up, this is a 'bay' thing. People in this thread are throwing around salaries that amount to more than any doctor, lawyer, or politician makes in most major world cities. A lot of people in here need a reality check, comparing their 'profession' of front end jQuery to what a doctor does - I can't believe the person above made that remark. You're all worth what the market will pay, yes, but have some humility please. We all know we're in a bubble here, no need to get a big head about it and act like 100K+ is your god given right to what amounts to one of the least capable, accountable, and professionally trained careers in the developed world. Pipe down, nobody in the late 90's bubble talked like this.

This is not a 'bay thing'. I make much more money than he complains about, and I work remotely for US companies.

Most developers are underpaid, most don't even know by how much. We provide a lot value, we automate things resulting in tremendous savings for the businesses.

Most doctors don't need to learn constantly. And we're not talking jQuery. Yes, there are hacks out there who only know it, and they do deserve a low pay. Most front end developers need to know a lot more than just jQuery to make a modern website. HTML/CSS/JS/optimization/image compression/SVG/frameworks/cookies/local storage/browser compatibility/W3C validation/debugging/data structures/algorithms/etc. The list goes on and on.

If programming were easy, everyone would do it. There's a reason developers are expensive.

> "I'm only getting paid $100.000 per year and it's so low, boohoo"

And you advocate that more of the wealth that we create by our own labor goes to the only other involved party - those LP heirs who do not work, and parasitically suck millions and tens of millions and hundreds of millions each year from those of us who do work. Me saying I should keep more of the wealth I create is "whining" according to you. I guess the parasite heirs who suck off my labor and their toady advocates like you must hold the moral high ground then. You're the one who needs some perspective, parasite.

Do you earn as much as the equivalent experience in the other professions then you are being take advantage of.

A simple google finds that in the Netherlands a Doctor makes between ($130,911 and $252,727) so you are being taken for a ride

you also have to factor in the fact that, as high as it is, housing cost in SF and in the Bay are still double digits percentage lower than NYC. Living in San José or Palo Alto is something like 30% less expensive then in NYC. That's big, considering you might be paying 35k a year for your housing.

Actually seems to be the other way around in my experience.

Not sure where you're getting your information from. SF became more expensive than NYC a couple of years ago.

http://www.cbsnews.com/media/top-10-priciest-us-cities-to-re...

http://www.fool.com/investing/general/2014/10/12/most-expens...

Not really. If you feel compelled to rent a one bedroom apartment in the West Village or Williamsburg maybe.

There are plenty of cheap, low crime places to live within the city limits with access to the subway and local supermarkets etc. They might not be the center of hipsterdom, but they are affordable.

In the Bay Area, Caltrans trains do not go south between midnight and 5AM. Same with BART trains leaving San Francisco. This was a problem when I was out there. New York is not like this - PATH, LIRR, Metro North, and NJ Transit have trains running at all hours. There are plenty of affordable places with a 20 minute commute to Manhattan, and even more within a 25 minute commute, and more within a 30 minute commute etc.

I see people move to NYC, insist on living in a nice part of Manhattan, then complain how expensive their apartment and groceries are and how small their apartment is. There are plenty of nice, cheaper places they could be living if they were willing to be part of the dreaded "bridge and tunnel" crowd.

I don't have any insightful macroeconomic explanation to offer. Just my $0.02: if you are complaining about earning $80,000 to sit behind a computer screen and type all day, you are one entitled SOB. There are 10 million people in China and India who would probably cut off their right arm if it meant they could work for a well-funded startup in the Bay Area for $40,000 a year. They'd make it work even if they had to live in RV's in Fremont.

So what? By your logic we should all feel fortunate we have a toilet that flushes or fresh water out the tap because not everyone has those and maybe we should but that wasn't what he asked was it.

He asked why is there such a big apparent difference between similar roles in different places, which is a perfectly legitimate thing to ask and could have done without the holier than thou spiel.

"Sit behind computer screen and type all day" is the worst thing I have heard about my job and "cut off their right arm if it meant they could work for a well-funded startup" the worst about my country.

It requires great skill to build a company or be the part of first 10 employees. You cant just pick up a person on the street who knows how to type and expect them to build a Google. And as far as the India/China situation is concerned, you get to brag only because of the currency conversion rates. Lookup the number of Indian and Chineese employees in top US copmanies and startups and also do some research about the startups in these countries, if you know how to type into a search engine.

> if you are complaining about earning $80,000 to sit behind a computer screen and type all day, you are one entitled SOB.

What does that make the LP's, and VC's, and angels, and accelerators, who do no work, and sit on their yachts whining how much money that the workers who do all the work are making?

I do all the work and I create all the wealth. If I am being paid $80k, then on average I am creating $100k, or $120k etc. for the company. It's a joke that the parasites who live on my sweat, and their toadies like yourself would use the word entitled. Yes, I am entitled to the wealth I create, in fact I am entitled to more than that.

If the wealth I create does not go to me who worked to create it, who is it going to? To the lazy heir LP. You advocate more going to these parasites which just reflects how you think - like a parasite.

at an agency I worked at, every employee was supposed to bring in about a million bucks a year on a 70k a year salary.

OMFG this reads exactly like some communist screed with one difference. If you own a single laptop you own 100% of the means of production, you do not NEED LP's, VC's, Angels, or a paycheck. If you want to keep 100% of it, then go, code up your own damn site like any number of people here did, don't take a dime from anyone and go produce some value and keep all of it. There are basically zero costs involved with launching a web startup. do it then. you're acting like this is the nineteenth century and you're working in some factory owned by a VC. you own the tools. what exactly are you missing? Go build something and put it up. right now. tonight. go go go go go go.

> this reads exactly like some communist screed

Well, if the idea that people who work and create wealth should keep the wealth they create is a "communist" idea, then so be it.

<sarc>

you have a moral duty to quit your job and code a site you own 100% of, using your laptop which is the means of production. how can you support the unjust social structure you're a part of today? The people working in your office as support staff are letting you generate value neither you nor they keep.

You have a moral duty to resign today and code a site on your own laptop, from home, owning and keeping 100% of the wealth/value.

or to update your philosophy to be practical, sane, and not hypocritical. either way you cannot continue as you have written. it is unjust.

</sarc>

In case it isn't obvious I say this tongue-in-cheek, and expect you to update your philosophy and not your work conditions.

but the choice is yours. Today, you are the factory owner. Go home and turn it on. or stop complaining. here HN literally supports both options.

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