
Ask HN: Why are startups all offering 140k base? - confusedapp
I worked for a startup that recently shutdown. I am interviewing for a new job and the offers are are starting to come in. Bizarrely, each startup is making the exact same initial offer of 140k base. The startups all different sizes, from 10-100 person companies. The roles are each different ex: frontend dev, fullstack dev, backend dev, or ML data infrastructure.<p>How can I possibly be worth the exactly same amount across each of my different skills to different business models in different niches? Is there some though leader going around in the startup space that is pushing a &quot;140k should be enough for anyone&quot; story?<p>I made 196k base previously (traded equity for more salary), and they were happy to have me. Am I just blowing the interviews and these offers are the bottom of the barrel grunt work? I mean 140k and maybe 30k worth of options (at latest 409a valuation) vesting over 4 years is a sharp new grad territory. When I ask companies how they calculated their offer, they all say the role &quot;should be thought of as equivalent to an L4 at Google&quot;. That is obviously bullshit because I hear Google L4 total compensation is in range 250-350, not 147.5.
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seattle_spring
140k at a startup does roughly map to mid-level (L4) Google engineer in terms
of YOE. No startup with only 10-100 employees is going to offer a Google comp.
I'm not saying it's OK, but that's reality. If a startup offered 200k worth of
options at their current valuation, they'd probably run out of stock in a few
weeks. They have to bank on employees being OK hoping that the stock will
appreciate considerably.

I know conventional wisdom says to not share your current salary, but in your
case I would consider sharing your previous 196k base before they can give a
low 140k number.

Edit:

> Is there some thought leader going around in the startup space that is
> pushing a "140k should be enough for anyone" story?

Probably not, but I suspect they're all pulling from the same "market
analysis" surveys that probably all say that an L4 at a company of size 10-100
makes between X and Y. They probably all target the 50th or 60th percentile,
and then make you the offer assuming you'll negotiate upward 10-15k.

~~~
confusedapp
Thank you for the market pricing info.

I don't even want 200k worth of options. I want cash bonuses from delivering
the features that sign profitable customers with a speed that my bosses think
is improbable.

I am happy to be paid out of the money that I went out and brought in, but
every company I have talked to is incredibly allergic to any suggestion that I
be paid real money for the value I deliver. Each time I have offered to take
the low base offered but with 0 options and a cash bonus system based on
directly attributable sales, the company comes back with not a culture fit and
declines to proceed.

I am freelancing right now while I look for a job and find it very frustrating
to work as a contractor selling turnkey business problem solutions to startups
(complete apps, setup CI, sso, add permissions to existing app) and have them
not even negotiate quotes for day rate of 1.6k, but then when I offer to focus
exclusively on a single business as an employee then suddenly they can only
see 1/3rd the value in the same work!

I feel stuck where as an employee I am viewed as a replaceable cog who is not
worth the extra time to even think about giving out bonuses, while as a brand
new contractor I am not yet proven/connected enough to consistently fill the
pipeline.

~~~
taurath
> I am happy to be paid out of the money that I went out and brought in, but
> every company I have talked to is incredibly allergic to any suggestion that
> I be paid real money for the value I deliver.

Thats the wrong attitude, generally. You are a replaceable cog - just because
you wrote a billing system that takes in millions a year doesn't mean you get
the cut of those millions - the value isn't from the billing system, the value
is from what the company provides, and unless thats billing systems then
you're not going to get a cut. You're selling what is a commodity and asking
to be paid as a specialist.

------
macando
\- In SV.

\- Knows how business operates.

\- Track record of delivering turnkey solutions.

\- Can bootstrap with own freelancing cash.

Time for you to start your own company.

------
taurath
140k base for FAANGs allow them to get a few new hire suckers, and also keep
the press and glassdoor away from what they're really paying people. It also
depresses wages as other companies latch onto the 140k number and engineers
going into FAANGs will ask for less. Most of the money is in RSUs.

Just avoid companies that aren't paying you enough - you can work your ass off
and be doing wonderful new fancy specialized work and still make 50% of the
prevailing wage, because the company won't pay more.

------
askafriend
It's not a conspiracy. It's at least partly paid market research.

[https://radford.aon.com/surveys/pre-ipo-compensation-
survey](https://radford.aon.com/surveys/pre-ipo-compensation-survey)

------
e1g
$140k base is within the market band for a "good-but-not-great" Generic
Engineer outside of FANG. "Say who?". Says the market -as long as businesses
can place butts into seats at this rate, the price is right. Companies
complain about the lack of talent like people complain about rent - I too want
a better piece for less money, it's true.

> Is there some though leader going around in the startup space that is
> pushing a "140k should be enough for anyone" story?

Imagine a super lean startup with a handful of people. Engineer wants $200k,
her manager reasonably expects a premium on that, and the CTO/CEO is one level
higher. Now it costs $1M/yr for 3 people's fully loaded comp and a closet at
WeWork. Yes, Google & co can pay this and more because 1) their main challenge
is how to build warehouses fast enough to store all that incoming cash and 2)
they don't pay people to work there, they pay people to not work at
competitors or start their own thing. Elsewhere, this comp strategy is
commercial suicide, unless you're building logistic apps for the cartel or
doing gambling, which is about the same thing.

From another angle, there are silverback VCs saying their CEOs should not be
paid more than $150k. Jungle rules take over, and it's quite understandable
that people two levels below shouldn't have salaries higher than the head of
the troops.

> How can I possibly be worth the exactly same amount across each of my
> different skills to different business models in different niches?

What that Generic Engineer does is about as interesting as what a generic
accountant does - i.e. not at all, and will change in 2-3 years anyway.
Frontend/backend/ops use different acronyms, but engineers will engineer. For
example, look at people involved in the revenue pipeline: pre-sales, post-
sales, customer success, relationship manager, account executive, etc. These
are all totally unique snowflake special roles until you take half a step back
and hey from here I can barely tell them apart from marketing or customer
service folks.

> I am happy to be paid out of the money that I went out and brought in, but
> every company I have talked to is incredibly allergic to any suggestion that
> I be paid real money for the value I deliver

The process of writing software is among the trivial parts of building a
software startup. Development work is rarely connected to cashflows, and
should not be incentivized as a rev-share based on specific feature/module.
How much $$ is it worth to do CI/CD, or SSO? No one would do that work. Even
if there was a feature requested by a big client, how much of that money
should go to the UX person, QA person, sys admin, lawyer who reviewed the
contracts, sales person who negotiated the deal, the property manage who keeps
the roof over your head etc. Firms exist as a way to removing transaction
costs among these professionals, who create more value together than
independently. Suggesting you 'deserve' X% is a signal that you may undervalue
contributions from professions other than your own and that feeds the default
"bad culture fit" world view.

> when I offer to focus exclusively on a single business as an employee then
> suddenly they can only see 1/3rd the value in the same work!

"I love you, but we let's stay friends" means she doesn't love you. If you
have a relationship with existing clients, know they business, and they
decline you offers to get more serious for <50% TCO, this is a big red flag.
Maybe they don't have the money etc, but more likely they do not see value in
the work which should be fascinating to dissect and understand, before re-
packaging yourself to strangers.

~~~
macando
It's possible to put a price tag on a new SaaS feature. You can say "In one of
my previous companies we implemented exports to CSV, Excel, PDF and our
customers loved it. We can offer that feature". You deliver it and they bump
the price of their mid tier to $X + $3. Done!

~~~
e1g
Let's try to price out couple features -

1\. Spotify expects 2019 sales to grow by 20-30% but profitability is still
MIA and their net loss will be $300M. Let's say they are thinking to add a
feature to generate Excel extracts of your playlists. You are the product
owner for the desktop app, and the senior developer calls a meeting to say
they had done market research and 300 upvotes on /r/spotify say this is a good
feature, and he's open to all reasonable rev-share offers to implement it.
However, if the percentage is not reasonable, his team is not going to want to
work on this feature. How do you negotiate?

2\. Apple announced animoji as one of headline features for an iOS release.
There was a group of designers and animators working on the Alien animoji. The
Alian animjoi was used in an ad with Childish Gambino to promote the feature.
iOS itself is free, but Apple makes money on hardware with TrueDepth cameras
that make animojis possible. In the fiscal quarter following that iOS release,
Apple scrapped together ~$10B in profit from iPhones. What portion of that
should be assigned to the designer who used Illustrator to create assets for
the Alien animoji, TrueDepth camera people, marketing team who worked on WWDC
slides and TV ads, and celebrity team + lawyers who negotiated with Gambino?

~~~
macando
Spotify and Apple are big, publicly traded companies. People working on their
new features are seniors compensated well above 140k. In a small SaaS startup
if you can design products and code your contribution can be measured in terms
of money. The thing is this clashes with culture of most startups. In their
eyes, commission based compensation is for sales people, not for engineers.

~~~
confusedapp
I do sales. I specifically ask for commission on enterprise sales I negotiate
and sign, not for engineering features.

I have contributed to sales in my last two roles and it is the reason that my
comp was high.

