
Can you make “big money” as an employee in software? - swimorsinka
http://thinkfaster.co/2015/03/can-you-make-big-money-in-software
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philbarr
At least I can make database connections as an employee in software.

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kelukelugames
Was the article worth reading? It had a very clickbait title.

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gedrap
A summary of big tech companies (Apple, Google, etc) salaries in the USA
according to GlassDoor. You haven't missed anything :)

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api
Yes, in a few ways I am familiar with:

(1) Finance. They make so much "free" money that they can afford to just pay
massive salaries and not blink. You just have to be okay with doing things
that basically add no value to anything.

(2) As a _very early_ employee in a hugely successful startup. But this is
roulette, since most startups fail and some only succeed after so much
dilution that your share ends up tiny.

(3) Working your way up to a CXO level (or near) role in a very large
established company. This is hard and takes years of both work and corporate
politics.

(4) There are some niches, like doing IT for oil and gas operations in remote
areas, that I've heard pay very well... but these are almost like joining the
army.

I'd say #1 and #4 are probably the most straightforward. If you want to pursue
#2, you should approach employment with a super-early startup by thinking
about it as if you are an investor. Would you take a small chunk in a seed
round with this company? If not, pass, cause if you are taking a lower salary
+ equity _you are making a seed investment_.

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Plough_Jogger
(2) As a very early employee in a hugely successful startup. But this is
roulette, since most startups fail and some only succeed after so much
dilution that your share ends up tiny.

This is a very poor way of describing the risk / upside of joining a startup.

In the aggregate, the odds of any randomly selected startup may present odds
similar to roulette, but practically, you have the ability to choose who you
work with and which company you work on.

Given the ability to be selective, you can dramatically increase your odds of
a successful outcome, assuming that you have the skill set to a) identify /
evaluate market opportunity / team capabilities and b) utilize your technical
ability to add significant incremental value to the company.

The early team at PayPal did not have a 1/48 chance of success; it was
probably closer to 1/10.

Edit - (Not actually 1/10, but significantly higher odds than those of a
startup selected at random) Odds were chosen to correspond to the given
example of roulette.

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wlesieutre
Roulette players also have the ability to be selective. You just put your
money on the number/color that is going to be successful, and then you have
much better odds than someone who didn't put money on the one that will be
successful.

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Plough_Jogger
'The number/color that is going to be successful'

In roulette, there is no competitive advantage between specific numbers or
colors. In startups, that is not the case.

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arbitrage314
If you want to make "big money," you should pretty much avoid WORKING at
startups at all costs. Instead, get a high-paying job at an established
company, and invest the difference in the startup's equity.

I've considered lots of startup jobs because I believed strongly in the
companies. Every single time, however, I was able to get a larger chunk of the
company by keeping my current job and simply investing.

To give an example, my current job pays about $250k, and one year, I invested
$100k of that into a startup, leaving me with ~$150k of salary. This $150k +
startup equity was a better deal than the startup was offering in both salary
and equity. Plus, equity bought as an investor is much less tax toxic than
equity options received as an employee of a startup.

On the other hand, most people who work at startups aren't interested in
money. If that's you, that's totally cool, and I respect that!

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conjecTech
Your comment assumes your presence/work has no impact on the success of the
startup, which is an unfortunate thing to assume. Otherwise the two equity
stakes have different payoff expectations.

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arbitrage314
Yep, that's a good point. If the startup will be less successful without you,
then it's not a perfect arbitrage opportunity. This would be especially true
if the company were small or starting out.

For most established companies, however, I think the difference of one person
is typically quite low.

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beat
I have a term I call "win at money". You've won at money when you have enough
capital to live comfortably for the rest of your life just on the interest
from low-risk investment.

Can you win at money in software? Yes, but pretty much only by founding your
own company or being among the first handful of employees at a startup that
gets huge. On the other hand, you can make a comfortable middle-class living
at software very easily.

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jeffreyrogers
I think this is a good point. It's also worth noting that there are pretty
much no careers where you can just get a normal job and end up "winning at
money". Finance is a possible exception, but it comes with its own tradeoffs
and the biggest players generally leave their finance jobs to start their own
funds.

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beat
Right. The system is designed so you'll finally save enough to "win at money"
about the time you're too old to work effectively anymore.

What kills me is seeing friends whose jobs involve hard physical labor. They
can't save enough to win at money before their bodies start giving out from
the abuse. In better economies with unions and cultural support, they just
sort of loaf away their less productive, later years. In America, they get
laid off and can't work anymore.

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hacknat
I know an Engineer at Microsoft who makes in the $500k+ range. Trust me, none
of you would envy him (okay, some of you might). The way he does it is he's
the guy who solves tough (not necessarily interesting) technical problems in
the shortest time possible for x important feature. When .NET 4.5 was shipped
you couldn't use the `await` keyword in a try-catch statement, because there
was some issue with the debugger. He created a proof-of-concept in one month,
but he threw an ungodly amount of hours at it. He's divorced and he lives at
work. He's gets huge stock bonuses every time he does something like this,
but, IMO, it's cost him a lot to get that money.

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bdcravens
Key word: "employee". Where someone else tells you what to do and controls
your destiny. You can wrap it up in whatever words are prettiest, but
employees serve the founders' visions for the product, financial rewards, etc.
(which is of course perfectly fine, given the risk founders take)

That doesn't mean the only choice is to become a founder, not everyone is
there yet. Looking at the article though, you see the bias that defines so
much of the literature: despite the fact that we're creating software that
reaches the world, the only place to get a job is the west coast of the US,
right?

Wrong. There are tons of places doing 7 and 8 figures in industries driven by
software. Small businesses. Be prepared to rethink how your career works. If
you want to just hack and live in your little hacking world with your fellow
hackers drinking hacker beer and listening to hacker music, then you're just
an employee. If you're willing to stretch, and embrace what makes business
happen, and apply your technical skills to those problems, and tie your
success to the success of the business, there are some tremendous
opportunities to be had. There are plenty of non-VC'ed businesses owned by
people making real money who are more than happy to reward those who help them
make more.

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giuscri
> Small businesses. Be prepared to rethink how your career works.

could you explain better?

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HeyLaughingBoy
He means start a business doing something profitable.

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nakovet
In between GlassDoor data he talks about founders being the Lords of the
Startup Feudalism and I kinda agree, companies used to pay 25-40k to an
employee, a programmer/engineer can take several jobs from the industry
henceforth the salary is 3x the regular salary. However the successful founder
become rich and invest in other companies small, medium, big and help raise
the inequality.

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ChuckMcM
That is the broken narrative.

An employee can get stock in 5 different companies in 5 years, a founder is,
at best, able to get one company off the ground in 5 years. An employee can
move change jobs (and often get a pay raise) when the unexpected hits a
company puts it on the skid. A founder will never be invested in again if they
jump ship on the company when it hits a big problem. An employee can work for
a cash salary every year, a founder often will spend one maybe two years
without salary. Founders file for personal bankruptcy, employees generally
don't.

And the interesting thing is that any technical "employee" can work for 5
years in the Bay Area and get up enough cash to be a "founder" for their first
startup. (I went 12 years before going into a startup but the earliest I've
seen it be successful is 5, you have to know enough about running a company to
make it work).

The reason the narrative is so skewed though is because you here stories about
the successful founders but few about the marginal ones. You rarely hear about
the person whose personal bankruptcy has made every part of their life that
involves running a credit check harder. For every successful billionaire
founder there are THOUSANDS of millionaire employees.

The problem here is the notion "big money" and perceived inequity of
distribution. But if you actually put everyone who identifies as a "Founder"
in a group, and everyone who identifies as an "Employee" in a group, it is
much more likely the people in the latter category will have retired early.

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ForHackernews
> A founder will never be invested in again if they jump ship on the company
> when it hits a big problem.

Is that really true? What about all the "fail fast" mantras we hear so much
about? It seems like I read about plenty of founders who have run three or
four companies into the ground before finally having a success?

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ChuckMcM
There are two kinds of failing. One is to run, and one is to fight.

For a founder who fights hard, they put in the work to make it happen and try
various approaches when adversity strikes until they, and their investors,
agree they have done everything they can to try to make it fly. That person
will get another shot, because investors do realize that this is a gamble but
they know that if there had been a way to make it work, this person probably
would have found it.

Then there is the founder who never varies from their day one tactics, against
advice from advisors, and then decides, when it is clear the company is going
no where, to resign and go somewhere else. That person rarely gets a second
shot at the prize.

There is a third category of founder who, and this is almost literally true,
curls up in the face of all the stress and shuts down. With luck, their
investors replace them quickly and they get early treatment to avoid PTSD.
Folks rarely talk about them. Their best outcome is to move to a stable, low
to moderate responsibility position in a large company.

If you're a fighter, you can get funded as many times as you can afford
(remember pre-seed is all on you). If you're a runner you get at most two
shots at the game. And if you're not cut out for the life, its important to
find that out and deal with it early, even one person taking the short exit,
is too many.

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mathattack
The link was dead. But to answer the question - I've known several engineers
who have done very well. It's not $100+ million money, but in the 5-10 million
range. The key was both being visibly talented (the kind of people universally
recognizable as being capable of solving the hardest problems) and joining
companies that grow like a rocket (Apple, Google, etc).

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ultrasaurus
As the informal statistics police, I'm uncomfortable with directly comparing
jobs such as lawyer or doctor that require specific (and in the doctor's case
limited) degrees to ones that anyone can claim to be (there are no 15 year old
part time doctors).

Also, while maybe not relevant to a discussion of $200k+ jobs, averages among
employed people may not be the average relevant to you -- it's much easier to
find work as a junior marginal software developer than a junior marginal
lawyer.

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JanneVee
Found an archived link of it if you get the database connection error.
[https://archive.today/WyTCF](https://archive.today/WyTCF)

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signa11
was it peter-thiel's talk that mentioned that you are not a lottery ticket ?

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army
Great, another person who doesn't understand marginal tax rates.

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3327
startup case:

the short answer is no. Why ? Statistics. 1-2% doesn't get you anywhere, after
dilution, vc's getting, stake and if an eventual takeover happens. A 50mn
takeover will leave a founder with about 6mn is an O.K aprox. Granted he had
50% of the company to start with, where does that leave you?

established company case: As an employee you can hit the 1mn mark over a few
years depending on the company. But that depends on what you mean by "big
money"

Assumptions: big money > 5mn

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dangravell
I guess we all have our different requirements but I think that's quite a high
bar for "big money".

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tracker1
NOTE: In many locations without a degree you can't call yourself an
"Engineer".

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jrockway
> Because California income taxes are 10%, salaries in San Jose lose an
> immediate 10% when compared to those in say, Seattle.

But I get to deduct state taxes from my federal taxes, so it's not exactly 10%
different.

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mdorazio
It's still a lot, though. Let's say you make 100k a year. State tax is 10k. If
you weren't getting hit with the state tax, you would be paying $21,175 or
21.18% in federal tax (filing single). If you deduct the 10k from state tax to
reduce your taxable federal income to 90k, you're still paying $18,375 in
federal tax.

So let's compare total taxes: $28,375 with state tax vs. $21,175 without. So
you're paying an extra $7,200, or 7.2% of total income. That's on top of the
sky-high cost of living in CA compared to other locations.

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beachstartup
site is down.

after starting my own company and seeing modest success, i wouldn't want to
get rich any other way. i feel much more in control this way, and even if it
is an illusion, it's a useful one.

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svimma23
Blog is back up now

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Aqueous
"Error establishing a database connection."

I see what you did there.

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gue5t
Fuck money. Hacking is about the novel manipulations of technological systems,
and you're supposed to be poor while you do it.

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aeykie
I always thought of hackers as people who loved various forms of freedom,
including but not limited to economic and technological freedom.

~~~
bdcravens
Yet $2800 MacBook Pros

