
The Perk Bubble Is Growing as Tech Booms Again (Airbnb) - jedwhite
http://online.wsj.com/article/SB10001424052702303763404576419803997423690.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond
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patio11
I do not identify as an anti capitalist by any means, but I can't help feeling
a wee bit Marxy when thinking of someone in Manhattan reading the WSJ opining
that an engineer getting fed by the company constitutes a perk bubble. (I also
get a little Marxy about the perks themselves, as they are _explicitly
designed_ to trick twenty something into not saying what they need to say,
which is "Screw the soda, it's a seller's market right now, and that offer is
under market by twenty thousand dollars.")

~~~
tomjen3
The truth is that most young people do get more out of an office with that
kind of perks than a few thousand extra.

Heck free food, a place to sleep, shower and dry-cleaning? You could basically
live there and would save much more than the 20k in expenses...

Not to mention that it would be a lot more fun than going home and doings
things I don't particulary like, rather than staying and doing things I love.

But that may just be me.

~~~
patio11
So I'm working on a post about the psychology of owning a business versus the
psychology of being an employee today, and this has been weighing on my mind.
Here's my thinking:

There is a particular, exact dollar value which gets you the perk Do Not Worry
About Laundry Ever Again. Google (presumably) doesn't have Google-branded dry
cleaners on the premises, so this can be bought. What $TECH_EMPLOYER is taking
advantage of is that young twenty-somethings think the entire solution space
is "Do it yourself at the laundromat" and that "We'll do it for you" is thus a
magical, irreplaceable unicorn of a perk from a company who really understands
their inability to handle domestic chores.

You can buy that perk. In a high cost area like, I don't know, San Francisco,
I think that it is highly likely that it costs less than $800. Let me check my
guesstimate with the Googles: yep, you can literally have someone come to your
door every two weeks for the year, grab your bag o' stuff, and bring it right
back to you when it is done, for less than that.

You might think "But I have to actually arrange that." No, admin help is
_also_ a perk which can be purchased, and admin help is _incredibly cheap_
because there is virtually _nothing_ that a secretary can do in San Francisco
that cannot also be done by a virtual assistant in the Philippines for ~$10 an
hour. (If for some reason that makes you uncomfortable, bump it up to $20 and
now Nancy is a homemaker in Kansas.)

You could, after having a VA, send her an email saying "Hey Nancy, price out
options for laundry service and catering where I live. I want to never worry
about these things ever again after you handle them, except to pay. By the
way, I like salmon and iced cocoa." and Nancy would come back in a day later
with the number it would take to drown you in salmon and iced cocoa. And it
would cost far, far less than $20k.

~~~
jmitcheson
One thing that springs to mind in your example is the difference in social
status. So I'm generalising (isn't all of psychology generalising..) but a
person who has their laundry done for them by their company seems important
and valuable; a person who pays for it just seems lazy / inept.

For example, I was once told a business suit gave status because it prevented
the wearer from performing physical labour. A person in a suit was displaying
that they did not have to perform physical labour in order to survive, unlike
others who did - thus elevating their status _. Perhaps there is an element of
this psychology in the domestic perks of modern day tech companies: the perks
are displaying that they are important / smart enough to not have to perform
some domestic duties or obtain their own sodas.

_ Interesting side note, that now the hoodie is becoming like the reversal of
this display: it says the wearer is important / smart enough that they _dont_
have to wear a suit

Anyway, just a random though stream. Good luck with your post!

~~~
patio11
_a person who has their laundry done for them by their company seems important
and valuable_

I grant that California may be a funny place, but in what social pecking order
do engineers at Google beat lawyers, doctors, investment bankers, hedge fund
traders, CEOs, assorted executives, or any other profession that routinely
hires household help, when seen from the eyes of someone who cannot do pointer
arithmetic?

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davidw
Perks that are pleasing in and of themselves are nice. Stuff that is designed
to promote this sort of 'vibe':

> Working at Airbnb "is like a really fun school where you get paid," says Joe
> Gebbia, the 29-year-old co-founder of the company, whose offices have a two-
> story indoor tree house and a section of a retired Pan Am plane. "Or maybe
> it's more like camp."

Feels a bit fake to me. It's a job. They pay you to be there, and they are not
your friends. Friends are people who you hang out with after you've both
changed jobs several times.

Also: work parties in SV suck, if you're a straight guy, because there are
_not very many girls_.

Food isn't a bad perk, although fizzy drinks are not very healthy. The best
perk I ever had at a job was a massage. It made me feel great, didn't take too
long, and since most everyone got one, it wasn't like you stuck out for taking
advantage of it.

~~~
Empact
> work parties in SV suck, if you're a straight guy, because there are not
> very many girls.

These same parties can be fun if you accept that you're not going to meet a
romantic partner at a work party. There are a thousand other great social
circumstances which are more balanced and "productive" in this area.

~~~
potatolicious
I'm not in SV (Seattle instead), but I'm _already_ tired of "work parties".
For once I'd like to talk about something _other_ than vim vs. emacs, Android
vs. iOS, Python vs. Ruby, etc etc ad infinitum.

The homogeneity of this environment is aggravating. It takes a _lot_ of work
to break out of it. I'm not sure what it is about geeks, but much of our
community seems to take pride in being about tech - and _only_ being about
tech.

~~~
davidw
One of the fantastic things about moving to Italy for me was meeting lots of
people who do various things in life. Sure, I have friends that I can 'geek
out' with from time to time, but even most of them have plenty of non-
programmer friends. Also, being a programmer, as far as I can tell, seems to
be regarded as a job like most others, not something too terribly nerdy or
uncool.

~~~
potatolicious
I have a coder friend who recently moved to NYC and he reports (for the most
part) the same thing. In Seattle telling people he's a software engineer does
one of two things: it starts a big geek-out discussion about something, or
people roll their eyes "oh boy, _another_ one of you guys". In NYC on the
other hand people regard it as just another job.

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bruce511
What I find interesting is the nature of the perks being offered. So while a
big established business might offer 401K or medical and so on (and to be
fair, it's probable that startups offer some of that too) the focus seems to
be on perks that "keep you at work".

Free meals? Great, I don't have to go home just because I'm hungry. Fun at
work? Great I don't need to go home, or go out, to meet my friends. Place to
nap at work? Shower? Great - I can spend more time in the office.

The work-hard, play-hard mentality, appeals enormously to people who have no
real reason to ever leave work. If all your daily chores are taken care off
(free dry-cleaning, free food), and if your social needs are met at work, then
you'll naturally spend more time there.

This life-style appeals less to me, 'cause I have a wife and kids to go home
to, and a social life outside the office, and hobbies, and fixing-the-roof-
when-it-leaks and stuff like that. But when I was 22 I had none of those
things, and I would have thrown myself at an environment like this. Does it
honestly matter if I'm making 10K or 20K a year less than I _could_ when I get
all my (paltry) living expenses paid for? And the bragging rights over my
peers are worth a LOT.

Is it a bubble? Well, it's a sign of supply and demand reaching the place
where demand outstrips supply. Demand for employees, and also demand for
investment-opportunities (by those with cash). That will inflate salaries, and
lead to creative (read "fun") work environments.

Enjoy the good times, because as sure as nuts are nuts, the wheel will turn
and the down-times will come again. Party hard now, but save some nuts too for
when the supply overtakes demand again.

~~~
bmj
Agreed. But, then again, even when I did work at start-ups in the 90s, without
kids and responsibilities, I much preferred "out of the office" activities. I
thoroughly enjoy programming, and make time to hack when I'm not in the
office, but I also like to do things that have nothing to do with computers,
or the people I work with. So...these perks have always been lost on me, and
like you, I see them as a "perk" at least partially designed to keep you in
the office more.

That said, if this works for other people, by all means, have fun with it.

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mbesto
Are we now in the age of the "Articles using the word bubble to gain traction"
bubble?

~~~
jmitcheson
Perhaps it's a bubble ponzi scheme ;)

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tatsuke95
As an investor, employee perks are fine; trading $x in salary for a
convenience that --when bought on scale or bulk-- might even save the company
money. Employee happiness has tangible value.

On the other hand, as an investor I think I'd see decorating the executive
offices with airplanes and tree houses as excessive and wasteful.

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sambeau
How long until they start supplying dormitories?

We geeks really are 21st century medieval monks, and I, a UX designer and
developer am nothing more than a manuscript illuminator.

I am tempted to put "Limner" on my next business card.

~~~
michaelchisari
_We geeks really are 21st century medieval monks_

I don't know if monasteries are the right metaphor. Maybe more like highly
paid company towns.

~~~
sambeau
I don't think they had those in medieval times.

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iamelgringo
Market price in a talent acquisition for a productive software engineer is $1M
to $1.5M locked in over four years. That means that the annualized cost for
talented engineering is $250k to $350k per year.

Paying for laundry, dinners, etc... to keep those employees productive and
happy is a rounding error.

I've worked for years in an industry where a certain class of employees get
paid at least $150k, up to $800k per year. These people get their laundry done
for free. They walk around in clothing that is remarkably similar to pajamas,
and these people often sleep on in special rooms dedicated to letting them
sleep. Indeed, these people often put on their pajama uniforms when they walk
into the building, sleep in them, and then change and go home.

These people get special parking permits, they get free food in the cafeteria.
They have entire staff's devoted to making them as productive as possible. In
fact, there are entire occupational disciplines devoted to making this class
of employees as productive as possible, and make sure they have to do as
little menial work as possible.

These people are doctors. And, there are entire disciplines devoted to making
different specialties as productive as possible. Cardiac Cath Lab tech's and
Cath lab nurses are on call 24/7, and their job is to make sure that
_everything_ aside from patient care is taken care of for the doctor. Often,
the Interventional Cardiologist walks in, talks to the patient on a gurney,
looks at an EKG, and then goes and dictates a chart while a team of 3 nurses
and tech's set up the patient, get the Flouroscopy machine ready, and call the
physician back into the room to perform the procedure for 45 minutes.

No one blinks twice that the cardiologist gets to wear hospital provided
scrubs, has a call room where they can sleep in, gets fed for free in the
cafeteria, has special parking spots, has a physician lounge with free
newspapers, deluxe coffee and snacks stocked 24/7/365. Why?

Because a busy Cardiologist in a single day, might place 10 pacemakers $30k a
piece in 10 different patients. The hospital can bill $80k to 100k a piece for
the procedure, and make enough money to care for the uninsured hoards in the
Emergency Department.

Why then, do we balk at an engineer getting laundry done, wearing comfy
clothes to work, or being able to wear a fake mustache once a week? The
engineer :: user ratio at Yelp is about 1 :: 2 Million last I heard. It's
about the same at Facebook and Reddit.

The only other industries where the employee to revenue ratio is comparable or
better are the oil industries and the finance industries. Pay for software
engineers is only now starting to catch up to the revenue that they are able
to generate for a company.

Also, the software industry, and in particular the startup industry is built
from "creatives".

What perks do other "creative" industries enjoy? No one thinks twice about
playful, creatively colored rooms, toys laying around at a design or
advertising agency in Amsterdam or New York City. If I were lead writer for a
television show in Los Angeles and I had a bull pen of 12 writers that got
together and wrote scripts for TV shows every week, I'd make sure that those
writers had anything and everything they needed to spur creativity and focus
on writing great copy.

Why should software startups be any different? Perks are cheap. Engineers are
_really expensive. Keep those engineers happy. If you're doing anything less
than that, you're not spending your money well.

~~~
Apocryphon
Saving people's lives is a sustainable, indispensable industry. Yet another
photo sharing app flush with irrationally exuberant VC funding isn't.

~~~
iamelgringo
_Saving people's lives is a sustainable, indispensable industry._

Pacemaker representatives make a 3 to 5% commission on every pacemaker or
implanted defibrillator they install. A busy Cardiologist can put in 10 in a
day. Each pacemaker costs a minimum of $30k. I've seen pacemaker's go in
people that probably didnt' need it. That doesn't mean the entire industry
sucks.

For every misfunding of Color, there are 80 barely funded 2 to 3 person
startups building solid, revenue producing companies in the Valley. When these
startups get funded they struggle to recruit and need to retain engineers
because they are head down building product.

That doesn't mean that perks industry wide are corrupt. An exception does not
a rule make.

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michaelpinto
Until the newly hired programmers start demanding demanding shares of your
company in the interview and ask about the availability of your onsite sushi
chef and masseuse we still won't be able to match the high point of the first
dot.bomb era. And did I mention about companies competing to see who can
through the best party?

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johnyzee
I'm probably too old anyway but _Mustache Monday_ could get old on me real
quick.

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brown9-2
_Cashmere hoodies are all the rage on Sand Hill Road in Menlo Park, Calif.,
home to many big-name venture-capital firms, according to venture capitalist
Marc Andreessen, who recently brought on former U.S. Treasury Secretary Larry
Summers as a special adviser. Mr. Andreessen says "the challenge for now is to
get Larry to wear a hoodie."_

Something about this feels very odd.

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kym
Not so related to perks but Steve Blanks published an intriguing article on
the second tech bubble that I thought was a very good read.

It's called "The Internet Might Kill Us All" -
[http://steveblank.com/2011/06/22/the-internet-might-kill-
us-...](http://steveblank.com/2011/06/22/the-internet-might-kill-us-all/)

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lkozma
Still a long way until they match the perks of more traditional industries:
[http://economicsnewspaper.com/policy/spain/the-insurer-
munic...](http://economicsnewspaper.com/policy/spain/the-insurer-munich-re-
paid-prostitutes-to-motivate-employees-26447.html)

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wnoise
I'm wondering about the tax consequences of perks as opposed to equivalent
salary bumps...

~~~
anamax
> I'm wondering about the tax consequences of perks as opposed to equivalent
> salary bumps...

"free food" can't be taxable to the employee because there's no accounting.
There may be limits on how the company can expense it but I suspect the
"keeping them at work" is a good enough argument.

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MrKurtHaeusler
"The hoodie's centrality to tech culture..."

Heh, journalists.

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bluedanieru
_The party room at reviews site Yelp Inc. has three beer kegs with built-in
iPads to offer information about what's on tap._

Uh, do you need an iPad for that? It's a keg, you can just write 'Kilkenny' on
the side in magic marker and be done with it.

~~~
stellar678
info like who's the biggest drunk in the office (check-ins), momentary flow
rate of the tap, etc... it's actually pretty fun!

