
Big Company vs. Startup Work and Compensation - ingve
http://danluu.com/startup-tradeoffs/
======
jarjoura
250k a year in 5 years at a big corporation, really? Yea if you're lucky to
work on a project/team higher-ups care about and are also willing to bust your
ass working long hours to meet insane deadlines. Also, you better be someone
who is excellent at communication and charismatic if you want to get invited
to the table of interesting work.

There are a lot of brilliant hyper-competitive people who work at these big
companies and you will be a small fish. So I think this article is spreading a
myth that there is guaranteed piles of money to be made by working at Google,
Facebook, Apple, etc.

~~~
dsacco
This doesn't undermine the author's point. As another commenter said, people
are really underestimating the likelihood of earning a $250k salary at a large
company. It's really, really doable at a large company within 5 years if you
hit senior level and live in a metropolitan area.

The author's core point is that you are much more likely to become a senior
engineer at a large company (and thus earn ~$250k in salary) than you are to
hit the jackpot at a startup.

If you were to take the set of people who achieve senior tier (or comparable)
at large tech companies and the set of people who earn at least $250k as a
lump sum payout for working at a successful startup, you'd find that the
former group is vastly larger than the latter.

If you were to do the same exercise and replace the second group with folks
who actually got "rich" (for any reasonable definition) working for a startup,
you'd find that it would not even be visible as a pixel next to the former
group.

Statistically, you are simply better off trying to hit senior at large tech
company if you want to optimize your career for wealth. This is so doable
within five years that at large companies like Google and Microsoft you are
expected to hit senior level, and if you don't it begins to reflect badly on
your record. More explicitly, "senior" is the last level that everyone is
expected to hit, and at which you are "allowed" to not seek further
promotions.

~~~
Cyberdog
> It's really, really doable at a large company within 5 years if you hit
> senior level and live in a metropolitan area.

If, if, if, if. Just by numbers, most devs don't meet these criteria. And even
in the periods of time which I personally have, I still was not making
anywhere near this kind of money.

These numbers are inflated and out of reach to the vast majority of developers
in the workplace today, full stop.

~~~
dsacco
Yes, there are if's involved. It is not certain that you will achieve senior
tier at a large company in a metropolitan area. But you are also not certain
to earn anything from your startup equity.

I will reiterate - you are more likely to reach $250k working at a large
company than you are to earn it (in salary or lump sum) at a startup.

This has been corroborated by numerous individual's experience in this thread,
including my own. I personally interact with companies that pay this on a
_weekly_ basis.

~~~
mkozlows
You need to quit saying "a metropolitan area" when you mean "Silicon Valley
and a few places that have satellite offices for companies based in Silicon
Valley," is the thing.

Show me the companies in Columbus, OH that pay that way. Or Milwaukee, WI. Or
or or.

~~~
darpa_escapee
New York, Philly and DC exist. They all have tech markets that are not at all
dependent on SV.

~~~
ngoede
It is my experience that these figures are well on the high side for Philly
though.

------
herge
I'd recommend anyone looking for their first job out of university to consider
strongly a job at a startup. Consider it a 'finishing school', where you'll
have the highest chance to touch as many different technologies and tasks as
possible (from system administration, to backend to frontend work), as opposed
to the 'Big Company' where (especially for a first job) you'll be focused on
one task.

The important thing is to _leave after one year_ , no matter the compensation
you are getting. Teams have a tendency to give the shittiest work to the most
junior member, and there's very little inertia to replace that person if they
are doing a stellar job at that shit work, but once you leave that startup
with bankable experience under your belt, you'll have a much easier time
interviewing and negotiating yourself a cushier position at either another
startup or a big company.

Most big companies have a much better career 'ladder', where you'll be on a
path to more interesting work once you've proven your worth, but I suspect
you'd still be in a better position coming into the company one or two years
in, rather than starting the treadmill at a lower salary/title.

~~~
jzwinck
I went about it the opposite way, and can definitely recommend that as well:
big company first, then small. The big company experience shows you a ton of
things, like how to interview, build, and deploy at scale. The small company
can benefit from your ability to bring order to chaos, develop tools which are
obvious in any big company but strangely missing from every small one, and
more.

Maybe it doesn't matter which one you start with, but you should give both a
try at some point.

~~~
curun1r
This sounds great when you envision that big company as Amazon, Google,
Microsoft or Facebook. It sounds less so when you envision that company as
Oracle, eBay, Yahoo! or SAP. Some large companies are mostly going to teach
you politics, byzantine process and spending money as a means of scaling bad
software.

It's important to differentiate skills learned at big companies. Some are very
useful, but others are coping mechanisms that have no place in a startup.
Meanwhile, the scrappiness and well-rounded skill set learned at a startup
will almost always have a place in larger businesses.

My own personal recommendation for early career workers would be to prefer the
cream-of-the-crop mid and large companies where you'll get useful experience
you can't find anywhere else, then prefer startups and leave the slower-moving
and more dysfunctional larger companies as a last resort.

~~~
sbilstein
yes. which big company matters so much. i find it frustrating when my hacker
school friends deride big companies as having no interesting work being done
or not being great places to work. Having worked at startups and two different
big corporations, I've learned the most at the very large company I work at
now, almost nothing at the first one I did and a mixed bag at startups.

~~~
baudehlo
Heck, even well known boring big companies (eg IBM, Oracle) have great smaller
teams that are doing interesting things. Much of it is a crapshoot. The nice
benefit of the smaller company is that you have much higher likelihood of
seeing your code go into production, and experiencing the feedback from it
being used. At a big company you will get shielded from that. Often for good
reasons - but the feedback truly helps your career.

------
arbitrage314
I've made this point before, but since it's a bit relevant here, I'll make it
again (sorry to repeat):

If you're primarily interested in making money, or if you love the startup but
not the compensation, you should NOT work at that startup.

If you're a good developer, you can get a better deal by working at an
established company and simply investing. This has been true for every startup
offer I've ever seen. Ever.

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 (BY FAR). 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!

~~~
silverlake
AFAIK, working at Google et. al. pays well, but for most people your career
will cap out at senior engineer. At other big companies (banks, telecom, oil,
etc) a good Google dev can climb the tech career ladder quickly and make more
money, get more responsibility (if that's your thing).

Do you want to be a small fish at Google, or a big fish at Goldman Sachs?

~~~
sinatra
You may be under-estimating how competitive and difficult becoming a big fish
at Goldman Sachs is. And in many places (ex, banks), your technical chops are
not appreciated as much.

------
vinceguidry
I didn't do more than browse the article because I didn't need to hear the
arguments to accept the conclusion. I think the only place perhaps in the
world where working in a startup could be seen as any way superior to working
at an established business is in Silicon Valley, where enormous amounts of VC
money come together to create a modern Rome.

Certainly we need Rome, the modern world wouldn't have existed without it, but
Romans themselves are myopic and self-obsessed. They need to be, otherwise it
wouldn't be Rome.

I love that Silicon Valley exists, but I wouldn't want to live there. I love
the people that go there and exist on the bleeding edge of innovation. I'll
happily sit here behind the curve and have a normal life with a house and car
and kids. I'll root for the dreamers that go there and hope that they too can
one day achieve their dream life. I don't need that glory.

~~~
loopbit
Actually, as an European (as in, in a completely different environment than
SV), I'd recommend the opposite with a small tweak, add "small company" to the
startup meaning.

Most big companies I've worked with in Europe have horrible new employee
training package or no training at all. I haven't worked in a single one that
took fresh out of college types and allowed them to work in different
departments. The most common scenario when a new graduate gets hired into a
team doing X is to throw him in, get whatever documentation the team has, even
maybe someone to ask questions and the expectation is that he will do X for
the next few years.

Opposed to this is the environment in a small company/startup, where you'll be
forced to do a bit of everything and even lend a hand with stuff that is not
your job at all. You'll have the chance to see different technologies, see the
whole process end to end AND then, decide what you want to do.

BTW, is salary that important for people starting their careers? Salary
advancement yes, even what salaries you might expect with 2/5/10 years of
experience, of course. But for a first job? Does it matter that much?

My first salary was crap (600€/month in the year 98), but allowed me to work
in multiple environments (web, databases, sysadmin, embedded system...) and
when the time came to look for a new place, allowed me more freedom to choose
what I wanted to do (the biggest problem I had finding a job, in the middle of
the .com crisis, was convincing employers that, yes, I had indeed worked with
all those technologies in 'only' 2.5 years). I multiplied by 5 my salary with
that second job, which was a more than decent salary in the country at the
time.

~~~
vinceguidry
We're on the same page here.

I don't work at a big company, I work at an established one. The key factor is
that they're not still trying to validate their business plan, not the size. I
want one that's been around for at least ten years. Less than that and I have
to ascertain for myself whether the company's going to be around long enough
for me to get what I went in there for.

The goal here is mitigating existential risk to your employment situation.
There's outside risk, the chances of your company going under, and internal
risk, the chances of getting fired or laid off before you've accomplished your
goals.

Working at an established company mitigates external risk, working at a small
one helps mitigate internal risk because you can get to know your company very
well and keep alive to shifts in politics. For me, the small, established
company is ideal. I work at such a company now and will only jump to a similar
company for a significantly higher salary. Small bumps aren't worth the
switching costs.

------
lafay
I've worked at both startups and big companies since I first came to SV in
1999. And some startups that became big companies. For me, there's much more
than the practical & financial considerations laid out here. Deep down I know
that I enjoy taking risks -- I like the roller coaster ride, and having a very
real and visible impact on whether the company as a whole sinks or swims. Know
yourself and don't ignore your intuition.

Also, while "rand(100)" might be an accurate characterization of the returns
of all employees over all startups, it is not entirely a game of chance. There
is skill involved in picking the right startup to join: being proactive in
your search, building a personal network, finding founders with track records,
considering enterprise startups. You can learn to improve your odds -- a bit
like learning to count cards.

~~~
bri3d
If you think you're that good at picking financially successful startups, why
not invest just money rather than time AND money?

~~~
thomaslangston
Because you're not legally able to do so unless you're an accredited investor?

~~~
pil4rin
Is this true? if so, how can sites like angel.co exist? I believe I can invest
in most of the startups right now on there..

~~~
colbyaley
You must be an accredited investor to invest on angel.co. see:
[https://angel.co/help/general-
solicitation/accredited](https://angel.co/help/general-
solicitation/accredited)

------
stanleydrew
I don't want to criticize too harshly, because I do think this analysis is
generally good (if slightly unoriginal).

The problem is that these analyses always focus on how you, as a prospective
employee, can extract the most value from the world. Optimizing cash vs equity
or arbitraging location or whatever.

You can see it seep through all over the place in the language used. Sometimes
it's subtle:

> I’ve told that anecdote to multiple people who didn’t think they could get a
> job at some trendy large company, who then ended up applying and getting in.

Waiting and hoping to "get in" is pretty weak. It implies that we're all just
meat-sacks working away until some of us get lucky and manage to convince a
fancy company to overpay us and let us extract a lot of value from them.

If you have value to contribute to the world (and you definitely do), then go
figure out someplace where you can best contribute it. Stop worrying about the
best way to take things from the world and figure out the best way put stuff
in. The rest will take care of itself.

~~~
ljk
aka "ask not what your world can do for you, ask what you can do for your
world"!

~~~
stanleydrew
More-or-less yeah. You'll have a much better time in life with this worldview
I think.

------
lost_name
> A new grad at Google/FB/Amazon with a lowball offer will have a total comp
> (salary + bonus + equity) of $130k/yr.

I think these companies are actually _too_ ideal to draw this conclusion from.
For everyone Google/Amazon/FB, you also have a Comcast, an Oracle, an HP or
Cisco.

You frequently hear about companies like Apple, Google, Facebook, etc trading
employees. You don't hear about the typical big company poaching anyone
besides executives.

Edit: The above doesn't seem to represent a clear thought. I'm trying to argue
that the average big company doesn't pay as well as those three. Similarly,
the average startup isn't going to be able to pay massive dividends in four
years.

------
habosa
Equity at a startup is a joke these days, even as valuations climb to
infinity. When you're an engineer at a VC-funded startup you're competing
against VCs for a piece of a pie. And guess who will walk away with the pie at
the end? Will it be the Ruby expert who wrote the backend, or will it be the
VC partner who drew up the terms of the funding and the exit?

If you join a startup early you'd be very lucky to get 1%, 2% maybe? Ok so
then 4 more rounds of funding go by and you're diluted. Then finally after 5
years you sell to Googapplesoft for $200M. Holy shit, payday is here! Wrong.

First you're going to pay out to all of the preferred shareholders, some of
whom might have special payout clauses because you guys really needed the
money. Then you find out your 1% is now 0.3% and you have to wait 6 months to
sell any of it. So you busted your ass for 5 years for a few hundred thousand
dollars when you could have had a full-benefits, low-stress job at
Googleapplesoft in the first place and not put nearly so much at risk.

Oh and there's a 90% chance that exit never even happens and all you did was
work way below market salary for worthless stock. Oh and that whole time you
probably had crap health insurance and minimal 401k matching so your savings
aren't looking too good either.

The point of the above is not to say "don't work at a startup" because it's
obviously a great experience and the right choice for some. And who knows,
maybe it will be WhatsApp and you'll be a billionaire and you can come back
here and mock me. But if you run the numbers (as the article says), you really
shouldn't work at a startup if you're after money.

------
minimaxir
It's worth nothing that the mean and median salaries of graduating Carnegie
Mellon University CS majors, one of the top CS schools, is only $103k/105k:

[http://www.cmu.edu/career/salaries-and-
destinations/2015-sur...](http://www.cmu.edu/career/salaries-and-
destinations/2015-survey/pdfs-one-pagers/scs-2015-post-grad-
stats-12-17-15-kc.pdf) [pdf]

Having $130k as a baseline salary for the analysis is silly. (However, a total
compensation of $130k is not silly)

------
lilcarlyung
Working in Europe I can never believe these fantasy numbers from the U.S. 250k
USD after 5 years, seriously? A good Senior Developer here, with 5-10 years of
relevant experience, might have a base salary of around 50-60K EUR, and
perhaps another 0-2K EUR in bonuses. Then you have to pay around 30% income
tax and another 20% if you hit a certain income bracket (which you do with
50K) in many Western European countries. If you want to make more you need to
do contract work or roll your own business.

~~~
aianus
It's real and if you're willing to move to SV, they're always hiring.

~~~
pzone
But also get ridiculously lucky or be past the 95th percentile of coders.

~~~
TulliusCicero
Nah. Programmers at Google, Facebook, et al. are all pretty solid, but most
aren't amazing ninja rockstars or whatever. I'm at one of them, been doing
fine career-wise and I'm certainly not mind-blowingly good or anything.

------
miles_matthias
I don't see why this is getting much attention. You can look at the financials
all day long, but what really matters is your happiness. Are you going to be
happy at a big company doing the same job day in and day out? If so, great!

If you're the type of person that can't stand repetition and predictability
and want the emotional roller coaster of creating something new, then join a
startup!

We don't have blog posts talking about the payouts between being an artist and
a hedge fund manager, and yet people still become artists. Why do we do this
in the startup culture? We shouldn't feel apologetic or like we're missing out
on something if we decide that what makes us happy is to work at a startup.

~~~
mruniverse
It's basically a reply to the positive coverage that Startups get. Startups
get the glory (as much as you can in this line of work anyway). They get TV
shows, movies and endless blog posts. And judging from the attention, his post
was needed.

------
tomasien
Getting a job at Google as an engineer is ridiculously hard. The guy that
wrote Homebrew couldn't even get hired even though 90% of their engineers use
his software.

[https://twitter.com/mxcl/status/608682016205344768](https://twitter.com/mxcl/status/608682016205344768)

If you can get a job at Google, it's very different than getting a job "at a
big company" and has historically actually increased your odds of success
later on (via the propensity of investors to fund Xooglers). So I would
definitely agree - taking a job at Google when you haven't had one before vs.
starting a startup is a very legitimate choice to make. Taking a job at
Microsoft vs. starting a startup, I would argue (and the X-Microsofters in my
life) a very different one.

~~~
ilyanep
You shouldn't confuse "getting a job there is hard" with "the interview
process is random and skewed toward false negatives, with an especially bad
job done with experienced candidates"

\---

"Second problem: every 'experienced' interviewer has a set of pet subjects and
possibly specific questions that he or she feels is an accurate gauge of a
candidate's abilities. The question sets for any two interviewers can be
widely different and even entirely non-overlapping." \-- [http://steve-
yegge.blogspot.com/2008/03/get-that-job-at-goog...](http://steve-
yegge.blogspot.com/2008/03/get-that-job-at-google.html)

"I have 25 years of software development under my belt, I published a book,
spoke at various conferences in Europe, have a Github profile (admittedly not
very lively), worked for well-established enterprises and have great
references. Why shall I still prove myself?" \--
[https://news.ycombinator.com/item?id=10757186](https://news.ycombinator.com/item?id=10757186)

------
dmourati
I spent the first 15 years of my career as follows:

3 years in small companies outside the bay area 10 years in bay area startups
~2 years in bay area big corporations

I can say the following. The transition from startup to big company was really
tough. Part of this was because I was used to being "the guy" for such a wide
range of things. At big corporations, these roles are divvied up into 5-10-15
different roles. This is both good and bad. On the plus side, I can relate
somewhat intelligently to colleagues across a very wide range of roles. On the
minus side, the colleagues all (rightfully) feel their areas are their domain
and don't typically recognize expertise coming from outside their team. This
knowledge with lack of credibility was hard to reconcile until I fully
realized what was going on.

------
exstudent2
I don't think you can go into a company as large as Google and expect your
salary to double in five years. HR will have set limits to how much of a raise
you can get in any given year and even with promotions you would be very
unlikely to see that kind of bump. I also don't think the middling programmers
he mentions would hit the 250k year mark.

Orthogonal to the point of the article, but the only time you can really get a
salary bump is _before_ you start, so make sure to negotiate like hell before
you get in. Once you're in, you're going to be grinding to get a 3% raise
(contrary to what the OP states).

~~~
ryandrake
The idea of starting fresh out of school at a company for $130K, doubling up
to $250K seems to me ludicrous, besides for a rare few outlier roles at a rare
few companies. I can say I've got close to 20 years of experience and I don't
make anywhere close to that.

Not saying there are no roles like this--just saying this probably several
standard deviations from the mean, and not useful as a "back of the envelope
estimation of big company tech salaries in general"

~~~
Retric
I personally know someone that went from 130k to over 1 million in 7.5 years
at a large 20,000+ person non valley company. Skills, luck, negotiation, and
HR will get ignored.

~~~
ryandrake
Totally believe it, but he or she is a clear outlier, when considering the
huge breadth of tech positions out there.

------
georgefrick
So I've been at this 9 years and I'm not making six figures. Fuck. I don't
even understand where I went wrong. Part of me can't believe the article at
all.

His comment about cost of living was kind of an outright dismissal, very odd?
I don't think Google will let me work from Milwaukee.

Where is the information on travel, quality of life (owning a house?), etc?

~~~
nkurz
_I don 't think Google will let me work from Milwaukee._

Depending on your skills, maybe they would, maybe they wouldn't. But you might
be surprised to learn that the author worked for Google an hour-and-a-half
away in Madison? [https://github.com/danluu/tex-
resume/blob/master/resume.pdf](https://github.com/danluu/tex-
resume/blob/master/resume.pdf)

~~~
georgefrick
I am surprised, and it my own mistake not to look into. Thanks for pointing me
to his resume.

------
sudo-i
Paul Graham/Sam Altman/Michael Arrington/etc... are just spreading their
messages as they are always, because in the end more startups/more smart
people at startups, the more it has an impact on their wallets.

It's just a fun as arguing which is a better phone, Android or iOS... it's
super old and a boring, divisive conversation.

------
richcollins
Author missed option 3:

Do contract work at $250 an hour or equivalent compensation in shares at >=
series B funded startups. Choose the level of risk you're willing to accept in
cash vs equity. (Nearly) completely avoid politics and other office related
BS. Take vacation between gigs if you like. Get a very broad variety of
experiences at different companies and get a good feeling for what companies
are willing to pay for should you decide to start your own.

------
gniv
There is valid criticism to be made, but the negativity in this thread is out
of proportion.

As somebody who worked at Google for 5+ years, I'd like to emphasize a point:
If you sustain good work [1] for a few years, you will be rewarded well beyond
expectations [2]. Your compensation will depend on your performance, and not
on your starting salary. I think this is unique to Google and maybe a few
other tech giants. From this point of view, the generalization to 'big
company' is flawed. But otherwise the points made by OP are true, and I wish
more new grads would see it (and believe it).

[1] Your overall contribution to the project is important. Whether you work 30
or 50 hours a week to get there, it depends on you, of course.

[2] And those rewards do not depend on the stock price going up. That's just
cream on top.

~~~
foobarqux
Since the thread is about making career decisions, can you explain why you
left Google?

~~~
gniv
I didn't leave. I guess I used the wrong tense.

------
hacknat
When it comes to compensation I think it's pretty clear that Big Companies
win. You don't even need to point to Google, Facebook, etc to make this point.

However, his argument becomes truly hand-wavey and spurious when it comes to
the interesting work part. Of course some of the most interesting tech papers
are coming out of Google, that doesn't mean anything for the average Google
employee. Also, in his, argument, he goes from "here's what the average can
expect for compensation" to, "you need leverage to work on interesting things
at big companies...get some".

Of course not all start ups provide interesting work, but I think the dice
roll is solidly in the camp of start ups for interesting work against the Big
Cos, whose interesting work dice roll, I would guess, is similar to the start
up comp dice roll. Unless rebuilding a bog standard UI framework is your
thing.

At my first startup job I got to:

\- build a compiler

\- implement shared memory on high traffic services

\- play with any language I wanted

\- manage smart and interesting people

\- more stuff, but I'm tired of typing.

~~~
sbierwagen
You did a greenfield implementation of a compiler?

Why?

~~~
marssaxman
it's terrifically fun?

~~~
dasil003
Investors invest in fun?

~~~
marssaxman
Was the question about investors? I thought it was addressed to the person who
did the implementation.

~~~
dasil003
He said he worked for a startup.

------
r0m4n0
Like everyone else... I couldn't get past the repeating theme:

> But the total comp for “a good hacker” is $250k+/yr, not even counting perks
> like free food and having really solid insurance

Maybe that's anecdotally true for the big companies in a small high demand
area of the country (really just the bay) but not so most everywhere else.
Probably why Paul Graham used a figure less than 1/2 that.

With that figure exaggerated, I'm not sure I can take any other points made
here seriously...

~~~
TulliusCicero
It's true for the author's experience. We have a culture of not really
discussing comp openly, so people mostly base what they think as 'normal' off
what they and immediate friends in the industry make.

------
binarysolo
To set people's expectations properly, this guy is high-tier dev that focused
on his niche and probably had his payoff event 10 years into work. (Presumably
his 8 year stint at Centaur and the buyout had some of that.)

AFTER all those 10 years, the Sr. Engineer plays at Google and Microsoft were
probably 250k+, when they needed that 10 years of specialized experience for a
$10M+ project and can pay to play.

Anec-data: As an SV person who's worked at BigCorp and funded startups (from
co-founder to CTO)... these numbers definitely trend high amongst my friends
and acquaintances who graduated Stanford CS in the early 2000s.

------
more_corn
You had me till you non-ironically referenced mchurch. Seriously if you ever
see him start talking just turn around and walk away.

Having worked at Google for 7 years and now at a startup, I have to say the
big company bullshit factor is huge. Even at Google where where bullshit is
gold plated and served with delicious, locally sourced, healthy and tasty side
dishes.

I learned a lot there, worked with brilliant people, was able to carve out
super gratifying work. But, it just got silly. I'm thrilled to be gone, and
hope never to go back.

~~~
kzhahou
Mchurch goes to the extreme quite often, but there's still a ton of truth in
his main themes. He's trying to get people in the SV/VC-funded world to open
their eyes to the subtle and not-so-subtle deceptions told here.

------
nostrademons
I've done both - 3 years as an employee across two different startups, 18
months as a founder, 5.5 years at Google, and now 18 months as a founder. I
guess I'm quoted in the article too. :-)

All I can say is that the market is actually a lot more efficient than most
people give it credit for. I remember coming out of school and thinking "Why
would anyone work for a big company when the payouts for startups are so much
better?" After a bunch of experience, I've found that:

1\. Those big startup payouts are much rarer than a typical new grad
conceives. They're also more widely distributed: perception is that startups
are "go big or go home", but a number of companies end in talent acquisitions
that are just slightly less or more than what the founders would've earned at
a big company.

2\. Compensation at big companies varies wildly, and people with the effort &
effectiveness levels that you'd expect from a startup often are actually
making startup-level money. There is _zero_ reason for anyone doing this to
publicize that fact, and oftentimes they're contractually forbidden from
disclosing it.

For people trying to decide between these - forget about the financial rewards
and ask yourself "What would you like your working life to be like?" I'd also
forget the common wisdom about startups = no life & big companies = drudging
pace; both of these are inaccurate on a micro-level, and you can find startups
that prioritize work-life balance or teams within a big company where
everyone's life revolves around work.

Instead, think about the problems you would like to solve. Do you want to do
cutting edge research that pushes humanity's knowledge forwards? Work for a
research lab or big company's research department. Do you want to bring new
technologies to the masses? Then you want a startup, probably one that has
spun out of a major university with a couple professors as founders. Do you
want to put social hacks in motion and bring technology to ordinary lives?
That's probably also a startup, probably one with young founders. Do you want
to scale technologies and work with big data or machine learning? Big company;
startups usually lack ownership of enough data, unless they're a consultancy.
Do you want to apply technology to an industry that currently does things
backwardly? Join a startup whose founders have significant domain knowledge in
that industry.

If you work on problems that you believe in, you'll find that you're much more
effective at solving them. The financial rewards follow after that; money is a
lagging indicator for value generated, not a leading one.

~~~
6chars
"oftentimes they're contractually forbidden from disclosing it"

Is that true? That sounds illegal.

~~~
pluma
You'd be surprised how unwilling people are to risk breaking contracts even
when the actual terms are not valid or enforceable. Not to mention that there
are plenty of ways to get fired over something you can't legally be fired for.

------
thesimon
Tangential to this article, but >pay outside of the US is often much lower for
reasons that don’t really make sense to me).

Can someone explain why salaries in for example Europe are so much less? Out
of uni salary for example seems to be around 38k in Europe, whereas in US
everything under 90k seems very low. Just the difference in purchase power and
costs?

~~~
alain94040
There is a huge difference between companies where software is the product
(Google, Microsoft, Silicon Valley startups), and companies where software
supports a business that has nothing to do with software (most IT jobs).

When software is the product, you tend to consider your software developers as
money makers and pay them better. When you think of your engineers as a
necessary evil to sell other stuff, you tend to pay them as little as
possible.

Europe is full of the second scenario. That's the problem.

~~~
devonkim
The majority of the world's software is the second case. It just so happens we
have a lot of software product and services companies in the US. Also, just
because you're a technology vendor doesn't mean that you'll treat your
software developers well. There's tons of really mediocre software companies
(large ones, even) that outsource developers constantly and shower sales with
massive bonuses because they've failed to make a good business being good at
technology, so they become a sales-oriented culture. This tends to happen at
the majority of large (10k+ employee) software companies across the Fortune
500. Technology itself is a business few are actually capable of doing well
in, most just mark up crap for other businesses and deliver "value" in areas
that have nothing to do with good engineers of any sort.

------
autotune
As someone in The Bay Area looking for work as a sysadmin with a heavy
interest in automation/devops (obligatory plug), it's not a question of Big
Company vs. Startup, it's a question of who is hiring and has at least been
open to interviewing; these have almost unanimously been startups. I'd like
nothing more than the stability of a large company with interesting projects
and decent pay but lets be honest, how many of us will really have the chance
to work for Google or Facebook vs the earlier stage startup that's a bit more
risky but has a product you find worth supporting and has reached out to you
based on their interest in the projects you've been working on?

------
siculars
It may have been said elsewhere, but even if it has it should be said again.
There is a huge difference between a tech "Big Company" like Google, FB,
Amazon, Apple, etc., a Startup Company and a traditional non-tech "Big
Company" like, oh, you know, most of the Fortune 500 in virtually every other
industry - retail, pharma, insurance, transport, etc.

A tech Big Company values engineers and pays accordingly.

A non-tech Big Company simply does not value engineers or tech and consider
both to be cost centers instead of drivers of growth.

I would plainly say that jobs at either a Startup or a tech Big Company would
both be better options than a job at a non tech Big Company.

------
eldavido
I think the endgame of SV is to become more like Hollywood. Not that that's
necessarily a bad thing.

Typical startup raises a $500k seed round and is two founders + 2 senior
engineers building the v1. If founders want Google-caliber people, they can't
afford to pay $200k; the cash just isn't there.

So companies will have to start giving out real chunks of equity (5% or more)
to early key hires. And "who you are" will matter even more than it does now
(e.g. look what having Spielberg or another A-list director does to a movie's
prospects, they can get the good actors, etc.)

I just don't see any other way this plays out. SV will become more like
Hollywood.

------
mcguire
Although, overall, I think this article is reasonably right, there are quite a
few things sketchy about it. But I'll just start with the first that comes to
mind:

If Google and Facebook are your median exemplars, I _really_ want to know what
your sample is. Those aren't exactly large companies. Amazon, too. Apple and
Microsoft may be, at least in this industry, but I still have the feeling that
the total number of the technical people that this article seems to be
addressing is much larger than the total employment of the "large companies"
(and small ones).

Also, another minor issue: During my years at IBM (technically, contracting
for IBM, but even then you couldn't pay me enough to sign on), I did get to
work on very interesting projects and learned a great deal from some very
smart people. On the other hand, everything I did was shovelled into the trash
can immediately after I finished it. Project cancellations, reorganizations
(IBM: I've Been Moved), etc., these are fun facts. Of course, I don't expect
start-ups to be any different in this regard, given their failure rate.

------
aeturnum
For money:

Work at whatever job meets your financial needs, everything else is gravy.
This will be hardest at the start, but as you gain seniority, you'll have
increasing freedom to work where you want. All things being equal, established
companies will pay better. Save money, but don't take jobs you hate to save
more money - it's not worth the equity.

For work:

If you know what you want to work on and can get a job in an established
company, do that. Established companies are much more likely to actually have
you work on what they hired you to work on. They are also much more likely to
continue the project you were hired for. There are exceptions, but generally
you will have much greater resources available to you. Your work may never see
the light of day, or may only be used internally, but you'll walk away with a
lot of experience on a specific area.

If you don't know what you want to work on or you like working a little bit on
a lot of things, work for a startup. Especially for junior roles, there is
enormous flex in terms of what you'll actually work on from day to day. This
is not limited to programming, but includes all branches of tech work:
architecting, service monitoring and setup, marketing, etc. The downside is
that it can be hard for you to explain, in a substantive way, the amount of
work you did during this time. The upside is that you learn a lot and get a
feel for many things.

As for future options - startups will give you many shallow options, working
at a big company will give you lucrative & focused options. If you work only
in one area, understand that you are betting on that 'kind' of work to
continue into the future. The more experience you have, the more value you
have _in that market_. The value in that is entirely dependent on the value
the market puts on your skills. You can often pivot, but it can be difficult.
Keep that in mind when looking at future work.

------
LukeHoersten
I prefer to work for smaller companies because of the way work and
responsibility are divided. At large companies I've worked for, work gets
divided into much smaller chunks so each developer is working on a very small
sliver of the total product. At a smaller company, your typically solving a
smaller, more focused problem as a group, but also, you get a much bigger
chunk of the work as a developer. It's easier to have ownership over a whole
project. It's why the term "full-stack developer" is so common in the startup
world and basically unused in the enterprise/corporate world. Of course all of
this lies on a gradient of headcount vs. total workload so I'm sure there are
great counter examples out there.

------
mruniverse
I work at Big Company and although I grumble, I know it's probably better than
going to a Startup. I think the Startup route is like trying to win in Vegas.
Some win, most don't. Although it could be fun depending on what you're
looking for.

At Big Company if I get bored I can move to a different group fairly easily.
And I know my work will be used by millions of people a day. I think that's
the part people forget; A lot of people will use your product. At a Startup
good luck with that.

And another thing, if you start to have conflicts with someone at a Startup
and it's not resolved, it will be a pain to work there. At Big Company, at
least you can move to another group or hope they will.

------
peter303
I dont think these high salaries will last because we are in the midst of a
startup bubble with too much VC money chasing too few good ideas. Echo 1990s.

However even if return to the 2004 scenario of 80K/100K that is still
comparable to other professional careers and better than most college majors.
So I'd recommend staying in CS if you like it.

~~~
krschultz
The counter argument is that now that the entire world is on the internet
(unlike the 1990s), the addressable market for tech is significantly greater
than it once was. Maybe there isn't a bubble at all, or maybe even if their is
a bubble in VC the value of a single good engineer is still really freaking
high.

------
sinofsky
You could apply this same model to IBM very easily if you started from college
any time from 1993 (April to be precise) and 2013. If you just worked your way
up the promotion ladder you would have done super well financially (better
than the SP500 by 4-5x).

The problem with any comparison is hindsight. Many other large cap tech stocks
do not behave that way. Certainly you could have joined Microsoft at a certain
time and "given up" at the "wrong time". Your cash comp might have been quite
good (or not).

The thing to ask yourself (and I definitely am not judging or implying one way
or another) is where does your code go and what does it do? A lot of that IBM
code, well... And of course many startups don't make it as well.

If all you want is money with low risk the choice is clear. If all you want is
a chance at a huge payoff with high risk then the choice is clear.

If you're happy with the end result of your code then in a Fountainhead sort
of way that's what matters. Then whichever risk path you take for your
compensation is secondary. And your views on this might change at different
life stages.

Finally the ability and skills to navigate and succeed in either a startup or
a big company are different. Depending on when you choose and how you grow and
evolve you may or may not be at the right place at the right time.

That's my shortest comment to a very long topic :)

~~~
mailshanx
>> If all you want is money with low risk the choice is clear.

It's not quite clear to me: care to explain?

~~~
sinofsky
Assume starting salary and velocity and ability to perform are all equal. Then
that's one interpretation of the original article.

------
bigcothrowa
At my BigCorp employer, Senior Engineer starts at like, maybe $140k total
compensation, on the low end. I don't know where the author is drawing these
$250-350k minimum figures from, but it feels like "thin air."

That being said, a startup in my area would pay 50-70% as much.

~~~
TulliusCicero
Depends on the tech hub and employer. He's mostly discussing top tier
companies like Google, Facebook, etc. where they're very successful and
software is their product, more or less.

------
code4tee
Article makes some good points. The cash-out value of "equity" one gets in a
startup can, if you are lucky, result in some nice lump sum at some point down
the line. However, many often miss the point that this big lump sum is quite
often still much less that the cash given up in the meantime by agreeing to
accept lower cash comp in exchange for said equity.

No different than when people talk about how they bought a house for X and
then sold it for Y at some point down the line, giving the impression that
they made a nice return on investment. Off course such casual math forgets
that it costs a ton of money in interest, taxes and maintenance costs to hold
such an asset for this length of time and these need to be subtracted from
what appears to be a nice lump sum payment down the line. In reality, net net
many people never make a $1 owning their nice fancy house even though when
they sell it results in a nice lump sum.

With jobs and houses there are lots of other factors at play, but when it
comes to $ it's important to understand the difference between perceived
"windfalls" and actual net return. The true results are often not what people
expected.

------
morgante
I was nodding along throughout this and pretty much agreeing that overall a
big company makes sense for most people.

Then I got to the final footnote. That kind of Kafka-esque bullshit is what
keeps me working in startups. I could not stand working in a culture where
policies which are widely seen as unhelpful and ridiculous are still routinely
inflicted upon employees.

Yes, startup "bullshit" also exists, but the difference is that it's totally
possible to avoid that bullshit by picking a good startup to work at. I've
never had anything like the experiences described in [1], despite working at 3
different startups. On the other hand, big company problems seem to be
universal: it's not possible to find a big company without at least some
arcane and employee-hostile policies. (For example, Google's blind hiring
keeps me from ever considering working there.)

[1]
[http://totalgarb.tumblr.com/tagged/startupbullshit](http://totalgarb.tumblr.com/tagged/startupbullshit)

~~~
quanticle

        Then I got to the final footnote. That kind of Kafka-esque bullshit is what 
        keeps me working in startups.
    

While I agree that big companies can have weird Kafka-esque bureaucracy,
they're still generally a lot better at record-keeping than startups. I've
never had a big company ask me if I could go without pay for a couple of weeks
while they waited to "sort out my payroll paperwork". I did eventually get the
back pay, but it was pretty tense for a couple of weeks, as I waited and
wondered if I'd made a terrible mistake in quitting my work for a large
corporation to go work for this startup.

------
invaliddata
I've worked at sv companies of all sizes, and I think that for a fresh grad
especially, the most important thing as some have stated is to find a team
(manager, coworkers) and project that are right for you. You want a place
where you will be supported, where you will have interesting work, and where
you'll be able to develop in all the aspects (not just technical ones) that
you'll need as a more senior developer. You'll want to avoid toxic cultures
and places where no real work gets done. In companies of all sizes and stripes
there is a huge amount of variation internally. Unfortunately it's often
difficult to know what a particular team is like unless you know an insider.
This advice may seem like common sense, but in my own experience and through
talking to junior colleagues, many people don't have much of a clue for what
to look for in a job (beyond - they pay a bit better / I've heard of them and
its a prestigious name / I have some idea about what they want me to do and it
sounds vaguely intetesting).

For fresh grads there is almost no negotiating room on compensation.
Additionally, what one learns and experiences is critical to career growth. At
one sv bigco I got paid intern level wages to manually label machines in a
server room for a month (hired as a developer). I'm sure this is not represent
tative of that company. At another bigco I have seen fresh grads and interns
get plum work assignments (and pretty good compensation, according to
surveys), and I know that's not the case for many other parts of that company.
Neither of these companies is appamagoogsoftbookflix, but I know both these
scenarios can be found pretty much anywhere.

Even midcareer professionals should care a great deal about the people and
projects they will be working with, but there the ability and need to optimize
compensation can be more acute. So, avoiding optimizing for compensation and
company prestige early in ones career is something to be cognizant of.

------
methodover
> Moreover, the pitch that you’ll only need to work for four years is usually
> untrue.

Definitely, and not just for the reasons stated in the article. I believe it's
pretty common for employees to get escalating stock options as they progress
in the company. When I first joined my startup as the second engineer hire, I
got something like 0.2%, under a four year vesting schedule. After a year I
got a bit more, like 0.3%. After another year and a half or so, I was given
enough to bring me up to what is currently 1% -- but again, under a four year
vesting schedule. Most of my options vest under a four year schedule that
started 2 1/2 years into working there.

Is it pretty common for regular engineers to get 1% options right off the bat?
I thought it wasn't.

------
krisdol
How do you even argue with someone who thinks that the average "big
corporation" pays and looks like Google or Facebook? The vast majority of them
aren't. That's my experience from working at them, interviewing at them, and
seeing my colleagues work at them. The best thing about big cos? Generally I
had good comradery and in-office perks, as well as good hours. When it comes
to pay, raises, innovation, passion, speed, benefits, on all of those terms
I've always had a better experience at smaller companies.

Sure, that may not be true across the board, but the author's assumptions are
far reaching. I mean, 250k? Really? I'm not questioning his honesty, I just
envy the bubble he lives in.

------
Rainymood
As a European constantly reading about total compensations in the 200k+ seems
like FUCKING crazy to me, holy shit. What the hell.

~~~
Avalaxy
Same here. Threads like these completely alienate me, feels like a completely
different world. I can't image a software developer getting more than a 100K
per year (non-freelance), it's not rocket science or anything.

------
theptip
The section on options doesn't mention early excercising and 83(b)s. I thought
it was commonplace to allow options to be exercised before vesting, at a
nominal valuation. File your 83(b), and then any increase in value of your
options are not considered capital gains; you just pay tax on the final amount
that you sell the shares for.

Is this an omission in the post, or is the early exercise option less common
than I thought?

------
pyrrhotech
The median income for full time workers in the US is about 40k, not 30k. Also
I don't personally know anyone who makes $250k cash comp, and I know people at
google and facebook and a handful of other "big corps". I have a friend who's
close tho, around $230k at google after 6 years. You can't count the
appreciation of the stock on the RSUs

------
mychael
The grass is always greener on the other side. Unless you live in the Bay Area
where you lose either way due to the cost of housing.

------
throwaway_lazy
Why not add consulting (i.e. helping startups out as someone "external") into
the mix?

I make ~$110k/yr after taxes (!) and insurance and I work 10 hours per week,
tops. I literally watch Netflix more than I work on an average workday. I know
it's not great money (don't have a Tesla), but it's quite cozy.

Thoughts?

~~~
infinite8s
What sort of consulting?

------
Cymen
The last couple rounds on this have talked about experience at startups but
they neglected to go into the value of that experience. From the startup side,
people will say the experience is valuable and what they mean is the
experience of getting to make more technical choices and experiencing what it
is like to have to make compromises to get something shipped in an early stage
company.

So the startup people talk about experience in the context of assuming you
will also want to do a startup.

The author of this piece kind of ignores the value of having to make those
difficult choices in the face of shipping something. But that value is only
towards actually starting a company. It's not nearly as valuable at a large
company.

So that bias shows through in the writing although I agree with the rest of
it. It's just a tiny argument towards the value of startup experience that in
context for some people does have immense value while for others it is
negligible.

------
kbenson
> Perceptive readers will note that 100 does not actually show up on a d100 or
> rand(100).

I was _just_ perceptive enough to notice, that, copy the entire table into a
comment and pontificate on it, then notice that I missed the sentence in
question _immediately_ after commenting, and delete it _3 seconds_ after
posting it. :/

~~~
nkurz
But is the "perceptive reader" actually correct?

There are many pictures online of d100 dice clearly showing a '100':
[http://www.amazon.com/Role-Playing-Dice-Spherical-
ZOCCHIHEDR...](http://www.amazon.com/Role-Playing-Dice-Spherical-
ZOCCHIHEDRON/dp/B0026NDDEE)

And while the argument for rand() starting at 0 is true for Perl, even this is
language dependent. More frequently, rand() doesn't even take an argument:
[http://linux.die.net/man/3/rand](http://linux.die.net/man/3/rand)

~~~
kbenson
Yes, my comment (prior to deletion) said _and rand(n), depending on
implementation, may explicitly exclude n_. I looked it up for C/C++ first, but
it was slightly confusing, and there are articles that go into quite a bit of
depth about how rand() can be misleading. perldoc was my next stop, as I was
almost positive that perl's rand explicitly excluded the upper bound (and it
does).

My recollection of 100-sided dice was that it was often printed as "00", so
you could take it as either 0 or 100, depending on your need.

------
joshjkim
2 things: (1) this may change soon but for the past 2 years I've seen a decent
% of startups pay around the Google scale ($130-$160), with raises not too far
from the scale set-out in the article. However, the big difference of course
is that many of these startups will never make it to year 5... (2) this should
be qualified as "...for Engineers" (maybe implied by the venue ha). The math
is pretty different when you talk about (a) finance/consultant types deciding
between big institutions and startups [pay is MUCH worse unless you win big,
but hours and work satisfactions are higher..or supposed to be] and (b)
sales/ops types [pay is comparable, hours are worse, but potential impact is
higher..or supposed to be].

------
afro88
Meanwhile in Berlin...

[http://www.payscale.com/research/DE/Job=Senior_Software_Engi...](http://www.payscale.com/research/DE/Job=Senior_Software_Engineer/Salary)

------
tabeth
So for me this begs the question, how do you get to this point? I've never
cared too much about compensation, since though I went to a good school, I did
the computer science major pretty quickly and after graduation am working at a
start-up I think is great.

Should the goal be to spend time studying for interviews, or is this some
other strategy? This article assumes you're at some level to command this
level of compensation, but how do you get to that level to begin with? I know
the classic advice: do good work, write excellent code, etc, but is there more
specific advice?

------
bambax
I wonder what people do with all that money. If you're capable of earning
$250k working 5 days a week, why not earn $100k working only 2 days a week?

~~~
bigcothrowa
It doesn't scale down like that.

~~~
gozur88
Wouldn't that be nice, though? I'd do it in a heartbeat.

One of the guys tried to arrange that where I work, and he ended up retiring.

~~~
bambax
As a contractor that's basically what I do; the drawback is you have zero job
security, and you're not really "part" of the company (which, depending of the
client can be a good or a bad thing).

I think if enough people asked for it, it could become more mainstream; we
spend way to much time at work IMHO.

------
tvural
I appreciate some of the writer's points, but he's so eager to prove his point
that he makes some obvious mistakes. The 38% of founders who failed took on
average a few months to do so. Quality of research papers is produced is not a
measure of how interesting work at a company will be - was Steve Wozniak
churning out papers while he worked on the Apple II?

------
eecks
I make less than the year 0 at year 3.

------
fludlight
TLDR: Article about lifetime earnings that fails to mention cyclicality. Good
luck with that.

~~~
krschultz
Though it probably reinforces his point more. Would you rather be working for
Google or a random startup when the next recession comes?

------
vlunkr
Don't forget that there are other options. I work for a small consulting
company. Our size allows us to have the agility of a start-up, but without the
long hours and the stress of your product failing.

~~~
johnward
Consulting without long hours? Does that exist?

~~~
ercu
For my case, in a consulting company headquartered in a relatively 3rd world
country, it is not allowed to work after 6pm. Because of family issues that
employers value.

~~~
aries1980
Yep, this is the case at large consultancy firms such as Capgemini or
Accenture, not for small company where you tougher scale your resources.

------
shanwang
Have to say i'm really jealous. You don't get nearly that much in
google/microsoft London office, not sure about FB but I doubt it's much
better.

------
142535
At my big company in Australia, I made 85k after 4 years, with high income tax
and rent of $1800. I have quit to create a startup. I don't really know what
will happen now.

------
pinkunicorn
The last line is pretty important -

"You should figure out what the relevant tradeoffs are for you."

The author is just summing up his experience. Individual mileage definitely
varies!

------
Xyik
The point of joining a start-up is to take risk and make more $. I'm not sure
there is anyone who doesn't get that. Obviously joining a large stable company
with consistent growth will net you high stable pay, the point is if you want
to make an above average amount of money that moves the needle and makes your
life feel different, a start-up is the way to go.

------
shocks
Can anyone give some figures for big companies in the UK?

------
SEJeff
Or you simply work in finance in tech.

