
Developer won’t get hit by a bus, they’ll get hired by Netflix - deltamidway
https://www.neomindlabs.com/post/your-developer-wont-get-hit-by-a-bus-theyll-get-hired-by-netflix
======
game_the0ry
I agree with the author's point about using popular tech stacks to alleviate
the ramp-up time for new hire productivity, but that is not the optimal
solution. The optimal solution is for management to not let high-productivity
talent from leaving - increase their comp to whatever offers they might get in
the open market. That's how labor economic works - it's a market.

Investment bank and management consulting figured this out a long time ago.
Example - when you new grad starts in i-banking, they're in training for 4-6
weeks. Not doing anything productive, just training to do the job. Not the
case in engineering, you are assigned user stories day one and your training
is doing the work. So new i-banks are highly paid (so they don't leave because
talent is perceived to be scarce and valuable) and they're companies invest in
them (through training early on).

Right now, corporate managers are vomiting in their mouth when the have to
look at how much they need to pay to keep their engineers from leaving. It's
because of the perception of engineers - they're seen as semi-skilled labor
(cost center, not strategic to the business) and are easily replaceable (no,
they're not). Culturally, they have been conditioned to think this way, so no
wonder turn over is so high every where.

~~~
Aunche
Not all companies need $500k engineers or can afford them. An optimization at
Netflix that improves performance by 1% may save them millions of dollars. The
same optimization at a medium-size company may only save them a few thousand.

Also, it's much more difficult to quantify the impact of a software engineer
compared to investment bankers and consultants. The latter two are directly
making money for the firm.

~~~
game_the0ry
> Also, it's much more difficult to quantify the impact of a software engineer
> compared to investment bankers and consultants. The latter two are directly
> making money for the firm.

Yes, it is difficult, but possible.

Here's quick and dirty analysis - consider Sears, Walmart, and Amazon:

\- Amazon pays its engineers near top of market - $1.5T market cap.

\- Walmart has a pretty good engineering culture. They acquired a tech company
to start Walmart Labs for data science stuff and they even have popular open
source software (Hapi.js) - they're the largest company by revenue and $370B
market cap.

\- Ever been to Sears.com? Me neither - largest retailer in 1980 to bankrupt
in 2018, stock price at $0.23 and $94M market cap.

I deduce that investment in software engineers == higher stock price.

~~~
reaperducer
_I deduce that investment in software engineers == higher stock price._

Easy to do when you cherry-pick three companies.

Run your analysis on 10,000 companies large and small and you might have
something.

~~~
game_the0ry
> Easy to do when you cherry-pick three companies.

* Netflix vs Blockbuster

* Uber / Lyft vs taxi cabs

* Airbnb vs hotels

* Blogs vs print media

* Youtube /Instagram vs TV

* porn tube sites vs porn studios

I could keep going.

I've also tried the corollary - companies that are successful while cutting
cost in tech, but I can't think of any successful companies that are cutting
investment in tech.

------
perlgeek
The "hit by a bus" thing is used for the most dramatic effect: there's nothing
you can do, there's no grace period where a "poached" developer can give some
wisdom to his/her successor etc.

Managers know that it's not the most likely case, but it's still possible.

~~~
roland35
Yeah I think "hit by a bus" generally means there is 0 chance of knowledge
transfer and is more a disaster recovery term than a talent retention term.

Unless you really burn a bridge with your workers they should have at least a
week or 2 to transfer knowledge!

~~~
treeman79
Opposite opinion. You should never need more then a day to knowledge transfer.
If that.

I always try and cross train people enough that I can quit at any point and
it’s not an issue.

All processes are kept automatic where no one is crucial to keep it running.

Mostly it’s useful for vacations. In the past I went on a cruise. And I wasn’t
sure the company will be online without me to baby them through.

After that I got extremely serious about investing in the team and tools to
never let that happen again.

~~~
nitrogen
I agree with making things automatic. But sometimes you have to let team
members specialize. It's less efficient for everyone to know everything. But,
it is good if everything is known, at least in part, by at least two people.

~~~
treeman79
A Company got down from 20 to 3 people. Completely different tech stack each.
Many warnings that company was in major trouble if any of left. Other 2 had no
way to support.

Oh It was so painful when it happened.

------
marcinzm
There's several reasons a bus is seen as worse than them being poached:

* Early startup employees have golden handcuffs regarding switching jobs. Sure, Facebook is offering them $500k but they'd be on the hook for $200k in taxes if they exercise their options and they leave a bunch more un-vested options on the table.

* You can mitigate them leaving by having a better work environment, equity and so on. Not much you can do about a bus.

* You can pay them to stay on for another month or to consult after the fact. No amount of money get's you an hour long phone call to the afterlife.

edit: Also, the article underestimates the effort needed to get a FAANG job.
They don't just call you up and offer you a job. They offer you the chance to
take a grueling set of white board interviews that require months of studying
to pass.

~~~
redisman
Options for most startups are mostly way overrated. The opportunity cost to
hang around for 5-10 years to maybe get to a liquidation event is very high.

~~~
acapybara
Seems like a thing where if a FAANG wanted the early startup employee enough,
they would gladly compensate for the one-time cost with a signing bonus.

------
roland35
FAANG companies can certainly offer more money, but there are lots of things
other companies can offer too (besides Ruby on Rails apparently).

\- ownership of the product and process

\- less red tape and politics

\- good work life balance

\- location other than Silicon Valley

\- boss who pays attention to engineer needs and wants

Money is a huge factor but it isn't the only one!

~~~
thelean12
I feel like people try to tell themselves this, but money is BY FAR the most
important factor. And FAANGs pay a ton.

Maybe this can be true if you're going from like $250k to $270k from FAANG to
FAANG.

But most of the time we're talking about something like $180k to $250k when
getting poached to a FAANG. It would take a huge amount of perks or otherwise
to make that gap worth it.

(Of course this isn't true for everyone. But it's true for most)

~~~
hinkley
I know a guy who passed on Apple because they weren't offering anywhere near
that. Are a lot of people really seeing this kind of money?

~~~
khalilravanna
Yes: [https://www.levels.fyi/](https://www.levels.fyi/)

~~~
hinkley
See, I always have trouble with 'stock'. I need more details. Is it a stock
grant, or an option grant? Because with a publicly traded company, they'll let
anyone buy options. The difference is that I don't have to wait 2 years, but I
also don't _get_ to wait three years if things aren't great at 2.

~~~
oblio
It's always stock grants. Only crappy companies give their employees option
grants these days. FAANG doesn't do it, as well as the second tier of tech
companies (Oracle, Adobe, etc.).

And they will make you rich. Someone who works for these companies at a non-
junior level for more than 5-10 years and is reasonable about expenses can
quite easily become a millionaire if they work in their offices in developed
countries. 5 years for senior positions, 10 years for regular positions.

------
pavlov
The author makes it sound like Rails is the recommended way to build software
that is maintained by a revolving door of junior developers whom you don't
have to motivate or compensate, because you can just hire another cog-in-the-
machine when the old ones inevitably wise up to your game.

Not sure if that was the intended message.

~~~
biztos
Also, it might not even work!

What happens when one of your fungible junior engineers happens to be smart
enough to do some tricky things _even with Rails?_

And then she gets hired by Netflix to do something more career-enhancing than
copy-pasting Ruby code from StackOverflow.

Now you're stuck with your revolving door of undercompensated junior
developers and a _complicated_ Rails application. Uh-oh!

------
BrentOzar
Instead of "hit by a bus," I prefer the term "win the lotto."

Any member of your team could win a life-changing amount of money in the
lottery, inherit it, win a gambling bet, etc. Frame it as a good thing rather
than a death or a change of hire - somebody might just flat out retire because
they don't financially need your employment anymore.

~~~
MattGaiser
I see this one as a different problem.

If your team members who won the lotto would just give their two weeks and
quit, then your company/team has a substantial morale/motivation problem.

Such a company is not creating an environment where people enjoy being a part
of it.

~~~
jdmichal
Yea sorry that's bullshit. I certainly don't need the stress of a job in my
life if I have other options. I don't care how much I like my job, it's still
a job and the only reason I'm doing it is to make money. Otherwise I'd be
spending time with my family and doing hobbies, of which one would likely
still be writing software.

And I wouldn't expect anyone in that position to give me two weeks. Two weeks
is about not burning bridges. If I never need to cross that bridge again, what
do I care if it burns?

~~~
ghaff
>And I wouldn't expect anyone in that position to give me two weeks... If I
never need to cross that bridge again, what do I care if it burns?

IMO that makes them an asshole.

But, to your point, sure. If I have FU money then depending on a lot of things
including what arrangements I could make with an employer, I might well choose
not to work for someone else.

~~~
jdmichal
Agreed. A rich, independently-wealthy asshole. But there's also a difference
between my moral judgements and my preparations. I can hope someone won't be
an asshole, but I will prepare for it.

~~~
ghaff
Sure. And again this comes back to the bus factor. If someone disappears off
the face of the earth _for whatever reason_ that will hopefully not
precipitate a major crisis at any company with more than a handful of people.

~~~
jdmichal
I never said anything otherwise? I'm unsure what you're trying to get at. Are
we just agreeing with different words?

~~~
ghaff
Yeah, we're agreeing. Hope for the best, expect the worst.

------
joncrane
I always call it the "lottery problem" instead of the "bus problem" because
it's more positive. Also for some people, getting hired at a FAANG is like
winning the lottery so it jives with OP's article.

~~~
hobofan
The problem with either of those is that the chances of either of those things
happening are incredibly low, so the urgency to act on it isn't there. If
someone would tell you that you have to prepare to the one in a few million
chance of winning in the lottery, you would likely also ignore it.

An employee getting hired by another company (doesn't need to be FAANG) is on
the contrary a rather common occurrence, and a lot of people understand the
importance of preparing for that.

------
crazygringo
> _you want more than one person in your business to have domain knowledge_

> _Everything gets a lot easier if you select the right software and
> framework_

Huh? Domain knowledge doesn't refer to your tech stack or coding practices. It
refers to _why_ you've built things the way you've built them -- customer
requirements, business requirements, technical requirements.

Ruby on Rails may improve _onboarding_ time, but it has _zero_ to do with
domain knowledge.

------
Tainnor
This is such a low-effort blog post:

1\. It's click-baity. From the headline you'd think it would be a discussion
about why engineers hop jobs so frequently, why in particular FAANGs seem to
be so attractive, and what we could do to increase retention. Instead, the
post just quickly summarises what we've known for ages (turnover is a big
problem), very briefly goes off on a completely irrelevant tangent (that it's
more likely for an engineer to change the company than to be hit by a bus,
which is true, but pointless) and then tops it off by the insane suggestion
that "just use Rails" is the answer to all of your turnover woes (more on that
below).

2\. There is an interesting discussion here to be had: _why_ exactly do
companies suck so badly at retaining talent? My take on it is that we all
(companies, developers, etc.) routinely emphasise the wrong things (office
perks, showing off tech skills, etc., instead of a good understanding of the
product) and burn people out, but as said: this is a much larger discussion.
More importantly though I disagree with the received wisdom that "developers
are developers" and domain knowledge is worth nothing. Of course, you always
should be prepared for the worst (i.e. the proverbial bus), but it should
still be the companies' priority to retain good people as long as possible
because once somebody leaves, so much knowledge just goes to waste and has to
be reacquired. At my last company, my whole team was fired because they
thought that some other team would be just as good for the product, ignoring
the fact that we'd built up the product ourselves and all the knowledge for
two years. But to the higher-ups, the view was that developers are
exchangeable.

3\. The author just really comes across as immature and uniformed with their
unilateral praise of Rails. I've worked on Rails apps so messy that they were
almost impossible to understand. And, by now, Rails is by far not the only
framework with strong conventions and a lot of out-of-the-box support for many
common things - Spring Boot for example (whatever its faults) arguably
supports even many more requirements. But more importantly, for any kind of
non-trivial app, the complexity is not just in the technology: it's in the
(often contradictory) requirements, the different architectural tradeoffs, the
little gotchas, the personalities in the team, etc. etc.

------
catwind7
> Everything gets a lot easier if you select the right software and framework,
> primarily if you use Ruby on Rails. Rails itself is a full-stack framework
> that has a best practice for every piece of a web application. If you are
> committed to doing things “the Rails way,” you cut the total cost of
> ownership by A LOT.

Rails has an incredibly large community but I think this statement would be
equally true for any tool you're well versed in

~~~
gremlinsinc
Having worked w/ rails/laravel, I'd say you could say the same thing and it
may even be 'more' true about laravel (see: built in queues, authentication,
etc), with rails you need devise, and 3rd party packages for a lot of the
normal boilerplate.

However, lately I'm thinking more about performance so would love to work more
with rust or golang, though I find rust harder to grok mentally. Golang is
nice though, and easy to follow most code samples.

~~~
catwind7
I've been meaning to checkout rust/golang for some time now - might pick up a
book on it. I've worked primarily with rails the past few years and at times
it feels like some of our biggest maintainability issues are the direct result
of certain third party packages we reached for to solve boilerplate.

Not to knock on using libraries or anything like that, but we've definitely
felt the pain of putting tools / convenience ahead of architecture.

------
rl3
Being on the receiving end of poaching is simply a failure to compete in
arenas beyond compensation.

Not only must you compensate your talent at the top of the market and then
some (including generous equity), but you must give your employees an amazing
work environment with excellent work/life balance, _while_ providing something
for them to work on that motivates them on an ideological level.

When any part of this aegis cracks, poaching has the potential to ravage your
ranks.

I would say that in the case of especially valuable or world-class talent,
it's the founder's responsibility to know as much as they can about that
person, and to truly pitch them on a level that fully aligns across all
dimensions of that person's life. Give them not only excellent comp, but
_fulfillment and purpose_ that is congruent or even symbiotic with their
personal lives and overall ambitions.

Deep down, most people aren't pawns that you can simply acquire with a number
and expect the highest quality work from.

~~~
yourapostasy
_> Deep down, most people aren't pawns that you can simply acquire with a
number and expect the highest quality work from._

In practice, it is _extremely_ rare to find managers who effectively practice
this. When you do, it's pretty amazing to watch in action.

I've only seen one such manager out of hundreds I've encountered consulting.
That manager's team members won't leave the team for even 2X pay increases,
because they figure the additional anticipated stress and job insecurity is
not worth it. The amount of trust between that manager and the individual team
members is higher than I've ever seen elsewhere, and that manager redefined
for me what was possible with people skills superpowers. RDF doesn't even
begin to describe it, and this field was accomplished without Jobs' infamous
tantrums.

~~~
rl3
Thanks for that, it's encouraging to hear.

While I've no experience in the corporate world proper, as a solo founder 7
years into the same project I've a similar game plan with respect to talent,
and just hope one day to have the privilege of giving it a go. Further (albeit
slightly outdated) context in the link below.[0]

My scenario is more to do with how to put together a dream team, and convince
people to join that team. With world-class talent, you have to consider that
some of the people you want to hire are already quite wealthy and/or famous.
Therefore, if you want any hope of landing let alone retaining them, you have
to dig deep and discover what motivates them, and understand what aligns with
their existing pursuits and goals.

If I ever do get the chance to hire any of these people, I'm not that worried
about the sell. I've probably had countless imaginary conversations with each
of them over the past few years. To even have the opportunity to talk to any
of these people would be an _honor_ , so the notion of somehow mistreating
them, or failing to both compensate and appreciate them to the maximum extent
possible just doesn't compute. That extends to the non-wealthy, non-legendary
hires as well; if anything it's a healthy model to approach how you treat
_all_ people in your employ.

As an aside, one of the biggest problem I face with respect to hiring (minus
funding and, you know, actually getting off the ground) is: who to approach
first? Dream team assembly dynamics are very delicate from a game theoretical
point of view, and I've begun to think this is perhaps the wrong way to
approach thinking about the problem. Elizabeth Holmes infamously used the _"
If I get person X, then getting person Y will be easier._" strategy to great
effect, but she was a complete fraud.

There's a few ideas I have here that aren't fully elucidated, but probably
could be thought of as consensus-based offers. Pitch people individually and
in a personalized fashion, but with no expectation they accept the offer
unless certain conditions are met, such as others on the prospective dream
team agreeing to the same understanding, or even making it contingent on
funding itself.

Assembling a ~50 person team pre-funding certainly is putting the cart before
the horse in so many ways, but I think it can be done. The look on the VC's
faces would something. "Here is the vision, here is the prototype, here's a
team of 50 exceptional people—some of whom are legends—that have agreed to
build this thing together, contingent on funding. Just need the money."

[0]
[https://news.ycombinator.com/item?id=22429827](https://news.ycombinator.com/item?id=22429827)

------
rl1987
Realistically speaking, isn't getting hired by Netflix et. al. a practical
impossibility for 99+ % of software developers?

~~~
odyssey7
Back-of-the-envelope.

In 2014, Google had around 28,500 software developers. [1]

In 2016, it was estimated that the US had around 3.87 million professional
software developers. [2]

So around that time, about 0.75% of all software developers in the US worked
for Google alone. If your organization employs a few dozen skilled developers,
there is a very strong chance that some of them could find a placement within
FAANG. It's likely that these are the engineers that you rely on the most.

[1] [https://www.quora.com/How-many-software-engineers-does-
Googl...](https://www.quora.com/How-many-software-engineers-does-Google-
have?share=1)

[2]
[https://en.wikipedia.org/wiki/Software_engineering_demograph...](https://en.wikipedia.org/wiki/Software_engineering_demographics#United_States)

~~~
oblio
Only some of those employees were in the US, though. So probably the chance
was 0.5% or lower.

------
nwsm
A good idiom doesn't need over-explanation, and I think the "bus factor" is a
good idiom; no Rails or Netflix commentary required.

~~~
ryathal
I think "poach factor" is a more important idiom/risk, naming particular
boogeymen isn't all that relevant. It's far more common, and far costlier. As
someone who has literally experienced the bus (well car) factor, after the
blow of the initial loss, there is some sense of we have to find a way to
manage that takes over.

------
madrox
I don't care how you put it, but the fact is that people leave. I led an
engineering team I was quite proud of, and days came that I had to let top
engineers go. Everyone has growth arcs, and they had opportunities to seize
their dream jobs working on things they'd never get to otherwise. I was proud
to have felt like a stepping stone on the way to their dreams, even though it
screwed the business temporarily. I learned a lot of what this article is
trying to say. Calling it a bus sounds like a one in a million disaster to
prepare for. Getting hired by Netflix is far more likely but just as
impactful.

This is written to business leaders, but I feel like if phrased differently
would sound familiar and accepted by HN. Namely, don't adopt esoteric
technologies no one else knows. Document production process. Never let mission
critical operations exist solely in your lead engineer's head.

The fact is that it's never a good time for your best people to leave, but
that's inevitable on a long enough timeline. It's the duty of business leaders
to be prepared for that so they don't have to resort to dirty tactics to
convince them to stay.

~~~
neomindryan
Thank you, this is great feedback.

------
markmiro
I've felt companies would want what the post lays out:

\- A safe software stack

\- Make code understandable (industry best practices)

\- Focus on employee ramp up time

I was confused when some companies stressed different things, and I didn't
quite realize until reading this post that it might be coming from a place of
fear of losing engineers.

What I've seen:

1) Committees for coding standards

2) Teamwork over code ownership

3) Peer code reviews to enforce quality

Sounds like these things would help increase code quality and reduce the bus
factor. But I think there are some dangers.

1) Committees can mean that no individual is responsible for bad decisions

2,3) Teamwork is great if people have separate roles. Too many cooks can
become a real problem otherwise.

I suspect people afraid of responsibility are more likely to embrace
committees and teamwork. Dickheads incapable of working with others are more
likely to take ownership (or else they'd be completely unemployable).

I also suspect many startups cargo cult practices that work well for giants,
but are net negatives that encourage your employees to leave if you're small.
Lacking ownership but getting paid super well is a better tradeoff than
lacking ownership AND lacking amazing pay.

------
giantg2
I guess I'll be the one to say it. No, I am much more likely to be hit by a
bus than hired by any high-caliber tech company. I'd say stroke or heart
attack top the list for me - probably will happen before 40 too.

------
darth_avocado
And here I am, can't even get a recruiter from Netflix to reply, after
submitting my resume on a job that I was match for 10/10 requirements on the
description AND got someone to refer me.

~~~
dadoge
When was this? Companies now are slowing hiring down a whole bunch

~~~
darth_avocado
Pretty much last 5 years of my career

------
auganov
> “Staying on the Rails” makes any new developer productive almost immediately
> ... Sticking to the standards evangelized by the community and adding proper
> documentation ... makes onboarding a breeze, which creates more productive
> developers, which makes hiring more accessible, which reduces your “bus
> factor.”

You could make the reverse argument. Using "industry standard" tools makes
your top performers much more likely to get poached. Using unusual (but
enjoyable) technologies might increase employee loyalty.

------
ninju
I use the phrase "win the lottery" rather than "hit by a bus". Has the same
impact but it's less negative (though probably less likely :-))

------
Kalium
Sometimes it does happen. I once interviewed with a company that was hiring
because one of their engineers had died in a motorcycle accident.

Personally, I think trying to reframe it as happy and positive and coming with
a grace period is a little frivolous. Your team should be prepared to
transition someone's responsibilities in the context of a sudden, wrenching,
and traumatic change.

------
at_a_remove
When working on a project, I would title my documentation something like "Bus
Document," aiming for a soup-to-nuts file describing how the project came to
be all the way out with appendices describing each file format, etc. I spent a
lot of time talking about the Bus Factor, to little avail. A pity.

------
pronik
Nitpicking, but FWIW that's not the definition of a bus factor I've learned.
It's a number of people to be hit by a bus for the project to die. Bus factor
of one is a SPOF, so you need to increase your factor, not decrease it.

------
fernandokokocha
That might be an unusual situation but actually happened to me. I used to be
in a team of two, going to work after one weekend - he's dead.

------
gremlinsinc
This reads basically as an ad for "use rails its better than the rest, cause
it's what we use, and you need us! So hire us!"

------
heyoo
Are $500k+ yearly salaries in SV really that usual?

~~~
fizwhiz
> Are $500k+ yearly salaries in SV really that usual?

Salaries? Not at all. Total compensation? Well, it depends.

Software engineers with < 10yrs of experience routinely make this much at
FAANG. The total compensation number usually includes the following:

* Salary

* Bonus (anywhere between 15-25% of salary)

* Initial grant that vests over 3-4yrs

* Stock "refreshers" that you get annually

* General equity appreciation due to a bull market

For senior engineers, the equity portion of their compensation far outweighs
their salary.

~~~
naveen99
I wouldn't count the equity appreciation as compensation. you already own the
capital, its your own capital gain, not income from employer at that point.

~~~
blawson
Yes and no. When your RSUs are granted at 100k and then vest a few years later
at 300k, from yours and the IRS' perspective you made whatever + 300k.

~~~
vkou
Yes, but you should value them at 100k, because it is the functional
equivalent of getting a 100k cash bonus, that you (instead of diversifying)
foolishly spent on buying a single company's stock.

You don't actually need to work at Facebook to sink 100k into buying Facebook
stock (That you then forbid yourself from selling for 4 years).

~~~
stale2002
> that you (instead of diversifying) foolishly spent on buying a single
> company's stock

So, it is actually a bit more complicated, and better than that, and long term
stock grants act as a psuedo stock hedge.

This is a simplification, but imagine that there is stock worth X, that hs a
50% chance of the stock doubling in value, and a 50% chance of it crashing to
0$. You might think that this would be equivalent in expected value to X, but
that is not true.

It is not true, because if the stock goes way down, you don't have to "accept"
those losses. Instead, you can jump to another company, mid way through, and
get back your previously high salary.

In that way you can capture the upside potential, while also being protected
against the downside losses, in that if the stock goes down, you just jump
ship, and get a high salary somewhere else.

~~~
naveen99
hedging is not arbitrage. There is no free lunch.

~~~
stale2002
In this case it is free arbitrage.

This is because if the stock goes way down, and you are 1 year into your 4
year vest, then you can leave the company, and get a high compensation package
somewhere else.

Do you understand how this makes it so you have free downside protection, from
those other 3 years, because you can leave and get the high salary somewhere
else, if the stock crashes?

~~~
vkou
Since RSUs vest over time, the penny-for-penny equivalent financial
transaction for receiving $100K worth of RSUs over 4 years, would be for me to
receive $100K of cash compensation over 4 years, and using it to buy stock
(That I can't sell for X months).

There's no advantage to RSUs. Cash is better in every way, because, at worst,
you can invest it in the _exact same allocation_ that your RSUs are invested
in. Any gain from them rising in price could have been realized by investing
cash. Any loss from them falling in price is a real, not a paper loss. [1]

I'll take $100 of cash over $100 of RSUs any day. I probably wouldn't take $80
of cash over $100 of RSUs, though.

[1] Unless for some weird reason, you are accounting your personal finances,
where a 4-year stock grant is realized in year 1. If you are doing this, you
should stop, because it is not an accurate way to do accounting.

~~~
stale2002
> the penny-for-penny equivalent financial transaction for receiving $100K
> worth of RSUs over 4 years, would be for me to receive $100K of cash

You still dont understand. Let me work this out for you, year by year.

Lets say that the stock grant is 25k a year, over 4 years. But there is a 50%
chance, after year 1, of the stock doubling and staying there, and a 50%
chance of it going to 0. IE, it will be worth 50k or 0$, which is an expected
value of 25k.

So you have 100k of stock, and 25k vests on year 1.

Situation 1: you win the coin flip, and the stock doubles. Your 25k that you
received, is now worth 50k. BUT, you now have an ADDITIONAL 150k that is
unvested. The unvested stock has increased in value! If you stay for 3 more
years, you get 200k in total.

Total value: 200k, over 4 years.

Now, lets look at situation 2.

In situation 2, the stock crashes to 0, after 1 year. Your 25k vest, is now
worth 0$. As is, the next 3 year vest is also worth 0.

But here is the trick. What you do now, is that you quit your job. You do not
stay at the company for 3 more years, to get the 0$ of stock. Instead, you get
different job with stock that vests at 25k a year.

Total value: 0$ for the first year, + 25k/year at job 2. Which equals 75k.

Do you see how this is different?

You absolutely could NOT get the same value as this, if you were paid in cash.
Because if you were paid in cash, then you would realize the full losses of
situation 2.

> Any gain from them rising in price could have been realized by investing
> cash

No, actually. In situation 1, I receive 200k, and in situation 2 I receive
75k, because I am protected by the downside risk, by the fact that if the
stock crashes to 0, I can leave the company and get my salary higher again.

This is not possible by investing 100k from the beginning.

~~~
vkou
Yes, you're right, RSUs are better as a signing bonus, in a bull market. (In a
bear market, plus a harder job market, you would have been better off locking
cash in for your comp - if switching jobs after a year would not get you an
equivalent RSU/cash grant)

Once the four year vesting cliff is done, though, the annual top-ups aren't
much different from cash (Because if the stock inflates fantastically, you
will get fewer RSUs next year).

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warmcat
Pretty sure the author will also get "poached" if a FAANG offers them 200k
more than what they currently make.

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arez
is this a RoR ad? It doesn't really provide any new insights. If your devs are
hired by nflx or hit by a bus the outcome is the same. It's just a saying

~~~
nwsm
Yes it is. From the homepage [0]: "Dedicated to the stewardship of Ruby on
Rails applications."

I guarantee no one needed the author to explain that "hit by a bus" applies to
more than tragic accidents.

[0] [https://www.neomindlabs.com/](https://www.neomindlabs.com/)

~~~
gremlinsinc
I wouldn't hire them cause their ui/ux sucks. I'm fullstack, and not a design
expert but I can do better than that easy. The dropdowns at the bottom of the
page are the worst.

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tom-thistime
"Hit by a bus" means hired away. That's the meaning of the phrase.

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yieldinglylow
In Soviet Russia, if developer go to Netflix, developer get hit with bus.

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paulgb
> never underestimate the amount of money the FAANGs have to poach your
> talent.

I really wish we'd stop using the word "poach". It's a loaded word with
negative connotations, but what it really means here is "offer someone a
better situation than you offered them". Employees have agency, they aren't
wild elephants who need your "protection" from "predators" who just want to
pay them more.

~~~
JPKab
The thing that hits me is the "$500k+/year in the valley".

Is this really a thing? Am I a giant dumbass for staying in Colorado? Even
factoring in my stock grants, I'm nowhere close to that number.

~~~
WWLink
I feel the same way about being a dumbass for staying in los angeles lol. Here
I am getting low 100k and some linkedin recruiter tells me about a 400k job.
Wait WHAT?!

Man I'd happily take up one of those Google jobs, but being an embedded
software guy, I'm not even sure what they'd want me for. It seems like a lot
of silicon valley companies are a great place if you're a web dev, or use
C#/Java all the time.

~~~
dmoy
I have both interviewed and coached embedded software devs into positions at
<FAANG company>.

You probably won't end up doing embedded work though, just as a point of
warning. I mean you might, but probably not. As sibling poster alluded to,
there are some jobs closer to that area, but more likely than not you'll end
up on some other team doing something completely unrelated to embedded.

It doesn't have to be a permanent thing though -

It does not take too many years of $300-$400k compensation to make your future
much more free to pursue what you want. If you do FAANG for 5-10 years while
saving aggressively and can't take any more of it, then you can go back to
working on embedded software for a third of the pay and have a huge buffer for
retirement.

------
draw_down
And frogs don't really sit in boiling water.

These are called figures of speech for a reason, being literal about them is
not admirable nor worthwhile.

~~~
MattGaiser
I still see it as an important distinction simply because developers also have
an interest in not getting hit by a bus.

But they are quite happy to leave for Netflix and given turnover rates in
tech, are almost guaranteed to leave in a few years.

~~~
tom-thistime
It would be an important distinction, except that "hit by a bus" always
primarily meant being hired away. (For me "always" means "since the mid
1990s".)

~~~
MattGaiser
Fair, but an organization should still be able to survive a literal bus hit
too.

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gsich
Why is Netflix seen as such a tech giant? They serve videos. CBS, HBO, Vimeo,
Youtube, Amazon do it too. Nothing special.

