
How to get rich in tech - sirteno
http://startupljackson.com/post/135800367395/how-to-get-rich-in-tech-guaranteed
======
Futurebot
"And if you go in with this mentality, even when startups fail, you succeed.
If you put five years into building a company and team, you will end up with a
great network of talented and motivated people, lots of first-hand experience,
and often some management experience as well. Worst case, your next step could
be going into Google at the VP level it would’ve taken you 15 years to get to
joining out of college to “inject some startup DNA,” and catch up on salary
within a few years. Unless this internet thing is a fad, that job will always
be there for you."

This advice is quite precise about where it applies. If you're at a startup
that is undercapitalized, working you 12-16 hours a day, 7 days a week, with
poor management and no opportunities for anything but building and
maintenance, you can actually wind up worse off than when you went in: no
built-up network and nothing that would make you "VP at Google" material, and
in the case of startups doing pay cuts (in an environment of ever-rising
rents), even less money than when you started(!) He is referring to working at
"decent or better" startups; problem is, you may not know you're not working
at one of those until you actually work at another one.

The rest of his advice is probably worth listening to, but the above part
should be considered very carefully.

~~~
trjordan
So this happened to me. I believe it 100%, but it's nowhere near as
straightforward as you may believe after reading this.

The reason is that if you want to work hard for a startup, you need to ditch
the role mentality. You have to be all in on the company, all day. You have to
think like a CEO without being a CEO, and without access to all the
information that comes with it. You also don't get comped for it immediately.

My path:

\- Joined a company just as they got seed funding. Wrote code for 1.5 years.
Constantly fought to understand why we were building what we were and where I
could cut corners while still being proud of my work.

\- Company got acquired. Took as job as sales engineer. Gave 6 demos a day for
9 months.

\- Asked to scale my role. Turns out that's product marketing, so hired my
replacement and moved to marketing. 2 months in, we fired my VP and I started
reporting directly to CEO. Did this for another 7 months.

\- More marketing churn, I ended up running marketing (team of 2). 1 left,
hired 4 total more over 8 months.

\- Decided I was leaving, told my CEO with 6 months notice. Ran the search for
a new CMO (obviously the CEO had final say, but we didn't have many
significant disagreements).

At every one of these steps, I freaked out about my ability to perform. I'd be
up in the middle of the night, or stressing about not understanding anything.
I wasn't leveraging my skills -- I was stepping into gaps the company needed
filled and backfilling the roles I was leaving.

If you can find a company that will let you do this, you come out with an
AMAZING skillset. I'm 30, and I haven't tested my ability to get a VP-at-
Google job, but I'm not finding anything in starting my own company that's a
total surprise. The breadth and exposure I got from trying different roles at
a startup every 6-12 months has been frighteningly valuable.

You can't stay heads-down and think writing code is all the your startup
needs. You need to think like a founder for 5 years, without any of the
upside, and you'll get a huge amount of intangible value from the experience.

~~~
Futurebot
I did this for several years, and it didn't give me anything near VP-at-Google
skills, maybe "VP-at-so-so-company" skills. I was in charge of development,
systems administration / DevOps, SEO (got multiple things to the top of
Google), some management (of non-technical freelancers, because I was the only
full-time technical person), and a variety of other "fill in the holes" jobs.
This was after multiple stints at other small companies (but not 5 full-time
people small.)

I got some things out of of it, no question, but absolutely nothing compared
to what I would have gotten at a high-quality company that had reasonable
hours, plenty of capital, very ambitious people (no one who worked there is
anywhere near technology now - most are 9-5 or non-technical consultants),
interesting technology, etc. The most important thing I got was "be incredibly
careful about who you work for and what promises you choose to believe", but
saying to people "don't be naive / foolish" is easier to say than it is to
evaluate the intentions and capabilities of founders / companies. The second
most important thing would be the ability to say "I've been through the
wringer before."

The quality of companies varies wildly, and the wrong environment will do very
little for you. Some wind up at ones near the bottom of the quality pile and
having the ability to recognize that you're at one _isn 't_ a given.

------
code4tee
Most people get 'rich' slow and steady rather than overnight ...and by 'rich'
those that are financially the best off typically don't look like it. They
drive a modest car, live in a modest home, have nice but not flashy things.

3 main rules to live by:

1\. The easiest way to increase your ability to save (other than a windfall
inheritance) is to earn more money. Live a balanced life, but make sure that
focus includes a strong career track with 1, 5 and 10 year goals. As has been
discussed elsewhere at length, popular culture likes to play up the person
that worked at a startup and sold their options for millions. This is very
rare (most options are worthless or end up being worth less than the cash one
gave up in the form of a lower salary to get them). Most 'rich' people are
those that work hard and earn above average salaries over long periods of
time.

2\. As soon as practical, at every stage of your life live below your means.
This isn't practical early on when some people are just scraping by, but once
you start earning some real $$ learn from times when you had less $$ and live
happily well under your means. If you earn $150k, live like you earn $100k. As
one earns more it's fine to spend a bit (maybe you have a somewhat expensive
hobby). Saving every penny eating beans and rice your whole life is no way to
live. However, so long as you live well under your means you'll do very well.
One of the biggest mistakes I see high earners make over and over is that they
increase their spending as fast or faster than they increase their earnings. I
can't tell you the number of "millionaires" I know that have trouble paying
the electric bill some months. Don't fall into this trap.

3\. Invest, but do so in a diversified and conservative fashion. Slow and
steady is the key. Trying to "get rich quick" is also an easy way to "get poor
quick." Build a reasonable pool of assets and invest when the market is up or
down, just keep investing throughout your life. The math shows time and time
again that people are horrible at timing the market. When everyone was in a
full blown panic in 2008-09 the smart person just kept investing. Every $ the
they invested is now worth 2-3x. Those that panicked and pulled out or stopped
investing missed out big time.

~~~
alexfisher
Some of the best advice I've read in this thread so far. I'd recommend
reading:

1\. The Richest Man in Babylon

The $7.89 I spent on this book, which I read in a single night, is the best
investment I ever made.

2\. Think and Grow Rich

An older book, but there are some golden nuggets within.

~~~
awakeasleep
So you got rich?

~~~
cal5k
No, but he sure did think about it!

------
wsc981

       If you want to get rich, your best bet on a risk-adjusted 
       basis is to join a profitable and growing public company. 
       Google for short. Make $200-500k all-in a year, work hard 
       and move up a level every 3-5 years, sell options as they 
       vest (in case you joined Enron), and retire at 60, rich. 
       This plan works every time.
    

I don't think this is great advise. Not everyone is able to join a company
like Google due to either luck or their capabilities. I also find being rich
around 60 years pointless, since you've wasted too much of your life working
for "the man" at that point.

I think a better approach would be the following:

1\. Become freelancer.

2\. Do what you love and do it well. If you're passionate enough about your
job you should be able to increase your rate over time.

3\. In western european countries: aim for at least 100.000 EUR a year.

4\. Live cheap and save up. Invest the cash you don't need at any moment in
real estate (house) and index funds.

5\. Travel around the world and find a nice cheap country you could enjoy your
life in.

6\. Emigrate once you have enough money to live comfortably in your country of
choice.

\---

That's my plan at least. Currently I'm on a 'holiday' (2 months) in Thailand.
I figured the following:

\- In Thailand one can live (bare minimum) for around 500 EUR a month (some
Russians in my co-working space live from that amount).

\- Property can be bought for around 50.000 EUR in Pattaya. Not really huge,
but decent with shared gym and swimming pool in apartment complex.

\- 100.000 EUR invested in indexfunds should net me on average around 6% a
year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average
minus ~1% tax).

\- With no monthly rent to pay, I'm should be able to live a bit more
comfortably compared to my Russian co-workers here :)

\- I could fully focus on personal software project and hopefully that will
add to my income over time.

\---

I won't be financially rich, but I would have financial independence and could
do what a love in a country with nice weather, good food and nice people -
it's another form of wealth.

~~~
JDDunn9
I'm more-or-less doing this now too, here's a few problems I've run into:

\- Visa renewals. Leaving the country every 90 days to renew your tourist visa
gets old fast.

\- Finding a country that is both stable and has a low cost of living. I was
in Bangkok during the last revolution when the current military junta took
over. The airport shut down and I had to take a bus past a lot of guys with
machine guns to get out of there.

\- Starting a family changes things. Poor countries have poor education
systems. I enjoyed my visit to Pattaya, but wouldn't want my kids passing by
"walking street" on their way to school.

\- You lose some small niceties like Amazon Prime and Hulu :)

~~~
ido
I've been through this thought process myself & my conclusion was that a lot
of the eastern side of the EU (including eastern Germany) is not a bad
compromise between fairly low cost of living & decent infrastructure/public
services.

~~~
turar
What countries do you have in mind?

~~~
ido
I currently live in Berlin which is getting borderline expensive (still much
cheaper than almost any major western city - more so now with the weak euro).
I've heard good things about the Czech republic and Bulgaria. Seems like
Croatia isn't bad either.

~~~
prodmerc
Don't forget Romania :-)

------
pla3rhat3r
While I don't agree with all the points, the best advice in here is:

"But for all that is good and holy, don’t join a startup for the fucking
money."

If you're joining or starting a company because you think you're going to buy
a yacht and a small island, stop it! Recently I've seen some Founders tweeting
things that make me shake my head every day. You're not going to be rich
unless you have that once in a lifetime solution no one else is building.
That's why it's called, "winning the startup lottery." It's still a fucking
lottery. :)

~~~
adventured
There are thousands of small, private technology businesses worth millions or
tens of millions of dollars across the US, that have taken little to no
venture capital, and in which the founders have very large equity stakes in
their own business.

It does not require the equivalent to winning the lottery to get rich with a
technology business. The odds are several magnitudes greater that you'll get
rich creating a technology business than playing the powerball.

Being worth $4 million, and having a small business that generates $650,000
per year in profit, is rich.

Getting rich with a start-up in Silicon Valley, given the approach used there,
is like playing the lottery. The start-up lottery you're referring to only
exists in SV / SF. Nearly everywhere else, the fundamentals of having an
operating business still rule - in that world, a lot of people get rich
running smaller technology businesses. $50 million or $500 million rich? Nope,
$5 million rich. Silicon Valley is mostly all or nothing, and that's what
makes good outcomes so relatively rare.

~~~
puranjay
Exactly what I tell my startup friends. I know people who run design
consulting firms and pull in $300-500k/year in profits. Some run SEO/SEM
marketing agencies and do similar figures. They give themselves generous
salaries and own nearly 80-90% of their businesses which, on paper, are worth
$4-5M.

That's definitely very, very well-off, if not F-U rich. And it's very "safe",
unless your $1M in revenue hinges entirely on one or two clients

~~~
ryanSrich
It's safe but it's also exponentially more difficult than starting a startup.

The amount of connections one would need to start a business tomorrow
generating $500k in annual profits is insurmountable.

Being a successful consulting agency or freelancer is attainable in two ways:

1\. Know a lot of people at a lot of very large companies that are willing to
throw you a bunch of work.

2\. Build up clientele for a very long time making no money until you hit
critical mass.

When I was freelancing it was one of the worst experiences of my life, so of
course I'm bias. But I want readers to know that there are 2 sides to every
coin.

~~~
halcyondaze
Exponentially more difficult than starting a startup? No shit, all you have to
do to start a startup is say you started one and give a vague semblance of the
idea.

~~~
ryanSrich
In more concrete terms; I'd say it's harder to gross $100k as a freelancer
than it is to raise a $6 m+ Series A.

------
tptacek
Developers at failed startups do not as a rule get offered VP-level jobs at
Google.

~~~
w1ntermute
VP level jobs at Google have nothing to do with being a developer and
everything to do with playing office politics extremely effectively (and
getting lucky, as with much else in life).

~~~
tptacek
I am very wary about claims like those from the article about how working for
a lower salary at startups will allow you to somehow compress N years of
career experience into (N-k) years of actual work.

I think the instances where that actually happens are balanced out by the
instances where your work will be valued at _less_ than what it'd be worth had
you worked at Google.

~~~
w1ntermute
> I am very wary about claims like those from the article about how working
> for a lower salary at startups will allow you to somehow compress N years of
> career experience into (N-k) years of actual work.

That claim has never made any sense to me (I think I first saw pg make it). In
my experience, there's little to no practical difference between working as a
developer at most startups and doing the same at a bigcorp in terms of
experience. There's certainly a lot of rah-rah-rah about the "startup
culture", but places like Google try very hard to make their employees happy
as well.

There might be a little more cowboy coding at the startup and a little more
bureaucracy at the bigcorp (though it's a good manager's job to shield
engineers from that bureaucracy), but your future job prospects are almost
always better when you've got a bigcorp stint on your resume.

------
blantonl
One important approach this article is missing is the fact that there are
thousands of quiet, successful, single owner companies that have found a niche
and don't aspire to change the world, and they still bring in hundreds of
thousands of dollars in profit every year.

Getting on with the Google's or the VC backed "change the world" startups
aren't the only ways to get rich in tech.

~~~
halayli
pretty much.

------
lazyjones
If you have the skills to go work for Google and climb up the career ladder
there, you probably have the skills to start your own company, work harder and
retire at 40 (not 60) with a decent amount of wealth. Just find an interesting
niche, develop it for a large market and don't waste your time on worthless
features. I retired at 41 this way and don't think I was even Google material
when I started (too old and relatively inexperienced). Also, listen to this
advice:
[https://news.ycombinator.com/item?id=10787615](https://news.ycombinator.com/item?id=10787615)

~~~
pjc50
_Just find an interesting niche, develop it for a large market and don 't
waste your time on worthless features._

"Just"

It requires a good mixture of luck and keeping your ear to the ground to find
an undeveloped but large market niche, and a good crystal ball to know which
features are worthwhile. I'm not saying it's impossible, but it's far from a
certain path to victory.

~~~
enraged_camel
The more domain expertise you have, the less luck you need to identify a
worthwhile niche in that domain.

People tend to think that startups are for young people, but most successful
startups are actually founded by 40-something year-olds for this very reason.

[https://www.quora.com/What-is-the-average-age-of-founders-
fo...](https://www.quora.com/What-is-the-average-age-of-founders-for-the-most-
successful-startups)

------
msoad
If you worked five years in a startup that failed it's hard to believe that
you can get a VPN job at Google. With acquisition maybe. But Google don't hire
VPs like that.

------
bcoinbanker
Powerful VC who profited from the kind of situation described in the nytimes
piece: "Don't join a startup because you are trying to maximize wealth". F __k
yes, just like you, the only reason I joined and you invested in that dating
app is to save the singles from this damn evil world.

------
blue11
Google and startups are two extreme ends of the spectrum, and neither is that
great in terms of risk-reward balance. Personally, I'd recommend joining an
established, but still growing, medium-sized company. That means shortly
before, or a year or two after IPO, somewhere between 100-500 employees. That
kind of a place still has momentum and is still relatively generous with
equity. You won't get as rich as your pre-IPO coworkers, but you'll do OK and
with less sacrifice. If the company is still growing, there will be
opportunities for promotion and for learning and doing a lot of cool things.
Think of joining Google or Facebook when they had 500 employees. In hindsight,
it seems obvious that that was a good time to join, but I'm sure that lot's of
people passed on the opportunity, thinking that it was too late. So
recognizing that a company still has momentum can be a bit tricky. If you are
coming out of college, one easy way to test if an established company is still
a good place or if it has stagnated is to do an internship there.

------
tabeth
The real question I think is what are the preconditions to "get rich in tech"
and how do you get to those preconditions?

Assuming you're not in a position to get the typical pedigree associated with
the preconditions, e.g. Stanford/MIT/ C.S, how does a "typical" engineer
become amazing. I would love a comprehensive guide on how to do this.

Being great at your job is one thing, meeting the preconditions associated
with getting rich in tech, is another.

~~~
sethammons
"Amazing engineer" doesn't have to correlate with getting rich in tech. I see
a couple of paths for getting rich. One, be lucky and work for a start up that
becomes a unicorn. Maybe not the best of plans. Two, solve problems for which
others will pay for solutions, work hard, and still be lucky (just not as
lucky as finding a unicorn - or maybe you accidentally make a unicorn). Three,
be an amazing engineer, get a decent salary, save and invest, and wait. For
becoming an amazing engineer, focus on providing solutions to the stage of
company you enjoy working at. While it might be splitting hairs between being
good at your job, I feel an amazing engineer does something more than just
their job. They bring something that helos push the company forward. At the
beginning, maybe companies need fast implementations that can just get by.
Maybe later they need proper automation and tooling. Perhaps they need a solid
team lead who works with people as well as tools. Maybe later they need more
experience collecting telemety on their systems. Or need more elegant designs
to scale. Or whatever. Experience, practice, and/or studying can help you
strive to be an amazing engineer. If you find yourself not growing year after
year, do something about it. Hope that was cohesive. Posting from a phone
throws me off more than I normally am, haha.

------
orionblastar
Yeah I followed advice like this. It does not always work. I studied hard in
college, I worked hard, and I was a programmer earning good money.

I never learned how to deal with stress and the stress from the job caused a
mental illness that forced me to go on disability.

If I had to do it all over again I'd develop stress management skills along
with people and social skills. Getting along with people who don't understand
how technology works is a big deal.

I don't know how to get back into working again and I'm 47 and barely getting
by. Blew through my life savings and filed chapter 13 bankruptcy due to high
medical bills. If I never developed that mental illness, I'd most likely still
be working.

~~~
copperx
Did you find the job more stressful than college? can you explain what
triggered the stress?

------
foobarqux
Does anyone have an actual example of someone getting to VP level at Google
through a startup faster than you could otherwise?

------
danieltillett
_My first piece of advice for startup job seekers is that equity, all things
equal, you can’t pick ‘em. On a risk-adjusted basis, startups are likely to be
about the same. If there is information that a company has significantly de-
risked, it will be priced in. Despite the market often being very wrong, you
are unlikely to outsmart it._

I don’t understand the argument for this. Isn’t the whole basis of venture
investment being able to identify business that will return above the risk-
adjusted return? Given many investors lack the technical understanding to know
a good risk from a bad one how could this be priced in?

~~~
w1ntermute
> Isn’t the whole basis of venture investment being able to identify business
> that will return above the risk-adjusted return?

No, it's to generate proprietary deal flow by building a brand for your firm.
YC has done this with HN and pg's essays, while a16z has done this with Marc
Andreessen's incessant tweeting and all the blogging by Chris Dixon, Ben
Evans, et al.

At this point, YC's/a16z's success has become self-perpetuating - the best
founders/companies will apply to YC and pick a16z over other VCs, the best
employees will join companies backed by YC/a16z, etc. It's no different from
institutions like McKinsey or Harvard.

~~~
danieltillett
Sure, but they still have to pick the above average companies. Even if they
don’t pick them and just them picking them means the company has a better
chance of success then average then you should be picking companies that
YC/a16z will like.

~~~
w1ntermute
The difficulty isn't in identifying the above average companies, it's in
getting them to take your money. Given how little money it takes to get to an
MVP these days, most companies backed by the top VC firms already have
significant traction, or the founders have a prior success, pedigree,
connections, etc.

> you should be picking companies that YC/a16z will like.

Just look up any of the articles on YC's demo days - you've got dumb money
coming out of the woodwork from all over the world, trying to get a piece of
the action.

------
retube
Reading the linked article about how employees of Good paid huge tax bills on
stock that ultimately proved worthless - how insane is US tax law?? Surely you
should only be taxed on realised gains, i.e when you cash out.

~~~
mahyarm
You get taxed at the amount of 'profit' you have gained when you exercise the
option. There is an 'ISO' stock option type for employees that makes the tax
event when you actually cash out, but an alternative tax system called 'AMT'
(alternative minimum tax) kicks in pretty quickly and taxes you anyway. The
entire system assumes you are getting public company stock or something
similarly liquid and taxes you as so.

Capital losses cannot be applied to normal income in practice in the US
either, only to other capital gains.

~~~
adventured
> Capital losses cannot be applied to normal income in practice in the US
> either, only to other capital gains.

That's wrong.

You can deduct $3,000 per year in capital losses against normal income.

"Generally, realized capital losses are first offset against realized capital
gains. Any excess losses can be deducted against ordinary income up to $3,000
($1,500 if married filing separately) on line 13 of Form 1040. Losses in
excess of this limit can be carried forward to later years to reduce capital
gains or ordinary income until the balance of these losses is used up."

[https://www.irs.gov/uac/IRS-Reminds-Taxpayers-They-Can-
Use-S...](https://www.irs.gov/uac/IRS-Reminds-Taxpayers-They-Can-Use-Stock-
Losses-to-Reduce-Taxes)

~~~
mahyarm
That is why I said in practice. You just had a $50k loss from your startup
option tax bill? It's going to take 17 years before you can deduct all of that
loss from your normal income!

$150k loss? 50 years!!

In other countries, capital loss can be deducted from your normal income
immediately.

~~~
smileysteve
> You just had a $50k loss from your startup option tax bill? It's going to
> take 17 years before you can deduct all of that loss

Unless your next startup options (or Google/Big Co RSUS) have a 50k gain the
next year(s). Then it only takes year(s).

Or if you have diversified and have market investments that likewise increase
50k and then you sell them.

------
TeeWEE
Ok how does this work in Europe. In Amsterdam, high salaeries are around 72000
per year. Of which 50% goes to the tax. So you only have around 3k per
month...

~~~
pc86
Part of the benefit of living in the US is the relatively low tax climate
(California notwithstanding, its state income taxes are 4x what I pay) which
generally leads to increased socioeconomic mobility (a disputed statement, I
know).

I imagine the advice for a European with a salary cap of approximately 70-80k
is the same for an American with a salary cap of 85-90k: wealth is most likely
only going to come from entrepreneurship or blind luck.

~~~
athenot
Salaries in the US are much closer to those of in the EU once you factor in
the cost of financing your own safety net. That's the counterpart of lower
taxes.

Now if you're in the US and pretend to have an EU salary by stashing away a
big chunk of it, then yes that is most desirable.

~~~
crucifiction
Not in tech. Per other HN recent articles its relatively straightforward to
make in the $150-250k range as a software engineer at BigTech. Even if you
decide to stash $30k/year after tax for your own 'safety net' (equivalent to
whatever net you receive in an EU country), you are still coming out way ahead
of a EU software engineer that is probably making $70-90k USD equivalent
before taxes take half.

~~~
nommm-nommm
Does anyone make that much money outside of expensive cities like San
Francisco and New York though? I know that I am underpaid but I don't think I
am __that __underpaid.

~~~
crucifiction
That is where the bulk of tech jobs are, around cities where you can make that
much. For example, you can make that in Seattle or basically anywhere in the
bay area (no, you don't need to live in SF unless you want to). The cost of
living is higher, but the cost of living in large EU cities where tech jobs
are going to be is similarly higher.

I think people also make bad comparisons when doing cost of living exercises.
While it is true that potentially much more $$ will be going to rent/mortgage
in a high cost of living area, many other things are going to be the same as
anywhere else. A $100k Tesla is $100k in SF just like its $100k in North
Dakota. After tax + basic needs costs and someone in a large tech city is
going to have significantly more disposable income still than someone making
much lower salary with much lower cost of living.

------
GoodJokes
Ironically, some of the richest people I know are actually the poorest.

------
GoodJokes
If your goal in life is to get rich than you have already failed as a human.
It is a very easy to get rich. Commit to an amoral lifestyle.

------
astazangasta
This is the same horsehit they sell graduate students. "Ah, we're paying you a
pittance,but the experience is worth it!" But you can't eat experience, and
all of this - grad school, the startup ecosystem, etc. - is just a way for
greedy assholes to exploit naive young people when they are at their most
energetic.

Don't accept sub-market pay and long hours in exchange for 'experience'. Other
people (i.e. investors) are making money off your work. Get paid.

~~~
volaski
Did you even read the article? People who don't want risk can go to Google and
make tons of money. There's nothing wrong with it. This guy is saying if
you're working for a startup you shouldn't do it for the money since a much
better choice in that case would be to go to Google. I guess no matter how
good a piece of advice is, you aren't able to take advantage of it if you're
not ready for the advice.

~~~
astazangasta
Did you read the article? This isn't about assuming risk for the hope of
greater reward, this is about working hard and getting nothing in exchange but
'experience'. That advice is bullshit.

~~~
hoorayimhelping
> _getting nothing in exchange but 'experience'._

Are you assuming there's no pay involved? I didn't get that from the article;
it's not saying take a job for no pay. It's saying it's unreasonable to expect
to get paid Google money at a startup.

In exchange for not getting paid what you're worth to Google, you get to touch
a lot of different areas and get a lot of experience with a lot of things.

------
J_Darnley
Don't bother. Don't even try. It will never happen to you.

~~~
iso8859-1
What will happen then? Your post is useless without arguments.

