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How to Hire Your First Engineer (ycombinator.com)
219 points by runesoerensen 8 months ago | hide | past | web | favorite | 126 comments



These are good points for finding your first engineer, but here is a tip for helping close your dream hire: offer more equity.

Your first eng hire will shoulder nearly all of the technical burden soon after as the founders transition into more of the non-technical roles (sales, outreach, recruiting, fundraising, business strategy). The amount of blood, sweat, and tears poured in by the first eng hire is somewhat less than a founder, yes, but not the 30-50x typical equity ratio we see today.


Depends on pay, right? If you are offering employee #1 market pay, why would you give them 10% equity? That is potentially millions of dollars for not taking a risk.

I have been on both sides of this, and have thoughts. What do you think is fair for employee #1 making at or near market rate?


Even if you pay your #1 employee at market rate he is taking huge risks and should be compensated accordingly. Working at an early stage company often comes with huge job insecurity, loss of medical benefits more mature companies might be able to offer (better insurance etc.) and a possible kink in your CV (3 years at Microsoft look much better than spending 3 years at an unsuccessful company that eventually shut down).

To sum it up, I would expect a #1 engineers equity to be at least half of a founders equity AND payed at near-market rate.


lol @ startups with no engineers yet paying “market rate”... they will maybe pay market rate within their stage band i.e. compared to other SV seed-stage startups, but this will still be way below the liquid total comp at a post IPO tech company. At this point in the tech cycle the math is so out of whack in favor of big co that I can’t with a straight face recommend to anyone that they join a seed startup as an early employee engineer unless they’re already well off financially (5-7 years ago I felt like I could). There are exceptions, of course.


Yeah but those exceptions are pretty big. The hiring pipelines at FAANG are so over-tuned for false negatives that there are plenty of engineers who are good enough to work at a FAANG for FAANG-level compensation yet are not actually getting offers from FAANG companies. They're on the market for (market minus FAANG)-rate compensation.

Then you have to remember that FAANG companies are large enterprises, by definition, and that comes with a lot of overhead - design by committee, politicking between middle-management fiefdoms, not being a part of the conversation when irrefutable directives are issued by executives four levels above you, varying levels of paperwork and documentation that are necessary in large organizations. That's soul-sucking for a lot of people, and those people will exclude themselves from FAANG-level compensation, and are on the market for (market minus FAANG)-rate compensation.

The real reason why a lot of founders can't hire at market rate compensation is that any early employee, even if you're paying them market rate, needs to buy into your vision just as much as you do. The upside for early employees, even more than potential compensation, is in being a strong influence, including at relatively senior levels, as the company grows. If, as an IC, you find yourself being recruited by somebody who you think is a strong and experienced leader, selling a product that you personally think is important, then you grab the bull by the horns and get on. If somebody who rambles and can't make eye contact asks you to join to build out Uber-for-pidgeons, it doesn't really matter how much compensation is being offered; you're going to walk away.


>The hiring pipelines at FAANG are so over-tuned for false negatives that there are plenty of engineers who are good enough to work at a FAANG for FAANG-level compensation yet are not actually getting offers from FAANG companies.

What happen is that these people will keep trying until they get in. They will focus only in one thing and one thing only: FAANG.

> That's soul-sucking for a lot of people, and those people will exclude themselves from FAANG-level compensation, and are on the market for (market minus FAANG)-rate compensation.

I find things have changed a lot where housing dictates personal career choices lately. It sucks to not be able to buy your own property. I don't care what people strategy is (be it work 4-5 years for FAANG and move midwest or whatnot).


There are many companies that offer pretty good pay and great job security outside FAANG. Try Microsoft, Oracle, Siemens, Airbus, SAP or one of the million medium sized companies whose name you've never heard of unless you're in the same line of business.


My experience has been that those companies (except for Microsoft and Oracle) have been well below FANG compensation levels, while being in line (and sometimes lower) than what I can get from later stage startups and not much higher than I have heard from early stage startups. I have only looked for opportunities in NYC and Dallas, though, so that might skew my observations.


You realize not all startups are in SV?

You realize not all job markets have developer jobs paying 400k?


> You realize not all startups are in SV?

Absolutely. Having said that, I won't join non-SV startups. Why? very simple: the chance of hitting the jackpot is significantly higher in SV.

> You realize not all job markets have developer jobs paying 400k?

For sure, but why would I joined non-SV startups getting paid peanuts while I can join a more established company and get paid double (base, stock, bonus, health benefit).

I felt that First Engineer is a sucker if you don't get compensated well enough (be it way more equity than the typical 0.5-1% or something else).

At the end of the day, I'd choose to maximise my career: be it joining a startup to gain experience knowing the whole stack or joining large enterprise for better career-path and compensation.

I don't join startups to "Change the World" or to "Hit the jackpot with 0.5-1% equity".


> Even if you pay your #1 employee at market rate he is taking huge risks and should be compensated accordingly. Working at an early stage company often comes with huge job insecurity, loss of medical benefits more mature companies might be able to offer (better insurance etc.)

Sorry, but no. Jobs are very easy for a good dev. You are taking no zero risk as engineer #1 at a startup if your pay is market rate.

> and a possible kink in your CV (3 years at Microsoft look much better than spending 3 years at an unsuccessful company that eventually shut down).

To who? I would hire the 3 failed startup guy any day over the 14 years at Microsoft guy.

> To sum it up, I would expect a #1 engineers equity to be at least half of a founders equity AND payed at near-market rate.

Haha. I mean I guess it's fair to expect that. Maybe someone would give it to you. To me, it sees like a very inflated value of self worth if you are wanting to take little to no risk but then reap MOST of the benefits of being a founder.


I mean "market rate" in terms of salary is 30 - 50% pay cut over total comp compared to working at an established company with RSUs and massive EoY bonuses. That coupled with the general resume risk means your first hire is leaving a lot on the table.

If you need the best, you're going to have to pony up equity since you just can't compete otherwise. The open secret however, is that for most startups, you really don't need the best. You don't need top quality to throw together a web backend and a mobile app and start growing a base; for those companies it makes no sense to dilute the massive payout for the founders by sharing anything with the code monkey actually delivering the app.


There is a name for this. It is called a cofounder ( Who is comparatively more junior than the rest of the team ).


A cofounder takes risk, an employee does not. Both are valid, but different, paths.


I think the earlier stage you are (seed, angel) then yes, there is definitely risk for a large class of employees. You're taking a risk on the founder's ability to execute, joining a company that is not cash flow positive and tying your mortgage payment/insurance to their ability to raise money in the future... it's derisked in each successive round and startups/founders are not all equal, but I think if we're talking 1rst employee it's fair to say there's some risk.


Employees take risks. The earlier the startup, the bigger the risk. The risk may be different but it's still a risk.


Yep...if I'm going to be offered $x as employee #3 with little to no equity, and the same $x at a stable company...I don't see why I should risk joining when there's little reward.

Risks can be: Stress due to working more (wearing more hats, not enough employees) Not having a stable paycheck because company needs to pay venders otherwise they go bankrupt. Recession or downturn, loss of job immediately while big company can weather.

Etc...all the things not at a big company.


If your first engineer is any good, “job insecurity” is the last thing he’s worried about. In today’s environment, even a slightly above engineer can get a job within a month.

Loss of medical benefits is just another number to add to thier salary. Statistically, equity especially for an unproven idea is meaningless. It’s likely not to be worth anything.

Three years as the lead engineer at even a failed startup looks a lot better on your resume than just being a low level drone at Microsoft. You will probably also have your hands in a lot more pots making you even more valuable.


> If your first engineer is any good, “job insecurity” is the last thing he’s worried about. In today’s environment, even a slightly above engineer can get a job within a month.

Can get a job. There is no end to the stream of recruiters offering jobs that I am overqualified for and pay well below what I currently make. The companies that can match what I have now (which, to be honest, is still lower than I could get at the Google tier) are few and far between.


Why assume #1 engineer is a he?


Can we just charitably assume that s/he knows that English lacks a gender-neutral second-person pronoun and picked one out of he or she (like those baby books that alternate between gendered pronouns) to finish what s/he said so s/he didn't have to use the thought-interrupting construct "s/he"?


It'd sure be great if people didn't make that assumption, but the HN guidelines ask you to make the strongest-possible interpretations of comments when responding, as doing otherwise leads to unnecessary, off-topic flamewars.

Other commenters use different pronouns when describing hypothetical scenarios, and that's great, but it also sometimes triggers flamewars from a different direction.

Best to just avoid playing that game altogether.


What risk? Market pay, many startups have decent health insurance, and even if it blows up, it actually looks good, not bad on the resume.


> many startups have decent health insurance

About what kind of startup are we talking here? When we discuss #1 engineer compensation we are most likely talking about a very early stage company that likely lacks a profound company structure and employee benefits program. So I would assume that #1 engineers will most likely not be greeted with a good health insurance on the employer side.


I was employee #1 at a startup. Right out of the gate our medical was better than Google’s. Having been exposed to the financial side of things, the cost difference between shitty and decent insurance for employees was inconsequential in the overall cost of doing business.


I was engineering hire #1, and we had no insurance and pay was half market rate, but at least the founders were incompetent and abusive depending on the day.


And therein lies a valuable lesson: don't be employee #1 if you don't know the founders personally, or can otherwise make sure they have a good track record.


> If you are offering employee #1 market pay, why would you give them 10% equity?

So that they care about the company on a similar level to the founders, and feel a real sense of ownership, dedication, and responsibility.

I've been in a position several times now where at work I'll have a reputation as a very capable engineer, typically placed on or leading the most critical projects etc. —but, my employers still have no idea what my contribution could have been if I were made to feel like the company was partially my project too, and that there wasn't some massive (though never explicit) social divide between the founders and everyone else, the rest of us being mere tools for the founders' use (only one job I was at really gave that impression—the others were pretty good about creating an environment where everyone felt equal. But from speaking with many other prospects, it appears to be a typical attitude).

There are thresholds in perception of ownership which when crossed give access to new categories of behavior in the perceiver. Think about 1%, 5%, and 10% equity in terms of sharing an object among a corresponding number of people: how much do you feel that thing is yours when sharing it with 100 people? With 20 people? With 10 people?

For me, 10% is about where the line would be where I'd be willing to drop side projects etc. and seriously dedicate myself to the company. (And in my experience, this is not atypical: in the very early stage startup I was in, basically everyone was laying groundwork for their own startups on the side, or at least had other projects they were more interested in—but they'd make sad, fake displays of their dedication to the company to try and cover. At our largest there were still only ~7 people in the company.)


This comment resonated with me. I have always felt this way as an engineer, whether it be a startup or a big company. I was always at kids table by virtue of being an engineer.

I solved it by becoming a product manager. I miss engineering, but I no longer have that angst on a daily basis. I have found PMming is a job where sense of ownership + willingness to work to further overall success of the given project is heavily rewarded. And the precision of thought that is a pre-requesite for engineering can equally be applied to PMming (though not all PMs have it!).


That's a direction I've been thinking about too!


The problem is market rate. You mention market pay and equity as two separate things. But market rate is really total comp: base, bonus, and equity. For a senior engineer in the valley this is hitting $300k+. Saying we are close to market on salary and ignoring the rest of a total compensation package is disingenuous but suits startups (and others). A package with a value of $1.2M over 4 years would take a significant chunk of equity from a seed stage startup, or about 10% of equity on a convertible note round at a 10M cap, right around what the parent suggested. It’s fair to say we can’t give that up, but it’s also fair to say you aren’t matching market rate.


Depends on pay, right? If you are offering employee #1 market pay, why would you give them 10% equity?

Because this is how you get good people. If you want to offer them what they could get by working someplace else, they may as well work someplace else (likely without the hours, stress, or potential instability of a startup).


Maybe, maybe not.

Startups offer a lot of non-financial benefits over working at the big established companies.

1) Looser culture. Less likely to have a dress code or an attendance policy.

2) Less meetings, more coding. For someone that wants to get stuff done, way more to do in a startup.

3) Sense of purpose. A huge part of life satisfaction is doing something that actually matters. WAY easier to do this when you are shipping a product to actual customers vs sitting between 6 layers of management at google writing code to improve ad conversion by 0.1%


Right. That's why I have side projects, to satisfy 1,2,3.

My bank doesn't accept "sense of purpose" as payment. My real job is for my mortgage and retirement.

An extra $10k+ per year counts a lot when compounded. $10k a year for 30 years, 7% average long term stock market return gets you $1 million.

That could a better life style, retire many years earlier...all without the risk of a Scrappy startup hoping for a unicorn buyout.

Play with the numbers...but that's what you are giving up because you want to wear a graphic t-shirt to work.


Sense of purpose. A huge part of life satisfaction is doing something that actually matters.

Truly, and it's changed my life for the better.

I'm unclear, however, on the relevance of this statement to the extant startup scene -- ref: the latest YC class, for example.


There are quite a few health-related startups in the latest YC class that seem to be doing important, such as Hepatx.


The sense of purpose is defeated if you realize you're really just generating value for founders who will never let you get a fair piece of the pie.


Pssh, I get all that at my entry level corporate job.


Well what do you mean by market pay? Because savvy engineers playing the SV game will say 300-400k total comp they get from FANG is "market". However that's assuming A) you can jump through the hoops to get one of those positions and B) you can stomach the politics of whatever team you happen to land on.

Neither of those things are much of an indicator of a good #1 engineer hire—yeah you want an above average engineer, but you don't want someone who is dependent on world-class tooling, world-class colleagues, or is so focused on tech that they can't see the forest for the trees of the business landscape they are in.

You need a solid engineer who is a hustler, willing to dive deep into whatever area is necessary, but doesn't fetishize some aspect of technology or become obsessed with implementing something in-house because it's an interesting technical problem. Current hiring practices are largely cargo-culted off of successful tech giants who face very different problems from what the average startup does.

If you find someone who gets it and has the skills to back it up then they deserve to be brought in with both a real salary and real equity because at this stage every hire is still life and death for the company. The challenge is whether you can recognize this person.


Market comp for a talented experienced engineer is 250-450k. If you are paying that much, you can go ahead and skimp on equity.


I disagree with you on different grounds. Your points downthread about how it's not a risk are on the nose. No stigma for being part of a startup (the opposite) and even startup benefits are pretty great these days. This isn't ramen/buddies closet sort of work any more.

I'd say the reason you want a strong equity package is a question of alignment and incentive, though. Ideally this person is going to be a VP of Engineering for you someday if you scale up and on top of that needs to have architect + SRE + hacker + sysadmin skills. On top of that, you'll probably want them to make similar sacrifices that you (as the founder) are making to get the business off the ground. It shouldn't be founder equity, and maybe the standard 4 yr + cliff structure isn't right for it, but you probably want this person to have a substantial vested interest in the success of the company.


Two tranches: one a number of shares at par value to make up the difference in pay, the other the same grant you'd give any employee. Really though either pay cash market rate or else give them a meaningful stake.


5-20% depending on how much you're using their expertise.

If you offer tiny or no equity, they have no incentive to align for growth. Also, founders are usually way less useful than the people they hire.


I understand your point, but I won't take market pay for being the first employee. If I wanted market pay, I will go with a well-established company.

I am assuming that you won't sell goods and services you produce at cost price. If that is case, you'd have worked as an employee of that buyer. Similarly, if I don't get a share of the value I produce, I won't join any startup as a early employee.


> ...why would you give them 10% equity?

Because they’re taking on a gigantic risk too?


What risk?


The huge career risk of having a string of no name companies on the resume rather than Google, Microsoft or Apple. I am quite certain I’d be much farther along in my career today had I taken the job at the big name 20 years ago instead of horsing around with a bunch of failing small companies.


Guess what? Most software developers don’t live in Silicon Valley and never work for a FANG company, we seem to be doing okay....


Most of those developers "doing okay" are doing significantly worse than us SV and FAANG company engineers. I save more every year now than a good number of junior engineers take home in a year, and I'm a crappy average developer not even at FAANG with a much smaller total comp than their staff. There are a tiny, tiny number of SE jobs having more than 50% of my current salary (let alone equity and other benefits and perks) just about anywhere else that isn't also a hot tech/startup market (Austin, NY, Chicago).


The average software developer V in San Francisco makes about $190K according to salary.com.

In most other major American cities outside of New York/DC area its about $140K. If you compare the cost of living in any of those cities, it starts looking a lot worse for Silicon Valley.

https://qz.com/906086/san-francisco-is-actually-one-of-the-w...

If you go the billable consultant route with the right skill set, you can get up to $200K

https://www.indeed.com/m/viewjob?jk=e67229f7e25ea37b

Yes this is a realistic range. I’ve been given firm offers to do that type of work (AWS not Google) but the travel requirements would be too disruptive right now.


Software Emgineer V on Salary.com represents the tippy top outlier of the elite senior engineer totem pole. It’s a stretch to call that an average anything. For a more realistic median salary range, just look at the figures for plain Software Engineer.


The Software Engineer V salaries at salary.com for the cities that I'm familiar with seems to represent salaries for a developer/architect with 10-15 years of experience who avoided management.

But the idea that software developers can't do well in other lower cost cities without working for a FANG or even companies that most people have never heard of is another example of the SV/HN bubble.


The best #1 engineer is someone who is willing and will want to help do some cold call as well. Offer not just more equity but better base pay. They deserve better base, real cash. Then we talking. If you offer me my current salary (not faang level), plus a very good equtity (2-5% stake?) then I will work 15 hours every day likr I do now anyway. I will pull in 18 if you want. As a workalochic, I am up for all night. I will do cold call and go out to reach new users as well. I will clean the office with you. You want your founding team to feel they own a stake.


Anyone else getting a little tired of the immediate reduction of any conversation around early-stage startup job opportunities to "comp vs FAANG"? As someone who spent the last 5 years in early stage startups, before recently accepting a FAANG offer, I'm starting to realize folks who only think about comp probably aren't good fits for startups. Here are a few quick reasons to take less comp at a super early stage startup:

- You will develop a wide breadth of skills you simply can't develop at FAANG, as you will be involved in product meetings, business strategy conversations, and will regularly eat lunch with the CEO. I imagine the reverse of this is true as well, in that there are skills developed at FAANG that are hard to develop as employee <50.

- You will get to fast-track your career progression, in that you will be in line for promotions much earlier than in large companies, as opportunities emerge.

- Companies (including FAANG) will look for folks with your skillset (my startup experience was a huge plus in my recent job search).

- You will work on hard problems, with passionate people; folks aren't punching the clock here. This is fun.

Also, for folks just thinking about comp, I'd like to gently point out that a 40 hour week on work you feel "meh" about is ~35% of your waking life. That's not to say you can't find exciting work at FAANG (I hope I have), but rather that there is more to a job than comp or career progression, and working with passionate folks on hard problems can be incredibly fulfilling.

Edit: formatting


As someone who did a long string of failing small companies and finally settled in among the FAANGs, I respect your experience but disagree with everything you said.

Wide breadth of skills? If you’re hired as a code monkey you’re going to monkey code. Nobody ever asked me what I thought about the latest business partnership or synergy strategy. Just code.

Career progression? Another nope. With only a few people in the company, you can’t go up and you can’t build a team under you. Who are you going to manage? There’s nobody under you! My startup coworkers used to jokingly give each other fake “Senior Director” titles which were meaningless of course because there were two managers in the whole company, one was the CEO. Even if you did somehow get a fancy title or a team under you, and got bought by a big company, you’re back to “3rd engineer from the left” in their hierarchy.

Hard problems? I don’t know, not in my experience. Just problems unappealing to the bigger players.

And for all that you risk the company not being able to make payroll or canceling your benefits. Sorry, I can say definitively that working at small companies probably set my career back 10 years.

EDIT: I suppose it’s highly dependent on the company.


I think your edit hits the nail on the head, as we’ve clearly had different experiences.

I should clarify that a lot of the hard problems at early stage cos are around creating something that is not only new, but is also a viable business, with minimal resources and huge time pressure. Whether the technical side is hard or not is another question entirely.

Anyways, thanks for the comment — in addition to providing a good counterpoint, it’s a good reminder for me that my experience is neither universal nor even necessarily the general case. YMMV.


I wonder, how often "huge time pressure" is more imagined than real. Unless "time"="investors".


Career progression IMHO is best at mid size companies. Small enough to get the progression, large enough to actually get experience.


I’ll also point out something I learned the hard way. Junior folks take note: Career progression, if important to you, is something you absolutely must ask about and confirm during your interview. Some employers want to hire you as a mid level engineer and have zero intention of ever promoting you past that. You need to be able to identify and walk away from those companies. You also need to take responsibility for it. Your manager won’t. For a long time I had this romantic notion that if only I did a really awesome job, someone would notice and career growth would happen. It just doesn’t work this way. You need to take direct action.

I remember several exit interviews where I told my managers that one of the reasons I’m leaving was no upward career movement. They looked shocked, like they couldn’t imagine that would be important! Maybe they were legitimately surprised, I dunno. I’ve also had managers say things like: “oh trust me, you don’t want to get promoted or go into management, it’s so much stress!” They will try to gatekeep and you need to push through that.


These might be not be unrelated to the fact that those small companies failed.


But, as "First Engineer", you get maybe 1/25th or 1/50th the equity of a founder, and you might join 3 months after the company's "founding" pre-product / pre-product market fit. The company might pivot substantially 5 times before finding fit, or might not find fit at all, or it might take 10 years to see any benefit in the 1% of cases where the company does make it.

I'm not disagreeing with your comment, but if the reason you join is to work on hard problems with passionate people then there ought to be a strong reason why it makes sense to be engineer #1 and not yourself a founder.


Not to say it can't happen, but I dislike the meme that early engineers for startups are working on "hard problems". From a business and social sense, for sure, having to develop quickly, pivot even more so, and pound dirt to carve out a fit is an experience in itself. But, from a technology side, most startups are positively mindnumbing for engineer one. Think your Ubers, your Instagrams, your Facebooks, your Dropbox, the problems don't get technologically interesting until you start doing them at scale. Until then you've got a bog standard php/phython/whatever web/mobile app. Compare that to the opportunity to work with the cutting edge in machine learning, or deployment at scale, or bleeding edge hardware that you'd get at your Facebooks, your Googles, your Microsoft. To me working at a startup I expect hefty comp to be giving up getting to work on interesting problems for the chance of having more agency and winning the lottery if we get huge. YMMV of course, but for me and I think a lot of tech people I'd rather do interesting work for a soul crushing application than soul crushing work to #changeTheWorld (especially if the former pays upwards of 5x more and the latter only pays out to the founder(s)).


For future career prospects, a stint at FAANGM is a safer bet than joining a small startup. Most startups fail and it may not easy to find another job right away. If you're at a big tech company, you'll have the credential to find a job more easily (and with their job stability you can generally choose to look for one while working there).


Its ~35% of your awake hours during work weeks. At FAANG comp rates there's no reason that has to be anywhere near ~35% of your life.


>Anyone else getting a little tired of the immediate reduction of any conversation around early-stage startup job opportunities to "comp vs FAANG"?

The difference is so big, that I hope it continues to get repeated, until we start seeing a fairer distribution of equity.

>- You will develop a wide breadth of skills you simply can't develop at FAANG, as you will be involved in product meetings, business strategy conversations, and will regularly eat lunch with the CEO. I imagine the reverse of this is true as well, in that there are skills developed at FAANG that are hard to develop as employee <50.

Yes, this is true. Note, however, that this exposure isn't necessarily that transferable, unless you plan to become a founder yourself (which isn't a bad idea).

>- You will get to fast-track your career progression, in that you will be in line for promotions much earlier than in large companies, as opportunities emerge.

Only internally. It won't transfer to long term career progression unless your startup happens to be widely successful.

>- Companies (including FAANG) will look for folks with your skillset (my startup experience was a huge plus in my recent job search).

Nah. Experience in general is a huge plus in today's job market - but non-founder startup experience is no better than any other experience, unless your startup happens to be widely successful.

>- You will work on hard problems, with passionate people; folks aren't punching the clock here. This is fun.

People are passionate and not punching the clock in most places. You certainly do get to work on hard problems at small startups much more though.

>Also, for folks just thinking about comp, I'd like to gently point out that a 40 hour week on work you feel "meh" about is ~35% of your waking life. That's not to say you can't find exciting work at FAANG (I hope I have), but rather that there is more to a job than comp or career progression, and working with passionate folks on hard problems can be incredibly fulfilling.

And your comp today directly determines how much of your waking life down the road you will need to spend on work. Higher comp today means financial independence tomorrow (allowing you to work on whatever the heck you like).

Note: I'm a happy early engineer at a startup that offers competetive comp (based on my personal evaluation - and I'm normally a skeptical person - the expected value of my compensation is clearly higher than what I would get at FAANG), so I'm not agains startups; it's just highly unfortunate that most startup founders are incredibly stingy with equity.


They are stingy with equity because it's easy to make a bad hire and then be unable to fix the cap table. I do think there should be a better balance, though, and agree that they can be quite stingy even with those who turn out to be good hires.

I feel being first engineer at a startup gave me the skills to found my own company and make a living on my own terms, which is ultimately what I want from life. Being super rich isn't too important to me as long as I feel I have broken out of the mold and am on a path to greater personal and creative freedom. I honestly wanted to kill myself after a few years at a well-liked, growing 1000 person company. It was too confining and I was too distant from the real world. I can't imagine ever being happy at a FAANG Corp, even if the work is initially interesting. The weight of layers of managers above always becomes unbearably heavy for me, especially since I naturally struggle against authority.


Well, while large companies are moving towards immediate vesting, startups continue to have 1 year vesting cliffs, so they have plenty of time to fix the cap table after a bad hire.


I've been hired as Engineer #1 at two startups (both doing well). I wrote some thoughts recently about how I was recruited into that role:

https://twitter.com/philfreo/status/1012171080834969601

On the hiring side, I also incorporated some hard lessons learned about growing our Eng team from 2 to 14 here:

http://philfreo.com/blog/when-who-how-to-hire-an-engineering...


I've done the #1 employee thing too. The founder was someone I had worked for previously. He was technical enough that I didn't have to worry about growing the team from there, he handled it all.


I see you mentioned something like. Make sure you’re still excited after 30 days (or fire fast).

That's a big NO-NO for me. 30 days is way too small for any company to make a decision on a hire. It just means your process for hiring is not good. We must start with firing people who were responsible for the that bad hire first.


Fantastic blog post on hiring. Thanks!


I remember hearing as a high schooler that The Italian Mob acquired great loyalty through only hiring people whose family they knew or had met before. Maybe a dumb metaphor, but the painpoints, lonely nights, long hours and competing offers you're gonna face with your Engineer #1 are going to require some deeply rooted trust.

We're lucky enough to live in a time where our skills are in great demand and compensation can be matched without blinking an eye - my advice to business minds hiring their first engineers is to get to know them, build trust and find the ones who are committed to building cool shit with you for the long haul. Don't just make it about comp and perks.

> As I said at the start, hiring your first engineer is incredibly hard unless you’re lucky enough to have a friend you can convince to join


There's an argument to be made that you want someone incentivized by something rational like compensation.

If your critical employees joined the company for romantic and/or emotional reasons, it can be very difficult to retain them should they somehow become disillusioned.

You can far more easily acquire funding to increase compensation than you can make someone change their mind about how they feel about something the leadership has done or the direction the company is heading.


"Comitted to building cool shit" is not a motivation that will persist through hard times.


Maybe you didn't make it this far

< Don't just make it about comp and perks.


As engineer no 1 at an early stage startup, you don't need ths same skills that are needed at FAANG. I may be wrong, but you are constantly iterating and mostly building software that has a shelf life of may be 3-6 months. You are not building for reliability or scale. You are building mostly ad-hoc and to fulfil an immediate market need (which may or may not exist 2 months from now). Where as at FAANG you are by design building for reliability and scale from day 1. Very different skills.

I can't comment which skill is more valuable. They are somewhat orthogonal to each other right ? The better you get at software engineering the more process oriented you become. Hopefully an early startup gives you that kind of progression, but very unlikely, since the progression is directly correlated to the startup's scale and success.

If someone desires to put good software engineering into practice from day 1, then engineer #1 at an early stage startup is not the right choice.

This is all based on anecdotal experiences so am happy to stand corrected.


An interesting exercise: assume the first engineering hire you want has to be at least the senior engineer bar at a top tech firm.

In order for the engineer's median compensation to match the median compensation he would make working at FANG, how much stock would you have to give them making reasonable assumption about valuations (ie, assume your start up will have a trajectory in the top 30% percentile, but not in the top 0.1%).


I think FANG is not the right group to look at when it comes to “top” tech firms unless you also mean other companies like FANG wrt how competitive they are, such as MS, unicorns, hedge funds, etc.

Depending on what you’re making you also might be doing yourself a disservice by only wanting to hire from “the best” - if you’re making a simple website or CRUD app as part of a larger business strategy such as online ordering, you don’t need to hire an expert in big data


I wonder what proportion of HN would have different careers if software engineering paid, say, as much as humanities while humanities paid like software engineering. It seems like everyone here (myself included) isn't really in it for the money, but who knows what would happen.


Weird, I think it’s almost the opposite. I wouldn’t be in software if it didn’t at least allow for an upper-middle class lifestyle - I would probably have tried to either become a scientist, a brewer, or a banker. As a scientist I would maximize my mental interest and engagement in the work, as a brewer I would have the best lifestyle, and as a banker I would have the most money. Software right now is great because it does pretty well in all three categories, but if it paid just as well or a little more as being a scientist, I would have little reason to stick around in software.

Age is probably somewhat of a factor here since people who went into software before it was so highly paid likely didn’t have money as a huge motivator, compared to people who went into software more recently


I like software engineering and have always had a personal interest in it. In fact, I'd say that I'm more passionate about it than 90% of the programmers I've worked with and spoken to.

Having said that, software engineering as a profession is shitty in some respects. I don't think I would do it if it paid as little as the humanities. I'd continue doing it on my own time, but the drudgery of dealing with other people's bad code, corporate practices, clueless bosses, clients who undervalue and lowball you, etc. wouldn't be worth dealing with.

It's not so much that I wouldn't be able to make a living, because I think I'd be content living on relatively little(as I am currently experiencing), but life is just too short to deal with professional software engineering when I'd get so little out of it.

Alternatively, I'd just go into woodworking. Income becomes relative to the quality of work produced (I've never worked anywhere that actually cared about or rewarded quality code) and I could say or do whatever I want without someone else reaping most of the benefits and judging my actions by outdated 1950s office standards.


If we could go back to role where we worked on our own. Where we created our own programs from our ideas. We work on waterfall projects by day and hacked our own ganes at night. Never to be included in business meetings never to talk to the customer and never to have a standup meeting.

Where everyone loved something about technology programming/hardware/etc and continued day or night.

In many ways things would be better. This represents a time before everyone liked computers and most feared them. Salaries were not as high as today. The work was harder but more meaningful.

We can't go back. The future looks more like turning programmers into interchangable pieces that can be commodized. Defining all work into smaller pieces.

I think many of us would trade big salaries for jobs at places like bell labs.


I'm doing this because this is one of the few things I'm good at that people will pay me lots of money to do. If it paid less than being a teacher, I'd go become a teacher instead. It's not that I'm dispassionate about it, but I have to eat.


I love engineering. But you know what, when rent is $3000+ per month, there's only so far my rational mind will let me go.

I loved art and drawing too. But I wisely chose not to master in art when going to college.


Yeah, same. I think I could have enjoyed going into history but the huge salary disparity certainly helps make the choice between two otherwise more or less equal paths.

Also, rent in some cities might not be as much if fewer people went into tech ;-)


That’s Silicon Valley thinking. Most software engineers are no more “passionate” than any other endeavor.

I go to work every day just for the money. I keep on top of tech trends for optionality.


I'm only in it for the money.

I'm good at my job and I enjoy it for the most part, but I'm only doing it because I get paid well.


I was doing rocket science but switched to software engineering for the money. I certainly enjoy software engineering, and am not in it solely for the money, but had there been no difference in compensation, I would never have switched. I like having a chance at owning a decent home in the Bay Area (where I've grown up) some day.


Well, the other option going into college was music. Although it's also quite likely I would have landed as a historian or linguist.

I would probably have continued programming in the evenings, but doing history as the day job. Today I program in the day, and often read history in the evenings.

Ultimately, I like paying rent/mortgage, soo.... yeah.


When I started college in 2001 I knew I was going to be an engineer but was undecided between computer, mechanical, aerospace and chemical. I loved tinkering. If I recall, at that time the salary for undergrads wasn't a huge difference where salary would have driven your decision.

I ended up in computer engineering because it came natural (and now, software engineering as that's where the jobs are). If humanities salary was swapped I'd be a history major while tinkering on the side :)


well i think software engineers would likely be unionized if that were the case.


How have we ended up with “engineer” as the only acceptable job title for people who build software? What happened to programmer? Developer? Or even (glances at title bar...) Hacker?


I find it interesting how many startups try to remove all bias from the hiring process, make interviews as objective and metric based as possible, but in the end, personal connections (friendships even) are still most important for your first hires.


There is so much risk in hiring an early employee, it's totally reasonable to try and only hire from a personal network for the first three.

Managing great employees can be challenging; managing someone you don't know is great can be 10 times more difficult.


It makes sense to me. Either you validate someone through knowing them or, if you don't know the person, use interviews and other tests.


1. Find somebody that is very good and passionate at something.

2. Present your idea the best you can.

3. Only hire if he/she is interested in your idea.

4. Offer stake in your business so it is also his/her business.


Why would I be interested in your idea? More than likely you aren’t trying to feed starving children. I might pretend like I’m interested, but at the end of the day, it’s just a paycheck.


Well, this is simple. You want somebody invested and passionate about the project.

Have you ever noticed, you can move mountains if you are genuinely interested in something? That it is difficult to focus and too easy to procrastinate if you don't want to do something or find something boring?

Corporations are good at solving large problems because they can throw funds and money at the problems. They can absorb the damage caused by people who are barely productive.

When you are startup you can't do that. But the advantage you have is that you are looking for one person at this point in time and you can be picky and wait until you find the one. Bad hire at this point in time can frequently spell disaster for your budding enterprise.

I don't want to say that it is totally impossible to find somebody who might not be interested about your idea but will still do good job. But it is unlikely and then remember, you are not only looking for your first engineer but also your first manager, possibly CTO, etc.

Look at stories of successful startups -- in most cases first hires seem to have been critical and mostly seem to be passionate people who then established themselves close to the top of new organization.


> it’s just a paycheck

This is probably part of why it's hard to find a good first engineering hire -- for better or worse, most engineers aren't a good fit for that stage of a company's growth.


Doesn’t the founder have the same motivation? To make money?


Founders do not treat their company as "just a paycheck". They're not just turning up to punch the clock. Early on, the company is their life -- their efforts determine its success, and their company's success is their own success. The same goes, to a lesser extent, for early employees.

Maybe that's not widely agreed, though. I saw an ad on the "Who's Hiring?" post this month looking for a first engineer with a broad and deep skill set and big responsibilities offering 0.2% equity... Essentially no motivation to move heaven and earth to make the company succeed. Shrugs.


Founders do not treat their company as "just a paycheck". They're not just turning up to punch the clock. Early on, the company is their life -- their efforts determine its success, and their company's success is their own success

Yes because they have a hope for a larger reward later.....

The same goes, to a lesser extent, for early employees.

Them not so much.

For instance Marco Arment was the first engineer at Tumblr. The exit was for $1 billion. He is rumored to have received less than $6 million.


I got an offer recently to be a first engineer where two founders (non-technical guys) would ask me to solve some major problems but could not offer competitive salary and absolutely refused any stake in the company when asked. So no technical knowledge and no common business sense.


Some traits I look for in engineer #1: a) should obsess about architecture and code organization (they will be laying a foundation so having a bit of OCD helps), b) should make good tradeoffs and optimize for speed (they will be building the wrong things initially), c) mature enough to understand that they will be writing and rewriting a lot (see (b)) and d) last but not least, should have a strong desire to do a startup (knowing all the risks)....


Don't you mean not optimize for speed, since they will be building the wrong things initially?


I think they meant optimize for speed of writing code not running it.


As the first engineer at a successful startup.

Responsibilities- * Take over everything technical I was good at and hired for. * Take over policy and progress on everything I was good at. * Be on call 24/7. * Do whatever the CEO/CIO didn't want to do.

Think this is pretty standard from my reading of other startups. The one lesson I should have learned and didn't is that as first engineer you should get 10% or more equity if you stay > 5 years.


I think with a good business side you can get away with mediocre first technical hires, which you will probably end up with.


How do you tell a good engineer from an average one?

If you can’t do that then all the time you spend taking them out to dinner is wasted.


Nice article.

On TripleByte - they should make it clearer that the platform is only for the Bay Area and Software Engineering.


Indeed, the title is startingly misleading, but it's par for the course.

It seems that "Engineer", in the context of hiring, for anything YC-sponsored, means programmer. Even "Work at a Startup" was (and likely still is), exclusively for software engineers.

This is despite the fact that YC actually accepts/funds companies that aren't pure software plays.


I am being cynical but this article feels like a reason to promote/plug TripleByte complete with a $15,000 offer at the end.


The article offered no new insights, it was more like an infomercial for the author’s company.


Hiring is a difficult task that I'm currently in the middle of attempting, so Harj's article is something I recognize. I'm not after a first dev, but I am part of a team that is after a dozen or so devs and I've now been day 1 on three different ventures.

The problem is that the main piece of advice is correct but unuseful. Indeed, you should look at people you've worked with. In some sense they've all interviewed with you already, so you know what it's like to work with them, you know how good they are at communicating, and you know their limitations.

Unfortunately, most people haven't worked with enough people to have more than one or two likely candidates for whatever they're thinking of doing. Your homies are either not right for the role, unwilling to move from a position of comfort, or not willing to put your friendship on the line.

The same is also the reason why your company cannot grow via connections of employees past some point, the r < 1 on that series and it will converge on some low number.

Where my problem is a bit different to the article is that before you have any devs, you have a really big problem identifying good devs. Heck even hiring for devs outside your specialty is hard. If you can't do X, how are you going to find a good X? You will end up falling back on recommendations and reputation, and you'll pay up for a branded individual if one is around. Not in itself terrible, but every penny counts early in a startup.

I was talking to a shop who were after their first programmer a few months back, and they did the sensible sounding thing of bringing in a trusted friend from a FAANG to interview people. Main issue with that is that person is thinking about how a megacorp hires people. Mainly avoid guys who can't reverse a linked list, and stick the new guys into a process that already exists. But it's not quite the same things you care about as a day 1 startup.

Day 1 guys need energy. Sad to say it, but this probably tilts against people who have kids. In my first day 1 jobs, I didn't have kids, I could wake up at 6 and code to 11 at night. Or you do like my current firm, where I was also day 1, but let people work from home. Then you suddenly have a very big carrot for experienced hires. The guys in the previous paragraph did the same.

Day 1 guys also need a high degree of autonomy. When you've got nothing, as in not even a chat about what stack you're using, day 1 guy needs to put down those foundations. This is a lot harder than you think. Not only do you need to consider budget, you need to think about what a small team can do, you need to think about what imaginary future employees will want to work with, and you need a way to get from little team to big team where your hands aren't tied by your day 1 decisions. And you gotta balance current technical debt against future payments on that account.

You also need to be broadly read. You can be highly specialized, but you need to have some idea of what's going on in the software world in general. Chances are you will end up picking the most standard choice of everything that isn't your specialty, like Django for a web framework or SciKit for a bit of ML. But you need to have an idea about a huge variety of things to know what the landscape roughly looks like.

So how do you find a person like that? Well actually none of the methods other than "network" will actually check for these qualities. Most people are specialists with a label that enables them to move to other jobs with similar titles (Low Latency c++ dev), and recruiters are on the lookout for the label. Inbound and Outreach are also not going to tell you how broad someone is, because everyone writes stuff on their CV to look specialised, with a bit of breadth to catch a few interviews. Meetups, maybe, depends on how good you are at directing the conversation. A skill in itself.


I think it is important to offer more equity to your engineers.


How to make sure that you can fire your first engineer without too much damage? maybe state-by-state instructions...


before you hire an engineer, make sure you have your onboarding streamlined


This is the worst advice. You don't want to spend resources on problems that are not yet even problems. Especially extremely early when you don't have any resources to burn.

One super power startups have is being frugal with money, why would you want to throw it away?


No engineer taking a role like this is going to expect an onboarding process. Many of them are specifically drawn by the idea they'll get to sit down and solve a problem on day 1.


Agreed. Even if I’m not #1, or even #10, you’ll stand a much better chance of hiring me if you never, ever, mention the O-word in my presence.

shudder


> Many of them are specifically drawn by the idea they'll get to sit down and solve a problem on day 1

I don't see how engineer #1 or engineer #100 changes that.

When I onboard a senior engineer, they get a problem on day 1.


The difference is that when hiring engineer #1 there's no technical infrastructure to which you'd onboard someone, and nobody who's really qualified to make a decent technical onboarding process - you're hiring a person to create this process (among others) from scratch, make the initial decisions themselves (instead of being told them during onboarding) and onboard others.


Onboarding become here are the bathrooms, there is a great place to eat down the street.


Have you been in the position to hire many folks for startups?

Could you share a bit more about why, in your experience, this is something to prioritize with your first engineer?


What should the onboarding look like for the first engineer?


Almost all the early employees I have met in successful startups have been towering contributors to say the least. Many of them enjoyed very very comfortable jobs in FANG (or equivalent money companies) before taking this up OR moved into one afterwards.

Unless the startup founders themselves are technically up to the bar required, I would think this is going to require huge motivation to make folks like that join. That can be either in the way of convincing them with your software potential enough for them to make the switch OR a ton of money/equity (And not FANG level money, even better). I would go with the latter in 90+% of cases, probably both.

IOW - I don't think we have a proper market place today that serves these high tier developers who will single handedly make or break it for you. I don't think the normal recruiting methods apply to excellent established candidates. You might luck into one, but it is going to be real hard unless you draw from known sources.

FWIW, I am very curious if there is one such premium marketplace as well. (Sorry if this sounds gentrifying, but there are a bunch of engineers I know whose gross comp is close to 1MM/yr or more and I don't think you are going to find them prowling LinkedIn or responding to regular methods anytime soon. Anecdotally I do believe many of them have the capacity to do magic technically though).




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