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Startup jobs with low salary and negligible equity, what gives?
133 points by 4k on Jan 21, 2015 | hide | past | web | favorite | 133 comments
Hi HN, I am a developer in my 30s with over a decade of experience. Being on a lookout for a new job, I have been researching lots of jobs lately (since I don't mind moving, been looking in most parts of the US). I am divided at the moment between finding a startup job or finding a rather drab big corp job with good money.

I noticed some rather unsettling job adverts in the past while. Some pre series-A startups in the valley offering like $90k in salary for an experienced developer and 0.05% equity. I am just trying to understand who are their target candidates that they expect to join for such an offer (not to mention crazy working hours)?

I have a small family with SO not working. So, I'd be at best manage to make ends meet at that kinda salary in SF, plus the equity is negligible, and the work hours... seriously, am I missing something here? Who would take these deals? And then I often find popular posts on HN where founders are giving out about how tough it is to get good engineers!

Joel Spolsky had a really interesting insight [+] once about hiring pools: they're disproportionately filled with people who you don't want working for you, because if you're hireable, you exit the hiring pool fairly quickly, and the dynamics of this system quickly mean that the pool is filled full of people who aren't even FizzBuzz qualified.

I think the other side of the market is isomorphic to this: any publicly available list of jobs is disproportionately filled with positions which qualified talent has seen, evaluated, and rejected as unsuitable.

[+] Citation: http://www.joelonsoftware.com/articles/FindingGreatDeveloper...

Note: I originally posted this reply about 2 hours ago and then deleted it. But actually, I think it's worth leaving up.

I really respect Joel Spolsky's accomplishments (I've mentioned him recently in my own comments), but I found the blog post you cited wrong at best and offensive at worst. It perpetuates one of the most frustrating things I experienced while job hunting: the stigma of unemployment.

Even though I voluntarily left my last position, companies looked at my candidacy very skeptically. Things I was told by companies:

- "To be honest, we think you're an entrepreneur just looking to make enough runway to move on to the next thing."

- "Well, we're really impressed with you and you have the technical chops, but we're concerned that you like to think on a higher level and might tire of the daily nitty gritty." (Not true, and basically the same as above.)

- "You did well on your coding interview, but we've got enough candidates in our local area that we've decided to restrict our search to it." (i.e. relocation jitters. Not coincidentally, when I finally found a position, it was in my city.)

There are also people who are competent programmers, but come from strange backgrounds, like the music major-turned-coder who posted the other day. I, personally, am almost entirely self taught, haven't worked with other engineers and have only coded on my own projects (you can see my github if you want). People making hiring decisions are scared for their own jobs: they don't want to be the guy who hires the guy who never had a "real" coding job before. If it doesn't work out, I can see where that would come back on them pretty hard. (Conversely, having worked at Google or Apple is a major bonus for the opposite reason.)

Oh, and plenty of people underperform in on-the-spot coding interviews. Some people are affected much more strongly than others by anxiety. It goes both ways. I've read hiring managers on here gripe that they hired someone who interviewed well but sucked in reality. And my guess is it goes the other way, too.

So I find his assertion that people actively looking for work aren't the ones you want to hire incredibly naive, elitist and just plain wrong.

As someone who used to be very pro-self-taught programmers, I changed my mind after actually working with some (and having to maintain the code of others). Most of the ones I've run into have holes in core skills that are taught as part of a CS degree, like threading, pass-by-reference vs pass-by-value, DB normalization, separation of concerns, basic optimization, etc... To be fair a lot of CS grads haves holes too (including me), but at least you can assume some sort of base to work from. I'll never forget the blank stare from one of my self-taught coworkers when I tried to explain that it was a bad idea to try to do a full parse of a Turing-complete language with just regexes. He seriously thought that if he just tweaked his regexes a little more it would work.

Also, working on code in a team is very different from working on personal projects alone. It adds in a whole bunch of things that aren't necessary on personal projects. You don't just need to know how to use a VCS but how to use it in a way that won't cause headaches for your coworkers. You need to know how to write code that people other than you can read and maintain it. In many cases you may be responsible for drawing out requirements from users. You need to communicate effectively with the rest of the team. None of these skills are exercised or put on display by your typical github repo.

So, personally, I can see why someone would be very hesitant to hire a self-taught programmer with no experience. If someone has a degree and a little job experience, you know they at least know enough to pass their courses and survive in a team environment. With the unknown guy, you need to do some very rigorous testing to make sure you're not getting a dud. A lot of companies might not have the resources to do that.

I appreciate the thoughtful response and I don't really disagree with you on any of this. In fact, if I were interviewing for positions, I'm not sure I'd handle it any other way -- it's human nature to choose the "safe" option -- but that doesn't make it right or optimal. But it's also taken to an extreme: I have a BS in CompSci (from 12 years ago), but "never been a professional coder" almost always outweighed everything like a fat kid on a see-saw. It's a double-whammy: not only are they looking at self-taughts harder, self-taughts are naturally going to be less comfortable with best practices, lingo and other general experience they'd pick up in a month's time on the job.

In trying to put my thoughts into words here, I found it easier to whip up some pie graphs instead.


Damn! I forgot to include "Do you have exp with the company's stack?". Oh well. That's more about getting the interview in the first place, so I guess it's ok.

Why is it a bad idea to parse a Turing-complete language using regex expressions? I have implemented the XScript language from Age Of Mythology and AOE3 with that approach; it seems to be quite efficient and flexible, is there something I should look out for?

(This comment is pretty informal; if you want to know more, look up terms like "context-free grammar", "Parsing Expression Grammar", "Backus-Naur Form", "regular language", or even "formal language theory".)

The problem is not "Turing-complete" (roughly, "can express arbitrarily complex stuff"), but "context-free" (roughly, "you can parse without considering what you've seen so far").

For instance, Brainfuck is Turing-complete (in the "Turing tarpit" sense) but really easy to turn into tokens (in fact, an informal approach may not even distinguish between "+" and "the token 'increment'"). Even realistic languages like C can be parsed without using anything much more advanced than regexes (you need some ugly kludges to support typedefs, and you should pretty much ignore newlines; one would typically use something more like yacc, but that's still not a very sophisticated tool.)

On the other hand, XML or HTML (which are not Turing-complete, and, informally, "not that expressive") are pretty much impossible to usefully parse without extensively considering context - <a><b /><c /><d /></a> gives and <e><d /></e> are "very different <d />'s".

I don't know XScript, but regexes may be a completely viable approach. In fact, if your current approach works, it's likely good enough - it requires some theoretical background to express why you can't parse HTML with regexes, but you'll run into lots of trouble if you try (leading to stuff like http://stackoverflow.com/questions/1732348/regex-match-open-...). Of course, there's value in finding out your approach won't work before you've spent weeks of effort. ;-)

Thanks for the information! Looks like I've got some reading to do :)

To take the other side of that argument, as someone who has seen hundreds of resumes and interviewed hundreds of developers in the past, you do have a challenge in front of you to overcome the "never had a real coding job" stigma. Focus on your strengths when selling yourself (like, being a totally awesome rock star developer who can tackle any challenge).

The stigma is real and you can't fight it on those terms. But you've got other qualities that people want, and you can "win" those interviews if you can get that point across. Make your resume scream "rock star coder".

Or maybe they tried the 0 team experience dude once, and it was a disaster.

Indeed-- Spolsky's solid hiring advice could readily apply in reverse for job seekers. Go to the Mountain, build your own community*. But that's hard, and surfing job boards is easy.

Yes, definitely this.

Don't go through the front door. At most, use publicly listed job ads as a form of research. Never assume they represent all the jobs that are actually available to you.

There is no substitute for actually talking to people and getting to know them. Make your own wishlist of companies you'd like to work for. People running startups who are even minimally competent know they need to network a lot, so they're easy to find and network with.

For what it's worth, n=1, I got an internship at Google and a full-time job at Apple by applying through their respective websites.

I wholeheartedly agree with checking out 'other' doors, but it definitely doesn't hurt to at least start with the front door.

Google and Apple are the exceptions. They are massive profitable publicly held companies. And they don't compensate ordinary hires with equity on a percentage basis (maybe x number of shares as a bonus/retirement package).

They are so big that they have HR policies and anyone you are likely to know well enough to give a heads up on a job at either company is not high up enough to shirk the formal HR process. Small companies are very very different.

I'm on a first name basis with well-known engineers high enough to shrink the formal HR process at Google, Yahoo and Facebook. If I asked to interview with them tomorrow, they'd put me in the process immediately, in an expedited manner. I'd probably go straight to the on-site interview.

I'm not bragging about this, because it really wasn't difficult to do. I didn't go to school with them, and with one exception I met them all after they had joined their companies.

Cold-emailing influential people, or introducing yourself to them at meetups, or any one of the myriad other ways to meet people applies in this situation.

Just be genuine, and network with them long before you'd ever want to call in a favor, this way you actually have a relationship with them. It also helps if you share something in common and actually have something to talk about, and if you want to connect with them for the sake of having smart colleagues, not just influential friends.

The comment to which I responded mentioned an internship at Google and a [presumably early career stage] job at Apple. I consider it an orange relative to a situation where a person has developed collegial peer relationships over some number of years in a profession.

When my good friends whom I helped get jobs now work for Google won't speak to me anymore, I just assume it's because they know I wouldn't make a good programmer there. It's a rough river to paddle.

Framework fetish foils FizzBuzz facility.

Most pre-Series A start-ups will offer (far) below market salary; they have to, since, generally (and as another poster said), they have only $X00,000 in the bank and no revenue. This is pretty typical.

What the 0.05% equity package indicates is that the founders probably have an unrealistic expectation about how much their venture is worth at this stage. I've seen this a few times in naïve, young (23-25 years old) first-time founders that don't have significant amounts of experience working in start-ups and/or technology in general. This trivial amount of equity is a huge red flag, not only because its present value is negligible (guess what the risk-adjusted rate of return is on a start-up run by first-time founders?), but because it indicates that the work environment will likely be unpleasant (hellish hours, frequently changing requirements, no clear vision -- common in companies run by first-time founders).

Also, keep in mind: if these founders are foolish / naïve enough to think they'll be able to hire a credible, valuable engineer with this package (they won't), they're also likely foolish / naïve to get screwed by their investors. Founders are only at the bottom-middle of the start-up hierarchy: VCs are above them and LPs are above them.

Probably the same founders who are on Quora, asking why their programmers won't work 80 hour weeks.

Can you link me to some of these so I can laugh?

Yes, thank you. The questions are naive, but the answers do restore my faith in humanity.

I saw those questions before, and I honestly wondered if the people asking them were really stupid or just trolling.

Ahahah thank you!

> Who would take these deals?

People that are insecure about what they bring to the table.

Pre series-A the risks are still huge and the stock should be priced accordingly. Say the founders think a pre series-A company is worth $2M and they offer 0.05% equity you could enter negotiations asking for 1% more if you feel like it (and walk away if it goes below 75% of your counter opening bid) if you can defend the position that there is still a 95% chance that the company won't make it unless they have you on board.

Otherwise price the stock at 0 and ask for a market conform salary.

They'll move. An offer is just an opening move, nothing more.

1% isn't enough equity to justify a below market salary for something with a 10% chance of a $100,000,000 exit in five years...and if only the outlook were that good and imagining no dilution and benevolent actions by controlling shareholders.

If the equity is important, then it should have some chance of producing fuck-you-money at liquidation. 0.05% is only fuck-you-money if there's a Google IPO size liquidation and there's been no dilution ($11,500,000 @ $23billion). That ain't significantly more likely to happen to a software developer than a chef.

10% chance of a $100,000,000 exit in five years

That seems highly optimistic.

They're pointing out that, even if we assume a ridiculously high value for the equity, it's simply not worth any money. You're absorbing substantial risk for equity that has no chance of being worth real money.

This seems to be a common pattern in finance, where one party tries to shed all their risk cheaply.

That's exactly the point.

It depends on how far below market you will get, but you're right, for plenty of the offers out there 1% would be (way) low. But 0.05% is to be laughed at (politely, of course), no more than that and then simply counter with an offer that you'd be happy with.

As soon as it becomes hardball negotiation, then the context of later events is the same "what can I get out of this" finite pie. The goal is not a percentage but an opportunity for a life-changing payout. 1% or so means that the major shareholders aren't concerned if my working hard doesn't get me rich in circumstances where they become rich.

They're fine with us all having worthless stock together.

What I am getting at is that taking equity means getting a lawyer to oversee the business terms. Going into business with someone who doesn't value the long term success of those with whom they are in business is a bad idea in my opinion. It's better to hang out with people I trust.

That goes to the heart of the most frequent cause of trouble between shareholders: badly aligned interests. Even so, if you're looking at the stock as a lottery ticket and the company does take off you're in a good position to make a fair amount of money, you just shouldn't count on that. But if you're going to play you might as well play for stakes that are worth it. Each to his own, I think a big part of the 'compensation' in being part of any start-up is that you get ring side seat on how that whole thing works and you can - if you are not just heads down coding - get some very valuable contacts out of it.

This can turn out to be worth more than either the stock or your salary but that's a long game and one with even less guarantees.

Still, I'm pretty sure that very few people that were on board with one of the bigger SV successes of the last 2 decades are going to complain about their pay-day, whereas for everybody whose company did not make it it hardly matters how much stock they got. And that's really where these founders miss the boat: they should be happy to share a sizable chunk of what is essentially worth nothing. They are essentially already busy with their exits when they should be building a company and that alone is a good reason to avoid those companies.

Badly aligned expectations are perhaps worse than badly aligned interests because they spoil what could be an otherwise good relationship.

Shares that signify that the owners want a person to help run the company are different than shares as a form of payment. There's nothing wrong with either so long as everyone understands which it is. If it's compensation, then it's mostly a distraction from evaluating the job offer. The ringside seat to a rocket-ship ride comes with or without shares.

Or getting "let go" 24 hours before vesting date.

Accelerated vesting upon termination is your friend here. Have your lawyer look over the contracts.

There's a good metric buried there:

    Is the deal so good to a first approximation
    that paying a lawyer to review it is clearly
    a no-brainer?

This is definitely a great negotiation advice. I probably could negotiate better terms. But still it'd still start us (employee and employer) on the wrong foot. They'd think I am being greedy and I'd think this is a place where founders would always try to screw me over - breaking mutual trust - effectively ruining the positive spirit of working together.

> But still it'd still start us (employee and employer) on the wrong foot.

Absolutely false. I hear VPs all the time speak about trying to "close a candidate" during negotiations, like a car sale. If you are a tough negotiator you will only earn their respect.

No, you're not being greedy. They are being greedy. Being reasonable in return and walking away when you don't get what you want are the valid responses. Lots of good advise elsewhere in this thread regarding vesting and making sure that you don't end up with 'B' class shares.

This is completely backward. Your perceived worth is tied to your price. You will literally get better treatment and more respect by negotiating a better price.

Not negotiating just makes you look like you don't understand business and shouldn't be trusted with any business decisions.

Contrary to what people want to believe, greed is a huge part of the startup ecosystem.

If they're so stingy with the equity upfront, won't that make you suspicious they'll just try to screw you out of it later?

Let's flip that around: If they are not stingy upfront then that shows that they know they can screw you out of it later, the fact that they are stingy indicates they will have to pay up.

The target candidate for these startups largely doesn't exist. Most folks accepting such a salary in the Bay Area are recently out of college and living in small apartments with roommates.

When it's all said and done, most of these startups will settle for a few offshore contractors or hire remote people who live in cheaper parts of the country where $90K goes a lot further.

The tried and true "solution" to this problem is to import a number of H1b visa holders from other countries who are willing to work for the lower salaries and accept the lifestyle choices that it imposes in the Bay Area. For many of them, $90K in the Valley is still an upgrade from where they are coming from.

For those of us with a decade or more of experience, it's best to focus on the post Series A startups that have the money to pay. However, many of these jobs involve cleaning up code written by those inexperienced folks who accepted less pay in the early days.

Even H1's would scoff at that. The pay discrepancy is largely overstated.

"accept the lifestyle choices that it imposes in the Bay Area"


H1's working for lower pay seems like a fallacy. Part of the visa process involves paying prevailing wages.

Yes by law there is a prevailing wage rule, however in practice this is abused.

1) It is basically never enforced 2) The people rubber stamping the applications don't have a clue about the person, the job, or the title

What happens is employers pigeon hole developers into less experienced roles with lower pay grades according to the BLS (the source of data employers must use to justify the wage)

For instance you can take a person with 10 years experience and either say she is a 'Level 1 Web Developer' at 52k in SF, OR you can say she is a 'Level 4 Software Developers, Systems Software' at 134k in SF. Which would you chose as an employer? And these are extremes, you can play somewhere in the middle depending on your comfort.

http://www.flcdatacenter.com/OesWizardStep2.aspx?stateName=C... and then I selected the BLS region as SF and you can see all of the occupations they define which sound similar and are described similarly, but have wildly different pay scales.

EDIT: I'm reading the prevailing wage guidance document now[0] and employers can actually provide their own wage data surveys to determine prevailing wage. Wow!

[0] http://www.flcdatacenter.com/download/NPWHC_Guidance_Revised...

I wouldn't put too much stock in the "market wage" requirement. It's easily subverted. All it means is that the position advertised needs to pay market rate for that job title. You could hire an unusually talented senior engineer as an "analyst 1" and as long as you pay the analyst 1 market salary, you can get away with it. There's very little oversight.

Also, keep in mind that if it's difficult to hire at "market rate", that tends to be a signal that market rate is too low. Suppressing wage growth is, in the long term, not really all that different from lowering wages (suppose that there is no wage growth for 10 years - "market rate" remains the same - in an inflationary economy, this means wages are much lower in real terms). This is why some people are now proposing a wage requirement considerably higher than market rate for H1Bs, to ensure that the process doesn't suppress the wage growth needed to make the field attractive to talented people.

Last I checked, the metrics around prevailing wages to hire an H1B are not adjusted based on the local market. So you can get away with paying an H1B the same in the Bay Area as you would in suburban Iowa.

Would you share a link? My impression was that market wages actually need to reflect the local wages, not national, but I'm not sure of this.

well, one way to a self-fulfiling proheshy is to advertsie below market jobs in the market you are looking at.

Here's a way to counter this: interview, make them want you, and then decline any offer explicitly because of the comp.

Startup founders are trying to go (even more) lean and cheap out on salaries, relying either on inexperienced new grads, the insecure, or on a "rah rah go team, the company is priority #1" culture of self-sacrifice. Don't play into it.

>I noticed some rather unsettling job adverts in the past while. Some pre series-A startups in the valley offering like $90k in salary for an experienced developer and 0.05% equity. I am just trying to understand who are their target candidates that they expect to join for such an offer (not to mention crazy working hours)?

I had a similar experience recently. all the "startups" expected me to take a 30-40% paycut vs. the larger places, essentially because they expected me to be excited about their company.

Which is weird, because if the startup doesn't get really big, even if it does okay, nobody is going to care it's on my resume. But the large companies? especially the large companies with a reputation for high standards? they look good on the resume.

Another funny bit is that the same thing, as far as I can tell, is true of contract positions.

What irritated me is that I was going through headhunters... e.g. they were already paying 30% extra for the headhunter - if they just gave me that, I'd have been happy, at least for the first year.

The other thing was that they were weird about money. I talked to one startup and (after an 8 hour interview) they seemed super excited. the person who would be my supervisor gave me his email, and man, I thought I was in. "how much are you looking for?" I named a high number, about 10% higher than I expect to actually get, because that's what I always do. Let them talk me down. I even mentioned my bottom number "a guy who has been working for me for most of his career just landed a job at $x" - but nope, the mood immediately changed; I was hustled out the door and the company went completely dark. no response to the official or the personal emails. I finally got some bullshit answer from the recruiter, where he read back the "why you shouldn't hire me" things I give companies before any interview.

The solution? I ended up getting a contract gig at the large advertising company in mountain view. I'm pretty happy with how things worked out; It's closer to where I live in the south bay, it looks way more impressive on the resume, and I need three people to sign paper before I do overtime.

> "why you shouldn't hire me"

Care to share this?

I don't want to spend 8 hours interviewing for a job and not get it, right? so I try to get the likely dealbreakers out of the way up front.

Of course, it never works. You don't get to talk with the people that matter until you are in the interview, at which point, well, I haven't found a way to let them gracefully cut things off early, you know?

In this case, I had been working for a company that I owned most of for the last half-decade.

Also, I have pretty good Linux systems experience, but my experience with the latest applications is somewhat out of date.

I also told them what I thought I could get salary-wise; the exact number they found so shocking later on.

I understand your reasoning, I was just wondering if you had like an actual list you attach to your resume.

hm. that sounds like a better idea than trying to, you know, talk with people, because the decision makers usually see the resume, while you only get to talk with people that don't matter until the actual interview.

would be interested too

A few thoughts:

1. The definition of an "experienced" developer is subjective and varies widely. Startups with younger management may (incorrectly or not) apply senior labels to candidates with fewer years of experience and lower compensation expectations.

2. Anecdotally, I have seen startups in SF/NY take advantage of the lower earning expectations of candidates who are relocating into those metros and aren't prepared for the sharply different cost of living. There are places in the US where $90K goes much further and is a more competitive offering, especially for those who are willing to take less cash for the opportunity to work on something exciting.

3. "Developer" is a huge category. Some technical skills are far more scarce than others.

Low salaries and negligible equity are the natural consequence of there not being enough technical talent in the Bay Area.


How do you figure? This is exactly the opposite of what one would expect would arise in a talent-constrained seller's market.

I think he's poking fun at the currently trendy idea that there's a talent shortage of programmers.


Or surplus of startups.

You'd think developers would be good with numbers. But put $ signs in front of those numbers, and suddenly they're not very good. Trading away hard cash for gimmicks, and a tiny amount of equity in early stage startups.

Did I mention we have free lunch AND dinner brought in each day?

A strong desire to keep geeks infantile.

Can you imagine pitching this sort of 'perks' to professionals in science, medicine, or engineering?

[follow up from another HN link ;)]:

"... to provide for their care and feeding. It is probably no accident that the relationship between dogs and their owners mirrors the attachment relationship between parents and their children, behaviorally and physiologically."

and a pingpong table too

These things have become a joke -- I guess because they are so common in SF -- but damn, for a single person who doesn't like cooking or taking long lunches, and likes ping pong, these things are pretty damn cool.

and we're going to change the world

and will make it a better place

In short: you know too much. These salaries are taken by fresh college grads who don't know better, and think the adventure of "a startup" is better than working for a larger company (it can be, but there's no guarantee).

Many startup CEOs would like you to believe they are the only ones doing interesting work, but there are plenty of larger organisations that are still fun to work for, and more likely to value you as an employee.

>In short: you know too much. These salaries are taken by fresh college grads who don't know better, and think the adventure of "a startup" is better than working for a larger company (it can be, but there's no guarantee).

While you are right, you make it sound like $90K is underpaid for someone right out of college. $90K is pretty good for a promising kid with a fresh degree but no real experience. More than fair; they are unlikely to get much more at a real company. It's kinda silly for someone with 10+ years experience, but those 10+ years are worth something.

>they are unlikely to get much more at a real company

It depends on the school. For my friends going into software out of college, 90k was towards the bottom end (the top end was more like 200k).

yeah, I'm talking about a normal uni. I'm sure if you go to Stanford (and/or have parents who could get you into Stanford) the world looks like a very different place.

Of the people I know, $130K+ is a reasonable salary, with some experience under your belt. Out of college, you are looking at $80-$85K cash (maybe $90K if you convert stock and other bits to cash) I do know a small handful of technical people who can pull off $200K plus, but they are experienced and staggeringly good, and have proved that they are staggeringly good. It's not something that your regular programmer can expect.

I got $85K at a Boston company not known for paying top-of-market, just out of college, in 2010. A junior dev not getting $100K right out of college in SF is being underpaid even worse than is normal in this industry.

if you think it can be normal to be underpaid... you are using words differently than I am. In this context, by 'underpaid' I mean "getting paid less than the prevailing wage for the work you are doing" - and by 'normal' I mean 'average or median- usual'

Using my definitions, it's impossible for it to be normal to be underpaid. You are only underpaid if you are getting less than the normal wage.

Some people use 'underpaid' to mean something that has to do with the cost of living, and some people use 'normal' to mean "correct" - but that makes for a very different sort of conversation.

It is normal to be underpaid in this industry relative to the astonishing value a software developer creates, yes. This should not be controversial. $85K is low, even taking that into account, for a new college graduate.

>It is normal to be underpaid in this industry relative to the astonishing value a software developer creates, yes.

Your opinion of how much value a software developer creates is irrelevant, except to the extent that it influences wages you are willing to pay to others, or wages you are willing to accept, and only that matters to the extent that there is demand for you and/or how many developers you can hire.

In the real world, median starting salary doesn't even break 70K, much less 85K, according to salary.com, even in silicon valley.


My point, with this thread, is that while yes, there does exist a group of developers who make bank right out the gate and continue to do so throughout their career, for most of us? most of us are median. For most of us, $200K+ a year is purest of fantasy. And $85K right out of school is not bad at all.

> Your opinion of how much value a software developer creates is irrelevant, except to the extent that it influences wages you are willing to pay to others, or wages you are willing to accept, and only that matters to the extent that there is demand for you and/or how many developers you can hire.

Or to the extent that the capitalist class can collude (with the help of useful idiots who have bought into the narrative) to avoid paying a wage representative of the value created.

Markets with imperfect information are set by the ones with the most information, and that's not the worker. The results are unsurprising.

> In the real world, median starting salary doesn't even break 70K, much less 85K, according to salary.com, even in silicon valley.

That's great. I live in the real world and I made $85K coming out of college, in Boston, at a decent-not-great company in 2010.

In this industry, "median" is fairly terrible.

>Or to the extent that the capitalist class can collude (with the help of useful idiots who have bought into the narrative) to avoid paying a wage representative of the value created.

This idea that your wage has much to do with the value you create, well, it's what I believed at your age, too. It's a fun thing to believe when you make more than anyone else you know who is your age. It certainly made me feel valued.

But the idea that what you get paid has very much to do with the value of what you produce is obviously silly, unless you have a definition of value that makes one person working at a hedge fund worth ten civil engineers.

If we're going with economic models, what you are paid has everything to do with supply and demand for people with your skill. The "value" you produce has something to do with demand, but in this case, value is measured in such a way that one hedge fund analyst is worth ten civil engineers, so it doesn't really map to how a normal person thinks of 'value' - and even then? well, there's always the supply side of things to consider. If other people are able and willing to do your job for less money...

>In this industry, "median" is fairly terrible.

Compare it, say, to aerospace. I know guys who have masters degrees from places like MIT working at the local defense contractors. Some of these people are better programmers than I am They can't come within 30% of my salary, and I'm a mediocre sysadmin who barely graduated from one of the worst high schools in California.

And yeah, I mentioned civil engineers; the people who design physical infrastructure. Roads, bridges, sewer and water systems. They make even less; even with advanced degrees and experience, they are lucky to make half what I do.

I mean, yeah. there are other job types that make more money than people who build and support web applications. But compared to, really, everyone but the top-ends of finance, legal, management and medical, we have it pretty good.

People whine about making only $100k/yr and having to pay bay area housing prices. What do you think it's like for the people that clean your bathrooms? that make your food?

We have it pretty good. I mean, I'm not saying that you shouldn't try to get more, or that it wouldn't be great to get paid more, I'd certainly enjoy a bigger house and a nicer car, and maybe a driver... but sometimes you need to sit back and recognize that even if you aren't in the 1%, well, life in the top quintile isn't bad at all.

"Don't complain, you're doing better than the poor!" is transcendentally fucking evil--a word I do not use lightly, but you're happily sucking down the disease of the middle class. The rich guy takes nine cookies. He elbows you and says, "hey, that poor guy's gonna take your cookie!". And you hop to.

I don't want the poor guy's cookie. I want the rich guy to actually spread it frigging around so we can moor compensation to value created--to the poor guy, the civil engineer, and to me. But instead, the rich guy and his rich guy friends collaborate to keep the rest of us in a position to keep working for them and to never, ever, ever get within arm's reach of real success ourselves (unless you want to play the roulette game of startups, where you'll enrich them long before you see a dime).

But clearly I'm just an ingrate.

>"Don't complain, you're doing better than the poor!" is transcendentally fucking evil-- a word I do not use lightly,

Yeah. I think you use "Evil" lightly. I mean, I do too, but that's mostly because I live a sheltered and comfortable life, much like you probably do. Seriously, listen to yourself. You are calling me "Evil" for saying "Hey, perhaps you should count your blessings"

I mean, I understand the people who think I'm evil if I don't give the homeless guy a buck; I don't really agree with them, but I can see their point. I don't see your point.

>I don't want the poor guy's cookie. I want the rich guy to actually spread it frigging around so we can moor compensation to value created--to the poor guy, the civil engineer, and to me. But instead, the rich guy and his rich guy friends collaborate to keep the rest of us in a position to keep working for them

I'm not saying you are wrong... But what are you gonna do about it? I don't think you are going to find very many people in our income tax bracket who are willing to risk all for a few more bucks.

More to the point, popular action is going to target us - look at where income tax brackets top out. To most people, at that point? you are rich. I mean, I'd like it if they stretched it out further, and eliminated the capital gains loophole, but to your average voter, I'm one of the rich fucks who ought to get soaked.

> and to never, ever, ever get within arm's reach of real success ourselves

what is real success to you, if not this? I can live pretty comfortably for a year off of three months pay.

My point, here, is that you can spend your time and effort and emotional energy railing that other people are in some ways unfairly slightly better off than you are, or you can focus on, you know, living your life.

Bachelors. Not as in Bachelors degree, but literally bachelors: They're young, cheap, work crazy hours, and easily seduced by free pizza - the ideal startup employee.

Can agree. I used to be like this and loved the free pizza. Now I'm earning more working my slightly less shiny corporate job with sensible hours. I have time to cook decent pizza though!

This is what I assumed. They're biased towards younger programmers with no life circumstances that would cause them to need a higher salary (e.g., kids).

I'm a bachelor and you are out of your mind.

Don't worry about playing hardball in the negotiation. You can preface your negotiation by saying something like this.

"As long as we're on opposite sides of the negotiating table, I am going to do my best to get a fair share of possible upside from your company, and a decent salary. When we conclude this negotiation fairly, we'll be on the same side of the table and working towards the same goals."

"Now, I want half a percent and $110K."

Keep in mind that your BATNA (best alternative to a negotiated agreement) is to say, "No thanks. Good luck." They need to hire somebody: time is money at their stage of business. You don't need to jump into their job.

But don't have this conversation at all unless you think their business idea is worth five years of your life.

> time is money at their stage of business.

Yes, this is one of your best sources of leverage, as long as you can take your time and be picky (which you absolutely should be able to do if you're a working programmer).

The longer you keep them talking to you, the better. They can't waste time forever, and their own sunk cost bias works in your favor.

Equity positions are very negotiable. Ask for more equity, a lot more, like 1 or 2 percent.

To be honest, I am half-scared of taking equity instead of cash pay. The reason is, I don't understand it as well as I should. It always scares me to think that through some VC-magic, whatever equity I have could end up nearly worthless (possibly an irrational fear since I don't understand the whole mechanism).

This article[1] may help you to understand why you (rightly) have a justified fear of equity dilution as the company grows and (probably) raises additional capital through future funding rounds. The relevant quote: "When you are issued employee equity, be prepared for dilution. It is not a bad thing. It is a normal part of the value creation exercise that a startup is."

The article tries to explain how equity dilution (for both founders and employees) pans out. It is worth a read.

[1] http://avc.com/2010/10/employee-equity-dilution/

That's a good point -- ensure you get the same class of shares as the founders. Yes, sometimes even founder shares get diluted to worthless, but it only happens when the alternative is the company folding, in which case the shares would be worthless anyways.

Here's the math I do:

share of company * realistic potential valuation * chance of hitting it * expected dilution.

chance of hitting it ~= 3% expected dilution = 50%

So using your example:

0.0005 * 1B * 0.03 * 0.5 = $7500

No, you are right to be scared. Very few of the first employees will see anything come from equity.

Not irrational at all, the equity is most likely worthless. If you are young and want to roll the dice then it's OK.

What are you expecting from pre-Series A startups? There are lots of pre-Series A startups with six figures in funding and little to no revenue. For obvious reasons, most of them are not going to be paying $140,000/year and if they are, you might not be comfortable with the runway risk.

In terms of equity, since you mentioned that you are the breadwinner for your family, why are you sweating the equity? A lot of folks here will no doubt suggest that you negotiate for more equity, but equity won't pay your bills. If cash is your biggest concern, negotiating around equity is pointless.

It sounds like you want a very early-stage startup job with BigCo-like pay, meaningful equity and reasonable hours. For the most part, this is a dream.

I'd like to start by saying that in many ways, your post is grounded in reality. If you want a well paid, stable job, then yeah, early stage startups with equity probably aren't the best thing for you.

Here's the problem - almost all silicon valley hiring, compensation, equity, and work conditions are now viewed in the context of an absolute insistence from employers that there is a critical shortage of software engineers (remarkably, a claim that is made with absolutely no data on compensation, equity, work conditions, and long term career opportunities offered relative to the jobs available to highly educated and hard working people in other segments of the economy).

So you say that the idea of a well paid job with substantial equity in an early stage startup is a dream, but to a lot of us watching this, it seems like the people being outrageously unrealistic are the ones trying to hire talented programmers for ludicrously low wages and equity. The difference is, I'm not going to congress claiming someone owes me a job on the terms I've decided are fair. But these employers seem to think that if they can't hire under their conditions (in this case, in a company that may be gone in 6 months, at a salary far too low to support a family with a child, with equity too low to be worth much under almost any outcome other than a few shoot-the-moon scenarios), congress needs to get involved in increasing the number of programmers available for hire.

So, why the hell would anyone leave that much money on the table? If you're asking me to do something crazy, you better be willing to pay for it.

.5% equity, especially when it will end up being diluted, is a fool's game.

> So, why the hell would anyone leave that much money on the table? If you're asking me to do something crazy, you better be willing to pay for it.

At most early-stage startups, there is no money on the table. If you want to maximize your earnings, focusing your job search on pre-Series A startups is a horrible waste of time.

The OP seems to be asking for startup excitement, reasonable hours, high salary and meaningful equity. At a pre-Series A startup, you might be able to find two of the four.

> .5% equity, especially when it will end up being diluted, is a fool's game.

Rhetorical exercise:

1. What's .5% of $0?

2. What's 2% of $0?

3. What's 10% of $0?

Equity at early-stage startups is a fool's game.

The expected value of a startup, even pre-Series A, is not 0.

You seem to be confusing the expected value of a startup with the value of one's equity. There is a reason that the vast majority of vested stock options go unexercised when employees leave companies.

Additionally, you are not factoring in liquidation preferences. Rhetorical question: what's 10% of $10 million when your investors put in $5 million and have a 2x liquidation preference?

You seem to not understand the notion of expected value.

If the strike price is a concern, it could probably be negotiated down. I had the impression the they have generally gone down anyway.

> If the strike price is a concern, it could probably be negotiated down.

Please ask a qualified accountant about Section 409A of the tax code and what happens if you're granted stock options at less than fair market value.

Yes, 5% of $0 is still $0.

Even worse, it's 0.05%.

A lot of us understand pre-Series A startups are cash poor, and for the right company, wouldn't mind working for (reasonably) less cash.

But 0.05% equity? Seriously, that's insulting. Don't these morons want their employees to be motivated? Isn't that the point of equity?

I'm curious - what's a reasonable SF salary/equity comp in this situation?

$90k in salary for an experienced developer and 0.05% equity

Yes, that looks wrong. Equity should be 10X more (0.5%). Whether it's a good deal for your situation or not is a different discussion, but at least that would be more in line with typical deals.

Are you living in the Bay area now? If you're not, and you're living in a city with any sort of active startup community at all (like any big city in the midwest, for example), try finding a startup at home. It'll be cheaper, you don't have to uproot your family, and you might get a much better deal.

90k is "low" ? Don't ever leave the Valley, you'll be even more disappointed

It's definitely low, even outside of the valley. Probably not low in the mid-west.

Around here, most programming jobs top out around 60-70K. I've seen a couple for around the 90K mark, but not many and most require quite a lot of experience.

Near Utah.

Top out? I started at 65k with one year of experience in Utah Valley. And the company I worked out didn't pay super well.

Relevant to this discussion: A startup job ad for $40k salary in SF.



I read this as "this is the worst job at a 'startup' that's never going to have big exit"

They are fishing. All they need is one developer to take this deal, not all of them. Just ignore it and move on.

They're offering you the comp of someone who just graduated, they may not realize that though.

I haven't even graduated and I wouldn't touch that offer with a 10 foot pole.

You may need to recalibrate before graduation, it's about right for recent grads, depending on amount raised and team size of course. You'll get more cash comp post series-A/B/C, with lower % equity.

It's even worse in Europe.

You can always negotiate more, if you can convince them you are worth the investment. They might be willing to shell out more compensation if they really want you.

And not all corporate jobs are boring. Find one that fits what you like to do.

If youve got a job already just hold tight, Q1 isn't even over yet. Most hiring kicks up again right before the spring when the sun is out again

If startups aren't willing to provide the means they don't deserve good engineers.

Was this site used in your search? It seems geared toward sf startups: https://www.startupers.com/

Here's a suggestion, as an experienced developer, why don't you take a risk on yourself and start your own company?

That makes very little sense. You shouldn't start a company unless you have a very strong idea, evidence that it makes sense, capital etc.

If the pay is not high enough for your needs, you shouldn't bother looking at startups, or at least you shouldn't be looking at pre-series-A startups. Everybody has their own motivations for why they choose to work somewhere, and money/compensation isn't always the top consideration. At early-stage startups where money is tight, salary will usually be difficult to negotiate too much, but equity can be negotiated more easily.

The equity is preposterously low for an early stage startup. Even if the company were incredibly successful and ended up being worth $100 million (unlikely) and your equity wasn't diluted at all (unlikely), your equity would only be worth $50k.

Startup jobs are the new corp jobs.

And vice versa, as someone at corp decided to "innovate." (The hours are still better for most, though.)

You missed H1B.

Shameless plug - Find all salaries reported by H1B employers including startups at http://salarytalk.org/search

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