"Facebook is quietly telling people, never in writing, that there’s no reason their stock won’t hit $100 billion in total valuation over the next couple of years. No guarantees, yadda yadda, but hey if you get 1/10 of 1%, that’s $100 million in stock."
Am I missing something, or is expecting "1/10 of 1%" equity insane? I've never heard of a mid-level developer getting that at a company of Facebook's size.
Everything I had read previously stated that Google salaries were nothing special compared to industry averages, and it was the perks and culture that differentiated them
But there's no way $150k is average for a mid-range developer.
Even back in ~2005, "Seattle area compensation" was ~90k for folks just out of college, if you managed to get to mid-range it was around 120k, and then around 175k at senior IC levels. And, at the mid-range the eligible bonus amount jumped to around 50% yearly, and at the higher levels to > 100% of base.
These numbers were slightly higher than Google's at the time, but GOOG was still playing the "our stock options are worth more than their stock grants" line. In any case, ~150k for mid-range is certainly believable.
That said, realize that mid-range in pure software companies making Big Stuff is a little different. Most startup-level CTOs and Fortune 100-level "Architect" types came in at the bottom of mid-range, just due to not having worked at scope.
At the time, Apple had the lowest pay for comparable grades of any of the firms we researched in our Seattle-area recruiting. Of course, those stock packages have probably made up for things -- if they didn't just flip them at vest for cash immediately, like most employees do!
Also, if you think 150k is high, you should chat with folks doing software development in the finance industry. It's honestly a bit overboard, but the companies do what they have to in order to make sure that offers from Facebook, etc. aren't at all tempting.
I suspect what's called "area compensation" is towards the higher end of what the average developer can expect.
My rather vague impression is that the people who are considered good enough that a recruiter has to hire them will get the 80-100k while for the rest its more like 60-80K.
Correct me if I'm wrong - please, I'm curious really...
Edit: Google in particular is a large company by now. At the start, I would assume they'd pay premium for developers but over time I'd assume they'd aim to pay least possible for the people who met their standards.
I have friends at Google, and have heard nothing indicating that salaries are anywhere in this ballpark. I also just spoke to someone whose girlfriend works there, and he too agreed that this article is bullshit. They might mean mid-level manager, or they may be counting all of the perks as part of the salary. But even there, a half-million retention bonus seems absurd to both of us.
Could "Mid-level developer" might mean a super developer who's considered at the level of a mid-level manager? IE, mid-level != mid-range?
Google is a lot bigger than Facebook currently so I'd assume Facebook would be aiming to pick what they consider the "cream". The article mentions 118. Google has ~20K employees and a good portion of them would engineers.
In any corporation of that size, there are some "mid-level developer"s who are far better at what they do than their title suggests. For whatever reason, they just haven't moved up in title as fast as they've moved up in skill or productivity.
But we also have five additional levels above "senior software engineer," and there are a pretty large number of people in those higher regions. I'd say 150k is a bit above the "mid level" range, but it's certainly not above the 95%ile.
No it isn't. Based on personal experience. Bonuses and stock easily add 30% more.
I don't know why Google salaries get knocked in the mainstream. And why Google doesn't try to set the record straight. It's a huge opportunity cost for people going into startups.
Bonuses for an ME employee have run about 15-20% in the last two years. Stock refreshes are negligible, as the initial stock grant is the primary source of such an amount.
T4 average 100k. Senior average 125k, but have a much higher initial stock grant and a slightly higher bonus level.
The report of Google salaries at Glassdoor.com is accurate.
Engineers start at T3 out of college, and move to T4 after a year. T4 is mid level. Senior is a T4 with a good win and some presentation skills. Staff are some of the best engineers with long track records, but require some managerial skills. Those above are superstars and managers.
As someone on TC put it, a mid-range dev at Google could easily be a superstar dev elsewhere. Ignoring that, if you factor in vesting stock and the annual bonus, 150k doesn't seem that insane to me.
It's possible that they are including the costs of benefits and perks. My impression that mid level for google (which is to say, top level people most places in the valley.) was around $30-$40K lower than that in terms of cash monies.
But I could easily believe that if you include the cash value of benefits, vacation, and perks, that shoots up to $150K. Google's salary is generally not anything to write home about either way, but they do hire people who would be top-end most other places, and their perks are top notch.
That's impressive, but they will have to double their profit several more times to warrant a 100b price tag.
Google has a PE ratio of 20. If you extend that to FB, they'll need to make 5b in revenue to get to 100b. Assuming that last year they banked 20mm, they would have to double their earnings eight times to get to 5b.
Not saying that Facebook deserves a $100b valuation, but, in all fairness, a PE ratio of 20 isn't realistic either. Facebook is perceived as the growth company that Google used to be. Investors will be willing to pay a premium for that.
Amazon is $59B. (http://www.google.com/finance?client=ob&q=NASDAQ:AMZN) Amazon's user base is probably comparable to Facebook, and they're monetarizing the hell out of it. How is Facebook supposed to almost double that?
I'm not sure Amazon's userbase really is comparable (I'm not even sure how to measure, since Facebook users vists Facebook every day, whereas Amazon users don't).
I think the difference is in potential. Facebook has more potential than any other company to make huge amounts of cash. What it's making now is (probably) just the beginning.
Any other company? Really? Name a sufficiently large petroleum company: they automatically have more "users" than Facebook for something those "users" are automatically guaranteed to pay for. (Do anything and you use petroleum, directly or indirectly. Even getting out of bed in the morning requires energy, i.e. food, and that food was shipped using petroleum products and likely harvested with petroleum-consuming tractors as well.)
You can even get more potential from having a lot fewer users, but monetizing each user by a greater amount. Having tons of unmonetized users and looking for a way to monetize them is questionable at best.
Yes, if Fb finds a strong monetization engine for its huge user base then $100b seems possible.
However, as I remember, Google had found their monetization engine before their IPO. Fb hasn't and the IPO is supposed to be just around the corner. Plenty of other large sites didn't work out like Google. I mean, Fb could wind-up like Yahoo, lots of users but no great monetization from them. In fact, Fb looks a lot like a better Yahoo since it more or less provides what Yahoo provides in a more integrated format.
Consider, if a brick-and-mortor company somehow offered free storage of real-world goods anywhere in the world, they could easily grow to millions of users too. The monetization question would loom large as well.
Yes but what about long-term value? I may be wrong but I thought options given to employees don't allow them to sell for some amount of time after an IPO.
Hmm, let's see. Facebook claims to have an active userbase of 500 million people. If they can find a way to show $46 worth of ads to every one of 'em every year, they can make $23 billion.
It does sound a little high, but not as insane as it initially might.
At 500 million active users, they're sweeping up some pretty non-trivial percentage of all of humanity. Unless they figure out something that'll grow their revenue by 100x...I hope that any investor isn't banking on the continued exponential growth curve of the human species as a market for targeted adverts in the near term.
Basically they're going to need to start selling "stuff" for that valuation to make any sense at all.
Which rules?? Public traded companies often give out something called guidance, which tells investors what range they think their profits and revenues, and by extension, stock price will be in the coming quarters.
From what I read, their average salaries are much lower but their loyalty is much higher. Besides, you don't hear of too many Apple employees quickly leaving for other places, at least not as much as Facebook/Google.
"No matter how much resolve you could muster, it was still difficult to quit Apple if Steve wanted you to stay. You'd have to sit down with him for a reality distortion session, which was often effective at getting people to change their minds."
My vague impression is that working at Apple gives you more prestige with the general public than Google or Facebook. Google has a geeky (well, even geekier) aura, and people don't like Facebook like they like Apple.
While I know a lot of people who have Apple devices and like using them, I know even more people who use Google on a daily basis. So my own vague impression is that Apple and Google are about the same, with maybe an edge to Google.
Our brains can only superimpose our romantic fantasies over reality for so long. One romantic fantasy would be "I'm cool because I work at Apple". I can't see a talented person working somewhere for more than a year or two unless they genuinely were satisfied with the job and environment. Money isn't the only thing that motivates people.
Well, in some ideal technical world, they wouldn't care what people think of their company, and they wouldn't care about their salary either. They'd just work at the place with the most interesting stuff going on. But most people do care at least a bit about those external factors, whether it's money or social prestige.
First, suppose Google has value 'x' in terms of signaling to the opposite sex, Apple has value 'y'. The x is already high, as Google has the reputation of a) paying well (whether justified or not) b) hiring the smartest. Women are attracted to intelligence. Now suppose Apple does have a cool factor, there's only an x - y difference in signaling.
You spend majority of your waking hours at work, so the perceived margin has to be very high to justify taking a less satisfying job, but which has higher signaling potential.
For a perceived margin to be high either a) the actual margin is high b) the person has to perceive \epsilon of social status much higher than \epsilon of job satisfaction. Generally, the people who value social status are almost by definition not going to work hard enough to become "half-decent (or better) engineers".
This also ignores the fact that most adults are either already in long term relationships or are celibate (voluntarily or involuntarily). "Looking for a girlfriend/boyfriend" is a temporary state, unless you're really interested in the dating game as a hobby which likely means less time for other hobbies e.g., hacking.
In my case, I'm in a long term relationship, having met my girlfriend while working in a nameless start-up doing email security (hardly "sexy", but plenty of technical challenges that I'd never see where I to work on "yet another app"). She could care less what the name of the company I work for is anyway.
So we're left with several logically valid conclusions:
* Apple hires worse engineers: people who are too interested in status to devote time to studies, people who are more interested in "playing the dating game" rather than fulfilling their passion. Typing this on a MacBook Pro, I see no evidence of this.
* Marginal signaling is really a lot better at Apple than Google. I can't see any evidence of that. Both are household names. Google has a reputation for hiring best, Apple has a reputation for building quality products (implying, hiring best).
* The quality of work is roughly equivalent at Apple and Google and decisions are often made by factors such as one offering work that the other doesn't, etc... People love working for both and only a minority is leaving either to work on "hotter" but less technically challenging applications.
I'll leave judgment for the reader, but something (perhaps reason?) is telling me latter is the case.
Exactly where I was going. As a crude generalization, working at Google signals that you're really smart, and working at Apple signals that you're a cool guy/girl who also happens to be smart. For most social situations and especially in attracting members of your preferred sex, the second image is better.
Apple salaries are not much lower, they are in fact much higher than Google. This article is bullshit, $150K is not what a mid-range engineer makes at Google.
I would think that Apple would employ a lot more computer engineers and people on the hardware side and that these would be the tech employees at apple with highest salaries, but I might be completely off base.
Am I missing something, or is expecting "1/10 of 1%" equity insane? I've never heard of a mid-level developer getting that at a company of Facebook's size.