What a bunch of crap. It's great that young engineers are making so much money right now, because that's just money that the VCs would otherwise be making. And what can I say, I'm a partisan--I think that's a perfectly fine thing. Indeed, it's worthwhile to take a page out the the VC playbook here. Clearly, the VCs have figured out that you don't need to keep young, ambitious people "hungry" for them to work their asses off. Look at who the VCs hire--people exiting from bulge bracket NYC banks. Look at what they pay these people. Every time I hear complaints about skyrocketing SV engineer salaries, I go over to WSO and remind myself: nope, still not ridiculous yet: http://www.wallstreetoasis.com/salary/venture-capital-compen... (note that VP is not a particularly senior person in most financial firms--usually 6-8 years out of college assuming the person didn't go back for an MBA).
That's a relative viewpoint, which still doesn't explain away the effect of money on the individual developers, who essentially no longer have to strive to create something of value in order to maintain their lifestyle. I think the article's right: that's a problem, and it's very difficult to pin down, much less solve.
Sure it's a comparison between two industries, but I don't see why the observations don't translate. The young associates working for VCs don't rest on their laurels just because they have fat paychecks coming in. Indeed, they work incredibly hard to keep the gravy train from stopping. Why should it be different in engineering? Just because an engineer makes a lot doesn't mean he doesn't have tremendous incentive to create something of value, because ultimately if he doesn't those paychecks stop coming. Indeed, big paychecks and golden handcuffs are actually an incredibly effective way to get smart people to put in tremendous effort. It's a model that the Valley fully believes in and buys into, because that's the model VC firms use.
Every once in a while you read something and shake your head thinking, "I always felt this but was never able to verbalize it like this." This is one such post: one of the best things I've discovered in 6 years of Hacker News.
As someone who has always built and shipped, I've been troubled by a subtle shift in thinking in our industry the last few years. Why so much hostility and failure to learn from others? Why so much attitude?
This brilliant post finally explains it: because so many of us who at one time would have been building products, services, and value are now building anything but: resumes, reputations, portfolios, and (Heaven forbid) "personal brands".
Thank you, Glenn Kelman, for one of the best arguments I've seen in a long time for builders to just shut up, find a customer, and satisfy them.
Just a few gems that really resonated with me:
But one crucial difference between this boom and the last is that the folks in the last boom had to ship or starve.
Amazing what you can do when you have to.
But how many engineers hired from Stanford or Berkeley in the past year will ever feel the savage need to make something happen, to bust out of the matrix, to push the limits of their abilities?
Is "bust out of the matrix" the new "think outside the box"?
The problem is that the young engineers earning that much become well-fed farm animals at the very moment in their lives when they should be running like wild horses.
What a great metaphor!
The result for many engineers and product managers is often a case of arrested development, as they drift from one startup to the next, dabbling in several side-projects, without the ballast of having solved some really hard problems or contributed to a lasting business.
Sometimes, not having an alternative is the best motivator to finish something.
After all, the only way to get much better at your craft is to be challenged in ways that make you uncomfortable. Yet not many people in high technology are uncomfortable these days.
I had no idea.
Startups, like professional football, are best done by the most desperate people on the planet.
These are very good points. I believe this also echoes Bret Victor's comment at the end of his famous Inventing on Principle[1, 2]
There are many ways to live your life. That's maybe the most important thing to realize in your life, that every aspect of your life is a choice. There are default choices. You can choose to sleepwalk through your life, and accept the path that is laid out for you. You can choose to accept the world as it is. But you don't have to. If there's something in the world that you feel is a wrong, and you have a vision for what a better world could be, you can find your guiding principle, and you can fight for a cause. So after this talk, I'd like you to take a little time, and think about what matters to you, what you believe in, and what you might fight for.
The Passionate Programmer[3] had a similar point throughout the book. Pg said similar thing years ago on his You Weren't Meant to Have a Boss[4].
As someone outside the valley (but a fellow traveler on HN), this attitude of "personal brand" has always confused me. Are the problems being worked on so hard that genius defeats competition? In essence, are the incentives for people in Silicon Valley so misaligned that a person can open numerous unsuccessful companies and still have a positive brand?
When you say for builders to shut up, find a customer, and build--isn't that what was being done before? If so, how could this incentive setup of serial failure being rewarded be avoided?
The problem is that the young engineers earning that much become well-fed farm animals at the very moment in their lives when they should be running like wild horses.
So you think that just paying a young grad $100k a year (which is a shitload of money by most European standards, but adjusting to your SV environment not that much) will just turn him into a well-fed far animal? will just put off their need to "break outside the matrix"? If you want most of your engineers to be mostly motivated by "hunger", you're doing something very wrong at one level or another!
$100k is beyond comfortable for everywhere in the Bay Area except SF. You can still spend ~$2700/mo on rent, and have money leftover for fun and savings. Hell, even in SF that will get you a pretty nice life.
And they often come out of it with long-term injuries that require ongoing, lifelong medical treatment, similar to boxers. Hence all of the recent discussion about concussions, though there are more factors than just that.
They have the opportunity to. But they don't have to. They have their whole life to continue to make their living, they don't turn to vegetables without any ability to work.
You mean it is impossible for them to work a regular job after retiring from the NFL? Keep in mind that NFL recruits from College, and (if you ignore the cases of cheating the system) most colleges have academic eligibility requirements. Therefore pretty much all pro football players also have a college degree (except the ones that get drafted before graduating -- I don't know what that statistic is).
Heck, if I could have gotten a couple million dollar head start in life by working on my hobby once a week, I'd take that even if I had to delay a regular career by a few years.
Except that you'd be betting that you're the exception:
"According to Sports Illustrated, 78% of NFL players are divorced, unemployed, or bankrupt two years after leaving the game, and MSNBC reports that one in four NFL players live paycheck to paycheck" [1].
Most athletes do not invest wisely, and often lack the experience to handle large sums of money [2]. Are you so sure that you'd be the exception?
I understand the statistics, I was just responding to "they have to earn a lifetimes salary". I was under the assumption that the reason for College sports eligibility requirements was so that athletes can have the ability to support themselves after their sports career is over. In fact, I've often run across people in various professions (such as the guy at the car dealership) who were former professional athletes.
Sorry, that was sort of an inside joke. A guy at work told me a story of how his nephew wanted to be a garbage man when he grew up, since they only have to "work one day a week".
I don't know the stats but I suspect that most of them don't have degrees. Many exhaust their college eligibility just "a few credits" shy of graduating.
You make a good point, but football players also have the desperation maker of competition and winning. There are surely players that make it to the NFL and coast, but 1) they have competed to get to the NFL, 2) there are plenty of people willing to take their current jobs, and 3) a Super Bowl win is a big prize that they probably haven't gotten yet and requires some amount of "desperation" to achieve.
Most of the young men who play in the NFL do not come from money. In fact for a lot of them, being the best football player in their high school was their only hope to go to college at all, let alone earn millions of dollars.
Most returns on VC are negative, almost all are below-market versus standard investments.
EDIT: On the other hand, it's questionable the degree to which the market valuations of regular investments are being pumped up by our capitalism-and-bailouts-induced capital glut.
The social craze was clear with Groupon's blunders and Facebook's IPO. That there is a crash coming should have been--and was--clear then.
Ever since then it's only gotten clearer that there's a crash coming, even if those that say "It's soon" were repeatedly proven wrong.
In other words, it is asymptotically becoming "sooner" the more and more it's being proven that "soon" isn't actually that "soon."
(This is, of course, the nature of predicting events that throw up so many signals.)
---
What I mean to say, actually, is that you're asking a pointless question. The signals that indicate "Crash imminent!" have long been fired.
When I say it's "very, very close," did you think I mean it's within a year, or within days?
From a certain way of looking at it, it's at the moment of _least_ certainty how 'soon' an event will occur that the event becomes very, very likely to occur. Because that's when we're the _most_ certain that it's inevitable, but the least certain how it will happen!
---
The answer you probably wanted: Google Reader's collapse makes it devastatingly clear to the tech world that there's a giant gaping opportunity to displace social media. All of it. App.net thinks too small, and the start-up world's programmers--all of them--are sharpening knives.
> the start-up world's programmers--all of them--are sharpening knives.
This is an astute observation—that is what we're all doing. But we've become so comfortable creating and sharpening knives that no one has dared make the cut. We're sharpening knives, sure, but that's all we're doing.
There are big things out there waiting to be built. An integrated social system that actually works, and fits within people's lives in a natural way that Facebook and twitter simply don't. There's room to bring in all of our connected experiences in the same way a great chef creates a seven course meal. Artfully. Human. I don't personally believe software has seen the magnum opus of which it is capable, yet.
I loved this article because it's so right. We're all so spoiled that we haven't been able to build the Great Wonder of the Internet. We're just making stones in a disorganized fashion. I have this feeling of desperation that I can barely explain, but I think that like most people who can just see a glimmer of the wonders we could be building, I am too comfortable where I am to act on it and create something truly grand.
Sharpening knives, creating better knives, sorting our knives, admiring our collection of knives. Someday they'll be used for the great art that is bound to come, because it's possible, and like countless cultures before us, we feel compelled to complete what we know is possible.
Early on in the internet era, much less the social network era. Everything we've done so far has been just mapping out the territory. The actual building on it is yet to come.
And it's ok if you're too comfortable where you are to build it. Others aren't. They'll get it done.
Would you mind elaborating why you think App.net thinks too small, and where the market disruption is indicated by how Google Reader collapsed?
Understand that I primarily stare at a shell most of the day, so I'm not completely savvy on newer startups. Google Reader shutting down just made me check out newsbeuter sooner rather than later :). App.net just seems like a Twitter competitor with longer strings; what do you see?
Google Reader's demise is really strong proof that Larry Page is obsessed with Google Plus to the point of depravity. There are alternatives, but that doesn't distract from the point: _Google_, one of the bright centers of the Internet, is behaving with abject incompetence.
Google just made a huge mistake. It made that mistake because of a huger mistake in trying to compete with Facebook.
People don't like Facebook. The technically illiterate might allow it into their lives, but they have no loyalty to it.
However, Facebook is the center of mass for people's online selves. App.net _is_ just a Twitter competitor with longer strings.
And in a certain sense it only makes sense that the center of this social media nonsense gets shut down.
There'll be a new Facebook soon. Hopefully a better one.
I agree with there being a new Facebook. If you look at Internet companies, after about the 7-8 year mark, they either rebuild, rebrand, and get better...or someone else comes along and makes a better mouse trap.
Although I use Facebook extensively, I do see where someone could come in and make a better one. The only thing is we have never seen something with the tentacles that Facebook & twitter have. Go to almost any page on the Internet and I can guarantee you'll see a "share" button. Did MySpace have that? I mean 1 out of every 12 people on the planet uses Facebook.
I am not tying to pessimistic, and I hope someone will take them off their high horse, but how will a service displace something that has over 1 billion active users? Maybe that just adds to the point that it is past their prime. Humans like the latest, greatest, shiniest this and that...so maybe everyone is ready to move on.
Hopefully multiple services will displace Facebook. Facebook's 1 billion+ users use Facebook in so many different ways. I don't want to share a service with the "friends" who simply want to send me game invitations, show me the dinner they just cooked. . .or fight in public.
Pardon me if I'm being too cynical or if I'm missing the point, but all I see is a CEO saying that young employees should work more for lower wages, with some naturalistic, late XIX century imagery of bravery — fighting in a war, the most desperate people, bringing out the beast, horses running wild.
He's also saying startup CEOs have it too cushy. He's saying they can just cruise from startup to startup, and while they may not get OMG rich, they can live a pretty well-off lifestyle.
Which he's arguing, not entirely unreasonably, reduces the chances they'll swing for the fences. They can take less risk and still get a fairly guaranteed reward of a good level of comfort.
Think about who benefits from the CEO living an ascetic lifestyle and that then being a "cap" on everyone below them. I read this whole thing as an appeal to young founders to screw themselves over.
In the old days of Unions, people willing to work for no money would get beat up, because fools like that ruin life for everyone else.
The types of people willing to destroy their health and have no family, no significant others, no interests outside of work should be thrown in jail because all they do is drive down the quality of life of everyone else.
The more that these kinds of myths spread, the worse our lives will be. As software people, it's essential that we counteract this romanticization of economic exploitation, or we will be dragged down with all the clueless fools who buy it into.
I can't get behind beating people up or putting them in jail. Maybe a scolding and/or a sternly worded letter. Or, if people are taken in by the hype, maybe even on a place like hacker news, raise awareness of your objections in the form of a comment.
Putting people that harm society in jail is one of the few ways to actually deal with these kinds of social issues.
Your kind of gutlessness is pretty much exactly why the world has been gifted to neoliberal extremists. Normal liberals lack the courage of their convictions. They're afraid to do anything beyond sending a stern letter.
Your pathetic sternly worded letters go straight to the paper shredder. The corporate state doesn't care. Capitalism doesn't care.
The only truth that capitalism recognizes is power. The only way to stop neofeudalism is through strength and power.
Putting people in jail as I said is really not an effective policy. There are far better policies. But I'm not actually making a specific policy recommendation, I'm arguing that normal modes of individual behavior that are condoned by American capitalist democracy are not effective at solving these issues. To solve these issues the only choice is to do things that your neoliberal masters would consider immoral. The point is that what they call a sin is actually virtue, and vice versa.
Using your muscles/strength/laws/guns/brains to ensure economic safety for everyone is a virtue
The thing is, it's well within people's rights to use their time as they see fit, and that is going to include behaviors I don't agree with or I feel are destructive. This is what it means to live in a free society. I can't throw someone in jail because they fell for some VC bullshit. It's just insane.
Let's put aside the fact that it'd be hard to establish a set of behaviors of similar severity on which to jail people (and build consensus on, because it's not right to jail people on one person's opinion); if society put up such a low bar for jailing people we'd have more jailed than free people. There are behaviors that society has deemed destructive and you can be jailed for; taking a low salary does not appear in this list.
With these areas you are frankly not going to get traction talking the way you do. There's lots of injustice out there, there has been with every political and economic system created to date or what's likely to come in the future. When you are outnumbered like this the best approach I can think of is to live well, be an example to others, and be frank about your opinions to those who will listen. (It's an overused example but as I write this I'm starting to think of the example of Gandhi here.) Talk of guns, beating people up, jailing them for what is in many cases just innocent/naive people doing what society expects of them, does not strike me as constructive.
Edit: To be clear I'm not saying that drastic political change (i.e. through legislation) doesn't sometimes have to happen. I'm saying you need pick your battles wisely. Jailing people for accepting a sub-$100k offer does not make sense.
The "back in my days" speech has been old since recorded history. But I think you'll find as you get older that your "my days" occurred in particularly brilliant times. At least, that's what history would suggest.
One one hand, I totally agree with what Kelman has to say. Perks are poisonous and can seriously undermine our culture. On the other hand, what about the power-law-driven disparity between what the CEO stands to gain if the company becomes successful vs. employee #5? Or #100?
These perks reflect the fact that employee #5s are beginning to understand their real worth, just as players have in professional sports world. I guess even employee #1s are wanting perks as well, feeling the gap between themselves and their wise and well-moneyed investors.
We can decry the loss of innocence -- or the loss of some kind of better work ethic from yesteryear -- all we want, but it won't bring the good times back. Let's just move the industry forward and make the best of our latest batch of talented brats.
Maybe some of these examples sound preposterous to you, but they’re what the rest of America does every day. Looking for candidates who have visited that hard place in themselves at one point in their life isn’t some Marxist fantasy of mine. It’s how capitalism works best.
I'm pretty much spewing morsels at my screen now, screaming for the sheer irony of this statement.
MARXIST FANTASY!? Bull ever-loving mother-fucking shit! Yes, this is capitalism, but not "how capitalism works best", this is Capitalism, Red in Tooth and Claw, solely because the author values the bloodshed and tears more than the actual creation of wealth in today's startups.
I could take a criticism of the frivolity of some of today's businesses, or some other attempt to persuade that the boom cycle is reaching its end and the "fake" businesses that don't really produce enough value to justify their own existence will have to die.
But this is just blood-fetish! He says in his own words: engineers' salaries are worth every penny in value created!
Startups, like professional football, are best done by the most desperate people on the planet.
Then get out of Silicon Valley and take this Fight Club crap to Gaza Strip, one of the most desperate regions on the planet.
This guy has Protestant work ethic brain damage. He enjoys the aesthetic of self-flagellation, the pain and suffering.
He's sado-masochistic and loves pain, both his own pain and the pain of others.
People who talk like this are the worst people in the world because they always end up taking out their bloodlust on others. They advocate for low wages, for harsher punishments, for more terror at every opportunity. It is the most blatant expression of thanatos and the fact that people like this hold significant positions of power pretty much sums up why the majority of the world's population has their head held underwater by a tiny, brutal elite.
The elites are sadists. They morally justify their sadism with their own masochism--"I love to suffer, so you should too!"
The thing being that the Protestant work-ethic comes off as completely ridiculous to anyone who's not a Calvinist or a secular raised on Calvinist values.
I mean, I pulled some truly long working hours just last week-and-a-half. Project had to get done, and I had realized I needed to rebuild it shortly before it was due in. So it got done, and more than just that got done too.
Doesn't mean I liked it, for Heaven's sake, nor that I would recommend continual 12-hour workdays and all-nighters as the Right Way. It's entirely unsustainable over the long term, and, as I deserved, I crashed hard on the weekend.
Yes, it's funny to read the "set for life" comment in reference to a wage that's just about good enough to pay for an apartment around here. Not to mention considerably less than what most of the non-"talent" in the so-called "war for talent" expects in a year.
Same here. That jwz piece really left an impression on me, so whenever I run into an article, like the TC one here, with some founder/VC/"serial entrepreneur" talking about culture or work ethic or some crap like that, I really have no choice but to assume that this guy is just some scrub trying to lure me under a desk.
The old adage "follow the money", or the even older, "cui bono"[1] really should be brought into play here.
jwz made out all right, he got the startup lotto. But most people won't. And I'm not keen on seeing underpay and overwork glorified in some song and dance by a CEO/VC/$etc. Cui bono.
Of course, if someone wants to pour blood, sweat, tears, health, and their life into a company, that is of course their choice. But I think they should own both that risk and that reward for that risk. I think that if an employee is asked to go without, then the employee should also own the reward as well. It is a basic principle of investing: higher risk carries higher rewards (otherwise you don't invest).
If the employee with a family who works 80 hours a week and sleeps under his desk wants to write a paen of glory to their lifestyle, that I will respect. They will know of what they write.
I think I would rather be underpaid in graduate school, personally.
I challenge the idea that a startup is the best place for an aspiring new engineer to learn. If you don't have an adequate number of high caliber technical folks on your team it's simply impossible to effectively absorb and train new engineers.
Just because someone is smart and has raw talent does not mean they are wise. In order to build that technical wisdom you need to be a part of an engineering organization that has it already. Some startups do, but universally characterizing all startups as being the best learning environment is incomplete advice at best and dangerous, self-serving advice at worst.
When new grads approach me about wanting to do a startup I tell them to work at a Facebook or google for a year to learn the ropes, then make the jump.
Like you said, it's just complete bullshit. Rapidly assembling CRUD apps to discover a market is somehow gaining technical skills?
If you want to develop technical skills, the way to do it is by reading and then trying to solve the challenging perennial problems. This generally is not profitable activity which is why it is funded by research grants.
This guy is confusing technical skills with something else, something that sounds like a hypermasculine myth about the value of self-flagellation. It is Protestant work ethic bullshit, the kind of bullshit that, when it permeates a society, makes that society utterly anti-pleasure and impossible for any sane person to enjoy.
> Now, of course, you can cash out as soon as the startup has made any significant progress. ... How many startups would be doing better now if all their early people still had to work there for a big payday?
You can also look at it from the other direction: if only a small proportion of people are great at founding startups, then doesn't it make more sense for them to leave early to found other startups? As long as the people left at the first one have the ability to continue the trajectory, I don't see the problem -- and presumably, the people allowing them to cash out don't see the problem either. It's just a more efficient allocation of scarce resources.
> The broader trend of generally increasing pay, ... Before most computer science graduates ever walk across a stage to get their diplomas, they’re set for life.
Why shouldn't they be? If doctors and lawyers are set for life (depending on how you look at it), why shouldn't highly capable engineers be too?
> The result for many engineers and product managers is often a case of arrested development, as they drift from one startup to the next, dabbling in several side-projects, without the ballast of having solved some really hard problems or contributed to a lasting business.
I don't get what's so bad about this. A lot of businesses don't last, period. Side projects are great.
This whole article comes across almost as a lament for where the Real Men Engineers all went -- the ones who would slave away for little money, solving the hardest problems, out of some kind of macho competition, romantically proving their mettle.
But that's ridiculous. As long as engineers play a valuable role in the economy, they should be compensated in accordance.
This whole article seems to be rooted in some kind of anti-change nostalgia. It almost all boils down to the author being annoyed that 24-year-olds are "collecting expensive scotch". If that's what really bothers you, then the problem is with you judging other people's tastes, not with them.
Maybe there's a valuable point somewhere in the article, but it's hard for me to see it with the author's terribly patronizing, the-trouble-with-kids-these-days attitude.
>"Before most computer science graduates ever walk across a stage to get their diplomas, they’re set for life."
Be careful, the market can and will sort this out. Blacksmiths used to be set for life; so did lawyers more recently, now they struggle to find jobs. Smart people are what will always be in demand, not a specific skill.
Good article. My expectations are low with TechCrunch nowadays.
My experience in third world countries are that blacksmiths and, more commonly, ferriers are set for life (though not set greatly); this is because of the ability to customize things to specific needs. I guess in the US this would be the equivalent of a machining shop?
Skilled trades are doing pretty well these days even in the US. Much better than a lot of college graduates. The going rate for a decent plumber/electrician/welder isn't cheap.
"The problem is that the young engineers earning that much become well-fed farm animals at the very moment in their lives when they should be running like wild horses."
Thats probably the most rational thing to do since the chances of making it big with a startup are minimal while the chance to ruin your health/life are huge.
Well yeah, but don't you see, workers and founders behaving rationally ruins the romantic hero-story investors tell themselves to justify their place in the world!
Someone shove these people into a Davos Parallax VR already....
Silicon Valley has a weird relationship to capitalism. They sometimes like to pretend to themselves that work isn't about money, and the laws of supply and demand shouldn't apply to labor.
You should work for us because, it's, like, really great! You should want to work 55 hours a week because you really want to! The fact that you're creating stockholder wealth is merely incidental.
Every company in the valley seems to pay "market wages" and then complain that there's simply not enough talent out there. It shouldn't be about the money for them. They should want to work here, because it's so great!
People should be paid what's "fair" and should want to work as much as is practical. Some kid out of college should be paid what's fair for them as a person - it's like a moral issue - not according to the value they create for the company, which can be enormous even if it's just a kid of school. And we need rock stars, not warm bodies, even if the gain to the company from hiring each non-rock star is still enormous.
I am familiar with several SV firms that would make like $400,000 per year per new hire, but insist on paying "market wages" based on experience, and then complain it's impossible to find enough people to hire. You think if we were on wall street a firm would hesitate to double someone's salary if the firm thought they could make double that by hiring them? No one in SV wants to compete on pay. Everyone wants to convince themselves that they've created the greatest place on earth to work, and that everyone should work there because it's so great. The fact that they create wealth for the stockholders is a benign coincidence.
If SV ran the retail industry, everyone with the same job titles would make pretty much the same amount of money working at either Saks Fifth Avenue or Old Navy. What if Saks wanted to hire someone away from Old Navy? They would try to convince them that Saks is really great!! Not because Saks could see that it could gain more from the person working for them than at Old Navy than Old Navy would and can therefore pay them more. That's economic efficiency. But it seems kind of crass, doesn't it? You should want to work for us! Because it's so great, and we'll give you a tiny, tiny, tiny percentage of the equity.
What if I went around telling employers I wanted a strict 40 hour work week? How suddenly would they forget about that hiring shortage? Wanting to work less shows you don't care. You should want to work here. Not because by you working here it creates more wealth for us than we're going to pay you. You think that multiple still doesn't apply if someone is working 13% less hours!? But someone who wants to work less doesn't care, and you should want to work and want to work here as much as possible.
I get six dozen recruiter emails a week. All of them sound exactly the same - you should work here because it's so great! None of them want to compete on fundamentals - pay me more and give me more vacation time. How distasteful! As a result I am completely indifferent between all of them. Everyone likes to pretend it's not about money and there is no price curve for labor. It's weird.
> Silicon Valley has a weird relationship to capitalism. They sometimes like to pretend to themselves that work isn't about money, and the laws of supply and demand shouldn't apply to labor.
What's amusing is that SV is also a place bankrolled by VC, and the VC firms don't buy into that stuff at all. They have no problem paying huge bonuses to lure people away Morgan Stanley, Goldman, etc. But you'll rarely hear them espouse for engineers the mantras they believe for financial professionals: you gotta pay those big bonuses if you want to get the "top talent."
Of course they want engineers to be desperate, it's a lot cheaper that way. This idea that the best ideas come from desperation isn't necessarily accurate anyway, builders want to build, its in their blood. It's why I hack on the weekends and played with breadboards and legos as a kid.
Having enough money allows me to focus on doing what I love best: building stuff. I want to be a part of building the Holodeck, paying me less won't make me want it more.
It's perhaps difficult to quantify the marginal contribution of your latest hire. However, almost all companies are keeping track of their revenue-per-employee, and it's fairly common around here to remark that your company is not yet doing well until that number hits about $200,000/man-year. Apple and Google and the like have about double that.
At that level of revenue, yes, there are taxes and capital costs to pay, but you can also afford damn fine salaries, too.
I'm already engaged to someone, and sorry, but I really do feel pretty uncomfortable with open fanboyism. I guess for a better response I might paraphrase Marx: the development of you is the basis for the free development of us.
But you see I've been reading HN since the beginning and the endless neoliberal bullshit has made me despair for hacker culture--to the point where I'm now embarrassed to tell educated people that I work in the software startup scene. I'm ashamed to call myself a hacker because of the people the word is associated with.
The smartest people I know see only bad things coming from Silicon Valley. I try to convince them that there are a few good hackers out there who can make positive contributions to civilization...
But even the hero Aaron Swartz has a blighted track record because he created reddit--a shitheap that is destroying culture and causing a resurgence in "White Nationalism" aka Nazism.
If you recognize that memes don't matter, reddit's most notable cultural achievement is that it has become the biggest white pride recruiting site on the planet. And this is the legacy of our BEST hacker activist... this is pg's big hack of society.
So your existence on HN has been meaningful. There are other hackers with similar thoughts, but they rarely speak up publicly. The ones that I know have learned to keep quiet or use pseudonyms so they can get by without conflict.
Funny thing, Reddit mostly doesn't have an indigenous white-nationalism community. What you see is, mostly, a raid from Stormfront that turned into a permanent infestation owing to Redditors' bizarre notion that the First Amendment guarantees them a right to say anything they want on Reddit without censure or moderation.
It's called the class war. The ownership class has class consciousness, but the laboring class does not. The ownership class knows when to wink and nudge and how to run a subtle cartel, because they have class consciousness. But the laboring classes don't know how to do this; instead they fight against each other in a race to the bottom.
The market has always been broken. The "free market" is pretty much the biggest myth since Jesus.
Judging by the vote patterns I see in this topic, the laboring class here does have class consciousness. I get the feeling a lot of start-ups are really just utilizing Ricardo's Law of Rents to reap the full value of the founders' labor without having to rent it out to an external capitalist. As long as that can continue profitably, it will and should.
The main reason that top software developers aren't paid more than market rate is that their true value is almost impossible to accurately quantify. This is less of a problem in the financial services industry where it's relatively easy to measure the profit contribution of an individual investment banker or stockbroker.
In companies that are generating significant revenue it's pretty easy to tell if a change is profitable or not, and that you could make X more changes worth Y with Z more developers - not even trying to put a price on individual developers, just a typical developer whom may not even need to be a diamond-in-the-rough, rock star, ninja, volcano-surfing lion tamer.
In many business models it's pretty easy to see the value added by a new, average developer at this firm may be way more than it is at other firms in the hiring market, and are irrationally failing to make gains from trade and inefficiently allocating the labor market by refusing to capture the quantity of labor supplied at a higher price point, before of (I think) cultural reasons.
All of us have different equations with which we evaluate opportunities. An exciting work environment and a chance to build something you believe in may be a perfectly rational reason to work for below-market rates, especially if you take equity, in essence making an investment in the company.
I have a similar perspective on this issue. I would like to discuss this further. If you are interested please email me. My contact is in my profile. Same invitation is open to anyone else who has the same perspective.
Losers (bottom/workers): trade away expectancy and long-term growth for stability and risk reduction. Rationally checked-out. Strategically minimize discomfort.
Clueless (middle/managers): non-strategic, eager people who clean up the mess made by Losers below and Sociopaths above them. Give a lot to the company, get mediocre returns. Losers are actually less "losing", because they know the trade they are making. Clueless expect to be rich, respected, or secure one day but hit a glass ceiling (Effort Thermocline, the highest one can go by working hard rather than smart) and never get it.
Sociopaths (top/executives): strategic and hard-working, but insubordinate and risk seeking. Take the other side of Loser risk-selling and turn it into personal gain. Good at engineering situations so that upside risk goes to them and downside goes to others (often Clueless).
MacLeod Losers are most of the workforce, and it's relatively easy to turn a reliable profit on one. You pay him a pittance X, and he gives you labor worth 1.25X, and at scale you can make a lot of money this way. However, if you're trying to build a brand or reputation quickly and impress people (press/investors) your average* productivity per person matters, not your sum profit. MacLeod Losers, who reliably return a small-but-positive profit for the company, bring that economically unimportant but socially relevant average down.
VC-istan is a world without MacLeod Losers. MacLeod Sociopaths are the investors and tech press and executives who are brought in by VCs after the company's de-risked. But VC-istan startups (founders and employees) are all-Clueless. That's why "you should want to work 55 hours a week because you really want to" in VC-istan. That's why being a "true believer" in the company matters more than being able to do the job. That's why there's such an age discrimination problem. They're looking for Clueless.
What keeps a company or system stable is the Effort Thermocline. It's the interface between Clueless and Sociopaths and it's the point where jobs become easier with increasing rank instead of harder. (Clueless are often oblivious to its existence.) It's the glass ceiling that you can't cross unless you work smart and "get it". The unconditional work ethic of, e.g., the macho brogrammer only gets you to upper-tier Clueless. VC-istan's Effort Thermocline is especially stable because it exists between companies.
From your list of positions one might occupy, I find none appealing to me. Since I own the business I work at, does that automatically qualify me to be a sociopath?
Having nice work conditions works for the boss too. Who wants to own a crappy business? I want to go work somewhere nice, and if I am in charge of the place, I think it is then up to me to make it happen.
Well it suggests you are dedicated and a strategic thinker, but not very subordinate. Presumably in owning your company you have to forgo a certain amount of buddy-ness with your workers for the benefit of the company; that's what's being alluded to.
The linked articles are quite interesting in their entirety: looking at binary values of being strategic, dedicated and subordinate has some interesting implications and avoids the suggestion of amorality and mental disfunction carried by the sociopath tag.
One other claim of the articles is that for certain companies the investors are the (sociopathic) executives and the CxOs are middle-managers under a delusion. Not universal but again food for thought.
>Since I own the business I work at, does that automatically qualify me to be a sociopath?
No. The sociopaths are the ones who control the economic system and the bulk of the capital, who, if your company becomes worth anything, will make you an offer you can't refuse and you will no longer be an owner.
If you refuse to be bought out due to some kind of lifestyle ideology, then you're clueless and suffering from Protestant Work Ethic brain damage.
You're describing an instability. You are an instability. The laws of capitalism dictate that your situation as business owner should either set you up as a sociopath maximizing your outcome, or sell the company to a sociopath who can make more money using your company than you're able to make.
If you then could retire but choose not to, you're clueless, because you're enthusiastic about being a cog in a dehumanizing capitalist machine. Only clueless people and sociopaths feel good about that. Clueless people like it because they have no clue, and sociopaths like it because power and destruction is what turns them on.
Personally I just find that most people who willingly engage in commerce without a financial need to do so lack imagination. I do make exceptions for hacker types like pg who seem to believe they are subverting the system with their economic activity, but the line between being a subversive capitalist and being the most deluded sort of clueless person is very fuzzy.
Wow. Now I have gone from a sociopath to clueless.
Perhaps there are s subset of people that you have not met, or do not understand. I would identify with those people who enjoy work (I must suffer from Protestant Work Ethic brain damage, despite being an atheist), because when I do work I accomplish things, and this accomplishment makes me happy. Why this makes me a clueless sociopath I am not sure, but the several companies I have started in the last 23 years have at least let me live in modest comfort. I could have retired around 30 and lived of passive income but that is really quite boring.
Maybe you should try starting a company since you know so much about it.
The MacLeod organization is dysfunctional and does not apply to all companies. This series of essays is about how not to get a MacLeod pyramid. It turns out to be a complicated topic not amenable to quick solutions. The short answer is... no, you're not a sociopath just because you own the business.
Rank culture (valuing subordinacy above all) is the one with the most pronounced and rigid MacLeod structure. Tough culture (valuing dedication, often to extremes) tends to exist when the company gets a hard-on about culling low performers and Loser/Clueless stability breaks down... but a new proto-Sociopath set uses the enhanced performance standards to take and give bribes and run extortions and they become the new holders of rank.
There are two good cultures-- guild and self-executive-- that don't have MacLeod tiers.
I like the D&D concept of alignment. There's a moral spectrum (good, neutral, evil) and a civil one (lawful, neutral, evil). So there are 9 possible alignments. Most people and especially most organizations are true neutral (meaning neutral in both) in ideology, even if they tend toward the rank culture's lawful evil over time.
The ideal "Organization Man" is morally neutral, and civilly neutral with regard to the greater society's laws, but lawful with respect to the organization's laws. Most organizations can find something to do with lawful and civilly neutral people, but have no idea how to handle the chaotic.
MacLeod Losers tend toward civil neutrality. They're not chaotic enough to feel a need to break rules, but not lawful enough to care about rising in the company, unless they can get the hard currencies (compensation, more freedom, career progress) that actually matter. Lawful people, however, see important positions as a validation in themselves and seek them.
MacLeod Clueless tend to be lawful. Some are lawful good, some are lawful evil; most are lawful neutral.
MacLeod Sociopaths are the people who don't fit: they find the comfort of the Loser world to be false, and the delusions of the Clueless to be laughable. They tend to be chaotic, which creates an up-or-out time pressure on their organizational trajectories.
This doesn't mean they're bad people. Chaotic good are the white-hat "good Sociopaths", and chaotic neutral tend to be gray-hatted but will usually try to be decent.
Chaotic people rise in organizations because they have no other choice. They either need to get into an executive sinecure, or into a special, high-creativity role where their outsized talents (see: convexity) are an asset that overcomes their social deficits.
However, evil people also rise. Neutral evil are the most capable, because they're fluent in law and chaos and have no strong pro- or anti-organizational bias. They can be chaotic when out of power and lawful when in it. However, lawful evil is perhaps the most virulent, because while neutral and chaotic evil can indulge in non-ambitious sadism, lawful evil are driven.
So, organizations end up being run by a chaotic-or-evil set that needs to make itself look like something else, and society doesn't much like or understand them and calls them "sociopaths", but the most interesting subset (chaotic good, chaotic neutral) are not bad people.
the typical founder of a company that hasn’t yet released its first product earns, according to private salary surveys, nearly $200,000 per year.
Whoa! So, let me get this straight, if you get funded in the valley (let's say even if you go through YC) then as a CEO you decide to pay yourself $100k+?
Assuming your funding round is high enough (a few million dollars), then yes. You raise money then pay yourself.
If you're smart, you keep the money to grow the company and don't pay yourself $250k/year. Under $150k is safe. You don't want to be worrying about your own expenses while running a company, but you shouldn't be out buying new Audis or Teslas as a baby founder CEO.
If you're 25 years old and have no college debt and no responsibilities of any kind, $50K may be enough to live on in SF or in the Valley. (Although probably not without parental assistance, or some sweet group housing deal.)
If you're 35 or 45, $100K or even $200K is not going to pay the mortgage and support a family.
We clearly have seen some egregious examples of CEOs cashing out before their company succeeded. But the suggestion that paying yourself $150K is out of line - displays a lack of familiarity with the cost of living in the Bay Area today.
I feel like this article is one big false equivalence. I'm not really sure what the takeaway point is either. Is this representing the P.O.V of the employers, or is this someone who wishes the best talent would break-out and build spectacular products on their own? Because, I suspect it's the former. There's a big draw for young talented engineers to start their own thing, be their own boss -- that's why there are perks for settling at a bigger corporation. For a young, brilliant, mathematician who in school dreamt of winning awards for solving the unsolvable... well, they're probably not gonna be too excited about selling coupons, ads, or whatever else it is your company does. That's why there are perks. /rant.
Build something good is no longer an acceptable USP for a startup. Any tech of value can be copied fast.
The tech innovator has been replaced at the head of the table by the hustler. Someone who can network, cut deals, bring in the $ is more valuable to a startup this cycle. It's no longer value being traded, it's expected value.
This is what the 07-13 spin of the wheel is all about.
This has been my experience. "Hustle" and "Hack" make up the ying-yang of tech startups. Hustle skills are more valued nowadays in SV than hacking skills. Silicon Valley these days is full of hustle and hype, but with no hack to back it up.
Perks such as massage, car wash, or yoga classes are peanuts. How much it costs to wash a car? 10 dollars a month? It is like saying company provides chair and free toilet paper in a bathroom.
From the article:
"After all, when evaluating a Redfin job applicant one of the big questions I’m trying to answer is “when did she do something hard?”
It could be something you put yourself through for fun like running a marathon or far more serious like fighting in a war. It could be the grinding repetition of preparing for a piano recital or the grit required to dig ditches or paint houses for a living. It could be raising a child all by yourself."
---------
I completely agree with this part. I have hired a 100+ people and the most impressive ones in the long run are usually people who have achieved something notable - published in a poetry book, achieved something in a competitive sport, etc. - it doesn't seem to matter what it is, as long as they have done something hard, and that they know they achieved something. It seems to give them the confidence to get through more challenging problems in the workplace. Even a person who has run a small 2 person business has achieved something that most of the population never will, and they tend to have more 'grit' or whatever you wish to call it.
1) A lot of it is about efficient use of engineering (or sales, or product) time. Yes, one can skip catered/cooked meals, gyms, and onsite dentists, but what's the tradeoff? The team will go out for lunch, which, depending on location, might waste up to two hours of employees' time. In a busy location like SoMa or FiDi it's just deciding on the place and then waiting to be seated, in a remote location, like Google's or Facebook's campuses, it would be the time it takes everybody to get in the car and drive.
2) Tax savings also come into play if the company is profitable or on the verge of achieving profitability. Catered lunch to every employee of the company is a business expense, transferring the same amount of money to an employee in the form of higher salary or bonus is taxed at both company and employee levels.
3) Some of the perks cost very little to establish. Car washes, onsite dentists, haircuts are something that employees usually have to pay for, and it's just the matter of providing some space to the vendor who's willing to provide this service to the employees.
I see this as part of a bigger problem, which is a lack of gusto in Sillicon Valley. People aren't striving to solve problems deeply meaningful to themselves, they are looking for the next big buck in social/local/corny. Others are just as much going after whatever seems to have money in it rather than some problem domain they could be passionate about. Then, of course, if you haven't some problem that truly bugs your existence, you're gonna cash out and live like a fat cow as soon as you can. I could never understand people aiming for exits. Exit? I want to change the world! Or a tiny bit of it. But MY tiny bit.
Passion, people! I know the term gets thrown around a lot and it often doesn't mean as much as people make it, but I'd say a minimum of passionate involvement with your problem domain would be nice to find in SV more often. I know I can never rest on my laurels until I've brought down at least one big corporation by doing what they do in an open source, anarchic, power to the people way. Hell, I want to bring down the www, have it lose mindshare to a fully peer-to-peer network, but bluetooth doesn't cut it. I hate these walled gardens, I fear for our future which they can undermine, and I wouldn't want to contribute to more of these gardens, pretty on the inside with unicorns and flowers, until you reach a wall and see surveillance equipment and people shot down trying to escape.
But what do VCs know? They're in for a buck, and so are most companies who get big enough to lose it's founder's initial vision. Some companies are founded on a great vision, to solve a passion imbued problem, to give true value to society. O'Reilly has been discussed here recently and it rekindled a lot of my beliefs. I don't want to be at the helm of some billion-dollar ex-startup if I'm just gonna be a puppet to a board of investors. I'd rather stay lean, hungry and foolish, make a true crowd business out of my problem domain, where my software is open source and lots of third-parties have a go at profit. I'm just one of them, thriving on an open ecosystem. That sounds better. I like what App.net is doing. More people should follow the lead.
Every era has its pyramids; this is far from the first or worst severe misallocation of human effort and resources.
It absolutely is happening, however. So if some tiny fraction of this current era's chosen realize their good fortune and power, they could truly change the world.
I don't buy in to this "excellence requires discomfort" mythology, at least as used to justify bad work conditions and low compensation in startups. Truly excellent people have intrinsic ambition that wouldn't go away just because they had stable, high salaries. In fact, they're going to have more freedom and do better stuff.
What causes wealth to ruin many people isn't comfort, but the social pressures that are often required if one wants to stay wealthy and in access to high-status people, most of whom turn out to be a defective or, at best, a mediocre crowd. Giving people enough money that they have the autonomy to run their lives and some comfort isn't going to have that effect.
There are real ways in which certain types of discomfort are useful, but many organizations have completely perverted this into "all discomfort builds character."
-To improve rapidly at a skill, you have to practice at the edge of your abilities. If you're a decent writer you're not going to improve by mindlessly writing what you already know for hours on end. Only the time you spend challenging yourself really counts.
-There's a decent amount of evidence that being surrounded by wealth triggers laziness. That is, if your office has opulent wooden desks, high-end art, etc., that sends signals along the lines of "conserve the resources we already have." While if your surroundings are a little messy it triggers an instinct to work hard and gain more resources. The Talent Code goes into detail on this. Note that all that matters here is appearance-this doesn't mean that you'll get more performance by giving your employees crappy computers, it means you'll be better off if your office looks spartan.
As long as a company only promotes "discomfort" in these two elements, that can actually be a good thing. But when you get to the point of physical discomfort, that's almost certainly a negative.
That's really interesting. You're absolutely right on the first point. The issue is more of one where a corporate environment with prevailing discomfort discourages the high-end deliberate practice, because people don't want any more risk or pain. As for the second, this is the first time I've heard about it, but it makes a lot of sense.
