[ivanjovanovic]

I overall agree with your sentiment.

I would though not agree fully about where you assume value is created. Usually, developers / middle managers do not create value. Mostly they are implementing ideas of others and in these ideas is most of value concentrated. I would say they deliver value but don't create most of it.

[volkk]

Doesn't that depend on your definition of creating value? Im biased because I'm a developer perhaps, but I think that these ideas would all be theoretical concepts if these developers weren't actively building them.

Perhaps I have a pessimistic view of the industry, but I've worked at 4-5 startups now (4-5 because one I'm on the fence about calling a startup) and I've come to find that the most value was always "created" when the devs and middle management (product) worked closely together to deliver and hustled/bustled without being blocked by some upper management bullshit. As soon as these companies grew, and these 250k-300k a year "executives" joined, everything slowly went up in flames. This is anecdotal, but it's an issue I've come to notice through personal experience in our industry.

[defined]

This. Seen the same thing in 3 startups. Add me to the anecdata.

It would be awesome if we could get statistically significant numbers of people to report on this effect, although how to avoid selection bias etc. is beyond me atm.

[cableshaft]

Happened at a company I worked for after we were bought by a larger corporation. And we were a company of 500+ employees.

Although we had a CTO that grew up with the company (used to be a programmer there) that reported direct to the CEO at the smaller, now we have no CTO and at least 5 layers in between us and the new CEO.

[ivanjovanovic]

It sure depends. The way I think is that it starts with an idea, ability to preserve the idea, develop it and maintain its essence through iterations with others. Still it is the idea that is making the difference at the start and working around that idea that makes difference at the end.

I was developer, and I was middle manager and I understand the sentiment fully. There are many aspects of reality that higher level management has to deal with which are not usually what they want reality to be but in practice you can not change it.

[volkk]

> There are many aspects of reality that higher level management has to deal with which are not usually what they want reality to be but in practice you can not change it.

The issue I see here is that there are plenty of companies that are very successful and have a small hierarchy and very little hoops to jump through.

[ryandrake]

It's a good philosophical question: A company creates a great product. What person actually created the value? The product visionary who thought of the idea? The developer who implemented it? The manager who approved the budget allowing the work to happen in the first place?

[speby]

You're implicitly making a common mistake confusing value creation and value capture.

Yes, it is true that developers writing the software for Google's search engine and Gmail and other products, particularly the early developers who were writing core functionality before it even existed yet, are creating value. But are/were they capturing the full value created? In general, no. To the extent they "captured value" only came in the form of salary/benefits/etc. So they captured some, to be sure.

In highly successful companies who create hugely successful products that create tons of value, the actual capture of that value is absolutely not shared equally. This is in part because the risk was not shared equally.

Just as in successful companies, unsuccessful companies that ship a product that does not do well or fails completely, the developers who created it still captured a salary along the way. The investors and others who put in money or time and energy for little or not pay (in exchange for equity) were the ones with the most risk.

Bottom line... everyone involved in company-building and product-building create value along the way but value capture is generally concentrated for very good reasons.

[s73ver_]

They're concentrated for reasons. It's highly debatable whether those reasons are "good".

We all take risk. I could find myself working for a company that doesn't make it, or just decides to fire me at a moment's notice. Losing my job and not being able to find another one means I might not be able to feed and house my family. That's real risk. On the other hand, most investors are pretty well off, and can weather a few startups failing. They're likely not going to get to the point where they don't know if they can continue to house their family for the next few months.

[kamakazizuru]

"they have more so its ok for them to lose some" - is a flawed logic. The reasons are "good" because they incentivize behaviour. An investor is willing to put a chunk of his money into the startup because he can expect a good return, why else would he take risk on people? An employee is not inherently risking to "lose" anything by taking a job, they risk not gaining something for a while if the job goes, but that's different from proactively putting skin in the game.

[s73ver_]

I'm not saying it's ok for them to lose some, I'm saying that they're not taking on the risk that everyone claims they are. And yes, an employee very much is risking to lose something. If they get fired or the startup goes under, now they face a very real situation where they might not be able to feed or house their family. I highly doubt that these investors are even close to that point.

[kamakazizuru]

"If they get fired or the startup goes under, now they face a very real situation where they might not be able to feed or house their family." this is true for all jobs, my point is, unless you are working for free, you arent giving up something that you will lose. Time yes, but thats why you need to make sure you get paid what you think your time is worth.

[open_bear]

> This is in part because the risk was not shared equally.

Developer joining a startup risks almost as much as a founder. He leaves his existing job for a promise of a salary, and if this startup fails - is left without a job, and possibly, without a salary either. This happened to me, and I was paid for first 2 months out of 6 I worked there.

> The investors and others who put in money or time and energy for little or not pay

Investors still have most of their money, I am left without a job, unable to pay my mortgage and possibly buy food.

Imagine this: I put $X, you put $Y into an investment. If investment is successful, I get a 100$, you get $Y+$X-$100. If it is not, we both get nothing. Would you consider this investment fair? No sane person would put a money into an investment fund, expecting a fixed value in return, but employer-employee relations are exactly that.

[eldavido]

This is a foolish question, but that's the point. There is simply no objective way to analyze this.

It all comes down to which group the people signing the checks value. I often say "pay is a social construct" and this is what I mean -- there's no objective basis for any of it. I think devs are paid better in the Bay Area than elsewhere just because we're assumed to be more important here relative to other parts of the US/world.

There is no objective reality here, just a bunch of beliefs.

[s73ver_]

Ideas don't create value. Ideas represent the potential for value.

[sidlls]

The deliberate process of developing ideas, otherwise known as "product development," has value.

[jjsjdhh88]

I've not worked anywhere where product development was the only group to come up with an idea that made it into the final product.

My last gig was terribly silo'd as far as responsibilities go. But people go to lunch and happy hour together. Product dev would call out anyone that contributed, even though their team got the kudos because of process (despite the teams being cool, I left because management was shite).

These things bleed into each other constantly.