[mtgex]

This suffers from the same issue with using a real estate agent to buy / sell a house.

Agents are not financially incentivized to get you the best offer. They are financially incentivized for you to accept any offer, period.

The extra commission on negotiating a higher offer does not justify the time and energy. Additionally, it increases the chances that either party will terminate the negotiation outright.

Agents are not working for you, they are working on closing a deal and in fact the agent and the company they're selling you to have the exact same incentives. Get you in as quickly and as cheaply as possible.

Negotiation is more about soft skills, charisma, information obfuscation, and outright lying than it is about fighting to get what you "deserve."

[cornholio]

It all depends on the incentive structure. This product here is not the typical job agency, but a negotiation service that you can use when you already have an $100.000+ offer. Presumably, they will get paid proportional to the excess they can get for you on top of that, as either money or benefits (otherwise, you would just accept the offer).

The information asymmetry between the employee and company is huge: they know the market inside out, they negociate compensation packages every day and are strongly motivated to hide how bad they need to fill the particular position and how in-demand are those specific experts. Meanwhile, you only know your own salary and expectations, you are unable to objectively rank yourself and go on bits and scraps of information gathered here and there. This is a situation where you are ripe to be taken advantage of, especially on a booming market.

Where by "taken advantage of" I of course mean "sell your product for less than fair market value".

[jholman]

This is precisely the compensation scheme that seems best.

I think I'd be comfortable paying 1/3 of the boost, for as long as I keep the job (probably with repeat business for the agent, when I change jobs). Maybe with a cap of a few years?

On the other hand, that's probably not a very large slice of total wage, so it's still pretty small compared to the 20% that recruiters apparently get. But maybe agenting is a lot easier than recruitering.

Not that I'm looking for a dev job currently.

[EGreg]

I think this incentive structure can actually work! I would use this. If I applied for Jobs.

[rb212nyc]

I'm one of the 10x founders. Just wanted to comments here...I won't answer every question but this one felt important to answer. My thoughts are as follows...

There are mitigating factors as it relates to what we are offering and the concerns you raise -- and one misunderstanding.

The misunderstanding first...we are not selling anyone to anything. We have no involvement in finding you the job, we are not recruiters, we are not headhunters. So we have no alignment with anyone other than YOU.

The first mitigating factor is that we offer two different negotiation options. One is us leading the process and speaking directly to your prosepctive employer, the other is us advising you behind the scenes and you talk directly to your prospective employer. In both cases, we are working hand in hand with you so nothing that is being conveyed is something you're not endorsing. Our goal IS to get to a yes, but ONLY a yes that you feel good about. If you don't feel good about it, then the negotiation ends and we move on.

The other thing is that we're offering to provide this service during our beta phase as a pay what you feel it's worth to you. You could choose to pay us nothing...we need to EARN whatever amount you choose to pay us. So we are 100% incentivized to be both ethical and effective during this process. Because if we're not, you're not going to recommend us to others and you're not going to pay us. And honestly, this business will be built and has been built almost exclusively on recommendations and word of mouth so that's a MAJOR incentive to us.

I do agree with you about one thing though, negotiating is NOT about fighting. It's about presenting reasonable and substantiated reasons why certain points should be adjusted. It's about knowing the myriad of areas TO negotiate. It's about understanding the standards and practices across different verticals. And most importantly it's about truly understanding what YOU want out of a deal. Fighting has NO place in this process.

As a concluding comment, agenting is a VERY old profession and widely used in many other verticals. There is a very good reason for this, put simply, most people are not the best at advocating for themselves. But if that doesn't describe you, if you possess all the knowledge required to get you the best deal possible, that's great. No need for our help. Otherwise, let us prove to you why there is a difference. If you don't like it, don't pay us.

[whiddershins]

Great response the only thing I’d like to point out is that agenting is the most common and effective when someone needs repeat representation.

A musician or actor is constantly signing new deals and the agent needs (in theory) to balance any immediate incentive to close the deal versus long term income from retaining their best talent.

A salaried job negotiation is more similar to a real estate deal in that it tends represent a very large portion of the client’s financial world and happen much less frequently.

The divergence of incentives becomes harder to manage in that case, because each individual deal ends up being such a smaller part of the agent’s income than the client’s.

That’s a known problematic dynamic across many “verticals” that your answer only partly addresses.

[rb212nyc]

I agree with your point, up to a point...but the hope is that if you use us for this job, you'll use us for the next. Tenure at companies for employees sub 35 is less than 3 years now. And in tech it's even shorter. So we're taking the viewpoint that though the number of deals we may help with per person is lower than it might be in entertainment, it's not limited to just one and done.

All that said...think of this concept a bit like a public defender. We believe that great talent has a right to great representation. If that's only great representation for one negotiation, that's fine. We still aim to provide great service for that one negotiation.

[yanslookup]

> One is us leading the process and speaking directly to your prosepctive employer,

This is exactly what I want and would pay for. However, I wonder how this works in practice. I work for a fairly well known software company and am involved in the hiring process and I can say with about 90% certainty that negotiations would cease as soon as a candidate presented representation. And my gut is telling me that is the norm in the software industry.

Can you speak to this concern? Have you run in to this or has this come up at all for past clients?

[rb212nyc]

I think this is a very fair point. The way we have dealt with it thus far is to provide guidance behind the scenes if a company doesn't want to speak to us directly. The candidate would stay the face of the process and we would feed them information. That said, when we started 10x, it was unheard of for tech freelancers to have agents. We got some push back. But that changed fairly quickly and we get zero push back now. On the contrary, companies are genuinely happy to have someone like us as an intermediary (on the freelance side). We shall see if the same holds true on the full time side. But good question.

[gowld]

Standard negotiating technique (cars, jobs, etc) is that if you are not the expert, refuse to negotiate live/synchronously. Negotiate over email. When you negotiate over email, your agent can be silently at your side.

[dpweb]

I find this facinating and quite exciting.

First of all, my experience is many tech people, generally underestimate their ability and earning power - sell themsevles short. Even true rockstars, is very common.

Especially when it comes to salary. People are REALLY uncomfortable asserting themselves for more money. Like, phobia level.

Plus the, you need to talk to my representative. That’s some serious signaling. I’d love to hear about the results they get.

[Aloha]

What I'd really love a company to do is offer a service where I can pay them to look for a job for me - I work 50+ hour weeks now, I dont have the time to go job hunting, I'd be nice if I could find a recruitment firm, who would work for me.

[tibbetts]

A good independent recruiter will do this. Many senior engineers I know maintain a relationship with a couple of recruiters who know what kind of startups they like and only bring them compelling offers. The recruiter can expect a multi-decade relationship with the engineer and thus has reasonable incentive to treat them well. They will even sometimes place these engineers commission-free when they know it is the right thing.

You can also get into this relationship with certain VCs.

[fecak]

Former indy recruiter here, and this is good advice. The line between "agent" and "recruiter" is blurry in cases of skilled and highly-ethical recruiters, and I'd toyed with changing my model to an agent approach. The issue is that job seekers don't want to pay someone anywhere near what a hiring company pays as a recruiting fee.

[Aloha]

I would quite happily pay someone 1-5% of the wage of the position, if I could find someone to do the work for me.

I dont know how to find the people to do that - its not in my wheelhouse.

[eropple]

Recruiters, on the other hand, are paid up to 20% or so of the position's salary to get you to take it.

You're not paying enough.

[fecak]

Not a lot of people do that. As mentioned, it's a service idea I kicked around a bit and wrote an article about that still gets me inquiries years later. 1-5% might make it worthwhile depending on how high ticket an item you are.

The work required by an agent to place a 200K engineer isn't too much different than that of a 50K engineer, other than the 200K engineer likely being more marketable.

And the difference between 1% and 5% is substantial. I don't think I'd offer agent services for 1K, but for 5K I would.

[Aloha]

Finding one of those is the hard part - I work mostly in Telecom - so I'm not looking at companies for the most part that are VC funded (or even in the valley)

[tibbetts]

Ask current and former coworkers or ask former bosses or former HR what recruiters they like working with.

[gowld]

You invite people to start an engagement before stating the price. Your profession is negotiating high prices.

See the moral hazard? How do I know you aren't going to negotiate all the salary surplus into your fee? :-)

Sure, you're in a pay-what-you-want Beta now (fascinating, and wonderful if it turns out to be a profitably pricing structure long term!), but consider posting a pricing model up-front, something like "X% of the negotiated lift in 1st-year pay above your first offer from a company"

[jeff_marshall]

> The misunderstanding first...we are not selling anyone to anything. We have no involvement in finding you the job, we are not recruiters, we are not headhunters. So we have no alignment with anyone other than YOU.

How do you get paid? ... and the obvious corollary, why should I trust that our interests are aligned? (either as a candidate or a hiring manager?)

[paulcole]

I know it was a long comment but you could’ve at least tried reading a few more paragraphs. You would’ve come across this:

>The other thing is that we're offering to provide this service during our beta phase as a pay what you feel it's worth to you. You could choose to pay us nothing...we need to EARN whatever amount you choose to pay us. So we are 100% incentivized to be both ethical and effective during this process. Because if we're not, you're not going to recommend us to others and you're not going to pay us. And honestly, this business will be built and has been built almost exclusively on recommendations and word of mouth so that's a MAJOR incentive to us.

[michaelmior]

This doesn't seem to be taking reputation into account. Sure an agent can just try to close any deal to get their cut and move on. However, an agent who does this as a matter of practice is not going to have the same long payout.

[__jal]

Can't point to a study or anything, but the behavior of real estate agents in the wild would seem to contradict you.

[tibbetts]

Real estate agents have a lot less reputation, their clients are less able to compare outcomes, and their clients are less highly connected than clients of an agency like this.

[michaelmior]

Perhaps. I'm not a homeowner so I have no practical experience here.

[d0lph]

Couldn't you just rebalance the commission so the pay increase is the majority of the commission.

Not saying the current situation isn't messed up, but there is no reason it couldn't be fixed.

[bradleyjg]

It's hard to design an incentive structure that's perfectly aligned. In the case of a commission only on the increase, now they've gone from having too much of an incentive to get any deal done quickly to not enough of an incentive to close a deal even if it isn't a large increase. You can fiddle around with a fixed part and incentive part, but it is very hard to find the right spot. One alternative is to pay by the hour but that comes with its own set of perverse incentives.

[gowld]

You don't need the agent to close the deal. If the agent peters out after the first hour of negotiations, you can take whatever they put on the table and continue yourself.

Anyway, look at the numbers here: a good salary negotiation takes maybe 5-20hrs to fight for, I don't know, $10K-$50K/yr gain? And a $5-$50k sign-on bonus? Even targeting an "premium consulting" rate of $500/hour, the agent can make a lot of hay to get their cut, putting in the basic standard amount of work.

[mtgex]

Yeah I can see that, although in that case you do need to prove to your agent what you were making before, and if they feel it's not worth their time they will be more likely to pass on working with you.

But that's a whole paradigm shift in thinking about agency, and they're perfectly happy with how things operate currently. They would have to spend a lot more time actually negotiating.

In the case of real estate, the idea that you absolutely need to work with an agent is so entrenched that it's very difficult to get anyone to consider the alternative outlook.

[Kiro]

No idea where you live but that's definitely not how it works in my country.

Real estate agents here do a lot. They decorate your apartment, take professional photos, create marketing campaigns on Facebook and all the big listing sites. You set a date and they handle the showings. After that there's one bidding.

The only way they would be able to sell it before the bidding is if someone makes an offer before the showings.

[gowld]

This is a middlebrow dismissal that argues against evidence (the pricing model and the negotiation style) that doesn't even exist in the OP.

[chapill]

None of that really applies to 10xmanagement specifically.