[anamax]

> 50k ($40k after taxes in California filing single) is $20k after the median single bedroom apartment rent in Santa Clara county

$20k/year for rent? (When I was renting, I never paid median.)

$20k/year more than a $300k/30 year mortgage plus insurance. (Property tax adds another $4k or so in SJ.)

And yes, a $300k mortgage is possible in SV - older founders could have bought a while back and I suspect that some folks are paying about that now.

[tptacek]

I'm not sure what your point is. I have a ~$300k/30 mortgage, and I'm not paying less than I would for a 1 bedroom apartment in San Jose.

Even if I could, though, so what? Again: you can live in SV on $19,500/yr. People do it. That doesn't make $19,500 a reasonable comp package.

In discussions like this, people tend to talk as if there are two alternative comp plans: either (a) the package where founders build their own futons out of cinderblocks and shipping pallets, or (c) market salary.

There is, believe it or not, (b): significantly lower than market --- which for a startup founder in SV is probably north of $120k/yr --- and significantly higher than subsistence. The (b) comp plan is the rate that would allow a startup founder to:

(1) Rent (or make mortgage payments on) the same home they had prior to starting the company

(2) Continue making car payments on the car they bought last year

(3) Maintain all previous insurance levels

(4) Maintain phone, cable, and Internet

(5) Cut meals out by 50-75% but keep the grocery list approximately the same

Every one of these items is negotiable, but so is having a private sleeping space. If you want all of them, though, you're paying substantially north of $50k/yr in SV. I'd think $75k is closer to the mark.

The median income in SV is $85k ($96k if you're tech). People judge the quality of their lifestyle based on their peers. It's hard to argue that you'd feel just find with $40k after tax.

I'm getting sucked into what I admit is a very boring discussion, I know. I just wanted to make the (a) (b) (c) point.

[anamax]

> I have a ~$300k/30 mortgage, and I'm not paying less than I would for a 1 bedroom apartment in San Jose.

That may be true, but we agree that you could pay less.

"reasonable comp package" is meaningless. There's market and there's desired, but we're talking about what a founder could live on in SV.

Many people can live on something just north of what a grad student lives on. Some can't.

The former have more options than the latter. Most people can arrange to not have car payments. Some can share expenses with a partner.

Some people may choose to maintain a $100k lifestyle instead of founding a company because the latter would require them to live on $3-40k. (I lived on less while I was unemployed.) Others won't.

My point is that it's doable and I don't think that it's a huge sacrifice. Other people will disagree. As a result, some of them won't be founders. That's okay as long as they understand the consequences of their choice and that it is a choice.

BTW - SJ's $86k/$96k median household income is for households. Most SJ households are dual earner and they're not renting two one bedroom apartments.

[tptacek]

Andy, what I'm objecting to is the binary notion of living an absurdly pared down lifestyle versus starting a company. It's not a tradeoff. Apparently, it's not even currently a tradeoff if you want to take venture capital (taking VC improved my prior fulltime salary by about $40k the one time a company I founded raised it, but that was during silly season)... but I know it's not a tradeoff if you can sell.

I'm not crazy famous guy like Joshua. We bootstrapped 5 years ago. Sorry, dude, I never had to eat ramen. Or, look at Patrick. He's not living on ramen either. He flies back and forth from Nagoya to Chicago on a semiregular basis. He just launched a product. How many hours do you think he worked this week? I betcha it isn't 40. And this is his launch week.

I'm going to go way out on a limb: the $50k salary bit is just macho BS. Have at me, Andy, I can take it.

[anamax]

> Andy, what I'm objecting to is the binary notion of living an absurdly pared down lifestyle versus starting a company. It's not a tradeoff.

In some cases, that is the decision that folks have to make. In others, it isn't.

It depends on lots of things, including, but not limited to what the funders are willing to do and the founders' resources.

More power to the folks for whom this isn't an issue. I think that other folks shouldn't make the decision thinking that you can't live on less than $50k in SV. I'm not saying that anyone should make that decision, I'm just pointing out that it's an option for a lot of folks who might think otherwise.