[arcticbull]

50X the risk is a tough one, often founders aren't paid, and opportunity cost is just so high today.

If a 30-year old engineer is looking to make a jump, a senior IC role at $BIGCO pays $500-750K/yr starting, with significant refreshers each year, cash bonuses and promotion path to even more. The average time to liquidity for a successful startup is 7 years. Assuming the founders take small or negligible salary for the first 4-5 years then take market salaries, their opportunity cost is easily $5M.

So considering a $5M opportunity cost, and the fact the company wouldn't exist without them, they literally can't just up and quit whenever they want, and are working 100 hour weeks for years on end... yeah, I'd say that's fair.

tl;dr: $5M opportunity cost of guaranteed payout vs $100M maybe sometime in the future doesn't seem insane.

[logicslave]

a senior IC role at $BIGCO pays $500-750K/yr starting

At age 30:

This is really only at Facebook and Netflix. Its more like 375-450k at Google/Amazon/MSFT/smaller tech companies.

Facebook and Netflix together definitely employ less than 40k engineers. Of which, no more than 10,000 are ICs with starting comp greater than 500k.

So youre really talking about 10k people between those two companies, throw in the other FAANG, and its less than 40k people.

Of those people, few have the well rounded ability to start a tech company and launch a product end to end, with the sales, product, design, tech etc.

Your post makes no sense and is talking about unicorns that dont really exist.

[PragmaticPulp]

Well said.

It’s important to acknowledge that these highly compensated positions do exist in unique scenarios for extraordinary people. They are attainable for someone with sufficient drive, dedication, and luck.

However, it’s equally important to acknowledge just how rare and unique those positions really are across the industry. $750K compensation isn’t a routine occurrence for engineers just going about their lives.

I’m part of a group mentoring program for CS college students. Some of their compensation expectations are completely out of touch with reality due to comments like this. We encourage everyone to do their research and negotiate, of course, but it’s getting frustrating to watch people distraught because they think their $180K TC offer in SV is a “lowball offer” or who think they’re going to get Netflix level compensation from some random company in their small Midwest home town.

[logicslave]

Its mind blowing to run the math on how many people work these positions. For instance, I know for a fact that less than 650 people at UBS make more than 500k in investment banking. Take that number, and all the biggest banks, and you have less than 10k people making more than 500k in investment banking at the big banks. This is miniscule. Yet people talk about these careers like they are viable, or even worth the time and effort. They arent, unless you are top of your class at Harvard, have connections, or are irrational.

Engineering is different in terms of the number of positions, but still, the high IC comp is pretty rare once you run the math

[arcticbull]

You don't think someone who's smart, talented, and with diverse enough experience/background to found a startup and lead it to an exit would be capable of a staff engineer role at Facebook? What would you consider a fair point of comparison then?

[PragmaticPulp]

If we reduce people to pure levels of drive and motivation, maybe it’s a reasonable comparison.

However, in my experience the types of people who thrive in climbing the corporate ladder (Facebook included as a bureaucratic corporation) are very different from the types of people who seek out building their own successful companies. There’s less overlap between the two personality types than you might expect.

[logicslave]

"would be capable of a staff engineer role at Facebook"

Completely different skill sets. The founder can be scrappy with web programming, knowing a myriad of frameworks and some really good css. He's good at selling, networking, getting people on board with his vision. Maybe his real value comes from his domain knowledge, which lets him succeed where others couldnt.

Its a completely different job. The staff engineer could start a database startup, cofound some highly technical startup. But his highly developed technology skills just arent that valuable in an early stage company. Hes not worth 500k at a startup. He doesnt provide the same value he does at Facebook.

[jashmatthews]

You can work on compilers, distributed databases and other "hard technical problmens" as an intern. Staff Engineer means something quite different.

Staff Engineer is much more about understanding what to build (including the product implications), how to build it, how to communicate that with everyone else. The kind of skills that would make you a highly effective founding CTO.

[arcticbull]

I actually disagree with your characterization of the role at FB, however, what would you consider to be a better way to model opportunity cost?

[emteycz]

Don't forget that VC investment is convertible debt that the company needs to repay even if it flops.