| This doesn't line up with my mental logic. If the companies are paying X amount, they have to be getting at least that much value back, or they wouldn't have that position. Now sometimes after a new CEO or an acquisition you do see some internal shuffle and some positions deemed redundant are removed, but that's rare, and generally the positions are transfered from one less profiting category of the company to another. So from my point of view, you could argue that the employees are worth ("value of company" / "number of employees") - "value of patents" - "value of brand recognition" - "value of production equipment". I would bet that, especially at FANNGS, that equation would result on a much higher compensation per employee then what is currently given. The reason people arn't being paid that amount though I believe is due to investors having the option to invest in someone else. As an investor (an employer is an investor into an employees career). You always take a bigger cut of the value of what you invest in, and you're allowed that leverage because you tend to have the option to not invest in some particular X, and have a plethora of alternatives you could invest in as well. Thus as en employee we tend to be paid market rate, instead of by value, because there are other possible employees who could provide similar value that be willing to undercut you. If companies go full remote, it could mean that there are even more options for employers to hire someone who could provide the same value and is willing to undercut you, for example if they have a much lower cost of living, they might be happy with a lot less money. My bet will be that if remote dev work becomes the norm in the industry, you'll see compensations level off, Bay Area compensations will go down as employer can hire from cheaper places, and places that currently had low compensations will increase, because local companies will now have to compete for talent with big companies like FANNG. |
Tech companies are in the business of creating new products. Hell its practically the name. All companies use technology, technology companies are ones that create new technology as a core aspect of what they do.
Predicting what new thing will be valued by the market and what won’t is a very hard and unsolved problem.
So just like the VCs that funded them, tech companies adopt a throw shit at the wall and see what sticks approach.
They can do that because the scale of users that can use your work is enormous. Getting it right in software can make up for a lot more of getting it wrong than in most industries.