[ffrr212]

> And the FAANGs are willing to pay very large amounts of cash to acquire promising startups.

But I think FAANGs also drain the talent pool for startups by paying very high salaries (& partially equity) to employees such that startups have a hard time to competing on this level. At least it feels it's getting worse than, say, few years ago.

[vlovich123]

Those high salaries though arguably just allow people to build nest eggs to go the startup route whenever they want.

The real challenge is that, rationally, startups an extremely large gamble on a lottery where your expected value is < 0. Most startups fail or take too long to get acquired and, unless you’re a founder/invested, you’re not seeing the really big amounts that make it really worth it (and sometimes even then). Fundamentally the challenge is that as a regular employee (even early) your stake is too small. I think startups can attract talent more easily by taking the salary disparity and matching it with stock (ie if you’re making 300k and the startup is paying 150k, for the first few years the startup should treat you like you’re investing at least 100k into the company because that is what you’re doing with your time).

As an anecdote, I have a friend who was working at a startup that got acquired by Google recently (he’s a Staff SWE so he’s making really good salary). He noted if he had just stayed at Google instead of working at a few startups over the years he would have been at least break-even or better based on salary + google RSU performance over that time. My personal experience with startups was a bit different. While the acquisition I went through was larger for me at the time, the biggest impact was that it pushed me into a far higher salary band. Startups and smaller companies can be a better way to “level up” some times than the traditional corporate ladder climbing.

[srtjstjsj]

By the time they have the nest egg, it's too late to launch a startup without hiring people who FAANG are competing for.

[dasil003]

Not following, why would they not need FAANG-qualified engineers now but they would later?

[vlovich123]

It’s not unreasonable by the time you’re 30 or 40 that you have sufficient funds that the team or project is more important to you than a salary for a few years, especially since it’ll always be there later anyway.

[pbronez]

My theory is that the big firms can do this because those relatively fixed lob or costs over huge user bases. Smaller companies just don’t have the leverage.

I also think this applies to internal applications at huge enterprises. The number of users for any given internal application is small, so you can’t spread the development costs out very far. You have to connect the initiative to something that impacts the whole firm, the whole customer base to really invest in it. Even then you’re dealing with a user base that is way smaller than the big tech firms enjoy, so you still get outspent... unless you have dramatically better margins.