this article is missing the picture. Yes the candidate engineer / salesperson / marketer is motivated by money.
But of all the things they could work on, why this team, problem or company? Many jobs will pay similar money.
Some version of this question is extremely helpful in
(a) understanding if the candidate is going to be disappointed/not get what they want a few months into the job
(b) identifying what motivates them, to help them find fulfllment and growth in their career (part of your job as a manager).
Good comments overall. One insight here is to put yourself in their shoes to understand how to negotiate the best outcome. Most people don't rationalize themselves as mean or psychotic - there is probably some rationalizing behind the decision. E.g. diamondage is not a great engineer and we need to clean up the cap table before we increase the valuation because we can hire someone amazing.
To be clear, I'm not saying that's right or true. But assuming that's their position, does it change anything about your negotiation strategy?
Estonia could have a shot at becoming the "Delaware" for non-US entrepreneurs, esp EU, i.e. have all the high-growth companies incorporate because of clear, friendly startup support infrastructure and laws.
Plug: I'm one of the founders of Ginger.io, the healthcare company Larry, Sergey & Vinod mention. We're doing some really interesting things in healthcare and sensor data-- deploying across a varity of healthcare systems and driving interventions, and the best part is having a real impact on people's lives.
If you'd like to learn more, shoot us an email at [email protected] or see our Join-Us page.
With any advanced technology product, production volume plays a big role in making the underlying tech commodity and gradually dropping price per unit.
F22's would be a lot cheaper to make (than today) if everyone had one in their backyard, like a Honda Civic.
For someone not willing to sell all their hardware, the alternative would be to flash all drives with fresh OSX / Windows, and then recover from the cloud at your destination.
Maybe now we can all just give them tablets with root access, intentionally designed to be "hacked".
Even better, give them Raspberry Pis' and let them code what they need to get to Facebook and every other site. 5-10x cheaper than an iPad, substantially more instructive.
* For most 100 person+ tech companies in SF/Boston/NY, there most likely will be salary bands for different roles and levels. You can get this information on glassdoor and other sites.
* The waters get tricky with seed/early-stage startups, without dedicated HR resources, since most founders are not great at HR consistency. For such interviews, its OK and helpful to ask for a broad range for the role during the screening interviews. Its usually hard for the company to give you specific #s because they haven't completed technical interviews, and have no idea how good you really are.
* For BOTH big and small companies, its OK to ask for their comp philosophy early in the process. Eg. some companies pay higher-than-market cash but low options. Some incentivise the other way. If its more that 10-15 people, they should have an answer for this. If its a very early stage company, they may not have figured this out yet.
* Across all offers, you should be comparing total comp, not just base salary. Total comp = base salary + bonuses + stock options + healthcare + other benefits. For a early-stage startup, you may be able to ask them to move some of these around, based on your personal needs. After about 10-15 people, it becomes really hard for the company to do this, because everyone has to fit into comp bands.
* Advice to me from the head of recruiting/HR at a 3000+ person leading bay-area company: Every candidate they hired came up with an argument/data on why they should be paid more. Its part of the negotiation process, and the equivalent is me going to investors with a pre-money valuation that I think we're worth for our next financing.
* No company wants to interview a candidate for 2 days and discover they can't close the candidate because he/she is amazing but has completely different salary expectations. Hiring is huge team effort, and that's a bad outcome for the company too.
I'm NOT an advocate of even (50/50 or 33/33/33) equity splits precisely because of point #2 (Commitment) in the original article.
Almost every startup I've ever seen or been involved with, there have been different levels of commitment early on, which is OK. If/when things go wrong (which they inevitably do), having a clear leader/decision instead of deadlock, can be the difference between death vs. survival of the company, which is much bigger than the individual founders. These are inherently emotional moments. Even for the departing founder, the survival of the company is almost always a better outcome both in financial and personal impact terms.
That being said, unequal equity positions have historically been misused by business/MBAs against tech founders, esp true 5-10 years ago. This is probably why YC has a strong bias towards equal equity positions.
Edit: For comments talking about the "CEO vs. employee" mindset, if you make your co-founders feel like employees in 2-3 person company, you're a shitty CEO, period. In fact, a good CEO should make early employees feel like true team members (not just the co-founders).
You are right about responsible spending numbers. Tech workers making $80k-ish in SF can't really afford to live in the Mission, SoMa, South Beach etc. WITHOUT roommates. There just aren't any 1-beds for less than $2500 - $3000 in the Mission right now.
This post completely ignores VC-startup fit, fund size, investment strategy and other factors.
There are many different kinds of (institutional) VCs. A firm with a $100MM active fund invest very differently than A16Z with a > $1 B available for investment. The ideal ownership stake within the portfolio company, comfort level with higher valuations, investment allocated across multiple rounds for a portfolio company all are a function of fund-size and investment strategy.
As the active fund size increases (e.g. $500MM or $1B), the fund is biased towards making big investments and hugs wins are needed for LP returns. When fundraising for your startup, its critical to understand if these dynamics are going to be a cause of conflict between your investors and you. Just because a VC firm invested in Facebook, doesn't mean their dynamics make sense for your startup.
But of all the things they could work on, why this team, problem or company? Many jobs will pay similar money.
Some version of this question is extremely helpful in (a) understanding if the candidate is going to be disappointed/not get what they want a few months into the job (b) identifying what motivates them, to help them find fulfllment and growth in their career (part of your job as a manager).