Silicon Valley is slowly drifting into the pay model used by sports franchises, with extraordinary salaries for franchise level talent.
Take Instagram, which entered into tech folklore when its 13 employees — only half of whom were developers — created a simple photo-sharing app that wound up getting bought by Facebook for a $1 billion in 2012. WhatsApp took that dynamic even further. With just 32 engineers, the company built a messaging tool that Facebook — once again digging into its considerable coffers — bought for $19 billion in February.
This kind of reward is exactly the kind of incentive that drives companies to compete for the engineering talent that can make a difference in hitting that IPO jackpot.
So it is that one Silicon Valley startup is trying out its own version of shock and awe to grab the attention of the best of the best engineers. Weeby.co, led by a CEO whose technical work is used on more than 2 billion devices worldwide and who has advised more than 100 companies on fundraising, is building an innovative development platform for social games and is offering to pay its engineers an average salary well above market rate: $250,000 a year, or a million dollars over four years, plus equity.
Foolish? Prescient? Let’s see what impact this has on VC-funded startup salaries over the coming year.
This is one of the smarter developments to come out of the Valley in a long time. Of course the big bucks should go to the people who actually build the tech … just like with a pro-league sports team, no one is going to pay for an app because the accountants were stellar or the manager was extra-skilled at filling out forms. The money should go to where the real – and rare – talent is. Period.
No one pays 170 bucks for a centre-ice seat because they are fans of the strength and conditioning coach. And no one buys an app because of the reputation of the human resources manager at the software publisher. The money is there, let’s applaud the fact that it is going to the right talent.
Engineering talent isn’t the only factor to a great app, and let’s face it—a great app doesn’t mean a profitable app. I’ve seen lots of brilliant coders’ talents wasted by project/product managers who couldn’t manage their way out of a paper bag. Don’t even get me started on marketing wonks who misprepresented/-positioned a product in the marketplace resulting in a fraction of sales of other inferior products. Yes, you can’t get a great product from lousy engineers, but great programmers isn’t the only key to success.
tho who’s to say a great strength & conditioning coach doesnt require exceptional talent in its own right? and doesnt it directly enable an athlete’s star power?
I have been waiting for a VC-funded company to make a move like this for ten years. It makes no sense that software engineering and architecture jobs have such low total compensation attached, when you consider the body of knowledge that lead and senior developers needs to master.
The H1-B visa situation in the United States is a vestige of an old thought process that put project management at the top of the development food chain. The developers, UI, and hardware designers are the people creating the greatest value in the vast majority of successful tech products and services.
That’s why when the team wins, you see guys raise the Cup who you don’t recognize unless you are part of the team. That’s why the staff gets rings just like the players.
They all played a part in winning, but the players put the puck in their net and keep it out of ours.
Absolutely. The fans of the strength and conditioning coach are his family and a few other people like his college teammates. Those people are in the building, but they are sitting in comp seats.
Of course it contributes to the athlete power … but the undeniable fact is that it is MUCH easier to become a strength coach. There are thousands and thousands of kineseology grads who could do the job … orders of magnitude more than there are people who have the skills to deke out a pair of defenders and put the puck in the top corner on a backhand.
Just like there are far far FAR more people who can push numbers onto a tax form or sign timesheets. There are skills, and there are RARE skills. Pay for the rare ones, and you will probably succeed. Pay for the front office crap instead, and you end up with a company called Blackberry.
Above-market salaries is a tried-and-true recruitment method. It’s often far more meaningful than the promise of equity, which rings hollow in a market with a huge failure rate.
However, there’s a downside to “shock and awe” salaries for startups that are bootstrapping. Finding affordable (quality) talent is getting progressively more difficult. I’ve been experiencing it directly for a few years, and it’s getting worse. We can’t compete, and attrition through recruitment is a given.
I’d rather give an engineer a high salary than a some athlete.
I’m paid really well at my current tech company and One of the best revenue generators. I’m planning to leave because of crappy HR support.
there is a point of no return. in the US, CEOs now make 300-400x that of average worker pay. are they 300-400x better? 300-400x more productive? much better than a CEO who would take “only” 100x, or 20x worker pay? no. at some point it’s just throwing money into the wind.
Not to mention a possible fly by night job. No thanks, I may not be getting $250,000 yearly, but what I am paid is not bad and it’s in a company that appreciates me. And one I know I’ll be working for for as long as I want.
But for people out of work and talented this is a great opportunity. I just worry about this kind of hiring practice becoming typical. I don’t see that as advantages to the employee so much as the employer.
We’re not on the same page.
I’m speaking to the dynamic created in the hiring market top to bottom.