Big Tech Companies Pounce as the Allure of Startups Fades

https://www.bloomberg.com/news/articles/2016-11-14/big-tech-companies-pounce-as-the-allure-of-startups-fades

by kgwgk • 10 years ago

181 107 10 years ago

johnm1019• 10 years ago

I have to wonder if part of the trend is that a generation of software developers came out of college and jumped into the startup scene during its most recent run. These folks are now forming relationships and starting families, or wanting to spend more time doing not-software dev things. They are realizing that stability in your job lets you do and plan other things in your life. Given that there is no economic certainty in working for a small start up in a city with an astronomical COL, many are deciding the risk isn't worth the rewards.

It's also possible that there are really large challenges being undertaken which require resources that actual start-ups with 10 million in VC can't do. Things like autonomous cars (Uber isn't a start-up anymore IMO), rocketry, aerospace, energy, foundational biology. Is it possible that many great minds see these as more worthwhile pursuits?

adrenalinelol• 10 years ago

Innovation is hard to come by from behemoths because it's easier to convince MBAs on squeezing labor costs and cornering markets vs. going to the moon.

di4na• 10 years ago

Or maybe the big names are suddenly trying to get back in the game.

mdorazio• 10 years ago

I think you nailed it with your first point. The startup craze (re)started around 2010. A lot of the 22 year old fresh grads enamored with the startup scene at that time are now nearing 30, have probably been burned once or twice by startups not turning them into millionaires, and are now starting families and wanting to work "normal" hours with people close to their own age. Add on the fact that most startups are located in areas that are too expensive by far to make home ownership a real possibility, and you've got a decent size demographic in the software dev space for whom big companies are starting to look more appealing.

randomdata• 10 years ago

I'd argue that the startup craze restarted in 2008, on growth in the mobile app market. The reason: All the money flowing out of failing housing market went straight into tech and commodities. Suddenly these startups were bursting at the seams with investment money and everyone and their brother were trying to get a piece of the pie.

But now, commodities have already crashed. Money is starting to flow back into housing. It stands to reason that the easy money in tech has also left. 'Everyone and their brother' are starting to move on to the next get rich quick scheme.

jordanb• 10 years ago

I think part of this is perhaps a shift in strategy among big non-tech companies. They used to be extremely aggressive about outsourcing and offshoring tech roles. My sense is that this strategy is changing among many of them as they come to see technology as a core profit center for them.

dkarapetyan4• 10 years ago

The only time technology is a core profit center is if technology is the actual business. Just because a business requires technology doesn't mean it can be turned into a profit center. Most businesses just shuffle paper but now they do it digitally. At best that's a cost saving strategy. You need something else to make it a profit center and few businesses are in a position to do so and even fewer decision makers have the willpower and foresight to make it happen at said businesses.

AlwaysRock• 10 years ago

I work in Merchandise Mart in Chicago home to 1871 (start up hub) and a number of large companies like Allstate, Motorola, Yelp, Braintree (paypal) and its interesting to see the shift in where people are taking job. It seems the large companies have shifted to creating new exciting teams and thus snatching up a lot of talented engineers that I have seen going to start ups over the last couple years.

toomuchtodo4• 10 years ago

I used to work in Chicago, and the startup scene was never that great. People asked me why I left when I could've worked for Groupon or SpotHero.

There is nothing innovative going on in Chicago unless you're in the financial speculation industry, and its at least well paid.

mempko2• 10 years ago

I worked at HERE maps which has a large office (800+) in Chicago and worked on a computer vision system that processed 3D LiDAR and imagery. There are teams working on building crazy 3D tools and processing for building maps for autonomous vehicles. Its sad that nobody knows they are in downtown Chicago because its pretty damn interesting work.

cx10004• 10 years ago

I agree that working at a startup for equity is akin to the lottery, but the perks of startups are so much better than big companies. Catered lunch, free food in the kitchen, kegs onsite, etc. I could never go back to a cubicle with no windows in sight!

bpicolo• 10 years ago

There are a ton of big companies with good perks and no cubicles.

Excluse• 10 years ago

Catered lunch, free food in the kitchen, kegs onsite etc.

Pretty much every Big Co. in SV offers these perks and more. And yes, they also have windows.

toephu23• 10 years ago

Really? Name more than 10 in Silicon Valley (and exclude SF). I can only name a few: Google, Facebook, Yahoo, Adobe?, ... ?

clifanatic2• 10 years ago

they also have windows

Not Apple. They have OS/X.

kasey_junk• 10 years ago

Catered lunch, free food in the kitchen, kegs onsite, etc.

Without getting into the relative availability of these things (I think you are underestimating how available they are in big companies).

These are extremely cheap to provide. The perks that cost a lot for companies to provide, health insurance, better pay, better retirement options, education reimbursement, etc. Are where real comparisons between perks should be made. In my experience those are systematically more common in big companies than small ones (that is governmental policy makes it easier for big companies to provide these).

shostack• 10 years ago

Don't forget work/life balance. As I've gotten more experienced under my belt, I increasingly value my free time. I no longer have any interest in burning the midnight oil because a company is constantly in crunch mode due to poor planning, understaffing, etc.

Larger companies often can provide a better work/life balance because they have more resources to do so. Now, that isn't always the case--many of them abuse the hell out of their employees because they can, but there often isn't the same "working 80hr weeks" you get at startups.

I've found that increasingly the dollar value of my free time is one of the most valuable "perks" a company can provide.

cx10004• 10 years ago

I might be. I work at a well established and funded "startup" with the same benefits as the big company I came from, but with a bunch more perks.

I see a lot of replies insisting that big companies have the same perks as startups plus the standard benefits, and that's great. It makes happy for the legions of employees working there (and me if I end up back there someday). Our experiences are anecdotal, so I wonder if this is actually a widespread thing at large companies. I doubt it, but I hope I'm wrong.

Naritai• 10 years ago

Are you the last person in SV to hear that Google offers catered lunch & free food?

cx10004• 10 years ago

Uh yeah I know about that.

Since when does Google == All Big Tech Companies?

rfrey• 10 years ago

My buddy works as a controls engineer in a company building injection molding machines that has an on-site chef for 100 employees.

My father-in-law started a psychological testing firm in the 80s that had all these things. With no programmers, imagine that!

mahyarm4• 10 years ago

A lot of big cos offer office space with windows. In fact it's pretty standard. Even a few of them give you private offices by mostly default, like microsoft!

amyjess2• 10 years ago

free food in the kitchen

I work at a mid-size (~500 employee) telecom. "The [company name] 15" is a meme here because there's always so much free food in the kitchen. Every time anyone meets with clients/partners/etc., they always have way too much food catered, and the leftovers get put out for the rest of us. New employee orientations are especially awesome because they always order like ten times as much food as the newbies can eat. And we get donuts and klobasneks in the break room every Friday morning... plus every day, the break room is stocked with cereal and milk.

I like to post about the stuff I find in the break room on Facebook, and I've had multiple people tell me they gained 15 pounds just reading my posts.

I could never go back to a cubicle with no windows in sight!

That's a mixed blessing. I consider cubicles a perk, and while windows are nice, the lack of windows isn't a deal-breaker for me, and they have their downsides.

At my last employer -- a 12-person defense contractor that put the "small" in "small business" despite having been around for 20 years -- I sat facing the window. We had four people in the room, with an empty seat for a fifth, none of us with our backs to the walls: we all faced the edge of the room. Three of us faced plate glass windows. Yeah, sure, the view was pretty. We worked on the 12th floor. I faced a freeway and a light rail line, with a rail station visible as well. It wasn't uncommon for us to stop work so we can gawk at a nasty accident on the freeway, so we can speculate on why the police have the freeway closed off, or to marvel as a hawk flew in front of our windows. That's the good. The bad is that the glare could get blinding at times. And all of us were afraid of closing the blinds because we didn't want to interfere with somebody else's view, so we just sucked it up and worked in glare on various days.

And then there was the office layout itself. Nobody had any privacy, and we could all see each other's monitors from our desks. I never worked on the same project as two of the people in my room (and they usually were on separate projects themselves): it wasn't uncommon for other members of their teams to walk into our office and have an impromptu design meeting with them while the rest of us tried to tune them out. And, no, we had no meeting rooms readily available to us: we rented a handful of offices in an executive suite that we shared with other companies, so any meeting rooms had to be booked well in advance and cost us $$$.

Now, at my current employer, I work in a cube farm, and I love it. I have my own space, I can see when someone's coming up to me, my cube doesn't get used as an impromptu meeting room, etc. Sure, I don't have my awesome view anymore, but it's not terribly important, and I'm no longer dealing with glare. If I really need to look outside, there's a window not too far away from me anyway, and when the weather gets bad, a lot of us gather by that window so we can check out the storm.

mercurysmessage• 10 years ago

So you like open office plans? Give me a cubicle and the ability to concentrate over a loud open room any day!

bdcravens4• 10 years ago

Personally I prefer working from home where I have the food I chose.

toomuchtodo4• 10 years ago

Seconded. Have worked from home for 2.5 years. It would take a crazy amount of money to coax me into an office.

youdounderstand• 10 years ago

Perks are terrible. Pay me in straight dollars please, not company scrip.

vram22• 10 years ago

Many big companies that are doing well financially give their employees many perks (apart from decent to good pay). And this is not even a new thing. Goes back to my dad's or grandfather's time or even earlier. Source: personal experience and heard from family and friends (including of previous generations, like older cousins, uncles, etc). And I'm talking about both Indian and American companies - had / have some family background in both (as employees).

jly4• 10 years ago

None of these perks are really all that interesting.

Free lunch/snacks/drinks might save you a couple hundred dollars a month, max, if you use them everyday. A little resourcefulness with leftovers, brewing some coffee at home, etc, and that perk is worth way less. It's worth little compared with your paycheck.

After doing different office layouts, I have come to enjoy cubicles or separate offices, more and more. Open concepts are not unique to startups, anyway.

yesiamyourdad• 10 years ago

Also, those are easy to downgrade or eliminate. People might gripe if the snacks are from Costco instead of Whole Foods, and they might gripe if they're done away with altogether, but ask someone to take a $200/month pay cut, and they'll be really pissed off.

conjectures• 10 years ago

If I had any alicorn I'd use it to make a potion that would banish the word 'unicorn' from the English language for a decade.

pyrrhotech2• 10 years ago

I've worked at 3 startups (~50 employees, ~300 employees and ~120 employees) and 1 big company. I'll definitely never be working at a startup again unless I own it. I didn't realize how underpaid and overworked I was until I joined the big co. Nor did I realize how narcissistic and demagogic my leadership was. Of course there were some benefits like less bureaucracy, but the pros of working at a big company far outweigh the cons.

Cranzatz• 10 years ago

I've worked mostly at smaller companies my whole career. Two years ago I joined a company with 4k employees, which merged with a 50k+ employee company. It's a very uncomfortable situation for me.

I absolutely hate how political and bureaucratic my current company is. It's so difficult to get anything done, because of the micromanagement and second-guessing for the sake of "collaboration." It's dreadfully slow. Nearly all management has family and kids; most of my direct coworkers don't. Two are engaged, one is married with two kids. I'm gay and am not planning to ever have kids. So I have a ton of free time in comparison to my straight coworkers.

My plan is to start my own company in a few years. I don't think I can tolerate an atmosphere where I can't set my own pace. I'm a pretty competitive person who likes quick results. I get the feeling I'm out of place in my current environment.

pyrrhotech2• 10 years ago

I totally understand what you are saying. Small companies may be better for you. For me, I'm only at work to get a paycheck. I'm also a very competitive person, but that's why I want to have a strong work/life balance -- so I can have time to work on the things I want to work on, like my game (http://wizardsofzenith.com) and improving my PRs at road races. But I definitely understand if your heart is really in the work you do at your job that a big company environment would be very frustrating.

mahyarm4• 10 years ago

There is different kinds of big companies. Salesforce will be different than google which will be different than cisco. Some of them will be far more positive than others.

bubbleRefuge• 10 years ago

How about late stage startups that have plans to go public(my situation) ? In this environment, we are still small enough to where you can make a name for yourself and stable enough where pay and benefits are good. There is a mix of people: family, married no kids, single. When we hit the exit, people who come in the last couple of years will get something, but nothing like the early employee's.

jly4• 10 years ago

Things can move slower at big companies, but sometimes that can be a nice opportunity to come in and help change the culture. If you can't tolerate it or it can't be changed, probably time to move on. I bet in most big companies there are high performance teams that move more efficiently than the average - it's just sometimes not easy to find them or get on them.

If you want to work with a team that spends all of their free time at work, you may find it challenging in most places, but especially big companies. Having work/life balance is pretty important to most people, especially when you're just collecting a paycheck and not invested/owner in a business.

acedinlowball2• 10 years ago

Are you one of those people that thinks everyone around him is an idiot? That if everyone could just leave you alone, you could get a shitload of work done in no time?

bryanlarsen• 10 years ago

There are tons of small companies / startups out there that pay well and/or don't overwork. There are also lots of large companies that don't pay well, and lots that have a crazy overwork culture.

CalChris• 10 years ago

TL;DR Millenials are turning 30.

sangnoir• 10 years ago

Lots of millennials are in their (early-mid) thirties already.

hibikir• 10 years ago

The way startups run today and the way compensation is often structured just makes startups a bad deal economically in the best of times.

Imagine for a second that you become employee 10 in a new startup that you believe in. You dedicate it 15 hours a day for 5 years, everything went awesome, and now the company is worth 5B. Your stock options would be worth millions in case of a liquidity event. Great, right?

The thing is, it's 5 years later the company is probably 300-800 people now, and therefore is a very different company than the one you joined, and if it's still growing, it's be a different company still next year. But there's no liquidity event: You cant exercise your options because you can't pay the taxes. If you want to exercise anything, the company has to go public, and you sure don't control that. So you either wait in a job that probably doesn't fit you anymore, or your stock compensation was worth nothing. Therefore, whether the startup does great or not, you have to apply the 'I might want to quit' discount. If I am assuming 8 years to IPO, which is not insane that discount is going to be huge by itself. I'd not rate my chances of staying in a job for 8 years as 1/10. And that's without considering that, career wise, you'll be learning more changing jobs every couple of years or so.

Let's compare this to a public company: Their stock compensation has none of that complexity, especially now that RSUs are the way to go. You can sell them for cash immediately at the stock price that day. The downside is minimal, and chances are your first block of shares comes after one year, so if you hate your job, you sit there a year, sell your shares and quit.

Given how much stock the bigger companies are awarding developers, you have to completely ignore compensation to go to a tiny startup: You kind of have to bet in the world around you changing to make exercising options early to be more or less free, along with believing that the startup will go the distance. Those are odds I'd not take

benmathes3• 10 years ago

Yes. Nobody who understands the risk-adjusted rewards of startups does it for the money. Best odds of getting rich? Go work at Google and bank your check/bonus. At best, startups are a faster way of getting experience. [1]

Employees don't even know they are making that bet, though! Most don't even know the details of what they are getting, let alone how to evaluate it. I've been working with AngelList to help fix this, much more coming very soon.

[1] http://startupljackson.com/post/135800367395/how-to-get-rich...

jarjoura• 10 years ago

That's not completely fair. Startups want and need more experienced employees and cannot afford to bring in new grads at the scale bigger corporations can.

Facebook, for example, has an entire org that focuses just on internships and new grads. They are offered space and time to learn and grow. Some may still fall through the cracks, but far less so than at a startup that doesn't have the resources to hand hold.

At a big company you can learn how to be a team player and specialize in areas that are interesting to you. At a small company you learn how to become a jack of all trades and must cover your bases.

pj_mukh3• 10 years ago

Some solutions: http://blog.samaltman.com/employee-equity

lafay• 10 years ago

If you're joining as employee 10, you should negotiate for the opportunity to early exercise all of your shares and avoid any tough tax choices later on. Perhaps even a starting bonus to cover the cost of exercise.

This also puts you in a position to exclude your entire gain from federal capital gains tax if the liquidity event is at least 5 years out:

https://blog.wealthfront.com/qualified-small-business-stock-...

benmathes3• 10 years ago

True, but startup employees shouldn't be effectively penalized for inexperience in arcane startup securities and tax law.

toomuchtodo4• 10 years ago

I would really like to see YC incorporate this into their options boilerplate.

asabjorn• 10 years ago

With large early rounds exercising your stock might set you back 50k or more, making you an investor as well as an employee. With the odds of startup success it is advisable to diversify more than that unless you are already wealthy.

dkarapetyan4• 10 years ago

And that's without considering that, career wise, you'll be learning more changing jobs every couple of years or so.

This isn't true. You should switch because you want a raise and don't like the people. The raise situation can be fixed most of the time staying where you are so really you should only switch because the people situation has changed and you no longer like it. Switching because you think you will learn anything new is the wrong reason to do it. Programming hasn't changed since the 70s. You are not gonna learn anything new building the next CRUD app powered by mysql instead of postgres.

jdbernard2• 10 years ago

You are not gonna learn anything new building the next CRUD app powered by mysql instead of postgres.

No, but you will if you switch to embedded development, mobile development, devops, etc. Programming has radically changed and expanded in scope since I've been doing it, and I wasn't even alive in the 70's.

figers3• 10 years ago

Don't necessary need to be IPO, could be bought out...

ryandrake2• 10 years ago

“It does me no good to get rich when I’m 45 when I’m 30 now,” goes the thinking of many prospective hires these days, he said. That’s helped him make some hires out of companies that would have been tough to recruit from a year or two ago, including Uber and Airbnb, he said.

This part doesn't make sense to me. Wouldn't it be the opposite? Doesn't the "want to get rich now" crowd prefer the start-ups and the "want to get rich later" group prefer the larger, stable companies? (Spoiler: Chances are, neither of these groups are going to "get rich", sorry.) The people that big companies ought to be going after are the ones who TRIED to get rich early, ended up holding worthless lottery tickets, and are content to toss them away for a little stability.

pm902• 10 years ago

The people that big companies ought to be going after are the ones who TRIED to get rich early, ended up holding worthless lottery tickets, and are content to toss them away for a little stability.

Why? Broad generalizations really don't help here. Here is a counter: Its likely that people who have worked at BigCo's are better at working with their bureaucracy, they know that they won't get immediate results but understand the system and are willing to work with it to get things done. So they are more likely to succeed in that environment.

poof131• 10 years ago

I recently made the jump from startups to bigger co. For me there were a few considerations:

1. We’re at the end of a bubble and doing a slow pop. Multiple companies that have raised a lot of money don’t have the revenue or unit economics to be sustainable. Employees with compensation tied up in stock aren’t going to do well. Had a friend leave two companies within 6 months (didn’t bother vesting) that both raised over $100 million because the executive teams were celebrating $900 deals.

2. Startups don’t exit anymore. Waiting 8-10 years for an exit is unacceptable. It might be okay for founders who take a couple million off the table at the B round or VCs who keep the IRR on their books, but for employees it’s a fail.

3. Founders as rockstars. The narrative is hurting the industry. People I like and respected raise money and become narcissistic assholes. Last founder I worked for who I considered a friend told me “he was like Elon Musk or Larry Paige, a technical genius, and not to question his leadership”. This was after he fired his cofounder and chased off the one other employee of our seed stage startup.

4. Risk vs. Reward. As an employee with founders trying to keep 50% of the company to be like Zuck, companies never exiting, and no idea what the terms of later rounds are, working at a startup is becoming stupid. Saying it’s about the mission, it’s about learning not earning, when the VCs and founders are doing great is disingenuous.

We’re at the end of the cycle. I’ve seen 3 now: 2001, 2008, 2016. Hopefully in the next round the powers that be will figure out how to better reward everyone who takes risk working at startups. Right now employees take almost as much risk as founders for much less reward.

ryandrake2• 10 years ago

Wow, great comment. You've put to words a lot of what now keeps me away from start-ups. It's no longer "probably financially rewarding" to be employee number 30. Seems like in earlier cycles (1990s and before), the cream was spread much more evenly among the people taking the career risk, where now, it's almost entirely captured by founders and investors.

sulam3• 10 years ago

The cream has never been evenly spread. It likely never will be, although it could be improved. In order to evenly spread it, you have to be able to measure contribution. Good luck with that.

Previously VCs got most of the cream, founders got to ride out the public markets for their pay day, and early employees had to hope they were working at a Microsoft.

rubicon332• 10 years ago

"It might be okay for founders who take a couple million off the table at the B round or VCs who keep the IRR on their books, but for employees it’s a fail."

Does that actually happen? I've always wondered if founders walked away from failed startups having made a couple million off the funding rounds... How common is that?

mahyarm4• 10 years ago

Way more common than you think. Founders do not talk or advertise this part of startups, and often hide it from the employees themselves.

Often the only way you find out is if you have access to and read through the company documents. Another way is having a friend that works in finance and has visibility into this kind of stuff / you monitor SEC filings or other finance services or heard it through the rumor mill.

The logic is to incentivize the founders to go for the big wins that the VC formula is set up for.

ci5er• 10 years ago

It didn't used to much in the late-PC rah-rah of the 80s or the dot-com 90s, but I understand it's increasingly common now. Not wanting to be beholden to the VC's growth paradigm handcuffs[1], especially going into an economic downturn[2], and wanting to share a "taste" all the way around as we expand are two of the reasons I've been trying very hard to avoid VC this time to the party.

[1] The VCs are bound to an business model and we who take their money are bound to support their outcomes. That's not a bad thing, but it constrains options.

[2] I found out early on (this is about to be a conclusion based on extremely limited data) that any VC that hadn't himself been through three down-turns, two as a VC, were 1000% worse than useless on the board. You don't want to get stuck to the hip with a wet-behind-the-ears rockstar-wannabe VClet going into a downturn.

dkarapetyan4• 10 years ago

The cycles will continue. The workforce is as much to blame for the mythos as the VCs. Everyone likes to think as you pointed out that they're the next Larry Paige or Elon Musk when in reality those people are as much a product of their times as they are a product of hard work and intelligence. That's a harder story to sell though and given a long enough time people forget why the last bubble went pop and start believing in all the same things that lead up to it.

trhway• 10 years ago

Hopefully in the next round the powers that be will figure out how to better reward everyone who takes risk working at startups. Right now employees take almost as much risk as founders for much less reward.

Like big companies started to do it last time around, the startup will have to start giving RSUs instead of options without too much unreasonable limitations on sale of those RSUs on the secondary market. That would allow to much more easily (and realistically) valuate and realize your actual compensation.

Every time startup makes me an offer (and i almost don't interview with startups), a typical option loaded one, i always kind of wonder - "you wanna me forgo $50K+ in total in exchange for what? Shouldn't i get a stock like other investors? Because applying my time and skills at discounted rate is like investing the monetary value of that discount.". The only time when startup matched the total (of a concurrent offer from a public co.), several years ago and i should have taken it, it was a really early stage back then a unicorn of today. One can say being generous is a sign of unicorn :)

pj_mukh3• 10 years ago

There's gotta be a good way to do the risk calculation. Take the the drop in salary most people take to join a startup subtract the payoff from a startups' exit event (usually more than big co's) multiply by the risk of a payoff while controlling for the stage you join (a 30 person company is much less likely to fail than a 5 person company etc.)

figers3• 10 years ago

How about working for a startup with good co-workers using technology you enjoy and making a good salary? If the huge exit is not there it can still be a good job with much more flexibility than a fortune 500's cubicle farm I've worked at in the past...

redwards510• 10 years ago

Except for the looooooooooooooooong hours and lack of work/life balance..

smallgovt• 10 years ago

As a founder of a series C startup, I agree that common stock options in startups are grossly over-valued right now.

Based on my experience, the median offer for 1st engineers at an early stage startup is around $100K + 1%, vested over 4 years. My guess is that the same engineer's market rate at Big Co is $150K. It is nearly impossible that 1% is worth $50K /year.

Most startups will try to convince you that you should price common shares according to the company's last valuation (or more), but by my estimation, this is off by at LEAST a multiple of 2.

Here is why:

- Common shares are worth ~25% less than preferred shares due to liquid preference

- Inflation -- earnings from common stock are paid out on average 5 years from now. you should apply a 20% discount to the company's current valuation due to this.

- Risk -- startups are inherently risky. unless you are already wealthy, you should be further discounting for this.

Here is a spreadsheet that models out each of these discounts: https://docs.google.com/spreadsheets/d/1fA95D0YR9RWF7JGrP1W9...

In reality, you should be pricing common shares at closer to half the company's last valuation. Unfortunately, in my experience, employees are willing to buy into the hype and are currently valuing their shares at TWICE the company's last valuation.

Don't count on companies being an agent for change in this area -- employees just need to get smarter. Companies will follow suit by raising offers.

Also, although I agree that common shares are overvalued, I don't buy the undertone of your message -- that employees ought to make more BECAUSE their founders are getting rich. How much founders make and how much employees make should have little to do with each other. The former is dictated by how good of a business the founder has built, and the latter is governed by how much your peers are willing to work for.

acedinlowball2• 10 years ago

I have been the CTO of several very successful startup exits and I agree with everything in this post. Well said.

Yhippa2• 10 years ago

Let's say that startups do indeed become less attractive as time goes on. Do coding bootcamps prepare their students for jobs at BigCorp?

vanadium• 10 years ago

Given the stacks at BigCorps (at least here in Chicago), I would say "it depends". Working in an enterprise environment where everything is older and battle-tested, probably not, given most of the camps gloss clean over the details, opting for training against the MEAN stack or variants thereof as far as front-end options go, that would enable someone coming out of these camps to hit the ground running.

It'll be an interesting observation to see if that comes to pass, but insofar as I'm concerned, they're training front-end students for startups building platforms.

hiou• 10 years ago

Launchcode certainly does[0]

[0] https://www.launchcode.org

Yhippa2• 10 years ago

This is the first time I've heard about this but I really like what I'm seeing based on what's on the site. This sounds like a really good way to get the candidate you need if you're a BigCorp. I wonder what the acquisition cost of going through Launchcode is vs traditional channels?

bdcravens4• 10 years ago

I'm not convinced they prepare them for startups.

sfaf• 10 years ago

As a coding bootcamp grad, I agree. I think bootcamps are better for mid to large companies actually where you will get mentorship and processes to help you graduate from being an apprentice to a contributing member of your team.

Many of my bootcamp colleagues at small stage startups regretted the decision.

sulam3• 10 years ago

I love how this article manages to contradict itself completely in the space of two paragraphs.

Paraphrase #1: Salaries at startups aren't very high, without considering options.

Paraphrase #2: Yelp is having to raise compensation to compete against startup job offers.

Past the very early stage, the first statement is untrue. I sincerely doubt that Uber is paying less base salary than GE. Certainly it is in the ballpark -- because every well-funded startup out there (there's a lot of them) pays "market rate" which nets out to "we match salaries for everyone except Google employees."

pj_mukh3• 10 years ago

Yea, I was confused by this narrative. Startups are raising so much money but they are paying lower salaries than the big cos. Where is that money going?

pm902• 10 years ago

I don't think its a contradiction: every tech company has to raise salaries to get talent, including startups. But the total compensation may be lower by startups.

Uber/Yelp are no longer startups. I think the article is referring to companies much earlier in the life cycle.

maxlamb• 10 years ago

Yelp was founded in 2004, Uber in 2009 - they are not startups anymore. I think the statements are still holds true if we consider startups new companies that are less than 4-5 years old.

megablast• 10 years ago

He is suggesting that people are taking a wage cut to work at startups, because of the chance of a big payout later on.

Yelp has to pay a lot more, not to beat their startup salary, but their expectation of a big payout.

sulam3• 10 years ago

My point is that this is not the case. I don't know anyone taking a big pay cut to work at a startup unless they are a very, very early employee, essentially a co-founder. A company's seed round might be $2M these days (this used to be an A round) and A rounds are easily $6-8M. It's hard to justify not paying someone market rate when you have $2M in the bank and a plan that says you're going to use it to hire engineers.

samfisher83• 10 years ago

This is just like the early 2000s. I bet you could write this same article in 2025.

bdcravens4• 10 years ago

Most of the commenters here seem to think it's a dichotomy. There's many small, bootstrapped companies, where you can do some cool things tech-wise.

Big Tech Companies Pounce as the Allure of Startups Fades

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