I think there was a golden era of startups capturing value from the old guard, but that era is largely over IMO. All of those tech darlings are hiring consultants to help build corporate functions and product strategy — turns out there is significant value in knowing how to manage a company of 30,000+ employees and revenues in the hundreds of billions of dollars. Even a fraction of a percent gain in efficiency translates to enormous sums, which the consultants capture some percentage of in fees. As the unicorns continue to evolve into mature enterprises, more of that value will shift into the consulting / finance realm.
If I were graduating in 2020, I would not go into tech as an engineer if my goal was to get wealthy. It’s still a great career and you’ll be able to live a very comfortable life regardless, but if building wealth is your goal you need to follow the prestige (aka political power).
> It’s not uncommon for people in consulting to be making $500k-$1m annually by the age of 40
This is not "uncommon" in FANG either (just take a look at the salary charts), and if anything can be reached earlier.
> there was a golden era of startups capturing value from the old guard, but that era is largely over IMO
If I could take a bet against this, I would. That value capture is only going to increase.
Consulting and tech have similar starting salaries, but consider finance/hedge fund engineer starting tc is about 3-4x tech for top 3 grads rn.
Based on what? This is not true in my experience, unless you're comparing finance tech to FANG tech, in which case it is true. Moreover, at Harvard, some segment of those who go into finance are "connected" with higher paying finance jobs due to their parents/etc.
Consulting salaries are lower (sometimes substantially) than tech starting salaries.
If it's a good flagship, absolutely can keep up.
If you do something like conditioning on a CS degree, finance probably mops the floor w/ tech.
Can't you, by starting or (much less favorably) joining a startup?
Obviously there are other components as well (how much you travel, being on call...), but that already captures a lot of what's commonly missing in salary discussions.
That's the point, you don't know whether there will be any. So they are definitely not "as good as cash". Just because they aren't lottery tickets doesn't mean they are equivalent to cash.
Edit: Just to clarify, $300k as a senior engineer is without any stock appreciation at all. I made $250k as one step below senior without any stock appreciation at all. My point about significant stock changes is for significant stock changes downwards, meaning if the Google stock somehow lost 50% of their value or something like that.
My point was a more holistic view. It's great that there is a 95% chance that your stock RSUs will increase. But if there is a 90% chance that within 3 years it's a 15% increase or more, you should rather use the 15% increased figure for calculation instead. And then the risk is much higher because it's not just stock not going down, but stock not going up as quickly as it did before.
Yes. I sell projects to my former classmates all the time, and if I ever find myself out of a job, I could have a half dozen interviews within a month. The network is absolutely amazing if you go to one of the top 20 or so schools and have some people skills. You can't really make use of the network if you're a PM.
> And is the hours-adjusted total income of a consulting career that much better for wealth building than an extra million bucks pre-tax at age 30?
Lifetime income for a partner at a consulting company can easily top $30 million -- with the benefit of being able to blow the escape hatch and land in a VP role in industry if you burn out on the consulting work.
Not like interest rates can get lower or search could get less competitive.
If your firm is operating on leverage of 20:1, sure you can make $2-20M annually. But, realistically, what are your odds on the margin of making partner 25 years down the road?
People would rather work at FAANG than Stripe because FAANG will get you a lot more pay and connections. And people know that, so they will value people from FAANG for it. But it comes from the root fact that FAANG makes a ton of net income per employee, same as some finance/consulting firms, and that net income is more attributable to you specifically, rather than say someone at General Mills.
A better pick for “non prestigious but good company “ might be Khan Academy, which has an amazing service with great engineers but as far as I know doesn’t make or pay a ton.
Khan Academy is sought after in the cs student community as well. although won't be first choice for many.
Facebook has a quarter of the worlds population active on it.
Google has most of the search and is responsible for Android, which is the most popular mobile OS in the world.
Amazon broad cloud computing mainstream and now controls a huge chunk of the world compute because of it.
Apple effectively defined the smartphone era.
Netflix is like 60% of all of the Internet traffic and made legitimate streaming a thing.
Stripe... is an easier to use PayPal?
It is less mainstream so exclusivity increases the demand factor.
Amazon's work culture is not very positively seen. Facebook's product is often seen negatively upon although not that much. Google is seen positively.
Some of it is tied into recruiting as well. Apple has a very opaque intern and new grad recruiting process. Netflix simply doesn't hire SWE interns and newgrads.
For Stripe, Presumed High caliber engineering colleagues (party due to size and growth), especially because there is a lot of hype for Stripe and its documentation and process among tech professionals.
High potential for stocks rising at IPO, like Snowflake (although there seems to a value cap) so kids are not as excited about it as Databricks.
Also wondering, why?
A 2.6+% merchant fee payment processor?
High potential for stocks rising at IPO, like Snowflake (although there seems to a value cap) so kids are not as excited about it as Databricks.
Pshh what? You work at FANG and think this?
But generally I think the OP is correct: working for FAANG has made many, many people far more money over the past decade than they would have otherwise made on average in a startup.
I suspect that eventually the tide will turn, as it always does. The companies will get middle-manager bloat, MBAs and accountants start pinching pennies, systems get dragged down in technical debt, and more nimble competitors eventually outcompete. But we're not there yet.
furthermore before they were fang companies, google was the top tier startup and IBM was the equivalent to FANG.
WeWork and Airbnb want a word.
A word about what? Their salaries are certainly competitive with, if not higher paying than, Google and Stripe's are objectively higher.
Generally people only seek at prestigious firms like Goldman early in their career and switch over to more obscure but lucrative opportunities: prop firms, pe, hf, etc.
If you're later in your career, you should have enough contacts and know enough people to get in the door at a small firm. If you don't know their name, you'll have a hard time getting in. These kinds of places don't post job openings on indeed. You kind of have to know someone.
In this vein, the tech industry screws its employees as far as their share of revenue-per-employee goes. Apple makes 10x per employee what Jane St. does, and I doubt the small firms achieve the difference.
$190,000 vs. $2,000,000. Netflix is even higher: $2.4MM. What numbers do you have?
I can't even begin to count the number of people I've met at Stanford whose parents own "X," where X is a little publicized, privately held business with >$10M in revenues.
Absolutely. I worked at ten, with employee numbers from single digits up to about fifty. As we all know, most startups fail. Even among those that succeed, few employees avoid all of the traps that founders and VCs create for them (e.g. dilution and special share classes) to get more than a modest payout at the exit. For most, even that "big payout" might not match the year-after-year premium they could have gotten by working and climbing the ladder at one of the already-big tech companies.
As one point of evidence, my two semi-successful exits did help me retire earlier and in more comfort than I otherwise might have. I'm grateful for that. OTOH, my three and a half undistinguished years at Facebook helped more.
Depends what you want. I had a guy work for us at my first startup: he was employee #6 and once we got to about 13 or 15 he decided it was time to move on. I was surprised, but he felt the business was just too big for him. And indeed I've looked at his career over the ensuing years and he's worked for some amazing companies...always just for a year or so and always when they were very tiny. Sometimes I noticed he'd worked with the same people, so he wasn't leaving because he was a poor performer (we missed him) but simply because that's what he liked.
Also, 200,000 sounds way too high for total number of technical positions at these companies. There are a very large number of people working non-technical jobs there as well.
Top 5% among paid professionals is your low bar of proficiency?
Source: work at Amazon
I find it somewhat astonishing that you would be extremely insulted by the exclusion of your employer from some arbitrary acronym.
It's well known that Amazon hiring standards are the lowest of FAANG, just like G's hiring standards are lower than N (as a whole). That doesn't mean that everyone who is an SDE1 at Amazon is less talented than everyone who is an L3 at Google, it's just different means.
The "20% comment" was the one above me, I was just responding to it.
The average Amazon engineer is less talented than the average Google engineer. That is what I was saying. I wasn't making any claim about how talented you are or aren't!
It's insulting, and I'm glad they were downvoted for it.
> There is a reason top talent decides to go elsewhere
In what way are we not top talent? Cite examples.
Do you have any proof of this?
I'll provide an example that illustrates both points: me. When I went from Red Hat to Facebook, my already-pretty-good total compensation jumped by almost 50% - more considering how each company's stock performed during the relevant vesting periods. I'm pretty sure there were others around me who had been promoted from fresh-out to my nominal level in a quarter to a half the time it had taken me to build my career. Some of them were quite likely making even more than me despite their narrow experience and resulting unsuitability for the same role anywhere else (a topic for another time).
If my salary curve was a race car, theirs was a rocket ship. The FAANG compensation premium to start fresh out of college might be smaller, but the potential growth over the next several years is much greater than elsewhere in tech ... and yes, recruiters do use that as a lure. Given the uncertainty (and compensation inequity) at startups, working at a FAANG is the most likely route to early wealth for most techies.
Of course, you can also get rich early if you get to put FAANG on your resume and parlay that into an early-employee job at a startup that later hits it big. That's prestige at work but, looking at the attrition/retention rates at FAANG, it seems to be the less common route and therefore I'd guess it's the less common motive.