Startup employees don’t earn more

Image by Sebastiaan ter Burg. License: CC-BY-SA 2.0

Since the average startup founder who makes it to Series A earns more than a large company employee, many believe that early-stage startup employees also earn more (albeit less than founders). Dustin Moskovitz has even claimed that startup early employees have better earnings prospects than founders.

We’ve looked at the data, and this does not seem to be true on average. There are strong reasons why people might want to work at a startup (e.g. career capital), and it’s true the employees of the most successful startups will earn more; but someone deciding between working at a startup vs. a bigger company should rarely be making the decision based on income. On average, startup early employees earn at most only a little more than developers at larger companies.

Three estimates of how much startup early employees earn, including both equity and salary

According to AngelList, early-stage backend developers, for example, generally get about $110,000 in salary and .7% equity (salary data from Riviera is similar).

While the startup salary data is fairly clear, it’s hard to know how to value the equity portion of their compensation. Below are three different methods for doing so, which all show that developers at early-stage startups at most earn only a little more than they would at a large tech company.

1) Using average exit values

Let’s assume the 0.7% equity stake will eventually get diluted down to .35% at time of exit (a typical amount of dilution from Series A to exit).

Continue reading →

The return to coding bootcamps may not remain so high forever

We have been positive about learning to code as a way to gain useful skills for earning to give or doing directly valuable work, and promoted software engineering as a career path.

We are not the only ones who have noticed that this is a pretty great opportunity. From the LinkedIn blog:

Technical talent is in high demand. As of publishing this post, a LinkedIn job search for “Software Engineers” in the US reveals more than 100,000 open jobs. Adding a couple more tech-related roles (“User Designer,” “Data Scientist”) increases the total to more than 200,000 job openings. Job seekers looking to meet job requirements can enroll in a Master’s degree program, but that comes with a 2-year opportunity cost. Now, a shorter path is emerging: fully immersive coding bootcamps.

Coding bootcamps typically last 6-12 weeks and require participants to show up to a class in person. Bootcamps are a relatively new model, but they’re a growing trend that could help close the skills gap. Tapping into the Economic Graph, we compiled aggregated data on over 150 bootcamp programs and more than 25,000 LinkedIn members who have indicated they are attending or have attended bootcamps to identify emerging trends.

Continue reading →

New in-depth profile on software engineering

We’ve released a major update to our career profile on software engineering.

See the updated profile here and the full report on which it’s based here.

Our recommendation in the profile:

Software engineering at large tech-firms is a highly promising option that’s especially easy to test out. If you have good analytical skills (even if you are from a humanities background), you should strongly considering testing it.

Topics explored in the full report include:

  • How to test out your fit for software engineering.
  • Using software engineering to pursue high-impact projects on the side.
  • A comparison of US and UK earnings – we found that average salaries are 40% higher in the US than in the UK, 80% higher in Silicon Valley than in London, and starting salaries for bootcamp graduates are around twice as high in Silicon Valley as in London.
  • What software engineering is like day to day and the key stages of progression.

Continue reading →

The camel doesn’t have two humps – update to software engineering profile

In our current software engineering profile, we say:

Programming ability seems to roughly divide into two groups: those who find it relatively easy and those who don’t. If in the past you’ve done well at mathematics and science and can think abstractly, then it’s likely you can learn to program well enough to get an entry-level job within about six months.

In evidence of the first claim, one piece of evidence we cited was a paper called “The Camel Has Two Humps” by Dehnadi and Bornat.

However, we’ve just discovered that Bornat has publicly redacted this paper. He says:

It’s not enough to summarise the scientific result, because I wrote and web-circulated “The camel has two humps” in 2006. That document was very misleading and, in the way of web documents, it continues to mislead to this day. I need to make an explicit retraction of what it claimed. Dehnadi didn’t discover a programming aptitude test. He didn’t find a way of dividing programming sheep from non-programming goats. We hadn’t shown that nature trumps nurture. Just a phenomenon and a prediction.

Though it’s embarrassing, I feel it’s necessary to explain how and why I came to write “The camel has two humps” and its part-retraction in (Bornat et al., 2008). It’s in part a mental health story. In autumn 2005 I became clinically depressed. My physician put me on the then-standard treatment for depression, an SSRI. But she wasn’t aware that for some people an SSRI doesn’t gently treat depression, it puts them on the ceiling. I took the SSRI for three months, by which time I was grandiose, extremely self-righteous and very combative – myself turned up to one hundred and eleven. I did a number of very silly things whilst on the SSRI and some more in the immediate aftermath, amongst them writing “The camel has two humps”.

Based on this, we’ve removed the paper from the profile, and removed the claim about the distribution dividing into two clumps.

We intend to do a more thorough review of the predictors of success in this field when we release our full profile of software engineering in the new year.

Did we make a mistake in this case? The profile was only at the “considered” stage, so not the result of in-depth research. Even so, when most skills and abilities are normally or log-normally distributed, we should have been cautious about the existence of a bimodal distribution without relatively strong evidence.

Continue reading →

Learn to code in 16 weeks for free in the UK at Founders and Coders

Introduction

Ben Clifford

Are you interested in doing something like App Academy to learn to program, but in the UK? Makers Academy is often thought to be the best option, and we’ve had good reports from one of our members. But it costs £8,000. What about doing something similar for free?

In this interview, Ben Clifford – another member who changed his career due to 80,000 Hours – tells us about a free alternative called Founders and Coders. Ben recently went through the course, and is currently working at a startup in London.

If interested, you can apply here. the deadline for the next round is on Friday.

Summary of main points:

  • Founders and Coders is a free coding program based in London.
  • The course aims to make people full stack javascript developers in 16 weeks.
  • The biggest benefits of doing a coding course are providing structure and tackling motivation problems.
  • The weakest point of Founders and Coders is links to employers but Ben thinks this would not stop determined students can get jobs.
  • The most important thing for getting a place is commitment to becoming a software developer. Being motivated to do good in your career also improves your chances.
  • Applications for January close on Friday 12th December. You can attend taster days by supporting their Indiegogo campaign.

Continue reading →

Case series – why and how to learn programming

Software engineering is a lucrative career with an unusually low barrier to entry. Due to its appeal, some people in our community have switched into programming via many different routes. To help guide other individuals who are considering making this transition, we’ve gathered the five people in our community’s experiences learning to code and getting employed as a programmer.

  • Some programmers say that they enjoy their work because of the puzzles and problems involved in programming. They also say that they enjoy being drawn into a flow state.

  • One undesirable characteristic of software engineering is its white male monoculture.

  • Other common peeves are the need to understand large existing codebases and engaging in the boring aspects of fixing broken software.

  • People learn to program in a variety of ways including App Academy, computer science degrees, and teaching themselves while doing another job.

  • It’s easier to get hired if you’ve done an internship. Applying widely also helps. One App Academy graduate applied to 30-40 companies, out of which he got 5 phone screenings / code challenges, 2 in person interviews, and one offer.

Continue reading →

App Academy interview with Buck Shlegeris

Buck Shlegeris is a teaching assistant at App Academy in San Francisco. Buck plans to use his earnings in programming to give to charities that improve the future. We discussed whether 80,000 Hours members can start a career in programming by doing a coding bootcamp. Below are some edited notes from our conversation.

Summary of main points:

  • People can enter training at App Academy from an unrelated background such as philosophy or other humanities with a few weeks of preparation.

  • The application includes some programming challenges and takes takes 10-20 hours to complete.

  • The course requires 60+ hours of work per week for 12 weeks.

  • 90% of App Academy students make it to graduation. By asking for help if you are failing to progress, you can probably further reduce the chance of dropping out.

  • Over 95% of App Academy graduates seeking employment as programmers attain it.

  • The average income of graduates is $100k in San Francisco’s Bay Area, with 90% securing an income from $80-120k. In New York City, the average income is $84k.

Continue reading →

In which career can you make the most difference?

The-fork-in-the-road_0

Introduction

Previously, we introduced a way to assess career opportunities in terms of their potential for positive impact, but which careers actually do best on these criteria? In this post, we’ll apply an adapted version of this framework to some career paths that seem particularly promising for recent graduates. Using what we’ve learned over the past two years of research and coaching over 100 people, we’ll provide a ranked list of options.

Summary

  • If you’re looking to build career capital, consider entrepreneurship, consulting or an economics PhD.
  • If you’re looking to pursue earning to give, consider high-end finance, tech entrepreneurship, law, consulting and medicine. These careers are all high-earning in part due to being highly demanding. Our impression is that software engineering, being an actuary and dentistry are somewhat less demanding but also highly paid.
  • If you’d like to make an impact more directly, consider party politics, founding effective non-profits, working inside international organisations, government or foundations to improve them, and doing valuable academic research.
  • If you’d like to advocate for effective causes, consider party politics, journalism, and working in international organisations, policy-oriented civil service or foundations.
  • Some career paths that look promising overall are: tech entrepreneurship, consulting, party politics, founding effective non-profits and working in international organisations.
  • Some paths we think are promising but are largely neglected by our members and would like to learn more about are: party politics, working in international organisations, being a program manager at a foundation, journalism, policy-oriented civil service and marketing.

Continue reading →

Case study: can I earn more in software or finance?

Software

Jessica is a software engineer at Google, who donates much of her income to GiveWell recommendations and 80,000 Hours. She plans to continue pursuing earning to give, and came to us wondering whether she might be able earn more using her skills; in particular by switching into finance or moving to Silicon Valley.

Summary of lessons learned

We found:

  • An engineer at Google can expect to earn about $150-$200 p.a. after 3 years of experience, which will then grow at 2-6% p.a. afterwards.
  • Google engineers are among the most highly paid engineers in big companies.
  • Google engineers do not appear to earn more in Silicon Valley compared to major East Coast cities, although software engineers on average earn more in the Valley.
  • She may be able to earn more by switching into finance, but we need to do more research.

Continue reading →

Case study: choosing between working at Effective Altruist organisations, Earning to Give and Graduate school

Introduction

Back in May 2013, I realized I would be graduating in a year and wondered a lot about what I should pick for my first career. The questions I had at the time were:

1.) Should I aim to work in an Effective Altruist organization, go to graduate school, or should I earn to give?

2.) Where should I look for employment if I want to earn to give — law, market research, or programming?

I spent a little time considering other options (finance and consulting careers), but the bulk of my time was spent comparing EA org employment, grad school, and the three earning to give careers.

Lessons learned

  • Direct work in EA is promising, but there are limited employment opportunities and a generally strong base of talent to draw from that makes replaceability an issue.

  • Graduate school also seems promising, but programs with high direct impact seem limited in employment opportunities.

  • It’s important to consider factors about the career other than salary when doing earning to give. Law was my best earning to give opportunity at first glance, given that it had the highest salary of the options I was willing to consider. But when I looked more deeply at non-salary factors, it became my worst option.

  • Market research and computer programming are my most promising paths and I should consider both further. They allow good salary potential while offering many other benefits.

  • Publishing my ongoing thought process was valuable in ways I couldn’t even imagine at the time, creating the opportunity to meet people I couldn’t have met otherwise.

  • Spending time directly in Oxford was also incredibly valuable in meeting with people that could help me think through my decision process.

  • An analytically-minded person can train in programming quickly enough to seriously consider programming as a career path. While I started with intermediate computer programming knowledge in irrelevant computer languages, it took me about 150 hours of training over 20 weeks to know enough to interview competently. I don’t know if this is a unique case, though.

Continue reading →

Research into the earnings of software engineers

Software

Introduction

We recently did a case study for an individual who has worked at Google for several years in an East Coast city, earning between US$140k and US$180k, and donating a large fraction to GiveWell recommended charities and 80,000 Hours. They asked us the following questions about their expected earnings in software engineering:

  1. What are my prospective earnings if I continue as an engineer at Google?
  2. Could I earn more by moving to Google HQ in California?
  3. Could I earn more by joining a start-up in Silicon Valley?
  4. Could I earn more by becoming a programmer in finance?

We interviewed five people about these questions (see full details at the end of this post) and did a simple analysis on Glassdoor. In this post we present notes on our findings.

Summary of findings

In summary, we found:

  1. They can expect their salary to increase 2-6% per year if they stay at Google.
  2. They probably can’t earn more by moving to Google HQ in the Bay Area, though we encouraged them to ask more people about this.
  3. They can probably expect to earn more by joining a start-up. But we’re still investigating this issue so aren’t confident.
  4. We’re unsure whether they can earn more by entering finance, though there is potential for significant salary increases so we recommended they speak to a head-hunter, and eventually apply to several companies.

Continue reading →

Software engineering: Britain vs Silicon Valley

Several British members of 80,000 hours, both students and people considering switching careers, have asked about entering the field of software development. The field has a reputation as high-paying, and in Silicon Valley, the heart of the global software industry, average salaries are now reported over $104,000 (£66,000) with generous bonuses. This image is bolstered by the spectacular success of tech startup founders like Bill Gates and Mark Zuckerberg, communicated by news media and movies like The Social Network. Moving from salaried to startup status and back is easier than in many industries, a fact which should be of special interest to altruists with strong skills, as discussed in the two linked 80,000 hours blog posts. The media report fierce competition for engineers between companies like Facebook and Google.

Meanwhile, in the United Kingdom there have been recent news stories with titles such as “Computer Science graduates are the least employable in the UK”. What is the real story here? How attractive is the software industry for those who want to make money and use it to do good? In some ways, the British statistics are misleading, but they also reflect a real difference: software engineers in the US, and especially Silicon Valley, really are better compensated. This post will lay out the supporting data, and discuss ways people outside the United States can make their way to Silicon Valley.

Continue reading →

Salary or startup? How do-gooders can gain more from risky careers

Consider Sam, a software engineer at Google. His employer ranks highly in both quality-of-life and salary rankings. Sam is a great coder, and passionate about his work. But Sam is not satisfied: he is sorely tempted to take his savings and launch his own company. There are costs in taking the plunge: entrepreneurship would mean working harder, and investing time and money into a venture that might easily fail with nothing to show for it. On the other hand, success would mean bringing his vision to life, and potentially a financial payoff far beyond what he could hope for as a salaried employee.

Considering just these factors, Sam isn’t sure which way to go, like many other talented technologists. But if one of Sam’s goals is making a big impact on the lives of others, that can tip the balance towards entrepreneurship. Here’s how…

Continue reading →