- you increase value; your bosses team up with each other and claim the credit; you might even get booed for some minor deficiencies whereas they will be boasting about their achievements
- you are generous and do non-AGPL based open-source; parasites are waiting in the open, incorporate your code to their commercial offering, never paying you anything; your bonus will be rude complaints about bugs in your code in your issue tracker
- you work for minimal salary and generous equity; when push comes to shovel, CEO will kick you out of the company due to "company problems" and claim your equity; bonus to the threat to your existence will be burnout from overworking and lack of credit
- your company creates a new opening for a lead position in your team for which you are the primary candidate; managers of other teams privately ask you if their friend can be pushed to your manager as the "one"
Can’t agree more. OP argument only holds if “value” is an absolute and objective concept and if everyone in the company is measured by it.
It just does not work like that. It’s a simple maximization problem. If your ideal is science and engineering and good code then your value will only be recognized by people who share the same ideal and these people are usually not the one distributing money.
If your ideal is making money then you will do everything in the book to make sure that the ones that distribute it mostly distribute it to you. That means taking credit, over promising, transferring blame, sabotaging careers, networking, shmoozing, etc...
Sounds familiar? That’s the ABC of the corporate world. That’s why most large companies end up being steered by incompetent people (Peters principle, IOW the last level you can reach before your incompetence really shows and shmoozing is not enough anymore).
If money is what you are after, either stay in a big Corp and forget about technical excellence or start your business and pray. Or, realize that there can be other form of rewards than money for your excellence.
> you are generous and do non-AGPL based open-source ; parasites are waiting in the open
This is not you being generous or them being parasite. BSD type license is not "hint hint GPL type honor code". You need to communicate what you want from others trough the license.
If you use non-AGPL or non GPL open license that's a sign that others can exploit your work for commercial purposes without contributing back money or code.
If you use BSD type license and others exploit it like it was intended to, don't complain. If someone uses AGPL or GPL, but you need the code don't complain. Offer money or code.
Yes, I don't like how some people try to rationalize the circus that really goes on. In reality, for most people, it's chaos, it's random and it doesn't make any sense... For a select few people everything just happens to work out; then these 'survivors' feel compelled to lecture everyone else about how everything works... In reality, these 'survivors' know nothing about how things really work because their personal experience is so far from the norm that it is not applicable to anyone else except themselves and other equally biased survivors.
You must have worked at some really terrible companies. While I don't doubt this is the case at some places the places I've worked haven't been like this at all.
"- you work for minimal salary and generous equity; when push comes to shovel, CEO will kick you out of the company due to "company problems" and claim your equity; bonus to the threat to your existence will be burnout from overworking and lack of credit"
I have personally seen this more than a couple of times. The worse I have seen is the CTO having worked for the company for a few years get fired and then his shares diluted away to nothing.
There is a correlation between these types of CEOs and hiring fresh grads. They are more susceptible to this type of brainwashing. Engineers with a few more years of experience having seen this are more wise.
I think you completely missed the point of the article. The point is that the total perceived value delivered to customers is the long-term cap on your salary.
Your company can't charge more than the perceived value delivered, and they can't pay you more money than they charge the customers.
To add to your points. In my opinion, the reason people in corporate companies can behave as you describe is that once corporate companies get moving they are hard to stop. Like a ship. When the company was started it was innovative and found a product that was required by millions of people. These millions of people will continue to use product despite corporate shenanigans happening in different internal teams.
People will continue to use Google to search for pages on the Internet despite all the products Google launches and retires. Millions will send parcels using FedEx no matter what software is used to run it. All manner of corporate games can take place at FedEx i.e. use Oracle or Posgresql. Remove Java, use PHP ... it doesn't matter people will still send their parcels. I know I am over generalizing but the shenanigans make it hard to tie your contribution to revenue.
In reallity its not your problem if the company is not able to extract value from your work. Your work has a price they have to pay it weather they extract value or not. What if a terrible farmer buys a lamborghini tractor covered in gold then tells the person making it that the tractor only produced 10 dollars so he is going to pay for it 3 dollars. Some other farmer might get a lot more production from the same machine. Or what if i hire a team of nasa experts to build the most advanced and revolutionary nut cracking device then realize i just wasted a lot of money for nothing? Can i tell the experts sorry but nut cracking does not produce the value to justify the cost of the machine so you will not get paid. Its complete nonsense.
The real issue is that the converse statement is rarely true. Providing less value to your customers is a way to be paid more. Obviously as the entire thread points out, the outcomes are probabilistic in nature and certain job titles have low ceilings on wages as do certain companies.
As a barber, you can only cut one person's hair at a time. Regardless of your customer service, this will limit your impact and compensation. Own a chain of barbershop and you'll impact more people and be compensated accordingly.
This thread seems to dedicated to the annoying cap on individual contribution in a team game.
If you get recognition as the golden goose, many companies will promote rather than kill. Getting recognition is a part of figuring out where value is added .
Creating value is fundamental to the job but no one is going to give you money whether you create value or not.
You have to both create value and proactively take the cut of the profit you deserve.
Giving away code is no big deal. Code is a rapidly depreciating asset and everything you create you will create something better tomorrow.
You give people code to demonstrate what they have the opportunity to buy if they want to make money. If they are stupid they don't pay and you find smarter people who want to make money.
IMO, that's a bit too cynical. How could a business grow if it doesn't create any values at all?
Reality is more nuanced and what can be considered 'value' are harder to tell but overall I think one should always strive for excellence in making values for the society. My experience working in different jobs (most are non IT) is that as long as you can create values, there will be a suitable place for your ability.
> This is why I struggle with scenarios where people discuss pay and work without considering value.
Counter-point: firms exist.
If I'm the one figuring out how to create value, why the hell are the C suite, middle managers, and investors getting 99% of the profits?
So no, in the context of a large firm, it's definitely NOT an engineer's job to figure out how their skills align with market demand. And that's the whole damn point of a firm.
Now, this may be reasonable advice if I want to maximize by income. But maybe my goal is to maximize income under the constraint that "my excellent engineering" is the primary consideration in my performance evaluations. And there's nothing wrong with that; people trade income for all sorts of things. Telling someone not to make that trade-off is like chiding them for buying an expensive latte or sending their kids to an expensive private school. It's not your money, so it's none of your business.
edit: And, furthermore, the success of large firms and the high compensation available at those firms suggest that the author's advice might actually be actively harmful. As an engineer, you might actually be better off ignoring engineering-value alignment because you might be better off simply executing well within a well-oiled machine.
Profits by definition are calculated after labor costs are deducted, so employees get 0% of the profits in salary.
However, take a look at your company's accounts and see how much of the gross revenue is paid out as wages and salary. It'll be a big chunk. There's your share.
But, to continue your analogy - if you're asking me advice on how to make ends meet, then it absolutely is my business to chide you for the expensive lattes you buy daily.
The point discussed in the article is very valid: you need to be perceived as "delivering value" - otherwise, your compensation will suffer. That's the whole reason why you earn well working in finance - not because "only the smartest make it there", but because you're very close to the money. The money a quant brings in can be connected to him with a very short line.
> As an engineer, you might actually be better off ignoring engineering-value alignment because you might be better off simply executing well within a well-oiled machine.
This is generally the approach for maximizing cash compensation, in lieu of being a highly sought after programmer by Google et al. That and jumping from jobs every 2 years for 20-40% pay increase.
By Value, I think OP is talking about value in the context of an engineers role.
For an engineering, you can create linear value with your amazing code, but as you contribute more broadly (architecture design, mentoring, code-reviews, etc), you multiply the value you provide.
> If I'm the one figuring out how to create value, why the hell are the C suite, middle managers, and investors getting 99% of the profits?
Yes, the original statement is totally reasonable:
Ultimately, I want a profitable product to be a byproduct of my excellent engineering, not have my engineering be just a means to an end, of getting to a profitable product.
In other words, “I want to work for a company that values engineering excellence.” And the reply is something like, “you don’t understand how business works”? It’s true that an understanding of the concepts in the article will help you recognize a good business so that you don’t go to work for a company started by engineers with no understanding of business themselves, but you don’t want to work for someone that has a knee-jerk reaction to bringing up engineering quality as something important, either.
Depends on whether you want to be a fungible cog in a race to the bottom on compensation. If yes, then you should make yourself a commodity. But if you want to move up the value chain, you should find out where those links are and start climbing.
Unless you want to be micromanaged you need to keep the big picture in mind and think about how your work is providing value and how you can help maximize that.
I completely endorse the suggestion that engineers should learn to understand this concept. If you learn one thing in your career, it should be this. One of the differences between working at BigCorp versus working at SmallCo or VentureCo is that in the smaller companies the relationship is much easier to trace out.
Dan Warmenhoven (when he was CEO of Network Appliance) had a wonderful way to very clearly explaining this in an accessible way. From gross margin to net margin to the fraction of the margin that was allocated to engineering.
But the other concept, on-off splits, is also something which I think managers need to understand a bit too. When I was at Google their compensation system tended to unfairly bias toward people delivering features and I and others argued for recognition of people that made delivering those features possible (which finally came about in 2009). As a manager you have to recognize when someone on your team or in your organization is helping the whole team work better or get more done. Whether that is an administrative person who is keeping things in the group calendar current or a tools engineer who is keeping the build running smoothly. If you're lucky they will be sick for a week and you'll see the entire organization hiccup as it adjusts. I say lucky because that will give you visibility into their contribution you might not otherwise have until it is too late.
When I was at Google their compensation system tended to unfairly bias toward people delivering features and I and others argued for recognition of people that made delivering those features possible (which finally came about in 2009).
Interesting. I started at Google as a SWE in 2009 and I did not see any of this. I left in 2011 so I don't know how the situation is today.
However when I worked there it was obvious that when promotion cycle came everyone was first to claim they "put feature X into Y", even if they were just the ones doing the wiring, not the ones implementing the actual thing.
The situation was aggravated by the fact that promotions were (probably still are) in the hands of "promotion committees" (which most often did not have a damn clue about your product or team and who contributed what in reality) and not in the hands of your boss. As a result I saw promotions biased towards the most shameless liars and self-promoters.
I’ve had coworkers confide in me that their value isn’t being seen. Some were really good, some were constant problems to be managed. I have seen this scenario you observed, and my standing advice is take a week off.
If people are glad you came back then you are correct and you need a raise or more power or both. If they just ask you about your trip then your perception of your value is out of whack.
> In basketball, there’s a metric they started tracking in recent years called on-off splits. Simply, it’s meant to capture how much better your team is with a given player on or off the court. I love this metric because it’s an attempt to measure an individual’s impact on a team’s performance with an acknowledgement that individual statistics can’t paint the full picture.
Also found that 'on-off splits' metric so resounding.
I sometimes wonder if the vulgarity of capitalism forces us to think this way. You don't see lawyers, doctors, or capital-P engineers thinking this way. They have to think about the state of the art and practicing their craft with the utmost attention to detail. Anything less would be unprofessional.
And yet we programmers hear this story time and again: you don't matter, your craft doesn't matter: _all_ that matters is getting that money. If that's what your company values then that's what they'll make you do... and we don't have any profession to back us up when we say, "That's not good enough."
I suspect this is part of the story of how the Equifax's and the like happen: we prioritize profits over integrity and the consumer pays. If you, the professional software developer, refuse the company will simply find someone else who will. And they will probably hire them for less.
And yet if we were to raise the bar, stakeholders argue, then programmers would not be affordable: producing software would be too expensive and nobody would do it.
Programming craft does not matter because programming craft has no content. Doctors treat and fix bodily ills; their actions— the uses of their craft— are determined by the state of the patient. Similarly, lawyers' craft is determined by the content of the law. (The results can be encouraging or horrifying depending on whether the laws that apply to your time, place, and situation are just ones.) What determines the content to which a programmer's craft is applied? If it does not make money or serve the public good that your nonprofit addresses, why should your firm support it?
I say this as a programmer who likes writing beautiful code. Nevertheless, when we look around, we see no equivalent of charity hospitals for coders, where philanthropists donate wings and endow chairs to advance the state of the craft. (Not to disparage what we do have: CS Departments, GitHub, some open source foundations are awesome, but do not reflect similar public standing.) Our craft is not valued on its own terms because the broader society does not believe it is inherently beneficial to them. In a day when facebook and twitter throw our elections open to tampering, uber does... whatever uber does, and everyone's even more addicted to Netflix than they were to TV, can you blame them?
Lawyers are valued because they make society freer and fairer. Doctors enhance human dignity by caring for those made weak by sickness. Do you have an equivalently positive outcome for what our profession does when left to its own devices? If not, it's rightly difficult to appeal to the pieties of your profession with someone who does not share that profession.
This isn't meant to be a rebuke, rather, a reminder that good skills are unhelpful unless put to good use. If you don't like money as a means of keeping score on that, there's plenty of work in the public and nonprofit sectors.
"I sometimes wonder if the vulgarity of capitalism forces us to think this way. You don't see lawyers, doctors, or capital-P engineers thinking this way. They have to think about the state of the art and practicing their craft with the utmost attention to detail. Anything less would be unprofessional."
That's ridiculous. Of course they think this way. How many doctors are working in a hospital doing the latest surgical technique, versus how many have opened their own office? Do you think opening a private practice means you concentrate more on medicine vs. administration?
They do it because it pays more.
Thinking programmers are unique in having to balance their profession and business is just plain wrong. It's true that most professionals might not think about it that often, but then again, most programmers don't think this way either.
If you pretend simple economics is best representation of reality then this blog post is exactly on point, in a perfectly efficient market the value you earn for others is proportional to the profit you get in return and both are proportional to the good you do in the world.
Simple economics are not the best representation of reality.
For many pride in one's work can matter more than pay, the engineering profession attracts some of the most passionate do-gooders (Gates to name a famous example) who care about the world improving. They aren't usually recognized for it because they try to improve the world by fixing the systems rather than flying to a 3rd world country and building a house.
Additionally, in reality but not in simple economics, there is a huge gap in value-generated for the company and perceived-value-generated for the company. In fact, there can be situations where the two are negatively correlated and the engineer knows best.
Finally let's remember that short-term value to the company isn't the end-all-be-all. Did you know Zynga had some individual users who spent over 100 grand on virtual items? Great companies often arise by ignoring the short-term-profit and focusing on delivering a great product with a great experience, even if the market for it doesn't exist yet (i.e. what google did)
"We get our money from customers" doesn't actually cover many other very real use cases. Let's try:
- We get our money from bosses who want higher headcounts to justify their position.
- We get our money from competitive poaching, so that if GOOG/MSFT/FB has us the other firms don't.
- We get our money from salespeople tricking customers into buying our products. This deception is easier if the products actually meet a need, but that isn't required.
- We get our money from VC firms playing pyramid games.
- We get our money from government grants that need to get spent or funding gets cut next year.
- We get our money from grants that have to be spent to show investment in "innovation" or "modernization".
- We get our money from selling out users to drive advertising clicks.
- We get our money because...BTC is stupidly volatile.
~
It's extremely naive, in the modern economy, to say "herp derp just deliver value to customers and you'll get paid what you're worth".
EDIT: Nice downvotes. Again, consider that maybe the modern economy is so twisted and weird in software dev that maaaaybe this simple Protestant work-ethic narrative doesn't actually hold water. Sorry to burst your bubble.
> We get our money from selling out users to drive advertising clicks.
Advertisers are the real customer and users the product and all that. This perverse incentive is the driver of most garbage on the web. And not only is the user sold out, they are manipulated by the advertising, the products (e.g. search results, news pages) are manipulated, and now elections are manipulated (Because Facebook et al designed to put the user first would not have spread viral bullshit).
Engineers need to put morality and social good above making more money. Greed is not the god that people should be worshiping and designing economic systems around.
This smells like a straw man argument. Most of us don't have pie in the sky ideals about perfect codebases. we have practical, hard won expectations of a work-person like codebase and we want to build to that standard - not some higher perfection ideal. And being prevented from having good engineering by "get it out the door no matter what" is frustrating because 99.9% of the time that leads to crap service, overruns, and more crap work on top.
the exceptions like say "move fast and break things" are ... exceptions not the rule. your company is not a facebook like special snowflake and using the snowflake argument to drive poor engineering decisions just makes you look silly.
one essay i remember from ages back on Joel On Software was him describing working at a Jewish / Israeli bakery. the bread oven was rusty and broken on the outside and looked like crap. but inside it was spotless stainless steel, because the bakers knew that the inside was what counted, and any money spent polishing up the outside of the oven was just waste.
that is an exeellent way to see the software / value argument - you have to know where the value comes from, and make that part fucking perfect. the rest can just be hung together with string.
Any disagreements on which part needs to be perfect is really a misalignment if understanding the business
"If you want to increase your compensation over time, continue to put yourself in a position where you can deliver the most value."
This assumes an efficient market. In the real world, however, value of a software engineer's output is really difficult to measure. Indirect value (like helping a team member) is even more difficult to measure than direct value (like implementing features or solving bugs and so on).
> value of a software engineer's output is really difficult to measure
True, but you can make it easy for your boss to conclude that you do deliver a lot of value. For example, don't assume he knows what it is you're doing, or the value of it. Show it and tell it and remind him. It's what any good salesman does, and face it, we're all salesmen one way or another.
This is really dishonest and disrespectful to people. Most companies are dictatorships, where all of the profits that come from maximizing value to customers do not go to employees. Employees have absolutely no say in it whatsoever and in fact are paid for their time for the sole purpose of not sharing profits with them.
I don't think it's disrespectful, because I think this is what the OP is saying. When considering how to make money in this business, you need to look at the company you're working for. He emphasizes that if it does not provide value, you won't do well there. If it's overly greedy, the same holds.
It's worth noting how good we have it: when you examine career salaries against years of school required and unemployment/failure rates (i.e., insurance salesmen can make millions, but most don't/can't.) then software engineering is one of the highest paid professions in the US. Could this be true if a controlling majority of employers were so greedy?
> If you want to increase your compensation over time, continue to put yourself in a position where you can deliver the most value.
Implied in the article but not stated: it's not about how hard you work. Working hard has nothing to do with it. Nobody cares how hard you work. It's about what value you provide to the company.
The claim that "we get our money from our customers" is, on its face, wrong. Of course we're paid by the company, not the customer. The simple truth this article misses is that your wage is simply the price of your labor, and it is the firm that is paying it. The "value you add for customers" (however that might be measured) really doesn't come into the picture. The job market is competitive, and the amount your company pays you is primarily determined by how much they would have to pay someone else to do the same job.
> the amount your company pays you is primarily determined by how much they would have to pay someone else to do the same job.
This is true, but the thing you're missing is that there's not many folks out there that can add value for customers. That's why engineers who create value get paid so well, which is the articles point.
I've noticed that engineers that get paid the most tend to understand the technical and business trade-offs that come from decisions they make.
The customer pays the company for some perceived value. It may not even be real. But given that it is, the Engineer may contribute to the process, or the testing, or the coding. Which are useless to the customer and not even perceptible. Consider: if the same product were delivered without testing, would testing be valueless?
No, its the whole enchilada that the customer pays for. The Engineer is a part of the product but so is the guy on the loading dock, and in the mail room, and sweeping the floors.
No we have to look elsewhere for compensation justification. This religion (born out of the Agile process?) that only work contributing to customer needs has 'value' has got to go. Its false on the face of it.
Fellow engineers: your (loose) money comes from overcapitalized companies fighting for talent that can multiply their investor's bets or, at least, their investor's hopes.
I'm pretty surprised to read this. I did not observe any statistically significant correlation between "creating value" and "compensation". The examples are so overwhelming I feel it's on the OP to exemplify his rather false assertion:
- Big corps pay loads of cash to research centers that provide exactly zero value to customer.
- If you don't man up and negotiate no one will bump your compensation just because you're "creating value"
- Creation of value is so vague a term it's practically meaningless
There is no correlation between creating value and compensation, as compensation is set by a job market, where companies compete for workers with each other. It really doesn't matter how much value is created as long as the worker doesn't have a better choice.
- to understand one's value in $ terms, it needs to be measurable in some way.
Some possible ways to measure:
- for a product already being sold to customers, my features are helping retain customers (bug fixes, performance improvements etc) as measure by A/B testing or sales guys saying "that fix landed the sale".
- for a product not yet being sold, my performance in building the product is helping time to market as measured by improvement in sales and marketing results : "we landed a field trial today with the features I helped implement" or "those demo videos have improved response to our marketing campaign"
- for work in a large company, my performance helps my organization achieve some stated goal by its general manager. As measure by : "we got that thing done the GM laid our last quarter, his meetings with upper management were very positive and landed additional funding to the project"
Interestingly, for each of these, value in terms of $ gets more and more difficult to measure.
in my experience, working in smaller companies, value is much easier to understand, but the work tends to be "everyone sweeps the floor".
In larger companies the work tends to be more specialized - and potentially more "cool" but driven by harder to pin down dynamics of the larger corporation organism. It also tends to be more "maddening" as the organization flip-flops around trying while seeking extremely difficult to attain growth.
The value I can deliver is strictly limited by the sales department these days. In the last four years, I have increased the value proposition of the business 100x-1000x (hard to know for sure, but not less than that) with my team's contributions (team of 2), yet I have not gotten a raise. No matter what I do, if we don't sell more, the value does not increase. So why should I care about the value I'm delivering when it does not affect my pay whatsoever?
Let's face, it almost all jobs are like this. Certainly all startups that are running on others' funds. Certainly all big corps. The author here is talking about a very small percentage of companies where individual contributors can actually contribute to the value of the company and the company reciprocates in value to the employee (pay). The one company that I worked in where this was the case, gave decent single digit raises. Hardly commensurate with value, but not bad.
In other words, there's no reason to focus on value provided for an employee at most companies because such focus is either unrewarded or almost unrewarded.
Tangent: had a similarly disappointing experience with Coinbase. Not worth going into details, but I walked away feeling like the application wasn't taken as seriously as I would have expected.
> If you want to spend your life crafting beautiful code with headphones on, you can absolutely do that. You will get paid just fine for that. But if you’re not influencing others and helping the broader team execute, you’re setting a ceiling on the degree to which you can contribute to the company’s output.
How does building a stable, easy to maintain, extensible product not help the broader team execute?
"All you can contribute is what your own two hands can code."
The value of which has no obvious bound. The failure rate of software projects is huge and each failure can easily cost millions of dollars, or much more if it amounts to a product failure or business failure.
A single engineer's technical choices can easily make or break a project. It's hard to tell later which were the crucial choices, though.
> This is why engineering career ladders start to layer in responsibilities for things that a single individual can’t accomplish themselves. This doesn’t mean you need to become a manager, but it does mean you need to look beyond yourself to maximize the value you’re able to bring to the people who are ultimately paying you.
This is where I am right now. I've been a dev professionally for 2.5 years, and I'm looking ahead to what it will take to become a lead and eventually a senior engineer. I notice other senior engineers around me continuously providing value to those other than themselves: in the form of contributing more documentation, directing and organizing design meetings, and in general taking time to gather others to solve a recurring technical issue org-wide, once and for all.
bitL|8 years ago
- you increase value; your bosses team up with each other and claim the credit; you might even get booed for some minor deficiencies whereas they will be boasting about their achievements
- you are generous and do non-AGPL based open-source; parasites are waiting in the open, incorporate your code to their commercial offering, never paying you anything; your bonus will be rude complaints about bugs in your code in your issue tracker
- you work for minimal salary and generous equity; when push comes to shovel, CEO will kick you out of the company due to "company problems" and claim your equity; bonus to the threat to your existence will be burnout from overworking and lack of credit
- your company creates a new opening for a lead position in your team for which you are the primary candidate; managers of other teams privately ask you if their friend can be pushed to your manager as the "one"
eeks|8 years ago
It just does not work like that. It’s a simple maximization problem. If your ideal is science and engineering and good code then your value will only be recognized by people who share the same ideal and these people are usually not the one distributing money.
If your ideal is making money then you will do everything in the book to make sure that the ones that distribute it mostly distribute it to you. That means taking credit, over promising, transferring blame, sabotaging careers, networking, shmoozing, etc...
Sounds familiar? That’s the ABC of the corporate world. That’s why most large companies end up being steered by incompetent people (Peters principle, IOW the last level you can reach before your incompetence really shows and shmoozing is not enough anymore).
If money is what you are after, either stay in a big Corp and forget about technical excellence or start your business and pray. Or, realize that there can be other form of rewards than money for your excellence.
Nokinside|8 years ago
This is not you being generous or them being parasite. BSD type license is not "hint hint GPL type honor code". You need to communicate what you want from others trough the license.
If you use non-AGPL or non GPL open license that's a sign that others can exploit your work for commercial purposes without contributing back money or code.
If you use BSD type license and others exploit it like it was intended to, don't complain. If someone uses AGPL or GPL, but you need the code don't complain. Offer money or code.
jondubois|8 years ago
Kalium|8 years ago
- you look around for growth opportunities, and learn that your company hasn't promoted any engineers in the past year
sumeno|8 years ago
thwos213112|8 years ago
I have personally seen this more than a couple of times. The worse I have seen is the CTO having worked for the company for a few years get fired and then his shares diluted away to nothing.
There is a correlation between these types of CEOs and hiring fresh grads. They are more susceptible to this type of brainwashing. Engineers with a few more years of experience having seen this are more wise.
WalterBright|8 years ago
aidenn0|8 years ago
Your company can't charge more than the perceived value delivered, and they can't pay you more money than they charge the customers.
mmsimanga|8 years ago
People will continue to use Google to search for pages on the Internet despite all the products Google launches and retires. Millions will send parcels using FedEx no matter what software is used to run it. All manner of corporate games can take place at FedEx i.e. use Oracle or Posgresql. Remove Java, use PHP ... it doesn't matter people will still send their parcels. I know I am over generalizing but the shenanigans make it hard to tie your contribution to revenue.
tmp98676|8 years ago
billf1953|8 years ago
As a barber, you can only cut one person's hair at a time. Regardless of your customer service, this will limit your impact and compensation. Own a chain of barbershop and you'll impact more people and be compensated accordingly.
This thread seems to dedicated to the annoying cap on individual contribution in a team game.
dreamfactored|8 years ago
saas_co_de|8 years ago
You have to both create value and proactively take the cut of the profit you deserve.
Giving away code is no big deal. Code is a rapidly depreciating asset and everything you create you will create something better tomorrow.
You give people code to demonstrate what they have the opportunity to buy if they want to make money. If they are stupid they don't pay and you find smarter people who want to make money.
coconut_crab|8 years ago
Reality is more nuanced and what can be considered 'value' are harder to tell but overall I think one should always strive for excellence in making values for the society. My experience working in different jobs (most are non IT) is that as long as you can create values, there will be a suitable place for your ability.
unknown|8 years ago
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dingo_bat|8 years ago
agumonkey|8 years ago
throwawayjava|8 years ago
Counter-point: firms exist.
If I'm the one figuring out how to create value, why the hell are the C suite, middle managers, and investors getting 99% of the profits?
So no, in the context of a large firm, it's definitely NOT an engineer's job to figure out how their skills align with market demand. And that's the whole damn point of a firm.
Now, this may be reasonable advice if I want to maximize by income. But maybe my goal is to maximize income under the constraint that "my excellent engineering" is the primary consideration in my performance evaluations. And there's nothing wrong with that; people trade income for all sorts of things. Telling someone not to make that trade-off is like chiding them for buying an expensive latte or sending their kids to an expensive private school. It's not your money, so it's none of your business.
edit: And, furthermore, the success of large firms and the high compensation available at those firms suggest that the author's advice might actually be actively harmful. As an engineer, you might actually be better off ignoring engineering-value alignment because you might be better off simply executing well within a well-oiled machine.
WalterBright|8 years ago
Profits by definition are calculated after labor costs are deducted, so employees get 0% of the profits in salary.
However, take a look at your company's accounts and see how much of the gross revenue is paid out as wages and salary. It'll be a big chunk. There's your share.
virgilp|8 years ago
The point discussed in the article is very valid: you need to be perceived as "delivering value" - otherwise, your compensation will suffer. That's the whole reason why you earn well working in finance - not because "only the smartest make it there", but because you're very close to the money. The money a quant brings in can be connected to him with a very short line.
balls187|8 years ago
This is generally the approach for maximizing cash compensation, in lieu of being a highly sought after programmer by Google et al. That and jumping from jobs every 2 years for 20-40% pay increase.
By Value, I think OP is talking about value in the context of an engineers role.
For an engineering, you can create linear value with your amazing code, but as you contribute more broadly (architecture design, mentoring, code-reviews, etc), you multiply the value you provide.
> If I'm the one figuring out how to create value, why the hell are the C suite, middle managers, and investors getting 99% of the profits?
That sentiment reminds me of this scene from The Wire: https://www.youtube.com/watch?v=1e10ZPVafUA (NSFW - Language)
dgreensp|8 years ago
Ultimately, I want a profitable product to be a byproduct of my excellent engineering, not have my engineering be just a means to an end, of getting to a profitable product.
In other words, “I want to work for a company that values engineering excellence.” And the reply is something like, “you don’t understand how business works”? It’s true that an understanding of the concepts in the article will help you recognize a good business so that you don’t go to work for a company started by engineers with no understanding of business themselves, but you don’t want to work for someone that has a knee-jerk reaction to bringing up engineering quality as something important, either.
dreamfactored|8 years ago
golergka|8 years ago
Because you're guaranteed compensation as an employee. You will get your salary even in the firm loses money - you're not taking any financial risks.
ajmurmann|8 years ago
ChuckMcM|8 years ago
Dan Warmenhoven (when he was CEO of Network Appliance) had a wonderful way to very clearly explaining this in an accessible way. From gross margin to net margin to the fraction of the margin that was allocated to engineering.
But the other concept, on-off splits, is also something which I think managers need to understand a bit too. When I was at Google their compensation system tended to unfairly bias toward people delivering features and I and others argued for recognition of people that made delivering those features possible (which finally came about in 2009). As a manager you have to recognize when someone on your team or in your organization is helping the whole team work better or get more done. Whether that is an administrative person who is keeping things in the group calendar current or a tools engineer who is keeping the build running smoothly. If you're lucky they will be sick for a week and you'll see the entire organization hiccup as it adjusts. I say lucky because that will give you visibility into their contribution you might not otherwise have until it is too late.
rsp1984|8 years ago
Interesting. I started at Google as a SWE in 2009 and I did not see any of this. I left in 2011 so I don't know how the situation is today.
However when I worked there it was obvious that when promotion cycle came everyone was first to claim they "put feature X into Y", even if they were just the ones doing the wiring, not the ones implementing the actual thing.
The situation was aggravated by the fact that promotions were (probably still are) in the hands of "promotion committees" (which most often did not have a damn clue about your product or team and who contributed what in reality) and not in the hands of your boss. As a result I saw promotions biased towards the most shameless liars and self-promoters.
hinkley|8 years ago
If people are glad you came back then you are correct and you need a raise or more power or both. If they just ask you about your trip then your perception of your value is out of whack.
karmakaze|8 years ago
Also found that 'on-off splits' metric so resounding.
agentultra|8 years ago
And yet we programmers hear this story time and again: you don't matter, your craft doesn't matter: _all_ that matters is getting that money. If that's what your company values then that's what they'll make you do... and we don't have any profession to back us up when we say, "That's not good enough."
I suspect this is part of the story of how the Equifax's and the like happen: we prioritize profits over integrity and the consumer pays. If you, the professional software developer, refuse the company will simply find someone else who will. And they will probably hire them for less.
And yet if we were to raise the bar, stakeholders argue, then programmers would not be affordable: producing software would be too expensive and nobody would do it.
mitchellst|8 years ago
I say this as a programmer who likes writing beautiful code. Nevertheless, when we look around, we see no equivalent of charity hospitals for coders, where philanthropists donate wings and endow chairs to advance the state of the craft. (Not to disparage what we do have: CS Departments, GitHub, some open source foundations are awesome, but do not reflect similar public standing.) Our craft is not valued on its own terms because the broader society does not believe it is inherently beneficial to them. In a day when facebook and twitter throw our elections open to tampering, uber does... whatever uber does, and everyone's even more addicted to Netflix than they were to TV, can you blame them?
Lawyers are valued because they make society freer and fairer. Doctors enhance human dignity by caring for those made weak by sickness. Do you have an equivalently positive outcome for what our profession does when left to its own devices? If not, it's rightly difficult to appeal to the pieties of your profession with someone who does not share that profession.
This isn't meant to be a rebuke, rather, a reminder that good skills are unhelpful unless put to good use. If you don't like money as a means of keeping score on that, there's plenty of work in the public and nonprofit sectors.
edanm|8 years ago
That's ridiculous. Of course they think this way. How many doctors are working in a hospital doing the latest surgical technique, versus how many have opened their own office? Do you think opening a private practice means you concentrate more on medicine vs. administration?
They do it because it pays more.
Thinking programmers are unique in having to balance their profession and business is just plain wrong. It's true that most professionals might not think about it that often, but then again, most programmers don't think this way either.
unknown|8 years ago
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alexandercrohde|8 years ago
Simple economics are not the best representation of reality.
For many pride in one's work can matter more than pay, the engineering profession attracts some of the most passionate do-gooders (Gates to name a famous example) who care about the world improving. They aren't usually recognized for it because they try to improve the world by fixing the systems rather than flying to a 3rd world country and building a house.
Additionally, in reality but not in simple economics, there is a huge gap in value-generated for the company and perceived-value-generated for the company. In fact, there can be situations where the two are negatively correlated and the engineer knows best.
Finally let's remember that short-term value to the company isn't the end-all-be-all. Did you know Zynga had some individual users who spent over 100 grand on virtual items? Great companies often arise by ignoring the short-term-profit and focusing on delivering a great product with a great experience, even if the market for it doesn't exist yet (i.e. what google did)
therealdrag0|8 years ago
angersock|8 years ago
- We get our money from bosses who want higher headcounts to justify their position.
- We get our money from competitive poaching, so that if GOOG/MSFT/FB has us the other firms don't.
- We get our money from salespeople tricking customers into buying our products. This deception is easier if the products actually meet a need, but that isn't required.
- We get our money from VC firms playing pyramid games.
- We get our money from government grants that need to get spent or funding gets cut next year.
- We get our money from grants that have to be spent to show investment in "innovation" or "modernization".
- We get our money from selling out users to drive advertising clicks.
- We get our money because...BTC is stupidly volatile.
~
It's extremely naive, in the modern economy, to say "herp derp just deliver value to customers and you'll get paid what you're worth".
EDIT: Nice downvotes. Again, consider that maybe the modern economy is so twisted and weird in software dev that maaaaybe this simple Protestant work-ethic narrative doesn't actually hold water. Sorry to burst your bubble.
eevilspock|8 years ago
> We get our money from selling out users to drive advertising clicks.
Advertisers are the real customer and users the product and all that. This perverse incentive is the driver of most garbage on the web. And not only is the user sold out, they are manipulated by the advertising, the products (e.g. search results, news pages) are manipulated, and now elections are manipulated (Because Facebook et al designed to put the user first would not have spread viral bullshit).
Engineers need to put morality and social good above making more money. Greed is not the god that people should be worshiping and designing economic systems around.
unknown|8 years ago
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lifeisstillgood|8 years ago
the exceptions like say "move fast and break things" are ... exceptions not the rule. your company is not a facebook like special snowflake and using the snowflake argument to drive poor engineering decisions just makes you look silly.
one essay i remember from ages back on Joel On Software was him describing working at a Jewish / Israeli bakery. the bread oven was rusty and broken on the outside and looked like crap. but inside it was spotless stainless steel, because the bakers knew that the inside was what counted, and any money spent polishing up the outside of the oven was just waste.
that is an exeellent way to see the software / value argument - you have to know where the value comes from, and make that part fucking perfect. the rest can just be hung together with string.
Any disagreements on which part needs to be perfect is really a misalignment if understanding the business
nawitus|8 years ago
This assumes an efficient market. In the real world, however, value of a software engineer's output is really difficult to measure. Indirect value (like helping a team member) is even more difficult to measure than direct value (like implementing features or solving bugs and so on).
WalterBright|8 years ago
True, but you can make it easy for your boss to conclude that you do deliver a lot of value. For example, don't assume he knows what it is you're doing, or the value of it. Show it and tell it and remind him. It's what any good salesman does, and face it, we're all salesmen one way or another.
foobarian|8 years ago
maxxxxx|8 years ago
zzzcpan|8 years ago
mitchellst|8 years ago
It's worth noting how good we have it: when you examine career salaries against years of school required and unemployment/failure rates (i.e., insurance salesmen can make millions, but most don't/can't.) then software engineering is one of the highest paid professions in the US. Could this be true if a controlling majority of employers were so greedy?
hinkley|8 years ago
dboreham|8 years ago
WalterBright|8 years ago
Implied in the article but not stated: it's not about how hard you work. Working hard has nothing to do with it. Nobody cares how hard you work. It's about what value you provide to the company.
Work smart, work effectively, not hard.
danieltillett|8 years ago
The further you are from the owner of the business the more likely you are to be rewarded for non-productive proxies.
devingoldfish|8 years ago
ryanto|8 years ago
This is true, but the thing you're missing is that there's not many folks out there that can add value for customers. That's why engineers who create value get paid so well, which is the articles point.
I've noticed that engineers that get paid the most tend to understand the technical and business trade-offs that come from decisions they make.
JoeAltmaier|8 years ago
No, its the whole enchilada that the customer pays for. The Engineer is a part of the product but so is the guy on the loading dock, and in the mail room, and sweeping the floors.
No we have to look elsewhere for compensation justification. This religion (born out of the Agile process?) that only work contributing to customer needs has 'value' has got to go. Its false on the face of it.
galfarragem|8 years ago
avip|8 years ago
zzzcpan|8 years ago
throwawayjava|8 years ago
andyidsinga|8 years ago
- to understand one's value in $ terms, it needs to be measurable in some way.
Some possible ways to measure:
- for a product already being sold to customers, my features are helping retain customers (bug fixes, performance improvements etc) as measure by A/B testing or sales guys saying "that fix landed the sale".
- for a product not yet being sold, my performance in building the product is helping time to market as measured by improvement in sales and marketing results : "we landed a field trial today with the features I helped implement" or "those demo videos have improved response to our marketing campaign"
- for work in a large company, my performance helps my organization achieve some stated goal by its general manager. As measure by : "we got that thing done the GM laid our last quarter, his meetings with upper management were very positive and landed additional funding to the project"
Interestingly, for each of these, value in terms of $ gets more and more difficult to measure.
in my experience, working in smaller companies, value is much easier to understand, but the work tends to be "everyone sweeps the floor". In larger companies the work tends to be more specialized - and potentially more "cool" but driven by harder to pin down dynamics of the larger corporation organism. It also tends to be more "maddening" as the organization flip-flops around trying while seeking extremely difficult to attain growth.
mnm1|8 years ago
Let's face, it almost all jobs are like this. Certainly all startups that are running on others' funds. Certainly all big corps. The author here is talking about a very small percentage of companies where individual contributors can actually contribute to the value of the company and the company reciprocates in value to the employee (pay). The one company that I worked in where this was the case, gave decent single digit raises. Hardly commensurate with value, but not bad.
In other words, there's no reason to focus on value provided for an employee at most companies because such focus is either unrewarded or almost unrewarded.
unknown|8 years ago
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zebraflask|8 years ago
unknown|8 years ago
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dboreham|8 years ago
zumu|8 years ago
How does building a stable, easy to maintain, extensible product not help the broader team execute?
jeffdavis|8 years ago
The value of which has no obvious bound. The failure rate of software projects is huge and each failure can easily cost millions of dollars, or much more if it amounts to a product failure or business failure.
A single engineer's technical choices can easily make or break a project. It's hard to tell later which were the crucial choices, though.
hinkley|8 years ago
z3t4|8 years ago
pricetag|8 years ago
This is where I am right now. I've been a dev professionally for 2.5 years, and I'm looking ahead to what it will take to become a lead and eventually a senior engineer. I notice other senior engineers around me continuously providing value to those other than themselves: in the form of contributing more documentation, directing and organizing design meetings, and in general taking time to gather others to solve a recurring technical issue org-wide, once and for all.
fahayekwasright|8 years ago
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