[mtgex]

This suffers from the same issue with using a real estate agent to buy / sell a house.

Agents are not financially incentivized to get you the best offer. They are financially incentivized for you to accept any offer, period.

The extra commission on negotiating a higher offer does not justify the time and energy. Additionally, it increases the chances that either party will terminate the negotiation outright.

Agents are not working for you, they are working on closing a deal and in fact the agent and the company they're selling you to have the exact same incentives. Get you in as quickly and as cheaply as possible.

Negotiation is more about soft skills, charisma, information obfuscation, and outright lying than it is about fighting to get what you "deserve."

[cornholio]

It all depends on the incentive structure. This product here is not the typical job agency, but a negotiation service that you can use when you already have an $100.000+ offer. Presumably, they will get paid proportional to the excess they can get for you on top of that, as either money or benefits (otherwise, you would just accept the offer).

The information asymmetry between the employee and company is huge: they know the market inside out, they negociate compensation packages every day and are strongly motivated to hide how bad they need to fill the particular position and how in-demand are those specific experts. Meanwhile, you only know your own salary and expectations, you are unable to objectively rank yourself and go on bits and scraps of information gathered here and there. This is a situation where you are ripe to be taken advantage of, especially on a booming market.

Where by "taken advantage of" I of course mean "sell your product for less than fair market value".

[jholman]

This is precisely the compensation scheme that seems best.

I think I'd be comfortable paying 1/3 of the boost, for as long as I keep the job (probably with repeat business for the agent, when I change jobs). Maybe with a cap of a few years?

On the other hand, that's probably not a very large slice of total wage, so it's still pretty small compared to the 20% that recruiters apparently get. But maybe agenting is a lot easier than recruitering.

Not that I'm looking for a dev job currently.

[EGreg]

I think this incentive structure can actually work! I would use this. If I applied for Jobs.

[rb212nyc]

I'm one of the 10x founders. Just wanted to comments here...I won't answer every question but this one felt important to answer. My thoughts are as follows...

There are mitigating factors as it relates to what we are offering and the concerns you raise -- and one misunderstanding.

The misunderstanding first...we are not selling anyone to anything. We have no involvement in finding you the job, we are not recruiters, we are not headhunters. So we have no alignment with anyone other than YOU.

The first mitigating factor is that we offer two different negotiation options. One is us leading the process and speaking directly to your prosepctive employer, the other is us advising you behind the scenes and you talk directly to your prospective employer. In both cases, we are working hand in hand with you so nothing that is being conveyed is something you're not endorsing. Our goal IS to get to a yes, but ONLY a yes that you feel good about. If you don't feel good about it, then the negotiation ends and we move on.

The other thing is that we're offering to provide this service during our beta phase as a pay what you feel it's worth to you. You could choose to pay us nothing...we need to EARN whatever amount you choose to pay us. So we are 100% incentivized to be both ethical and effective during this process. Because if we're not, you're not going to recommend us to others and you're not going to pay us. And honestly, this business will be built and has been built almost exclusively on recommendations and word of mouth so that's a MAJOR incentive to us.

I do agree with you about one thing though, negotiating is NOT about fighting. It's about presenting reasonable and substantiated reasons why certain points should be adjusted. It's about knowing the myriad of areas TO negotiate. It's about understanding the standards and practices across different verticals. And most importantly it's about truly understanding what YOU want out of a deal. Fighting has NO place in this process.

As a concluding comment, agenting is a VERY old profession and widely used in many other verticals. There is a very good reason for this, put simply, most people are not the best at advocating for themselves. But if that doesn't describe you, if you possess all the knowledge required to get you the best deal possible, that's great. No need for our help. Otherwise, let us prove to you why there is a difference. If you don't like it, don't pay us.

[whiddershins]

Great response the only thing I’d like to point out is that agenting is the most common and effective when someone needs repeat representation.

A musician or actor is constantly signing new deals and the agent needs (in theory) to balance any immediate incentive to close the deal versus long term income from retaining their best talent.

A salaried job negotiation is more similar to a real estate deal in that it tends represent a very large portion of the client’s financial world and happen much less frequently.

The divergence of incentives becomes harder to manage in that case, because each individual deal ends up being such a smaller part of the agent’s income than the client’s.

That’s a known problematic dynamic across many “verticals” that your answer only partly addresses.

[yanslookup]

> One is us leading the process and speaking directly to your prosepctive employer,

This is exactly what I want and would pay for. However, I wonder how this works in practice. I work for a fairly well known software company and am involved in the hiring process and I can say with about 90% certainty that negotiations would cease as soon as a candidate presented representation. And my gut is telling me that is the norm in the software industry.

Can you speak to this concern? Have you run in to this or has this come up at all for past clients?

[dpweb]

I find this facinating and quite exciting.

First of all, my experience is many tech people, generally underestimate their ability and earning power - sell themsevles short. Even true rockstars, is very common.

Especially when it comes to salary. People are REALLY uncomfortable asserting themselves for more money. Like, phobia level.

Plus the, you need to talk to my representative. That’s some serious signaling. I’d love to hear about the results they get.

[Aloha]

What I'd really love a company to do is offer a service where I can pay them to look for a job for me - I work 50+ hour weeks now, I dont have the time to go job hunting, I'd be nice if I could find a recruitment firm, who would work for me.

[gowld]

You invite people to start an engagement before stating the price. Your profession is negotiating high prices.

See the moral hazard? How do I know you aren't going to negotiate all the salary surplus into your fee? :-)

Sure, you're in a pay-what-you-want Beta now (fascinating, and wonderful if it turns out to be a profitably pricing structure long term!), but consider posting a pricing model up-front, something like "X% of the negotiated lift in 1st-year pay above your first offer from a company"

[jeff_marshall]

> The misunderstanding first...we are not selling anyone to anything. We have no involvement in finding you the job, we are not recruiters, we are not headhunters. So we have no alignment with anyone other than YOU.

How do you get paid? ... and the obvious corollary, why should I trust that our interests are aligned? (either as a candidate or a hiring manager?)

[michaelmior]

This doesn't seem to be taking reputation into account. Sure an agent can just try to close any deal to get their cut and move on. However, an agent who does this as a matter of practice is not going to have the same long payout.

[__jal]

Can't point to a study or anything, but the behavior of real estate agents in the wild would seem to contradict you.

[d0lph]

Couldn't you just rebalance the commission so the pay increase is the majority of the commission.

Not saying the current situation isn't messed up, but there is no reason it couldn't be fixed.

[bradleyjg]

It's hard to design an incentive structure that's perfectly aligned. In the case of a commission only on the increase, now they've gone from having too much of an incentive to get any deal done quickly to not enough of an incentive to close a deal even if it isn't a large increase. You can fiddle around with a fixed part and incentive part, but it is very hard to find the right spot. One alternative is to pay by the hour but that comes with its own set of perverse incentives.

[mtgex]

Yeah I can see that, although in that case you do need to prove to your agent what you were making before, and if they feel it's not worth their time they will be more likely to pass on working with you.

But that's a whole paradigm shift in thinking about agency, and they're perfectly happy with how things operate currently. They would have to spend a lot more time actually negotiating.

In the case of real estate, the idea that you absolutely need to work with an agent is so entrenched that it's very difficult to get anyone to consider the alternative outlook.

[Kiro]

No idea where you live but that's definitely not how it works in my country.

Real estate agents here do a lot. They decorate your apartment, take professional photos, create marketing campaigns on Facebook and all the big listing sites. You set a date and they handle the showings. After that there's one bidding.

The only way they would be able to sell it before the bidding is if someone makes an offer before the showings.

[gowld]

This is a middlebrow dismissal that argues against evidence (the pricing model and the negotiation style) that doesn't even exist in the OP.

[chapill]

None of that really applies to 10xmanagement specifically.