(1) Finance. They make so much "free" money that they can afford to just pay massive salaries and not blink. You just have to be okay with doing things that basically add no value to anything.
(2) As a very early employee in a hugely successful startup. But this is roulette, since most startups fail and some only succeed after so much dilution that your share ends up tiny.
(3) Working your way up to a CXO level (or near) role in a very large established company. This is hard and takes years of both work and corporate politics.
(4) There are some niches, like doing IT for oil and gas operations in remote areas, that I've heard pay very well... but these are almost like joining the army.
I'd say #1 and #4 are probably the most straightforward. If you want to pursue #2, you should approach employment with a super-early startup by thinking about it as if you are an investor. Would you take a small chunk in a seed round with this company? If not, pass, cause if you are taking a lower salary + equity you are making a seed investment.
Google/Facebook both minted several thousand millionaires at IPO. The vast majority weren't CXAnything.
I don't know whether the article is about income or wealth, but if one puts "big money" at, say, $250k of gross income, then it's clearly achievable in software. Options include a) get a job at AppAmaGooBookSoft and stay in it for 5~10 years or b) hang out your shingle as an independent consultant and charge $8k+ per week at 75% utilization.
I have personal experience with (4). I work for a company that creates systems that are used on oil rigs. I came about this job in a round about way. I used to work in SF at a big name tech company, but I'm from a small town with no tech community whatsoever. My parents got sick, and I wanted to live closer, so I made the move home to support them. Found this job though connections and here I am.
The systems we create are complicated and require automation (PLCs, embedded systems, PCs) to function, so the company requires programmers. The money is fantastic for two reasons: they have a really hard time finding people and money for oil companies shoots out of the ground (most of the time).
The work is different from most systems someone would deal with at a startup. The systems range in age from new to 20 years old. Object oriented is a new and scary thing. I write and debug a lot of pascal and C. Also do a lot of sysadmin work on ancient systems, token ring networks etc.
The biggest difference however is work environment. Most rigs have an absolutely awful (think dial up) satellite internet connection, so there is no remote work. Everything gets done on site. This leads to a lot of travel, which is where you make the big money if you are willing to do it. The work environment is a lot different from a startup: Folding chairs and a table in the corner of a room if you are lucky, sitting on the floor if not. You get to see some interesting and scary parts of the world, police escorts from the airport, body guards on the way to the rig in really bad places, which can be very isolating as well as traveling for months at a time.
(3) also probably takes something akin to an MBA, from what I've observed. Not a hard and fast rule, but just what I've seen.
I would also add that the "billion dollar VC series-B startup or bust" is not the only alternative to grinding away under the yoke of someone else. If you find a nice little niche that isn't drenched with developers (non-profits, serving lawyers, etc.) - You won't be a billionaire, but you stand a much better chance of creating a $million+ sustainable product or service company in that space.
(2) As a very early employee in a hugely successful startup. But this is roulette, since most startups fail and some only succeed after so much dilution that your share ends up tiny.
This is a very poor way of describing the risk / upside of joining a startup.
In the aggregate, the odds of any randomly selected startup may present odds similar to roulette, but practically, you have the ability to choose who you work with and which company you work on.
Given the ability to be selective, you can dramatically increase your odds of a successful outcome, assuming that you have the skill set to a) identify / evaluate market opportunity / team capabilities and b) utilize your technical ability to add significant incremental value to the company.
The early team at PayPal did not have a 1/48 chance of success; it was probably closer to 1/10.
Edit - (Not actually 1/10, but significantly higher odds than those of a startup selected at random) Odds were chosen to correspond to the given example of roulette.
If you want to make "big money," you should pretty much avoid WORKING at startups at all costs. Instead, get a high-paying job at an established company, and invest the difference in the startup's equity.
I've considered lots of startup jobs because I believed strongly in the companies. Every single time, however, I was able to get a larger chunk of the company by keeping my current job and simply investing.
To give an example, my current job pays about $250k, and one year, I invested $100k of that into a startup, leaving me with ~$150k of salary. This $150k + startup equity was a better deal than the startup was offering in both salary and equity. Plus, equity bought as an investor is much less tax toxic than equity options received as an employee of a startup.
On the other hand, most people who work at startups aren't interested in money. If that's you, that's totally cool, and I respect that!
Your comment assumes your presence/work has no impact on the success of the startup, which is an unfortunate thing to assume. Otherwise the two equity stakes have different payoff expectations.
This may be a really stupid question, but how do you cash out your investments in these startups? Do you have to wait for them to get bought out or can you sell your stake in the company to other investors?
I have a term I call "win at money". You've won at money when you have enough capital to live comfortably for the rest of your life just on the interest from low-risk investment.
Can you win at money in software? Yes, but pretty much only by founding your own company or being among the first handful of employees at a startup that gets huge. On the other hand, you can make a comfortable middle-class living at software very easily.
Your "win at money" is similar to the philosophy on Mr. Money Mustache[1]. He advocates shifting your lifestyle down a few notches in places where it doesn't affect you much, reducing your cashflow needs and making it easier to "win", or in his parlance be financially independent and retire early.
> live comfortably for the rest of your life just on the interest from low-risk investment.
50-100k/yr is a comfortable life in most places. That's 1.2-2.5 million in capital. Definitely don't have to start a company of be in a start-up for that at all.
That is essentially the definition of financial independence, and it's certainly possibly with a job in software. It just involves saving as much as you can afford to and taking advantage of compound interest early on.
I think this is a good point. It's also worth noting that there are pretty much no careers where you can just get a normal job and end up "winning at money". Finance is a possible exception, but it comes with its own tradeoffs and the biggest players generally leave their finance jobs to start their own funds.
Btw, is commonly referred to as Financial Independence (FI). There are also several online communities devoted to FIRE (Financial Independence Retire Early).
I know an Engineer at Microsoft who makes in the $500k+ range. Trust me, none of you would envy him (okay, some of you might). The way he does it is he's the guy who solves tough (not necessarily interesting) technical problems in the shortest time possible for x important feature. When .NET 4.5 was shipped you couldn't use the `await` keyword in a try-catch statement, because there was some issue with the debugger. He created a proof-of-concept in one month, but he threw an ungodly amount of hours at it. He's divorced and he lives at work. He's gets huge stock bonuses every time he does something like this, but, IMO, it's cost him a lot to get that money.
Key word: "employee". Where someone else tells you what to do and controls your destiny. You can wrap it up in whatever words are prettiest, but employees serve the founders' visions for the product, financial rewards, etc. (which is of course perfectly fine, given the risk founders take)
That doesn't mean the only choice is to become a founder, not everyone is there yet. Looking at the article though, you see the bias that defines so much of the literature: despite the fact that we're creating software that reaches the world, the only place to get a job is the west coast of the US, right?
Wrong. There are tons of places doing 7 and 8 figures in industries driven by software. Small businesses. Be prepared to rethink how your career works. If you want to just hack and live in your little hacking world with your fellow hackers drinking hacker beer and listening to hacker music, then you're just an employee. If you're willing to stretch, and embrace what makes business happen, and apply your technical skills to those problems, and tie your success to the success of the business, there are some tremendous opportunities to be had. There are plenty of non-VC'ed businesses owned by people making real money who are more than happy to reward those who help them make more.
In between GlassDoor data he talks about founders being the Lords of the Startup Feudalism and I kinda agree, companies used to pay 25-40k to an employee, a programmer/engineer can take several jobs from the industry henceforth the salary is 3x the regular salary. However the successful founder become rich and invest in other companies small, medium, big and help raise the inequality.
The link was dead. But to answer the question - I've known several engineers who have done very well. It's not $100+ million money, but in the 5-10 million range. The key was both being visibly talented (the kind of people universally recognizable as being capable of solving the hardest problems) and joining companies that grow like a rocket (Apple, Google, etc).
As the informal statistics police, I'm uncomfortable with directly comparing jobs such as lawyer or doctor that require specific (and in the doctor's case limited) degrees to ones that anyone can claim to be (there are no 15 year old part time doctors).
Also, while maybe not relevant to a discussion of $200k+ jobs, averages among employed people may not be the average relevant to you -- it's much easier to find work as a junior marginal software developer than a junior marginal lawyer.
the short answer is no. Why ? Statistics. 1-2% doesn't get you anywhere, after dilution, vc's getting, stake and if an eventual takeover happens. A 50mn takeover will leave a founder with about 6mn is an O.K aprox. Granted he had 50% of the company to start with, where does that leave you?
established company case:
As an employee you can hit the 1mn mark over a few years depending on the company. But that depends on what you mean by "big money"
after starting my own company and seeing modest success, i wouldn't want to get rich any other way. i feel much more in control this way, and even if it is an illusion, it's a useful one.
[+] [-] philbarr|11 years ago|reply
[+] [-] kelukelugames|11 years ago|reply
[+] [-] ForHackernews|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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[+] [-] cubano|11 years ago|reply
[+] [-] Bachelor|11 years ago|reply
[+] [-] seansmith1020|11 years ago|reply
[+] [-] api|11 years ago|reply
(1) Finance. They make so much "free" money that they can afford to just pay massive salaries and not blink. You just have to be okay with doing things that basically add no value to anything.
(2) As a very early employee in a hugely successful startup. But this is roulette, since most startups fail and some only succeed after so much dilution that your share ends up tiny.
(3) Working your way up to a CXO level (or near) role in a very large established company. This is hard and takes years of both work and corporate politics.
(4) There are some niches, like doing IT for oil and gas operations in remote areas, that I've heard pay very well... but these are almost like joining the army.
I'd say #1 and #4 are probably the most straightforward. If you want to pursue #2, you should approach employment with a super-early startup by thinking about it as if you are an investor. Would you take a small chunk in a seed round with this company? If not, pass, cause if you are taking a lower salary + equity you are making a seed investment.
[+] [-] patio11|11 years ago|reply
I don't know whether the article is about income or wealth, but if one puts "big money" at, say, $250k of gross income, then it's clearly achievable in software. Options include a) get a job at AppAmaGooBookSoft and stay in it for 5~10 years or b) hang out your shingle as an independent consultant and charge $8k+ per week at 75% utilization.
[+] [-] oilman|11 years ago|reply
The systems we create are complicated and require automation (PLCs, embedded systems, PCs) to function, so the company requires programmers. The money is fantastic for two reasons: they have a really hard time finding people and money for oil companies shoots out of the ground (most of the time).
The work is different from most systems someone would deal with at a startup. The systems range in age from new to 20 years old. Object oriented is a new and scary thing. I write and debug a lot of pascal and C. Also do a lot of sysadmin work on ancient systems, token ring networks etc.
The biggest difference however is work environment. Most rigs have an absolutely awful (think dial up) satellite internet connection, so there is no remote work. Everything gets done on site. This leads to a lot of travel, which is where you make the big money if you are willing to do it. The work environment is a lot different from a startup: Folding chairs and a table in the corner of a room if you are lucky, sitting on the floor if not. You get to see some interesting and scary parts of the world, police escorts from the airport, body guards on the way to the rig in really bad places, which can be very isolating as well as traveling for months at a time.
[+] [-] dccoolgai|11 years ago|reply
I would also add that the "billion dollar VC series-B startup or bust" is not the only alternative to grinding away under the yoke of someone else. If you find a nice little niche that isn't drenched with developers (non-profits, serving lawyers, etc.) - You won't be a billionaire, but you stand a much better chance of creating a $million+ sustainable product or service company in that space.
[+] [-] Plough_Jogger|11 years ago|reply
This is a very poor way of describing the risk / upside of joining a startup.
In the aggregate, the odds of any randomly selected startup may present odds similar to roulette, but practically, you have the ability to choose who you work with and which company you work on.
Given the ability to be selective, you can dramatically increase your odds of a successful outcome, assuming that you have the skill set to a) identify / evaluate market opportunity / team capabilities and b) utilize your technical ability to add significant incremental value to the company.
The early team at PayPal did not have a 1/48 chance of success; it was probably closer to 1/10.
Edit - (Not actually 1/10, but significantly higher odds than those of a startup selected at random) Odds were chosen to correspond to the given example of roulette.
[+] [-] watty|11 years ago|reply
[+] [-] rch|11 years ago|reply
[+] [-] lgieron|11 years ago|reply
[+] [-] 3327|11 years ago|reply
[+] [-] LeonRobrotsky|11 years ago|reply
So, most silicon valley startups?
[+] [-] arbitrage314|11 years ago|reply
I've considered lots of startup jobs because I believed strongly in the companies. Every single time, however, I was able to get a larger chunk of the company by keeping my current job and simply investing.
To give an example, my current job pays about $250k, and one year, I invested $100k of that into a startup, leaving me with ~$150k of salary. This $150k + startup equity was a better deal than the startup was offering in both salary and equity. Plus, equity bought as an investor is much less tax toxic than equity options received as an employee of a startup.
On the other hand, most people who work at startups aren't interested in money. If that's you, that's totally cool, and I respect that!
[+] [-] conjecTech|11 years ago|reply
[+] [-] burger_moon|11 years ago|reply
[+] [-] giuscri|11 years ago|reply
[+] [-] beat|11 years ago|reply
Can you win at money in software? Yes, but pretty much only by founding your own company or being among the first handful of employees at a startup that gets huge. On the other hand, you can make a comfortable middle-class living at software very easily.
[+] [-] zrail|11 years ago|reply
[1]: http://mrmoneymustache.com
[+] [-] brational|11 years ago|reply
50-100k/yr is a comfortable life in most places. That's 1.2-2.5 million in capital. Definitely don't have to start a company of be in a start-up for that at all.
[+] [-] kkamperschroer|11 years ago|reply
[+] [-] jeffreyrogers|11 years ago|reply
[+] [-] a_c_s|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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[+] [-] hacknat|11 years ago|reply
[+] [-] bdcravens|11 years ago|reply
That doesn't mean the only choice is to become a founder, not everyone is there yet. Looking at the article though, you see the bias that defines so much of the literature: despite the fact that we're creating software that reaches the world, the only place to get a job is the west coast of the US, right?
Wrong. There are tons of places doing 7 and 8 figures in industries driven by software. Small businesses. Be prepared to rethink how your career works. If you want to just hack and live in your little hacking world with your fellow hackers drinking hacker beer and listening to hacker music, then you're just an employee. If you're willing to stretch, and embrace what makes business happen, and apply your technical skills to those problems, and tie your success to the success of the business, there are some tremendous opportunities to be had. There are plenty of non-VC'ed businesses owned by people making real money who are more than happy to reward those who help them make more.
[+] [-] giuscri|11 years ago|reply
could you explain better?
[+] [-] nakovet|11 years ago|reply
[+] [-] mathattack|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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[+] [-] ultrasaurus|11 years ago|reply
Also, while maybe not relevant to a discussion of $200k+ jobs, averages among employed people may not be the average relevant to you -- it's much easier to find work as a junior marginal software developer than a junior marginal lawyer.
[+] [-] JanneVee|11 years ago|reply
[+] [-] signa11|11 years ago|reply
[+] [-] army|11 years ago|reply
[+] [-] 3327|11 years ago|reply
the short answer is no. Why ? Statistics. 1-2% doesn't get you anywhere, after dilution, vc's getting, stake and if an eventual takeover happens. A 50mn takeover will leave a founder with about 6mn is an O.K aprox. Granted he had 50% of the company to start with, where does that leave you?
established company case: As an employee you can hit the 1mn mark over a few years depending on the company. But that depends on what you mean by "big money"
Assumptions: big money > 5mn
[+] [-] tracker1|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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[+] [-] jrockway|11 years ago|reply
But I get to deduct state taxes from my federal taxes, so it's not exactly 10% different.
[+] [-] beachstartup|11 years ago|reply
after starting my own company and seeing modest success, i wouldn't want to get rich any other way. i feel much more in control this way, and even if it is an illusion, it's a useful one.
[+] [-] svimma23|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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[+] [-] pg_is_a_butt|11 years ago|reply
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