They can't compete. They'll never be able to compete on the money front.
If you're a senior C++ lead dev working in the front office of an Investment Bank you can make 250k-500k/year.
If you join a startup as an early employee and get 1% equity , assuming a 10% chance of exit after three years, the company would need to have a $1 billion dollar exit for the risk-reward equation to break-even.
There are a lot of ex-finance developers in the startup world, but overwhelming they're there as founders, as that's the only way they'll get enough equity for it to be worthwhile.
Your risk reward equation doesn't account for preferences. There are a lot of folks out there that would be turned off by a 0% chance of a big exit, which is what 250-500K/year is. Every startup offers a tiny chance of fame and fortune that a normal salaried position lacks.
Even if you want a chance of a big exit, it makes more financial sense to just put 20% of your salary into angel investments every year.
Sure there are other factors at play such as lifestyle, corporate culture, etc. But when it comes down to hard money startups can't compete with investment banks.
It depends a lot on what the average Wall Street Firm would do with that programmer. Is the hacker going to be doing (for example):
1.) IT Admin stuff (Creating accounts, internal admin tools)
2.) Backoffice Dev (plumbing code to book trades, query databases, feed data to risk and PNL reporting tools)
3.) Infrastructure (writing fast code that talks to exchanges to trade autonomously, or writing tools to help people run lots of regressions, experiments, and simulations with ease)
4.) Desk Quant / Quant Dev (writing valuation models, trader UI, tools for trading, tech support for traders, structuring new products, building the grand unified system that processes financial instruments)
5.) Prop Trading (finding new ways to trade for profit; systematizing that into software)
I'd say anyone who is skilled at either 3,4,5 is going to generate more value to the Wall Street firms than what most startups budget for hacker employees.
That's really apples and oranges. In many ways, Wall St and startups don't want the same programmers, at least not as much.
Working on Wall Street--or most large companies for that matter--is largely transactional. You provide a service. You get paid for that service. You tend to get paid quite well to make up for the abuse you often end up taking. This is particularly true if you work in financial markets (as most Wall Street programmers do) where there are two kinds of people: traders and people who don't matter (being everyone else).
With a startup--particularly an early stage startup--you're taking a long term stake in the company, possibly a significant stake. If it's particularly early that stake but will largely be in lieu of a market wage (or any wage at all).
In my experience the profiles of the people in both categories (in an ideal sense from the company's point of view) don't quite match.
Wall Street is large, and there are many types of firms there. Technology is a lot more important in a lot of Wall Street firms now than they used to, and, at the hedge fund I used to work at, programmers were the first class citizens and made many of the large decisions. The startup type is the perfect fit for these places - they want people who, with little management, can make innovative tools from scratch that will earn the place millions of dollars. And they pay a lot of money for this kind of person.
With respect to recent grads (bachelors, master, PhD), if you have loans to pay off, the allure of Wall Street is significant and understandable as it puts more money in your pocket tmw vs. 99% of startups.
In the case of these grads, it's not an issue of profile but simple arithmetic that results in Wall St winning.
I would say that Wall Street is probably more appealing to experienced professionals than it is to recent grads. People have goals (e.g. comfortable retirement) and very real needs (paying the house, providing for family, etc.) that take money to accommodate. Most people would gladly accept a salary that allows them to reach these goals faster than most alternatives.
You'd think they'd want to hire someone in philli who's willing to work two days a week onsite and the rest from home but no. It's like I have the plague whenever I mention it.
I have a similar issue. My attempt at a solution is to build a portfolio so compelling that employers will hire me for (mostly) remote work without qualms. Hopefully the market for developers is still strong when my portfolio is strong.
Failing that, I guess I'll move back to civilization.
I think that there's a certain dynamic with people that work in person that doesn't happen as much remotely; In person someone could walk into a random conversation after overhearing an idea, start adding their own twist to it, and eventually someone starts scribbling on a whiteboard and a new iteration of your product is born. I just don't see that happening as easily over groupware.
Having everyone on site is almost essential for an early stage startup, but the more established the business the less frequent the dynamic you describe, imo. I think many companies would benefit from hiring a few remote workers. It is one of the many ways a company can win the war on talent. I think one underrated aspect of Google's success in attracting top talent is that they do R&D in many more locations than e.g. Microsoft. Also IIRC the main engineer on Chrome/V8 started working for Google from his home in Denmark.
I have a pet theory about the apparent shortage of 'experienced engineers' in the midst of high unemployment.
Software development as we know is an inherently unstable activity - it's very hard to gauge how much a project will cost in time and money. Supposedly 50% of IT projects fail and 70% don't meet all their targets (or something catastrophic like that).
Well here's my theory. When you can't tell how much something will cost or even whether it's really possible, when there are no guarantees, the only thing that can comfort you is that your competition wont fair any better. To ensure this, you just need to employ the top programmers/architects. If you have people of the best calibre, you can rest easy, because if they can't deliver, nobody can.
Thus, companies looking to launch risky software ventures need what is by definition a scarce resource (the best developers). Unless the nature of software changes drastically, there will always be a shortage of the 'experienced engineers' necessary to placate the anxiety of this high risk business. Human expertise is finite, the capacity of software projects to fail is infinite.
(particularly if you're talking about launching web apps and new platforms and such... if you just need some simple engineering then not so much)
um, if you want to build any great products, you need really good people inboard. Average is just not good enough.
I noticed this is the same for sports. I play soccer frequently, and I noticed that in order to win, you really need few good players in the team (way above average). Not everybody has to be really good, but you need few good pl
In a team of 11 you need a great:
Goalie
Defender
2 Midfielder (one center and one runner on the sides)
One great Scorer/Forward
The rest of the team can be OK, (i.e good enough or average), but with good organization this team will excel.
Now think of a startup that instead of being able to field 11 players on the field, they can field only 7-8. Then everybody on the team has to be really good from the get go for it to have a chance.
Once it grows, it can afford more warm bodies. People that can do useful work (fix bugs, create additional features), but that are not able to do groundbreaking work by themselves.
"Right now in New York City every technology company is hiring engineers, programmers, Java developers or PHP/Perl developers,” Carvajal said. “I haven’t seen it this hot since 1997..."
Ummm, did they get the quote from 1997 too? I find these stacks to be in the minority these days for a startup anyways. Or is this a NYC trend?
There is still a lot of PHP and Java in NY. I don't see as much Perl but there are still a few places that do a lot of hiring for Perl.
Scala seems to be the other growing area in NY right now---Foursquare obviously but a number of other companies like Obikosh (http://obikosh.com/job_pg.html) are pushing to grab Scala people.
This quote struck me as a bit outdated as well. Not because it mentions Java and PHP, but because it seems to imply that those are the big two skill sets. The "what does your startup use?" polls that show up on HN every know and then suggest Python and Ruby are in heavy use (though PHP and Java do still get a decent showing)
Believe it or not the self-selecting group represented on Hacker News is absolutely not representative of the developer majority.
Furthermore, it's very unsettling that even on hacker news there's this prevalent anti-PHP attitude. With the release of PHP 5.3, and the current maturity of the numerous frameworks there's never been a better time to use PHP.
I don't deny it as a general trend - but just curious as to why Mr. HotShot recruiter mentioned those three in the same article with startups in it. It's just interesting that quite an overwhelming amount of west coast startups tend to be ruby and/or python shops (in my recent memory, I've seen php mentioned in WePay and facebook; and Perl in Craigslist; Java seems to be mentioned in bigger tech shops or Android shops). If there is one "hot" skill today, I'd have picked JavaScript over all those three.
I'd like to add a further question, if it's not frowned upon.
Are there any that might be interested in folks who would start remotely (but willing to come out for bits of onsite time) and then relocate to NYC in a few months?
Plantly (Brooklyn) is hiring an engineer. We've nailed remote-working down to a science, and also have a great studio to hang/stay at when if you're around. Help us with our deployment stack, balance agility and security. We love Ruby & Python, mighty curious about Scala and Erlang.
NewsCred is hiring - we're looking for information retrieval engineers. So any experience (or even interest) in search, IR, solr, lucene, machine learning etc would be great. If not, willingness to learn.
We'd love on site, but would consider the remote option if the fit is great, and the remote location is near NYC.
We're a B2B company. We charge other web publishers a monthly fee to access our content API. Depending on what kind of content they need and how big they are, the pricing starts at 1K/month to 5 digits/month...
Flurry's got an engineering team here in NYC and is always looking for good Java developers, especially if you've got experience with Hadoop / large-scale data processing.
I'm a programmer in NYC who doesn't have a work visa. (But I've worked as a freelancer in the city for years, so I have lots of experience.) How should I bring that up to potential employers? During the application or during the interview or after I get hired? How much would it affect my compensation?
The problem with calling everything a bubble is the implication that bubbles inevitably pop.
In our industry, good programmers tend to create a vastly disproportionate amount of value compared to what they're paid. It's easy to pay programmers hundreds of thousands of dollars because with programmers, a few thousands of dollars of computers and some electricity you can make millions.
Maybe it's a bubble but I think it's simply a market correction. If your output is valuable you can and should be compensated well for it.
Well, bubbles do pop. The market was hot 96-2000, then cold say 2001-2005, then got hot till the mortgage crisis, then cold until a few months ago etc.
Great programmers can create a lot of value, in the right context. Boo.com ( http://en.wikipedia.org/wiki/Boo.com ) might have had developers as bright as Amazon's, working just as hard - but in the end they created $0 value.
It's obviously not a given that you get programmers together and they create value. There's a lot more to a business than coding.
What I was arguing is not that bubbles don't pop but rather that you can't call everything a bubble because that implies that it's going to go down.
Maybe it's because I'm a programmer myself and therefore I'm too biased but I see very few jobs right now that are in such high demand and whose demand is only going to rise even more in the near term.
Basically I was saying it's not a bubble, it's a normal market correction. We had the dot-com bust that devalued programmers massively because of completely artificial conditions and this "white hot" we're currently in really should be the norm.
Maybe it is a bubble and maybe it isn't. We shall see. But this kind of white-hotness occurred in past bubbles, so it's one more indication that's what going on.
Also, if you attend meetups in your field (eg NY Python/PHP/Android/etc meetup) they often allocate a few minutes for job offers/seekers. The article's right, there's a strong demand now. Make sure to save some of your income once you get a job (NYC can easily eat up any wad of cash you'll throw at it ;) - the bubble will inevitably pop, make sure you can wait the next one comfortably.
Yea the cash-eating qualities of NYC have kept me dealing with job hunt from the economic safety of my family home 3 hours away in PA. Not so easy to do under 2ft of snow ;)
Definitely a little wary of super early startups if only for the inevitable bubble pop. Under-capitalized and in a competitive talent market is a surefire pathway to quick collapse when the investment starts to dry up...
Good thinking. Like anything in NYC, startups tend to get overhyped and there's a lot of dumb money from rich kids or people who had a good run at finance etc. I wouldn't work for below market wage in this kind of economy.
When the bubble pops, you can use your savings and take advantage of the lower costs (and the fact you might not have a job anyway..) to start your own thing.
(Edit: I guess the downmodding means I need to add some disclaimers here... There are also smart rich kids and ex-bankers. Sometimes working for under-market wage does make sense, eg. if you're trying to break in to a new field. Some things are not overhyped in NYC. Your dreams may vary from those of Globex Corporation, its subsidiaries and shareholders)
See this is good though that it's the employee's choosing. They'll end up finding a better fit of a company, which works better for a startup. What interests you and what's your specialty?
I've been trying to break into Product Management or UX. I'd say my personal interest is in community / social products.
Kind of a weird situation, relocated from LA a month ago. I've been an independent contractor my entire career (10 years), huge range of skills including founded a startup, early stage product consulting, frontend dev, UI/UX design, Django & PHP dev, project management, social media marketing etc.
Not sure how to approach this employment thing on new territory, especially with such a weird career path.
NYC is actually perfect for a lot of this. I think UX, design, and front end dev fit well with the mixture of media and technology. Back end and hardcore tech is obviously important, but the real winner is going to be due to design. Dropped ya a LinkedIn and happy to intro you to some startups where this might fit: j@jasonlbaptiste.com (invite open for others as well).
Austin, SF/SV and NYC are all in the same boat: Tech talent demand is unbelievably high. If you have a LinkedIn profile with reasonable skills (hell, put "HTML5" in your profile and watch what happens) you probably are already aware of this.
What does it mean when companies are trolling around looking for "HTML5"? Is that just the new buzzword? Or are that many companies actually interested in building things with Canvas these days? (I hope it's not because they think you need some sort of special HTML5 experience to learn how to embed video.)
