Startups can compete with FAANG for hiring devs.
If you’re a startup competing with FAANG for developers by offering similar rates and benefits, you’ve lost.
Dev salaries in SF and NYC have skyrocketed. It’s common for engineers to make $200k or $300k per year + a multiple of that in equity.
How is a startup supposed to compete with that?
They can’t.
They can’t, and they shouldn’t.
But they still do.
Job boards are full of startups offering $100–200K/year in salary (and minimal equity) for engineers. Most of these startups will fail.
On the surface, these numbers sound like a great salary. Dig deeper, and you’ll understand why it’s crazy to think a startup paying these rates will get anywhere.
$100–200K/year in salary for an engineer working at a startup in SF or NYC can be paraphrased as “slightly less than what FAANG can pay”.
The moment something goes wrong at your startup, a logical engineer will start exploring other job opportunities — if for nothing more than to curb risk in case things get worse.
Good engineers are logical…
Things always go wrong at a startup…
…So your $100–200K/yr engineers will constantly be looking over at the greener grass of $200K/yr+ at FAANG.
You’ll be running out of money while your best devs are looking for other opportunities.
Instead, startups should do what’s always worked for them: get creative and scrappy; take advantage of unfair advantages.
While FAANG is offering the next Stanford grad $350K/yr and breakfast burritos with a side of açai bowl, Startups can find people and work arrangements that FAANG can’t (or won’t) compete with.
Startups should explore remote, globally sourced talent, and working via creative hourly arrangements.
Remote is no longer a fad — it’ll only become a more important part of work as we know it. But FAANG still forces most of their well paid engineers to commute. There’s a place to start.
And then there’s the rest of the world… services like Turtle, Andela, and TopTal make tapping great devs from across the world possible (and easy). Talent is everywhere, opportunity is not.
And finally — why 40 hours?! Because of child labor during the industrial revolution?
We’ve evolved, so why hasn’t our work week?
Why can’t a talented engineer split their time between two or three companies?
Does every company really need 40 hours of backend dev + devops help every single week? Why can’t a backend + devops expert share their time between multiple companies? FAANG may not be ok with this, but a startup should be. Needs don’t always add up perfectly to 40 hours per week. Startups are cash-strapped and dynamic; smaller-than-40-hour setups are, at minimum, more flexible and affordable.
At Turtle, we’ve made it easy to add $50/h, vetted devs at minimums of 10 hours per week (like AWS for high-end devs). This model has helped more than 50 startups get engineering teams running — and not a single one of our customers has failed due to the most common startup ailment: running out of $.
No matter how or where you’re hiring, remember to take advantage of what FAANG isn’t doing. Take advantage of:
- Remote work
- Global talent
- Non 40-hour/week setups
Comparisons:
(1) A startup with $500K in cash, not paying founders, and competing with FAANG:
(2) Swapping a FT Front-end dev for a 10h/week contract with someone at $100/h
But so far — we’ve only taken advantage of “not 40-hour/week setups”.
(3) Taking advantage of remote work+ global talent, $50/h can land a startup great devs from around the world.
And sure, you can’t outsource/freelance everything — but thinking all freelancers are crap is close-minded and lazy at best.
The healthiest startups I’ve seen consist of co-founders/founding teams and flex teams of freelancers to fit the natural dynamics of an early stage company.
If you’d like to model your own setup, you can make a copy of this spreadsheet and change any of the cells with a yellow background:
And if this model tickles your fancy, Turtle is an operating system for the model of work described above (demo).
Thanks for reading. Feel free to drop any questions as responses or we can argue about it on twitter.
