In Silicon Valley, the IT job market is hypercompetitive. Startups hoping to be the next Google, Facebook, or Snapchat use a wide range of tactics designed to give them a shot at snagging top engineering talent — the skills that can make or break a technical company, and mean the difference between billions and bust.
But the latest play in the engineering talent wars, being launched by startup Weeby.com, embraces a radically different philosophy from typical Valley tech startups. Instead of luring in talent with the promise of world-changing tech and substantial equity that will theoretically make them millionaires if their hard work pays off, Weeby.com is offering to make engineers millionaires from the start — by paying them a million dollars for their first four years of work.
The strategy: A transparent and “backwards” pay structure
Weeby’s salary structure represents a near-complete reversal of traditional Silicon Valley startups. While other companies establish ultra-low startup salaries and rely on finding passionate engineers who believe in the founder’s vision, Weeby.com intends to pay their talent like they’re already superstars, right from the gate.
The company’s founder, Michael Carter, believes that even the average market range salary of $111,000 for engineers in Silicon Valley isn’t enough. The Valley is one of the most expensive real estate markets in the world, and employees at a very low six-figure income still worry about making mortgage payments and raising families. At usual startup salaries, which can run $50,000 to $75,000 plus equity, those worries become serious concerns — and drive top talent straight to higher-paying doors like Facebook and Google.
The restructured compensation at Weeby begins with a base salary that’s at least $100,000 and commensurate with experience — always more than what engineers were previously paid. Engineers are then given performance-based monthly bumps of $10,000 until they reach $250,000. At that point, the monthly raises continue on a smaller scale, but ultimately the salary amounts to $1 million in four years.
In addition, Weeby is offering up to four times more equity than Silicon Valley startups of similar size, in a structure that will have employees collectively owning more of the company than its biggest investor.
The opposition: Higher salaries will attract mercenaries
Not everyone in Silicon Valley agrees that paying engineers higher-than-market rates is a smart idea, especially for startups. In an interview with CNet, Y Combinator president Sam Altman called the strategy “a horrific idea,” saying that if a company is known for paying huge cash salaries, they’ll end up attracting terrible cultural fits. Altman adheres to a more traditional view, stating that startups should recruit an initial batch of core employees who are “maniacally dedicated” to the company’s vision and products, and believe they’re working for a purpose that is bigger than themselves.
Three-time Silicon Valley founder Steve Newcomb, in the same interview, asserted that paying exorbitant salaries can harm a startup company’s reputation before they get off the ground. “If you have to pay people more money than market to come work for your company, then that’s a statement of the value of your product and the value of your company,” Newcomb said — also mentioning that above-market salary investments could upset investors.
However, Weeby’s investors are on board with the strategy, including Karl Jacob, who served as an advisor to Mark Zuckerberg’s six-man board during Facebook’s early days. Carter hopes that the idea of paying top engineers what they’re truly worth will spread, and more Valley startups will be able to build superstar teams that can change the world — and still get paid.
“Silicon Valley’s about getting a great team together and trying new things,” Carter said. “When you do something for the first time, it allows you to approach something with a fresh eye, [and] sometimes, you get a result like Google, Facebook, or Snapchat.”