"The rising cost of talent has also pushed up the level of funding startups need to raise. The idea that it is cheap to launch a firm is a myth, says Evan Williams, who co-founded Twitter and set up Medium, an online-publishing platform. “It’s harder and more expensive than ever to make a startup successful.” The more money young companies raise from investors to pay their employees, the harder it is for them to break even or become profitable."
> a few guys were paid millions of dollars to play baseball last night
Which significantly raises the bar on entering the baseball team market. The world is unlikely to suffer from the shortage of baseball teams. Shortage of new tech companies does seem to have stronger negative effects on the economy.
> Which significantly raises the bar on entering the baseball team market.
I disagree. Baseball is a legally enforced monopoly in the united states. (http://www.swcollege.com/bef/policy_debates/baseball.html) If not protected by antitrust laws, all major sports would arguably be prone to disruption and price undercutting.
The SF megacorps are not similarly protected. These salaries are market based pricing.
Sure, it's a bit different from the US sports. But you still cannot just set up a business and compete. You'd either start at the bottom of the football pyramid, meaning a multiyear barrier to entry, or you buy a club, which is paying an incumbent for their seat.
There is no shortage in baseball teams. In addition to the two that played last night, the US alone has hundreds affiliated and unaffiliated minor league teams. Add to that international leagues, and there may well be a thousand teams with professional or semi-professional baseball players. Top end salaries doesn't change this.
It is almost like you have to execute with a very small team of all technical cofounders that have equal or nearly equal equity until you can find a clear product market fit, then raise money, then hire lots of people.
You almost shouldn't hire lots of people until that point?
> The world is unlikely to suffer from the shortage of baseball teams. Shortage of new tech companies does seem to have stronger negative effects on the economy.
But you're not talking about companies producing technology, you're talking
mostly about companies producing gadgets or providing services without which
we would probably be just fine.
> Which significantly raises the bar on entering the baseball team market. The world is unlikely to suffer from the shortage of baseball teams. Shortage of new tech companies does seem to have stronger negative effects on the economy.
Ahh. I see. If only they let go of tight grip on our balls by issuing more stock to the wealth creators, the problem should resolve itself. That is not happening though. Hence the pain. If you can't pay in cash, you can pay(generously) in stock. Can't you?
As I often keep saying, this is at the root of the "Group X/Y/Z is underrepresented in Tech" problem. You can't make tech attractive to a broad segment of the general populace if it isn't attractive to, well, the general populace.
Some guys get paid millions of dollars to play baseball, and generally the American public seems okay with it. That is why you probably won't have a problem with diversity if you make a baseball team in your neighborhood. But hit pieces like this show that the American public in general distrusts the idea of "nerds" getting respected and paid a lot. This is going to translate into fewer people being comfortable with joining that distrusted group, i.e. tech people.
I suggest the root of the "Group X/Y/Z is underrepresented in Tech" is the aforementioned people who couldn't find cheap labor who will work 80 hours a week
Nobody is concerned that the top level baseball players are all men of similar characteristics because the teams themselves aren't making it an issue. The leagues realize that it is those men of similar characteristics that they are selling. Fans latch onto the players, even to the point of buying merchandize with the player's own brand. There is absolutely no worry about paying such a person millions of dollars, because the crowd is there to see David Ortiz, not a random woman who was born in India. There is no drop-in replacement for the brand of (insert your favorite player), and there never will be.
Tech is different. The product is the tech, not the people. In this case, it may have been Linus Torvalds or that random woman born in India who built your product. Assuming they are able to deliver equally, it makes absolutely no difference to the customer. Theoretically, everyone could be a drop-in replacement. As such, driving down wages is a top business priority, and the way to drive down wages is to increase the supply of the product you are buying (i.e. labour).
The stats show that men with certain characteristics are also most likely to be building the tech. "Group X/Y/Z" is the most logical untapped market to go after. If we assume women make up half the population, but make up almost no portion of the tech labour force, that is half the population that has not previously been within your hiring pool and are ripe for the picking. It is in your best business interest to encourage them to join the ranks.
This is also why those who couldn't find cheap labour are pushing learn to code initiative so hard. We don't see the baseball industry pushing for "learn to baseball" initiatives because, again, they are selling specific people and adding more random people nobody cares about does not help them lower labour costs.
1) warehousing: as an engineer you are on ice in an insignificant project in the bowels of one of these tech chaebols but are locked in with golden handcuffs. Some people find that soul crushing, some are perfectly content with it and just focus on raising their families and hitting personal finance milestones.
2) Disconnect from true value-add. As horded talent at one of the tech chaebols you're not paid on your direct value add, but rather your value is in context with higher more nebulous corporate goals. One day one of the corporate game masters decides your initiative is no longer a strategic play, and you are axed. One thing sv engineers often don't consider when they say they want Wall Street like comp, is Wall Streeters have a very mercenary and "live by the sword / die by the sword" existence - there are tons of guys on Wall Street making a million a year and if they lost their current gig they'd never work in the industry again. This works for many people, but others hate it.
One illustrative case: A guy I know was an expert at each of the legalese paragraphs in a high yield bond offering (aka "junk bonds"), his knowledge and experience could save issuers millions with a single tweak.
After fin crisis of '08: junk bond market close for a few years, was let go. By the time the market came back, there was a whole crop of young guys that survived '08 and had come up the ranks, no need for him.
For a more current example ask some FIC traders that are getting laid off at banks this year.
Tweaking bond offerings and doing FIC trading is not a "leather tanner" type skill. Maybe coding is for reprograming the "moister harvesters" but it sure isn't for "$1m a year doing "other bets" at Google"
Having said that, this feels like somebody got butthurt that they couldn't find cheap labor who will work 80 hours a week. Tough luck!