Everyone loves to compare tech to finance by talking about how much FAANG etc. SEs make, but let's be real there are only a select few elite coders who are actually making it rain at these places. Where does the average joe software engineer work, and how much does he actually make? When you compare this to finance, is it really better? Is the comparison really accurate?
Edit: it has come to my attention that these top tech companies alone hire amounts of coders an order of magnitude greater than the entirety of all ib analysts hired in a single year. This definitely changes the perspective.
software engineers have an easier path to starting their own company while also having the skillset to make a lot of money in a corporate setting whereas finance people can also make a lot of money in a corporate setting but do not have an inherent skillset which will make it easy for them to start their own company.
You think they have an easier path to starting their own company? It seems like finance guys can run pretty much LBO any company and let management run it while tech guys only competency is the actual tech side of things
And how the hell are you gonna “LBO” a company by yourself.. raise a shit ton of money from friends and family investors? What about debt?
Service it with cash flow.
And absolutely, that's literally what PE is. It's just a bunch of finance guys raising money via connections to do exactly that.
Software engineers have no clue about the inner workings of a company, neither operational nor financial. They may have an easier time creating a tech product that one could build a company around, but by no means would they be better at running a company. Outside of their narrow tech scope, they're inherently useless. Finance guys can go from working on transactions in industrials, to tech, to consumer, to business services, all in a single day.
Saying a software engineer would be better at starting/running a business is like saying a chemical engineer would be better at starting/running a business than an IB M&A guy. Simply not true. Engineers are intelligent, but their knowledge base as a whole is typically centered around one narrow, complex space.
Well, they have the ability to create a product like Zuck did. If you can create a product with cash flow, you can just hire finance people to manage the financials.
This is probably one of the most stupid comments I’ve seen here. Have you been under a rock for the past 7 years?
Product is the core of a business and everything else you can build around. When sequoia gives you funding, they help take care of the ancillary and business building shit, which is yes super important. Would you rather know how to roll up shitty ass companies for 4X EBITDA and sell at 6X or build a software startup at 50X Revenue.
Just anecdotally, tell me the number of folks in our industry that have made it big buying up PE-type businesses for themselves vs. the tech guys. In our generation the cream of the crop software engineer entrepreneurs are much better off than the cream of the crop PE entrepreneurs.
Maybe I’m “biased” because I went to Stanford but seriously the good tech talent outstrips the good finance talent easily.
Exactly, you're proving my point. Keyword: "cream of the crop".
Unless you're the one who's been under a rock the past 7 years you'd know that 99% of startup ideas aren't worth the shit stains on my toilet paper as almost all of them fail or get beat to market by a real player.
The average level finance/PE guy can at least competently keep a company afloat, while the average software engineer absolutely can't.
You said it yourself, even the cream of the crop needs someone like Sequoia to step in and handle the business side of things. Nowhere in this thread did I talk about "making it big", its about the business competency of the averages and finance wins out every time.
Loool you think a PE investor actually knows how to run a business in and out, soup to nuts and can just slide into a CEO role? Please please have you been in that seat? Do you think you really can be an operator after sitting in front of a 1000 line model and having endless DD calls and MDs asking you to model out various strategic scenarios? I can tell you after my IB/PE years I couldn’t just go hop into a portco as a CEO nfw. Am I stupid compared to my peers? No - I’m realistic and honest.
If we’re talking about “averages”, the average finance guy is at some no name bank in Kansas City or a $50MM PE fund in Reno. Get the fuck outta here. If you’re at an EB/BB or UMM/MF, then you’re not average as it pertains to finance. You should be compared to the Stanford grads that get jobs at DeepMind and shit. Idiot.
SWE and high finance give you equally useless experience for running a company at everything but the highest levels, so this take is basically complete nonsense. Then at senior levels you should be comparing engineering managers or technical product managers to banking SVPs / MDs, and there it’s going to depend on the type of business. For tech companies, where most of the startup activity is, claiming the banking guy is going to have the edge seems like a pretty big stretch
I have SWE friends working in FAANG and have asked them on what side project they’re working on and if they have ideas for their own apps - most are just satisfied with their jobs and don’t have a desire to code outside of work or the creativity to come up with a business idea
You would be comparing it to a corp fin analyst role, not IBD/S&T.
s&t is basically a "normal" finance job at this point, just like am, corpdev, er, etc
lemme break down finance jobs into tiers:
white shoe gold finance:
pe mf
high finance:
tier 1 city mbb
top ibd (pjt rssg, evr m&a)
mid finance:
vc
bb/eb ibd
umm pe
mbb in first world countries
low finance:
boutique ibd
am
er
corpdev
s&t
mbb in shit tier countries
b4 strategy
normal finance:
all else
You’re a troll
LMAO wtf is this
Bulge bracket is not high finance?🤣
This makes more sense. If this is truly the case the SE blows the avg finance guy out of the water.
I think you've left out key components of the question: cost of living, taxes, tenure, actual work/life balance. If you're an SE for Oracle/MSFT/SalesForce/etc (since you wanted to get away from FAANG) it's a night and day difference between living/working in the bay vs living/working remotely in a college town in the midwest or even in a metropolitan space like Miami, Denver or Austin.
I used to work with a couple of SE's in FinTech who had impeccable work/life balance because they were getting projects complete, and completed on time so the entire process keeps moving. Despite making probably ~20% less on paper in Iowa, compared to their same position in Seattle or the Bay area they had big ass houses, happy wife, no debt, maxed out retirement savings, etc.
Start out with already above decent pay and keep compounding those 8% raises every year with bonuses and equity comp and you see why there's proper lifers at Microsoft who's only "promotion" after ten years was adding the word senior to their job title instead of jumping every three years max like in finance.
All the big tech companies have average tenures of 1-2 years as well, so tech is not so different from finance in this regard. Companies often pay a higher salary to people they poach from other companies.
Here's some breakdown on FinTech (which is what I specifically talked about, away from FAANGs as requested by the OP for those of us who read): On average, employees at Microsoft stay with the company for 5.0 years. At Oracle, known for a hard-edged culture, a 7-year tour of duty is normal. On average, employees at Workiva stay with the company for 4.5 years. Some Salesforce staff have remained with the company for 10 years or more, which is very long tenure for some tech companies. (At Facebook, it has been reported the average tenure is about two years.) On average, a SAP Consultant works in this position for 3-5 years across multiple employers. Workday's retention score is in the Top 15% of similar sized companies (10,000+ Employees) on Comparably. Automatic Data Processing has great employee retention with staff members usually staying with the company for 5.2 years. Bloomberg median tenure is 5.9 years according to linkedin.
And before you ask, I tried to look up SW Engineers specifically, and the only results I saw that showed the high turnover rate you mentioned were for all employees including the front desk receptionist there at Apple.
Where do these guys go after these tenures?
Tenure in tech is way longer on average than 1-2 years. Source: 4-5 years at FAANG.
https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/cla…
If we're talking about averages, a random non-target CS major, or any of the other types of engineering, will beat a random non-target finance major any day of the week. Not even debatable, if you can find a result that disproves it, please show me.
All the money in finance is at the top of the bell curve, maybe that's why it's so competitive.
Interesting, but I wonder how it compares by occupation. Random SE vs. random IB, even at boutique IB vs no-name tech company level
avg SE is better compared to Corp Fin.
This. The number of SWE slots paying 150k+ to new grads is at least an order of magnitude greater than the number of high finance slots
Its a lot more than just "at least an order of magnitude greater". These days 150k for new grad is considered low in hcol cities. Amazon recently bumped their base to around 148k with all in first year to around 190k or so. Everyone and their mother has an Amazon offer these days. Google even bumped their lowball pre-negotiation offer to something like 141k base 205k all in. This isn't to mention the dozens upon dozens of unicorns/ipo'ed unicorns that pay 220-300k or the top bracket quant firms that pay 350-500k for new grad.
It is more so a pareto curve than bell curve
I have two friends who work at some no-name companies as software engineers after graduating and both earn between in the £35-45k bracket. No sure about bonuses, doubt they get any tbh.
Wow, I wonder how much of a factor your "prestige" of undergrad CS degree has to do with your SE comp fresh out of college.
45k at a no-name shop? That's pretty good to be fair.
I am paying entry level developers doing fairly straightforward frontend work ~$100k/yr and those with intermediate experience (~2 - 4 years) around $150k. I would expect to pay $250k - $300k for a "good" developer who is a true fullstack dev.
All these clowns work ~40 - 50 hours a week tops and are total divas.
A few years ago I was not paying anywhere close to that but salaries have exploded in the last 3 years.
In an HCOL area, a developer with 2 years of exp at a big corp is probably a 300k hire and the dude will work like 30 hours a week.
BTW we are in eCommerce, which definitely pays ~30% - 40% less than SaaS. My talent is very much so “good” and not excellent. Front end work simply doesn’t attract god tier devs who want to work on hard problems.
If front end work doesn't attract talent (thus, pay highly) what does?
Engineers love pretending to know about distributed systems, machine learning, and crypto.
Also, front end does actually pay very well. It's arguably the fastest way to grow your career in tech. Reaching senior and beyond with just a few years. It's just I imagine the above isn't running a business with high scale demands so he doesn't need to compete for the best FE devs. At FAANG companies there is no difference in pay between FE and other engineers.
In my experience, the promotions are usually way faster for FE engineers because engineers are geeky and like to work on brainy issues when at the end of the day all engineers are paid based on value provided / impact. Thus there is usually a ton of promo opportunity for FE engineers due to lack of competition.
Is this is a LCOL area? Mind sharing a multiple comparable cities so I get an idea?
Remote. I just stay from hiring people in SF that want insane pay to cover for their lifestyle.
I'm surprised you're even hiring North American technical talent. It's disgusting what a kid fresh out of a boot-camp can command in terms of compensation + work/life balance.
I wonder if there's a cap on earnings these guys can get though? Or is the potential essentially limitless the more skills you add? Seems like despite only working 30 hours a week, the name of the game is to spend your free time consistently upskilling yourself in order to a) advance and b) stay relevant
I've never even met a bootcamp grad and to be honest I feel like they're being artificially pushed online because they're for the most part for-profit institutions. If you want to maximize your earnings without spending money just study CS at community college then 2 years of state university with scholarships/aid. Or if you have a bachelors and time is more of an issue than money, take a few CS classes at a community college and then apply for a 1 year master's program.
https://web.archive.org/web/20170609211210/http://medium.com/techspirat…
$150k+ for a remote job that works maybe 30 hours a week? Just get two of those at the same time and make $300k+ to only work 60 hours a week.
Lol I read an article about a guy who figured out it took about 5hr of effort to land a job, and took 1-3mo to get rid of him after he did no work. At his peak he had something like 11 jobs at once and a run rate of 1.5MM+
Quick story. My gf’s cousin dropped out of a no name college, worked at wallmart for a year, joined a 1 year coding bootcamp in NY. This was over the past 2 years. After graduating he got a 100k job at a random software company working remotely. After 6 months he was promoted and now makes 150k. The finance bros who’ve been grinding their whole life are getting seriously fucked.
Unreal. Do you think the lack of a degree in CS will hamstring him down the road?
It won't. In swe, the aspects of your resume that count are portfolio and work experience. No good tech hiring manager would ding them for no degree and the bootcamp basically supplements most education before like masters/PhD etc.
This is why college might be obsolete in 10-20 years.
I used to work in corporate finance for a large tech company and could see pretty much everyone’s salaries across the world and many software engineers in the US made somewhat average salaries unless they were an executive, but we would outsource a good bit of work to India and they would pay them close to nothing there.
Interesting, define somewhat average. Average for America? Bc that's like $60k
Yeah average in US was $60-$140K roughly. The higher you go the less technical skill was needed and you could be a manager making much more than that as well. It was a big company so there were many levels of management.
Devs in the bay should expect at least 350k (cash + equity) when they reach senior status, which varies per person but is considered the expected terminal position for most engineers. It takes anywhere between 3-7 years to reach senior.
There is a common misconception that a terminal position means moving beyond senior is rare but that isn't true at all. Senior just means you no longer need hand-holding, so you're expected to know how to grow your own career. Thus managers don't automatically groom you beyond that rank. For example, Facebook actually penalizes you for not reaching senior within 5 years but after that, they no longer pressure you to take on higher scope work.
Tech salaries are currently being bid higher as part of the overall reshuffling in the economy. Facebook and Amazon are in particular finding it difficult to hire and are single-handedly pushing up the average pay for the industry. Remains to be seen how high and how permanent the salary bumps will be. More importantly, don't trust any number you hear that is more than a year old as salaries in tech are growing pretty fast yoy in general.
a FAANG job to be honest is a very low bar compared to working in IB. Unlike IB jobs, FAANG jobs are something any dev could obtain after a few months of studying algorithms (brainteasers essentially). So depending on what you consider normal, 350k in the bay is pretty easy, especially given recent trends in the market.
I guess someone is going to ask if getting a FAANG job is so easy why doesn't everyone work there? Well for some reason, people refuse to study and would rather complain about how the interview is stupid instead. It's kinda like how people in finance refuse to study for the CFA. As long as the general population refuses to study basic high school math, there will be a FAANG job waiting for you.
CFA might not be totally comparable here. As someone who passed two levels of CFA and work in IB, I find CFA useless. I should’ve spent those hours on modeling, or reading valuation books or whatever.
A friend of mine who landed a buy side research gig out of undergraduate told me the CFA is most useful when you tell the client you have one.
particularly annoying that I see buyside roles (PE mainly, not MF though but probably them too) all the time that say CFA is a plus, even though it's almost entirely irrelevant
Agree with everything else. Basically told the same from friends at MAANG
+1
The quip about people preferring to complain about the FAANG interviews instead of studying made me chuckle and is 100% accurate. Facebook and Amazon especially are desperate for engineers right now and will essentially hire anyone who can solve Leetcode medium, but people still refuse to prep.
Also the bit about the bar being way lower than IB is spot on. Comparing the recruitment process for IB and FAANG just isn't fair, the bar for is so much higher for IB, and the race starts at the beginning of high school when your track record for undergrad admissions begins. For SWE you can start anytime, study for a few months, and get hired
FAANG usually asks a mixture of LC medium and hard, no?
If more people stop being lazy, $350k won't be $350k.
Disagree with you on the "They just don't do Leetcode" part.
An interview at a tech company still consists of behavioral rounds and resume screens like any other company, and since they're at the top of their game they are able to reject a lot more. Keep in mind, the number of interns hired in 2020 and 2021 at the places I worked was a small fraction (1/3 to 1/4) of the normal number so a lot of kids have blank resumes and are not making it past these rounds.
Keep in mind, this is for new hires/interns. I'm sure seniors who earn a lot of money couldn't be bothered to relearn Leetcode and you're probably right in that case.
But the massive difference that makes it way easier is you can just apply to Google every six months or so and eventually get in on your third or fourth try. I'm not as familiar with non-quant finance but I don't think you can do this at Goldman
Some firms (Goldman, BAML, MS, among others) have cap of 3 applications/year. Other firms are unlimited, and yes you could theoretically keep applying every time a position comes up.
Def agree the ability to reapply so often is another huge factor in making tech a lot easier to break into overall. If you don't get into BB/MBB out of undergrad you only got one more shot after shelling out 200k for an MBA