How To NOT Get Screwed As A Software Engineer

Funniest thing is this: one of the technical persons who does all the work is the one actually reading the analytics. They're like, "Hey, like this, our launch bombed, what's the plan?" And the reply is, "Don't worry about it, this is like you need to be quiet. This is my department, you know, stop asking questions."

Alright, this is Dalton plus Michael, and today we're going to talk about how to not get screwed as a software engineer. Interesting, yeah? Tips, you know, we've noticed that a lot of the technical folks sometimes get exploited. They kind of get ripped off by other folks—evil business people. Yeah, it's kind of a bad pattern, and so we're going to talk about it.

So who is this aimed at, Michael? Who is this video for?

So we're talking to maybe you're a technical co-founder at a startup right now. Maybe you are a great engineer at a scaling-up company, the guy that everyone comes to, the person who always gets fixed, the woman who's always up late getting those text messages and having to… yeah, or you're at a really early-stage startup. Yes, but you're not a founder, a co-founder; you're like a lead engineer or head of engineering or there's some title. Yes, and the whole company is like three people. Yeah, but you're not a founder, you're not a founder.

Okay, there is the college student who all the MBAs go to build their prototype. Yep. Um, and then there's the googler, right? How did you describe it? It's the person that does the work that other people take credit for… yes, to get promoted, promoted in bonuses. Yes, it's the person that does the, you know, actually producing the products that a lot of people stick their career on. Yes, yes, yes, yes, so that's who we're talking to.

Yeah, so I think the thing that we're trying to really help you with is, yeah, we feel bad for you. So this comes up a lot for us at YC, where we read a lot of applications and we interview a lot of companies. We see folks where it's pretty clear what's going on— we can see it a mile away in the application that someone is getting exploited or ripped off, and it's usually the technical person. Yes, right? And it feels bad to see just all of these applications come in, and it's crystal clear what's going on. Yes, and so this is for you.

Yes, we would like to give you some questions to ask yourself to figure out whether you're being treated well or not. And I think that, to be clear, we don't want to presuppose, right? There are a lot of people who are in great situations. We just want to give you some tools. So let's talk about equity.

What are the questions people should ask themselves about whether they have enough equity? Equity at all? This comes up a lot. I know you're a big proponent of this, Michael, but in general, something like equal equity is pretty common for startups that apply to YC, and it's something we recommend.

And sort of the anti-pattern we might see is, say there's two founders and the non-technical business founder has 90% and the technical person has 10% or less. And the explanation is basically just that the business founder had sharper elbows, negotiated, was a better nego—like, there's actually no justification for this.

It was my idea. Yeah, okay, right? And so there's really no good reason; it's just that the business guy gets more for whatever case. Yes, and usually in those situations, you end up with something much closer to even. Again, you give this advice—how do you explain this when this happens?

I always just think that, like, the vast majority of the journey is ahead of you, not behind you, and you want your co-founders to feel like owners and partners. And I always think about, you know, in the early days of our company, on Sunday night when the website went down, I couldn't fix it. And so we're going to live in one of two worlds: the world where I get texts and I have to, like, cajole people to fix it, or the world where everyone feels like an owner and they get texts and they wake up and they fix it. Right?

And I think a lot of people just don't understand that if you can make people inherently motivated, they'll do far better work than if you yell at them. So that's the— that's the founder, you know, do you have close to equal equity? Yeah, what does your equity look like? And does it make sense? Like, is the justification for whatever your equity is—does it make sense to you based on what you bring to the team and based on your actual responsibilities?

Now, what about the early employee?

Well, the early employee notoriously kind of gets hosed on this stuff, especially if they're providing the work of an equal technical co-founder, yet they get 1% or less of the company. Again, this is very common where you'll have two business founders—three business founders, you know—yes, and then they'll have someone that's, you know, lead engineer that is effectively the technical co-founder, and they get like 1%. Not great. Yes, not great. That's not a good pattern.

I would say if you're in the scale-up and you are the essential engineer, the test I would kind of ask myself is: if this thing works, are you going to make a life-changing amount of money? And you know, I would argue that, like, you know, that doesn't mean you necessarily should have as much equity as the founders or you're going to have as much equity as someone who came in early. But it does mean that, like, if this thing actually IPOs or gets bought, and you get like a pat on the back and, like, you know, a nice Christmas bonus, probably you're not in the right situation.

Alright, that next group—the googler. I think this one's actually much more interesting because I would argue that if you're the googler, you're getting a bad deal if you're doing like 100-hour weeks and grinding, yep, and like your boss or your boss's boss is getting like mega vacation and $10 million a year packages and promotions and da da.

I would say on the flip side, though, like if you got good work-life balance and, yeah, I think it's risk-reward. This is a subtle point that Michael's making. I think it's for the opportunity cost that you're taking to not do something else. Yes, are you getting a square deal?

Versus if, again, if you're working really, really, really hard, perhaps another thing would be better. Yes, but if you're very happy with the trade you're making on work-life balance and compensation, hey man, maybe it's good. Yeah, it could be great for you.

Yeah, you know, and then I guess, you know, last but not least is the college student who, like, in most cases, even isn't even offered equity. Like, that's like, you know, they're just, they're just the typer. You're the intern. Yeah, you're our technical intern, just do all of the work, do the thing, we're just the idea guys. Yes, yes.

So equity is one set of topics you can ask yourself in these roles. Another one—and one that you brought up—was kind of decision-making process. Like, okay, we've established that you are doing a lot of the work. Yeah, it's basically do you have a seat at the table?

And so again, if you're trying to self-diagnose, am I being exploited as an engineer, as a technical person? Is the whole point that the business people have a lot of meetings that you're not invited to and all decisions about everything are made by the business people? And you are basically used as a robot to write code? Yes, probably not a great sign. Probably a sign that you might be being exploited, right? You're being used as, um, yes, like a machine to write code and not a person with a brain.

I think the next thing you should be thinking about is kind of effort level. You know, are you working these crazy hours but everyone's on vacation in Aruba half the time? Right? Are your counterparts who are doing fundraising and sales and HR and all the other tasks within the company grinding, or are they not? Yep, like this is a self-diagnosis thing, but it's really sad when you see someone in the world of technical co-founder and they really have to work their butt off, and they're really showing up every day.

Yes, and the idea guy or the salesperson or the business expert, the fundraising expert, yeah, actually isn't doing much. Sometimes they're part-time, sometimes they're part-time. And man, that is such a vector for being exploited. And so you should really feel, from a self-diagnosis perspective, that your counterparts are just as into it and there's just as much heart that they're bringing to the table as you are. And if so, again, maybe you're—maybe it's a great deal for you.

Yeah, I think that the last two are kind of connected—this kind of like is it working versus opportunity cost, right? Like one would argue that, like, because you're doing all this work, you have an amazing ability to judge whether the company's working. Yep. And you should maybe trust your instincts there.

And, you know, is it working? Right? Like you might be exploited if you're being asked to do all this stuff and, like, the evidence is painfully obvious it's not working well, and you're the technical person, so you notice. The funniest thing is this: one of the technical persons who does all the work is the one actually reading the analytics—like, "Hey, like this, our launch bombed, what's the plan?"

And the business reply is, "Don't worry about it, this is my department," you know? Stop asking questions. And so, if it just seems like you're bringing your A-game effort and doing all of the work, yes, and it's definitely not working, yes, probably might be a sign you're being exploited.

Well, and this is even more of the case that the opportunity cost might not be worth it. Yep. Or you might not be leaving because you're afraid, but you know intellectually this thing isn't working. Yep.

Alright, so, and like don't let them finesse you. Again, this is the same person that convinced you that you getting, you know, one-tenth of their equity is a great deal for you, is the one like, "Hey, I know it looks like we're not growing and we have no revenue and we're about to run out of money, but I got this fine." Like, don't let that same suave person keep doing the same move on you over and over again.

Yeah, it's weird because I never heard the term gaslighting, but it is—it's actually gaslighting. It's actually that, okay? So I don't want to paint too bad of a picture because on the flip side, we see situations that are great. Yeah, more often than not, you know, the folks we fund, it's mostly like a really awesome trade.

So let's talk about situations where, like, things are going well, right? Like, you signs that this is great. I think one sign is, from an opportunity cost perspective, you realize that you're at the best possible place in the world for the risk-reward ratio. Yes, and whether, however you're being compensated, yes, you're like, "Wow, I'm getting a smoking deal, and I know there's no better deal I can be doing."

And I feel privileged to be working on this team. I am because they care just as much. Like, if everyone feels like they're getting a great deal, that's a sign of a good culture.

Yeah, I also think if you feel like you're being given a lot of responsibility, you have a lot of opportunity to learn. Yep. I think most people don't realize that, like, you can learn at a startup pace or you can learn at a Google pace. And, like, a startup is an amazing opportunity to learn. So if you're getting better faster than your peers who are in big tech, you might be getting a really good deal.

Um, especially we see this a lot with people who learn a ton and then they go start their own company. Yep. And it's like, well, that startup was incredible for you, even if it didn't work out. Get rich from it, that was like the best education you could have ever gotten.

And we see this also with immigration. Like, sometimes that startup or that company is getting you to the country you want to be in or getting you the visa. Like, it's a great deal, that might be getting you a great deal, so that's like a really, really big thing.

Um, I also think there's this element of, like, you're not exploited if you're part of the problem. Yes, again, this is a subtle point. Let's see if we can explain it. It's basically if it's not working and you have a seat at the table, it's on you, man. Yes, yes. Like, you can't just blame, "Hey, business guy, you're not pulling your weight because no one wants our thing."

But if you have a seat at the table, and you have equal equity with someone, and you have a seat at the table in decision-making, just because it's not working doesn't mean you get the right to blame other people. No, that's not cool.

You know, and I think the last one that I will say is, like, um— and this is a slightly dangerous one—but like when people are honest with you and it turns out to be that way. When people are like, "This is going to be the hardest job you've ever done," and then it turns out that you're working like crazy. Like when the team you're coming into is extremely upfront with you about how it's going to be, and it turns out that way, and it's not good, it's not necessarily you're being exploited.

Like, you made that choice. Yeah, you chose that. That's a really great point, man. Like, think about expectation setting when you take any job. Yes, or when you go to school. Yes, the people—the great professors or teachers or bosses, it's not that they tell you it's going to be easy; it's that they tell you what's going to happen. Yes, and they're right, they're honest, and you're like, "Wow, I really respect that you set my expectations well and I knew what I was walking into."

And so again, if someone did an A+ job of expectation setting, you can't really argue that they're exploiting you or that this is like not what you signed up for. No, right? No.

Alright, so I suspect I'm in a bad situation. What do I do to fix it? If you think you might be in a bad situation, I would look at what are the other opportunities that you're taking an opportunity cost from doing.

So for instance, if you're at the big tech company and other people are getting tons of promotions because if you're at work, you probably are pretty well undervalued, and you could be learning more. And so I would explore starting your own company or going to work somewhere else.

If you really want that seat at the table, my guess is you could find a job where you have way more of a seat at the table when you're doing decision-making.

Well, I'll say a step you could do even before that: you can ask for a seat at the table. That's true. I remember there was this great employee at Justin TV, this guy named Tim, and he was disgruntled because the company wasn't doing well. And as disgruntled as he was, he actually would do the work to come up with ideas and to point out things that were wrong and to create fixes.

And like he took ownership. And what was interesting is that, as he took ownership, he was given ownership. So it wasn't this weird—it wasn't like, "Oh, like you're not at the table." It's like come up with the smart ideas. Maybe, maybe you do have a—maybe you are at the table, and you're just not participating or taking responsibility.

That's a great point, and we see this with equity splits because oftentimes it'll just be, "Hey, have you all thought about maybe like, or how did you come up with the equity split?" Like, "Well, it's, you know, 90/10." "Well, why?" "Well, it's my idea."

"Well, you know, most of the work is ahead of you, not behind you. What if you went like equal?" People are like, "Okay, yeah, fine." It's actually not that hard to fix the stuff sometimes. Shockingly, it's just they've never had the conversation.

Exactly. They almost expected the business person to do right by them or, like, gave up their, like, agency. And it's like, no, you have agency. Like, and then I'll say, you know, another thing is location. Like sometimes you're in a place where your work is invaluable, and there are other places where your work could be valued more, whether that's geographic location or company.

That's a great point.

Um, and I think the last one that I observe a lot is that sometimes you have to take a step backward to take two steps forward. So like maybe you're stuck in a bad job and like you have a lot of responsibility, but you're not being given good compensation. You might have to go switch jobs into a place where you have less opportunity, less responsibility, but better compensation.

You can develop a better network. Um, maybe you have to move. Maybe you have to take risks. Yeah, like, like maybe you have to do something that doesn't feel like you have the perfect next thing on your resume because it sets you up two moves down the line, right?

I think sometimes people are like, look at their careers very linearly instead of saying, like, it's the end that matters. Right? It's like, can I retire, raise my kids? D, and like maybe the path to get there isn't just this linear step by step.

So anyways, what would be your last parting piece of advice for someone suspect in this world?

Look, technical people know your worth. And if you're a really nice person, those are the people that tend to get ripped off the most. Follow our handy checklist and find a place where you're appreciated and valued the way you should be because you have this amazing, rare skill.

And for those business people listening to this, don't exploit folks. Be honest, be upfront, right? Like, make decisions that they're going to—that your people you work with are going to be excited about today, but also tomorrow. Because, like, if that amazing tech person leaves your company, you're… oh.

Alright. Great chat! Thanks.