Founder Salaries Revealed, TikTok Dethroned and Microsoft's Big 'Play'
The news and jobs report for the week of 10/17/2022
This was a wild week in the tech industry with the news of Elon Musk’s plans for change at Twitter taking center stage. In addition, more companies announced layoffs and the rumor mill was in full swing on who could be planning layoffs next. With all of the speculation in the industry, and consistent fears in the market, it is always good to find some exciting news. This week we’ll highlight some information on what founders are making, a new app that let’s teenagers say nice things about each other (yes, you read that right) and Microsoft’s bold gaming ambitions.
What Much Does a Founder Actually Make?
All credit is due to Pilot for their report highlighting this information. I’ll only scratch the surface, so please take sometime to check this out and review! Based on this report it looks as though most founders are paying themselves a median salary of $100,000. As per the article, 5% of respondents paid themselves zero salary and 46% pay themselves less than 46%. I checked in with the entrepreneurs in my personal life and the numbers are a bit skewed given the smaller sample size, but based on the feedback I found an average at around $120,000 with those under $100k striving to get to that number as their goal.
What should come as no surprise is that VC backed companies had founders with larger salaries than their bootstrapped counterparts. The tails of the distribution, zero salary and over $300k salary in this case, showed bootstrapped founders far outweighing VC backed founders. This also makes quite a bit of sense when you think about a boot-strapped founder starting out and taking zero salary, and at the same token a successful founder with no investments who made their business work and is seeing a six (or seven) figure income for their efforts.
The survey also breaks down the salaries based on geography and company size. There are a few surprises in that data, but the geography is what you’d expect with SF and NYC bringing in large founder salaries. Be sure to check out this data if you are a founder or anyone working with startup founders. Extremely insightful post!
Personal Take: If you are a founder, no matter what revenue your company is currently experiencing, this is a great report on what you could be potentially paying yourself. If you are thinking of starting a company (and you have a plan/foundation) this could be great data to help you understand where you could be averaging based on your development. Also, the added factor of VC vs bootstrapped is very interesting and is useful data to someone who may be looking at taking in VC dollars. With all of that said, there is no tried and true method for founders to pay themselves. Some months it may be 0 and some months it may be $10,000. It could depend entirely on what is happening with your business and what your variable costs look like. Hopefully you have a network of founders or wannabe founders to connect with and chat about these concepts, transparently. Helping each other out and having great things to say about your counterparts always goes a long way- which lead us to our next post….
Can Kids Finally Be Nice To Each Other…. This App Thinks So
Remember your high school yearbook? Maybe your friends wrote some kind words in there for you to read years later. Or maybe you were voted most likely to be an environmentalist with a Hard Rock band named ‘Sedimentary Rock’ (that was me by the way). Either way, it was always nice to see teenagers having positive things to say about each other when we all know how rough high school could be. Gas, an app that just hit the App Store, is looking to bring the yearbook-style superlatives right to the average teenagers smartphone (which is something I couldn’t say when I was a teenager - I was excited to just have text messaging!)
The app asks teens a series of multiple choice questions about their fellow classmates, all of which are positive; urging the teens to compliment each other or ‘gas’ each other up! As of time of writing, this was the most popular app on the App Store and has been downloaded 500,000 times since it’s launch in August.
The Wall Street Journal shared more information on the new app, which is a newer version of an app developed 5 years ago called TBH. More can be found here. At the time of writing this app is only available on iPhone and dethroned TikTok as the #1 app in the app store.
Personal Take: It’s great that this app is designed (including it’s algorithm) to be a place that makes teenagers feel better about themselves. We here so much about depression, anxiety and stress in today’s youth. They are connected to their devices 24/7 and I sometimes feel that isn’t the best thing for teenagers (or really anyone). To have a place where teenagers can exchange compliments and pump each other up is certainly a positive. There have been some negative remarks from counselors and parents around privacy concerns from the app. Anytime you gather information from 13 to 18 year old’s it’s a slippery slope. As long as parents are having active conversations with their children’s technology use and engaging with them over which compliments they are receiving than we should see good come from this app. Only time will tell where this goes or if it continues it’s current dominant reign in the app store. With that in mind, there is one thing I’m sure kids will always love…. Video Games!
Microsoft Is Building a ‘Next Gen’ Mobile Gaming Store
In January 2022 Microsoft announced its intent to acquire Activision Blizzard for $68.7 Billion. This news sent shockwaves around the industry as both companies have had tremendous impacts on the industry with their respective titles. This was also coming at a time when Activision was dealing with negative press related to cultural challenges within the organization; which at the time of writing are still ongoing and should not be understated.
In recent reports, (courtesy of The Verge) Microsoft has claimed that the goal behind this acquisition was to help with building out a next generation mobile gaming presence to better compete with Apple and Google.
There is a lot more to be unpacked here for hardcore gamers, but for casual gamers or people interested in the technology business there are a few key things to understand. First off, the market for mobile gaming is huge. The gaming industry was estimated to be worth $165 Billion in 2020 with consoles being $33 Billion, PCs were $40 Billion and mobile gaming out paced the rest with $85 Billion.
As of right now, Google and Apple dominate the space, but have very intricate rules around how in-game economies and developer run app stores function. Epic Games and Apple continue to have legal issues over Fortnite’s third party payment system; at the time of writing Fortnite is still not back on iPhone.
Epic Games does have one ally in their fight and that ally is Microsoft. This does not just extend to Epic Games though. Microsoft sees the demand for third party developers to have a marketplace that will allow for more freedom for their own app stores, transactions and currency systems. With Microsoft bringing Activision Blizzard to the table as partners to help build out this store there could be potential to take on Apple and Google for mobile gaming market share. Will this be easy, absolutely not. Apple currently limits ecosystems like the one that Microsoft is trying to establish. This could lead Microsoft to approach other partners or make a hardware play to bring their mobile gaming ambitions to light. This will be an interesting development to watch unfold… more to come!
Personal Take: Let me start by saying that I have no bias in this. I love my apple products, I love my Microsoft products (especially GamePass) and I’ve gamed on multiple types of platforms. I’ll make this short and sweet. Competition is a good thing in all industries and business. At the end of the day, as long as microtransactions are kept in check and quality is prioritized, the gamers will be the ones who win.
Round-Up
Well, that’s going to do it for this week! There were some very cool insights on what founders are making each year and how their company size and location effects that number. Apparently, TikTok has some competition from an app helping our high-school to be “less toxic.” Microsoft knows that you like to game on your phone and they want to be part of that market! Check back each week to see what 3-4 stories in the tech industry we highlight and discuss. I’m always happy to chat more in depth about any of this information - always feel free to find me on social media. Links will always be listed at the bottom of my posts.
Weekly Job Report:
Openings from 10/17 - 10/23
Quick note on methodology: The geographical parameters is the entire lower 48 states of the USA. The results are from LinkedIn’s job search feature and have been filtered down to include only engineering job functions and relevant job titles as noted below. Every attempt has been made to cut out duplicates, but they may still exist. Take this data with a grain of salt. Future reports will include Week over Week changes.
Software Engineering (Full-Stack) - 16, 909 Openings - AWS, VMware and Aha! featured the highest number of postings.
DevOps Engineering - 2,176 Openings - Google and VMware had large numbers of openings with this skillset
Product Manager - 6,196 Openings - Microsoft, Amazon and Hashicorp were well represented in companies looking for PM talent.
Data Science/Engineering/Analyst - 1,963 Openings - There careers were featured in a post from a few weeks back. New Relic, Amazon and Expedia are in need of Data focused professionals.
Thank you for reading - see you next week!
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Peter N. Rukis