A few weeks ago I had coffee with an experienced product designer. Let’s call him Carl. He’d been working at a respected San Francisco startup for five years, but he was getting restless. Carl had excellent experience and skills. Heck, the guy was even a decent coder.
I fired off a few emails to several startups that were right up Carl’s alley. One was an almost perfect match–it offered the right design challenges and aligned with Carl’s personal interests. He interviewed with the company the next day and the team was thrilled. In less than 24 hours the CEO sent Carl an offer to be their lead designer.
Unfortunately, the company significantly low-balled him on compensation. Carl was not impressed. He personally felt undervalued, and he worried that the company’s culture might underrate design generally. How did this crucial misstep occur?
For startups, coming up with a fair offer can be difficult. Publicly available data from popular job sites is murky at best. Even when salary charts appear credible, they’re riddled with hidden problems. Be careful, most of the data you will find skews very low.
At Google Ventures, we help our portfolio companies find, interview, and hire senior design talent–more than 40 top-level designers in the last two years alone. We know about what works and are always keen to learn more.
I spent a few days analyzing publicly available salary information to clarify the picture for our portfolio companies and other startups like them. This is what I found.
When I searched online for salary data, the first results were Glassdoor, AngelList, and SimplyHired. Each site lets you enter some variation of geographic region and job title to display a graph of typical salary ranges. It’s pretty easy to get a range of salaries for “UX Designer in San Francisco,” for instance. So, what’s the problem?
- The “designer” label is really broad. Many salary sites lump a huge range of designers together. Graphic designers generally get paid much less than UX designers or digital product designers–the designers typically hired by top startups.
- Agency salaries weigh down the curve. These data include design salaries from across the business spectrum. Glassdoor, for instance, includes quite a few design agencies. Many agencies make money by undercompensating and over-hyping young designers. A so-called “Senior UX Designer” at an SF-based agency is quite possibly a 24-year-old recent graduate earning a $60,000 salary.
- Not all startups are created equal. Even on AngelList, where there are few agency jobs, you’ll find plenty of startups that aren’t paying designers competitively. (Maybe they are scrappy and bootstrapped, or maybe they just don’t value design.) Looking at these startups as a whole is like including both the major leagues and farm teams in a survey of ballplayer salaries. If you’re trying to hire the best talent available, don’t be led astray by salaries offered by less competitive teams.
- Equity and other compensation are poorly represented. Oftentimes, startups balance lower salaries with higher equity or other perks (see below). Salary graphs have a very difficult time representing this balance appropriately. SimplyHired, for instance, lumps big and small companies together–a publicly traded company is represented the same as a startup offering equity.
The bottom line? If you rely on broadly available summary data, you’re not comparing apples to apples.
With just a little bit of work, it’s possible to glean useful data from AngelList and Glassdoor. Here’s what I did:
- Isolated for geography: San Francisco
- Isolated for job title: UX Designer, UI Designer, and Visual Designer
- Chose a few dozen companies that are in the same league as many of the small-to-medium-sized businesses in our portfolio. I filtered out design agencies, less well-funded startups, and big companies like Facebook, Salesforce, or Adobe.
- Copied each company’s salary range into a spreadsheet.
- For comparison, did the same for typical full-stack engineering jobs.
- This gave me fairly homogenous data that matched anecdotal evidence we’ve heard in the industry.
When I compared compensation details among like-sized startups in San Francisco, a few trends became clear.
Even among designers of similar seniority, there is marked difference in compensation for UX Design, UI Design, and Visual Design. Typical salaries for each in SF:
- Senior UX Designer: $100,000 to $150,000
- Senior UI Designer: $90,000 to $140,000
- Senior Visual Designer: $85,000 to $130,000
(Note: “Senior designer” is generally loosely defined as someone with five to seven years as a practicing professional designer.)
Surprisingly, design salaries at big, well-known companies in San Francisco are similar to those offered at startups. Big companies often include cash-like additions such as 401k matching, bonuses, or stock; but startups can offer equity that may become much more valuable. Compensation parity between startups and big companies reflects the super-competitive environment for design talent in San Francisco.
Another useful rubric is that in 2014, many San Francisco startups are paying their Senior UX Designers about 10% less than their senior engineers. About half the startups I checked were actually paying their designers and engineers the same amount.
I may be biased, but a smart entrepreneur would put design and engineering salaries on par and be sure to explain this to prospective designers. It shows that the company values design as much as engineering.
Obviously, all of this is specific to San Francisco. I suspect some of these trends are typical of large U.S. cities, but you should do your own local research.
[This is a condensed version of an essay that originally appeared on GV.com. Read the full article here.]