Company Culture, Salary and Stock Options, Dev Experience — The Joys and Sorrows of a Frontline Programmer

I have a group of best friends from middle school back when we studied computer olympiad,
after graduation we scattered to various companies to write code,
we’ve tacitly agreed on “split up to push lanes, TP when something happens,”
and from time to time we gather for a meal.

Disclaimer:
This article contains lots of personal feelings,
memories may be fuzzy,
the truthfulness of any content is not guaranteed,
any problems are the author’s fault. (Yep, that’s him, go ahead and flame him)

(One) Friendship

When Mia has time she also joins our quarterly gatherings,
she and YJ’s girlfriend A-Zhang are the only two girls in our pile of guys’ gatherings.
Besides sighing: “Programmers’ hands really are nice-looking.”
Mia also sighed with me:
“I think what you guys have is really rare.
You’ve known each other since 7th or 8th grade,
then kept in touch all this time,
and after graduation are all in the same industry.
I feel between you there’s plenty of common ground.”
“Yeah, in Japanese anime this is called the bond of fate.”

In our gang of teammates,
some went to Google UK after graduation and have already found true love;
some joined Huawei after graduation and have been traveling abroad while still single;
some are still studying, advancing their education,
and some have jumped from Microsoft, NetEase, Yitu into Pinduoduo’s embrace.

Most of the time we find a Cantonese restaurant and eat some Shanghai rice rolls,
the rice-going topics range from the classic 3v3 showdown in Ninja Village Battle,
to the climate differences between Guangdong’s spring humidity and Shanghai’s plum rains.
This gathering was initiated by little Huawei employee Enye, who’d just come back from a business trip abroad.
Like the dorm bull-shitting from before,
this chat session also gave me lots of thoughts.

(Two) Company Culture

We asked Enye how many days off he was taking,
Enye said he’d requested 3-4 days of annual leave, could rest for 9 days.
Everyone: ??? What kind of operation is that ???
Enye explained that Huawei has a convention,
that returning from abroad you get one default day to handle jet lag,
he took the opportunity to request connected leave, playing as rest.

Enye also mentioned he’d actually thought about jumping ship,
when everyone asked why,
Enye sighed: “I can’t save money.”
Because of the job’s nature, Enye has to travel to all sorts of countries in the world,
and he couldn’t help but follow food and travel topics on Zhihu,
no wonder he can’t save money.

After everyone laughed at his first-world problems,
he went on:
“Actually at my company, what makes me uncomfortable is also a kind of anxiety.”
In Enye’s feelings,
Huawei has extremely wolfish culture,
if an employee reaches 35/40 without certain achievements,
they get eliminated.
Enye also gave an example:
people he knew who joined at the same time as him,
have all already left because they couldn’t take it,
while Enye has always been top performance,
he also feels he might not necessarily be able to reach a high position by 35/40.

After hearing this I couldn’t help but sigh:
Huawei is Huawei after all.
Early Pinduoduo employee FM also said:
Our company in many aspects really wants to learn from Huawei.
I asked FM, is Pinduoduo also wolfish culture?
FM nodded, and gave an example:
many things they’re doing now are change-orders-overnight,
like the teams connecting with JD and WeChat,
the developers had already finished development,
but two weeks later, sorry, business-wise the contract didn’t close,
the whole team gets disbanded,
everything everyone made was for nothing.
Everyone was silent for a while, feeling there wasn’t much to say,
just chanted Alibaba’s mantra: “embrace change, embrace change.”

I continued asking FM: “Then in terms of development load, are you guys busy?”
FM and Freedom, who are in two different teams, simultaneously gave different answers.
Freedom who feels very busy said,
they do the company’s data analytics layer (hadoop + flink).
While the company doubled in headcount, their team didn’t add a single person,
busy as hell every day.
FM then added that teams like Freedom’s are special cases,
most teams at Pinduoduo have already slowed down,
now that the division of labor is finer, time spent on communication has increased a lot.
To give an exaggerated example, what one team could finish in 3 days before,
might now take two teams 3 weeks.

“That sounds a bit chill,
do you still 996 and work overtime Sundays?”
“Yeah!”
FM sighed again, actually feeling that with current workload they don’t need to 996.
For example his team including the intern has 6 people,
much of the time everyone’s work isn’t saturated.

Speaking of working hours there’s another example.
The day after Pinduoduo IPO’d they had a company-wide meeting,
two thousand-plus people sat on the floor in a big hall,
the bosses pulled out a piece of paper,
saying: “Let’s answer some questions everyone cares about.”
Then read: “Now that we have lots of people and tight seating, will we move to a new office?
Will we get an extra day off every two weeks, introducing alternating single/double weekends?
Will everyone get stock?”
The employees were super excited,
applauding heartily at each question,
the single/double weekend question got the most enthusiastic.
Then the bosses gave the three-combo: “No, no, no.”
After hearing this story, everyone present shed silent helpless tears.

As an outsider I sighed:
Honestly across all of China I’ve only ever heard of your company at this scale,
that’s company-wide 996, others at most do it by team or temporarily.
I feel the single/double weekend issue,
only your boss Huang Zheng can speak on it,
official opinion is needed.
But then again,
the salary they offered when hiring you was probably calculated as 996,
now switching to 995,
unless you’re willing to take a 16.6% pay cut,
the company would definitely lose money.
Freedom added:
Yeah, actually a lot of teams now have people who fixedly request personal leave,
to achieve the effect of manually downgrading salary to single/double weekends.

Everyone bullshitted some more about the essential difference between single and double weekends,
and summed up one truth, called:
Company culture totally depends on the boss, same for small teams.
Because many things can only be decided by the boss.

Talking along, I thought about my own company again.
In many aspects, Pinduoduo gives me a feeling very similar to my company,
to sum it up in a sentence: “China’s fast-growing internet startups today are like this, many systems have trouble keeping up.”
But on the other hand, I also feel many things at my company are more workable than at Pinduoduo.
Pinduoduo grows much faster than my company,
so a lot of infrastructure, culture has trouble catching up,
but my company first of all has double weekends,
and the internal cultural communication is also better than Pinduoduo’s.
Talking along, Freedom thought of going to NetEase after graduation,
and smilingly added: “Actually this company culture thing,
has a big influence on fresh grads.
Many people’s lifelong sense of the workplace originates from their first impression.”

Yeah, just like the Little Prince sighed:
The desert’s beauty comes from a wellspring hidden within it.

(Three) Salary and Stock Options

Talking about Pinduoduo’s post-IPO employee meeting,
I asked another insensitive question under a sensitive topic:
“After your IPO, what’s the way options convert to shares?”
The answer I got was the standard American tech company practice,
the same as the explanations online.
For example let’s take a fake company PiedPiper in Silicon Valley:

• Before the company IPOs, there’s no stock, only options
  • In theory, after IPO, options can be exchanged for stock
  • But options aren’t free either, you need to buy with the strike price
  • Generally the strike price is relatively low. For example, compared to the IPO stock at $10 USD per share, the strike price might be $0.5 USD per share.
• PiedPiper, when it just started up, issued 20% options.
  • The CEO put up his own money, came up with the Idea, contributed his own residence, owns 10% alone.
  • The other 5 early employees each own 2%.
  • All decisions are made by the CEO.
• The remaining 80% is divided equally over a 4-year period.
  • This way even if some early employee leaves in the first year, he only has 2% options, won’t take up space without producing.
  • New people who come later also receive all their options over 4 years.
  • Everyone works hard, of one heart making a good product.
• Three months in, product prototype is out, after running market estimates, company is valued at 800k, investor A invests 800k.
  • Originally company was valued at 400k, options had already been distributed 20%, doubled investment means investor wants 40% options.
  • But the investor says: how about this, I’ll double the company valuation, but I want to finish distributing options now, can’t wait 4 years.
  • Company needs money to launch the product, agreed. So CEO + everyone got 800k cash and 50% options, investor A got 50% options.
  • Investor A has a high option share, but the CEO still makes decisions, only has to have a monthly meeting with investor A to report what he’s doing with the money.
• After product launch, results were great, a year later, company hired more people, valued at 3 million, raised 2 million cash from investor B.
  • Because options had previously been fully distributed, with new funds coming in now, everyone’s options got diluted, roughly:
    • CEO 15%, five early employees 3% each, investor A 30%, investor B 40%.
  • Now the CEO has to have monthly meetings with both investors A and B, sometimes has to do things the investors’ way.
• As the company grows, more funds are introduced, even the company prepares to IPO.
  • Multiple investors and professional managers form a board of directors, most company business direction is decided by the board, the CEO becomes a true Chief Executive Officer.
  • To write a clear prospectus, the company stops issuing options to new coworkers.
  • To avoid cash flow loss after IPO, the board recommended that PiedPiper set a 5-year option exercise time.
  • Because much of what was later issued were subsidiary options, the board set option-to-stock conversion ratios from 5:1 to 10:1 for different subsidiaries.

(The example dragged on a bit, and is all personal speculation, probably much is inaccurate)
FM mainly talked about one point,
that Pinduoduo’s option exercise method is 4 years to max options, and another 3 years before exchange to cash.
Everyone felt this was super painful upon hearing,
and unanimously said: “Then FM you definitely can’t jump ship now, otherwise you’d take a huge loss.”

To quantify how much loss,
we conjectured a set of fake numbers:
Suppose 100k shares of options,
strike price of $0.1 USD per share,
IPO issue price of $20.5 USD,
option-to-stock ratio of 5:1,
option tax rate of 40%,
both option grant time and exercise time being 4 years;
then after the company’s successful IPO,
the cash you can exchange for is (100k / 5) * 20.5 - 100k * 0.1 = 400k (USD)
your work over 8 years essentially equals an extra 400k / 8 = 50k (USD) per year, approximately 350k (RMB).
Meaning if you successfully startup with the company,
it’s equivalent to an extra 350k RMB annual salary each year.

Sounds like a lot,
let’s calculate the mathematical expectation.
Suppose successfully starting up and IPO’ing is one chance in ten,
i.e., 10% probability (already very high!),
then without knowing the company’s future,
the startup’s pie-in-the-sky buff actually equals 35k yearly salary,
approximately 3000 RMB monthly salary.

After one round of blind analysis,
everyone summed it up:
“Most of the time, the mathematical expectation of how much you can earn is constant.
Whether you’re at a small, medium, or large company.”

But speaking of which,
I couldn’t help complaining to FM/Freedom:
“You guys at Pinduoduo really are anomalies, the money you give is really a lot.”
During the recruitment season earlier this year,
several people we sent offers to went straight to Pinduoduo,
when we asked why, the offer prices were close to double what we offered,
really exaggerated.

But my company has one merit,
which is absolutely guaranteed fairness,
for example I feel our company has no inversion situations.
(Inversion: refers to a phenomenon where due to market changes, classmates with relatively large skill differences experience reversed salaries due to the order of joining)
Because the internet industry depends heavily on R&D level,
this causes excellent talent’s salary to rise year by year,
the market growth rate being higher than the company growth rate results in many cases of same graduates joining the company,
where the senior who graduated in 2016 and worked a year actually has lower salary than a 2017 fresh grad.
On Zhihu there’s a hot question with 6 million views “Why do companies prefer to give high salaries to new hires rather than giving raises to old employees they know well?” which is about this.

Speaking of inversion, Freedom painfully recalled:
“I felt the team I was in at the time, my performance was the 2 in 271, but my reward was the 1, very unfair.”
271 refers to most companies’ incentive systems following a normal distribution,
giving the top 20% performers the best rewards,
making the worst 10% eat shit (or the politically correct way to say it is give them work suggestions),
the remaining 70% are about the same.
Different leaders have different policies:
some Leaders like to have everyone take turns eating shit,
the benefit being everyone gets along,
other Leaders make the worst eat shit,
in many cases one person fixedly keeps eating it;
some Leaders have newbie protection,
new comrades just out of school, or just joined the team, won’t eat shit at first.
But everyone also complained, if calculated purely by dps,
the new hires should eat shit, we also grew up eating shit ourselves.

While saying this, the newly served fried-dough-stick rice rolls were divided up clean by everyone.

(Four) Dev Experience

Talking about money always has this grown-up feel,
vulgar yet real.
To make the topic less heavy,
Enye who’s thinking about career development asked:
“Without considering money, what are the similarities and differences between early-stage companies, mid-stage companies, and large companies?”
“Without considering money,” I thought, and said,
“I really, really like the work environment of excellent small companies.”

For one, the dev experience is amazing.
When we only had a few people,
although tech had divisions, frontend and backend,
each person was full-stack on the business,
meaning anyone could do anything,
data flow data storage data format? Your dumpster.
Business code CRUD 400/500? Your dumpster.
Deployment versioning service distribution dependencies? Still your dumpster.
And every change took effect very quickly,
the feedback effect was super strong.
FM quietly nodded:
At that time there wasn’t much communication cost,
I’d say I could finish in two days,
then in two days I’d grind it out,
you’d think I was awesome,
I’d think I was awesome too!

For another, like FM said,
it’s the communication cost issue.
I asked FM: “Don’t you feel after you have more people, bickering becomes really serious?”
FM said yes, and gave a concrete example:
their R&D had a lot of people,
many people didn’t know each other,
so they didn’t know who the team lead was or who had decision-making authority.
Then business issues are often ambiguous,
from time to time someone has disagreements over business issues,
then argues for a long time without any decision,
causing a lot of time to be spent on communication.

Talking about this topic,
everyone resonated strongly,
Enye whose work involves dev plus product management plus customer relationship maintenance excitedly said:
“You know why? This is exactly seat decides the head!”
Many times both sides’ conflicting views are actually correct,
the issue is both people’s seats face their own direction.
Even when you reach senior level it’s the same, both doing decision-layer’s needs,
but your KPIs are different, teams are also different,
naturally it’s hard to avoid bickering.

Talking to this point, I thought about a very important concept in the whole OKR methodology called “calibration.”
That is when big tasks are broken down,
the first thing to ensure is their direction must be consistent,
there can’t be conflicts between them.
Since the methodology talks about this,
it means conversely this problem actually exists widely.

Talking along, FM said with an air of an old hand:
“So actually as R&D, it’s important to maintain good relationships with product, ops, marketing folks.
Even at work, if everyone doesn’t see each other as partners, it’s actually super painful.”
Everyone nodded in agreement.

Having pulled at this so much,
I noticed we’d strayed from the initial topic,
so I added:
Actually whether small companies or big companies are better,
I feel it depends not only on the person but on the team,
I really love my current team atmosphere.
For example,
our former Ctrip teammate,
after coming to my company sighed:
“Damn, there’s actually places like this? All the bickering I learned at the big company is useless here!”
Everyone laughed.

(Five) Romantic Life

A few guys born in the last century gathered together,
naturally chatted about the topic of pretty girls.
Everyone discovered that 4 out of 5 present were single,
and a buddy had entered the “Kiana is cuter actually” Buddhist state,
couldn’t help sighing.

Finally, everyone planted flags on Enye’s head, who’s going back to Spain again next Monday:
“Next time you come to Shanghai, bring a girl with you.”

(End)