Done that. My last tenure was as CTO for a VC firm. After a year off (due to company foreclosure and becoming a father), clearing my head, and trying to make sense of my experiences, I came to a couple of conclusions:
1)I had been overpaid commensurate with the *actual* work that I performed... starting as an engineer and moving on into management
2)The amount of money wasted, not just on salaries, by most firms in the '94-'00 time frame was ridiculous. If you are not able to bootstrap your company (perhaps with a very small initial investment), you probably should re-think your concept.
3)Clients are *not* going to spend a million bucks on a website anymore. They are not going to spend 900k, 750k, or even 500k. Especially considering Verisign and their horrible "Create a business website for 34.99" commercials. That means that the hourly rate charged to those clients drops significantly... henceforth, salaries must be adjusted.
4)Entreprenuerial people would rather take the gamble of a big chunk at the end of the year than a very high salary with no chance of the year-end profit sharing. That's why we only hire entrepreneurial people.
I don't entirely disagree with you that the market may rebound. But, I still hold the above as true. Even if my firm had millions in the bank, I would probably stick with my assumption above (salaries limited to <= 100k.
At my company, we are capping *all* salaries to a reasonable rate... where reasonable <= 100k. The reason behind that are two-fold: 1) IT workers on the whole made way too much during '94-'00, and, 2) it makes our bottom line better at the end of the year and so we are able to give out more in the way of profit sharing.
The days of 200k/year are over for the vast vajority of us, and the 250/hr consultant is endangered. That's a *good* thing, I think... it makes us focus more on doing our jobs than how much money we accrue per day.
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1)I had been overpaid commensurate with the *actual* work that I performed... starting as an engineer and moving on into management
2)The amount of money wasted, not just on salaries, by most firms in the '94-'00 time frame was ridiculous. If you are not able to bootstrap your company (perhaps with a very small initial investment), you probably should re-think your concept.
3)Clients are *not* going to spend a million bucks on a website anymore. They are not going to spend 900k, 750k, or even 500k. Especially considering Verisign and their horrible "Create a business website for 34.99" commercials. That means that the hourly rate charged to those clients drops significantly... henceforth, salaries must be adjusted.
4)Entreprenuerial people would rather take the gamble of a big chunk at the end of the year than a very high salary with no chance of the year-end profit sharing. That's why we only hire entrepreneurial people.
I don't entirely disagree with you that the market may rebound. But, I still hold the above as true. Even if my firm had millions in the bank, I would probably stick with my assumption above (salaries limited to <= 100k.
The days of 200k/year are over for the vast vajority of us, and the 250/hr consultant is endangered. That's a *good* thing, I think... it makes us focus more on doing our jobs than how much money we accrue per day.