How top startups pay designers
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 — 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 the 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 a few things 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.
The problem
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, which weigh down the salary numbers. 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 who 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.
The simple way to get informed
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.
What I discovered for San Francisco, circa 2014
When I compared compensation details among like-sized startups in San Francisco, a few trends became clear.
There is a hierarchy of design skills
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: $100–150k
- Senior UI Designer: $90–140k
- Senior Visual Designer: $85–130k
(Note: “Senior designer” is generally loosely defined as someone with 5–7 years as a practicing professional designer.)
Top startups pay similar salaries to the big companies
Surprisingly, design salaries at big well-known companies in SF 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.
Designers are paid similarly to engineers (or a bit less)
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. Not only will designers appreciate the competitive salary — they’ll also appreciate 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.
I can’t afford that, now what?
You may be reading the salary figures above with some astonishment: “Surely, not all startups can afford these salaries!” Early-stage startups might think twice before offering their first designer a $150,000 salary. What else can you do to attract excellent design talent?
Equity is a big equalizer
Early on, equity is an excellent way to compete with bigger companies. Offering a generous percentage of equity at early-stage prices can offset a lower starting salary.
A tactic I’ve used is to offer early senior hires two options:
- Option A has a higher salary and lower equity
- Option B has a lower salary but more equity
The great talent almost always chose more equity and appreciated the opportunity to have a larger stake in the business.
Keep in mind: Many designers do not know how to calculate the value or potential upside of equity compensation. It can be difficult to understand strike prices, outstanding shares, options vs grants, etc. Take the time to explain that there’s more risk at your early-stage business, but that there’s also significantly more potential than joining another company that has already raised $40M in their D Round.
Mentorship and culture are important
Designers are enticed by more than just money. They want to grow as designers, and mentorship can provide that opportunity. If you already have one strong designer, use that person as a lure for other talent by advertising the potential for mentorship and growth. Likewise, if you feel that your company has a great design culture (or you want help building one), be clear about it. You might be able to beat a more generous offer from another company if your business is more fertile ground for design.
Frame a great challenge
Designers are motivated by challenges. Describe your company’s unique design challenge, or show why your business is making the world better in a concrete way and challenge the designer to join you on that mission.
Offer clever perks
Surprisingly few startups think creatively about using perks to entice designers. Some small “carrots” can make all the difference in securing a designer in a competitive hiring landscape. A few ideas:
- Moving costs
Designers outside the largest cities in the U.S. are often wary of making the big move to your city. Reduce the friction by offering no-handcuffs moving expenses. For a few thousand dollars you might attract a stellar candidate who never considered leaving Boise. - Signing bonuses
For truly top-level talent consider a meaningful signing bonus. This can be tied to a cliff period (e.g. 12 months) but it’s a strong indication that you’re serious. - Hardware budget
One company I worked with offers every member of their design team a monthly hardware budget. Each month, designers can expense up to $250 on any device with an interface. I saw designers buying Nest thermostats, Fitbits, GoPros, and all manner of gizmos. This is great! For only $3,000 per designer, per year, the company created a cool perk that the team loved. (It was somewhat educational too!) - Unique incentives
There are hundreds of clever incentives you could offer designers. Give them free membership to a local art gallery; send them to any conference anywhere in the world once a year; give them $200 each month for Uber, etc. For a relatively small expense you’ll stand out when designers are choosing their next move.
Hiring designers is hard work. And with the hot competition for design talent in 2014, it’s even more difficult than it was a few years ago. Spend a few hours to analyze the publicly available salary data in your region, and make sure you’re offering a competitive salary. Add equity compensation to capture the upside potential, and pitch the unique challenges that your startup offers. Include some smart incentives and you’ll have a shot at recruiting truly excellent designers that give your company the highest chance of success.
If you have questions, comments, or want to share your own experience, tweet @gvdesignteam or @dburka.
