Okta’s successful IPO on Friday marked another win for San Francisco’s technology industry, which has exploded in the past decade with new software and internet companies.
But Okta’s location is a blessing and a curse.
Buried in the risks section of the software developer’s prospectus is language that now shows up in every IPO filing for Bay Area companies.
The non-legal version would say something like: “engineers around here are expensive and flaky.”
Non-engineering talent is going to get super scarce. Startups just don’t value it. They offer horribly low salaries compared to established companies. I know senior financial analysts that make more than startups want to pay for director level. They want someone that’s director level to take the massive pay cut with the promise of pre-IPO equity. The problem is there are really successful public companies that are generous with equity. The startup would have to quadruple in value and have a successful exit just to break even on comp over a 4-5 year period. That math just doesn’t work. Then they wonder why their req is open for 6+ months, and they can’t find anyone.