Gergely Orosz: The Main Reason People Leave Big Companies for Startups with Temporary Pay Cuts is Engaging in Mundane Work
The Main Reason Engineers Leave Big Companies to Start Their Own Ventures
Gergely Orosz points out that people leave big companies and accept temporary pay cuts to join startups mainly because they feel underutilized and are engaged in mundane work.
Recruitment pitches often say, "You can do work that matches your potential." A secondary factor is equity: joining a VC-backed startup early and obtaining good shares can yield returns of 10-100 times the salary if the company grows and exits.
Another common motivation is a combination of the two, participating in the entrepreneurial gamble when they believe the odds are favorable.
In terms of market mechanisms, the high salaries and stability of big companies and the high-potential equity of startups create talent mobility. Funds flow from big company salary packages to startup equity incentives. The beneficiaries are startups that can provide meaningful work and equity, while the pressured side is the big company teams engaged in mundane internal projects.
Supplementary data shows that this viewpoint is unrelated to AI and is part of a long-standing pattern of talent mobility.
Source: Public Information
ABAB AI Insight
Gergely Orosz has long observed the flow of tech talent, noting that the main reason for leaving big companies is a lack of meaningful work rather than just salary. Startups attract mid-to-senior engineers with the promise of "realizing potential" and upward equity opportunities.
From a capital perspective, VCs exchange equity dilution for talent from big companies, motivated by the potential for high returns to offset short-term pay cuts. Big companies, due to their size, lead to project fragmentation, accelerating talent outflow.
Similar cases can be seen in past tech cycles where engineers moved from Google and Meta to startups. We are currently in a phase of ongoing competition between the stability of big companies and the high-risk, high-reward nature of startups.
The structural judgment indicates capital concentration: talent flows from low-utilization big companies to high-leverage startups, driven by the expectation of meaningful work and equity outweighing short-term cash, causing scarce engineers to cluster around high-potential projects.
ABAB News · Law of Cognition
Mundane work is more damaging than low pay
Equity is the gamble ticket for talent from big companies
A sense of potential is the real recruitment trump card