The January jobs report released Friday is chock full of positive figures for the American worker. But there’s one other number that came out worth noting, a single stat that acts as one of the best measures of the health of the technology industry, which is itself one of the best leading indicators of the economy. Read: U.S. adds 225,000 jobs in January as hiring speeds up again — labor market ‘astounding’ According to the 2020 version of the compensation guide we put together every year, the average tech account executive saw a salary increase of more than 4% last year. Even better, the many dozens of companies we surveyed indicated that in order to hire those same executives, the companies were willing to offer starting salary increases of 9%. These are the frontline salespeople at recently funded startups. And that means that before accounting for other forms of compensation like options and bonuses, the salaries of some of the most important employees at rapidly growing companies in Los Angeles, Chicago, New York, San Francisco, Austin and points beyond grew at more than twice the rate of inflation. Think of it as a measurement of tech at its most basic level. An account executive is the person doing demos and closing deals. The fact that there’s a significant rise in their base salary suggests there still exists a healthy competition for their services. And that’s important because they’re doing what matters most: Generating the revenue that makes everything else in the company possible. Contrast that with some other stats, those usually used by the large number of vocal doomsayers who’ve tossed out predictions of a tech bubble about to pop since the end of the Great Recession. The Economist cautioned nearly a decade ago that “irrational exuberance has returned to the internet world.” “Silicon Valley tech bubble is larger than it was in 2000, and the end is coming,” CNBC announced in 2018. “Another tech bubble could be about to burst,” the Financial Times echoed at the dawn of 2019. Search a little, and you’ll find even more pronouncements to kick off this new decade. These and many other similar pieces have no shortage of ammo accompanying their calls for caution. Bubble prognosticators cite price-to-earnings ratios and an equity-market-cap-to-GDP ratio that have reached all-time highs. Yet those analyses come from a 30,000-foot viewpoint, often accompanied by an unhealthy obsession with unicorns at the expense of the industry at large. As publicity magnets like WeWork, Peloton
met with investor dismissal when they chose to go public, the chorus only got louder. This skepticism is perfectly understandable. The business commentariat has been naturally eager to get on record in hopes of anticipating a financial cataclysm. No one wants to be caught unaware like so many of us were in the run-up to the Great Recession. And, to be perfectly fair, the failures and struggles of so many cash-burning unicorns do make for great press. What seems to be lost, however, is that the tech startup economy is now entering its fourth decade. That it remains composed of not just unicorns, but thousands upon thousands of companies great and small. And that the true value of the industry — a gift for innovation — hadn’t slowed one bit. This becomes clear the more data you have to pull from, especially data that represents the on-the-ground truth about tech, rather than a play-by-play of the industry’s most interesting targets. Investing in sales is the purest expression of the goals of venture capital, the engine that drives most tech growth. To meet hyper-ambitious revenue targets. To support product development and further ingenuity. To demonstrate that a startup’s promise is not just sound in theory, but in the real dollars and cents of a market speaking. It shows that executives big and small aren’t merely fixated on valuations and new rounds of funding. They’re placing their money at that juncture where companies either thrive or fail. To be sure, this isn’t a completely comprehensive view of the tech industry as a whole. This year’s guide is based on the placement of 373 account executives at dozens of companies. That’s far from everyone who’s getting a new sales job, but it’s also not a small sample size. And it’s another data point that explains why very smart people continue to bet big on tech’s good health — venture-capital investment has broken the $100 billion mark two years running, reaching a record $136 billion in 2019. As for tech’s IPO struggles, these can either be seen as a bubble soon to burst, or as a portrait of a healthy industry in a constant state of correction. Investors showed with Lyft, Peloton and the like that they’re no longer enchanted by the simple promise of an idea. They’re demanding equally hopeful signs of revenue before they leap. It is sometimes useful to look at an industry from a great remove. Just as often, though, it’s useful to know what’s happening on the ground, where the hundreds of thousands of people who actually make up an industry work in relative anonymity, doing jobs that, at least for the time being, are not only available but pay well. Carolyn Betts is the founder and CEO of Betts Recruiting.