Ask HN: Typical Startup or Abuse?

Over the past year I have been working for a local startup, in the United States, as the Jack-of-all-trades. We offer a product specialized to a fairly niche industry that is doing fairly well. In the past year we haven gone from 2 to 75 clients, gaining around 3 clients per week in the past two months. The product typically nets $5,000/yr per client. The product itself is web-based running off of an opensource CMS.

For the first 10 months I was the only person in the office doing work ~9 hours a day. From client setup, to design, to code and deployment I did it all. Twice a week I would be joined by the other 3 part-time guys who would do what they could in their 4 hours they had. Besides myself and the other team members the founder would do sales two to three days a week part time. Now a year in we have eight full time team members (5 Dev, 1 Sales, 1 CS). My role in the company has now taken on the Jack-Of-All-Trades plus the management of these other team members. Which I consider to be a great accomplishment for myself and I am proud of. However one factor in all of this has not changed in the past twelve months: compensation.

I was never a fussy person about money, especially when it came to startups. (I was in two other startups prior to this one.) I understand that you must bootstrap and try to be as frugal and agile as possible in the start. However a year in, and I am still making around $500/week. Which, in the beginning was great. However over the past year I have moved out, bought a car (out of need, the other died), gotten married, and have had a child. (With a second one on the way.) The other two major factors are: no benefits, and the founder seems to refuse to officially employ me (or anyone else in the company.). He still gives all of us a 1099. Yet, he treats us like employees. We have required working times, usually 8AM - 6PM, we only get a half hour lunch with no other breaks, and are on-call 24-7. Honestly, those items don't even bother me that much. However what does is that if I am one minute late from my 30 minute lunch, the founder will immediately call me asking where I am. If I happen to arrive at work a minute or two late I get a lecture. If I don't answer a call, on a weekend, I get a talk about availability. And if I am sick, I am required to work from home for the day. (I was in the hospital and still required to work.) That is what really gets me upset about this situation. I am fairly sure what he is doing is illegal with the 1099 issue. But it really upsets me that for all of the work and dedication that I have put in, that I can't get cut a break once or twice.

I am unsure how many of you are in a similar situation or even care. I honestly am not looking for any sympathy on this however I am seeking advice. Two weeks ago a new-hire and I went out for lunch and he asked me about the 1099 situation and asked what he should do. I told him to take some of the money out of his check to save for taxes. He said something to the degree of "But I only make $500/week!". I am not exactly sure why that made me lose my cool. Ever since then I have felt that the founder has not only been using me, but also the rest of the team. And I am letting this issue get to me. I spend each day now hating what I am doing because I have this feeling. I know the easiest answer may be: Well why not just talk to the founder? And I have.

The response is always the same: "We can't do that right now."(Benefits/Employ) "Remember I haven't even paid myself yet for any of this!"(Compensation) "It's cheaper for you if we do it this way!" (1099) And he won't budge.

I have been doing web work since I was nine. This is my passion in life. I spend all the time I can perfecting my craft and trying the best I can to stay current. I've never cared about money in the past, but the time has come where I have to. I hate myself for letting this job get to me to the point where it makes me burnt out on my passion.

This leaves me in the position of asking myself what to do now. My gut, and my wife, is telling me to begin looking for other jobs. Any advice? (And thank you for taking the time to read this over, I deeply appreciate it.)

That seems rough. I'm actually going through a similar (albeit not as extreme) situation, which is why I'm at home on a Saturday night trying to generate leads for my freelance business.

Two major points from me:

First, you shouldn't get angry. You're there of your own volition and have to make the best of your situation. I know it's rough to hear, but getting angry will just waste your time and make it harder to be proactive about improving your situation. I need to remind myself of this constantly.

Second, I cannot attest to the legality of what's happening within your company. However, it would seem that if the founder is such a tyrant then many people would defect (clients as well as employees).

It seems like you could start a competitor business which serves the companies clients better than they are being served now. Who knows, any illegal behavior might nullify a non-compete clause (I am not a lawyer so please verify).

At any rate, best of luck. I do believe that businesses who don't value their employees pay for it in the long run so hopefully these things work out.

Short term, try reaching out to some people for freelance work. It's probably the best and quickest way to raise your income.

Thank you for your advice. Along with doing this business I do run a fairly good freelance business to make up for the lack of pay. The freelance work is what really makes me happy. The clients are always great and seem to love the attention I give them and the work I generate for them. However it does make it a bit hard mentally and physically for me and my family. Getting home at six, seeing my family for three or four hours and then working until 3AM each night gets daunting.

Thank you for the bluntness, at times -- especially now, I think it is needed. I have been in this position twice before where I have been debating what to do in terms of leaving/staying. However this time is different. I have never felt a depression like I have over the past two weeks.

Mentally commiting myself is something I believe I can take hold of. My main issue and worry will be finding a new employer. The area I am in currently, Northern Eastcoast, lacks tech companies. I would have to relocate to Philly, New York, or Boston to get to any hub. And currently money is too tight to do something of that nature.

With this job I got myself into this nasty living paycheck-to-paycheck situation. I will have to have something in place before I leave.

Sorry, but I doubt that the guy is actually going to give you any equity. You could say you are leaving unless he gives you an offer on paper (which should include some notion of the percent of the company you will get - if he just offers 100,000 shares you can bet he will set total shares to 100,000,000,000 to screw you out of owning a real chunk), but he'll probably call your bluff.

As another poster suggested, get out and go freelance. Maybe you can steal his clients - I hope he has been as lazy on the non-compete as he has on granting options.