211–220 of 419 posts
Here's ALL you need to know about your company stock options: ask yourself - if I had ($PRICE_PER_SHARE * $NUMBER_OF_SHARES) in cash sitting in my checking account RIGHT NOW, would I dump ALL of it into my company's stock? If the answer is yes - hold onto those options and simply DO NOT exercise them. If the answer is NO - FUCKING SELL THEM NOW! Take the tax hit, diversify into other investments, take a cruse, waste…
I had a summer internship at HP while I was in college. (I graduated in 1992.) When I graduated, the assumption/expectation was that they would offer me a job. They hesitated, and a manager who was unusually nice to me explained that HP hires people who will stick around for many years -- and thus, they weighed every hire carefully. He went further and said that several years before that, when there had been a recess…
>the boss/owner should be paid last Yup. My dad is big on that too. Always thought he overplayed it, but one day he explained that the people he employs are quite poor. So if they don't get paid they can't put food on the table - literally. While he has a bit more of a buffer.
This situation is easily avoided by filing your 83b and early exercising your options immediately, or at least before a subsequent funding round/term sheet valuation cycle.
None of the comments describing those outcomes mention this. For those reading and new to the startup game, read up on the 83b. When you're an early employee at a startup, the cost of early-exercising even a substantial number of shares is often not cost-prohibitive. And should you leave the company before it all vests, you get a check for the unvested remains. It's a NO-BRAINER when the exercise cost is small.
As devs we had a really easy compared to now; expectations were low and getting anything working was enough to satisfy their investors. We knocked out things fast with a small team but a large difference before and after at that time was that before actually no-one tested or even looked at everything; they were happy spending the money. Salaries for devs were high and we were rockstars no matter the quality or performance.
When the crash came, most projects for startups instantly halted. Sometimes literally from 1 day to another we got letters from lawyers that their clients were filing for bankruptcy. Meaning a lot of ongoing work was unpaid (not a lot; our CEO did not tolerate late payment, but payment comes after the work, per month, so their were gaps).
The owner of our office (we had 2 floors, they had the rest) went bankrupt a few weeks in so we had to move. All offices around us became empty over the next weeks to months; almost every building was for hire the next year.
I had a lot of dev friends who lost their jobs at startups overnight and who all (I cannot think of any who did not) moved to big corps (not necessarily tech) and have not moved since.
We luckily, because of the worldwide components sales, had attracted some large clients (insurers, banks, unions, political parties) so we were not hit so hard; we had one of our best years 1 year after. We now had the opportunity to pick up very good devs and we did.
The fallout was that we did not acquire new clients for a few years and lived on the current clients (risky but better than the alternative of no clients).
Another thing we really noticed was that people after were really counting money and so they started to really push for performance and quality which put strain on us devs until we figured out how to cope with that (we never had to before).
A lot of devs I know could not find jobs until a couple of years later; companies hired way too many people. The big consultancy outfits at the end of the 90s started hiring and training non-stem grads as devs for instance. They hired whoever wanted to program to satisfy demand; the layoffs were massive. After the crash they noticed they did better work with vastly less people as well; the low focus on quality before the crash made many people kind of perform minimally.
There is some economic downturn coming soonish which always has consequences for jobs etc, but I cannot see it going the same way as it did then. Devs are already ‘applied optimally’ (worked to death) in many places so after the crash they cannot work harder as we were forced to then (financials went down, quality demands went up) but I do think, now that so many people are devs and companies are hiring whatever they can get, globally, that will cause a massive amount of layoffs and probably lower salaries for a while. Good, all round devs with communication skills won’t have issues, nor will talented beginners, but a lot of others will probably be axed.
The 2001 crash did do little in the long run; companies are still invested stupid amounts (far larger than at the time) into for bad/infeasible ideas and companies are again hiring whoever and training them. So mid to longterm (5 years) there is nothing to fear, short-term, depending on what and where you work and how good (and lucky etc) you are, you might get a few years off.
I found though that right after both crashes (2001,2008), it was a good time to create a startup; resources are cheap (people, offices, 2nd hand hardware (we bought a lot of servers and laptops of bankruptcy auctions for next to nothing) etc) so there is silver lining no matter what happens. Make sure to save money though.
The biggest issues were with friends who recently picked up ‘html programming’ and who worked in a (bad) startup and recently had a (too high; money was forever in the boom!) mortgage and kids right before the crash and suddenly everything collapsed. Luckily in my country you won’t die, but they usually had to sell.
I was living in Florida, working for a Boston-based WebDev/ISP consultancy. Smart people, high-flying projects, free snacks, nerf shenanigans, constant hiring, with bonuses for you-name-it. I'd recently gotten a nice bonus for bringing on my good friend as the office's systems administrator. Business slowed, clients missed payments, people started watching f*d.com, the first round of layoffs came, the execs did a tou…
>people started watching f d.com what is f d.com?
I see a lot of comments referencing 9/11 as a big cause of the downturn and am curious... why? Given the size and power of the US, the 9/11 attack was just a pinprick. Was it the social and government reaction to 9/11 that actually caused the damage? If so, was any of it deliberately engineered?
Earlier quoted context omitted.
I’m from Boise, where HP headquarters are. Many of my friends parents were laid off unceremoniously in 2008/9. There was a lot of resentment
HP was a different company by 2008. The HP Way had been replaced by the usual corporate abuse - good for the share price, bad for everyone else.
I went through it, and started a company soon after it crashed and then a couple more during the downturn. Ironically a lot of money can be made in downturns if you know where to look and how to approach it. What I saw and experienced was enterprise devs basically just kept doing what they did. Startup devs that could went into (or back in some cases) to enterprises. Enterprises used it as an opportunity to snag up g…
My anecdote is the opposite: My father was an engineer at a company that made machines for semiconductor manufacturing.
They had a physical product, customers liked them, they sold each machine at a profit - none of the obvious-with-hindsight folly of companies like Pets.com.
However, when the dot-com bust happened they went out of business anyway. Turns out the collapse of the likes of Pets.com dropped the demand for semiconductors from the point where every wafer manufacturer wanted to expand capacity to the point where no-one wanted to. Boom, no orders. And of course, some investors when they see 'tech stocks' are falling, will sell your stock even if your business is much less speculative than the likes of Pets.com.
There were three lessons I learned:
1. Your business may be nothing like Pets.com and may seem to have strong fundamentals - but if the bottom falls out of tech stocks, you can end up unemployed anyway.
2. When the going gets tough, satellite offices get hit before head office.
3. If you have car/mortgage/credit card payments, you can get insurance that covers the payments if you lose your job. A lot of the time this isn't a good investment - but once the company started laying people off and everyone could see the writing on the wall, people with debt brought gold-plated insurance and were glad they did.