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Ask HN: Typical Startup or Abuse?

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Re: Ask HN: Typical Startup or Abuse?

#151

Post by Daniel_Newby »

lkrubner wrote: post #146
Daniel_Newby wrote: post #123

Earlier quoted context omitted.

The 1099 versus W-2 gambit is dangerous. He could, in principle, claw back the entirety of the 1099 payments, including whatever you paid on as taxes, then adjust them to a W-2 and pay you back less W-2 taxes. You'd then have to wait until the next tax cycle to get a government refund on the 1099 taxes. Retroactive reclassification of money is a dangerous game unless you have big cash reserves and lawyers of steel. T…

Actually, the IRS has been cracking down on 1099 abuse. So, he doesn't necessarily need to get a lawyer, he could possibly just notify the IRS and let them come in with lawyers. I agree with you that using the law is always a bit of a gamble. But the mere threat of calling in the IRS might be useful.

The IRS has not exactly been cracking down on abuse. A lot of the 1099 stuff has been double taxation: contractor/employee gets paid on 1099, they properly pay all taxes including self-employment, then the IRS reclassifies them as W-2 and collects a second round of taxes and fines from the contractee/employer.

Basically the IRS considers the employer guilty unless they can track down the contractor/employee and extract paperwork from them, even though the IRS already possesses the documents that conclusively prove innocence. I'm actually mildly impressed nobody has truck bombed them yet. Crazy as he was, the airplane dude had a point.

The lesson for contractees is that you pay estimated taxes for your 1099 contractors. If they have deductible expenses, they can take it up with the IRS on April 15.

Re: Ask HN: Typical Startup or Abuse?

#152

Post by kls »

datawalke wrote: post #28
coffeemug wrote: post #22

I mean no offense when I say this, but you're a great example of a "smart but clueless" employee dishonest startup founders prey on. At $500/week, you are making $26,000/year. Assuming you're a good developer (and now manager), you could probably pull in $120,000 working for Google or Facebook, which means you're losing $94,000/year (!) in opportunity cost (not even counting health benefits or other minor perks). You…

I thing renegotiation is out of the question. I feel even if I renegotiated and it ended up being the perfect compensation/benefits position the day-to-day work environment would become hostile -- and that is something I do not want to happen. I honestly don't know what I was thinking. -- Well actually I do: Back in 2008, a year and a half into college, I won a local business plan competition and dropped out. (The co…

Going into college I thought everyone would have the same passion I did. Into the first semester I was helping teach my major related courses

Don't you hate when you come to that realization, it is even worse when you get out in the real world and find that these people make up a good portion of your technical peers. IT is one of the reasons so many IT projects fail. Crappy people make crappy products when it comes to software.

Don't fall into the education trap. I know that it chews on you and can give you an inferiority complex but unless that degree has MIT or Stanford it's crap. I fell into that trap and spent 40k to get no further than I already was. But I started thinking in my mind, I will get passed up for other people. This was after my first CTO position. Imagine that, I had made CTO, went on to sell the company, was wildly successful and yet the education trap was chewing on my mind. I realize now that the only person that ever cared was myself. We are in an industry where actions speak volumes and anyone you would want to surround yourself with as a peer, knows that a degree does not a good developer make.

Re: Ask HN: Typical Startup or Abuse?

#153

Post by kls »

datawalke wrote: post #60
mgkimsal wrote: post #58

To chime in - get out. What the owner is doing is illegal as well as unfair. As for not wanting his business to fail, I agree taking intentional actions to cause harm would be bad, but I suspect they'll cause themselves enough harm simply by you not being there soon after you leave. From the other side of the table, I employed a handful of people in the early 2000s. We had a couple good years, and then a couple bad y…

Freelance may be my best choice at the moment. I do however have to make sure I have a little more in the bank before I make the jump if I don't have a full time position lined up. Instead of killing myself with extra side-work raising my freelance rate may be in order just to have a little bit more of a cushion. If I didn't have a family to care for I wouldn't be as worried. Thank you for your advice.

Do not work for less that 40hr freelance. The agencies are charging no less that 80hr for you if you go through them and charging less than 40hr gives the impression that you are an amateur. Realistically, you should try to get what an agency would get if you have a direct client. When I have too much freelance work, and my regular peers are booked up. I always look for the guys that are in the $80-120 range. There are some hacks that have the audacity to try and get that rate, but for the most part those are the rates of a good self-starter that you know will be able to take the ball and run with it. If I am looking for another hand on a project that I am running, I look for the $40-60hr guys.

Re: Ask HN: Typical Startup or Abuse?

#154

Post by techiferous »

santry wrote: post #100
techiferous wrote: post #84

Earlier quoted context omitted.

"you CAN negotiate, it isn't evil" This is generally an option, but in this case it is not in the original poster's best interest to negotiate. The only proper course of action is to leave. His employer has demonstrated how he prefers to do business and that's not going to change. Negotiation can win you the battle, but there will be plenty more down the line. Might as well get hired by more scrupulous employers (and…

I believe Patrick was suggesting he negotiate with potential future employers for a fair salary, not with his current employer.

Ah, thanks for clarifying!

Re: Ask HN: Typical Startup or Abuse?

#155

Post by kls »

agentq wrote: post #132
sliverstorm wrote: post #48

Just to give you an idea of where you stand pay-scale wise, I am a student employed part-time. I make about the same as you during breaks when I have the time to put in full-time hours. You are making student money for professional hours.

To further goad the OP to immediately leave his current job: between junior and senior year of college, I made a bit more than the OP's yearly pay in a 12wk internship. Please, for your wife and kid(s), get out of this horrible situation.

My first tech job was 38K a year, 17 years ago.

Re: Ask HN: Typical Startup or Abuse?

#156

Post by kls »

Maven911 wrote: post #136

Also another piece of advice...I would aim for at least 60k$ a year in your next job (but tell them 65-70k$) based upon your 2 years of experience and you are not in a major metropolitain area...but due to the fact that you do not have a completed degree, especially a university one, I would expect it to be harder to negotiate salary terms.

As a hiring manager in at least 5 companies, A degree has never been a deciding factor in what I pay a new employee. Years of experience played a far larger role.

Re: Ask HN: Typical Startup or Abuse?

#157

Post by jtheory »

bensummers wrote: post #20
datawalke wrote: post #17

Earlier quoted context omitted.

I do believe life is a good deal of weighing risks and taking them at a period of time. Jumping right off to freelancing would be too uncertain at the moment. Bills come to around $1,500/mo. Freelancing at the moment generates around $900-$1200/mo. But I currently only have the bandwidth to handle 1 or 2 projects per month. On the rebellion side I would not feel ethical doing so. I don't want this guy's business to c…

If the product is as good as you say it is, there should be plenty of money to pay well. And paying people well should increase the quality further: if you don't have to worry about basic needs you've got more bandwidth for being technically excellent. Don't feel bad about 'rebellion', loyalty should be both ways and respect must be earned. Stand up for yourself!

If the product is as good as you say it is, there should be plenty of money to pay well.

It sounds to me like this business is currently failing, but your boss is "faking it" by exploiting you; he might just as well be paying you normally but keeping the doors open by draining his grandmother's bank account.

It might not be a problem with the product -- after all, the client list is growing swiftly.

Simply put, he needs to either find the money to pay for what he's demanding from you, or he needs to close up shop. He might need a loan or investment to cover the gap until you are cashflow positive, but in this case he is stealing from you instead.

It's not even an "investment" on your part, because he seems to have utterly no intent to pay you back. That's just stealing.

For comparison, in an honest situation, he would be either: * paying you a normal salary as an employee * paying you a higher rate as a 1099 contractor (to account for your reduced security and benefits) * or paying you less but accepting the difference as your personal investment in the company -- so like any investment, if the risk pays off, you would be paid back MORE than your investment in the future. This would be formalized by giving you shares, etc. (and you should be able to calculate how/when you would be repaid).

Re: Ask HN: Typical Startup or Abuse?

#158

Post by Maven911 »

kls wrote: post #156
Maven911 wrote: post #136

Also another piece of advice...I would aim for at least 60k$ a year in your next job (but tell them 65-70k$) based upon your 2 years of experience and you are not in a major metropolitain area...but due to the fact that you do not have a completed degree, especially a university one, I would expect it to be harder to negotiate salary terms.

As a hiring manager in at least 5 companies, A degree has never been a deciding factor in what I pay a new employee. Years of experience played a far larger role.

Sure..and it shouldn't if you could make them go through your tests. But regardless, not having a degree can get you easily screened out of a lot of jobs

Re: Ask HN: Typical Startup or Abuse?

#159

Post by jarsj »

mmaunder wrote: post #56

There are plenty of examples of entrepreneurs cajoling employees into working for little or no pay, sometimes with a false promise of stock options which are a tiny fraction of outstanding stock. But this is one of the worst I've heard. I'm sure the other comments from the smart folks who hang out on HN will echo the above. So I'm going to suggest a strategy for you that is as exploitative as your boss is being: 1. D…

In addition include the following in your plans,

1. Become slow. Start doing 50% of work you do now and quietly spend the rest of the time preparing for your interviews, getting some portfolio web projects live with POLISH, like getting those corners rounded and stuff. Its really important. Also make sure no one knows you are doing this.

2. When you quit, write a blog, just paste the same thing you wrote here. I am sure many out here will publicize it and help your message reach far. People like these need to be taught a lesson and best way you can do it is by telling everything you told here to his clients. I wonder if they would like to continue doing business with such a person.

Now to make you feel good. In India, 21 is actually early to start making money. I started at 21 at Google. 23-25 is the average age when people start taking jobs and making money. I am surprised that you are married. With your age and experience you should simply focus on building your skills, your resume. Note its better to have one or two polished and public projects than having dozens of half baked things lying around. If you need help polishing things, post it here (seperate thread) and we will help you out.

Re: Ask HN: Typical Startup or Abuse?

#160

Post by jlgosse »

jlgosse wrote: post #35

I'm sure you're great, but I'm sick of seeing: "I have been doing web work since I was nine." What's up with this? I was probably the most technology savvy kid to come out of my high school, and I'm still not even remotely close to saying something like this! I bet that when you were 9, you couldn't even do most advanced algebra, let alone real web work.

I'm not actually sure why I posted this. I was drinking that night, so I'm sure that had something to do with it.

Sorry guys!

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