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Ask HN: Pros and cons of working at a startup in 2018?

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Re: Ask HN: Pros and cons of working at a startup in 2018?

#651

Post by barry-cotter »

nostrademons wrote: post #324
sidlls wrote: post #248

Earlier quoted context omitted.

"Because founders take at least 100x the risk of an early employee, and 100x the personal risk and commitment." The risk part of this isn't remotely true in many cases,or rather it's offset by so many other benefits accruing to them. Founders generally are drawing at least a small salary and, in this context (YC/VC funded) they are not necessarily risking much if any of their own capital. Moreover they are benefittin…

Be careful about assuming that how the company looks when the early employees are hired is how the company always looked. It usually takes 2-3 years before a typical founder can get seed funding and even think about hiring employees. During that time period, they are funding the company themselves, and doing all the work themselves. Yes, they usually draw a small salary once the company is VC-funded. By that point, ~…

> There are a small minority of people who can raise VC on just an idea because they're white, wealthy, and went to Stanford

Really? Does white people baiting have to become totally normalised? It’s not like East and South Asians aren’t over represented in VC land.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#652

Post by bhuga »

I just finished a job search 6 months ago and it came down to comp. The earlier-stage companies I talked to seemed much more fun, but my life has some problems that money solves, and comp was very important.

The base comp was lower at the early-stage companies, but not critically so. The problem is that ~half of an engineer's comp these days is equity, and startup equity offers were far, far, far lower. My best startup equity offer implied ~2M for a 100M exit. If it takes 5 years to pull that off, I'm better off not just at FAANG, but any number of established companies.

> I think the next phase is to move the needle in favor of early employees.

I would love to see this happen. I like my new gig but I'm not scratching the entrepreneurial itch like I could if I were employee # less than 50. My life can handle the chaos of something failing in 24 months; FAANG will always be there if it doesn't work out. But I'm not in a position to be a founder, and I can't roll the dice for 5 years for the chance at 1/100th of the payday of a founder. But maybe 1/10th the payday?...

Re: Ask HN: Pros and cons of working at a startup in 2018?

#653

Post by whb07 »

shamino wrote: post #623
whb07 wrote: post #602

Earlier quoted context omitted.

Your example isn’t that accurate. Imagine being a talented sailor coming into an already sea worthy vessel. That’s for sure worth something. Now imagine having to create convince people to invest in your crazy boat idea, build the darn ship, prove it won’t sink, and then finally do some sailing. In no alternate universe is sailing a ship the same as all the other steps. Maybe you’re just as talented as the main dude/…

Good point. Let's say you do have that experience or skill in building a sea-worthy ship. Let's say you are more valuable than your founder given where the company currently is. Maybe the company is in the growth stage, and your skills matter more to the company's survival than the founder. Why, oh why, does the founder make out like a bandit, and you make out like a chump.

I mean...so go do it ? That’s the point. You might be a better version of Steve Jobs and Elon Musk, but if you’re not striking out on your own you will never get the rewards of the person who actually did do it. At this point all you’re saying is what the bitter/jealous little boy says “oh I could do that” while watching from the sidelines.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#654

Post by anonu »

bittcto wrote: post #635
acconrad wrote: post #129

I was the first engineer at a TechStars startup that did have a successful exit (I was there about 5 years before the exit). If there is something I want YC to know, it's this: You helped create the culture of founder empowerment. You have the power to evolve that narrative to those that sacrifice as early employees. Tell the world that early employees deserve a lot more equity. Tell the world that early employees co…

TLDR: 30 years experience, I learned: don’t go work for a SV style startup. Be a founder, even if you have no experience. Don’t take VC money for more than %10 of your equity in total. Better off, right out of school, founding a company and failing than working for a startup, especially if they take VC. It’s lopsided against the founders too. They might walk away with big checks but the risk is too high. This is the…

> Be a founder, even if you have no experience.

Easier said than done. Lots of people leave school without the faintest clue what they want to do. Getting a job somewhere gives people training and experience and maybe even credibility before they strike it out on their own.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#655

Post by chrisper »

pm90 wrote: post #561
GordonS wrote: post #354

Earlier quoted context omitted.

> how much revenue they earn per engineer That does not necessarily correlate with salary. At least it doesn't outside of SV.

Agreed. SV is different from the rest of the markets, and it is the main reason why it attracts so many engineers from all over the country (hell, from the world). Although I don't regret the time I spent outside of SV, from a financial perspective as a single young engineer, it absolutely, 100% makes financial sense to consider opportunities in SF that compensate you so well.

>Agreed. SV is different from the rest of the markets, and it is the main reason why it attracts so many engineers from all over the country (hell, from the world).

In my case, SV is so different that it actually made me want to leave. Personally, I can't recommend SV to anyone if monetary wealth isn't the only goal.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#656

Post by rgossiaux »

kentonv wrote: post #633

As a former startup founder, I tend to agree that most startups are low-balling early employees. These employees over-value their stock by imagining what it would be worth if the company reaches $1B valuation. It really is a lottery ticket. But in my opinion, the answer is more pay, not more equity. Employees should get market comp, period. Doesn't matter how early-stage the startup is. If a founder can't afford empl…

I don't quite understand. On the one hand you're saying that early employees should "demand market comp" and on the other you're saying that equity basically doesn't matter (and if you feel this way, it doesn't really make any sense to be joining a startup anyway). Are you conflating "compensation" with "salary"?

"Market comp" for a good engineer with several years of experience in the Bay Area is something like 250k - 350k at a Google or Facebook (with some variation in both directions here). It's not realistic, nor consistent with the market, for an early-stage startup to pay people this much in cash.

Early-stage companies should offer sufficient equity such that their employees should in expectation earn at least the same as they would at a public company. If their expected earnings are less than this, then more equity is absolutely a good solution.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#657

Post by nostrademons »

barry-cotter wrote: post #651
nostrademons wrote: post #324

Earlier quoted context omitted.

Be careful about assuming that how the company looks when the early employees are hired is how the company always looked. It usually takes 2-3 years before a typical founder can get seed funding and even think about hiring employees. During that time period, they are funding the company themselves, and doing all the work themselves. Yes, they usually draw a small salary once the company is VC-funded. By that point, ~…

> There are a small minority of people who can raise VC on just an idea because they're white, wealthy, and went to Stanford Really? Does white people baiting have to become totally normalised? It’s not like East and South Asians aren’t over represented in VC land.

I say "white, wealthy and went to Stanford" because that is the reality of it. The "Hi, I'm going to raise money on nothing but an idea because trust me" strategy does not generally work if you are Indian, Chinese, or any other minority ethnicity, unless you previously had an exit (in which case you know just how hard actually building a business is, and my comment doesn't apply to you). It largely also does not work even if you are white, if you happen to lack the cultural capital that comes with growing up wealthy and going to Stanford. I know a number of East and South Asian founders (I'm one of them) who have taken VC (I'm not one of them), and they all got to that point the old-fashioned way: they built a product and sold it, themselves, before any VCs invested. These are all folks who have plenty of credentials, including working at major successful Silicon Valley companies (Sun, Google, Microsoft) or graduating from Stanford.

(Exception: if you are Chinese and your investor is Chinese and you have a personal connection to that investor you can sometimes raise money on "Hi I have an idea and trust me." This is a recent development and comes from the massive amount of Chinese capital floating around these days, and is sometimes not actually the best move for your startup.)

Re: Ask HN: Pros and cons of working at a startup in 2018?

#658

Post by dunpeal »

kentonv wrote: post #633

As a former startup founder, I tend to agree that most startups are low-balling early employees. These employees over-value their stock by imagining what it would be worth if the company reaches $1B valuation. It really is a lottery ticket. But in my opinion, the answer is more pay, not more equity. Employees should get market comp, period. Doesn't matter how early-stage the startup is. If a founder can't afford empl…

> If a founder can't afford employees at market rate, they shouldn't be hiring yet.

That's a little bit too strict, and as such is not a position founders are likely to accept. Sometimes they need employees before they can pay market rate, and market rate is pretty steep for a senior engineer in the Bay, for example, and most other areas startups are heavily recruiting.

It's reasonable to offer generous equity for early employees willing to take the risk. What does need to stop is the toxic culture of giving out 0.01% even to earliest employees (engineer number less than 10, often less the 5) with the cynical fake-stardust pitch that "this will be worth tens of millions since we're definitely exiting at $1bn+".

As you mentioned, this culture of deceit has become commonplace and it's poisoning the well of future employees. You can witness its corrosive effect throughout this comment thread.

Give out substantial equity to those early engineers who take risk. Give them a realistic estimate of the risk they're taking, and the value they can get. If they take it, it's their prerogative.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#659

Post by dunpeal »

anonu wrote: post #654
bittcto wrote: post #635

Earlier quoted context omitted.

TLDR: 30 years experience, I learned: don’t go work for a SV style startup. Be a founder, even if you have no experience. Don’t take VC money for more than %10 of your equity in total. Better off, right out of school, founding a company and failing than working for a startup, especially if they take VC. It’s lopsided against the founders too. They might walk away with big checks but the risk is too high. This is the…

> Be a founder, even if you have no experience. Easier said than done. Lots of people leave school without the faintest clue what they want to do. Getting a job somewhere gives people training and experience and maybe even credibility before they strike it out on their own.

> Easier said than done. Lots of people leave school without the faintest clue what they want to do.

The rest of the startup game - building a product, pivoting correctly, building a team, overcoming oowerful rivals - is such a huge challenge, that gaining entry level experience before finishing school is perhaps the most straightforward piece of the puzzle.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#660

Post by cellis »

Cofike wrote: post #631
pm90 wrote: post #576

Earlier quoted context omitted.

No you absolutely won't, unless you luck out and end up on a good team. Big companies are notoriously bad about rewarding hard working and talented engineers. That is in fact one of the main reasons people leave them (including yours truly).

If startups don't reward engineers and neither do big companies, then what does?

Nothing. In all my years ( 13 ) software engineering, the people who made the most were the ones who could sell. And I don't mean like "sales engineer", but rather who could sell their projects to team members, bosses, etc. Making money really comes down to being able to sell

A) actual, i.e. what you've built or

B) potential, i.e. what will you build

And then to get rich you need a multiplier on those things. But just being a good engineer, in general, does not get richly rewarded. If you show me a pure engineer who makes 1 million, I can show you a founder who made 100x from his work.

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