Ask HN: What is the dark side of working at a successful startup? • Hacker News Board

Re: Ask HN: What is the dark side of working at a successful startup?

#41

Post by abraham_lincoln » Mon, Sep 17, 2018, 3:08 AM UTC

tlb wrote: post #8

Success can hide a lot of problems. Companies with wildly successful products have a strong bias toward "we must be doing everything right," when in fact the truth is only "we did some things right at some point". That bias can make it hard to change things, even clearly broken things. It can make it hard to introduce new products, since anything new will be tiny compared to the old successful product. It can make it…

This is so true, and I have unfortunately observed this personally too many times.

Re: Ask HN: What is the dark side of working at a successful startup?

#42

Post by dothedishes » Mon, Sep 17, 2018, 3:08 AM UTC

This is a great question. Thank you!

Re: Ask HN: What is the dark side of working at a successful startup?

#43

Post by abraham_lincoln » Mon, Sep 17, 2018, 3:10 AM UTC

throwaway515 wrote: post #25

tlb wrote: post #8

Success can hide a lot of problems. Companies with wildly successful products have a strong bias toward "we must be doing everything right," when in fact the truth is only "we did some things right at some point". That bias can make it hard to change things, even clearly broken things. It can make it hard to introduce new products, since anything new will be tiny compared to the old successful product. It can make it…

This exactly, and sometimes it can be more than just a broken process or two. It could be that the rumors you hear are true, that there's some dirty secret that will eventually surface and endanger the entire business, and that there’s no bond of trust with executive leadership to confront it before it’s too late. I worked at a unicorn that seemed unstoppable until allegations of fraud surfaced in a major publication…

Amazon.com?

Re: Ask HN: What is the dark side of working at a successful startup?

#44

Post by abraham_lincoln » Mon, Sep 17, 2018, 3:13 AM UTC

deanmoriarty wrote: post #36

crunchlibrarian wrote: post #16

I have had two startups promise me the moon and the stars only to fire me shortly after the product was developed and viable. One found a way to screw me out of all the equity as well, which would have made me a ten something millionaire. Once people start smelling money things shift quickly.

I would be very interested in knowing the specific details of how you got your equity stolen in a legal way, if you have some time to reply. Thanks

I am guessing no agreement regarding dilution and/or liquidity preference?

Re: Ask HN: What is the dark side of working at a successful startup?

#45

Post by chii » Mon, Sep 17, 2018, 3:14 AM UTC

tlb wrote: post #8

Success can hide a lot of problems. Companies with wildly successful products have a strong bias toward "we must be doing everything right," when in fact the truth is only "we did some things right at some point". That bias can make it hard to change things, even clearly broken things. It can make it hard to introduce new products, since anything new will be tiny compared to the old successful product. It can make it…

> "we did some things right at some point"

or got lucky, but attributed the success to ability/execution instead of learning the right lessons. Then, because of over-confidence, make poor decisions and cause problems down the line leading to failure (as "luck" runs out).

Re: Ask HN: What is the dark side of working at a successful startup?

#46

Post by closeparen » Mon, Sep 17, 2018, 3:22 AM UTC

jimmaswell wrote: post #13

fouc wrote: post #4

The dark side is probably the equity - how to actually cash out on that. For example, employees at Gilt were expecting an IPO and then eventually it got acquired by another company and devalued their stock, yet they paid taxes on the earlier value of it, and ended up losing money.

Why wasn't that a capital loss?

Capital losses offset capital gains, not earned income (except very slowly). They protect investors, not equity-compensated employees.

Re: Ask HN: What is the dark side of working at a successful startup?

#47

Post by throwaway292901 » Mon, Sep 17, 2018, 3:23 AM UTC

"Successful" has a different meaning depending on your title. I work for a successful startup and all the c-levels are happy, but as developer #1 I am very unhappy. The goal was acquisition. We developers did our job: we iterated on several products until one of them struck gold and is minting money. We are ready to move on. The founders are enjoying the success and have put less priority on acquisition. As a "stay-up" we are now in the growth phase: more middle-tier, more process, more meetings, more politics, more hiring, more distractions, etc. Due to our success, I can no longer afford the taxes on exercising my options. I'm completely locked up with golden handcuffs. I want to leave, but if I do and they sell in the next couple of years I don't think I could handle it. I feel stuck and it's starting to affect my mental health.

Re: Ask HN: What is the dark side of working at a successful startup?

#48

Post by deanmoriarty » Mon, Sep 17, 2018, 3:23 AM UTC

abraham_lincoln wrote: post #44

deanmoriarty wrote: post #36

Earlier quoted context omitted.

I would be very interested in knowing the specific details of how you got your equity stolen in a legal way, if you have some time to reply. Thanks

I am guessing no agreement regarding dilution and/or liquidity preference?

What you’re mentioning sounds more like a case where the company was not a big success and things like heavy dilution came into play? In that case, I’d hardly call it “getting screwed”, that’s just a risk of doing business with a startup that failed to execute properly, or lost against opposing market forces.

In other words, when the company goes bad and it’s forced to take heavy dilution or aggressive liquidation preferences it’s obvious that common holders are going to get wiped out. But, and that’s the part interesting to me, what greedy behavior from a company can make the common holders get screwed even when the company sale is a big success?

An example of getting screwed was the clawback clause that the Skype employees had, which gave the company the right of buying back the exercised shares from common holders at the original exercise price rather than the market value at sale time (or something like that). That’s called “being screwed”, not seeing your shares getting wiped out because your founders had to dilute the common holders (which many times includes themselves) 50% during a difficult fundraise.

Re: Ask HN: What is the dark side of working at a successful startup?

#49

Post by iamleppert » Mon, Sep 17, 2018, 3:24 AM UTC

The dark side is probably joining a cool small tech company with interesting problems and work and cool people. As a result of your (& others work) it becomes successful and one day you look around and realize you no longer fit in -- it's become the big tech company you left and vowed to never work at again. Your peers don't care about tech in the same way and don't have the same passion as you, but are still there regardless and viewed as your equal. You feel as if they don't deserve their place, and many actually discredit your work with the benefit of hindsight and all of their 6 months of experience. Increasingly, your tenure is seen as a liability rather than an asset and you feel the distinct sense of an "old crew" vs. "new crew" forming as the people you know and loved are slowly replaced with new comers who are attracted to the success of the company, like a moth to a flame, but who you know would never have joined in the early days. You watch as design by committee takes firmly hold, insignificant straw man wins are the subject of great excitement, and processes replace unstructured trust.

Finally, after the company hires a "Director of UX" you realize it's simply not your thing anymore. You must make the hard decision to leave and never look back.

Re: Ask HN: What is the dark side of working at a successful startup?

#50

Post by goatherders » Mon, Sep 17, 2018, 3:25 AM UTC

I've worked at a few startups in the relatively early days. My impression is that aside from money, early employees want to be appreciated for the success they helped build. People who were there when under 100 employees are less accepting of employee 500. Not always, but often enough. And those same employees can get preferential treatment from management. Again, not always but often enough.

Additionally it is important to remember that a successful startup isnt really a startup anymore. It's a business. When I was at WP Engine in the earlyish days I remember telling my boss "if we are successful then we are going to build a company we dont really want to work for anymore."