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Downsides to working at a tech giant

blog.garrytan.com

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Re: Downsides to working at a tech giant

#501

Post by dcow »

manigandham wrote: post #489
dcow wrote: post #486

Earlier quoted context omitted.

This. There is really no reason a founder deserves as much equity as they generally give themselves (I know the investors also have a say in what an acceptable cap table looks like so it’s not just on founders). If early stage startup founders split equity more evenly I think the numbers would start to make more sense. Maybe like 10% founder, 5% first 5, 2.5% next 5, and then 15% equity pool as you grow from 10 to 50…

"deserve" doesn't really mean anything. As for why founders get the most equity, it comes down to the most risk. They have the most to lose and are usually are paid last compared to employees who get cash and benefits. It's easy to claim the profits and yet ignore all the risks and losses incurred by founders. I've yet to see someone who thinks otherwise actually go out and start a company. Perhaps it's because the c…

“Deserve“ absolutely means exactly what it means.

I’m talking about the equity distribution sub-10 here. What sub-10 employees are getting any more benefits than their founder(s)? Maybe marginally more cash but it’s all still below market so it doesn’t really matter. But most founders I’ve encountered are actually paying themselves more than their early employees because they have to in order to maintain their lifestyle in big city. But they also have remarkably disproportional slices of equity.

If a founder is investing large sums of their own cash it’s because they have that luxury. And I don’t think that’s actually very common. More often a founder drops some sweat and cash to incorporate and then maybe isn’t getting paid much while they pitch for seed capital but they’re doing so because they can’t afford to take no salary for very long. Even if you occasionally do see founders who’ve “killed” themselves for their cause, most of the founders I’ve encountered actually come out of cushy jobs where they essentially moonlit as a founder until they met someone willing to blow a few MM their way. In my opinion this type of story does not justify such disproportional equity distribution.

At this point I honestly think telling founders that they take on so much risk and should retain such a large portion of their company because they did all the hard work is a somewhat subversive tactic used by investors who want to retain control over their investments. It’s a lot easier to reason with a single founder than 5 large equity holders.

I think founders deserve a lot. I don’t think the typical founder deserves 10 times the equity of sub-10 employees. I think you’d see more people willing to join early stage companies if the attitude around equity shifted.

Re: Downsides to working at a tech giant

#502

Post by sertaco »

rsanek wrote: post #179
garry wrote: post #110

Earlier quoted context omitted.

Yeah, at the end of the post I tried to reference this: You probably shouldn't work at a startup for the money per se. The real value is short cycles with users and being able to make decisions and ship. This is also cautionary for startups. You have to be an actually rewarding place to work, otherwise there is literally no reason to work there.

To me it comes off as a bit contradictory to say "you shouldn't work at a startup for the money" when the title of your post and video prominently feature the "$200 million" figure.

Spot on! Clearly author’s intentions were to convince people that being an employee at a startup pays monetarily. Which is now denied by him? I am confused.

Re: Downsides to working at a tech giant

#503

Post by whiskyant »

Grimm1 wrote: post #400

Edit: The sites I'm using make it seem like the RSU compensation is the one time grant for 100k+ over the 4 year period so if its really a 400k+ stock grant over the 4year period then yes there's really no way to compete with that for early stage companies and leaving that amount of money on the table is inadvisable if you can avoid it. That said I still hold my point about the type of experience you'll gain at a sta…

It's 100k per year not over 4 years... I can assure you that these numbers are not bunk and are very real. A lot of my friends have been offered 1.2M in RSUs for L6 positions.

I myself am an L5 and I got a 600k RSU grant - so I get 150k in vested RSUs per year (which started vesting after about 3 months, and which vests continuously throughout the year).

I also get 120k of RSU refreshers (which vest over 4 years) each year as well.

So yes, when I say my TC is 400k+/year, I mean I actually earn that much per year. This isn't accounting for stock appreciation either, my RSUs have increased in value by over 50% since I joined early this year.

Re: Downsides to working at a tech giant

#504

Post by dkersten »

keithwhor wrote: post #90

The pessimism in this thread really bothers me. I’ve read anecdotes on entrepreneurship being on the decline, but it pains me to read so many negative takes on startups. We’re actively training our young people to avoid taking risks, and it’s going to fuck us — especially if some of those young people have the ambition be early employees at, say, a startup that takes on climate change in a big way. Look — the fact th…

> The pessimism in this thread really bothers me.

I don’t recommend startups because of personal experiences. I’ve personally lost more working for startups (in terms of unpaid salaries, lower salaries and impact on health) than I did running my own startups. Startups rarely have good development practices, are often always in crunch mode and often have bad work-life balance.

Some people thrive in that environment, sure. Personally I don’t hate the environment but I can’t stick it too long either so I’ve job hopped a bit. But when you add that high-stress-low-discipline (discipline in terms of development practices) environment together with low salaries, false promises based on worthless stock, high founder ego and a high rate of startup failure, I don’t think it’s a good deal for most people, who would be better off in a stable balanced low (comparatively) stress well paying big company instead.

I hate to say it since I’ve started startups myself and it makes finding employees hard, but I think the people who really thrive in that environment are relatively few.

Sure it can be rewarding, you can make great connections and learn a lot but I’ve found big companies can be all of the same things, although the learning is usually deep in big companies and wide in startups, but a medium sized (ie established startup) company might be a good middle ground. Maybe everyone should experience it once though and then move on. I also will likely make another attempt at a startup myself too, but I do feel that there’s a difference when you own the thing.

Re: Downsides to working at a tech giant

#505

Post by lukevdp »

dcow wrote: post #486
munk-a wrote: post #359

Earlier quoted context omitted.

Absolutely, stock options in the US are super strange, they can be performance tied and for non-qualified shares. The thing I'd actually like to see is a better default governance for companies - companies are wholly owned by founders and I think there is just something fundamentally wrong with treating all employees as contractors by default until it's decided to grant them options or actual ownership. A bunch of pe…

This. There is really no reason a founder deserves as much equity as they generally give themselves (I know the investors also have a say in what an acceptable cap table looks like so it’s not just on founders). If early stage startup founders split equity more evenly I think the numbers would start to make more sense. Maybe like 10% founder, 5% first 5, 2.5% next 5, and then 15% equity pool as you grow from 10 to 50…

You are free to found your own company and do this.

Re: Downsides to working at a tech giant

#506

Post by gcpwnd »

keithwhor wrote: post #90

The pessimism in this thread really bothers me. I’ve read anecdotes on entrepreneurship being on the decline, but it pains me to read so many negative takes on startups. We’re actively training our young people to avoid taking risks, and it’s going to fuck us — especially if some of those young people have the ambition be early employees at, say, a startup that takes on climate change in a big way. Look — the fact th…

This is all very inconsistent. OP says in big corps you need politics to get (new) shit done. But building your people network is politics, regardless where you work. It is certainly easier if you are employee number five or ten, but it still distracts you from your actual work.

I can't say it another way but the very american person cult is worrying. Thiel any many other tech icons are just icons because they are billionaires and maybe populists. Having a network of those is surely a way to get funding. But that again beings politics on the table and more importantly implies that you can only be successful if you have connections to the billionaires club. It lacks a great deal of imagination that only startups can survive with the direct support of the big guys.

Re: Downsides to working at a tech giant

#507

Post by dcow »

lukevdp wrote: post #505
dcow wrote: post #486

Earlier quoted context omitted.

This. There is really no reason a founder deserves as much equity as they generally give themselves (I know the investors also have a say in what an acceptable cap table looks like so it’s not just on founders). If early stage startup founders split equity more evenly I think the numbers would start to make more sense. Maybe like 10% founder, 5% first 5, 2.5% next 5, and then 15% equity pool as you grow from 10 to 50…

You are free to found your own company and do this.

Of course I am! But I don’t want to found a company just to found a company. We’re talking about attracting talent to small companies. I’m offering my perspective on why joining a small company doesn’t make tons of sense with the status quo equity packages and sub-market salaries offered. There’s some good discussion on another post about this exact problem and it seems, at least, that VCs are starting to come around as well and there is productive discussion about alternative early stage plans/strategy for capitalizing in a way that can attract top talent from big companies. I’m not founder bashing please don’t take my comment the wrong way.

Re: Downsides to working at a tech giant

#508

Post by 55555 »

freddie_mercury wrote: post #416
senordevnyc wrote: post #21

This is such a weird post. Big fan of Garry, but I don't agree with most of this. 1. Just because it turned out that you would have made $200mm doesn't make it a mistake. If anything, that outsized return proves just how rare this kind of outcome is. If you look at the YC startups graduating every year, maybe 1 will ever generate $20mm for an early employee, let alone $200mm. Joining a new startup for that kind of ou…

> If you look at the YC startups graduating every year, maybe 1 will ever generate $20mm for an early employee YCombinator -- like all other VCs -- has the data trivially available to show actual compensation of early employees across entire classes of startups and not just cherry-picked best cases. After all, they have the cap tables and the exit dollar figures and how long it took to reach those exits and how many…

Very interesting point.

Re: Downsides to working at a tech giant

#509

Post by yowlingcat »

keithwhor wrote: post #219
yowlingcat wrote: post #192

Earlier quoted context omitted.

If the pessimism in this thread bothers you, imagine how much your woefully out of touch survivorship bias and bothers everyone else in this thread? One of the top comments that responds to your post tells you that the math changed. This is true. The fact that neither you nor Garry talk about the concrete specifics of this means that you're either unaware of it, or worse, intentionally sweeping over it. You really th…

The reason I haven’t responded to the math changing is because it’s Christmastime and I’m spending time with family. Some of the responses to my post require a much more thoughtful answer than I can muster while at the gym between meeting family members. Be patient. I’ll respond to the other post if you wait.

It sounds a little bit like perhaps your original post required a more thoughtful answer than you could muster while at the gym. Perhaps it could have used a bit more patience as well?

Sure. Feel free to respond. I think everyone would benefit from you contributing more to the discussion, especially if your original post didn't fully clarify your position.

Re: Downsides to working at a tech giant

#510

Post by pjc50 »

Tehdasi wrote: post #312
pjc50 wrote: post #46

Earlier quoted context omitted.

I'd be interested in seeing where you read that, because they absolutely failed to do anything useful about it almost all of the time. And at the expense of the rocket program too.

Dunno about the government, but ARM and Rolls Royce have certainly done very well in their given fields. Curiously they are parts suppliers, not whole product manufacturers.

RR are only alive because they're strategically important enough to warrant being bailed out several times. They were nationalised in the 70s, and looks like they're in trouble again: https://bdaily.co.uk/articles/2018/06/14/government-has-to-i...

ARM are one of the few fully homegrown tech success stories, along with Racal/Vodafone. Unfortunately the UK has a history of "technologically successful but economically unviable" projects, and isn't able to take advantage of the startup logic where investors cover the losses.

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