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A conversation with Shel Kaphan, Amazon’s first employee (2016)

blog.ycombinator.com

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Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#31

Post by jacobwilliamroy »

juskrey wrote: post #26
hobofan wrote: post #24

Earlier quoted context omitted.

Founders often also take on relatively little risk (or all the same risk of an early employee). The amount of money they put at stake can be very little, either living off Ramen which is cheap, or coming from a previous venture, then it's negligible. You should generally follow the same principle as investing in stocks: "Never invest money that you can't afford to lose." A lot of people also see a risk to reputation…

This is none of the employee's business to assess founder's risk exposure, he/she does not not lend money to them, but takes away from instead. By taking an employee founder is effectively paying monthly, mind that, very expensive, insurance which provides free hands at any moment when needed. Employee's benefit is immediate, unconditional and guaranteed. The opposite of being an owner of business.

The employee doesn't take money. The employee gives away life itself, measured in hours, in exchange for money. Do not trivialize this exchange. All of the value of the company comes from the bottom. The money that the shareholders put in is just a bet. SOMETHING has to back up that money, and that's what the employees are for: to help the investors win that bet.

Don't say "I'm taking all the risk over here" because it creates an adversarial dynamic with your team. There is no need for you to separate yourself from the rest of the company in that way. You're all on the same side and the language should focus attention on cooperation and the benefits which cooperation will bring. Writing a check takes seconds. Real work takes hours, days, months, years off of a person's finite life. Try to stay grounded in the real world.

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#32

Post by peterfield »

kirillzubovsky wrote: post #17
ignoramous wrote: post #12

Earlier quoted context omitted.

> Lots of early startup lessons in there. If you'd please highlight some excerpts?

Heh. I will. The biggest irony is that I started Smash Notes to pull out excerpts from podcasts, but haven't gotten to this one yet. Take a look tomorrow night. I'll pick out a few juiciest bits by then.

+1 Interested. I have been using Ardour and JACK and lot - which are Paul Davis' creation - amzing tools.

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#33

Post by abhinav22 »

I am a mid-senior level employee at a non-tech semi startup. It sucks. The founder wants everybody to work at his pace, and since he’s your boss, you have to mostly.

There isn’t much growth for pay increases or promotions since it’s not a large company, and job security isn’t the best because it’s a semi startup.

And since the founder is paying you directly from his pockets, he really wants to extract a full pound of flesh for every dollar he gives you.

He promised a few of the more senior employees a cut if we got external money, but when we got that, he didn’t give it to them and they both left to form their own company.

Working in a small startup style company without negotiating a cut of the ownership via shares, is being a sucker - you do 80% of the work & intensity for the owner and are left with not much if it takes off, unless you can find a good enough company that promotes you as it grows larger, and not just replace you because they can afford somebody with more credentials.

Some people may come back and say not to join such companies but pick wiser, but the harsh reality is that most of these startups founders are narcissistic and would sell you out for a dollar.

This is a just a warning and insight to anyone thinking of joining these companies.

For me, I can’t wait until the pandemic ends and I can find a better job elsewhere.

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#34

Post by denisastoyanov »

hobofan wrote: post #28
juskrey wrote: post #26

Earlier quoted context omitted.

This is none of the employee's business to assess founder's risk exposure, he/she does not not lend money to them, but takes away from instead. By taking an employee founder is effectively paying monthly, mind that, very expensive, insurance which provides free hands at any moment when needed. Employee's benefit is immediate, unconditional and guaranteed. The opposite of being an owner of business.

> he/she does not not lend money to them, but takes away from instead The employee takes money from the company, not the founder. Those two are only the same for the pre-seed phase of a startup. It's also unlikely that any people are employed before some investment round has been raised. Once some investment is raised, the money comes predominantly from the investors and not from the founder. At that point the risk f…

Why do you automatically assume that every single company have investors?

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#35

Post by hobofan »

denisastoyanov wrote: post #34
hobofan wrote: post #28

Earlier quoted context omitted.

> he/she does not not lend money to them, but takes away from instead The employee takes money from the company, not the founder. Those two are only the same for the pre-seed phase of a startup. It's also unlikely that any people are employed before some investment round has been raised. Once some investment is raised, the money comes predominantly from the investors and not from the founder. At that point the risk f…

Why do you automatically assume that every single company have investors?

Because we are on a thread about Amazon, and founder stock. We are also on HN, which has a startup context by default.

Of course not every company has investors. In fact I personally strongly favor that for my own endeavours nowadays, but that's not what the discussion was about.

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#36

Post by throwaway2245 »

juskrey wrote: post #11
RcouF1uZ4gsC wrote: post #9

Earlier quoted context omitted.

It seems that being employee #1 is a sucker of a deal with a lot of the same downsides as being a founder without the huge upside of being a founder.

Employee does not take any risk. He says in the interview he was working with number of failing startups before. They failed, but they've paid his fixed project or hourly salary nevertheless. Moreover, many of those people are willing to hire someone good who is available for temporary jobs, and hence paying very competitive rates, at the same time surviving on canned tuna themselves. I've been #1 techie in many fail…

It's doubtful to me that a founder leaves a failed project in a worse position than the first employee.

What risk exactly are we talking about and who has suffered it? (I'm assuming your suggestion of 'neck' is hyperbole)

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#37

Post by iflp »

dang wrote: post #16
a1pulley wrote: post #8

Apparently Shel didn't negotiate "founder's stock." This excerpt is from [1]: So, you are kind of the forgotten founder? Most people think of Jeff Bezos as the creator of the company. “In fact, to be completely technically true about it, he is the founder. But I was talking to him about joining him on the venture before the company was incorporated. He basically was just arriving from the East Coast and setting up hi…

Discussed in 2011 here: https://news.ycombinator.com/item?id=2975122 Edit: ah yes, and https://news.ycombinator.com/item?id=12437322 from 2016.

And for those who didn't follow the link, Shel actually clarified on this there: https://news.ycombinator.com/item?id=2977247

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#38

Post by deepGem »

At the time I thought, “Okay, I’m going to be building this website to run a bookstore and I haven’t done that before but it doesn’t sound so hard. When I’m done with that I’m not sure what I’ll do.”

Love this attitude. As flippant as it seems, the statement speaks volumes about confidence and the ability to venture into unknown areas. Skills often overlooked while hiring.

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#39

Post by ghaff »

jsolson wrote: post #19
raldi wrote: post #13

I'm confused about the part where Bezos was considering Washington and Nevada because he was looking for a state with no sales tax. As far as I can google, both of those states have had a substantial sales tax for many decades — Washington's is one of the highest in the country! What am I missing?

I assume that's supposed to be state/local income tax -- Nevada is one of the few states other than Washington without one. For much of Amazon's early history, the sales tax in Washington was only relevant if you happened to live in Washington. The set of areas where Amazon must collect taxes has grown, and at this point for all I know might be everywhere in the US.

Yes, South Dakota v. Wayfair a couple years ago basically overturned Quill v. North Dakota and requires companies over a certain size to collect sales tax wherever they are. (Prior to that a few states had independent agreements with Amazon to collect tax.)

Re: A conversation with Shel Kaphan, Amazon’s first employee (2016)

#40

Post by hobby-coder-guy »

deepGem wrote: post #38

At the time I thought, “Okay, I’m going to be building this website to run a bookstore and I haven’t done that before but it doesn’t sound so hard. When I’m done with that I’m not sure what I’ll do.” Love this attitude. As flippant as it seems, the statement speaks volumes about confidence and the ability to venture into unknown areas. Skills often overlooked while hiring.

What volumes does it speak?
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