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

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

#41

Post by deepGem »

RcouF1uZ4gsC wrote: post #9
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…

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.

Even to this day, employee no 1 will be offered stocks in the range of 0.5 - 1%.

Calling BS on this has not yielded any great results. If not anything, there should be some clause that benefits the first 2 or 3 employees with an outsized monetary outcome, if the company becomes immensely successful.

The above equity numbers probably make sense if founders have worked on the idea for a while, built some reasonable MVPs, done market validation, have found reasonable PMF and all that.

Bottom line, it's not worth being the first engineer purely from a monetary standpoint.

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

#42

Post by yowlingcat »

abhinav22 wrote: post #33

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…

> 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.

That may be the case but there is a world of difference between what you are describing and every hypergrowth Series B+ company with reputable top tier VCs I've worked at. Maybe part of the problem is the "non-tech semi startup" part -- tech startups, while still having founders who "would sell you out for a dollar" must nonetheless participate in a labor market which is biased in their counterparty's favor.

Why is this the case? The counterparty can work at a FAANG/newly public company, a quant fund/finance, and so there are bidders from multiple industries who want the top tier talent. Are you a technical employee or a non-technical employee? If the latter, have you considered making a transition towards working in a tech startup for better mobility, if you want to work in startups at all? I have run into all kinds of shenanigans in my tech startup employee days, but the general quality of life at the good companies was the best I've ever had.

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

#43

Post by jlokier »

deanCommie wrote: post #23
juskrey wrote: post #11

Earlier quoted context omitted.

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…

That's a very absolutist view of risk. A founder may only be investing an amount in the venture that does not affect their own quality of life. They could have other wealth or means, and losing the entire investment would not be catastrophic. They might have a personal runway of several years before they have to give up and get a day job. Meanwhile, the early employee at a startup is far from without risk themselves.…

> or even eating into them

I can confirm :/

Worked at a startup as an employee, made a significant financial loss, living on savings and eventually credit, because cost of living was higher than income. Eventually had to stop.

This happened gradually as I just couldn't keep up the work. Employer was annoyed with me for not doing more work. I kept telling them I had to do other work because their pay didn't cover my essential bills. They kept telling me if only I would finish X, Y and Z we'd have more money coming in.

I took a risky bet and lost - as an employee. I don't resent it, they really couldn't pay more. But it was definitely a gamble.

That financial cost still has lingering effects years later.

Don't assume employee #1 or #2 is not taking on a risk.

I'd still like to work at a startup! But I'll automatically turn down offers with low pay now, as well as offers of "no pay at the moment until we get investment" which I had some of this summer.

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

#44

Post by benjaminsuch »

abhinav22 wrote: post #33

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…

I'm actually in the same spot but for a tech startup. But the founders are very nice and have a lot of good will. I'm working 12-14 hours every day because I want and I have fun doing the work.

But even though I'm getting a lot less salary than I could have, I decided to keep grinding because I see way more opportunities and chances than my "personal loss".

Imo, everyone working his ass off in a startup should make sure it's worth. And that, for me, means looking for opportunities regardless how shitty the founders may be.

Being an early employee gives you a shit ton of responsibilities, but instead of seeing them as a burden, take them to shine and negotiate your future.

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

#45

Post by sokoloff »

abhinav22 wrote: post #33

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…

The pandemic has changed job searching, but in some ways for the better. Your former co-workers are just as likely to hire you as before. Many companies are announcing they’re remote-friendly or remote-first, and some of them have no idea what to do next.

Imagine the pandemic has 1-2 more years to run. Don’t let that delay lull you into forfeiting two more years of your short (work and non-work) life.

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

#46

Post by ffdjjjffjj »

benjaminsuch wrote: post #44
abhinav22 wrote: post #33

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…

I'm actually in the same spot but for a tech startup. But the founders are very nice and have a lot of good will. I'm working 12-14 hours every day because I want and I have fun doing the work. But even though I'm getting a lot less salary than I could have, I decided to keep grinding because I see way more opportunities and chances than my "personal loss". Imo, everyone working his ass off in a startup should make s…

This post reminds me of a younger me. The experience I got working hours like this at jobs like this was not as good as I thought. It was shallow and rushed, every cuttable corner was cut. And ultimately, it wasn’t worth it. You may not care about money now, but you will in 5 years when your friends are buying houses and your $5m ticket never got punched.

Just my advice feel free to ignore. I probably would have!

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

#47

Post by sokoloff »

vinhboy wrote: post #14

What kind of person flies across the country to meet complete strangers, then ask those strangers to move with them to another state to start a business in a completely new frontier. What's like the percentage of people who takes on that kind of wild Hail Mary pass and win it all? Also I am curious, as single-track minded Software Engineers, how do we protect ourselves from the super smart and super driven Bezos of t…

I’ll take on faith you don’t mean it negatively, but then what does it even mean to protect ourselves from the Bezos of the world?

He offers you a role and terms: you take it, you don’t, or you counter. That process converges on you working there or not.

I don’t worship at the altar of Bezos (though I have overall respect for him and his accomplishments), but I don’t see anything beyond my ability to say no that’s needed to protect myself.

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

#48

Post by research_pie »

abhinav22 wrote: post #33

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…

Man, sorry for that it seems that you got into a toxic startup culture. My startup was a bit like this 10 months ago, the other founders were all about making sacrifices and working 999h per week. However, nothing was working out properly.

I've made some drastic change to our culture to be more empathic, transparent and based on trust. Since then its way more enjoyable for everyone and we are way more productive. Salary for our employee are still under market, but we increase them whenever we have the chance and the financing. We aim to get to 10% above market value so that everyone is confortable. Also we've cut the 80h per week bullshit. If someone is working that much he is most likely doing a crappy job and needs to prioritize his day properly.

Here is a series of concept/book I've implemented that drove the change:

- Objective and Key Result: the only work that matter is those explicitly tied to the objective. There is a good book on that.

- The book Drive, it helped us understand how to create a motivating environment for our employee.

- The book Traction, it gave us a set of tools to make the business run smoother.

- Effective DevOps: It gave us a blueprint on how to structure our technology developement and team interaction.

- Peopleware: This was one of the best book that we've implemented. We moved to a remote-first company based on trust, we don't track time anymore and we don't care when people work. All that matter is objective attainement and the wellbeing of our employee.

Let me known if you want to chat about this.

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

#49

Post by juskrey »

jacobwilliamroy wrote: post #31
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.

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…

This is a static one dimensional socialist logic. In dynamics of lifetime and in aggregate employee leads much safer and well fed life than entrepreneur. And again, the latter gives his money to the former in any case

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

#50

Post by kirillzubovsky »

peterfield wrote: post #32
kirillzubovsky wrote: post #17

Earlier quoted context omitted.

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.

He talks about the software and how it’s taken him years to get traction and any real money from it, but now a decade later it’s doing quite well. This last year has doubled their sales as people were stuck at home!
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