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There’s no such thing as “a startup within a big company”

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Re: There’s no such thing as “a startup within a big company”

#231

Post by jjeaff »

g9yuayon wrote: post #203
DebtDeflation wrote: post #103

Earlier quoted context omitted.

>The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microsoft it was a base salary and set amount of stock. I joined a startup in 1999. There were 3 founders and I was employee #2 after that. I received a ton of options (this was before RSUs became popular). We had a great product and a great team, but 18 months later ran out of money and unfortunately it was right after…

Startup is not a lottery. Working for startup is risky, but the key is to build a system that increases your accumulated probability of success -- this is exactly why it's important to live in the bay area and work for some startups there, at least before the Covid-19. You get to see a large number of people who didn't fund any company, but still became financially independent or built an explosive career by choosing…

I wonder how many people each year make at least $1m from startup equity appreciation (that is actually liquid).

Because it's between 1500 and 2000 people that win at least $1m in lotteries in the US every year. Granted, lots more people play the lottery than start or join a startup, but it's an interesting comparison.

Re: There’s no such thing as “a startup within a big company”

#232

Post by g9yuayon »

jjeaff wrote: post #231
g9yuayon wrote: post #203

Earlier quoted context omitted.

Startup is not a lottery. Working for startup is risky, but the key is to build a system that increases your accumulated probability of success -- this is exactly why it's important to live in the bay area and work for some startups there, at least before the Covid-19. You get to see a large number of people who didn't fund any company, but still became financially independent or built an explosive career by choosing…

I wonder how many people each year make at least $1m from startup equity appreciation (that is actually liquid). Because it's between 1500 and 2000 people that win at least $1m in lotteries in the US every year. Granted, lots more people play the lottery than start or join a startup, but it's an interesting comparison.

I'm not sure if the calculation is correct. 2000 people winning lotteries out of at least millions of people, right? Yet in the startup word, it is thousands of people out a few hundreds of thousands? Another factor to consider is that your equity keeps giving, while lottery is a one-off deal.

Re: There’s no such thing as “a startup within a big company”

#233

Post by staysaasy »

zeroonetwothree wrote: post #150
aerosmile wrote: post #141

Earlier quoted context omitted.

I agree. I didn't want to make too much of a point of that, because if you filtered just for founders with prior exits, you might have a hard time scoring early opportunities with them (they usually have plenty of people to fill the first 20-50 jobs). But yes - joining Square the day it was announced that Jack Dorsey started another startup would have been a no-brainer for that career path (same with Max Levchin's Af…

This is very cherry-picked. Actually research has found that prior business success does not predict future success at all. Though failure does predict failure, so at least avoid that.

I was curious on this and did some googling.

One thing that I found per a paper from 2008 (https://hbswk.hbs.edu/item/performance-persistence-in-entrep...):

"All else equal, a venture-capital-backed entrepreneur who starts a company that goes public has a 30 percent chance of succeeding in his or her next venture. First-time entrepreneurs, on the other hand, have only an 18 percent chance of succeeding, and entrepreneurs who previously failed have a 20 percent chance of succeeding."

I remember reading something that had a collection of anecdata indicating that b2b success seemed to be repeatable but b2c did not.

Would love to see what other research data is out there.

Re: There’s no such thing as “a startup within a big company”

#234

Post by dv_dt »

ryandrake wrote: post #169
moneywoes wrote: post #166

Earlier quoted context omitted.

Are these actually enforceable?

It probably doesn’t matter in practice. They will have more lawyers and more money to burn on legal process than you. Who will go bankrupt first fighting a legal battle between you and, say, Apple?

In practice, I don't think I've ever seen a SV example of that kind of litigation from garage development of IP. Maybe I've just missed them?

Theft of IP from one company to a new company on the other hand there are multiple public examples of.

Re: There’s no such thing as “a startup within a big company”

#235

Post by wwww4all »

ma2rten wrote: post #110
nojvek wrote: post #77

When I was at PowerBI in Microsoft, all the execs hailed it as Startup within Microsoft. Come work here instead of Uber. I worked like a dog, sometimes till 2am in morning. My manager would routinely ask us to come on weekends. I was naive, I thought we are growing customer base, this is what a startup looks like. The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microso…

You can have payouts proportional to success even in big companies. Google famously payed $120M to Anthony Levandowski. This is because there was an agreement in place to pay projects in X based on the value that they create.

This has more to do with negotiation skills. Anthony Levandowki also negotiated deal with Uber to pay him more money. He knew his value and negotiated hard, and got paid by 2 companies.

Every engineer should learn from Anthony about understanding the value and negotiating hard with companies. Companies will pay up for in demand skills.

Re: There’s no such thing as “a startup within a big company”

#236

Post by UncleOxidant »

nojvek wrote: post #77

When I was at PowerBI in Microsoft, all the execs hailed it as Startup within Microsoft. Come work here instead of Uber. I worked like a dog, sometimes till 2am in morning. My manager would routinely ask us to come on weekends. I was naive, I thought we are growing customer base, this is what a startup looks like. The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microso…

You can certainly work like a dog in an actual startup with the hope that your equity will someday be worth something... only to have it be worth nothing because the company didn't make it. This is what happens in the vast majority of startups as few startups end up making the big time.

Re: There’s no such thing as “a startup within a big company”

#237

Post by trimbo »

DebtDeflation wrote: post #103
nojvek wrote: post #77

When I was at PowerBI in Microsoft, all the execs hailed it as Startup within Microsoft. Come work here instead of Uber. I worked like a dog, sometimes till 2am in morning. My manager would routinely ask us to come on weekends. I was naive, I thought we are growing customer base, this is what a startup looks like. The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microso…

>The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microsoft it was a base salary and set amount of stock. I joined a startup in 1999. There were 3 founders and I was employee #2 after that. I received a ton of options (this was before RSUs became popular). We had a great product and a great team, but 18 months later ran out of money and unfortunately it was right after…

> The vast majority of startups go bust before IPO or acquisition

In recent times, these giant late rounds with the amount of preference given mean that when acquisition happens, it often doesn't pay out for regular employees/common stock. The common stock employees get is for the moon or bust, or hope an acquiring company is generous.

Re: There’s no such thing as “a startup within a big company”

#238

Post by petters »

ZephyrBlu wrote: post #218
np- wrote: post #215

Earlier quoted context omitted.

People doubled their money on paper in unrealized gains. But since Bitcoin is being sold as a store of value and not as a medium of exchange nowadays, if you want to realize that value you need to sell. Where's that cash coming from? Other buyers, i.e. the next layer of suckers as indicated in OP's post. And if enough people decide to sell, then those doubled/tripled/etc values aren't going to last very long. Note I'…

The stock market is zero sum as well... When one person wins, another loses. Are people buying Google, Facebook and Amazon stock suckers as well?

The stock market is certainly not zero sum.

Bitcoin provides very little value outside speculation, not zero, but very little. That is the difference.

Re: There’s no such thing as “a startup within a big company”

#239

Post by staysaasy »

aerosmile wrote: post #126

The predominant sentiment in the comments is that equity is worthless, which very well may be a fair statement. It would also explain why relatively few people decide to start companies, let alone do it back to back several times after getting burned over and over again. But those same people will then argue that founders should not get 10x more equity than employees [0] (which, for the record, may or may not be just…

I would add to scenario 3 that the startup needs to do well enough to grow at least a bit (growth is a great teacher) AND your position at the startup has to scale with that growth. Otherwise from what I've seen you might be better off just starting your own company sooner, as founder equity is 1-2 orders of magnitude higher than non-exec early employee equity so it's arguably worth just taking more shots on goal.

"What I wouldn't do: keep a job at the mega corp, and work on new ideas nights and weekends. This may seem like having your cake and eating it too, but it works far less frequently than you would expect (you end up sucking at your job and at your startup, not to mention that your work-life balance is possibly worse than in any other scenario). Again, the alternative would have been to be an early employee and learn first-hand about entrepreneurship."

I like this point a lot, it mirrors my own experience watching many extremely smart people try and fail at this. This is actually potentially the single activity that I've seen really smart people fail at with the highest frequency.

What does seem to have some payoff is investing/advising/sitting on boards while keeping a job at a mega corp. But that isn't the experience that a lot of people are going for and is also hard.

Re: There’s no such thing as “a startup within a big company”

#240

Post by t0mas88 »

sharkweek wrote: post #199
iancmceachern wrote: post #158

Earlier quoted context omitted.

Great thought! It doesn't have to be crypto, it could be any reasonable investment...

Friend of mine left MSFT back in the early 2010s for a startup that is set to IPO in the next year or two if all the prevailing winds remain relatively similar. He'll do pretty well in the IPO because he has some of those early enough options as one of the first 25ish employees. BUT!!!He left MSFT at $30-40ish a share, now worth $240 a share. Unfortunately, he divested most of it into more general index which has bee…

Investing in the right single stock always outperforms the index. But risk adjusted returns may not be better than a diversified portfolio, Microsoft could also have dropped due to some scandal whereas the downside risk of a balanced portfolio is much smaller.
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