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Automation enables founders to grow companies with fewer and fewer employees

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Re: Automation enables founders to grow companies with fewer and fewer employees

#141

Post by oblio »

rqtwteye wrote: post #87
ceronman wrote: post #16

He is implying that founders can create a lot of value without employees, and that the claim that employees also create value is false. If that's true, then what about a social experiment: If you are a solo founder, you get all your profits for yourself. But if you have employees, you have to share your profits with your employees. If employees don't produce any value, easy, fire them all, you get everything. But if…

What's with that obsession about "billionaires"? If somebody can make a nice living with their business, isn't that good enough? Personally I think we are perfectly fine without billionaires.

> What's with that obsession about "billionaires"? If somebody can make a nice living with their business, isn't that good enough? Personally I think we are perfectly fine without billionaires.

https://news.ycombinator.com/

-> https://www.ycombinator.com/

->

> Y Combinator created a new model for funding early stage startups.

> Twice a year we invest $500,000 per company in a large number of startups.

> We work intensively with the companies for three months, to get them into the best possible shape and refine their pitch to investors. Each cycle culminates in Demo Day, when the startups present their companies to a carefully selected, invite-only audience.

-> https://www.ycombinator.com/topcompanies/public

Sometimes I guess we just forget where we are :-)

Re: Automation enables founders to grow companies with fewer and fewer employees

#142

Post by memish »

ceronman wrote: post #16

He is implying that founders can create a lot of value without employees, and that the claim that employees also create value is false. If that's true, then what about a social experiment: If you are a solo founder, you get all your profits for yourself. But if you have employees, you have to share your profits with your employees. If employees don't produce any value, easy, fire them all, you get everything. But if…

He's not implying that employees don't create value.

Startups share equity with employees. The earlier you are there, the more you get, in part because of the inherent risk.

This is why founders get the most equity and the most upside if it succeeds. They took on the most risk and it wouldn't otherwise exist.

If the company ends up being valued at 100B dollars, guess what, the founder and maybe some early employees are billionaires or hundred millionaires.

Re: Automation enables founders to grow companies with fewer and fewer employees

#143

Post by not_gpt4 »

As Peter Thiel has pointed out, the reality is that founders take on incredible amounts of risk and put in long hours to build and grow their companies. American exceptionalism is founded on the principle of rewarding hard work and entrepreneurship, and founders who succeed in building successful companies should be celebrated, not demonized.

Re: Automation enables founders to grow companies with fewer and fewer employees

#144

Post by zajio1am »

VictorPath wrote: post #68
vasco wrote: post #41

Earlier quoted context omitted.

Also this is not about a dystopian village with one single employer that exploits workers that cannot move. Startup employees agree with free choice to work somewhere for the agreed upon profit share, be that % based or fixed, or mixed.

Quoted post unavailable.

> in the US a hunter gatherer band a century and a half ago provides for their own needs

Such hunter gatherer band was much worse dystopia village. You were dependent with your life on the band and if you disagreed with others, you could not just switch bands as easily as you can switch employers today.

Re: Automation enables founders to grow companies with fewer and fewer employees

#145

Post by fnordpiglet »

ceronman wrote: post #16

He is implying that founders can create a lot of value without employees, and that the claim that employees also create value is false. If that's true, then what about a social experiment: If you are a solo founder, you get all your profits for yourself. But if you have employees, you have to share your profits with your employees. If employees don't produce any value, easy, fire them all, you get everything. But if…

His assertion is made worse by automation. Every skill the founder can automate they should. That’s efficiency. Every skill they can’t, that’s a crucial skill the founder depends on. The more crucial the skill, the more leverage the employee should have over the founder and the more incentive the founder has in sharing equity. This becomes magnified if the founder doesn’t have the skill to produce and operate the automation their business depends on, but even if they did have the skill - I think this is a population that understand the sheer amount of time and energy automation requires to simply oversee, operate, and maintain. The founder can’t be on call 24/7 for every function of every part of any but the most trivial of operations. Finally, typical ownership rules makes the founder highly enriched in equity unless they trade equity for capital or talent to the point they lose control. That controlling equity is the founders reward for the founding. Their share of growing profits is their reward whether they personally grow the profits or their employees do. A smart founder doesn’t try to do it all just so they can squeeze out some other people. They delegate responsibility to employees who in turn find ways to outsize the growth of profits and the value of the equity. Nothing says the founder needs to treat them well or provide them incentive to succeed - but everyone who has ever grown a company knows the best talent is attracted to where they are a “part” of the success, which includes sharing in the reward of their labor not just the labor.

Re: Automation enables founders to grow companies with fewer and fewer employees

#146

Post by czbond »

notlukesky wrote: post #27
czbond wrote: post #13

Earlier quoted context omitted.

I wholly disagree. SaaS are similar to automations for end customers. The CapEx spend of tens/hundreds of engineers that built the SaaS is offset by 1 company to remove the needed engineers from each company. Companies used to: build their own authentication layers, databases, infrastructure, code repositories,etc, etc. What starts in consumer always moves to Enterprise. So will AI and automations.

Maybe it wasn't clear but I was referring to low-touch SaaS as well with "self-service type of software app". There are low-touch SaaS apps and offerings serving the developer and some "enterprise" market segments. The problem with certain enterprise SaaS is that they are high-touch by the very nature of the sales process involving big-ticket items. Once you are in the territory of high ACV there are many sales "gate…

Thanks for the response. I upvoted because your comment added value.

Re: Automation enables founders to grow companies with fewer and fewer employees

#147

Post by czbond »

ghaff wrote: post #52
notlukesky wrote: post #27

Earlier quoted context omitted.

Maybe it wasn't clear but I was referring to low-touch SaaS as well with "self-service type of software app". There are low-touch SaaS apps and offerings serving the developer and some "enterprise" market segments. The problem with certain enterprise SaaS is that they are high-touch by the very nature of the sales process involving big-ticket items. Once you are in the territory of high ACV there are many sales "gate…

And chasing down purchase orders and higher expectations for customer support and, once you have direct sales, you need training for sales, and you have to generate qualified leads for them, and you have to respond to RFPs...

Thanks for the response. I upvoted because your comment added value.

Re: Automation enables founders to grow companies with fewer and fewer employees

#148

Post by Joel_Mckay »

22/23 founders ride their company into the ground, or hit the $100k/year marginal profit glass-ceiling. This remains true regardless of the amount of investment in time, labor, and or infrastructure.

If you don't talk to people that know these facts, than you are almost guaranteed to repeat the same tantalizing yet bad choices.

Automation only tends to make things more feasible, but sometimes bankrupts the firm in the process.

Cheers =)

Re: Automation enables founders to grow companies with fewer and fewer employees

#149

Post by tartoran »

ojbyrne wrote: post #67

I feel like he’s missing the second order effect. If everyone can automate everything, then there would have been (or will be) 900 Instagrams and 1 (or 20) that would have had a $1000 exit.

Early automators will obviously leave roadblocks behind them, new regulations regarding automation, etc.

Re: Automation enables founders to grow companies with fewer and fewer employees

#150

Post by 7thaccount »

yetanotherforg wrote: post #29
robertlagrant wrote: post #18

Earlier quoted context omitted.

> It's the automation that's making it possible to be successful, not the engineers doing the automation. That's like saying anyone who thinks hammers are a good idea is really saying a hammer makes a builder successful, not the builder. It's just a tool, and he's saying tools mean one person can do more. You don't need to straw man a philosophy on to it to then have something to argue against. > employees do the aut…

Can you explain how Founders are employees in this context? I read this as pg being focused on justifying post-acquisition wealth. It seemed to be a justification for the founders receiving 100s if not 1,000s of times the level of compensation as the workers. I would be curious to hear more justifications from him for this. Founders really take far less risk than employees. I say this as someone who missed out on abo…

Is that legal? Were you able to file a lawsuit or just ate all of the loss?
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