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Benefits matter, or why I won't work for your Y Combinator startup

mhalligan.com

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Re: Benefits matter, or why I won't work for your Y Combinator startup

#71

Post by donall »

mmt wrote: post #56
michaelochurch wrote: post #7

The prestige asset generated by YC is interesting, because I bet it's going to have an unintended consequence of increasing the social difference between founders and employees. If you're a YC founder, you're in the club. You were picked. It's great if you succeed; if you fail, you have a network. If you're a YC employee, you're just an employee of a small startup. YC founders seem, at least from this, to be blind to…

>Health insurance is a goddamn mess and a company can't expect to get it right in an afternoon, but it is important. How about just throwing money at the problem and outsourcing to someone like Trinet? Even if the company doesn't contribute much to premiums, I've always liked, as an employee, having Trinet.

I have had a series of bad experiences with Trinet. Not so bad that it's ruined my life, but bad like "I can't believe this is the best we can do for HR". I like the idea of outsourcing that sort of thing so we can focus on the hacking, but I feel like that particular space is ripe for disruption (to use a clichéd term).

Re: Benefits matter, or why I won't work for your Y Combinator startup

#72

Post by etchalon »

coolsunglasses wrote: post #58
etchalon wrote: post #42

Earlier quoted context omitted.

As a contractor, if you're taking in 800 dollars a day, and buying your own health insurance, you are not taking in 800 dollars a day. In fact, your take home pay is probably less than his (at least on the high-end of the per-diem). 1. You're paying a higher marginal tax rate on your earnings than he is on his salary. Self-employment tax is a real bitch. 2. If you're buying your own health insurance, the benefits you…

I've been contracting for a long time, I know the risks and it's not just about the money. It's about the self ownership. Of course it's better for the company, they want the ability to coerce the employee and hold their livelihood/healthcare hostage. With my arrangement, I keep the same healthcare plan no matter who I'm working for or what I'm doing.

Huh?

You can basically always keep your health insurance. You just have to pay a higher premium than your employer paid for it. They aren't "holding your health care hostage", they're given you a benefit of being a part of a group; a risk pool insurance companies are willing to give discounted rates to. Get fired, or quit? Just call the insurance company and ask what it'd cost to keep your coverage as is. There's generally ALWAYS an individual plan available with the exact same benefit levels.

Health insurance used to be a hostage game due primarily to pre-existing conditions. That's becoming less of an issue thanks to new laws (and if you were employable, was never much of an issue anyway).

However, I did not mean "just" insurance. Contractor arrangements are terrible for both the contractor and the company, in the long run.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#73

Post by swalkergibson »

arbuge wrote: post #35

Just curious on the part where he says that the stock is most likely worthless. Are there any hard numbers on the average outcome of YC startups, and startups in general? I mean, all else being equal, what is the expected value of 0.5% of the equity of the average startup at stage X these days?

It all depends. Dilution is a real killer. You may have 0.5% today, but what about after Series B? Or, heaven forbid, a down-round?

Even if you sustained no dilution, 0.5% of $100M is only $500K. Don't get me wrong, $500K is nice, but by no means is that life-changing money.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#74

Post by epoxyhockey »

coolsunglasses wrote: post #36
niggler wrote: post #34

Earlier quoted context omitted.

"I bet it's going to have an unintended consequence of increasing the social difference between founders and employees." I bet it exacerbates the current problem of too many startups fighting for too few competent people. There's no surprise here that working for a startup is usually a raw deal (worst of both worlds). I wonder if the lessons of 1999-2001 were forgotten. Makes sense, given that it's been more than a d…

They weren't forgotten, that's why it's so hard to hire.

They weren't forgotten,

True. I live in San Fran and would be much happier engineering for Wells Fargo than any startup (from a total-compensation viewpoint).

that's why it's so hard to hire.

This is probably more of an issue where the salary offered needs to match the risk of the job. There was an HN discussion some time ago about how wall street workers have to sign stiff non-compete agreements, but they get a substantial golden parachute if they are ever laid off.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#75

Post by minimax »

arbuge wrote: post #35

Just curious on the part where he says that the stock is most likely worthless. Are there any hard numbers on the average outcome of YC startups, and startups in general? I mean, all else being equal, what is the expected value of 0.5% of the equity of the average startup at stage X these days?

AFAIK comprehensive numbers for YC outcomes are not public, but Paul Graham has indicated that returns from YC investments follow a power law distribution, meaning that if you can only get equity in a single YC company (by virtue of being an employee) you have a very small chance of making a ton of money but probably will end up with very little.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#76

Post by phillmv »

aresant wrote: post #62

From the Author's bio: "I'm just this guy who used to enjoy tech, now I would rather build bicycles. I still work in the tech industry, for the money, but I no longer call myself a "technologist"." So points well made that a guy with children, in mid-career, and without much of a passion for the field he's working in finds a Y-Combinator offer to be less compelling than a more traditional package. But I'm not sure wh…

Listen, I know that once we turn forty we're all put out to pasture in the Great Programmer Iceberg and left to fend for ourselves but:

I think the takeaway is, you're not building something sustainable if you can't attract people with kids. Kids are a very natural and common lifecycle event for people over the age of 25.

In terms of dollars and cents, the notion that you're building a team of "world class talent" that doesn't include anyone over the age of 30 is silly.

Not that the vast majority of startups need world class talent, but that's neither her nor there.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#77

Post by doktrin »

waterlesscloud wrote: post #43
potatolicious wrote: post #39

Earlier quoted context omitted.

> "Startup employees haven't risked as much but their risk is compensated with appropriate equity the earlier they join and the more risk they take on in the form of lower salary and benefits." This is the part where we wave our hands and drop a smoke bomb. You're theoretically right, but it never works out that way. For all intents and purposes, in the current state of the tech economy, there is no inherent risk to…

I've been amazed the typical equity for early employees has stayed as low as it has for as long as it has.

I would replace "early employees" with "early engineers". Not sure why, precisely, but it wouldn't surprise me if negotiating prowess played a role.

Companies I've worked for in the past would never dole out more than 1% to engineers, but dropped anywhere from 2-5% on sales / biz-dev / managers. In one case, the engineers had actually been with the company for years and working at half-market wages prior to the non-technical hires.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#78

Post by dxbydt »

michaelochurch wrote: post #7

The prestige asset generated by YC is interesting, because I bet it's going to have an unintended consequence of increasing the social difference between founders and employees. If you're a YC founder, you're in the club. You were picked. It's great if you succeed; if you fail, you have a network. If you're a YC employee, you're just an employee of a small startup. YC founders seem, at least from this, to be blind to…

>if you fail, you have a network

What is the factual basis for this statement ? Its not like this network will clothe & feed you & find you your next gig when your startup goes south. There are several yc alumni who, after their startup went bust, also went bust.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#79

Post by mtoddh »

selectout wrote: post #17
danso wrote: post #6

> Though they brag about their "Unlimited Vacation" (today's buzzword), they offered only 15 days of PTO, standard for any professional job in the United States. Has anyone ever tried to take advantage of "Unlimited Vacation" at an early startup? I mean, sincerely tried to invoke that contractual promise as a way to take 3+ weeks consecutively?

Not me personally but an engineer at my current startup is taking 5 weeks off but the typical "Unlimited Vacation" also mentions as long as you get your work done. So they will be taking 5 weeks off traveling the world, but they are still getting work done (not the typical hours by any means, but getting what needs to be done accomplished).

they will be taking 5 weeks off traveling the world, but they are still getting work done

That's not vacation, that's telecommuting.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#80

Post by xradionut »

niggler wrote: post #34
michaelochurch wrote: post #7

The prestige asset generated by YC is interesting, because I bet it's going to have an unintended consequence of increasing the social difference between founders and employees. If you're a YC founder, you're in the club. You were picked. It's great if you succeed; if you fail, you have a network. If you're a YC employee, you're just an employee of a small startup. YC founders seem, at least from this, to be blind to…

"I bet it's going to have an unintended consequence of increasing the social difference between founders and employees." I bet it exacerbates the current problem of too many startups fighting for too few competent people. There's no surprise here that working for a startup is usually a raw deal (worst of both worlds). I wonder if the lessons of 1999-2001 were forgotten. Makes sense, given that it's been more than a d…

Worked for three start ups in the Web 1.0 days. Silly hours and silly promises of shares... Never again.
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