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

mhalligan.com

111–120 of 360 posts

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

#111
post #29

Earlier quoted context omitted.

As you've noted here, it seems like most startups support the traditional executive/employee status divide, but with better marketing. Using startup culture as a substitute for benefits, compensation and autonomy within a company is now standard practice. Unfortunately, it just a variation of the old Sociopath/Clueless/Loser paradigm (I am a frequent patron of your blog). I recently discovered a blog with some intere…

Is there anything going on on that blog these days? The analysis of The Office was captivating, but I can't even find those posts by Googling for them... What's the URL?

http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-o...

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

#112

Font size and contrast matter, or why I won't read your blog post

I found it odd that the individual lines seem to be written your as opposed to paragraphs.

I'm on my phone. In landscape it's readable, but in portrait the lines break weird like an email program wrapped them wrong.

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

#113
post #29

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…

As you've noted here, it seems like most startups support the traditional executive/employee status divide, but with better marketing. Using startup culture as a substitute for benefits, compensation and autonomy within a company is now standard practice. Unfortunately, it just a variation of the old Sociopath/Clueless/Loser paradigm (I am a frequent patron of your blog). I recently discovered a blog with some intere…

Heh. My company pulls that "we're a startup" crap every time they pull that sociopathic crap on us. It doesn't matter that we've been a public company since the late-90s (although changed the business model 6 years ago). We might be one of the worst offenders in regard to what you're talking about.

They cut our benefits package a year or two ago and now we're instituting a company-wide paycut (after finally having a profitable quarter). The best part about the paycut is that they dressed it up as if they were giving out performance-based bonuses (the top bonus is worth less than how much my pay got cut...).

If it weren't for the fact that I can work from home, I wouldn't be here anymore...but I don't see myself here this time next year. I don't see myself working for a company based out of the Valley ever again unless it's a very stable, mature business. The culture is so toxic.

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

#114

Earlier quoted context omitted.

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 gen…

I didn't mean just insurance either. Independence and the ability to come and go as I please is more valuable to me than whatever risk/reward calculation you're working with in your head.

Eh. Personally, I was a contractor for a long time, and I realized that the whole "independent" thing was total BS.

1. I was never independent. I had a "client", or a "contractor", I was obligated to fulfill. I only got paid if I did so, and I only got more contract jobs if I did a good job.

2. When one contract was over, I had to run out and find another one. While doing so, I was making exactly nothing. If I timed things right, I'd go from one contract to another, but that's not always possible, so I'd have a week or so of dead time where I should have been making money, but didn't.

3. If I was sick, there wasn't a team of structure in place to deal with it. I was sick. I didn't get paid. It sucked. Often it meant I had to do double-shift days to make up the lost time.

4. There was absolutely no "reward". There was just a steady, sometimes unsteady, stream of money, which worked out to about what I'd make salaried somewhere after I factor in everything.

5. As a salaried employee, I was still completely free to quit. No one could "make" me stay at a job I hated. And there aren't many (if any) legal ramifications of doing so. However, as a contractor, I might have a legal obligation (literally a contract), and the client had a completely valid way to sue me if I broke contract by not completing the work. Some clients demanded real contracts for long-term projects, and that absolutely sucked.

6. Founder spend payroll? Great. Contract abruptly ended. Scramble to find more work, no idea when I'll get paid for the money they already owe.

Being a contractor doesn't make you free or independent in any way that a salaried employee isn't.

The only way it works out is if you turn yourself into a business, and hire other people. That's basically what I did, and even now, I'm not really independent. I have employees/clients counting on me.

The only real "independence" comes from wealth that isn't generated or dependent on labor.

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

#115

Based on how he's valuing his PTO, he's valuing his time at either $328, $218, or $447 per diem. I hope he's not valuing his PTO based on the salary he's getting. I'm a 24 year old with no college degree and I currently cost about $800 per day on contract. (Not hypothetical, billing at that rate right now.) I'd rather make twice as much money consulting, pick my own damn healthcare plan, go to whatever conferences I…

Just FYI, insurance premiums can skyrocket one you get older or develop serious health issues (and such health issues really can come suddenly -- autoimmune diseases, etc).

I think you've built a wonderful position for yourself, but I'd urge you to be mindful of thepotential pitfalls in the future.

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

#116
You could have written a post comparing your experience with YC offered salary/benefits to non-YC/non-start up offers.

It could have been good for people job hunting or interested generally at an "inside look" at the market.

There's nothing wrong with looking at all your free market offers and making your choice.

For some reason I can't understand though, you crossed the line into "YC companies owe me better". They don't. They owe you what ever offer they seem reasonable if they took the time you interview you. You owe them consideration of their offer and an answer. That's the dance.

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

#117
The problem here I think is the disparity between being the last cofounder (15-30% equity before dilution typically) and being the first employee (1-2%) vs working for a more established company. If you compare the compensation for being an early employee in such a startup with working for an established company (eg Google, Facebook) then I think you'll find the employee of the latter will be better off in the long term 95% of the time and by a significant margin (disclaimer: I work for Google).

Now some people and some ideas can genuinely attract people to work for peanuts. I remember hearing about Square, then valued at $40m with their first round of funding (IIRC) and thinking "man I'd give anything to work for them" given the idea and the track record (Jack Dorsey basically).

The problem I think is that many startups think they have this kind of cachet just because they worked for Facebook in 2006. Social proof counts for something but it doesn't make you a great entrepreneur. Being a great entrepreneur makes you a great entrepreneur and that means running some kind of company that had some kind of impact (and, ideally, some significant exit).

Startups aren't for financial security. They are for the frontiermen who are hoping to strike it rich in the gold rush. Most don't but some do.

To the OP: you make very valid points and given your circumstances and preferences (and mine FWIW), I agree: working for an established company will give you a far better expected financial outcome at lower risk.

EDIT: I should clarify that there are of course non-financial reasons to work for a small startup. Less bureaucracy, it can be exciting, variety of work, degree of impact and so on.

A lot of people are willing to make those tradeoffs and sacrifice some financial return for the privilege. This isn't unique to the startup world. Games programmers, for example, typically get paid crap (until you get to be the lead developer on a big title and get a % of the revenue, etc).

All of this is simply supply and demand.

That all being said, living without health insurance in the US is incredibly risky. Generally only large employers have the clout to negotiate good plans with providers for reasonable premiums.

The other stuff (extra PTO, conferences especially, etc) are more luxuries than necessities but they do of course contribute to the overall financial outcome.

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

#118
I don't think benefits are the main reason to work anywhere -- doing meaningful work and working with great people far exceeds financial benefit, and salary/bonus/equity should dominate fringe benefits. However, why do benefits packages need to be uniform?

I personally hate having "benefits" in my compensation which come out of my salary which I don't really want. Sometimes companies get tax savings (i.e. they can deduct, I can't), but VERY RARELY do they get actual dollar savings (health insurance is one weird case, due to some people being more expensive to insure than they could ever pay, and that risk being spread across a group).

My personal ideal benefits package is: 0) Private office, 24x7 hvac, a door, decent security, locking storage, parking on-site ideally with a guard or gate. Essentially non-negotiable (or, wfh). EV parking would be nice too soon.

1) Max 401k match and maybe even profit sharing (in California, I'd happily take $1 of salary and put it into employer 401k match) -- I think you can get up to 46k/yr max, so 15k personal contribution, 5% salary match, and the rest as profit share up to 46k.

2) FSA, Transportation accounts (fully deductible for employer, and non-taxed). I ended up buying a bunch of air filters and condoms when I had an FSA, and I guess I could find a use for a TSA.

3) As much hardware as I realistically can use ($10-20k/yr -- not just computers, but I'd love to have a budget for a hw lab). Someone recently questioned whether a $4k per developer laptop budget was legitimate, and I seriously question why someone would deny a $1-2k marginal expense on a worker generating >$500k/yr in returns.

4) Conference/books/etc. (time is the big cost for the company there, not the cost) -- and "if you're speaking at a conference related to work, we cover nice travel)

5) Free food/etc. (i.e. RG's "unlimited Seamless"). Bad food is of negative value, since I'll feel obligated to eat it.

6) Decent travel when travel is required. Not first class, but helping you make it less painful -- either letting you do your own bookings (I'm better than any corp travel agent I've used), or doing it for you. Optimize for ff status. I pretty much need a $65/day car vs. a $30/day car (and tend to pay for the upgrade out of pocket when it's not covered), but would in exchange prefer a more complex $300 routed ticket vs. a $500 direct flight, and would stay on starwood points sometimes vs. paying cash.

7) I prefer to keep my health insurance separate from the company, for practical and philosophical reasons. (I pay $118/mo for better coverage than ~any company I've seen). Give me $5k/yr into my HSA instead, and pay any other marginal insurance benefit to me as extra salary or more RAM or something.

8) Use of company resources for personal projects (e.g. hosting a tech user's group, or helping friends launch their own startups by letting them use conference rooms when meeting with people, etc. etc.

I'm curious if people are "picky" like me, or would just prefer a bunch of benefits as a package. There are HR reasons to give everyone the same thing, but IMO one of the advantages of being a small startup is being able to customize packages for people. If I hired someone with sick kids, I'd obviously make sure there were a group health insurance plan for him or her. If I hired someone who was on an H1B or otherwise needed citizenship sponsorship, I'd call in favors with undersecretaries to write letters on his behalf. etc. There's no need for a small company to act like a megacorp.

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

#119
post #26
post #12

Earlier quoted context omitted.

How is this entitlement? He's rationally comparing total compensation packages and choosing the one that benefits him the best. This is something that even high schoolers working crappy unskilled jobs do. They look at the market and pick the job they feels the best suited for them. Yes, this particular individual gets well compensated compared to many. So what?

It's his tone which comes off as entitled to me. Very, very entitled. He sounds like one cocky dude to me. Let's all take a moment to reflect on a few things. For instance, we are pretty lucky to be passionate about something which just happens to be pretty good at producing a lot of monetary value for companies, and consequently it's not too hard for us to convince companies to pay us a lot and give us great benefit…

To me, being underpaid relative to my peers in what I do indicates in the most rawest, most basic, most blunt terms that I am valued less than they are.

Well then. If a company values me less than another company, I think I feel quite entitled to go to the company that values me more.

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