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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

#191

Post by rayiner »

resu_nimda wrote: post #186
rayiner wrote: post #160

Earlier quoted context omitted.

> if the founder's position is too risky and insane for his taste, how is an employee position going to be any better? The founder has upside potential to compensate for the risk. If the employee position has much less upside potential (i.e. equity), but just as much risk, it had better be balanced by higher compensation than you could get in a "stable, cushy job."

Correct me if I'm wrong, but the kinds of companies in question normally don't have the capital to offer that kind of compensation. That's why I added the edit to my comment: the employees should certainly get to share in the reward as compensation for their risk.

The whole point of this thread is that startups don't typically offer early employees enough equity to justify the combination of risk and often below-market salary.

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

#192

Post by khuey »

nilkn wrote: post #184
khuey wrote: post #181

Earlier quoted context omitted.

Your income is not determine by how hard you work. It's determined by how much value you create and how strong your negotiating position is for capturing that value.

Has that not been my point all along? ...

Perhaps I misread you, but you seem to think that this is unfair. Why?

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

#193

Post by lotsofpulp »

edent wrote: post #23

From a UK perspective - this post is nuts! I've worked with a few London based startups (and interviewed for several). Holiday 28 days minimum - as per law https://www.gov.uk/holiday-entitlement-rights/entitlement Rarely offered health care but - for all its flaws - our National Health Service is pretty good. Shares - yup, they're almost always going to be worthless. Pension - every company has offered me at least 5%…

>Pension - every company has offered me at least 5% matched pension - some more. The Government is mandating that even small employers will have to put you in a pension scheme soon - which is good.

Not really. Accounting for pensions requires the ability to project economic and biological conditions 20-40 years into the future. Humans aren't capable of this yet, and it results in dealing with fudged numbers (see the myriad pension funding crises around the world).

Another problem with pensions is that they are unaffordable. If they were affordable then you would see private companies offering annuities for sale, for as cheap as what pension actuaries "project" the cost to be. But it's far, far more expensive to buy yourself an annuity, because of tighter regulations in the private insurance market.

Finally, there is no reason to tie up your future with one employer, or the employer's future with old employees. If you want a pension, fine, demand $5,000 cash so you can buy yourself an annuity. But why someone would trust an anonymous person 20 years in the future with their compensation is beyond me. Your pension money can be gambled with, get lost due to corruption, or because it's all invested in the same funds in public companies, required government bailouts of private markets (see 2008 stock market crash).

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

#194

Post by CleanedStar »

seeingfurther wrote: post #20

Every thing comes down to risk vs reward. Founders risk it all to found companies and rightfully have the greatest reward. 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. YC definitively reduces risk and increases the potential for reward. It's easier for YC companies to raise…

This argument put forth is part of a tautological one its proponents make.

Some of you may be too young to remember the good old, bad old days of the Cold War, but one thing that was supposed to be anathema to Americans were "planned economies". It was proposed, mostly by corporate types and their supporters, that the US should not be a planned economy, it should be an economy like how the US is run - the majority stockholders of corporations make decisions about capital and production.

What happens when production decisions are not planned? There is a risk capital can be spent to create a product no one wants. Isn't that half the discussion on HN - minimal viable products, agile development, and other methods to try to avoid this? Why do the angels, VCs, and now blessed founders deserve so much money? Because they took on risk.

So the VCs tell us we should avoid planned economies and have an economy with risk - where capital is wasted on products no one wants. Then we're told they deserve all of this money because our economy has so much risk. It's a great tautology if you're willing to swallow it.

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

#195

Post by aashaykumar92 »

Benefits, or lack thereof, is your central point. I'm not quite sure that by comparing a YC-startup to another startup in the same round of funding, especially in the later rounds, it says much about YC or their founders. In fact, I'd argue there is no correlation. When a company has been backed by several investors, the founders don't usually carry a huge weight in deciding the benefits of each of their employees...they most likely listen to their advisors/investors.

If you think a company should offer a higher salary and/or better benefits, then best is to be frank and tell them. Especially since you are experienced and you've been given offers, a simple email or call saying "Hey guys, I think what you're doing is great but there are other companies at the same stage as you giving much better salaries/benefits", I like to think they'd be open to listening and looking to change. A illogical correlation + complaint on HN is not exactly doing yourself or anyone any good.

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

#196

Post by hkmurakami »

runarb wrote: post #188
marvin wrote: post #134

Earlier quoted context omitted.

Smaller Norwegian companies which offer shares to employees often have a "if you quit within 5 years, the company is allowed to buy all your shares back at the price they were when you received them" clause, or something similar. Obviously you'll only get sub-par or naïve people with such a policy.

You will probably find that some companies tries that regardless of where they are located. I doubt it is unique for any specific country.

imo I assign ownership of such policies to the founder(s) specifically rather than the nebulous concept of "companies".

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

#197

Post by bm1362 »

jedberg wrote: post #48

I always advise folks who are looking to work for a startup to value their stock at $0. Will you be happy and enjoy the work you are doing for the salary and benefits alone?

I agree; as a new grad I don't think about the money (it's all good!) but more so the experience- Will I learn from these people? Will it make me a better engineer?

The two most important factors IMO: the tech and the team.

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

#198

Post by hkmurakami »

guptaneil wrote: post #169
rohern wrote: post #128

Earlier quoted context omitted.

> 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. I think you mean "Founding a startup is for the frontiermen..." Being an employee is not. Being an employee is a losing proposition far more often than the 95% you cited.

It's a losing proposition, financially speaking. But it sure is a lot more fun and satisfying working at a startup than a large corporation. Although there aren't tangible or financial benefits for working at a startup, there are definitely benefits that a large company simply can't provide, like experience and independence. For someone in their early 20's straight out of college, those benefits can outweigh the fina…

The 2009 post by Mark Sussman, "Is it Time for You to Earn or Learn?" comes to mind (I think it was recently reposted to HN)

[1] http://www.bothsidesofthetable.com/2009/11/04/is-it-time-for...

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

#199

Post by threedaymonk »

epoxyhockey wrote: post #174
edent wrote: post #23

From a UK perspective - this post is nuts! I've worked with a few London based startups (and interviewed for several). Holiday 28 days minimum - as per law https://www.gov.uk/holiday-entitlement-rights/entitlement Rarely offered health care but - for all its flaws - our National Health Service is pretty good. Shares - yup, they're almost always going to be worthless. Pension - every company has offered me at least 5%…

Aren't the salaries in the UK horrendously low? The March Who is Hiring had a job in the UK with a 22-24K salary range. Source: https://news.ycombinator.com/item?id=5305245

Salaries in the UK are lower than the Bay Area, but I wouldn't say they're "horrendously low". I can see why that ad would make you think that, though: it really is absurdly low for London, but I don't think it's representative.

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

#200

Post by pja »

crusso wrote: post #83
edent wrote: post #23

From a UK perspective - this post is nuts! I've worked with a few London based startups (and interviewed for several). Holiday 28 days minimum - as per law https://www.gov.uk/holiday-entitlement-rights/entitlement Rarely offered health care but - for all its flaws - our National Health Service is pretty good. Shares - yup, they're almost always going to be worthless. Pension - every company has offered me at least 5%…

I do wonder why the UK scene doesn't seem quite so vibrant You just go through a list of state-required benefits or drains on individual risk taking and then you wonder at why the startup scene isn't quite so vibrant? Risk taking requires the ability to... uh... take risks.

The difference between the UK startup scene & SF has nothing to do with benefits & everything to do with investor culture IMO.
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