Employee Equity • Hacker News Board

Re: Employee Equity

#241

Post by 603techguy » Sat, Apr 19, 2014, 4:00 AM UTC

michaelochurch wrote: post #112

brudgers wrote: post #42

Earlier quoted context omitted.

The scenario is little different from any other where someone lacks a controlling interest. Controlling interests can sell the company to another company they control at a price that suits their interests. They can issue shares to dilute equity and use the shares to acquire a company which they also control. Any legal action agaist such practices can be defended on the company's dime. In other words, if scumbags cont…

In other words, if scumbags control the company, scumbags control the company. Fortunately, most people aren't scumbags. Most people aren't, perhaps. Most people who have the connections to be VC-funded startup founders are scumbags.

Read: I am not one of them or have the social skills/drive to be one of them therefore they are scumbags.

Re: Employee Equity

#242

Post by tptacek » Sat, Apr 19, 2014, 4:12 AM UTC

harryh wrote: post #202

patio11 wrote: post #162

Earlier quoted context omitted.

This is one of the things which we like to say about startups, but it doesn't stand up under scrutiny. The competing job offer is Google or another megacorp. What's their turnover for engineers in a year? 10%? 15%? The definitionally average startup has a higher turnover even if we restrict it to turnover caused by business failure , to say nothing of voluntarily or involuntarily losing one's job. If you exit a posit…

For engineers above a certain skill level it's difficult to imagine job security becoming a real concern in the foreseeable future. You're certainly correct about the opportunity cost of forgoing higher guaranteed comp at a BigCorp in return for a potentially higher reward, but I don't think that directly relates to the question of job security.

When Sonicity failed in 2001, I had a track record as a lead developer on a successful, well-reviewed enterprise product, the lead engineering role at an ISP that might still have been among Chicago's most popular, and research publications at least one of which has a cite record that a lot of ACM journal submissions would envy. Not to mention, I had cofounded a company that had raised a significant amount of money. I was living in San Francisco at the time.

I had to move to Ann Arbor to find my next job.

The thing about the daisy cutter that Patrick said is not a myth. If you're one of the people here that believes we're in a bubble, you should take it seriously. They didn't call 2002 "Nuclear Winter" for nothing.

Re: Employee Equity

#243

Post by cbhl » Sat, Apr 19, 2014, 4:13 AM UTC

nutjob123 wrote: post #233

michaelochurch wrote: post #148

Earlier quoted context omitted.

Most underperformers don't really cause any problems. They work slowly and can't be assigned anything important, but over time the organization can adapt to them. Consequently, nothing really happens to them until there's a general belt-tightening. Usually, because people don't like being dicks and most underperformers aren't disliked, they're rolled into a general layoff and get a severance. Overperformers, on the o…

'(on a bogus "performance" case where you're set up to fail) ' Can you elaborate?

Here's a starting point.

http://michaelochurch.wordpress.com/2013/07/03/my-name-is-cl...

Re: Employee Equity

#244

Post by kamaal » Sat, Apr 19, 2014, 4:14 AM UTC

michaelochurch wrote: post #111

jstrate wrote: post #69

I've worked at two startups, including one YC. Both were acquired by larger tech companies. I was employee #3 at one and rebuilt most of a broken codebase in the other. I got nothing out of either WRT options. I agree with the author on point 4 but I don't think more options are the answer, I should have just asked for a higher salary I would have been better off. Startup-bucks are even worse than a lottery ticket, b…

Now I work at a large tech company in SV and wont be involved in another startup unless I'm a founder. You're making the right call. I'm probably older than you and I've done two startups. My career hasn't recovered from the lost time. Total waste. Most startups (by startup, I mean "company focused on such rapid growth that VC investment is mandatory") are pure shit. They fuck up your finances, drain your emotional r…

The last paragraph is gem. I mean I wish more people understood this. If you are not a founder and made big money. Any other position where you can learn more than your age level peers is taken as arrogance and not qualification.

I report to 'architects' who haven't done or know 1% of me. By the fact that they've hopped 10 mega corps and with some neat interview skills always ensures they take home big salaries and bonuses.

While technical skills are good. Soft skills, social skills, a strong network is ultimately what really matter in the real world. Focus on that with a occasional focus on tech trends. Once you do that you can relax in positions of authority to make junior devs slog for you.

Re: Employee Equity

#245

Post by jboggan » Sat, Apr 19, 2014, 4:21 AM UTC

I'm going to be in a position soon to start hiring people and I've been thinking long and hard about this. I do think that engineers tend to get the short end of the stick when it comes to options, even when the nominal percentages sound good. I can think of friends who were early engineers at "successful" companies that took an awful long time to see any real money, let alone the vast majority who get nothing.

I'm seriously considering a profit sharing / options system where options are only vested in quarters that are unprofitable and profit sharing occurs otherwise. I know that this wouldn't be different at all for many start-ups that have little chance of profitability early on, but for those that do it could be a very interesting way to align interest and not screw the employees.

Re: Employee Equity

#246

Post by kamaal » Sat, Apr 19, 2014, 4:26 AM UTC

brudgers wrote: post #42

birken wrote: post #19

The problem with the 10%/20%/30%/40% thing is that if the company shoots way up in value, an employee could theoretically be fired after two years and not capture much of the value they helped to create. It also doesn't necessarily need to be malicious [1], sometimes companies change and a person's skills aren't as valuable anymore. If I were a prospective employee I would never take a deal like this, because it is r…

The scenario is little different from any other where someone lacks a controlling interest. Controlling interests can sell the company to another company they control at a price that suits their interests. They can issue shares to dilute equity and use the shares to acquire a company which they also control. Any legal action agaist such practices can be defended on the company's dime. In other words, if scumbags cont…

>>Fortunately, most people aren't scumbags.

No one is.

But money changes things. Let's there are two best friends, you offer the first person some money to back stab the other. The guy may not agree. However keep raising the offer and at some point of time when the figure hits a $X0/$X00 million I bet the guy's intentions will change.

Every one sells, its just the number that differs.

Re: Employee Equity

#247

Post by thrAway0101 » Sat, Apr 19, 2014, 4:37 AM UTC

michaelochurch wrote: post #148

redmaverick wrote: post #126

Earlier quoted context omitted.

overperformance is far more dangerous (in large companies) than underperformance. Why? Can you explain.

Most underperformers don't really cause any problems. They work slowly and can't be assigned anything important, but over time the organization can adapt to them. Consequently, nothing really happens to them until there's a general belt-tightening. Usually, because people don't like being dicks and most underperformers aren't disliked, they're rolled into a general layoff and get a severance. Overperformers, on the o…

"You're also probably the type of person who, when served with a PIP despite being one the biggest assets to the company, will go nuclear, create morale-killing spectacles, and be talked about for years afterward"

I think Googler's and Xooglers on HN have by now learned to restrain themselves but I've had enough of this troll. I don't know what the actual psychiatric terminology would be but I know what the symptoms are: Toxic levels of cynicism combined with massive delusions of grandeur ("... despite being one the biggest assets to the company..." Hah.). Please note that the company he's talking about is Google where he spent a few months (or perhaps a year or so) in 2010/2011 timeframe. His equally delusional rants on internal mailing lists were stuff of (hilarious) legend. It was clear to any engineer with half a brain who read one of his rants that you don't want this guy anywhere near your team.

I do sympathize if he's suffering from genuine psychiatric issues and needs medical help. Someone close to him needs to help him get the care he needs.

But please, please young hackers, don't pay any heed to his alleged words of wisdom. The world, and especially silicon valley, may not be all cookies and cream... but it's also not the satanic hellscape that you're reading about in these sickening threads. Lots of young people enter this world every year, do their work, get compensated handsomely and treated royally (way better than almost any other profession that a young graduate could find work in today) and live happy, fulfilled lives. I wish a few more voices here would spread a bit of positive news (and down-vote the ever cynical trolls on a regular basis).

Re: Employee Equity

#248

Post by nuser » Sat, Apr 19, 2014, 4:39 AM UTC

harryh wrote: post #202

patio11 wrote: post #162

Earlier quoted context omitted.

This is one of the things which we like to say about startups, but it doesn't stand up under scrutiny. The competing job offer is Google or another megacorp. What's their turnover for engineers in a year? 10%? 15%? The definitionally average startup has a higher turnover even if we restrict it to turnover caused by business failure , to say nothing of voluntarily or involuntarily losing one's job. If you exit a posit…

For engineers above a certain skill level it's difficult to imagine job security becoming a real concern in the foreseeable future. You're certainly correct about the opportunity cost of forgoing higher guaranteed comp at a BigCorp in return for a potentially higher reward, but I don't think that directly relates to the question of job security.

When my employer failed in 2002, I had no trouble getting another job offer. Unfortunately that company failed before my start date. As did the one after that.

I moved to NYC to get a semi-functional job market.

These days the possibility of highly correlated failure is a major component in my career decisions.

Re: Employee Equity

#249

Post by brudgers » Sat, Apr 19, 2014, 4:59 AM UTC

tptacek wrote: post #238

brudgers wrote: post #235

Altman's post suggests that the context needs changing. I suspect it needs changing to keep up with some of the very changes YC has wrought - changes to VC and the creation of startups and the options available to the sorts of employees startup founders need. The issue is that the new startup culture has diversified power and our concept of 'business founder' is out of date. A software company founder is not the anal…

If this was true, YC would see a trend of companies failing not because they failed to find a product/market fit, but because they had a fit and failed to execute when a key engineering employee left. And yet YC is forever telling people to focus on "building something people want", above all else. Jessica Livingston just gave an interview listing the things that caused startups to fail; it was a short list, and incl…

I'm not sure that failure is necessarily the form in which such a problem would manifest itself - I've been around enough businesses to know that they can muddle through personnel changes. But it tends to impede short term progress and create stress for those remaining after a key employee leaves - the sorts of problems the alleged no-poach agreements allegedly sought to mitigate.

Now there may be something else that motivated Altman's essay, but it is almost certainly related to YC and the idea of improving employee equity appears to have been seen as a potential solution to some trend in their data. I think that YC came to believe turnover was impacting rates of return, and YC has had to think about ways to mitigate it. They're at the point now where they would have that data and some companies in their portfolio are mature enough where brain drain has a significant impact. For example, they could be running regressions around on former employees of portfolio companies applying to YC against the return rates of investments in the former employers.

There's the pursuit of better returns in there somewhere, and I reserve the right to pull another theory out of my ass at a later date.

Re: Employee Equity

#250

Post by droopyEyelids » Sat, Apr 19, 2014, 5:13 AM UTC

tptacek wrote: post #237

username223 wrote: post #234

Earlier quoted context omitted.

> software developers are as a demographic cohort terrible at negotiating. Yep. It's no real surprise that coders are mostly men with poor social skills, while HR is mostly women with good ones, most of whom those men find attractive. Classic Valley symbiosis.

HR people do not as a rule do salary negotiation. You have to be a particularly "special" degree of bad at negotiating to end up out-negotiated by an HR person. I am sure there are companies that, by outward appearance, do have candidates negotiating with HR people after the interview is over. Step 1 in handling negotiation with those companies: realize that you are not negotiating with HR.

This is a weird bit of advice. From my experience I have to assume you're saying "HR isn't the decision maker when hiring in elite tech companies" but the fact of the matter is HR/Recruiting is going to present the offer to most people, and it takes a career worth of preparation to move the conversation beyond that offer.