The Problem With Founders
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The Problem With Founders
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Re: The Problem With Founders
#2[deleted]
Re: The Problem With Founders
#3I have to commend TC for writing an article like this, as they are largely the biggest vehicle for turning founders into Hollywood-esque stars and boasting founders as being disruptive (heck, their own conference is called Disrupt).
The central principle of realizing that there are more people behind a startup and we should cherish them as well, is an absolutely awesome thought!!
I just hope that the vision for how we recognize them is not how the author describes in: "We need to find a way to build up the profile of that quiet army of people who are developing products behind the scenes, the engineers and product managers who took risks to build their founders’ dreams." Because that just sounds like what they currently do to founders!
Idea: maybe TC could take the charge and list the founding employees profiles with every company article they write?
Re: The Problem With Founders
#4I have to commend TC for writing an article like this, as they are largely the biggest vehicle for turning founders into Hollywood-esque stars and boasting founders as being disruptive (heck, their own conference is called Disrupt). The central principle of realizing that there are more people behind a startup and we should cherish them as well, is an absolutely awesome thought!! I just hope that the vision for how w…
I like your idea. I expect if they implemented it they would see that the article gets it wrong on a number of levels.
Take any successful company, Google, Intel, Apple, Facebook, LinkedIn, Yahoo!, Microsoft, Boeing, any of them. Now compile a list of the first 10 - 100 employees. Now take the net worth for those individuals and compare it to the rest of the world. You'll find it lands north of the 99th percentile.
You can pull out exceptions of course, the sales guy at Sun who was worth several million and lost it all through a series of really poor choices, the Googler who left 6 months in rather than vest that first tranche of stock, the Apple employee who gave up their shares to live a simpler life. But for the most part all of those people have a net worth north of $1M. Ask Charlie Ayers, the original chef at Google if he is mad/bitter/whatever because Larry and Sergey are billionaires and he is just a multimillionaire.
The narrative that founders win and everyone else loses is wrong. You've heard about the abominable failure rate of startups 9 in 10 fail. An employee can get a piece of 10 different startups in 10 years if they move from place to place, vest their 25% of their option and exercise it. A founder is lucky if they get 3 shots at the prize in 10 years. Do the employees who are driving around matching Ferrari's in the Facebook parking lot feel bad that Zuckerberg is worth a lot more than they are? Most of them no, they don't care, they are "rich".
Do founders get the 'fame' ? Sure, is that a good thing or a bad thing? Sometimes it makes you a target. I was amazed at how much Eric Schmidt paid for personal security (its in the 10Q) he can afford it of course but really? You have to hire ex-special forces types because you're too tempting a kidnapping target? I personally would much rather be anonymously wealthy than 'target on your back' wealthy.
One summer I worked at IBM and lost my housing just before my internship was up. I stayed at one of my co-workers places for the last three weeks. He had a computer which he used to monitor the stock market, I helped him enter data into it (which at the time there was no Internet). One evening having just gone through a list of number/value pairs (qty and price) I multiplied them all out in my head and summed them, the result was over $2M. I asked him if that was his savings and he said "yup". I couldn't believe this guy who lived in the same tract house he had been living in for years was a millionaire. Where was the fancy car? the lavish furnishings? None of that. I asked him what it was like, he said, "I worry less about the future than I did before."
My point is that the ecosystem that is Silicon valley creates a lot of those kinds of people. People who don't get caught up in the razmatazz and just save money when they can, diversify when their stock value goes up, and accumulate over time. They are usually "employee" types and not "founder" types though.
Re: The Problem With Founders
#5So much nonsense in one article. If you think the "bar is so much lower" to becoming a founder then stop whining about being one of the forgotten early employees and get off your ass and start a company for the right reasons: finding a market opportunity and making money from it. If you can't or won't, then you can't expect the rewards.
Early employees are important, and should be given credit and fair payment for their work, but their risk profile is far, far less than the founders and investors. Investors stand to lose their investment (which is an accumulation of work) and the founders can lose money, reputation, and time. In my last business I lost hundreds of thousands of dollars of my own money and five year's 24/7 sweat. Every employee walked away.
Re: The Problem With Founders
#6I have to commend TC for writing an article like this, as they are largely the biggest vehicle for turning founders into Hollywood-esque stars and boasting founders as being disruptive (heck, their own conference is called Disrupt). The central principle of realizing that there are more people behind a startup and we should cherish them as well, is an absolutely awesome thought!! I just hope that the vision for how w…
I like your idea. I expect if they implemented it they would see that the article gets it wrong on a number of levels. Take any successful company, Google, Intel, Apple, Facebook, LinkedIn, Yahoo!, Microsoft, Boeing, any of them. Now compile a list of the first 10 - 100 employees. Now take the net worth for those individuals and compare it to the rest of the world. You'll find it lands north of the 99th percentile. Y…
I think you are correct about the big companies, but I didn't get the feeling that's who the author was addressing. They seemed to be addressing the new up and comers with founders who are stingy with equity and bad at sharing the limelight with their staff.
Re: The Problem With Founders
#7There's so much that's wrong with this post it's hard to know where to begin.
> The secret of Silicon Valley is that the benefits of working at a startup accrues almost entirely to the founders, and that’s why people repeat the advice to just go start a business.
This is simply not true in today's environment. Most startups fail so at a typical startup, there is no upside for employees or founders. Funding, however, is plentiful and most of that funding is directed to employee salaries. So who is benefiting the most at the average startup? The engineers paid well into the six-figures to work on modest CRUD apps regardless of said app's ability to drive sufficient revenue to sustain a real business.
In other parts of the post the author suggests that engineers (and other non-founders) aren't compensated appropriately, but his argument isn't convincing. Lots of early stage startups (perhaps the majority) don't generate enough cash to fund operations and many won't any time soon if ever. Just how much should folks be paid at a company that, without investment dollars, wouldn't be able to make payroll?
> There is a reason it is hard to hire in Silicon Valley today, and it isn’t just that there are a lot of startups. It’s because engineers and other creators are realizing that the cards are stacked against them unless they are the ones in charge.
There are a lot of reasons companies find it hard to hire in Silicon Valley today. They're too picky and/or focused on "culture." They can't pay market salary. Lots of companies are uninspiring and thus unattractive. Many startups fail at retention. Not everyone wants to work at a startup or live in an area with a high cost of living. And so on and so forth.
Absent hard numbers to back up the claim, the author fails to present evidence is there that there isn't enough talent primarily because individuals are leaving the labor force to start their own companies.
> Founders are not normal people in any of the ways that matter of course. For them, the benefits of building a business are many-fold. They can connect with journalists, advisors, mentors, new business partners, and most importantly, investors...
Note how the author left out "customers." Interestingly, the word doesn't appear anywhere in this article, nor do the words "sales", "revenue", "cashflow" or "profit." For a post that does an awful lot of complaining about how the fruits of startup success are divvied up, I think it's telling that the author completely ignored the things that make a company successful.
Re: The Problem With Founders
#8I have to commend TC for writing an article like this, as they are largely the biggest vehicle for turning founders into Hollywood-esque stars and boasting founders as being disruptive (heck, their own conference is called Disrupt). The central principle of realizing that there are more people behind a startup and we should cherish them as well, is an absolutely awesome thought!! I just hope that the vision for how w…
I like your idea. I expect if they implemented it they would see that the article gets it wrong on a number of levels. Take any successful company, Google, Intel, Apple, Facebook, LinkedIn, Yahoo!, Microsoft, Boeing, any of them. Now compile a list of the first 10 - 100 employees. Now take the net worth for those individuals and compare it to the rest of the world. You'll find it lands north of the 99th percentile. Y…
The Valley has changed. If you started in the 1990s, you got real equity and housing costs were low. You could get into the low millions just by working hard and living frugally. It was a different time-- more egalitarian and far more engineer-driven.
The question is: if you're 22-25 now and move into the Bay, do you have a good chance of ending up a made man (or woman)? The answer is "no". It's been overrun by MBA culture and has severe founder quality problems and I don't think it's salvageable.
Re: The Problem With Founders
#9Earlier quoted context omitted.
I like your idea. I expect if they implemented it they would see that the article gets it wrong on a number of levels. Take any successful company, Google, Intel, Apple, Facebook, LinkedIn, Yahoo!, Microsoft, Boeing, any of them. Now compile a list of the first 10 - 100 employees. Now take the net worth for those individuals and compare it to the rest of the world. You'll find it lands north of the 99th percentile. Y…
The Valley has changed. If you started in the 1990s, you got real equity and housing costs were low. You could get into the low millions just by working hard and living frugally. It was a different time-- more egalitarian and far more engineer-driven. The question is: if you're 22-25 now and move into the Bay, do you have a good chance of ending up a made man (or woman)? The answer is "no". It's been overrun by MBA c…
What qualified as "real equity" back then?
Re: The Problem With Founders
#10So much nonsense in one article. If you think the "bar is so much lower" to becoming a founder then stop whining about being one of the forgotten early employees and get off your ass and start a company for the right reasons: finding a market opportunity and making money from it. If you can't or won't, then you can't expect the rewards. Early employees are important, and should be given credit and fair payment for th…
Yeah. I was going to be upset at getting tarred as a naval-gazing member of the new startup elite, but then realized I make less money and have less social prestige than anyone Techcrunch actually cares about.