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There’s no such thing as “a startup within a big company”

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Re: There’s no such thing as “a startup within a big company”

#211

Post by wpietri »

Viliam1234 wrote: post #156
DebtDeflation wrote: post #103

Earlier quoted context omitted.

>The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microsoft it was a base salary and set amount of stock. I joined a startup in 1999. There were 3 founders and I was employee #2 after that. I received a ton of options (this was before RSUs became popular). We had a great product and a great team, but 18 months later ran out of money and unfortunately it was right after…

In my humble opinion, Bitcoin is a better lottery that equity, because it does not require you to work till 2am in morning. Instead of equity, ask for higher salary, and invest the difference in cryptocurrencies, stock market, and even the old-fashioned lottery. Maybe a bit of everything, to balance the portfolio. Your chances are not worse, and you can go sleep before the midnight.

I think an important difference between equities (your company's options, the regular stock market) and the other things (lottery tickets, digital commodities like Bitcoin, and traditional commodities like gold) is that equities are overall positive sum. The point of (most) businesses is to create value greater than their inputs. Speculating on commodities is in theory zero sum, but in practice negative. Actual lotteries are clearly negative sum. (US state lotteries return only about 60% of the input money as prizes.)

So if people aren't sure what to do with surplus time/cash, equity will (on average, over the long haul) produce a better return. Buying an index fund gives you zero control but good odds on a steady return; trading your time for equity (a company you start or one you join) gives you more control and narrow odds on a higher return.

There's no one right answer here, though. I'm happy with the startups I've done, but right now I'm happy to be banking a steady salary. A lot of this depends on one's situation in life and one's personal values, especially risk tolerance.

Re: There’s no such thing as “a startup within a big company”

#212

Post by spoonjim »

DebtDeflation wrote: post #103
nojvek wrote: post #77

When I was at PowerBI in Microsoft, all the execs hailed it as Startup within Microsoft. Come work here instead of Uber. I worked like a dog, sometimes till 2am in morning. My manager would routinely ask us to come on weekends. I was naive, I thought we are growing customer base, this is what a startup looks like. The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microso…

>The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microsoft it was a base salary and set amount of stock. I joined a startup in 1999. There were 3 founders and I was employee #2 after that. I received a ton of options (this was before RSUs became popular). We had a great product and a great team, but 18 months later ran out of money and unfortunately it was right after…

The flip side is that I valued my equity at $0 when I joined but it’s now worth $2 million.

Re: There’s no such thing as “a startup within a big company”

#213

Post by thegginthesky »

munificent wrote: post #183
somberi wrote: post #83

Earlier quoted context omitted.

I would like to offer an extended view from the wealth accumulation angle. True, equity builds wealth, but in a startup, since there is no floor protection, when the startup becomes worthless (can happen for any number of reasons, and often do), then one wishes one had taken a salary (and reinvested in stocks or as seed investment - ways to gain equity exposure). One could argue that PowerBI, in this example, gained…

> when the startup becomes worthless (can happen for any number of reasons, and often do), then one wishes one had taken a salary (and reinvested in stocks or as seed investment - ways to gain equity exposure). Well, sure. And when the startup becomes worth billions, one wishes they had taken the options instead of a higher salary. This is just an observation that having information lets you make better decisions. Un…

The point is that the odds of any startup to be worth billions, or for an employee stock option be worth a lot more than accumulated high base salary, is very very low.

So if one optimizes by using the expected value over time the conclusion is that high base salary tends to trump employee equity. One can make this sort of inference at any point in time, without hindsight at all.

Re: There’s no such thing as “a startup within a big company”

#214

Post by aerosmile »

zeroonetwothree wrote: post #150
aerosmile wrote: post #141

Earlier quoted context omitted.

I agree. I didn't want to make too much of a point of that, because if you filtered just for founders with prior exits, you might have a hard time scoring early opportunities with them (they usually have plenty of people to fill the first 20-50 jobs). But yes - joining Square the day it was announced that Jack Dorsey started another startup would have been a no-brainer for that career path (same with Max Levchin's Af…

This is very cherry-picked. Actually research has found that prior business success does not predict future success at all. Though failure does predict failure, so at least avoid that.

I should have added some context for why in my opinion it's important to have an experienced founder when you're an early employee. Remember - based on the framework I presented, the goal is not to optimize for wealth generation - for that you would have stayed at your mega corp. For simplicity, I am assuming that you cannot predict success at this early stage of your career (although clearly some people have phenomenal track records).

Instead, the goal is to learn the best practices (lean startup, hiring above your weight, shipping early, doing things that don't scale, etc), meet the right people (colleagues and investors), and also very importantly, learn how to build the right culture (this is a far more complicated issue than most first-time founders realize - hence the need for someone with ideally some historical perspective).

Re: There’s no such thing as “a startup within a big company”

#215

Post by np- »

tcoff91 wrote: post #198
xwolfi wrote: post #159

Earlier quoted context omitted.

Well but how do you get the money to buy any bitcoin in the first place ? You don't invest in crypto currencies, you join early enough to sell to the next level of the pyramid you convince via social media post :s But well you're right to say people should balance portfolio, I however don't see the value of the lottery, it's like paying taxes twice, with no chance of winning ever. At least bitcoin slowly loses value,…

Bitcoin slowly loses value? Even those who bought the very top in 2017 have more than doubled their money if they didn't sell. Bitcoin, when it does lose value, loses it very quickly but on longer time horizons nobody has ever lost money by holding bitcoin for 3+ years. That being said, buying at current levels is extraordinarily risky and more equivalent to gambling than anything else. The expected ROI of the lotter…

People doubled their money on paper in unrealized gains. But since Bitcoin is being sold as a store of value and not as a medium of exchange nowadays, if you want to realize that value you need to sell. Where's that cash coming from? Other buyers, i.e. the next layer of suckers as indicated in OP's post. And if enough people decide to sell, then those doubled/tripled/etc values aren't going to last very long.

Note I'm not saying that it's not possible to win in this system - clearly some people will, at the expense of many others. Perhaps it's my own ignorance, but I genuinely struggle to see how this isn't a zero sum game.

Re: There’s no such thing as “a startup within a big company”

#216

Post by chokeartist »

DebtDeflation wrote: post #103
nojvek wrote: post #77

When I was at PowerBI in Microsoft, all the execs hailed it as Startup within Microsoft. Come work here instead of Uber. I worked like a dog, sometimes till 2am in morning. My manager would routinely ask us to come on weekends. I was naive, I thought we are growing customer base, this is what a startup looks like. The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microso…

>The ultimate realization was in a startup you have equity, a decent amount in a good startup. At Microsoft it was a base salary and set amount of stock. I joined a startup in 1999. There were 3 founders and I was employee #2 after that. I received a ton of options (this was before RSUs became popular). We had a great product and a great team, but 18 months later ran out of money and unfortunately it was right after…

> Time is the most valuable commodity you have, don't squander it for lottery tickets and empty promises.

This should be the first thing someone sees when they load the Hacker News homepage.

Re: There’s no such thing as “a startup within a big company”

#217

Post by Apocryphon »

gwbas1c wrote: post #94

IMO, the bigger issue is that many people don't know what a startup is. Yet, as a culture we glorify a "startup." Everyone wants to work for one, even though they don't really know the clear line between a startup and an exit. I remember seeing billboards in Silicon Valley. They were from AOL, trying to recruit. They said, "You're the startup, we're the VC." At the time, AOL had no defining characteristic that made i…

It's also complicated by how in the 2010s we saw the rise of unicorns that could amass huge amounts of funding, and remain late-stage startups for long indefinite amounts of time. Was AirBnB really a startup, even a late-stage startup, in 2019? For the average employee, was the experience any different from working at FAANG?

Re: There’s no such thing as “a startup within a big company”

#218

Post by ZephyrBlu »

np- wrote: post #215
tcoff91 wrote: post #198

Earlier quoted context omitted.

Bitcoin slowly loses value? Even those who bought the very top in 2017 have more than doubled their money if they didn't sell. Bitcoin, when it does lose value, loses it very quickly but on longer time horizons nobody has ever lost money by holding bitcoin for 3+ years. That being said, buying at current levels is extraordinarily risky and more equivalent to gambling than anything else. The expected ROI of the lotter…

People doubled their money on paper in unrealized gains. But since Bitcoin is being sold as a store of value and not as a medium of exchange nowadays, if you want to realize that value you need to sell. Where's that cash coming from? Other buyers, i.e. the next layer of suckers as indicated in OP's post. And if enough people decide to sell, then those doubled/tripled/etc values aren't going to last very long. Note I'…

The stock market is zero sum as well... When one person wins, another loses.

Are people buying Google, Facebook and Amazon stock suckers as well?

Re: There’s no such thing as “a startup within a big company”

#219

Post by jonas_kgomo »

A startup studio is essentially this. Also, every big company has a X for Startups, plus open-source projects. Most big companies derisk by acquiring competitors, you can think of that as a startup inside a big company.

* where X is an element of FAAMG

Re: There’s no such thing as “a startup within a big company”

#220

Post by walshemj »

FartyMcFarter wrote: post #190
harikb wrote: post #164

Earlier quoted context omitted.

The thing most people forget about options & RSU is that one is taking away a big chunk of the TC and delay it to a future year. Even when you hate your job, you will be hesitant to leave the company because of FOMO and sunk cost fallacy That said, anecdotally, every one of my close circle of friends made decent amount money from equity (one of the many companies they worked at did very well) - far higher than the 10…

> The thing most people forget about options & RSU These two are very different things and they shouldn't be conflated. If you have FAANG RSUs vesting every few months or every year, you can convert them to cold hard cash on a regular basis. Options in a startup, or a company that isn't traded publicly are a different animal.

Very much so I (UK) have made some nice tax free returns on FTSE 100 companies share saves.

Pity we didn't get an exit back in 2000 when I had 0.5% of Poptel (everyone was a dollar millionaire at one point).

At the moment I have EMI shares in my current employer which vest on change of control

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