When a Unicorn Startup Stumbles, Its Employees Get Hurt • Hacker News Board

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#261

Post by Spooky23 » Thu, Dec 24, 2015, 3:53 AM UTC

sangnoir wrote: post #215

Spooky23 wrote: post #24

If Good was a unicorn, that definition needs some work. Good was in a downward arc since 2011-2012 imo. How many new customers did they acquire compared to Airwatch/MobileIron/etc?

"Unicorn" is rather well-defined (if somewhat arbitrarily):any valuation north of $1bn qualifies a startup as a unicorn. In some cases - such as this, the $1bn+ valuation is fleeting / illusory.

Gotcha. Usually you hear the term referring to Uber, Dropbox, etc. I never would have put Good in that company. (Although Dropbox can't seem to make a product that I am willing to pay for)

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#262

Post by rebootthesystem » Thu, Dec 24, 2015, 6:46 AM UTC

Aloha wrote: post #246

rebootthesystem wrote: post #229

Earlier quoted context omitted.

> if you knew the history of the labor movement in the 30's News flash: We are nearly one hundred years away from the 30's. Just because things made sense then (and they absolutely did) does not mean they make sense today. What I am putting on the table is a verifiable mathematical fact. No opinions here. Fire-up Excel and do the math. Not sustainable. And that's the point. I didn't say unions need to evaporate, I sa…

In other countries, they do work, just not here in a bunch of cases (the auto workers are a worst case). I'm not trying to justify the adversarial relationship the UAW takes with the big three - but as the old saying goes, it takes two to tango, and for a long time, neither side was willing to change the status quo. Not all unions are the same, many have what could more be described as a partnership. I don't have muc…

While I have sympathy for your friend, nobody forced him to stay on.

I have a couple of friends who own air conditioning and heating companies. They do very well now, yet they both started with one beat-up truck crawling in attics by themselves to earn a living. Years later they have employees and do well. They have both gone through surgeries of all kinds due to the punishment they subjected their knees and bodies to during their years crawling in attics doing duct work.

I know graphic artists who have had multiple surgeries on their wrists due to carpal tunnel injuries.

Carpenters who have lost fingers due to unfortunate accidents. And musicians with permanent Tinitus due to playing in loud environments for twenty years.

I spend my days working in front of a computer, probably 80 hours a week. There are consequences to that as well.

I guess the point I am trying to make is that all activities come with consequences. Yet not one of these people were forced to take and keep these jobs. Let's not blame employers for providing work people take freely. I am not justifying negligence in the case of unsafe working conditions. That is a criminal matter.

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#263

Post by morgante » Thu, Dec 24, 2015, 7:13 AM UTC

arbitrage314 wrote: post #111

I'm going to keep repeating this comment until the world hears it--I think most people joining startups are being taken advantage of without realizing it. Sorry to be repeating myself: If you're primarily interested in making money, or if you love the startup but not the compensation, you should NOT work at that startup. If you're a good developer, you can get a better deal by working at an established company and si…

Early in your career, startups can offer flexibility and growth opportunities which you wouldn't have otherwise.

One of the best jobs I've ever had was at a startup. I was still in college at the time, but they recognized the value I delivered and:

* Paid me a great full time salary even though I was staying in classes

* Let me run a full team, giving early management experience (great for my resume)

* Meaningful equity

No "established" company would have done this. It was a little crazy to do (who lets a college student run a tech team?), but I had a great experience and so did the team. Even if my equity is ultimately worthless, I will still have gained from taking that job.

Moreover, not all startup jobs offer poor equity terms. I've never worked at a startup for less than 1% (often much more than that) and always value my stake at less than half the VC valuation.

Even if I never make any money on a startup, I'll still endorse doing a startup early in your career. Later on, the calculus definitely shifts as mature companies are both more formulaic in their compensation and also offer benefits which become more important with age.

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#264

Post by morgante » Thu, Dec 24, 2015, 7:15 AM UTC

Balgair wrote: post #134

arbitrage314 wrote: post #111

I'm going to keep repeating this comment until the world hears it--I think most people joining startups are being taken advantage of without realizing it. Sorry to be repeating myself: If you're primarily interested in making money, or if you love the startup but not the compensation, you should NOT work at that startup. If you're a good developer, you can get a better deal by working at an established company and si…

Thanks for the comment, but 'investing' 100k, a sum FAR more than almost anyone reading the comment will ever see in their own bank accounts, is not 'investing' for most of us. Diversity and spreading the risk is bread and butter for almost all of us. Throwing 100k into a company you believe in' is a greater gamble than almost any reader could ever justify to their spouse and expect to stay married. You live in a ver…

> Thanks for the comment, but 'investing' 100k, a sum FAR more than almost anyone reading the comment will ever see in their own bank accounts

Assuming that the majority of HN readers are software developers, I actually don't think that's true.

While I agree that investing $100k into a company is a big gamble, it's important to realize that's precisely what you're doing if you give up a BigCo job for a startup one with a $25k pay gap and vesting over 4 years.

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#265

Post by morgante » Thu, Dec 24, 2015, 7:20 AM UTC

balls187 wrote: post #161

arbitrage314 wrote: post #121

Earlier quoted context omitted.

Most startups are more than happy to take your money. Just email or meet with the founders, explain your enthusiasm for the company, and you're usually good to go! For higher-profile deals, though--e.g., Uber--you wouldn't be able to invest such a small amount.

> Most startups are more than happy to take your money. Just email or meet with the founders, explain your enthusiasm for the company, and you're usually good to go! I would be highly skeptical of any startup founder who is going to take money from just anyone. Taking in random investment dollars could come back to bite founders and company in the ass pretty badly. From the time demanded by the investor, to working o…

While it's true that founders won't take money from just anyone, I actually think a software engineer with experience in the industry would be a great investor.

They can give you insight on tech problems/scaling, help with hiring, offer connections, etc. (Basically, most of the things you're looking for from investors besides money.)

A software engineer investing in your company is pretty different than your real estate mogul uncle trying to get in.

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#266

Post by dasil003 » Thu, Dec 24, 2015, 3:55 PM UTC

Swannie wrote: post #252

rlucas wrote: post #223

Earlier quoted context omitted.

I have several friends and acquaintances whose exits as founders were in the $5-500 M gross exit value range -- far from a Google / FB outcome. Those people all made an entire career's worth of money, or more, all at once* and with capital gains tax treatment to boot. (* well, after an earnout / lockup) They also exclusively held common shares. The deciding factor is whether their exit value was a meaningful multiple…

"> Tech employees need to wake up about common vs preferred shares" The important distinction is employee vs founder. You mention founders in your comment. Founders typically would hold a double-digit percentage of common shares. Employees that might get offered 0.1% if they are an early hire, or less assuming later stage (discounting exec hires here, because the OP of this thread was about engineers). Founders also…

You're exaggerating for dramatic effect. First of all, 1-2% is not uncommon for truly early employees. Second, it's quite typical for founders to work for free for a significant length of time to get the company off the ground. If the founders got the company to a 200M valuation with money in the bank to pay salaries, explain to me why employees deserve to be in the same order of magnitude shareholders as founders?

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#267

Post by sunrise21 » Thu, Dec 24, 2015, 7:00 PM UTC

rebootthesystem wrote: post #230

adrianN wrote: post #220

Earlier quoted context omitted.

I'm fairly sure that most car company employees in Germany are represented by a union, the IG Metall. Germany's car industry is still doing fine.

European unions don't function as US unions do. They are far, far more benign. They would never make deals that would result in the utter destruction of the company their very members work for. American unions have succeeded at delivering amazing short-term gains for their members at the cost of killing companies and industries. Ask any old-timers in the printing industry if you want to start grokking the subject.

But wouldn't all unions regardless of where they are from have similar goals and mechanism as you described earlier, such as their leadership wanting to stay in leadership (pandering if need be to stay there) and their members wanting to have good pay, benefits, etc.? What makes the European unions different from the U.S.?

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#268

Post by erik998 » Thu, Dec 24, 2015, 9:59 PM UTC

mathgeek wrote: post #43

caseysoftware wrote: post #27

Earlier quoted context omitted.

Yes, this strikes me as very Enron-ish throughout.

Interesting. In what ways? Enron was a public company that committed fraud.

The tragedy of Enron was the automatic investment plans in the 401k for most employees. The default choice was Enron stock. Also, depending on the nature of the matching contribution, Enron stock might have benefited from a larger matching employer contribution percentage or discounted share price. This is why 401k plans now offer various choices that are suitable and diversified for most people.

http://blogs.wsj.com/moneybeat/2014/07/04/are-you-stuck-on-y...

A defined benefit plan could have prevented this tragedy. It's funny though. Defined benefit plans are mocked at by large firms but increasingly being used by wealthy individuals/families and their small businesses. Nothing beats government subsidized PBGC insurance for the future retirement plans of America's job creators.

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#269

Post by ezxs » Fri, Dec 25, 2015, 1:40 AM UTC

Justsignedup wrote: post #232

tl;dr -- if you are not a founder, your stock is never going to get as much thought as a founder / investor's will. And also they make decisions on your behalf, often which benefits them greatly, and you little.

more like - if you are not an exec....

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#270

Post by Aloha » Fri, Dec 25, 2015, 4:17 AM UTC

rebootthesystem wrote: post #262

Aloha wrote: post #246

Earlier quoted context omitted.

In other countries, they do work, just not here in a bunch of cases (the auto workers are a worst case). I'm not trying to justify the adversarial relationship the UAW takes with the big three - but as the old saying goes, it takes two to tango, and for a long time, neither side was willing to change the status quo. Not all unions are the same, many have what could more be described as a partnership. I don't have muc…

While I have sympathy for your friend, nobody forced him to stay on. I have a couple of friends who own air conditioning and heating companies. They do very well now, yet they both started with one beat-up truck crawling in attics by themselves to earn a living. Years later they have employees and do well. They have both gone through surgeries of all kinds due to the punishment they subjected their knees and bodies t…

Why would he leave, yes the work is physically hard, and mentally monotonous, but the reward and pay is great - thats the tradeoff - they go in work their 20 years, and come out beat up and somewhat broken, and get a decent pension out of it.

Would he have stayed on without the great pay, benefits and pension? probably not, not enough financial reward for the work, he's smart enough to do anything he decides he wants to. That on some level is the price of doing business - or was at least for a long time - the UAW gave concessions to save the Big Three in the form of a two tier wage structure, which the big three appear to be willing to gradually eliminate the two tier structure - or at least bring them closer together now that they are financially healthier.

The thing is, I'd bet money though, if if I looked into it, you'd find autoworkers in each company (or anyone doing heavy assembly like that to be similarly well paid, relative to their local wage).