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Startup Winter: Hacker News Lost Its Faith

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Re: Startup Winter: Hacker News Lost Its Faith

#261

Post by jschveibinz »

Here are a few anecdotes from the U.S. that can hopefully add substance to this conversation:

1) I am an investor in startups, and I have slowed my investments to a trickle since the beginning of Covid. I have noted that this has been generally true of other investors like myself.

2) There are still tons of problems to solve through technology applications; but there needs to be a moat between your solution and what AI will likely disrupt in the next few years. So, think about solving problems in the physical world.

3) Many startups create a pool of equity at around 10-15% of total shares for awarding to key employees. If your startup doesn't have this, then that is a red flag.

4) When assessing a startup, consider two things first: are the founders experienced in the industry and market they are attacking? Is the value of the solution obvious? i.e. people will likely willingly pay well to have the solution?

5) startups are still thriving at universities that support entrepreneurship and technology commercialization.

6) financial stability of startups, especially technical startups, is greatly affected by non-dilutive grants and contracts, e.g. SBIR awards. Investors look for this.

Re: Startup Winter: Hacker News Lost Its Faith

#262

Post by kijin »

KaiserPro wrote: post #169
kijin wrote: post #137

Earlier quoted context omitted.

Yeah, this is often overlooked in all the talk of $300k FAANG salaries. Few people get those senior salaries, and those who do get it because of their unusual skills and experiences. A stint at a startup is still a pretty good way to get those skills and experiences, compared to spending the same amount of time as a junior developer somewhere else. If you can make capital gains equivalent to FAANG senior salaries whi…

levels.fyi will give you some confidence in the wage. Google, Meta, Amazon & microsoft all do banding, so the base wages is mostly public (hence why its all bollocks about wage negotiation, there isn't any.) The first level of senior for most of these orgs will tip the scales at around $300k Having worked at both startup and FAANG, I don;t think startups actually give you the skills to flourish here in corp land. Sur…

Being successful at a startup isn't about being a good coder, either.

Especially if you're a founding member or an early hire, it often has much more to do with having good insights about where technology meets business, knowing how to tackle difficult problems using limited resources (IRL, not just in a computer), and even a sprinkle of politics if your startup happens to "disrupt" the wrong kind of industry.

If your startup has a management team that can abstract away all of that stuff so that you can just code in peace, I agree that your tenure there will probably not be worth the hassle in a resume.

Re: Startup Winter: Hacker News Lost Its Faith

#263

Post by acuozzo »

benjaminwootton wrote: post #18
Temporary_31337 wrote: post #12

Pretend all you want but interest rates make a ton of difference. If you can make a safe, compounded, perhaps leveraged 5% from treasuries the financial bar that a successful startup has to pass is so much higher

Interest rates are like a dial which turns economic activity up and down. I’ve always understood that in theory but it’s the first time I’ve actually lived through it and it’s wild. A few years of higher rates and half of the tech industry and the people who buy tech seems to be on hold. It makes me realise how vacuous the last decade was and how a lot of our jobs and businesses existed because of dirt cheap money. I…

To really drive the nail in... consider what advances have been made in software over the past 30 years. In software specifically, NOT software enabled by faster hardware.

What can we do now in software which would not have been possible in 1995, even if we were to somehow make our hardware today usable by programmers then?

Re: Startup Winter: Hacker News Lost Its Faith

#264

Post by kijin »

hmmm-i-wonder wrote: post #221
kijin wrote: post #137

Earlier quoted context omitted.

Yeah, this is often overlooked in all the talk of $300k FAANG salaries. Few people get those senior salaries, and those who do get it because of their unusual skills and experiences. A stint at a startup is still a pretty good way to get those skills and experiences, compared to spending the same amount of time as a junior developer somewhere else. If you can make capital gains equivalent to FAANG senior salaries whi…

That doesn't really address that the burnout/startup/hustle culture is part of the risk/reward valuation employees make to work at a startup. If I can get the same compensation working at a FAANG with less stress, better hours and more balance/control over my life, and the resume entry may be 'more interesting' in some ways, but its hard to argue with FAANG on a resume either why wouldn't I? the choice to risk all of…

Some people just like the hustle culture. They can't seem to stand the boredom of a sustainable company with years of runway. So it obviously depends on your personality. For some, the thrill is worth the risk. For others, it's a huge bag of nope. I for one am clearly moving toward the latter group as I get older.

Re: Startup Winter: Hacker News Lost Its Faith

#265

Post by absolutelastone »

hmmm-i-wonder wrote: post #221
kijin wrote: post #137

Earlier quoted context omitted.

Yeah, this is often overlooked in all the talk of $300k FAANG salaries. Few people get those senior salaries, and those who do get it because of their unusual skills and experiences. A stint at a startup is still a pretty good way to get those skills and experiences, compared to spending the same amount of time as a junior developer somewhere else. If you can make capital gains equivalent to FAANG senior salaries whi…

That doesn't really address that the burnout/startup/hustle culture is part of the risk/reward valuation employees make to work at a startup. If I can get the same compensation working at a FAANG with less stress, better hours and more balance/control over my life, and the resume entry may be 'more interesting' in some ways, but its hard to argue with FAANG on a resume either why wouldn't I? the choice to risk all of…

This is the opposite of my experience. Big tech is far more hours and stress. And the work is much narrower and boring. The system is designed to make people into commodities and make you do work in the way that most benefits managers senior to yourself. Solve this narrow piece of a problem using this specific method alongside 5 other people doing other narrow pieces, versus a startup where you can just own the whole thing and iterate it faster.

Startups pay less and have to take what the can get. This probably causes a vicious cycle that makes the pay gap worse and worse.

Re: Startup Winter: Hacker News Lost Its Faith

#266

Post by cjbgkagh »

liontwist wrote: post #257
neilv wrote: post #253

Earlier quoted context omitted.

> nowadays YC teaches their founders to keep the money and stock options for themselves and for the investors. In founder-matching profiles, I've started saying that I wanted to spread the wealth around with early hires, more than the convention. If founders win, the early hires also win. Lesson learned: no matter how busy a founder is, they are no less petty than anyone else, and some will make time for a call, just…

I joined a startup that was big on this message. They were previously at startups and felt they didn’t get a fair share in an exit. Well it turns out even that wasn’t enough and they did the same thing. I suspect VCs control too much of the financing.

Maybe, but people are generally like that. When they’re in the same situations they do the same things. I think few people are honest with themselves, or even know themselves what they would be like if situations were reversed.

Re: Startup Winter: Hacker News Lost Its Faith

#267

Post by digitcatphd »

scarface_74 wrote: post #151
digitcatphd wrote: post #119

Earlier quoted context omitted.

Economic cycles. As soon as the next cycle builds up momentum all the low risk entrepreneurs will rush in again.

Where will they get the funding if not from VCs? What will motivate VCs if not large potential exits?

Don't make me tap the sign.

Re: Startup Winter: Hacker News Lost Its Faith

#268

Post by crossroadsguy »

KaiserPro wrote: post #17

I think the bigger issue is that most of the financial upsides of startups were illusory Unless you're a founder, you're unlikely to make any money, and predatory VC/backers using convertibles/senior debt to turn your equity into Zimbabwean dollars. Thats before any stats are calculated for lasting long enough to either IPO, make money or get bought out. As someone who did successfully exit, the stories of multiple-m…

I guess even if, and that’s a big if, a founder agrees to give an early employee Class A shares (I guess that would be the top tier, wouldn’t it?), even that could be turned into nothing, wouldn’t it? Unless you’re already rich enough to be able to legally stand up for yourself.

Even class A shares are given in the form of options? Such that even to make it yours after a certain period (usually after leaving) you actually have to “buy” it and then pay taxes on its fictitious price difference.

I have come across ESOPs just once from an American startup (but I worked in my home country) and the whole thing just shocked me. The price used to change as if someone (Board? Banks? Founders?) woke up and just threw a dart on a number chart and that became FMV of that day! Even when there’s no funding round or so!

Re: Startup Winter: Hacker News Lost Its Faith

#269

Post by mattgreenrocks »

p_j_w wrote: post #205
mattgreenrocks wrote: post #182

Earlier quoted context omitted.

Everyone: Big Tech ruins news/social media/small businesses/democracy! Also everyone: FAANG employees are better than everyone else!

I dont think FAANG employees are better than everyone else, but these two things don’t sound mutually exclusive.

Agree. Just an inflammatory observation that we are prone to both villainize and glorify the institutions that be without much cognitive dissonance. :)

On second thought, "irrationally preferred during hiring" gets at that idea better.

Re: Startup Winter: Hacker News Lost Its Faith

#270

Post by mattlutze »

ragnot wrote: post #150
itake wrote: post #107

Earlier quoted context omitted.

This tracks. I think the real value employees get is riding the rocketship in their career. Early engineers often have first dibs on higher level roles, like CTO or director over people that join late. Your initial grant might not be great, but being director at such a company is huge

You'll find that outside the startup, the director/vp/cto title doesn't translate. Larger companies will often write you off as being "not experienced" enough which is often code for "you don't look old enough for this position". Unlike engineering and the startup world, big companies want you to look the part not just know the part.

> Larger companies will often write you off as being "not experienced" enough which is often code for "you don't look old enough for this position".

It's not about age, it's about what you actually had to do. Company size, company age and political complexity are strongly correlated.

A successful large company engineering director spends their day mostly doing politics across the org, while a successful small company engineering director spends a lot of their day writing code, being an architect, filling in for product management.

> Unlike engineering and the startup world, big companies want you to look the part not just know the part.

Big companies want you to know how to play the long game.

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