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Startup Winter: Hacker News Lost Its Faith

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Re: Startup Winter: Hacker News Lost Its Faith

#281

Post by blackeyeblitzar »

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 wonder if part of the issue isn’t the startup world but the corporate world. There’s enough capital and anti competitive practices at big tech companies that startups are fighting for scraps. I would love to see a new movement to reshape antitrust laws and improve competition.

Re: Startup Winter: Hacker News Lost Its Faith

#282

Post by NoMoreNicksLeft »

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…

>Dodgy accounting & staff retention meant that actually you don't get fuckyou money.

What is fuckyou money at this point? Take the Mega Millions lottery jackpot, it's default is $20 million nominal. You get cash payout instead of annuity, now it's about $10 million. Maybe you live in a state without income tax (I do), but the feds get their cut, now it's $5 millionish. You look for a nicer house (been living in an apartment)... and, since you don't want to lose it to property tax arrears all that quickly, you budget for that too for the next 20 years. How much house can you afford? Turns out, you're getting at most some upper middle class home in a second class city. Maybe with a nice car in the garage too. No live-in maids and chefs, no 40,000sqft mansions with indoor Olympic swimming pools and gold-plated toilets.

Hardly seems like fuckyou money at all. I think while we weren't looking, inflation snuck in and changed what fuckyou money actually was. You basically need to not just be a multimillionaire anymore, but a sub-billionaire.

Re: Startup Winter: Hacker News Lost Its Faith

#284

Post by MomsAVoxell »

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.

I’m not sure it’s just the financing being controlled by “the VC’s”, but also definitely the entire culture.

I mean, the model for most companies - having a very heavy legal component when big money figures are being generated/spent - requires a great deal of bureaucracy which, somehow, inherently prohibits participation at an individual scale, in the massive profits.

It seems that a lot of it hinges on the nature of work for hire. If only there were systems in place that could make every human being a work for hire payment, even those performing CEO duties, then possibly the profits would be easier to spread.

I think a lot of startup problems exist in the Founder/CEO versus Founder/CTO versus Founder/CFO dynamic, which is what any company following the legislated structures must deal with.

VC’s exploit these dynamics, they can do it with money/financing, and they can do it without it, as well.

The crazy thing is, cases exist throughout history of three individuals getting together, building something great, and doing it without requiring any venture capital, generating through their own efforts, adventure capital.

Re: Startup Winter: Hacker News Lost Its Faith

#285

Post by Kye »

rUsHeYaFuBu wrote: post #244
tossandthrow wrote: post #240

Earlier quoted context omitted.

Well, it is a narrow understand. I also don't focus solely on the fact that I earn money from my job, when I speak to my colleagues - no, I wouldn't be on that job, if it didn't pay. > No one's doing business or lending money to not see a return on that. This is a very specific understanding of startups as entities receiving foreign capital or debt. The act of doing entrepreneurship or stating up is inherently devoid…

> The act of doing entrepreneurship or stating up is inherently devoid from profit motives I am assuming one is operating in the for-profit sector. If one is NOT operating in that sector then yes it is all the more reasonable to assume that the enterprise should be focused on solving a problem or creating some sort of intangible value. We can observe this is well with the open-source community, where profit motivatio…

VCs aren't banks and startups (in the SV sense) aren't seeking funding to do something tried and true in a new place. A VC invests expecting most of their investments to fail.

Banks expect returns, and the things they fund are expected to turn a profit. There are systems in place to claw back assets and funds in the event it fails to do that; and most will, but they're expected to come to the bank with a plan for profit in hand. There are different kinds of bankruptcies to address different kinds of failure. Banks tend to not give loans to people who fail a lot, and the terms get worse with each failure.

Meanwhile, in VC-land, the 1/10 startup that brings the profit for the fund could very well be started by the person who failed the other 9/10 times.

It seems like if the expectation is, with rare exceptions, most startups won't turn a profit, and there's no real penalty or punishment for repeat failure (because it's expected), it's not a for-profit system. It's a patronage system that periodically mints new patrons.

Re: Startup Winter: Hacker News Lost Its Faith

#286

Post by Glyptodon »

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…

When you consider that the dot com era had mortgage rates similar to or maybe even higher than now, and same with federal rates, I tend to think there's a combo of recent startups having poor/LCD ideas w/ recency effect leading to overvaluing current rates against potential growth.

Re: Startup Winter: Hacker News Lost Its Faith

#287

Post by wslh »

InkCanon wrote: post #279
wslh wrote: post #222

Earlier quoted context omitted.

There is innovation, but you’re operating within the same business domain. I wasn’t talking about stagnation but addressing the point made in the article as a software-based founder: will you compete with NVIDIA? Highly unlikely. Will you create an AAA game? Unlikely. Will you advance AI at a fundamental level? Again, highly unlikely. When I said “no way” I meant the chances are close to epsilon. In the past, there w…

IMO thinking about it as business domains first isn't good. From "first principles" you have technology (which is rapidly changing). After the technology has been made sellable, people come up with a label for it to put what it is in a box. So business domains are always lagging indicators . And inside there's this deeply buried implicit assumption that anything in the same business domains delivers the same value, p…

We agree that there are many opportunities. However, I would like to clarify that the market for these opportunities has become more sophisticated than before, and business development plays a key role. Ultimately, you will rely on or utilize advanced technologies created by others and few, such as OpenAI or Llama. The software you are developing could be built by many developers in the world, there is no secret there. While the quality of your developers matters, some may be better or worse, it's important to remember, as the startup adagio points out: your company doesn't fail because you can't deliver software; it fails because you lack product/market fit (and go-to-market fit).

Re: Startup Winter: Hacker News Lost Its Faith

#288

Post by neilv »

nico wrote: post #273
blindriver wrote: post #215

Earlier quoted context omitted.

I was the ~15th engineer at a YC startup that had a very big exit. Over 4 years I made less than $80k total (20k/yr) from my options while the founders made high 8 figures. Had I joined BigTech I would have made over $1 M just from stock and I would have worked less. Back during the dot com days, everyone from the secretaries to the chefs to the founders were getting rich but nowadays YC teaches their founders to kee…

We were rejected from YC because we wouldn’t dilute to 0 some of the early people at the company They first told us we were in, but that we would need to adjust our cap table so that only 2 founders would have equity. They gave us a phone call, we pushed back, and later they sent us a rejection email

Commendable. We need more people with decency, principles, and backbone.

Re: Startup Winter: Hacker News Lost Its Faith

#289

Post by Gud »

kijin wrote: post #278
Gud wrote: post #248

Earlier quoted context omitted.

Generally this is not true - the "risk" taken by these people is very small, because of how wealthy they or their parents are. If I had $1M and lost it, I would be devastated. If I had $1B and lost $1M, it would be a rounding error. I don't have any money, so how do I even get to $1M? And neither does my parents.

We're not talking about that kind of risk. It's just a synonym for the amount somebody is going to lose if the company fails, regardless of what the amount means to them personally. VC invests $1M in a startup, they are risking $1M. You just work at a company, get paid every month, and don't buy any stock, you are risking $0. That's all. If the company does well and the VC makes $5M back, it probably won't mean much…

Yes I understand this. My point is, what “risk” are the investor class actually taking? Not much, because they have enough to hedge their bets many times over, while a salaried employee can’t even be in the game. They simply can’t afford one measly chip.

Re: Startup Winter: Hacker News Lost Its Faith

#290

Post by Glyptodon »

A lot of the comments here boil down to "FAANG" is a better deal. But lots of people literally want FAANG to go extinct and won't work for them. Which means you work where?

Startup pay usually beats what random business pay for SWE work.

Probably there's some kind of third track, but it's less obvious to me.

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