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How to Build an Iconic Company – Keith Rabois [audio]

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Re: How to Build an Iconic Company – Keith Rabois [audio]

#31

Post by PragmaticPulp »

arcticbull wrote: post #23
logicslave wrote: post #21

Earlier quoted context omitted.

a senior IC role at $BIGCO pays $500-750K/yr starting At age 30: This is really only at Facebook and Netflix. Its more like 375-450k at Google/Amazon/MSFT/smaller tech companies. Facebook and Netflix together definitely employ less than 40k engineers. Of which, no more than 10,000 are ICs with starting comp greater than 500k. So youre really talking about 10k people between those two companies, throw in the other FAA…

You don't think someone who's smart, talented, and with diverse enough experience/background to found a startup and lead it to an exit would be capable of a staff engineer role at Facebook? What would you consider a fair point of comparison then?

If we reduce people to pure levels of drive and motivation, maybe it’s a reasonable comparison.

However, in my experience the types of people who thrive in climbing the corporate ladder (Facebook included as a bureaucratic corporation) are very different from the types of people who seek out building their own successful companies. There’s less overlap between the two personality types than you might expect.

Re: How to Build an Iconic Company – Keith Rabois [audio]

#32

Post by logicslave »

PragmaticPulp wrote: post #30
logicslave wrote: post #21

Earlier quoted context omitted.

a senior IC role at $BIGCO pays $500-750K/yr starting At age 30: This is really only at Facebook and Netflix. Its more like 375-450k at Google/Amazon/MSFT/smaller tech companies. Facebook and Netflix together definitely employ less than 40k engineers. Of which, no more than 10,000 are ICs with starting comp greater than 500k. So youre really talking about 10k people between those two companies, throw in the other FAA…

Well said. It’s important to acknowledge that these highly compensated positions do exist in unique scenarios for extraordinary people. They are attainable for someone with sufficient drive, dedication, and luck. However, it’s equally important to acknowledge just how rare and unique those positions really are across the industry. $750K compensation isn’t a routine occurrence for engineers just going about their live…

Its mind blowing to run the math on how many people work these positions. For instance, I know for a fact that less than 650 people at UBS make more than 500k in investment banking. Take that number, and all the biggest banks, and you have less than 10k people making more than 500k in investment banking at the big banks. This is miniscule. Yet people talk about these careers like they are viable, or even worth the time and effort. They arent, unless you are top of your class at Harvard, have connections, or are irrational.

Engineering is different in terms of the number of positions, but still, the high IC comp is pretty rare once you run the math

Re: How to Build an Iconic Company – Keith Rabois [audio]

#33

Post by carlosdp »

ditonal wrote: post #7

To his point about finding undiscovered talent, VCs are obsessed with finding people they can underpay via selling them on their “vision” and “impact”. They claim they can’t compete with Google and Facebook on comp, but the truth is they don’t even try to do so by offering fair equity deals. Instead they use rigged instruments like common ISOs with liquidation preference and 90 day exercise windows to intentionally s…

> Instead they use rigged instruments like common ISOs with liquidation preference and 90 day exercise windows to intentionally screw early employees over.

I'm so tired of this being repeated as if founders choose ISOs to screw over employees, it's flat wrong. ISOs offer the best tax advantages for employees. The 90-day exercise window is a government-imposed thing. If you want it changed, go talk to them.

I'd much rather give an employee an instrument in which they don't have to worry about any taxes at all until they actually want to exercise than have them sign a document they almost certainly don't understand and receive stock they get immediately taxed for and be confused why the IRS taxed them for stock they can't sell and that might end up being worthless.

Re: How to Build an Iconic Company – Keith Rabois [audio]

#34

Post by emagdnim2100 »

carlosdp wrote: post #33
ditonal wrote: post #7

To his point about finding undiscovered talent, VCs are obsessed with finding people they can underpay via selling them on their “vision” and “impact”. They claim they can’t compete with Google and Facebook on comp, but the truth is they don’t even try to do so by offering fair equity deals. Instead they use rigged instruments like common ISOs with liquidation preference and 90 day exercise windows to intentionally s…

> Instead they use rigged instruments like common ISOs with liquidation preference and 90 day exercise windows to intentionally screw early employees over. I'm so tired of this being repeated as if founders choose ISOs to screw over employees, it's flat wrong. ISOs offer the best tax advantages for employees . The 90-day exercise window is a government-imposed thing. If you want it changed, go talk to them. I'd much…

There's absolutely no reason companies can't issue options that automatically convert from ISOs to NSOs after the 90-day period, and leave the NSOs on the table for ten years. There is no downside to the employee or, really, to the company – other than that the options, which were pitched to employees as part of comp, aren't clawed back to the company's pool as quickly.

I've observed many startup founders who are disdainful of employees who leave, ever, for any reason, and definitely don't want them to receive proceeds from any of the company's future successes.

Re: How to Build an Iconic Company – Keith Rabois [audio]

#35

Post by jariel »

ditonal wrote: post #7

To his point about finding undiscovered talent, VCs are obsessed with finding people they can underpay via selling them on their “vision” and “impact”. They claim they can’t compete with Google and Facebook on comp, but the truth is they don’t even try to do so by offering fair equity deals. Instead they use rigged instruments like common ISOs with liquidation preference and 90 day exercise windows to intentionally s…

You're basically saying hat the VC's have too much comp, and are not handing enough to the FAANGers.

Also - the weird tone about VC's 'enriching themselves' ... when that is 99% of the objective of most employees? People would not work at FAANGS for 1/4 the salary. The money is a 'big deal'.

The power imbalance is probably not the issue. VC's are comped somewhere in the ballpark of 'correct'.

There are zillions of new VC firms every year, capital is cheap - and most of them fail. It is actually competitive.

If there's a systematic bias, it's the immense power of the FAANGS and their ability to hold on to top talent and not always putting them to very good use.

Re: How to Build an Iconic Company – Keith Rabois [audio]

#36

Post by jariel »

emagdnim2100 wrote: post #34
carlosdp wrote: post #33

Earlier quoted context omitted.

> Instead they use rigged instruments like common ISOs with liquidation preference and 90 day exercise windows to intentionally screw early employees over. I'm so tired of this being repeated as if founders choose ISOs to screw over employees, it's flat wrong. ISOs offer the best tax advantages for employees . The 90-day exercise window is a government-imposed thing. If you want it changed, go talk to them. I'd much…

There's absolutely no reason companies can't issue options that automatically convert from ISOs to NSOs after the 90-day period, and leave the NSOs on the table for ten years. There is no downside to the employee or, really, to the company – other than that the options, which were pitched to employees as part of comp, aren't clawed back to the company's pool as quickly. I've observed many startup founders who are dis…

One of the reasons is complexity.

Yes, there should be evolution on this front. It's a little lop sided, but not trivially easy to fix either.

These instruments are already very complicated.

Re: How to Build an Iconic Company – Keith Rabois [audio]

#37

Post by rco8786 »

jariel wrote: post #36
emagdnim2100 wrote: post #34

Earlier quoted context omitted.

There's absolutely no reason companies can't issue options that automatically convert from ISOs to NSOs after the 90-day period, and leave the NSOs on the table for ten years. There is no downside to the employee or, really, to the company – other than that the options, which were pitched to employees as part of comp, aren't clawed back to the company's pool as quickly. I've observed many startup founders who are dis…

One of the reasons is complexity. Yes, there should be evolution on this front. It's a little lop sided, but not trivially easy to fix either. These instruments are already very complicated.

Not gonna sugarcoat it - this is weak. Companies don’t offer this solution that’s better because it’s “complex”.

This is like when engineers say something is going to take a long time because “there’s a lot of moving parts”.

The reality, IMO, is that employees do not have a seat at the table when it comes to negotiating ownership shares. And, predictably, they end up with the worst part of the deal.

Re: How to Build an Iconic Company – Keith Rabois [audio]

#38

Post by emteycz »

jashmatthews wrote: post #25
emteycz wrote: post #13

Earlier quoted context omitted.

How much risk do the employees carry? If it is that easy, why don't the employees start a business too?

Lack of access to capital.

Most founders faced the same lack of access too, perhaps getting through is the secret sauce that is so valuable?

Re: How to Build an Iconic Company – Keith Rabois [audio]

#39

Post by mdonahoe »

rbranson wrote: post #2

An investor taking credit for founder's work is probably NOT the way to build an iconic company. https://twitter.com/rabois/status/1260257254957215749

I read it differently. It reminds me of some advice on pitching:

“Don’t waste you’re time trying to convince hesitant investors you have a good idea. Find the investors who already know it’s a good idea, and then convince them you’re the team whose going to do it.”

Re: How to Build an Iconic Company – Keith Rabois [audio]

#40

Post by jashmatthews »

logicslave wrote: post #27
arcticbull wrote: post #23

Earlier quoted context omitted.

You don't think someone who's smart, talented, and with diverse enough experience/background to found a startup and lead it to an exit would be capable of a staff engineer role at Facebook? What would you consider a fair point of comparison then?

"would be capable of a staff engineer role at Facebook" Completely different skill sets. The founder can be scrappy with web programming, knowing a myriad of frameworks and some really good css. He's good at selling, networking, getting people on board with his vision. Maybe his real value comes from his domain knowledge, which lets him succeed where others couldnt. Its a completely different job. The staff engineer…

You can work on compilers, distributed databases and other "hard technical problmens" as an intern. Staff Engineer means something quite different.

Staff Engineer is much more about understanding what to build (including the product implications), how to build it, how to communicate that with everyone else. The kind of skills that would make you a highly effective founding CTO.

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