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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”

#311

Post by CRConrad »

g9yuayon wrote: post #232
jjeaff wrote: post #231

Earlier quoted context omitted.

I wonder how many people each year make at least $1m from startup equity appreciation (that is actually liquid). Because it's between 1500 and 2000 people that win at least $1m in lotteries in the US every year. Granted, lots more people play the lottery than start or join a startup, but it's an interesting comparison.

I'm not sure if the calculation is correct. 2000 people winning lotteries out of at least millions of people, right? Yet in the startup word, it is thousands of people out a few hundreds of thousands? Another factor to consider is that your equity keeps giving, while lottery is a one-off deal.

But the GP's point pretty obviously wasn't a calculation of percentages, just comparing absolute numbers. As a percentage of the population it also holds, since that is the same whether you're looking at start-ups or rhe lottery.

Another way to look at it is ease of entry: If you're already playing the lottery, also joining a start-up isn't all that easy (as you said yourself, the number who do is much lower). If you're already working at a start-up, OTOH, also playing the lottery...

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

#312

Post by jdbernard »

jonfw wrote: post #104
cs02rm0 wrote: post #13

It's just big company talk to pretend they're cool and innovative. Obviously ridiculous garbage that probably got someone a good annual review score. A small company I was working with had heard that IBM, who had a customer in common, were operating some sort of "garage" thing that the customer really liked. Rumours were flying around, someone had heard it was a video conferencing app, they were desperate to know mor…

I worked within IBM garage, it's not 'any team of people', it's a specific organization that mostly does services work. Their 'secret sauce' is that they're trying to consult on technology and company culture at the same time, in line with Conway's lay. I.E. If you want to be more agile you'll want to adopt CI/CD, if you want micro services you'll want smaller more autonomous dev teams.

Yes but the parent's point is that the term "garage" has nothing to do with how or where the team actually works. It's a make-believe name chosen because of its association/connotation, not because of any actual grinding in reality.

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

#313

Post by staysaasy »

tarr11 wrote: post #241
staysaasy wrote: post #239

Earlier quoted context omitted.

I would add to scenario 3 that the startup needs to do well enough to grow at least a bit (growth is a great teacher) AND your position at the startup has to scale with that growth. Otherwise from what I've seen you might be better off just starting your own company sooner, as founder equity is 1-2 orders of magnitude higher than non-exec early employee equity so it's arguably worth just taking more shots on goal. "W…

Isn’t sitting on boards while you work at megaCorp a conflict of interest / violates your employment agreement?

No it's quite common, I'd say that most board members are employed elsewhere. You can see it in the independent board members from various public companies.

Random example: check out the Nike executive team at https://about.nike.com/pages/executives and search in the page for "board." You can see their past and current board membership.

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

#314

Post by jonfw »

jdbernard wrote: post #312
jonfw wrote: post #104

Earlier quoted context omitted.

I worked within IBM garage, it's not 'any team of people', it's a specific organization that mostly does services work. Their 'secret sauce' is that they're trying to consult on technology and company culture at the same time, in line with Conway's lay. I.E. If you want to be more agile you'll want to adopt CI/CD, if you want micro services you'll want smaller more autonomous dev teams.

Yes but the parent's point is that the term "garage" has nothing to do with how or where the team actually works. It's a make-believe name chosen because of its association/connotation, not because of any actual grinding in reality.

There is a physical garage (more of a hipster warehouse styled co-working space) that the org no longer fits entirely in, but was still in use up until Covid hit. The plan pre-covid was to build more of these spaces to use for co-working sessions with clients.

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

#315

Post by AtlasBarfed »

Uehreka wrote: post #132
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…

This is also an issue I’ve seen with companies that began as startups, but then transitioned into the “big company” phase: Founders and early employees complain that “when we were getting started, we could’ve gotten this feature done in a week! What’s taking so long?” There tends to be frustration that employees won’t work nights and weekends, even though their work could “turn this company into the next Amazon!” Whe…

UnitedHealthCare is an example of this on steroids.

UHC basically can't show a huge profit. Otherwise they'd be subject to investigations and pilloried for profiting off of the misery that is the US health care system.

But they make money hand over fist, because... it's the US healthcare system, and they have an effective monopoly/dominant cartel position as one of the four pigs at the trough (trial lawyers, doctors, insurance, drug/device companies). So instead of profits, a gigantic management tree has built up, and the managers take all the money.

Then tell their workers they aim for the bottom third of market compensation.

Colleges seem to me the same way: no "profits", but suck in huge amounts of money as the tuition skyrockets. Hmmm, and suddenly a huge administrative/management/MBA apparatus has appeared in higher education? You don't say.

Salary was basically a contract with employees to take steady income and employment (once upon a time ....) while the management layer and stockholders will eat the gravy. Motivation in that contract is strictly around 1) access to management for the "ambitious" and 2) don't get fired for the rest.

Hand in hand in IT with not being able to get things done quickly is that doing things quickly is high risk, and that violates the core motivation of almost everyone in the #2 don't get fired crowd.

Salaries = risk aversion.

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

#316

Post by heleninboodler »

ptmcc wrote: post #195
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…

Let's be careful here and not conflate options and RSUs, especially comparing between startups and public companies. Options in a startup are extremely likely to be worth nothing, ever. Not only does the company need some sort of liquidity or exit event, but the valuation then also has to be higher than the strike price on your options. And options usually have punishing exercise-or-lose-them requirements if you leav…

> If the company's stock declines, your RSUs are still worth something since the "basis" is $0. If you leave the company, your vested RSUs are still yours.

The quotes around "basis" here make me think you probably know this, but just in case someone needs this nit picked: this "basis" being referred to here is emphatically not the "cost basis" for tax purposes. If a $50 share vests and you sell it for $55, you have a cost basis of $50, giving you $50 income and $5 capital gain.

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

#317

Post by 1vuio0pswjnm7 »

zalequin wrote: post #308
1vuio0pswjnm7 wrote: post #272

Earlier quoted context omitted.

Jeff Bezos: "It's Day One." Ah, not quite. At that early stage, the risk and opportunities are different. He wants his employees to to work as hard as if it were Day One, but he cannot offer 10s of thousands of workers the same possibilities as if they arrived on Day One.

I think Bezos referred to the mindset of the people who live and die by the success of the company - namely the founders and executives who are responsible for making sure it succeeds.

Do they live and die by the success of the company. If the business starts to decline who is terminated first. The founders and executives. The audience for the letter from this quote is taken is not only founders and executives, it is Amazon employees, investors, potential investors and analysts, i.e., the public.

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

#318

Post by Decker87 »

sytelus wrote: post #290
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…

This is quite one sides view. There are many many examples such as Word, Excel, Google Maps, Gmail, FB Messanger etc started as “startup within big co”. Initially they were small, people worked hard and then they become very big. When they were small ( I don’t agree with thesis in this article. Yes, most startup efforts in big co fails but failure rate is probably not worse than usual startups. For successful startup…

That's a good point and a fine distinction about whether the success is higher or lower. The point that Noam makes is more that its different. It's not a startup anymore. That probably means less chance of abject failure or success.

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

#319

Post by lamontcg »

ignoramous wrote: post #230
lamontcg wrote: post #207

Earlier quoted context omitted.

The creation of EC2 originally (which at the time was not AWS -- AWS was originally the XML-RPC and SOAP APIs that allowed people to interact with the www.amazon.com website) was done by a skunkworks project in South Africa. That team was very, very far removed from Amazon proper and actually delivered. That's probably the only time I've seen that kind of startup-with-a-large-corporation work. I can think of other ex…

> The creation of EC2 originally (which at the time was not AWS -- AWS was originally the XML-RPC and SOAP APIs that allowed people to interact with the www.amazon.com website) was done by a skunkworks project in South Africa. AWS did indeed start out with E-commerce Services (2002) and Alexa Internet APIs (2004), but in mid-2003, when Andy Jassy took over AWS from Colin Bryar, he completely changed its charter to bu…

Yeah, it was a bit messier than that though. There was a ton of internal politics between 2004-2006, that Wikipage makes it sound way too clean. You're right though that S3 and SQS launched before EC2 did, but EC2 was highly politically charged internally. I don't know that it would have happened if they didn't ship development off to South Africa.

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

#320

Post by philipswood »

ryandrake wrote: post #155
westurner wrote: post #136

Earlier quoted context omitted.

Living and working elsewhere with the wages of the region reduces expenses and opportunities; but the wealth of educational resources online [1][2] does make it feasible to even bootstrap a company on the side. Do you need to borrow money to scale quickly enough to pay expenses with sufficient cash flow for the foreseeable future? Income sources: Passive income, Content, Equity that's potentially worth nothing, a bac…

I’d you are going to start something on the side, carefully read your current employment agreement, particularly the part about IP assignment. Most Silicon Valley companies I’ve worked with, including FAANGs, claim ownership of everything you produce, inside or outside of employment, at home or in office, using their equipment or yours. You don’t want to lick into a unicorn idea and have your former employer’s lawyer…

Unusual data point (I'm not sure if South African practice is applicable elsewhere) , but most bigger corps I've worked at have provided a mechanism to declare external interests, pending management approval, to work around these global clauses.

On paper any IP would be default belong to the Corp, but after some discussion/negotiations with your line manager and his higher-ups, you could do the paper work to declare.

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