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Startup CEOs who gave up fortunes to turn employees into millionaires

businessinsider.com

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Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#71

Post by unchocked »

dsirijus wrote: post #64
cm2012 wrote: post #61

Earlier quoted context omitted.

If you really think your employees will read this and know that you wrote this, you should probably delete this or reword this. Its bad for morale to appear flippant about employees.

The more I push the line of "I don't care what others think about me" to its absolute, the happier I am as a person. That does not neccesarily mean me earning more money or having a better team morale.

Your attitude is probably pretty standard fare for business overall. That said, you're probably going to continue to have the same problems that business overall has these days; detached employees, mediocre performance, and a generally escalating bitterness that the world does not love you as much as you think you love yourself.

Have fun with that.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#72

Post by modfodder »

dsirijus wrote: post #54

Ask HN: So, I'm the sole founder here with investor. The dude's awesome, but the contract we signed puts me in significant financial risk if the company doesn't turn up profitable. I have more than several employees (some of them will probably read this) who I pay regular and competitive money though I'm not particulary pleased with their output (but hey, it's improving, and there's not much of a talent pool here). M…

Not in the tech industry, but @ 42 I've worked in a lot of industries with a wide range of experience and worked with a lot of entrepreneurs and founders.

Without actually knowing you, I can't say what type of person you are. But I can say the type of people I've met who had similar viewpoints were very arrogant and rarely recognized the great contributions of their employees, and often took personal credit for directions or products created by others (often when they were incredibly dismissive of those ideas before a breakout success). I would ask you to re-examine your view of your employees, but if you are an example of the type I'm talking about, it most likely wouldn't do any good. Your ego will not allow you to actually recognize any contribution as anything but your own hard work. You blaming your apparent bad hiring decision on lack of talent pool rather than your own ability to seek out the best does not paint a favorable portrait.

The shit your employees have to deal with working for you just might be a magnitude order worse than what you are going through as their boss.

That's what I think solely based on your post.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#73

Post by zenogais »

dsirijus wrote: post #64
cm2012 wrote: post #61

Earlier quoted context omitted.

If you really think your employees will read this and know that you wrote this, you should probably delete this or reword this. Its bad for morale to appear flippant about employees.

The more I push the line of "I don't care what others think about me" to its absolute, the happier I am as a person. That does not neccesarily mean me earning more money or having a better team morale.

Read: "I'm not good with people. So instead I'm pretend not to car so I don't have to confront that fact as often"

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#74

Post by MichaelGG »

apalmer wrote: post #46

I dont think startup CEOs have any requirement to do this type of thing. On the other hand I think there is a powerful reality distortion field around start ups. Its literally more work than at bigco, for about 70% of the salary, for a lotto ticket that has a 1 in 1000 chance of pay off, and the jackpot payoff is something like 50K-100K. Really Really doesnt make sense unless you enjoy the atmosphere you are not goin…

Perhaps it is similar to how people buy lottery tickets for an epsilon chance of super happiness? Except it's easier to convince yourself that this startup isn't in a random lottery. And that your work can really influence things and change the outcome. It's true to some extent, but people are usually too prone to not even thinking about the priors.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#75

Post by mylons »

dsirijus wrote: post #54

Ask HN: So, I'm the sole founder here with investor. The dude's awesome, but the contract we signed puts me in significant financial risk if the company doesn't turn up profitable. I have more than several employees (some of them will probably read this) who I pay regular and competitive money though I'm not particulary pleased with their output (but hey, it's improving, and there's not much of a talent pool here). M…

I think I'm very glad you are not my boss, and never will be

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#76

Post by humanrebar »

JimboOmega wrote: post #7
x0x0 wrote: post #6

Earlier quoted context omitted.

And great employees can always go to {google, fb, twitter, microsoft, salesforce, etc} and get paid $250-$300 / year in cash or cash equivalents, instead of $125-$150 plus lottery tickets. In fact, I remember reading that round A is the worse time for an employee to join a startup: the large grants are gone, but the business isn't derisked, so your lottery tickets still have shit ev.

Is the going rate $250-$300k these days? Honestly, though - beyond just larger equity grants, I'd like to see companies have people get rewarded when the company does well... Through some kind of bonus (in equity or cash). It seems like most companies either have bonuses that are pretty much an expected part of salary, or they have no bonus in any situation. I've only really been part of the latter, though.

> $250-$300k Probably not the going rate, but to convince a top-notch dev to work in SF proper? Sure. Keep in mind that adjusted for cost of living, that's like $125k-$150k in most parts of the U.S., which isn't crazy for a top-notch systems engineer.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#77

Post by curun1r »

teej wrote: post #5
kjs3 wrote: post #2

They gave up some money to reward valuable employees. That's not, per se , being magnanimous or generous, it's being smart businessmen. All of these founders made out just fine, financially. When they start their next big thing, they'll be remembered not only as the guys who had a successful exit, they'll be remembered as the guys took care of their people along the way. That's about the smartest way to recruit top t…

I don't think you are giving these founders enough credit. Startup acquisitions, not unlike fundraising, can be very emotional. Acquirers can go from hot to cold very quickly if they hear the wrong thing or get the wrong vibe. The founders went to great lengths to structure the deal in a way that compensated their employees like this. It's likely that they put the entire deal at risk to do so. That, in my mind, stron…

FWIW, one of the founders in the article phrased it as being "long-term greedy." I'm sure it felt good to make millionaires out of employees (having been part of an acquisition where only ~10 people out of nearly 300 became millionaires, I can only imagine the parties we would have had if the majority of the people had gotten life-changing exits), but there was definitely an awareness of the long-term benefits among the founders in question.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#78

Post by ChuckMcM »

dsirijus wrote: post #54

Ask HN: So, I'm the sole founder here with investor. The dude's awesome, but the contract we signed puts me in significant financial risk if the company doesn't turn up profitable. I have more than several employees (some of them will probably read this) who I pay regular and competitive money though I'm not particulary pleased with their output (but hey, it's improving, and there's not much of a talent pool here). M…

Pretty much every one I knew that left a company or was terminated made some statement to the effect "They will be sorry when they realize all the crap I've been doing around here that won't get done now." And it is largely true, and largely irrelevent. Companies are the sum of their parts, regardless of how irreplaceable one or more employees feel.

If you read the article, the people in it generally liked and respected each other. That is key to making a healthy workplace. Without it you don't get nearly the output you might otherwise. My experience so far has been that when there is a lot of 'crap' that isn't getting picked up by anybody I have found issues with ownership (nobody feels like they own the results) and communication challenges.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#79

Post by timr »

wuliwong wrote: post #57

When I joined a startup a couple years ago as a very early employee. The equity they offered was some tiny percentage, like 0.1%. I did the math and said, "you know, we would need to exit for a billion dollars for me to receive a million?" The founder seemed surprised at that. Nevertheless, I joined the startup. What I don't understand is if the company does sell, and I only get my 0.1%, I should be upset or call the…

"you know, we would need to exit for a billion dollars for me to receive a million?"

It's worse than that. By the time you factor in preferred shares and other investment dilution, your 0.1% will be more like 0.00001%[+]. Few people think about that, and unless someone is actively looking out for your interests (e.g. someone giving retention grants -- or you demanding them), it's difficult to make a lot of money as an early startup employee. You can easily find yourself in a situation where you vest your grant, leave the company, and later find out that a new hire is making an order of magnitude more money than you in an exit. That's startup life.

The game here is predicting the expected value of an extremely improbable future event, and sacrificing present day money in favor of that event. There's no "fair" way to do it, so if a founder is asking that kind of commitment of you, they should be looking out for your interests over the long term as well.

[+] edit: I overstated my case here. You can probably expect 1-2 orders of magnitude dilution, but it doesn't really change the argument.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#80

Post by georgemcbay »

taylorbuley wrote: post #33
georgemcbay wrote: post #11

Earlier quoted context omitted.

Hunch fits the location and approximate acquisition price, but I can't speak to how screwed over the non-founders were (or weren't). Not sure that "everyone talks about" it (though that applies even more so for carrentals.com, IMO). Maybe they meant "everyone in NYC talks about it".

With Chris Dixon being praised in the piece, I have trouble believing the writer had Hunch in mind.

Good point! You're probably right.
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