Are founders really 1000x more valuable than their employees?

That's a lot of risk, so yes, for that class of startups founders should have higher ownership in the company and thus are worth more if the company is worth something.

On top of that, these boot strapped startups often pay their employees more than themselves, so on the income front, employees are worth more.

This article really underscores the weirdness of incentives that can crop up at venture backed companies. It almost makes no sense.

I used to work for a web design shop. My fellow programmers and I hated the fact that our bosses were making money on our backs. They would bill clients these huge fees for our hours and pay us 10% of that amount. What did we do about it? We complained to each other during lunch hours. Until one day when I threw in the idea, "lets start our own company". Then the truth came out, all those brave soldiers started backpedaling. I was in awe. I quit my job soon after, became a freelancer and 3 years later partnered up with another programmer to start a development company. We went through ups and downs at the beginning, not garnering much support, even from our own social circles. It's been a year and only now are some of our clients finally realizing the appeal of our offer. We have more work than we can handle and have had to moved into a larger office in a downtown area. I'm literally starting to hire next week. The same people we tried to get help from at the beginning, who were instead doing nothing but discourage us, are now more than willing volunteers.

I've had many similar experiences all throughout my life. I have once tried to organize a class action lawsuit against a company orchestrating an organized scam. I knew many of the clients personally. So I tried to gather them and the same thing happened, there was fud and people chose to wait and see what would happen as they left me to handle the initial steps on my own. I eventually reached an agreement with the company and got somewhat compensated. Later on when people heard, they tried to join in on the action, but by then it was too late, I had moved on with my life.

Another example, about 2 years ago, I had dealings with an agency that wanted to build this really ambitious website for one of their clients. I was hired as a developer along with other professionals from various fields (design, ux, marketing, etc). The agency ended up not paying any of us and while everybody were emailing each other trying to figure out what to do? I threw in a couple of bold ideas, such as bypassing the agency and dealing directly with the client, suing the agency. As expected the brave mouths didn't feel so tough anymore. I ended up hiring my own lawyer and a few months ago, I obtained a court decision. When people heard, I started receiving emails about "maybe ganging up to get our money".

All 3 stories have the same pattern. There is a problem, a risky proposal gets thrown in, people react to the idea, someone does something about it. I've come to the conclusion that being an entrepreneur is a character trait. You either have it or you don't.

Soon after I quit my job 4 years ago, I read or heard something somewhere, I don't remember the source, but it basically said, you get paid what you deserve. It's only now that I have a small and growing enterprise and that I have to explore the compensation question that I understand this. My coworkers from 4 years ago still work for the same boss. Maybe they got salary bumps, maybe they didn't, maybe they're still complaining during lunch, but one thing is sure we all got what we deserved.

You can see great examples of this by looking at basically any celebrity. Do Oprah and Brad Pitt really deserve billions of dollars for their contributions? Most people would say that morally their contribution to society is minor (or even negative), but the market doesn't seem to agree, and they are rewarded with money far exceeding the income of many business leaders. They get this money because they chose to do something people are willing to spend money on.

Why do thugs that play football, whose moral contributions are, again, minor or often negative, make millions of dollars each year? Because millions of average people pay $30/wk to watch them run into each other, $100/yr in team merchandise, etc. If you don't like that, convince people to stop spending money on football.

"I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all."