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Are founders really 1000x more valuable than their employees?

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Re: Are founders really 1000x more valuable than their employees?

#91

Post by rue »

thebigredjay wrote: post #79
rue wrote: post #71

Earlier quoted context omitted.

There's no problem moralising it while keeping in mind that the current system indeed is amoral. I think the point is whether it should be. Personally, I'm of the opinion that no job worth doing is worth less than any other job, but I recognise there's “some” ways to go before that thought becomes in any way mainstream again…

I don't think it's amoral. There are "world-shakers" in this life who aren't satisfied with how the world looks and they strive to change it. They develop an idea that provides value to others and they build a beast from nothing. With out people like this there would be no change, no progress. Founders create the world as we know it. And, a slight adjustment to the original phrase will correct it. Founders, in genera…

No, they really aren't. They can extract 1000 or 1000000 times the money, sure.

Re: Are founders really 1000x more valuable than their employees?

#92

Post by thebigredjay »

verysimple wrote: post #86
mattmanser wrote: post #20

Earlier quoted context omitted.

This seems a weak argument, it's only applicable once you've actually got a reputation to protect. The vast majority of founders aren't celebrities. Given that many entrepreneurs just keep failing and then trying again and again and again it doesn't make much sense to me at all. There is no risk. Maybe it will be embarrassing if Malhalo fails, but I'm sure that won't stop you trying again. Personally I think there's…

Given that many entrepreneurs just keep failing and then trying again and again and again it doesn't make much sense to me at all. There is no risk. 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 duri…

I've always found that nothing ever happens unless I do it myself. That's generally how I treat problems, and it has left me in a better place because of it. On the rare occasion I meet someone else with the same drive I'm usually just thankful for their company. Thanks for doing what you do!

Re: Are founders really 1000x more valuable than their employees?

#93

Post by NickPollard »

stonemetal wrote: post #85
cellis wrote: post #41

Earlier quoted context omitted.

HN is seriously degraded if this is being downvoted. If this doesn't ring true, then you haven't been a startup founder.

How so? OP said employees at a startup get 25% lower salary than they would at someplace more mainstream. He didn't mention founders making 25% less than they would at a day job.

Who do you think puts up the money that pays the employees?

Re: Are founders really 1000x more valuable than their employees?

#94

Post by WalterBright »

jshen wrote: post #9

When I was a kid my mom would complain about how the world was out to get her. She didn't frame it that way, but that's essentially what she was saying. One time she was complaining about lawyers because she was charged $300/hr or something like that. I asked her, "why don't you become a lawyer?" It made sense to me as a 12 year old and still does.

It reminds me of a story my dad told me. His secretary complained to him that "garbagemen make more than me." He suggested that she quit and get a job hauling garbage. Her answer? "No way, that's a dirty, disgusting job."

Re: Are founders really 1000x more valuable than their employees?

#95

Post by jessedhillon »

blacksmythe wrote: post #66
sbov wrote: post #4

It may not be normal, but the startup I was involved in never had to raise money. Were we all founders? Is anyone they continue to hire a founder?

In many cases the founders have a different type of stock (preferred vs common). In those situations there is no ambiguity about who is a founder. In other cases, the best definition of the founder is if you joined when there was no company.

Founders aren't usually given preferred stock. Preferred stock is for investors, and it gives them preference in liquidation events. It's to protect their investments, especially in the case of a bankruptcy where all assets are liquidated: the investors can pull out their money first.

Re: Are founders really 1000x more valuable than their employees?

#96

Post by petervandijck »

krschultz wrote: post #75
idiopathic wrote: post #61

Earlier quoted context omitted.

I know I am being too literal, and I am sure you did not mean it, but... it is nothing like burying a child. I started a company 2.5 years ago and had twin girls a year ago. The thought of losing one of my kids makes me well up while the thought of losing my company just makes me sad. I have heard lots of people in the world of start-ups say that starting a company is like having a baby. It's nothing of the sort. (I…

That's true, but the phrase "burying you child" is a pretty common metaphor. When my dog died, I said something to effect of its was like "burying my child", but obviously a child will be far more important than a dog. I think his larger point is still valid (that failing at a startup is traumatic) is fair.

I think the point was: you wouldn't have said that if you had kids.

Re: Are founders really 1000x more valuable than their employees?

#98

Post by mechanical_fish »

tptacek wrote: post #59
swombat wrote: post #54

Earlier quoted context omitted.

I was just about to reply something along those lines. Failing at your own startup is a bit like burying a child. You start with all these dreams of a bright future, and one day you find yourself facing the stark reality that it just didn't work out, that there's nothing you can do anymore to change that, and that basically the last X years of your life, where you sacrificed anything, were pretty much for nothing. "W…

Guys, I helped blow up a startup in '01 that I started in early '99. At our peak we had over 50 people. I'm also a father of two, and I absolutely assure you that startup detonation is going to be nothing whatsoever like "burying a child". The notion that company failures are "mourned" by founders is what prompts head-explodey threads about what "fair" is for founder equity comp. The reality is a lot simpler. The mar…

The notion that company failures are "mourned" by founders is what prompts head-explodey threads about what "fair" is for founder equity comp.

Interesting. I believe I have observed this very correlation.

(And, considering that I went away for a few hours and returned to find this thread haunted by the ghosts of metaphorical dead children, perhaps I should not have used the word "mourning". Obviously the overtones are too grim. Perhaps "brooding"?)

I agree that such brooding is not rational, and that it is not a good idea; perhaps I could even be persuaded that it's pathological. I'm not yet quite convinced that it's fictional, though. Maybe it really is. I've never been a founder myself, nor especially close friends with one, and all you can really know of other people is what you see from the outside.

Re: Are founders really 1000x more valuable than their employees?

#100

Post by palewery »

You don't know the value of employee X until after he has agreed to compensation and joined the company. If he joins and never completes a single task he is assigned, then yes the founders were 1000x more valuable. If he joints and is able to find 10x more customers than you had before than no he is not 1000x less valuable.
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