4 ms·

The company has to succeed, my stock has to go up in value, and as the company grows in size it can get much better deals on things like health insurance than I

by qjz 17y ago

The company has to succeed, my stock has to go up in value, and as the company grows in size it can get much better deals on things like health insurance than I can alone. $200/yr spent on soda doesn't benefit me in any way at all. I'll drink tapwater at work if I'm thirsty. Is startup culture really so averse to frugality and so blind to its benefits?

dagw 17y ago
If a company is in such trouble that $200 per year and employee will make any sort of real difference, then they have much bigger problems. Not wasting money is one thing, pointless frugality for the point of frugality is something very different. And really I think you're missing the point by focusing on the soda. If you want the company to grow then you have to keep the employees content and productive. A company full of disgruntled workers looking for a new job will not help your stock go up in value. If the price of that is $200 in soda for some people then that is money well invested, and a direct benefit to you.
- qjz 17y ago
  You'll get no argument from me that a good investment is money well spent, whether it's free soda or a company fleet of Lamborghinis. But what problem is the CFO in the article trying to solve? The author claims the startup is "fairly successful" but it's already a few years old, just breaking even, and still heavily dependent on financing. His true measure of success seems to hinge on the fact that the company continues to exist in a bad economy. Meanwhile, the CFO needs to address "Sarbanes Oxley compliance, a new accounting system, beef up IT and security, Section 409A (valuation) compliance, etc." This sounds like an important phase in the company's growth, and she's trying to find ways to pay for it. In the context of the article, this isn't an arbitrary decision that disregards morale, productivity or even QA. It's a growing pain essential to establishing the company's success. IOW, they do have much bigger problems. There's no question that preventing disgruntlement during these stages is an HR challenge that needs to be handled delicately. But I think the need can be communicated effectively without losing valuable employees. The fact that it wasn't is the real failure in the article.
  - gridspy 17y ago
    Despite upvoting you for your clear argument - I disagree. The top engineers are the lifeblood of the company, and to make trivial cost cutting measures ($10k really is nothing) that risk their retention is incredibly stupid. Decrees from the top that disregard the input of and value of the employees are the issue here, not how those decrees are handed down. I can't think of any way that HR could say "no more free soda" without it sounding like the stupid cost-cutting measure that it is.
crpatino 17y ago
The elimination of free soda has nothing to do with frugality in the face of financial distress. Quite the opposite, the article begins telling the story of how well they were doing (considering current economic downturn). The whole point of the article is that this cost reduction measure is really a political declaration of the new CFO. The engineers probably heard this message as... "You filthy lazy monkeys, leave the soda and go back to your TV-typewriters". The article position is that this bold declaration is bad business practice and that the new CFO should have shut up and implement more subtle and relevant changes, leaving the engineers to slowly realize for themselves that "things aint what used to be no more". Said that, I agree that startup culture is riden with excesses. It is a whole live hard, die hard philosofy of compressing a decade of work into 2 or 3 years in exchange for big exit, screw life balance and all that. My opinion is that this is not a healthy way to live, but if you are into it you better get sure you are getting extraordinary compensation for your extraordinary effort. Working 80+ hrs per week for an average salary makes no sense at all.
- qjz 17y ago
  The author didn't convince me that the company was successful or that the CFO's move was political, and even provides information that suggests the opposite (the company wasn't making a profit and the CFO needed to address critical areas that had been overlooked). Your last paragraph is particularly relevant. Startups attract engineers who want to work in areas that interest them and in workplaces that are fun. But eventually someone has to do the work they didn't want to do, and the change in the environment seems unavoidable. Anyone attracted to startups would do well to heed your advice.
  - crpatino 17y ago
    Let me quote from the article here... "Given all that could go wrong in this economy, they were doing well. Their business had just crossed cash flow breakeven, had grown past 50 employees, just raised a substantive follow-on round of financing and had recently hired a Chief Financial Officer. It was an impressive performance." The relevant pieces of information here are: 1. (Marginally) Cash flow positive: Even though the company may still be underwater, they are not adding to debt anymore. For a young company this is a nice place to be. Nobody expects you to be generating lots of money, but you are moving in the right direction and there is no immediate need to cut cost in order to survive. 2. Grown past 50 employees. Again, this mean they are in the right track. The fact that they are adding headcount means they are not stagnating, but growing. Besides, if they are cash flow positive, it is sustainable growth, not the crazy pump and dump trick of the dot com era. 3. Just raised a substantive follow-on round. This means they were not in immediate financial distress. They have a healthy operation and investors give them more money to keep making the right strategic decisions. No need to go cannibal here. The political declaration stuff is my personal interpretation of the incident. It says nowhere that the CFO implied or suggested that they should put those techies on their place. It is my personal belief that some key people may have feel that way, and that it was a blunder to risking that mis-communication to happen in the first place. Organizational culture is a delicate thing to mess with. And if you analyze the profile of people in the startup community (risk tolerant, idealism, and yes... hubris), it is a no-brainer that your local ubergeek is not going to take it like the average cube drone would.

by qjz 17y ago

dagw 17y ago

If a company is in such trouble that $200 per year and employee will make any sort of real difference, then they have much bigger problems. Not wasting money is one thing, pointless frugality for the point of frugality is something very different. And really I think you're missing the point by focusing on the soda. If you want the company to grow then you have to keep the employees content and productive. A company full of disgruntled workers looking for a new job will not help your stock go up in value. If the price of that is $200 in soda for some people then that is money well invested, and a direct benefit to you.

qjz 17y ago
You'll get no argument from me that a good investment is money well spent, whether it's free soda or a company fleet of Lamborghinis. But what problem is the CFO in the article trying to solve? The author claims the startup is "fairly successful" but it's already a few years old, just breaking even, and still heavily dependent on financing. His true measure of success seems to hinge on the fact that the company continues to exist in a bad economy. Meanwhile, the CFO needs to address "Sarbanes Oxley compliance, a new accounting system, beef up IT and security, Section 409A (valuation) compliance, etc." This sounds like an important phase in the company's growth, and she's trying to find ways to pay for it. In the context of the article, this isn't an arbitrary decision that disregards morale, productivity or even QA. It's a growing pain essential to establishing the company's success. IOW, they do have much bigger problems. There's no question that preventing disgruntlement during these stages is an HR challenge that needs to be handled delicately. But I think the need can be communicated effectively without losing valuable employees. The fact that it wasn't is the real failure in the article.
- gridspy 17y ago
  Despite upvoting you for your clear argument - I disagree. The top engineers are the lifeblood of the company, and to make trivial cost cutting measures ($10k really is nothing) that risk their retention is incredibly stupid. Decrees from the top that disregard the input of and value of the employees are the issue here, not how those decrees are handed down. I can't think of any way that HR could say "no more free soda" without it sounding like the stupid cost-cutting measure that it is.

crpatino 17y ago

The elimination of free soda has nothing to do with frugality in the face of financial distress. Quite the opposite, the article begins telling the story of how well they were doing (considering current economic downturn). The whole point of the article is that this cost reduction measure is really a political declaration of the new CFO. The engineers probably heard this message as... "You filthy lazy monkeys, leave the soda and go back to your TV-typewriters". The article position is that this bold declaration is bad business practice and that the new CFO should have shut up and implement more subtle and relevant changes, leaving the engineers to slowly realize for themselves that "things aint what used to be no more". Said that, I agree that startup culture is riden with excesses. It is a whole live hard, die hard philosofy of compressing a decade of work into 2 or 3 years in exchange for big exit, screw life balance and all that. My opinion is that this is not a healthy way to live, but if you are into it you better get sure you are getting extraordinary compensation for your extraordinary effort. Working 80+ hrs per week for an average salary makes no sense at all.

qjz 17y ago
The author didn't convince me that the company was successful or that the CFO's move was political, and even provides information that suggests the opposite (the company wasn't making a profit and the CFO needed to address critical areas that had been overlooked). Your last paragraph is particularly relevant. Startups attract engineers who want to work in areas that interest them and in workplaces that are fun. But eventually someone has to do the work they didn't want to do, and the change in the environment seems unavoidable. Anyone attracted to startups would do well to heed your advice.
- crpatino 17y ago
  Let me quote from the article here... "Given all that could go wrong in this economy, they were doing well. Their business had just crossed cash flow breakeven, had grown past 50 employees, just raised a substantive follow-on round of financing and had recently hired a Chief Financial Officer. It was an impressive performance." The relevant pieces of information here are: 1. (Marginally) Cash flow positive: Even though the company may still be underwater, they are not adding to debt anymore. For a young company this is a nice place to be. Nobody expects you to be generating lots of money, but you are moving in the right direction and there is no immediate need to cut cost in order to survive. 2. Grown past 50 employees. Again, this mean they are in the right track. The fact that they are adding headcount means they are not stagnating, but growing. Besides, if they are cash flow positive, it is sustainable growth, not the crazy pump and dump trick of the dot com era. 3. Just raised a substantive follow-on round. This means they were not in immediate financial distress. They have a healthy operation and investors give them more money to keep making the right strategic decisions. No need to go cannibal here. The political declaration stuff is my personal interpretation of the incident. It says nowhere that the CFO implied or suggested that they should put those techies on their place. It is my personal belief that some key people may have feel that way, and that it was a blunder to risking that mis-communication to happen in the first place. Organizational culture is a delicate thing to mess with. And if you analyze the profile of people in the startup community (risk tolerant, idealism, and yes... hubris), it is a no-brainer that your local ubergeek is not going to take it like the average cube drone would.