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no, we don't. There are plenty of reasons to argue for more equity but risk is not one of them. If you're good at what you do you can get a job tomorrow anywhe
by dpeck 11y ago
no, we don't.
There are plenty of reasons to argue for more equity but risk is not one of them. If you're good at what you do you can get a job tomorrow anywhere and there is near zero stigma about being associated with a failed startup unless you're on the founding side AND you've failed multiple times.
- davidw 11y agoThe salient point in the article is about opportunity cost. When you take a 100K startup job, and could have been making 200K somewhere else, that's a very real loss. Now, those are made up numbers, and you need to plug in real ones to make an accurate assessment, but that's his point.
- dpeck 11y agoright, and that is completely valid to discuss. I think it does a disservice to the other problems and discussion points to toss everything under "risk".
- x0x0 11y agoBut what would you call it besides risk? ie you're gambling (risk) that your opportunity cost will be made whole (and hopefully even exceeded!) via a liquidity event.
- dpeck 11y agoI'm not denying that it is risk, I argue that it doesn't allow for the subtleties and nuances (opportunity cost vs responsibility increase vs positive/negative association after exit/failure). There are a lot of different variables involved and a great many of them boil down to calculated gambles on the part of the employee and employers. Those are worthy of discussion and there are plenty of discussions to be had around those. But simply calling it "risk" and saying you need more of the upside is so simplified its nearly meaningless and impossible to have a conversation about with everyone involved having the same idea about what is being discussed.
- davidw 11y agoThere are certainly non-monetary benefits to working at startups, as well as costs. It certainly makes sense to include those as part of the calculation, but money is not a small part of that, either.
- jalopy 11y agoWhat else is opportunity cost in this case but risk that an early employee at a startup misses out on a much better financial endpoint at a non-startup with much higher salary and benefits (401k matching, etc)?
- ryanSrich 11y agoIn my experience startups typically pay more than other well established organizations, at least for Design/front-end roles. Agencies and Enterprise is typically where the low wages come from. This doesn't factor in Silicon Valley. SV is an entirely different animal. The cost of living there throws the math way off. I can imagine that those wages are typically very low. $200k in SV is comparable to $70k in most other cities. This is why it's beneficial to work remotely for a SV startup and live somewhere more desirable. I think we're conflating all startups with SV, which shouldn't be the case. Certainly folks joining SV startups IN SV are being taken for a ride.
- glass_of_water 11y ago> $200k in SV is comparable to $70k in most other cities. What's the basis for that estimation? Given California's income tax and higher rent, I'd say that the difference in cost of living is $20-30k, not $130k.
- ryanSrich 11y agoPurchasing a home. That should be the standard. Most people don't want to rent for the entirety of their lives.
- davidw 11y agoPart of the problem is the rampant NIMBYism in that area, which isn't really the fault of people doing startups. Still, though, it really adds to that area being expensive.
- Bahamut 11y agoOne can easily work a few years in the Valley and buy a nice house in much of the country...and likely get an opportunity to work remotely if he/she has worked at the company a few years. The raw numbers are nothing to sniff at, and you don't get that buying power in much of the country.
- sschueller 11y agoTell that to someone who is over 40, has kids and is in the Tech Sektor. Age is a huge stigma.
- a3voices 11y agoI wonder if it's looking old versus actually being old? If you look like you're in your 20s but are 40 (low body fat, not many wrinkles) maybe you won't be stigmatized against as much. I'm just curious about whether it's the appearance that matters, or the number.
- borkabrak 11y agoMe, too. I just turned 40, and got carded for alcohol two days later. I've always looked far below my age, but I have no guarantees about how long that will last. I'm only getting better as a developer.
- mixmastamyk 11y agoInteresting but moot, when you don't get past the phone screen. Funny story, one hiring "kid" the other day asked me if I like to wear ties... ha! I thought, I'm roughly ten years older than him, and wasn't working in the sixties, or whenever ties were popular.
- dpeck 11y agowould someone over 40 with kids, who doesn't have some self-provided stability be working at a startup with high risk anyway? That seems both foolish and more or less no-existent in any I'm familiar with.
- brandnewlow 11y agoI'd modify the headline to say "Early Employees....". They're the folks typically being asked to take below market salaries, but unless they're founders they won't see tremendous upside without a larger equity stake.
- dang 11y agoThanks, that is a good suggestion. Changed.
- brandnewlow 11y agoThanks!
- akg_67 11y ago> If you're good at what you do you can get a job tomorrow anywhere and there is near zero stigma about being associated with a failed startup Only true in good times. Ask the employees who were associated with failed startups during dot bomb, circa late 1990s and early 2000s. You were SOL if you worked for a failed startup or a high profile failed public tech company. You were at the bottom of the pile in consideration. I know several companies that excluded employees from consideration that were previously associated with such failed ventures, Guilty by Association. This didn't change until 2004+ or so. History will repeat itself.
- georgemcbay 11y agoCompeting anecdotes here and both can be true, but as someone working in the industry since the 1990s I personally never noticed any particular bias against people due to the prior company associations during this time period. People who lost jobs due to their companies going out of business were pretty SOL during this stretch of time (early 2000s), but in my experience the problem wasn't bias against them due to prior employers but rather that hardly anybody was hiring at all. Almost everyone (that wasn't busy filing for bankruptcy) was in a hiring freeze holding pattern waiting for the sky to stop falling.
- akg_67 11y agoYour sample of "hiring-freeze" companies is totally different from my sample of "hiring" companies in that time period. Employees looking for job don't care about the practices of the companies that are not hiring. They care about the practices of companies that are hiring.