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Why give employees big payouts, when they'll work just as hard for mere unsubstantiated promises of such payouts? The article shows how most employees are too

Why give employees big payouts, when they'll work just as hard for mere unsubstantiated promises of such payouts? The article shows how most employees are too occupied counting their imaginary fortunes to seek the most basic grasp of how their options really work. The race for riches in early-stage startups has become a gold-rush, and now that we are clearly after the peak, most employees are chasing the dreams of yesterday's big-payoff exits, failing to look around and notice that these were rare even back in the day, and now they hardly ever happen at all. Investors got savvy about protecting their investment, while employees are just as clueless as ever, so even when big IPOs do rarely happen, the employees see very little profit. This works very well for the investors. The downside is the erosion of equity as an incentive, but even more so - any sense of working towards a common goal and shared success, which is what startups are supposed to be about. This will hurt the entire industry. On an individual level, if you accept substantially lower pay, for a tiny unprotected bit of equity and someone's unsubstantiated promises that it will be "one day" earn you millions, then you are a fool.

ones_and_zeros 10y ago
Nothing will change, the industry won't suffer. There is a new crop of fools every May.
- simonebrunozzi 10y ago
  Do you say May in relation to the "eternal September" (+ 9 months to have a baby?)
  - franzen 10y ago
    https://en.wikipedia.org/wiki/Graduation https://en.wikipedia.org/wiki/Graduation
maxxxxx 10y ago
Sometimes I admire investment banks. They screw over anybody else who doesn't work at their company but within the company the pay seems really generous for everybody. Tech companies could easily pay much, much more and still make a lot of money for investors. Why are bankers so highly paid? Is it because they are asking for more money?
- mavelikara 10y ago
  > Why are bankers so highly paid? The skills acquired at their day jobs also enable them to be much more financially savvy than tech workers. Tech workers, I imagine, get better work computers for similar reasons.
  - maxxxxx 10y ago
    That's a good point. I have been thinking along similar lines about the push to 401k instead of pensions and people having to do their own investing. There are people who can focus 100% of their time on finance whereas we have to be good at tech, which already is a complex full time job, but then we additionally have to be investment experts.
  - brilliantcode 10y ago
    Excel is such a highly valued skill compared to machine learning in the mind of bankers, they think their job can't be replaced by AI as did the Luddites of the 18th century when industrial revolution took over.
    - nylonstrung 10y ago
      Then explain why we've seen almost no automation of the workflow of investment bankers of the last 15 years even though it is a massive payroll expense in banks that are aggressively cutting headcount and automating back office functions. It's not a job that is easily displaced by code.
      - brilliantcode 10y ago
        who says the next 15 years won't see the automation of investment bankers? We've only recently started seeing the rise of deep learning to reach new heights like AlphaGo, put Picasso to shame, drive cars, replace managers in Japanese factories, mimic human voice, predict conversion and see patterns & deep links unclear to the human. I don't see why we can't automate the workflow of coke snorting gordon gekko wannabe fuckboys on wall street in the next 15 years as will a large chunk of professional careers. To boot, we see lot of the floor trading becoming automated as a result of the innovation we had in the past 15 years. Luddites of the 21st century will hit the mid to lower upper class hard, I'd love to work on such problems.
acedinlowball 10y ago
I have several friends who have made out really well from their time in the tech industry. Most of them took more options instead of higher salaries. Now, most of my late-20s friends are buying houses and retiring (or starting their own companies) on the fortunes they have made. Just because you personally haven't had a windfall doesn't mean it doesn't happen.
serge2k 10y ago
> Why give employees big payouts, when they'll work just as hard for mere unsubstantiated promises of such payouts? That's why we should start teaching people that they won't get rich.

ones_and_zeros 10y ago

Nothing will change, the industry won't suffer. There is a new crop of fools every May.

simonebrunozzi 10y ago
Do you say May in relation to the "eternal September" (+ 9 months to have a baby?)
- franzen 10y ago
  https://en.wikipedia.org/wiki/Graduation https://en.wikipedia.org/wiki/Graduation

maxxxxx 10y ago

Sometimes I admire investment banks. They screw over anybody else who doesn't work at their company but within the company the pay seems really generous for everybody. Tech companies could easily pay much, much more and still make a lot of money for investors. Why are bankers so highly paid? Is it because they are asking for more money?

mavelikara 10y ago
> Why are bankers so highly paid? The skills acquired at their day jobs also enable them to be much more financially savvy than tech workers. Tech workers, I imagine, get better work computers for similar reasons.
- maxxxxx 10y ago
  That's a good point. I have been thinking along similar lines about the push to 401k instead of pensions and people having to do their own investing. There are people who can focus 100% of their time on finance whereas we have to be good at tech, which already is a complex full time job, but then we additionally have to be investment experts.
- brilliantcode 10y ago
  Excel is such a highly valued skill compared to machine learning in the mind of bankers, they think their job can't be replaced by AI as did the Luddites of the 18th century when industrial revolution took over.
  - nylonstrung 10y ago
    Then explain why we've seen almost no automation of the workflow of investment bankers of the last 15 years even though it is a massive payroll expense in banks that are aggressively cutting headcount and automating back office functions. It's not a job that is easily displaced by code.
    - brilliantcode 10y ago
      who says the next 15 years won't see the automation of investment bankers? We've only recently started seeing the rise of deep learning to reach new heights like AlphaGo, put Picasso to shame, drive cars, replace managers in Japanese factories, mimic human voice, predict conversion and see patterns & deep links unclear to the human. I don't see why we can't automate the workflow of coke snorting gordon gekko wannabe fuckboys on wall street in the next 15 years as will a large chunk of professional careers. To boot, we see lot of the floor trading becoming automated as a result of the innovation we had in the past 15 years. Luddites of the 21st century will hit the mid to lower upper class hard, I'd love to work on such problems.

acedinlowball 10y ago

I have several friends who have made out really well from their time in the tech industry. Most of them took more options instead of higher salaries. Now, most of my late-20s friends are buying houses and retiring (or starting their own companies) on the fortunes they have made. Just because you personally haven't had a windfall doesn't mean it doesn't happen.

serge2k 10y ago

> Why give employees big payouts, when they'll work just as hard for mere unsubstantiated promises of such payouts? That's why we should start teaching people that they won't get rich.