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Really? Where's that number coming from? Seems to me that if you build a startup that's acquired by Google (say for the relatively small sum of $5m after a cou

by swombat 16y ago

Really? Where's that number coming from? Seems to me that if you build a startup that's acquired by Google (say for the relatively small sum of $5m after a couple of years) that's still a whole lot more than you would have earned as a salary - even if you're a cofounder with just 50%. And on top of that you end up getting another good salary from Google as well once they acquire you.

coliveira 16y ago
He probably wanted to say is that on average people make more money from salaries. For each company that is acquired by Google many others don't go anywhere.
- wushupork 16y ago
  Agreed. Counting on getting bought by Google as an exit strategy is like saying winning the lottery is the retirement plan.
  - swombat 16y ago
    That's not the terms that jrockway used though. He said: Because 99% of people make more money collecting a salary than they do being bought by Google. He directly compared collecting a salary to being bought by Google, he did not compare earning a salary to starting your own company. The latter would be a fair statement, but if you are going to get bought by Google, chances are you will make more money than by earning a salary (unless you're an investment banker).
wuputah 16y ago
The 99% figure is obviously a generalization, but it's well known that most startups fail. Amongst the ones that don't, only a few are bought out by someone like Google, or go on to succeed in bigger ways. Additionally, only those with substantial stock positions in the company make out well on these pay days - the rest of the people who worked for the startup are making a salary. In short, most people are making a salary, and of those that try to found their own company, most will end up failing and making less than they would have if they took a salaried gig. That is the risk of founding a company.
philwelch 16y ago
$2.5m for one successful 3 year startup is 833,000 per year. So let's say every year you spend working on a successful startup, you earn $900,000, adding in a salary during those 3 years and rounding up for fun. But every year you spend working on a failed startup, you might only earn $50,000 (let's assume you can draw a small salary off of investors or revenue). And let's also say there's a 10% chance of success. The EV for spending a year on startup(s) wound be $95,000, which is probably within wiggle room of what you could earn with a salary. However, that's average. If you're clever and determined, your chance won't be 10%. At 25%, the EV goes up to $262,500 per year. That's a hard salary to get. But few people are sufficiently awesome to have a 25% shot, I suspect. (It's hard to say because there aren't many truly large sample sizes out there yet.)
- sunir 16y ago
  If one in ten Internet startups were acquired by Google, I'd short Google's stock. The likelihood of being acquired is closer to one in one thousand.
  - deleted 16y ago
    [deleted]
  - philwelch 16y ago
    I've been thinking about this, but really I'm not so sure we're talking about the same number. It's close to one in one thousand to have your first or second startup acquired, maybe, but at a certain level of competence it's not unreasonable to expect a $5m exit somewhere within your first ten startups.
    - sunir 16y ago
      It's very unlikely you'll get through 10 startups without having to spend your own money since a three time loser is not going to get investment very easily. Your average net income over the period of time it takes you to get a $5M exit will probably exceed your earnings from that exit, which will likely be less than $1M. The point is that startups are not an easy or guaranteed way to make killer money. That's gold rush thinking. Think about how many startups (thousands) are in Silicon Valley right now and how many have exited in the last 5 years (dozens). Don't get me wrong. Live the dream. I'm working at my 6th startup, and I just started my first one. But don't do it for the money. Do it because you're creating something you believe should exist in the world.
bmelton 16y ago
- Assuming that Doubleclick was the largest company Google has acquired - Assuming that Doubleclick had 5,000 employees (generous estimate, I believe) at the time of acquisition - Assuming that Google has only acquired the 75 companies listed in Wikipedia for Google acquisitions - Using August 2008's census data No more (and likely SIGNIFICANTLY less) than 375,000 people have been acquired by Google, There are 154.9 million people in the American workforce (collecting salaries). The actual number (based on the above information) leads us to believe that 99.998% of people make more money collecting a salary than they do being bought by Google. It's worth noting, perhaps, that I might be counting the wealthiest 2% of Americans within the 154.9 million census number (or that there are dramatically fewer employees in the workforce since the bubble burst), but those wealthy folks were almost certainly not acquired by Google (although, if they were, it doesn't skew the numbers that significantly.)

by swombat 16y ago

coliveira 16y ago

He probably wanted to say is that on average people make more money from salaries. For each company that is acquired by Google many others don't go anywhere.

wushupork 16y ago
Agreed. Counting on getting bought by Google as an exit strategy is like saying winning the lottery is the retirement plan.
- swombat 16y ago
  That's not the terms that jrockway used though. He said: Because 99% of people make more money collecting a salary than they do being bought by Google. He directly compared collecting a salary to being bought by Google, he did not compare earning a salary to starting your own company. The latter would be a fair statement, but if you are going to get bought by Google, chances are you will make more money than by earning a salary (unless you're an investment banker).

wuputah 16y ago

The 99% figure is obviously a generalization, but it's well known that most startups fail. Amongst the ones that don't, only a few are bought out by someone like Google, or go on to succeed in bigger ways. Additionally, only those with substantial stock positions in the company make out well on these pay days - the rest of the people who worked for the startup are making a salary. In short, most people are making a salary, and of those that try to found their own company, most will end up failing and making less than they would have if they took a salaried gig. That is the risk of founding a company.

philwelch 16y ago

$2.5m for one successful 3 year startup is 833,000 per year. So let's say every year you spend working on a successful startup, you earn $900,000, adding in a salary during those 3 years and rounding up for fun. But every year you spend working on a failed startup, you might only earn $50,000 (let's assume you can draw a small salary off of investors or revenue). And let's also say there's a 10% chance of success. The EV for spending a year on startup(s) wound be $95,000, which is probably within wiggle room of what you could earn with a salary. However, that's average. If you're clever and determined, your chance won't be 10%. At 25%, the EV goes up to $262,500 per year. That's a hard salary to get. But few people are sufficiently awesome to have a 25% shot, I suspect. (It's hard to say because there aren't many truly large sample sizes out there yet.)

sunir 16y ago
If one in ten Internet startups were acquired by Google, I'd short Google's stock. The likelihood of being acquired is closer to one in one thousand.
- deleted 16y ago
  [deleted]
- philwelch 16y ago
  I've been thinking about this, but really I'm not so sure we're talking about the same number. It's close to one in one thousand to have your first or second startup acquired, maybe, but at a certain level of competence it's not unreasonable to expect a $5m exit somewhere within your first ten startups.
  - sunir 16y ago
    It's very unlikely you'll get through 10 startups without having to spend your own money since a three time loser is not going to get investment very easily. Your average net income over the period of time it takes you to get a $5M exit will probably exceed your earnings from that exit, which will likely be less than $1M. The point is that startups are not an easy or guaranteed way to make killer money. That's gold rush thinking. Think about how many startups (thousands) are in Silicon Valley right now and how many have exited in the last 5 years (dozens). Don't get me wrong. Live the dream. I'm working at my 6th startup, and I just started my first one. But don't do it for the money. Do it because you're creating something you believe should exist in the world.

bmelton 16y ago

- Assuming that Doubleclick was the largest company Google has acquired - Assuming that Doubleclick had 5,000 employees (generous estimate, I believe) at the time of acquisition - Assuming that Google has only acquired the 75 companies listed in Wikipedia for Google acquisitions - Using August 2008's census data No more (and likely SIGNIFICANTLY less) than 375,000 people have been acquired by Google, There are 154.9 million people in the American workforce (collecting salaries). The actual number (based on the above information) leads us to believe that 99.998% of people make more money collecting a salary than they do being bought by Google. It's worth noting, perhaps, that I might be counting the wealthiest 2% of Americans within the 154.9 million census number (or that there are dramatically fewer employees in the workforce since the bubble burst), but those wealthy folks were almost certainly not acquired by Google (although, if they were, it doesn't skew the numbers that significantly.)