4 ms·

I agree with all of the points raised, and share the same experiences. But this one: > I might as well become a founder and start my own at that point Great!

by sdrinf 7y ago

I agree with all of the points raised, and share the same experiences. But this one: > I might as well become a founder and start my own at that point Great! So, how would you recruit your first 10 employees?

eanzenberg 7y ago
I don’t understand... why is the goal to convince a bunch of naive youngsters to work for you at 1/10 their value? You shouldn’t exist unless you can pay competitively for the same people, end of story. Until then, don’t hire
- pm90 7y ago
  The fact is that there are a bunch of younger programmers willing to work for a startup regardless of the comp. Founders naturally try to exploit this.
  - neltnerb 7y ago
    They could be taught ethics in college or find that their peers actually called them out for it? Heh.
novok 7y ago
That is a big reason why I don't start my own company, because I couldn't really live with doing that. My current armchair strategies: * Compete in a way that big tech are not willing to do, which means distributed remote companies. A lot of people don't want to live in $3.5k/month rent SF or other tech centers for various reasons. * What a lot of startups do, but RDF (reality distortion field) over with 'we only hire the best'. Don't hire the best. Either because they couldn't hack the big tech co interview, have visa issues, are very jr or have personality problems that make them unhirable in big tech cos. * Go bootstrap, so no VC style business timelines. * Give offers that basically make them pseudo-founders and match the expected value of bigco with the risk premium of startups. A hard pill to swallow when investors give a lot of money offer similar or smaller dilution terms effectively. I've never gone out to get investment, so I don't know how much of the above is also blocked by investors in general. Also crypto style 'startups' (ICO or just a completely new coin) have shown to deliver compared to normal SV startups, but most crypto companies do not deliver actual lasting value and are more pure speculation plays. A big crucial difference is they give crypto coins instead of stock, and those coins are liquid immediately. They are also not restricted to start in the USA.
- pm90 7y ago
  Founders should be willing to give a lot more equity to the first employees. I don’t get the logic of not doing this. You want your engineers to feel as if they have ownership in the equity that you’re building. It’s such an easy way to keep engineers engaged and productive that it baffles my mind that it’s not done more widely. I hate working for BigTech. Startups expect too much and compensate very little. The sweet spot for me has been medium sized public companies that offer great compensation but need solid engineering to grow their market share.
  - novok 7y ago
    It's the math again. Go do a spreadsheet and simulate a company as it grows and you see treating your first 10 employees in line with big tech expected value outcomes is a really, really big hit.
    - pm90 7y ago
      I know this is totally super optimistic, but can we change the perspective from > is a really, really big hit. to > really amazing payoff for the early engineers/employees My very limited understanding of the growth of the SV tech community is that its a generous cycle of people creating wealth, and then using that wealth to fund the next generation of tech. So it seems completely logical for SV founders to want to do more of this.
      - whatshisface 7y ago
        Whether it's a big hit or an amazing payoff are actually irrelevant, there is a going rate for engineers who are willing to accept startup risk (in a job market where anyone can get hired right after it fails this is not a lot of risk), and that's the price that will be paid.
        tabtab 7y ago
        When I was young and naive, they paid employees the "risk bonus" in stock shares, not cash. I asked for more cash, and they said, "nobody takes cash, stock shares are the thing". They were the dud thing.
cheriot 7y ago
One of the things that keeps me away from startups is how disadvantaged employee equity is. Options become golden handcuffs when they have to be exercised to leave. Execs and investors are not in the same boat as employees due to preferred shares, liquidation preference, and other terms. None of these are disclosed to employees. I've heard too many stories of start ups being sold where the founders cashed a big check and the employees didn't get anything. To be clear, I'm not an expert in this, but the startup ecosystem needs to regain trust if it wants to hire more competitively.
opportune 7y ago
Hope that they are not as interested in financial optimization as you? Or just take people who can’t get into top paying bigcos? Or be a good salesman? Same as everybody else who is recruiting for startups these days
hef19898 7y ago
Handpick them out of your network and give them not just equity but real control as well. That for the first 5 or so. The others should come from your network and be handpicked by your handpicked first 5 employees. And equity, but obviously less than the first 5. In my case my first employee, as soon as enough comes in to pay someone, is already recruited. Equity will be around 20%, with another 25 or so for the next couple of employees. That's without outside funding, doesn't seem to be necessary so. If it will be necessary that obviously changes.
juped 7y ago
Why do you think you need employees?

by sdrinf 7y ago

eanzenberg 7y ago

I don’t understand... why is the goal to convince a bunch of naive youngsters to work for you at 1/10 their value? You shouldn’t exist unless you can pay competitively for the same people, end of story. Until then, don’t hire

pm90 7y ago
The fact is that there are a bunch of younger programmers willing to work for a startup regardless of the comp. Founders naturally try to exploit this.
- neltnerb 7y ago
  They could be taught ethics in college or find that their peers actually called them out for it? Heh.

novok 7y ago

That is a big reason why I don't start my own company, because I couldn't really live with doing that. My current armchair strategies: * Compete in a way that big tech are not willing to do, which means distributed remote companies. A lot of people don't want to live in $3.5k/month rent SF or other tech centers for various reasons. * What a lot of startups do, but RDF (reality distortion field) over with 'we only hire the best'. Don't hire the best. Either because they couldn't hack the big tech co interview, have visa issues, are very jr or have personality problems that make them unhirable in big tech cos. * Go bootstrap, so no VC style business timelines. * Give offers that basically make them pseudo-founders and match the expected value of bigco with the risk premium of startups. A hard pill to swallow when investors give a lot of money offer similar or smaller dilution terms effectively. I've never gone out to get investment, so I don't know how much of the above is also blocked by investors in general. Also crypto style 'startups' (ICO or just a completely new coin) have shown to deliver compared to normal SV startups, but most crypto companies do not deliver actual lasting value and are more pure speculation plays. A big crucial difference is they give crypto coins instead of stock, and those coins are liquid immediately. They are also not restricted to start in the USA.

pm90 7y ago
Founders should be willing to give a lot more equity to the first employees. I don’t get the logic of not doing this. You want your engineers to feel as if they have ownership in the equity that you’re building. It’s such an easy way to keep engineers engaged and productive that it baffles my mind that it’s not done more widely. I hate working for BigTech. Startups expect too much and compensate very little. The sweet spot for me has been medium sized public companies that offer great compensation but need solid engineering to grow their market share.
- novok 7y ago
  It's the math again. Go do a spreadsheet and simulate a company as it grows and you see treating your first 10 employees in line with big tech expected value outcomes is a really, really big hit.
  - pm90 7y ago
    I know this is totally super optimistic, but can we change the perspective from > is a really, really big hit. to > really amazing payoff for the early engineers/employees My very limited understanding of the growth of the SV tech community is that its a generous cycle of people creating wealth, and then using that wealth to fund the next generation of tech. So it seems completely logical for SV founders to want to do more of this.
    - whatshisface 7y ago
      Whether it's a big hit or an amazing payoff are actually irrelevant, there is a going rate for engineers who are willing to accept startup risk (in a job market where anyone can get hired right after it fails this is not a lot of risk), and that's the price that will be paid.
      - tabtab 7y ago
        When I was young and naive, they paid employees the "risk bonus" in stock shares, not cash. I asked for more cash, and they said, "nobody takes cash, stock shares are the thing". They were the dud thing.

cheriot 7y ago

One of the things that keeps me away from startups is how disadvantaged employee equity is. Options become golden handcuffs when they have to be exercised to leave. Execs and investors are not in the same boat as employees due to preferred shares, liquidation preference, and other terms. None of these are disclosed to employees. I've heard too many stories of start ups being sold where the founders cashed a big check and the employees didn't get anything. To be clear, I'm not an expert in this, but the startup ecosystem needs to regain trust if it wants to hire more competitively.

opportune 7y ago

Hope that they are not as interested in financial optimization as you? Or just take people who can’t get into top paying bigcos? Or be a good salesman? Same as everybody else who is recruiting for startups these days

hef19898 7y ago

Handpick them out of your network and give them not just equity but real control as well. That for the first 5 or so. The others should come from your network and be handpicked by your handpicked first 5 employees. And equity, but obviously less than the first 5. In my case my first employee, as soon as enough comes in to pay someone, is already recruited. Equity will be around 20%, with another 25 or so for the next couple of employees. That's without outside funding, doesn't seem to be necessary so. If it will be necessary that obviously changes.

juped 7y ago

Why do you think you need employees?