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Is having a board of directors full of VC big shots to answer to that different from having a boss? I listened to a Changelog podcast the other day featuring S

• asperous 6y ago
  Even if you are totally self funded you still are accountable to your customers. For software companies this might not be so bad, but many small business owners will tell you they make extremely demanding bosses
  • sytse 6y ago
    And you are accountable to your employees. Take the board I have for example. It is a relief to know that if I’m not longer the right person they will replace me. If you are bootstrapped with 1000+ employees a board might be something you want even if you don’t need to do it from an ownership perspective.
    • sullyj3 6y ago
      I mean, at a certain point you're asking for ultimate power over everything and instead of attempting to become autonomous you find yourself attempting to become a supervillain
      • asddubs 6y ago
        the zuckerberg route
        • swagasaurus-rex 6y ago
          now that they're a publicly traded company, there's no way Zuckerberg could ever downsize Facebook into an honest company without the shareholders throwing a fit or suing the company.
    • skrebbel 6y ago
      Ah! That's an angle I hadn't considered yet. Was there a concrete point at which you and your co-founder agreed to accept a minority stake and therefore give up absolute control? Was it a hard call to make or, already then, a relief because of the employee accountability?
      • jlokier 6y ago
        Having a board of directors over you doesn't always mean dropping to a minority ownership stake, or even giving up absolute control. The board of directors is legally responsible for running the company, in practice through major company decisions and scrutiny, so you can take some relief from that if you're a CxO doing what you think best "day to day" but not entirely sure you really know by yourself. Your board will get the legal blame if it goes seriously wrong and you've kept them sufficiently informed and involved in key decisions. But you can still have a majority ownership stake while appointing a board. In doing so, you keep ultimate control (as shareholders) but you won't often exercise it. Having ultimate control might change the social dynamics, but shareholders are not responsible for the company, the board of directors is and they should know it. Shareholders have the power to pass resolutions which effectively override directors, but most of the time they don't. Even if they do, it's up to the directors to figure out how to do what the shareholders want in a responsible and defensible way.
  • deleted 6y ago
    [deleted]
  • fizixer 6y ago
    I'm sorry customers are no boss.
    • internet_user 6y ago
      customers are much easier to fire than a boss.
    • deckard1 6y ago
      yeah, this has always been the dumbest of takes. When I have an issue at Amazon, is Bezos picking up the phone? Hell no. Even at places where the "customer is always right", all that means is the customer is the boss of the hourly wage slave. The CEO doesn't give a damn. And this results in so much ugly behavior here in America, where customers think they can throw drinks at fast food workers and have an adult tantrum. Anyone comparing a customer to a boss has had the luxury of never having a terrible boss.
  • internet_user 6y ago
    you can fire SaaS customers. happens all the time.
  • maest 6y ago
    > Even if you are totally self funded you still are accountable to your customers. Rentiers are an exception.
  • iainctduncan 6y ago
    That is a totally different situation. Your customers can't just do whatever they want to you whenever they want. A board coalition with more than 50% of the shares can. They can say anytime they want, "we want out, your job is now to sell the company at the least possible loss". I have had this happen at a place where I worked.
    • afarrell 6y ago
      It can if you only have one customer. The issue is monopsony.
      • iainctduncan 6y ago
        I'm replying to a comment that specifically said "customers" in plural. If you are in a situation with one customer, then really, you're not even talking about a company-and-customers relationship anymore, that's more like a consulting or contracting relationship and is a whole different ball of wax.
  • abraae 6y ago
    > Even if you are totally self funded you still are accountable to your customers 2 main differences: 1) your customer's requirements are pure (usually) - "please add a frammel button so I can manage my widgets better". Your boss's requirements are less so - "please satisfy corporate by attending this compliance training". 2) you can fire any customers who you don't like. Not so your boss.
    • edoceo 6y ago
      I have this for my small business. About 450 small "bosses" (clients). Because we don't answer to investors or board or anything we have what I call "alignment" with our clients. Despite 400+ opinions, the pull on the team is one way: client needs. My previous Companies has outside money, board, etc. That's three directions of pull. We've saved a lot of time that way on investor management but our growth was limited by cash-on-hand.
      • Rebelgecko 6y ago
        Have you ever needed to fire a client? Or been in a situation where you have to juggle client needs that were non-compatible?
        • edoceo 6y ago
          Fire client: less than 2%. But looks, losing only 2% to focus on the other 98. Well, you'll grow back. Not-Compatoble request is a bit harder. But, with like 10+ prior years in consultant I'm generally able to direct thing to a multiple compatible solution. Lots of research and customer development play for that.
    • roenxi 6y ago
      > "please satisfy corporate by attending this compliance training". Compliance training is about legal requirement. A little extrapolation suggests it is going to be things that your bosses are only asking you to consider because they are legally mandated. If they were going to be considerations anyway, why mandate them? A lot of stupid things businesses do are to satisfy legal requirements that the business thinks is stupid. That one isn't the boss, it is the government.
• o_class_star 6y ago
  Everyone works for someone else, but at a certain level both of organizational standing and (for lack of a better way to put it) moral fluidity, you become invincible. CEOs only answer to shareholders insofar as they're expected to deliver a profit, which is actually very easy to do because most business "profit" is actually rent-seeking derived from resources (including intangibles) the business already owns. You have to be incredibly hubristic to fail as a corporate CEO. It's an easy job. That's not true for small companies. Startups are harder, and startup CEOs are basically middle management within the "hive company" of venture capital. The true executives are the VCs who float from project to project, careers and fates diversified, and can peel their names off anything that looks like it's going to fail. In big companies, though, most CEOs would do better not to show up, except once a quarter to give a speech or something. All they do is fire people, producing churn, and get in the way of the people who do the actual work. They can only fail if their egos get the better of them and they get so hubristic that they break something that used to be working. The same is mostly true of executives in general, although they have a little more vulnerability insofar as (a) if their bosses screw up, they may end up eating blame, and (b) if the CEO screws up so bad he himself gets fired, they'll probably also be replaced during the regime change.
  • tzone 6y ago
    Do you actually have any experience or even a remotely internal view of how much CEO actually matters in multi billion dollar companies? Or are you just making incorrect assumptions based on no actual knowledge and experience?
    • zachrose 6y ago
      Not to jump in on this question exactly, but Rakesh Khurana wrote a very well-researched book about the market for corporate CEOs, finding that expectations are hugely inflated with meager correlation between CEO compensation and anticipated results. https://www.hbs.edu/faculty/Pages/item.aspx?num=11408 https://www.hbs.edu/faculty/Pages/item.aspx?num=11408
      • o_class_star 6y ago
• fizixer 6y ago
  The one who puts up with the risk doesn't have a boss. - Investors don't have a boss. - A founder/CEO who owns 100% of a private company doesn't have a boss. But (s)he is putting up with very high risk, betting on self, and living with the consequences.
  • deleted 6y ago
    [deleted]
  • rtx 6y ago
    Great way to put this.
• philwelch 6y ago
  > EDIT: meta-level comment: it's kind of weird how we managed to create a world where nearly everybody has a boss. CEOs answer to the board, who answer to shareholders, who work at investment funds that have bosses and shareholders and LPs of their own, and down the rabbit hole it goes. I wonder if there's any general way out of this, different from "bootstrap a SaaS" which is a little specific to be good general advice. This is one of the many points Kaczynski makes in his argument that “the Industrial Revolution and its consequences have been a disaster for the human race.” The complete lack of true autonomy seems inherent to the system.
  • ghaff 6y ago
    Do you really think most individuals in hunter-gatherer societies had true autonomy? Or serfs in feudal Europe? In fact, if you have accumulated some degree of financial independence I'd argue you can have much more autonomy today than just about anyone pre-industrial revolution.
    • 317070 6y ago
      > Do you really think most individuals in hunter-gatherer societies had true autonomy? Actually, yes I do. It depends on which hunter gatherer society, but there is some indication from Sumerian scripts that before statecraft came a laisser-faire world, where people did not need to respond to a higher power, because one could always choose to bugger off to somewhere else. It only works of course when there is excess food compared to the amount of humans, which is not a stationary situation as humans multiply to fill that gap.
    • philwelch 6y ago
      Of course, if you’re capable of retiring and not working for the rest of your life, you can be very autonomous. You can also be autonomous if you are a lord in feudal Europe, because in these situations you’ve ascended to a position where other people work to satisfy your material needs. Which is really no autonomy at all because you are reliant on the rest of society to continue to literally work for you. Money abstracts this away, but if you achieve “financial independence”, that just means you have accumulated enough wealth tokens that you can indefinitely have enough to exchange for things that someone actually had to go make. You’re “autonomous” in the sense that you’re utterly dependent on an entire society that agrees with the practice of doing work in exchange for fiat currency. But the Pharoahs were also utterly dependent on a society that agreed with the practice of doing work because if you didn’t, the pharoah’s bureaucrats wouldn’t keep your land irrigated and you would starve to death. But autonomy as a person who actually does work is another thing entirely. Industrialization introduced time clocks, shift work, Taylorism, and all kinds of stuff that eroded that autonomy.
• rasengan 6y ago
  Everyone has a boss - whether it’s their customers or someone else.
  • musingsole 6y ago
    Physics is the final boss.
• redler 6y ago
  Ultimately the customer is at the top of the org chart, although one may be many abstract levels removed from their aggregate "management" decisions -- by intervening "middle managers" like the CEO, the board, and VCs. But certainly, in a smaller entrepreneurial venture, one feels the pressure from that ultimate boss more acutely.
  • WalterSear 6y ago
    On the contrary: the customer is a resource to be sought, managed and exploited. The boss ultimately dictates how this is to be done. Businesses fire customers, pivot the business to seek better ones, abuse/shortchange/swindle their customers all the time. There are Bureaus of Consumer Protection, but no Bureaus of Boss Protection.
    • redler 6y ago
      Perhaps you understood me too literally. I mean the customer as boss in the abstract sense — not as if they are making literal management decisions. Customer as metonym. When you seek product-market fit, or decide which features to prioritize for development, you are in effect seeking to satisfy this boss. When you make pricing decisions, you’re likewise being guided by the constraints of your target customer base. The customer can ultimately shut you down, firing everyone, to stretch the metaphor. Can you fire the customer? Sure. But you always need a customer of some kind, and as a going concern you ultimately serve at the pleasure of that (aggregate) customer, and not the reverse.
• heavenlyblue 6y ago
  > it's kind of weird how we managed to create a world where nearly everybody has a boss It’s a feature. Cycles get rid of hierarchies and individual corruption.
  • skrebbel 6y ago
    I don't understand why you didn't get more upvotes. This is a great angle (that aligns somewhat with Sytse's comment further up) that I hadn't considered yet. It's also a good counterpoint to the "having a boss is not natural" idea.
• samatman 6y ago
  It's not that weird when you consider that most of us are descended from agriculturalists, where that pattern has prevailed since the dawn of civilization (proper). Hunter-gatherers have patterns we can also describe as hierarchical as well, but it's meaningfully different. Given the cultural, and possibly even genetic, coevolution of this strategy, bosses are going to be 'sticky'.
• yes-the-day 6y ago
  Is it really that surprising though? Reciprocal altruism is a part of human nature. We give other individuals stuff they want so they will give us stuff we want. At the end of the day the economy and financial system are just a big layer of indirection in the process. Now whether you call your bosses "customers" or "managers" or "the board," at the end of the day it doesn't surprise me that much that everyone answers to someone.
• eutropia 6y ago
  I think that this is a natural consequence of organizing your economy around "Capital" instead of people. A fascinating alternative has been proposed by Yanis Varoufakis in which financial markets are eliminated, but labor and commodity markets remain: i.e. you can only own a single (variable value, single vote) share in 1 company at a time (usually a company you own are employed at); that share is tied to you as a person like a library card (you can't give it to someone else). Essentially all enterprises become cooperatively owned by the people who WORK for the enterprise. People have accounts with the Central Bank of their nation, etc... This stuff is pretty straightforward to do since banking is almost entirely automatable now. But that's far too egalitarian to catch on with the current state of affairs. :-)
  • buildstatements 6y ago
    I think it is the opposite - it is a consequence of which system has better long term surviveability. Companies survive because they don't die. That seems trite, I know. The consequences of it are important, as the equation is one where no matter how well you do, avoiding death is what matters. SHL at Gumroad is a great example. SHL was encouraged to quit by the VCs when Gumroad was not a clear unicorn[1]. SHL chose not to let Gumroad die, and Gumroad lives. The problem with all the ideas like the one Yanis Varoufakis proposes, is that they will almost certainly do well in good times, but companies survive because they don't die, and any system like the one you mention will lead to more dead companies. That's a big claim I know, but imagine a situation where a company has 20 people - 4 sales and 8 support (secretaries, returns, admin) in the office and 8 people who work in fulfillment - a warehouse and lets say deliveries. Times get tough, and they are forced to have a vote on who needs to be sacked - how do they vote? 12 of the 20 work together, do you really think they will vote to have their friends in the office sacked? And would they even get to that point? Why would anyone ever vote to lose their job? And what about pay rises? How do you negotiate pay rises when everyone votes? In a multi-division company, lets say 3 divisions, would everyone vote to take a lower pay than people in a more productive division? Would hiring be run along profitability lines, with one division growing large, or prestige/some other political goal like maintaining voting block power? Capital has clearly aligned goals that round to "don't die". Capital will be assigned in productive areas, pay rates will be higher in more valuable divisions (AWS vs Amazon Warehouse workers) and kill off products that aren't working (See Google). At the meta, system level, there is also alignment. Capital can be reassigned to different companies, aligning the individual players with the system overall. That is why Blackberry was valued below its cash on hand at one point - capital was reassigned as Blackberry was more likely to blow through the cash than grow. A system where shares can not be reassigned has no system level optimisation which saves the system, even as individual companies die. The same is not self evidently obvious or clear in collectivist systems, and always needs a series of extra steps to overcome self interest to be possible, none of which are convincing over longer timeframes. Any collectivist system would only need a very small bias towards something other than optimising profitability to have long term terrible consequences. Homo Sapiens had a tiny advantage over Neanderthals and other Hominids, and we are here and they are not. The casino advantage in most games is < 3% and think how much money they make. Collectivist business ideas will have all the same problems of politics, combined with the ability to die completely, which Governments do not suffer outside of war, as they have a taxation monopoly. [1] https://sahillavingia.com/reflecting https://sahillavingia.com/reflecting - "Some of my investors wanted me to shut down the business. They tried to convince me that my time was worth more than trying to keep a small business like Gumroad afloat, and I should try to build another billion-dollar company armed with all of my learnings — and their money."
• ashtonkem 6y ago
  Having a panel of bosses is emphatically worse than having a boss.