10 ms·

At the time I write this comment, half my screen is full of people calling Josh not so nice things. Folks, this is a founder who's openly sharing the kinds of

At the time I write this comment, half my screen is full of people calling Josh not so nice things. Folks, this is a founder who's openly sharing the kinds of things we usually keep hidden. I doubt there's been a startup exit in the last decade where a healthy skeptical HN'er couldn't find some wrongs being done, if the details had been available. It's extremely hard to get everything right, from every perspective. The only difference here is that the details are actually available. Please go easy. We want more posts like these, not fewer.

draw_down 6y ago
What exactly are you taking issue with? Come on.
adamzapasnik 6y ago
Half screen? I see a comment or two. I think it's normal/human thing to have discussions in comments like this one. Especially, when it's an exit related topic that gets shared on startup/VC related forum-site like this one? Prefer just "good job" comments, or what?
- TwoNineFive 6y ago
  I agree. I read all the comments in this thread and this time and the negativity isn't there. It just doesn't exist. I don't know if those comments were removed, but I just suspect they never existed.
arvidkahl 6y ago
I have sold a business as well, and I have to admit I am very surprised by this response, too. Not only does Josh divulge information that most founders are legally forbidden from ever revealing, he also was always extremely open about the journey of the business, even facilitating the [Open Startups](https://baremetrics.com/open-startups https://baremetrics.com/open-startups) page, where Baremetrics itself is listed. What surprises me most is the lack of understanding of founder risk. Most negative comments are related to employees not walking away from this exit. It feels to me that many here seem to conflate the inner workings of heavily VC-backed businesses with a slowly and sustainably growing company like Baremetrics. I see a lot of assumptions all over the comments. I appreciate the discussion, though. It's nice to see people sticking up for employees. But a sub-10-people SaaS that's ALMOST self-funded is not the same as a prospective unicorn.
jcims 6y ago
Same thing happens with GitLab somewhat regularly. I don't know of any company that operates with that level of transparency and somehow a select set of folks can't seem to control themselves when supplied with a reason to air their grievance.
- user5994461 6y ago
  GitLab is a poster child of why companies don't publish any details. Deleted the production database and customer data? You could apologize and move on. There should have been backups to restore from but clearly there weren't. The gitlab way: Go in great details about how there is no automated backup and the last one that was done manually 3 months ago doesn't work... and how there was no testing/staging environment to try the change before production... and how any intern could delete it the same way by accident on their first day. There's a reason companies don't publish gory details and internal discussion. At best there's nothing to gain from it and at worst it's highlighting incompetence and wrongdoing.
  - Jochim 6y ago
    I think it's a good approach, it: 1) Works as a club for developers to get the time they need to improve processes and code. "Do you want to be responsible for the HN article about the incident this will cause?" would give most managers pause. 3) Gives customers the confidence that you'll let them know when issues that might affect their experience or data are occurring. 4) Proves to customers that you can fix these issues when they come up. 5) Makes people wonder what's going on in your competitors that they're not hearing. On the other hand you don't get to pretend the sun shines out your ass, but that's disingenuous and most people will see through it anyway, you only trick the people that also want to go along with you.
  - jcims 6y ago
    That's definitely the pragmatic view and the obvious downsides are largely why this approach is so rare. Much like TFA I think there are things to be learned from that level of transparency and hope the experiments continue.
  - 6y ago
RedditKon 6y ago
I feel the same way, especially in regards to everyone opining on the investors taking a markdown. For context, it was General Catalyst and Bessemer. - General Catalyst: $2.5B+ in Assets Under Management - Bessemer: $4B in Assets Under Management DISCLAIMER: If you take venture capital, you should obviously always do it as a responsible fiduciary of both the company and the capital. With that said, I'm positive both of those firms will be fine. They're looking for 100x returns, a $400k write-down from a seed investment is nothing. If anything, it's worth doing that on the off-chance Josh goes on to create the next Uber or Salesforce and they want to invest again. SV runs on relationships.
- georgeecollins 6y ago
  I don't want to make any moral judgements against people making business decisions, in particular this founder for making the best deal possible. Good for him. However, no matter how much money General Catalyst or Bessemer made last year, I would not want to invest with them going forward. I get that this is only money on the margins, and they get a benefit from a write off. Still, how hard would they have had to fight to get some of their money back? It sends a disturbing signal to me to write the whole thing off. Someone will reply: "But they made $10b last year! You don't understand the business." And I am sure I don't. But the world is full of people who made a lot of money or were in the process of making a lot of money and then get careless. Or reply: "It's part of the model! If they don't get 10x-100x they just want to write it off as fast as possible. That's what there investors want." Sure, but if you are careless people will take advantage of you. Also, I just don't buy that all institutional investors that back VCs are that savvy. A lot of them are just following a trend and over funding an asset class. Tell me I am wrong. I am no expert.
  - loceng 6y ago
    There's the time-opportunity cost - they can't afford to be perfectionists and squeeze 100% of what they potentially could from a situation, which is arguably undue stress as well - and will cause further externalized losses in what their other focuses are.
  - 6y ago
codegeek 6y ago
I run a bootstrapped SAAS. I really and truly understand where Josh is coming from. I have fully sympathy for him and whatever actions he took for his best interest after a gruelling 7 years. I am really grateful that he has shared the numbers so openly. Josh, you don't know me but please go and do whatever the F you want to do and don't listen to what others say. You deserve it!! It is disappointing to see comments like "what did employees get" ? Employees get salary and as long as they are happy working for the company and company takes care of their well being, they are not entitled to any additional founder benefits. Not all companies are unicorn where "early" employees get a big piece of the pie.
karimf 6y ago
Relevant tweet from the author: https://twitter.com/shpigford/status/1326162432989990912 https://twitter.com/shpigford/status/1326162432989990912
- Sodman 6y ago
  I see this "HN is toxic" sentiment on tech twitter a lot, particularly from tech folks on twitter with a lot of followers and fans. My own experience on HN has been that folks may be more cynical than average, and sometimes lacking empathy, but I've found most arguments are at least made based on reality, facts and good faith. Those that aren't usually get downvoted and/or flagged pretty quickly. Meanwhile twitter threads are frequently full of trolling, memes and reaction gifs. Where does this "HN is toxic" mindset come from?
  - coward8675309 6y ago
    You hit the nail on the head: the cynicism. Cynicism isn’t a morally neutral stance. Assuming everyone else is arguing in bad faith and in favor of their crude short-term political/economic interests. Asserting that all property is theft and that the system is rigged. Dismissing those who disagree as gullible or stupid or (themselves) cynically trying to manipulate people. There is so much of it here and it comes from every angle. It is disgusting. That people who are here tend to self-identify as high-IQ does not help.
    - paganel 6y ago
      > Asserting that all property is theft and that the system is rigged. There is definitely a discussion to be had about property, smarter people than us have had it for at least 150 years (even more, if you include the discussion between Locke and Filmer), don't see anything that cynic about it. I'd go on to say that even Cynicism itself was a really interesting philosophical school [1]. I do agree that that there are some people on this website who still take the IQ thing seriously, but even there, I think that the majority regards it as bogus. [1] https://en.wikipedia.org/wiki/Cynicism_(philosophy) https://en.wikipedia.org/wiki/Cynicism_(philosophy)
spatx 6y ago
I agree, I'd like to see more posts like these. While I'm impressed by the unicorn startup stories, I want to also hear from those that did/could not take that path, which is a majority of the startups. One of the most impressive things is that Josh did all of this with a level of transparency few founders would be willing to. Of course, some posters here are talking about employees getting a raw deal, but it was there for all to see that the company had decided long back to prioritize profit more than growth. Any employee that would have expected a unicorn like exit would have known it wouldn't be the case and would have left long ago. Blaming Josh for that doesn't feel right to me.
randall 6y ago
Everyone is weirdly mean to you when you sell. I sold to fb in 2018 (height of cambridge analytica.) Even ppl who are now my bffs were mean on HN. (they didn't know me at the time.)
caffeine 6y ago
I think it's extremely valuable as a lesson for prospective early employees. My own personal takeaway is crystal clear: if you want to benefit from the sale of something, you need to be the owner! Much like a gardener or builder who doesn't get paid out when the house gets sold, unless you have a LOT of equity as an early employee, you will not be getting founder-type payouts (and rightly so as you took little to no risk)
- gumby 6y ago
  Companies don't have to be run that way. When we sold Cygnus the receptionist was able to pay off her mortgage and other debt. She was a 65 year old divorced woman and now she could afford to retire (she stayed with the company though). Of course we were a traditional SV startup -- people are different these days.
  - caffeine 6y ago
    Well I think the fact that you're a nice person who made sure the secretary was taken care of is great! But I wouldn't start generally inferring that it makes sense to take secretary jobs at startups on the chance the founders decide to pay off my mortgage.. Baremetrics is a more typical case, I would think.
  - ticmasta 6y ago
    the math is still incredibly lopsided. Your secretary can pay off her mortgage or buy a new car; the founders get FU money. This is just how it works; hate the game not the player.
- 1-more 6y ago
  > Much like a gardener or builder who doesn't get paid out when the house gets sold We may also interrogate this arrangement.
yibg 6y ago
They're also mostly from a very SV bubble point of view. A lot of posts point to the employees not getting very much from the sale. But there are lots of places in the world where employees of small businesses are not granted large equity stake, and work for a salary like most employees everywhere else. This is especially true for a steady profit driven company that's not aiming for hypergrowth (another very SV centric view of startups). We don't know how much the employees are paid, for all we know they could be paid the prevailing wage for their location.
fairity 6y ago
As a founder who's faced his fair share of public criticism, I used to share this sentiment. However, over the years, I've learned that facing critics and doing impactful work goes hand in hand. Put another way, if you don't have critics, you're likely not doing anything very impactful. In my experience, the key to maintaining equanimity in the face of harsh criticism is to: 1) Have a strongly held mission and set of core values. Commit to this mission/core values regardless of what anyone says. 2) Recognize that it's sort of funny how pretty much any action can and will be twisted and criticized by critics online. There was an article a few months back about Bezos dedicating $10B to fighting climate change, and the entire comment section was negative. Lol!
zaroth 6y ago
Ctrl-F for 'Salary' and you will understand what really happened. How many years did Josh work for $0 or just below market salary, take no money out of the company, in fact likely dump significant quantities of his own money into the company... all the while his employees enjoyed getting paid a agreed upon amount every pay period? $4mm after tax (hopefully Josh is getting the QSBS tax break) for a decade of extremely high risk high effort contribution to our economy is not a good risk-adjusted return, but it's at least a decent exit at the end of the day.
TwoNineFive 6y ago
Can you please be specific about what "not so nice" things you are/were seeing? I'm not seeing any inappropriate criticisms beyond what I would normally expect.

draw_down 6y ago

What exactly are you taking issue with? Come on.

adamzapasnik 6y ago

Half screen? I see a comment or two. I think it's normal/human thing to have discussions in comments like this one. Especially, when it's an exit related topic that gets shared on startup/VC related forum-site like this one? Prefer just "good job" comments, or what?

TwoNineFive 6y ago
I agree. I read all the comments in this thread and this time and the negativity isn't there. It just doesn't exist. I don't know if those comments were removed, but I just suspect they never existed.

arvidkahl 6y ago

I have sold a business as well, and I have to admit I am very surprised by this response, too. Not only does Josh divulge information that most founders are legally forbidden from ever revealing, he also was always extremely open about the journey of the business, even facilitating the [Open Startups](https://baremetrics.com/open-startups https://baremetrics.com/open-startups) page, where Baremetrics itself is listed. What surprises me most is the lack of understanding of founder risk. Most negative comments are related to employees not walking away from this exit. It feels to me that many here seem to conflate the inner workings of heavily VC-backed businesses with a slowly and sustainably growing company like Baremetrics. I see a lot of assumptions all over the comments. I appreciate the discussion, though. It's nice to see people sticking up for employees. But a sub-10-people SaaS that's ALMOST self-funded is not the same as a prospective unicorn.

jcims 6y ago

Same thing happens with GitLab somewhat regularly. I don't know of any company that operates with that level of transparency and somehow a select set of folks can't seem to control themselves when supplied with a reason to air their grievance.

user5994461 6y ago
GitLab is a poster child of why companies don't publish any details. Deleted the production database and customer data? You could apologize and move on. There should have been backups to restore from but clearly there weren't. The gitlab way: Go in great details about how there is no automated backup and the last one that was done manually 3 months ago doesn't work... and how there was no testing/staging environment to try the change before production... and how any intern could delete it the same way by accident on their first day. There's a reason companies don't publish gory details and internal discussion. At best there's nothing to gain from it and at worst it's highlighting incompetence and wrongdoing.
- Jochim 6y ago
  I think it's a good approach, it: 1) Works as a club for developers to get the time they need to improve processes and code. "Do you want to be responsible for the HN article about the incident this will cause?" would give most managers pause. 3) Gives customers the confidence that you'll let them know when issues that might affect their experience or data are occurring. 4) Proves to customers that you can fix these issues when they come up. 5) Makes people wonder what's going on in your competitors that they're not hearing. On the other hand you don't get to pretend the sun shines out your ass, but that's disingenuous and most people will see through it anyway, you only trick the people that also want to go along with you.
- jcims 6y ago
  That's definitely the pragmatic view and the obvious downsides are largely why this approach is so rare. Much like TFA I think there are things to be learned from that level of transparency and hope the experiments continue.
- 6y ago

RedditKon 6y ago

I feel the same way, especially in regards to everyone opining on the investors taking a markdown. For context, it was General Catalyst and Bessemer. - General Catalyst: $2.5B+ in Assets Under Management - Bessemer: $4B in Assets Under Management DISCLAIMER: If you take venture capital, you should obviously always do it as a responsible fiduciary of both the company and the capital. With that said, I'm positive both of those firms will be fine. They're looking for 100x returns, a $400k write-down from a seed investment is nothing. If anything, it's worth doing that on the off-chance Josh goes on to create the next Uber or Salesforce and they want to invest again. SV runs on relationships.

georgeecollins 6y ago
I don't want to make any moral judgements against people making business decisions, in particular this founder for making the best deal possible. Good for him. However, no matter how much money General Catalyst or Bessemer made last year, I would not want to invest with them going forward. I get that this is only money on the margins, and they get a benefit from a write off. Still, how hard would they have had to fight to get some of their money back? It sends a disturbing signal to me to write the whole thing off. Someone will reply: "But they made $10b last year! You don't understand the business." And I am sure I don't. But the world is full of people who made a lot of money or were in the process of making a lot of money and then get careless. Or reply: "It's part of the model! If they don't get 10x-100x they just want to write it off as fast as possible. That's what there investors want." Sure, but if you are careless people will take advantage of you. Also, I just don't buy that all institutional investors that back VCs are that savvy. A lot of them are just following a trend and over funding an asset class. Tell me I am wrong. I am no expert.
- loceng 6y ago
  There's the time-opportunity cost - they can't afford to be perfectionists and squeeze 100% of what they potentially could from a situation, which is arguably undue stress as well - and will cause further externalized losses in what their other focuses are.
- 6y ago

codegeek 6y ago

I run a bootstrapped SAAS. I really and truly understand where Josh is coming from. I have fully sympathy for him and whatever actions he took for his best interest after a gruelling 7 years. I am really grateful that he has shared the numbers so openly. Josh, you don't know me but please go and do whatever the F you want to do and don't listen to what others say. You deserve it!! It is disappointing to see comments like "what did employees get" ? Employees get salary and as long as they are happy working for the company and company takes care of their well being, they are not entitled to any additional founder benefits. Not all companies are unicorn where "early" employees get a big piece of the pie.

karimf 6y ago

Relevant tweet from the author: https://twitter.com/shpigford/status/1326162432989990912 https://twitter.com/shpigford/status/1326162432989990912

Sodman 6y ago
I see this "HN is toxic" sentiment on tech twitter a lot, particularly from tech folks on twitter with a lot of followers and fans. My own experience on HN has been that folks may be more cynical than average, and sometimes lacking empathy, but I've found most arguments are at least made based on reality, facts and good faith. Those that aren't usually get downvoted and/or flagged pretty quickly. Meanwhile twitter threads are frequently full of trolling, memes and reaction gifs. Where does this "HN is toxic" mindset come from?
- coward8675309 6y ago
  You hit the nail on the head: the cynicism. Cynicism isn’t a morally neutral stance. Assuming everyone else is arguing in bad faith and in favor of their crude short-term political/economic interests. Asserting that all property is theft and that the system is rigged. Dismissing those who disagree as gullible or stupid or (themselves) cynically trying to manipulate people. There is so much of it here and it comes from every angle. It is disgusting. That people who are here tend to self-identify as high-IQ does not help.
  - paganel 6y ago
    > Asserting that all property is theft and that the system is rigged. There is definitely a discussion to be had about property, smarter people than us have had it for at least 150 years (even more, if you include the discussion between Locke and Filmer), don't see anything that cynic about it. I'd go on to say that even Cynicism itself was a really interesting philosophical school [1]. I do agree that that there are some people on this website who still take the IQ thing seriously, but even there, I think that the majority regards it as bogus. [1] https://en.wikipedia.org/wiki/Cynicism_(philosophy) https://en.wikipedia.org/wiki/Cynicism_(philosophy)

spatx 6y ago

I agree, I'd like to see more posts like these. While I'm impressed by the unicorn startup stories, I want to also hear from those that did/could not take that path, which is a majority of the startups. One of the most impressive things is that Josh did all of this with a level of transparency few founders would be willing to. Of course, some posters here are talking about employees getting a raw deal, but it was there for all to see that the company had decided long back to prioritize profit more than growth. Any employee that would have expected a unicorn like exit would have known it wouldn't be the case and would have left long ago. Blaming Josh for that doesn't feel right to me.

randall 6y ago

Everyone is weirdly mean to you when you sell. I sold to fb in 2018 (height of cambridge analytica.) Even ppl who are now my bffs were mean on HN. (they didn't know me at the time.)

caffeine 6y ago

I think it's extremely valuable as a lesson for prospective early employees. My own personal takeaway is crystal clear: if you want to benefit from the sale of something, you need to be the owner! Much like a gardener or builder who doesn't get paid out when the house gets sold, unless you have a LOT of equity as an early employee, you will not be getting founder-type payouts (and rightly so as you took little to no risk)

gumby 6y ago
Companies don't have to be run that way. When we sold Cygnus the receptionist was able to pay off her mortgage and other debt. She was a 65 year old divorced woman and now she could afford to retire (she stayed with the company though). Of course we were a traditional SV startup -- people are different these days.
- caffeine 6y ago
  Well I think the fact that you're a nice person who made sure the secretary was taken care of is great! But I wouldn't start generally inferring that it makes sense to take secretary jobs at startups on the chance the founders decide to pay off my mortgage.. Baremetrics is a more typical case, I would think.
- ticmasta 6y ago
  the math is still incredibly lopsided. Your secretary can pay off her mortgage or buy a new car; the founders get FU money. This is just how it works; hate the game not the player.
1-more 6y ago
> Much like a gardener or builder who doesn't get paid out when the house gets sold We may also interrogate this arrangement.

yibg 6y ago

They're also mostly from a very SV bubble point of view. A lot of posts point to the employees not getting very much from the sale. But there are lots of places in the world where employees of small businesses are not granted large equity stake, and work for a salary like most employees everywhere else. This is especially true for a steady profit driven company that's not aiming for hypergrowth (another very SV centric view of startups). We don't know how much the employees are paid, for all we know they could be paid the prevailing wage for their location.

fairity 6y ago

As a founder who's faced his fair share of public criticism, I used to share this sentiment. However, over the years, I've learned that facing critics and doing impactful work goes hand in hand. Put another way, if you don't have critics, you're likely not doing anything very impactful. In my experience, the key to maintaining equanimity in the face of harsh criticism is to: 1) Have a strongly held mission and set of core values. Commit to this mission/core values regardless of what anyone says. 2) Recognize that it's sort of funny how pretty much any action can and will be twisted and criticized by critics online. There was an article a few months back about Bezos dedicating $10B to fighting climate change, and the entire comment section was negative. Lol!

zaroth 6y ago

Ctrl-F for 'Salary' and you will understand what really happened. How many years did Josh work for $0 or just below market salary, take no money out of the company, in fact likely dump significant quantities of his own money into the company... all the while his employees enjoyed getting paid a agreed upon amount every pay period? $4mm after tax (hopefully Josh is getting the QSBS tax break) for a decade of extremely high risk high effort contribution to our economy is not a good risk-adjusted return, but it's at least a decent exit at the end of the day.

TwoNineFive 6y ago

Can you please be specific about what "not so nice" things you are/were seeing? I'm not seeing any inappropriate criticisms beyond what I would normally expect.