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> Personally I'd like to see it move towards a point where taking everything just because you can isn't viewed as acceptable. It's not clear to me what you're

> Personally I'd like to see it move towards a point where taking everything just because you can isn't viewed as acceptable. It's not clear to me what you're actually suggesting. You think that when someone takes more than they need, they deserve to be shamed? How do you determine how much one can take? We all want the world to be more loving and compassionate, but rules and financial incentives drive productivity in our economy. If the financial incentive to start a company is reduced, there will necessarily be a cost to innovation. Imo, the goal should be creating a system where the rules are fair and clearly outlined. The rules and incentives for employment were very clearly outlined in the employment contract these people signed. And, the founder does not seem to be the type of person who over-promises. So, I see nothing wrong here.

Jochim 6y ago
> You think that when someone takes more than they need, they deserve to be shamed? How do you determine how much one can take? Shame is a pretty good motivator for encouraging people to behave in a manner deemed appropriate by society. I don't think there's an easy or definite answer for how much is appropriate. I guess the question I'd ask in return is: in the case of the woman caught on security footage dumping a whole bucket of Halloween candy into her plastic bag. Why is it that we find it appropriate to shame her and not a founder/ceo who does effectively the same thing? Why can we not apply these same rules of decency to business? > If the financial incentive to start a company is reduced, there will necessarily be a cost to innovation. I don't think this is necessarily true. By spreading the fruits of successful innovation more broadly you put the people who enabled that innovation in a position to use that experience to innovate further. I'd argue that model where innovation centers around founders aiming to hit unicorn status and then retire with 'fuck you' money limits it in the sense that those once you've earned your 'fuck you' money you aren't really incentivised to innovate any further. > The rules and incentives for employment were very clearly outlined in the employment contract these people signed. I'm questioning whether they were fair, not in this specific case, but I'm asking more generally is our approach to employment as a society reasonable and fair.
- fairity 6y ago
  > Why is it that we find it appropriate to shame her and not a founder/ceo who does effectively the same thing? In the case of Halloween candy, the owner of the candy is offering each person up to a few pieces of candy for free. If you take more than a few pieces, you are stealing from the candy owner. Stealing is bad because we believe in the right to private property. Stealing is, in fact, illegal. Of course, our legal system isn't set up to enforce punishment for small actions, so shame is a useful alternative form of punishment. > Why can we not apply these same rules of decency to business? In the case of employment, each employee is offering the business owner his/her time in exchange for a salary and equity. The expectations are crystal clear to both parties. When the business owner sells the company, taking his fair share of the purchase price (as determined by his equity stake) is NOT stealing. Nor, is it breaking any norms or expectations. > By spreading the fruits of successful innovation more broadly you put the people who enabled that innovation in a position to use that experience to innovate further I actually agree with this specific point for an isolated case. That is, in isolation, spreading the purchase price for a huge acquisition evenly across the employee base would probably lead to greater innovation. However, this only makes sense in isolation. If you make it common practice to share acquisition price more evenly among employees, you destroy the financial incentive that drives much of entrepreneurship. Startups are very risky, and without a huge payout for success at the end, the expected values just don't work out anymore. Smart engineers will be much better off applying for a traditional FANG job. In fact, this is already the case! What you're proposing would just make the math even worse. Remember, for every success case like this, there are 4 or more founders who failed. There better be a sweet reward at the end of the tunnel to keep them motivated to keep trying! Furthermore, for small acquisitions like this, even if you were to split his 3.7M payday across his 20 employees, each person gets $18.5K. Hardly an amount that would spur innovation.
  - Jochim 6y ago
    I'm not suggesting that acquisitions should necessarily be shared precisely evenly. I don't even think Josh necessarily earned an outsized return in this case. I do think that the current disparity in compensation that we're seeing is potentially dangerous to a healthy society. We're already seeing a move towards a rentier approach to the economy, where individuals can't afford to own property or other essentials. A major force driving this is inequality, those with the means have so much capital under their control that they can afford to outbid those that have a need for those resources. > In the case of employment, each employee is offering the business owner his/her time in exchange for a salary and equity. The expectations are crystal clear to both parties. When the business owner sells the company, taking his fair share of the purchase price (as determined by his equity stake) is NOT stealing. Nor, is it breaking any norms or expectations. I don't think it necessarily is crystal clear. A big part of the sales pitch to employees for many startups is that your.5% will be worth X when they reach Y valuation. This isn't too bad in itself, but when it turns out that the founders can issue new/preferred stock the incentives from an employees point of view become severely misaligned. > Furthermore, for small acquisitions like this, even if you were to split his 3.7M payday across his 20 employees, each person gets $18.5K. Hardly an amount that would spur innovation. I agree it that it doesn't look great for smaller acquisitions. Although there are some interesting (in my opinion) alternatives to selling to private equity. In my city for example, the founders of a print shop sold the company to the existing workers. The money was paid out over a few years from the company's revenue and they sat on the board to offer some advice on the transition. It seems like a more ethical alternative in that the workers are rewarded for their part in building the company, and the new owners are less likely to asset strip and gouge existing customers to recoup their investment. It has the added bonus of not adding to the concentration of capital in a small number of holders.

Jochim 6y ago

> You think that when someone takes more than they need, they deserve to be shamed? How do you determine how much one can take? Shame is a pretty good motivator for encouraging people to behave in a manner deemed appropriate by society. I don't think there's an easy or definite answer for how much is appropriate. I guess the question I'd ask in return is: in the case of the woman caught on security footage dumping a whole bucket of Halloween candy into her plastic bag. Why is it that we find it appropriate to shame her and not a founder/ceo who does effectively the same thing? Why can we not apply these same rules of decency to business? > If the financial incentive to start a company is reduced, there will necessarily be a cost to innovation. I don't think this is necessarily true. By spreading the fruits of successful innovation more broadly you put the people who enabled that innovation in a position to use that experience to innovate further. I'd argue that model where innovation centers around founders aiming to hit unicorn status and then retire with 'fuck you' money limits it in the sense that those once you've earned your 'fuck you' money you aren't really incentivised to innovate any further. > The rules and incentives for employment were very clearly outlined in the employment contract these people signed. I'm questioning whether they were fair, not in this specific case, but I'm asking more generally is our approach to employment as a society reasonable and fair.

fairity 6y ago
> Why is it that we find it appropriate to shame her and not a founder/ceo who does effectively the same thing? In the case of Halloween candy, the owner of the candy is offering each person up to a few pieces of candy for free. If you take more than a few pieces, you are stealing from the candy owner. Stealing is bad because we believe in the right to private property. Stealing is, in fact, illegal. Of course, our legal system isn't set up to enforce punishment for small actions, so shame is a useful alternative form of punishment. > Why can we not apply these same rules of decency to business? In the case of employment, each employee is offering the business owner his/her time in exchange for a salary and equity. The expectations are crystal clear to both parties. When the business owner sells the company, taking his fair share of the purchase price (as determined by his equity stake) is NOT stealing. Nor, is it breaking any norms or expectations. > By spreading the fruits of successful innovation more broadly you put the people who enabled that innovation in a position to use that experience to innovate further I actually agree with this specific point for an isolated case. That is, in isolation, spreading the purchase price for a huge acquisition evenly across the employee base would probably lead to greater innovation. However, this only makes sense in isolation. If you make it common practice to share acquisition price more evenly among employees, you destroy the financial incentive that drives much of entrepreneurship. Startups are very risky, and without a huge payout for success at the end, the expected values just don't work out anymore. Smart engineers will be much better off applying for a traditional FANG job. In fact, this is already the case! What you're proposing would just make the math even worse. Remember, for every success case like this, there are 4 or more founders who failed. There better be a sweet reward at the end of the tunnel to keep them motivated to keep trying! Furthermore, for small acquisitions like this, even if you were to split his 3.7M payday across his 20 employees, each person gets $18.5K. Hardly an amount that would spur innovation.
- Jochim 6y ago
  I'm not suggesting that acquisitions should necessarily be shared precisely evenly. I don't even think Josh necessarily earned an outsized return in this case. I do think that the current disparity in compensation that we're seeing is potentially dangerous to a healthy society. We're already seeing a move towards a rentier approach to the economy, where individuals can't afford to own property or other essentials. A major force driving this is inequality, those with the means have so much capital under their control that they can afford to outbid those that have a need for those resources. > In the case of employment, each employee is offering the business owner his/her time in exchange for a salary and equity. The expectations are crystal clear to both parties. When the business owner sells the company, taking his fair share of the purchase price (as determined by his equity stake) is NOT stealing. Nor, is it breaking any norms or expectations. I don't think it necessarily is crystal clear. A big part of the sales pitch to employees for many startups is that your.5% will be worth X when they reach Y valuation. This isn't too bad in itself, but when it turns out that the founders can issue new/preferred stock the incentives from an employees point of view become severely misaligned. > Furthermore, for small acquisitions like this, even if you were to split his 3.7M payday across his 20 employees, each person gets $18.5K. Hardly an amount that would spur innovation. I agree it that it doesn't look great for smaller acquisitions. Although there are some interesting (in my opinion) alternatives to selling to private equity. In my city for example, the founders of a print shop sold the company to the existing workers. The money was paid out over a few years from the company's revenue and they sat on the board to offer some advice on the transition. It seems like a more ethical alternative in that the workers are rewarded for their part in building the company, and the new owners are less likely to asset strip and gouge existing customers to recoup their investment. It has the added bonus of not adding to the concentration of capital in a small number of holders.