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This is also an issue I’ve seen with companies that began as startups, but then transitioned into the “big company” phase: Founders and early employees complain

This is also an issue I’ve seen with companies that began as startups, but then transitioned into the “big company” phase: Founders and early employees complain that “when we were getting started, we could’ve gotten this feature done in a week! What’s taking so long?” There tends to be frustration that employees won’t work nights and weekends, even though their work could “turn this company into the next Amazon!” When you bring up the fact that the difference is that they have equity and you don’t, and that they would materially benefit from growth but you wouldn’t, they tend to get grumpy. But they never do have a better answer.

AtlasBarfed 6y ago
UnitedHealthCare is an example of this on steroids. UHC basically can't show a huge profit. Otherwise they'd be subject to investigations and pilloried for profiting off of the misery that is the US health care system. But they make money hand over fist, because... it's the US healthcare system, and they have an effective monopoly/dominant cartel position as one of the four pigs at the trough (trial lawyers, doctors, insurance, drug/device companies). So instead of profits, a gigantic management tree has built up, and the managers take all the money. Then tell their workers they aim for the bottom third of market compensation. Colleges seem to me the same way: no "profits", but suck in huge amounts of money as the tuition skyrockets. Hmmm, and suddenly a huge administrative/management/MBA apparatus has appeared in higher education? You don't say. Salary was basically a contract with employees to take steady income and employment (once upon a time ....) while the management layer and stockholders will eat the gravy. Motivation in that contract is strictly around 1) access to management for the "ambitious" and 2) don't get fired for the rest. Hand in hand in IT with not being able to get things done quickly is that doing things quickly is high risk, and that violates the core motivation of almost everyone in the #2 don't get fired crowd. Salaries = risk aversion.
daemin 6y ago
I said this thing in response to Game Development crunch, which also applies to startups. The original creators of the company, now people in charge, have equity and that is a big reason they worked so hard to grow the company from nothing into what it is today. Therefore when they ask (or subconciously demand through company culture) to crunch or work overtime they should give out equity as an extra part of the compensation for working extra hours. Part of this is to align the founders' and employees motivations so they're more in sync, as both parties now have some form of upside to work hard and see the company grow. Another part of this is to make the shareholders and founders really think about the culture and how they expect other people to work. So if they want a culture that is about putting in many hours and effort then they should be prepared to lose a little bit of ownership to make that happen. If they're not comfortable with that then they this will act as a disincentive for them, so they fix the culture and their expectations and people can have a normal work schedule. One final note is that with whatever system there will be people that end up exploiting it, and as ever that's a people management problem. Hopefully with a trustworthy culture this will not happen.

AtlasBarfed 6y ago

UnitedHealthCare is an example of this on steroids. UHC basically can't show a huge profit. Otherwise they'd be subject to investigations and pilloried for profiting off of the misery that is the US health care system. But they make money hand over fist, because... it's the US healthcare system, and they have an effective monopoly/dominant cartel position as one of the four pigs at the trough (trial lawyers, doctors, insurance, drug/device companies). So instead of profits, a gigantic management tree has built up, and the managers take all the money. Then tell their workers they aim for the bottom third of market compensation. Colleges seem to me the same way: no "profits", but suck in huge amounts of money as the tuition skyrockets. Hmmm, and suddenly a huge administrative/management/MBA apparatus has appeared in higher education? You don't say. Salary was basically a contract with employees to take steady income and employment (once upon a time ....) while the management layer and stockholders will eat the gravy. Motivation in that contract is strictly around 1) access to management for the "ambitious" and 2) don't get fired for the rest. Hand in hand in IT with not being able to get things done quickly is that doing things quickly is high risk, and that violates the core motivation of almost everyone in the #2 don't get fired crowd. Salaries = risk aversion.

daemin 6y ago

I said this thing in response to Game Development crunch, which also applies to startups. The original creators of the company, now people in charge, have equity and that is a big reason they worked so hard to grow the company from nothing into what it is today. Therefore when they ask (or subconciously demand through company culture) to crunch or work overtime they should give out equity as an extra part of the compensation for working extra hours. Part of this is to align the founders' and employees motivations so they're more in sync, as both parties now have some form of upside to work hard and see the company grow. Another part of this is to make the shareholders and founders really think about the culture and how they expect other people to work. So if they want a culture that is about putting in many hours and effort then they should be prepared to lose a little bit of ownership to make that happen. If they're not comfortable with that then they this will act as a disincentive for them, so they fix the culture and their expectations and people can have a normal work schedule. One final note is that with whatever system there will be people that end up exploiting it, and as ever that's a people management problem. Hopefully with a trustworthy culture this will not happen.