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While I am happy for your company and for your first 10 employees (congrats, really), I am not sure that looking at their return teaches us much. Joining a fre

by oakfr 5y ago

While I am happy for your company and for your first 10 employees (congrats, really), I am not sure that looking at their return teaches us much. Joining a fresh startup as employee #10 (or less) is somewhat of a gamble (even at YC). The following data would put things in perspective: 1. How do the average first 10 employees of a YC startup do? 2. How did the following cohorts in your company do? I am not trying to be negative here, but trying to put things in perspective. Congrats again!

sskates 5y ago
To be clear, it's the first 10 engineers, a very different group from the first 10 employees. No question that the economics of FAANG is way better than an average YC company. That's an easy one. I don't have the data, but the economic outcome is easily 2-5x, maybe more. Following cohorts of engineers are a fraction of what I outlined so the economics are different. It's too hard for me to do the work to get an exact calculation, but probably the next cohort of 10 engineers is something like 1/2 that, and then subsequent ones are down to 1/3 or 1/4. They're joining years later and so taking on much less risk at that point.
- oakfr 5y ago
  Thank you for your reply. Makes sense. By the way, thank you for running this AMA and answering all the questions with so much clarity and transparency. What an example!
farmerstan 5y ago
To put things in perspective, in 1999 I joined a company that ipo’ed in 1997. The company’s first admin assistant made enough from the ipo to buy a vineyard in Napa valley. I was employee 40 at a YC company and after exit I made 5 figures whereas the founders made high 8 figures. YC definitely teaches the founders to keep a higher percentage of equity for themselves and distribute less to employees.
saranormous 5y ago
startups aren’t a game of averages. the averages are definitely worse than the FAANGs. choosing well (and getting lucky) are paths to “definitely better.” It also depends on what your professional goals are (growth, leadership, impact, fun, next opportunities) assuming they are not only monetary.

by oakfr 5y ago

sskates 5y ago

To be clear, it's the first 10 engineers, a very different group from the first 10 employees. No question that the economics of FAANG is way better than an average YC company. That's an easy one. I don't have the data, but the economic outcome is easily 2-5x, maybe more. Following cohorts of engineers are a fraction of what I outlined so the economics are different. It's too hard for me to do the work to get an exact calculation, but probably the next cohort of 10 engineers is something like 1/2 that, and then subsequent ones are down to 1/3 or 1/4. They're joining years later and so taking on much less risk at that point.

oakfr 5y ago
Thank you for your reply. Makes sense. By the way, thank you for running this AMA and answering all the questions with so much clarity and transparency. What an example!

farmerstan 5y ago

To put things in perspective, in 1999 I joined a company that ipo’ed in 1997. The company’s first admin assistant made enough from the ipo to buy a vineyard in Napa valley. I was employee 40 at a YC company and after exit I made 5 figures whereas the founders made high 8 figures. YC definitely teaches the founders to keep a higher percentage of equity for themselves and distribute less to employees.

saranormous 5y ago

startups aren’t a game of averages. the averages are definitely worse than the FAANGs. choosing well (and getting lucky) are paths to “definitely better.” It also depends on what your professional goals are (growth, leadership, impact, fun, next opportunities) assuming they are not only monetary.