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> Startup founders do not care about providing careers for engineers, and usually want to stop being a "startup founder" as soon as they possibly can - they are

> Startup founders do not care about providing careers for engineers, and usually want to stop being a "startup founder" as soon as they possibly can - they are chasing huge exits and being a founder is incredibly stressful. Imagine you were the founder of a business you've now realised... isn't going to be the next Google. Your product hasn't failed! By some metrics it's very successful! You've got investors who value your company at $10 billion, and they're ready to loan you $1 billion. But also, you've never made a profit, you've tried the most likely routes to profitability without success, similar businesses have suffered sudden implosions, and you'd have gone bankrupt years ago if it weren't for the fact there's chumps who'll work for you for free. You've got no plan for how to pay back that $1 billion. But so long as you keep your mouth shut about that last paragraph, and accept the $1 billion? You get a high-status job, a thousand-person empire, and a fat compensation package. 1000 of your colleagues stay employed too. Why would anyone climb off that gravy train?

epolanski 5y ago
> Why would anyone climb off that gravy train? Decency?
- revolvingocelot 5y ago
  The decent would have been selected against at the paragraph-about-which-one-keeps-one's-mouth-shut stage, if not before.
- _carbyau_ 5y ago
  A University near me has a Master of Business Administration (MBA) course that includes "Corporate Ethics". Can you believe it? The audacity! A business charging business people, for a course of knowledge both sides know they will never use...
- szundi 5y ago
  Ha ha ha
CityOfThrowaway 5y ago
I'm sorry... what? This scenario you've described is such a stretch that in all likelihood it has never happened.
mattnewton 5y ago
> Why would anyone climb off that gravy train? If I actually believe I can't deliver the stress alone of feeling like a fraud and waiting for the hammer to fall seems worse than the interim reward for me, but I can certainly see people built different who would tolerate that. I think more likely is that people let themselves be convinced it will work out during the process of convincing investors.
eyelidlessness 5y ago
> You've got investors who value your company at $10 billion, and they're ready to loan you $1 billion. […] You've got no plan for how to pay back that $1 billion. This suggests either: - the investors [think they] know something you don’t know - the investors are profoundly careless with their investment - the investors don’t exist, this is completely implausible - you’re actively misleading the investors about that paragraph, not just keeping your mouth shut
- michaelt 5y ago
  > - the investors are profoundly careless with their investment Sounds plausible to me. For example, consider WeWork - the CEO was literally buying office buildings with his shares, and having the company rent them off him. These investment funds are astonishingly careless.
  - eyelidlessness 5y ago
    I’m having a hard time finding information about this in the sea of other WeWork drama, so I can only speculate. This sounds like it easily could overlap with one or more of the other categories I listed.
MathCodeLove 5y ago
For reasons the above commenter has already mentioned. Most founder either want to run a profitable business or make their way to a big exit. Company valued at 10b? Great, sell or IPO. If the founder really realized that there was no profit ever to be made and genuinely didnt believe in the future of the company then the best move for their own self-interest would be to sell and gtfo. Not only if your premise impractical, but it's inherently illogical for your antagonist to act as you imagine.
- szundi 5y ago
  If the first commenter is naive, then this is even more so. Most people love to be looked up to, loved, payed nicely. They won’t quit.
- taneq 5y ago
  False dichotomy. “No profits ever” and “unicorn IPO” are not the only two options and if the latter isn’t on the cards, “fat executive compensation and cocktail lunches while pretending you’re on the way to the latter” looks pretty good.
- hinkley 5y ago
  As someone who has been acquired prior to profitability a few times, there are subtler variations at play here. There may be avenues to profitability that the founders have no stomach for. Their sense of ego will let them do a lot but there are things they won't do. There is some honor among thieves and being willing to exploit people is very different from outright abuse. There are much worse people out there in the world to have as a boss. This sort is merely run of the mill. The new owners have a different threshold, which you are about to learn. The exchange of money is fresh in their mind, they don't have a history with the employees, and they have a story in their head about how they can turn this money into a pile twice as high. They may well get the company to profitability, but if things were a little ridiculous before they may be a proper circus now. There's some magic algorithm they use for figuring out options and vesting periods to retain staff, and there's some inflection point where if you stay this long then you get the most extra money per month. This is the trap they have set for you. It's practically an optical illusion, which you can only see once you've stepped past it. You will underestimate the relative value of month 3 versus month 13, and you will forget that 6 months may be worth $6N dollars but 5 months is worth $0. And so with one month to go you will be willing to put up with 4x as much bullshit, forgetting that most of that extra money was already buying the last 5 months. In effect, double spending your bonus. The moment you leave you will wonder why you didn't do it ages ago, even as you are spending the cash. If it seems like you should stay for 2 years, then you will probably be happier with 1. If 3 years, then 2 years, maybe 18 months if there are increments smaller than a year. Of course, nobody can really tell you this, because your brain will keep asking you 'what if I had stayed' until it's happened to you at least once. But I think maybe you can tell people not to repeat that mistake. Trust your instincts from last time. This one won't be different.
hotpotamus 5y ago
I'd say this may be an overly cynical view of founders even. I don't think they're usually that calculating; my suspicion is that most of them believe their own hype and really do think their business is going to be the next Google. I'd say Adam Nuemann epitomizes this to me. He could be a calculating cynical genius, but he just seems like someone who in another time would have been either a rockstar or religious guru, but managed to hook up with a different crowd and everyone got caught up thinking an office sub-leasing company was some profound invention.

epolanski 5y ago

> Why would anyone climb off that gravy train? Decency?

revolvingocelot 5y ago
The decent would have been selected against at the paragraph-about-which-one-keeps-one's-mouth-shut stage, if not before.
_carbyau_ 5y ago
A University near me has a Master of Business Administration (MBA) course that includes "Corporate Ethics". Can you believe it? The audacity! A business charging business people, for a course of knowledge both sides know they will never use...
szundi 5y ago
Ha ha ha

CityOfThrowaway 5y ago

I'm sorry... what? This scenario you've described is such a stretch that in all likelihood it has never happened.

mattnewton 5y ago

> Why would anyone climb off that gravy train? If I actually believe I can't deliver the stress alone of feeling like a fraud and waiting for the hammer to fall seems worse than the interim reward for me, but I can certainly see people built different who would tolerate that. I think more likely is that people let themselves be convinced it will work out during the process of convincing investors.

eyelidlessness 5y ago

> You've got investors who value your company at $10 billion, and they're ready to loan you $1 billion. […] You've got no plan for how to pay back that $1 billion. This suggests either: - the investors [think they] know something you don’t know - the investors are profoundly careless with their investment - the investors don’t exist, this is completely implausible - you’re actively misleading the investors about that paragraph, not just keeping your mouth shut

michaelt 5y ago
> - the investors are profoundly careless with their investment Sounds plausible to me. For example, consider WeWork - the CEO was literally buying office buildings with his shares, and having the company rent them off him. These investment funds are astonishingly careless.
- eyelidlessness 5y ago
  I’m having a hard time finding information about this in the sea of other WeWork drama, so I can only speculate. This sounds like it easily could overlap with one or more of the other categories I listed.

MathCodeLove 5y ago

For reasons the above commenter has already mentioned. Most founder either want to run a profitable business or make their way to a big exit. Company valued at 10b? Great, sell or IPO. If the founder really realized that there was no profit ever to be made and genuinely didnt believe in the future of the company then the best move for their own self-interest would be to sell and gtfo. Not only if your premise impractical, but it's inherently illogical for your antagonist to act as you imagine.

szundi 5y ago
If the first commenter is naive, then this is even more so. Most people love to be looked up to, loved, payed nicely. They won’t quit.
taneq 5y ago
False dichotomy. “No profits ever” and “unicorn IPO” are not the only two options and if the latter isn’t on the cards, “fat executive compensation and cocktail lunches while pretending you’re on the way to the latter” looks pretty good.
hinkley 5y ago
As someone who has been acquired prior to profitability a few times, there are subtler variations at play here. There may be avenues to profitability that the founders have no stomach for. Their sense of ego will let them do a lot but there are things they won't do. There is some honor among thieves and being willing to exploit people is very different from outright abuse. There are much worse people out there in the world to have as a boss. This sort is merely run of the mill. The new owners have a different threshold, which you are about to learn. The exchange of money is fresh in their mind, they don't have a history with the employees, and they have a story in their head about how they can turn this money into a pile twice as high. They may well get the company to profitability, but if things were a little ridiculous before they may be a proper circus now. There's some magic algorithm they use for figuring out options and vesting periods to retain staff, and there's some inflection point where if you stay this long then you get the most extra money per month. This is the trap they have set for you. It's practically an optical illusion, which you can only see once you've stepped past it. You will underestimate the relative value of month 3 versus month 13, and you will forget that 6 months may be worth $6N dollars but 5 months is worth $0. And so with one month to go you will be willing to put up with 4x as much bullshit, forgetting that most of that extra money was already buying the last 5 months. In effect, double spending your bonus. The moment you leave you will wonder why you didn't do it ages ago, even as you are spending the cash. If it seems like you should stay for 2 years, then you will probably be happier with 1. If 3 years, then 2 years, maybe 18 months if there are increments smaller than a year. Of course, nobody can really tell you this, because your brain will keep asking you 'what if I had stayed' until it's happened to you at least once. But I think maybe you can tell people not to repeat that mistake. Trust your instincts from last time. This one won't be different.

hotpotamus 5y ago

I'd say this may be an overly cynical view of founders even. I don't think they're usually that calculating; my suspicion is that most of them believe their own hype and really do think their business is going to be the next Google. I'd say Adam Nuemann epitomizes this to me. He could be a calculating cynical genius, but he just seems like someone who in another time would have been either a rockstar or religious guru, but managed to hook up with a different crowd and everyone got caught up thinking an office sub-leasing company was some profound invention.