3 ms·

I once worked at a startup that was acquired and the founders made a killing. A few years after the acquisition, they founded a new company in an adjacent domai

by norir 4y ago

I once worked at a startup that was acquired and the founders made a killing. A few years after the acquisition, they founded a new company in an adjacent domain and started raiding their original company for talent. At the time I was working with a guy who had product and marketing experience who happened to be close college friends with one of the cofounders. No one liked working with this guy. Yet rumor had it that he was offered a 5% stake in the new company while the engineers they were recruiting were being offered .25-.5%. I was very confident that they would be successful but I opted not to work for them because I was so offended by the inequity of the offers. The developers they were attempting to raid also had proven that they were productive and effective so it wasn't as though they were making a wildly speculative bet on them. I also knew that in a major exit, I would be more resentful of the relative difference between my rewards and that of this other guy than I would have been pleased with my windfall. I had once had serious respect for the cofounders, but their greediness and willingness to perpetuate these systems of inequity permanently diminished my opinion of them. Yet, I have to concede that the cofounders were correct in their assessment that they could lowball the engineers with little impact on their prospects for success. They were able to exploit their way to a second major windfall, far larger than the first.

freedsoftware 4y ago
It's also that good marketing of a product is probably more integral to its success than its engineering. There are so many stories of superior technologies failing because of bad marketing.
- manuelabeledo 4y ago
  Good marketing would make a mediocre product succeed, but it will not save a crappy one. Also, "superior technologies" is a loaded term, because it is in fact very subjective.
  - trimethylpurine 4y ago
    Lots of products literally don't work at all and still sell, and even lead their industry in revenue. I wish it wasn't true.
- norir 4y ago
  I agree that marketing is extremely important. There is no product without the engineers and no customers without the marketers. If you prioritize quality, I think the engineers are more important. If you prioritize making money, perhaps then the marketers are more important. I don't really know. The problem is that in this particular case, the only things this person seemed exceptional at were being friends with the CEO and being unpleasant to work with.
  - throwaway9191aa 4y ago
    IME at startups (well very small micro startups) you focus on quality at first, and wait for the company to go bankrupt. Then sell the IP to another company you happen to own. That second company focuses on marketing without having to worry about the ownership %'s afforded to the engineers at the first company.
  - patriciaaa 4y ago
    [dead]
scruple 4y ago
Fascinating. We may have worked for the same founders at some point, as I have had nearly the exact same experience (I was an engineer at the 2nd startup with a ~0.5% stake (before dilution, of course!) -- the payout was nice but it was not a life changing event). One detail in my story is that I found out a lot about the personal lives of the founders and their friends. They all came from obscene wealth to begin with. The founders father was on the board of a major tech company in the Bay that bought the first startup and financially backed the second. The nepotism I've seen in my career disenchanted me long, long ago.
- q845712 4y ago
  I've been working on re-framing nepotism as "selective altruism" -- it's like there's an "in" group, within which the members feel completely justified and even a little obligated to help each other out. So it's our usual human tribal stuff, basically, but we can recognize the altruism in there. Of course the next step would be leveraging this thought to propose a mechanism to convince them to expand their notion of "in-group" to include, i dunno, everyone who works for them? Everyone who was integral in their success? Every living being with whom they share a planet? So that the altruistic instinct could be expanded to be helpful to many many more. ... no particular ideas atm, but commenting in case it helps someone else reach an actionable insight :)
matwood 4y ago
Engineers should absolutely know their worth. Were they also offering much lower pay for that little equity? It's perfectly fine to accept lower equity for market rate salary. That's adjusting risk to your personal situation.

by norir 4y ago

freedsoftware 4y ago

It's also that good marketing of a product is probably more integral to its success than its engineering. There are so many stories of superior technologies failing because of bad marketing.

manuelabeledo 4y ago
Good marketing would make a mediocre product succeed, but it will not save a crappy one. Also, "superior technologies" is a loaded term, because it is in fact very subjective.
- trimethylpurine 4y ago
  Lots of products literally don't work at all and still sell, and even lead their industry in revenue. I wish it wasn't true.
norir 4y ago
I agree that marketing is extremely important. There is no product without the engineers and no customers without the marketers. If you prioritize quality, I think the engineers are more important. If you prioritize making money, perhaps then the marketers are more important. I don't really know. The problem is that in this particular case, the only things this person seemed exceptional at were being friends with the CEO and being unpleasant to work with.
- throwaway9191aa 4y ago
  IME at startups (well very small micro startups) you focus on quality at first, and wait for the company to go bankrupt. Then sell the IP to another company you happen to own. That second company focuses on marketing without having to worry about the ownership %'s afforded to the engineers at the first company.
- patriciaaa 4y ago
  [dead]

scruple 4y ago

Fascinating. We may have worked for the same founders at some point, as I have had nearly the exact same experience (I was an engineer at the 2nd startup with a ~0.5% stake (before dilution, of course!) -- the payout was nice but it was not a life changing event). One detail in my story is that I found out a lot about the personal lives of the founders and their friends. They all came from obscene wealth to begin with. The founders father was on the board of a major tech company in the Bay that bought the first startup and financially backed the second. The nepotism I've seen in my career disenchanted me long, long ago.

q845712 4y ago
I've been working on re-framing nepotism as "selective altruism" -- it's like there's an "in" group, within which the members feel completely justified and even a little obligated to help each other out. So it's our usual human tribal stuff, basically, but we can recognize the altruism in there. Of course the next step would be leveraging this thought to propose a mechanism to convince them to expand their notion of "in-group" to include, i dunno, everyone who works for them? Everyone who was integral in their success? Every living being with whom they share a planet? So that the altruistic instinct could be expanded to be helpful to many many more. ... no particular ideas atm, but commenting in case it helps someone else reach an actionable insight :)

matwood 4y ago

Engineers should absolutely know their worth. Were they also offering much lower pay for that little equity? It's perfectly fine to accept lower equity for market rate salary. That's adjusting risk to your personal situation.