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> If I were an executive sponsor of software initiatives, for example, I’d want to take some of the lessons from the VC world. I’d expect, and plan for, project

by dvt 3y ago

> If I were an executive sponsor of software initiatives, for example, I’d want to take some of the lessons from the VC world. I’d expect, and plan for, projects to just “not work.” I’d bake that into expectations all the way up. In any decently-run company, this already is the case. Most customer-facing projects are treated as startups that will fail (most do, some don't). I think expectations are well-balanced... but compensation, on the other hand... > And more importantly, I’d want the developers of the project to have skin in the game to compensate for the risk. I’d want them to share in the upside risk, just like early startup employees do with their stock options. Because in the absence of that kind of incentive and risk management structure, what I see is sort of the worst of both worlds (software and corporate politics): new software products usually fail but nobody wants to take the blame, resulting in pervasive fraud and willful ignorance and shame and scapegoating and bitterness. This hits the nail on the head. I remember working on a customer-facing product at X company about a decade ago. Our team was small and scrappy, and we were able to build a product that would eventually bring in $2M/month+. It felt very startuppy: we were regularly staying late at the office, getting takeout in the wee hours of the night, doing swarm sessions, war rooms, etc. I will say: it was engaging and fun. But what was our reward? A few months later, we got some cheap puffy jackets (estimated cost: $100 bucks) and a slap on the back: "good job team." Companies will never let you share in the wealth. Why? There are enough suckers out there that are more than happy with six figures (when they should be making seven). I was already enamored with startups since my late teens, but after that experience, I truly realized corporate upside is basically non-existent unless we're in a market bull run. The year after, I quit and started to solely place my bets on my own startups. In fact, the downside of betting on your own startup is fast converging with the downside of working at a FAANG or BigCo. Job security is shot (layoffs galore), perks are eroding (WFH, etc.), so what's the point? Best of both worlds is probably taking a BigCo salary and attempting your own thing on the side. (Obviously, young kids, spouses, debt, etc. can change the equation substantially.)

gnarcoregrizz 3y ago
Yep. An employee won't see any upside of the project they're working on. There are no incentives besides some nebulous promo dangling ("we'll see where you are at the next review cycle...") , and usually no way for employees to capture the upside of their project. I created something valuable for the company I work at, and I was left without upside - just my salary. Meanwhile, the people with stakes in the business say, "well you're making a salary," while they are buying new homes. Engineers - you are capable of creating an extreme amount of value that far exceeds your income. Take care of #1.
- ryandrake 3y ago
  Companies want to have the scrappiness, grit, late hours, and employee devotion of a startup but without having to pay that pesky "outsized upside" when things go well. I once worked for a small closely held company (CEO and family were the sole, bootstrapped shareholders, no institutional funding), where the CEO would regularly moan and complain that his employees were so lazy and not dedicated enough and that they should "treat it as if it were their own business." It never really dawned on him that they might do that if it actually were partially their own business, with an equity stake (or even a bonus structure that rewarded effort).
- CMCDragonkai 3y ago
  Are you willing to take the downside too? How about the company doesn't pay you anything but gives you a cut of the profit, but also charges you if the project fails. There's no upside if there's no downside.
  - jahewson 3y ago
    That’s a creditor, not an employee. Even VCs take a management fee.
rando_dfad 3y ago
To take the other side of this, what % of the wealth you created would you have been willing to share with the engineering teams charged with KTLO work, and by them doing so enabled your team to focus on the new product? What about all the software teams who are not customer facing, and without whom you would not have had the opportunity to create this product? How much of your success is due strictly to your team? What externalities are you not counting?

by dvt 3y ago

gnarcoregrizz 3y ago

Yep. An employee won't see any upside of the project they're working on. There are no incentives besides some nebulous promo dangling ("we'll see where you are at the next review cycle...") , and usually no way for employees to capture the upside of their project. I created something valuable for the company I work at, and I was left without upside - just my salary. Meanwhile, the people with stakes in the business say, "well you're making a salary," while they are buying new homes. Engineers - you are capable of creating an extreme amount of value that far exceeds your income. Take care of #1.

ryandrake 3y ago
Companies want to have the scrappiness, grit, late hours, and employee devotion of a startup but without having to pay that pesky "outsized upside" when things go well. I once worked for a small closely held company (CEO and family were the sole, bootstrapped shareholders, no institutional funding), where the CEO would regularly moan and complain that his employees were so lazy and not dedicated enough and that they should "treat it as if it were their own business." It never really dawned on him that they might do that if it actually were partially their own business, with an equity stake (or even a bonus structure that rewarded effort).
CMCDragonkai 3y ago
Are you willing to take the downside too? How about the company doesn't pay you anything but gives you a cut of the profit, but also charges you if the project fails. There's no upside if there's no downside.
- jahewson 3y ago
  That’s a creditor, not an employee. Even VCs take a management fee.

rando_dfad 3y ago

To take the other side of this, what % of the wealth you created would you have been willing to share with the engineering teams charged with KTLO work, and by them doing so enabled your team to focus on the new product? What about all the software teams who are not customer facing, and without whom you would not have had the opportunity to create this product? How much of your success is due strictly to your team? What externalities are you not counting?