4 ms·

This seems like a general problem for a company like this: your great success demonstrates that your employees are incredibly valuable. And sometimes businesses

by hbrav 3y ago

This seems like a general problem for a company like this: your great success demonstrates that your employees are incredibly valuable. And sometimes businesses may say things like "our people are our greatest asset", but that's not actually true. They're not an asset. Your IP is an asset, and you own that. But your people are often capable of going elsewhere and producing equally good work, and they're likely to do that if they get a better offer.

jackblemming 3y ago
So give them real ownership of the company and real fruits of their labor. Otherwise yea why wouldn’t they go to the highest bidder?
- lil-grandson 3y ago
  That would be ridiculous. All the upside is supposed to go to a small handful of people who already have more money than they need.
- CaptainFever 3y ago
  Are you talking about options?
open592 3y ago
It's no different than professional sports. When you win the super bowl for instance, the value of many of your players (employees) suddenly jump. At that point it's infeasible to pay everyone what they can realistically get on the market. Thus you identify and pay your most essential assets, and the others leave and receive huge pay bumps. I think it's very valuable for the industry, and as long as the teams who are picking up these employees are able to utilize them effectively, will result in broader innovation.
- dragonwriter 3y ago
  > At that point it's infeasible to pay everyone what they can realistically get on the market. Largely, because of salary caps created fairly explicitly to break the winning -> popularity -> money -> monopolizing talent -> winning positive feedback loop. Success feedback loops aren't quite so constrained in most other industries.
  - entangledqubit 3y ago
    With the compensation deferral setup (like Ohtani in MLB), I'm curious if the influence of the caps will be eroded.
- golergka 3y ago
  Interesting dynamic, never thought of that. Were there instances where a sports club actually didn't want to win some title to prevent exactly this from happening? How would the sports association react if the club decided to throw the match for this reason?
  - passion__desire 3y ago
    Sumo wrestlers throwing away matches so that the other player can record a winning streak.
  - scarface_74 3y ago
    Well, I know it’s not the same thing. But some sports clubs do try to lose so they can get a higher place in the draft picks. https://en.m.wikipedia.org/wiki/Tanking_(sports) https://en.m.wikipedia.org/wiki/Tanking_(sports) And of course when kids don’t want to play during the summer /s https://en.m.wikipedia.org/wiki/The_Losing_Edge https://en.m.wikipedia.org/wiki/The_Losing_Edge
galoisscobi 3y ago
You assume that IP once created stands on its own. The programming as theory building view suggests that IP will degrade once people who have robust mental models about how the IP was created and works. So software/IP in essence has two critical parts that need to be there, the actual work that was created and robust mental models living in people’s heads who continue to work on those projects. It also goes against the idea that programmers are replaceable cogs that management can change out as and when they want to.
- Filligree 3y ago
  I think you're misunderstanding the GP. He's not saying the people aren't valuable; he's saying they aren't assets. That is to say, they aren't property. Which isn't what 'asset' means, but it is the central meaning; using it on people always felt squicky to me.
kcorbitt 3y ago
In my experience this kind of mass exodus is more associated with failures in leadership/management than an inevitable result of success. For example, OpenAI has been far more successful than Stability and its senior employees obviously have lots of options, but its staff turnover ratio feels much smaller than Stability's.
- brandall10 3y ago
  Isn't that largely because they're all locked into comp structures that can net top researchers something ~$10M? I guess one could argue it's a management issue that Sam Altman figured out a way to structure his company to make that possible.
darth_avocado 3y ago
> They’re not an asset. Your IP is an asset. While true for existing IP for industries like pharma, for industries like AI, your IP isn’t worth anything unless it keeps evolving. If you lose your key researchers, you’re done.
stavros 3y ago
"Our people are our greatest third-party suppliers" just doesn't have the same ring to it.
hackerlight 3y ago
They're not an asset but they're a hell of a lot more valuable than the IP. Ask anyone who runs a research org. The IP is nice but it deprecates rapidly. It's the fastest depreciating asset ever. The value is all the machine (network of talented people, culture) that builds the machine (IP).

by hbrav 3y ago

jackblemming 3y ago

So give them real ownership of the company and real fruits of their labor. Otherwise yea why wouldn’t they go to the highest bidder?

lil-grandson 3y ago
That would be ridiculous. All the upside is supposed to go to a small handful of people who already have more money than they need.
CaptainFever 3y ago
Are you talking about options?

open592 3y ago

It's no different than professional sports. When you win the super bowl for instance, the value of many of your players (employees) suddenly jump. At that point it's infeasible to pay everyone what they can realistically get on the market. Thus you identify and pay your most essential assets, and the others leave and receive huge pay bumps. I think it's very valuable for the industry, and as long as the teams who are picking up these employees are able to utilize them effectively, will result in broader innovation.

dragonwriter 3y ago
> At that point it's infeasible to pay everyone what they can realistically get on the market. Largely, because of salary caps created fairly explicitly to break the winning -> popularity -> money -> monopolizing talent -> winning positive feedback loop. Success feedback loops aren't quite so constrained in most other industries.
- entangledqubit 3y ago
  With the compensation deferral setup (like Ohtani in MLB), I'm curious if the influence of the caps will be eroded.
golergka 3y ago
Interesting dynamic, never thought of that. Were there instances where a sports club actually didn't want to win some title to prevent exactly this from happening? How would the sports association react if the club decided to throw the match for this reason?
- passion__desire 3y ago
  Sumo wrestlers throwing away matches so that the other player can record a winning streak.
- scarface_74 3y ago
  Well, I know it’s not the same thing. But some sports clubs do try to lose so they can get a higher place in the draft picks. https://en.m.wikipedia.org/wiki/Tanking_(sports) https://en.m.wikipedia.org/wiki/Tanking_(sports) And of course when kids don’t want to play during the summer /s https://en.m.wikipedia.org/wiki/The_Losing_Edge https://en.m.wikipedia.org/wiki/The_Losing_Edge

galoisscobi 3y ago

You assume that IP once created stands on its own. The programming as theory building view suggests that IP will degrade once people who have robust mental models about how the IP was created and works. So software/IP in essence has two critical parts that need to be there, the actual work that was created and robust mental models living in people’s heads who continue to work on those projects. It also goes against the idea that programmers are replaceable cogs that management can change out as and when they want to.

Filligree 3y ago
I think you're misunderstanding the GP. He's not saying the people aren't valuable; he's saying they aren't assets. That is to say, they aren't property. Which isn't what 'asset' means, but it is the central meaning; using it on people always felt squicky to me.

kcorbitt 3y ago

In my experience this kind of mass exodus is more associated with failures in leadership/management than an inevitable result of success. For example, OpenAI has been far more successful than Stability and its senior employees obviously have lots of options, but its staff turnover ratio feels much smaller than Stability's.

brandall10 3y ago
Isn't that largely because they're all locked into comp structures that can net top researchers something ~$10M? I guess one could argue it's a management issue that Sam Altman figured out a way to structure his company to make that possible.

darth_avocado 3y ago

> They’re not an asset. Your IP is an asset. While true for existing IP for industries like pharma, for industries like AI, your IP isn’t worth anything unless it keeps evolving. If you lose your key researchers, you’re done.

stavros 3y ago

"Our people are our greatest third-party suppliers" just doesn't have the same ring to it.

hackerlight 3y ago

They're not an asset but they're a hell of a lot more valuable than the IP. Ask anyone who runs a research org. The IP is nice but it deprecates rapidly. It's the fastest depreciating asset ever. The value is all the machine (network of talented people, culture) that builds the machine (IP).