4 ms·

I'd call that "post economic", but $5-10mm pretax (which is more likely what an employee gets at a Google as an engineer hired before IPO who stays through IPO

by rdl 12y ago

I'd call that "post economic", but $5-10mm pretax (which is more likely what an employee gets at a Google as an engineer hired before IPO who stays through IPO for 4y) is not enough, after taking care of one's personal expenses, to really fund serious startups. My definition of "rich" is being able to do something (fund businesses) which you fundamentally can't do while earning a salary. You could do that at an extremely limited scale either as a well paid employee or as 5-15mm exited founder. It's a pointless semantic argument, though. My real argument is that founders are making 10, 100, or 1000x what others are making in virtually all positive outcomes, and not actually doing badly in negative outcomes (sometimes better, due to soft landings; sometimes worse, due to forgone salary).

deleted 12y ago
[deleted]
ChuckMcM 12y ago
I understand your definition, I disagree that it's a pointless semantic argument. Employees at startups, riding an exit or two, can easily get to the point where they have no financial worries for them or their kids. My claim is that this outcome, financial independence, is a much more common definition of rich and a much more common goal, than the one you posit of "being able to fund businesses." For what its worth I've worked with, and know several dozen people who were non-founders and achieved that goal. I also know a few people who were not founders and got to the ranks of the .01% (the 1% of the 1%). Folks like Dan Warmenhoven who joined NetApp as its CEO after it was founded but before it was public, similarly Tom Mendoza (also at NetApp), Geoff Baehr who I got hired at Sun after it was public and who did quite well for himself. Being a founder has a bigger payout in a successful exit, being an employee has a better rate of return. The reason is that an employee has the freedom to say "Ok, this isn't working, eject!" and a founder doesn't. As the author points out, Founders that eject at the first sign of trouble find it hard to ever get funded again. Back in the dot com bubble they were the joke entrepreneur the wantrapreneur. They came out in the bubble to found a company and collect a big payout, but they had no idea why people got big payouts. Kind of like cargo cultists making landing signs hoping that somehow that will cause a plane to suddenly appear on final approach. I really believe its great when people are passionate about something and they invest every fiber in their being to make it happen. It doesn't always work but it is thrilling to be on the journey with them. It it much less fun to work for someone who is "just trying to get rich", they make poor choices. As an employee you can bounce bounce bounce until you find the right fit and the passionate people and ride it to the exit. As a founder you have to ride it and it you have to give it your all and you have to only step off that horse when you've exhausted every possible alternative. Anything less and your done. Yes, when it wins, it wins bigger than the rank and file, and when it loses it can destroy any advantage that extra sized piece of pie gave you because at the end of the day 10% of 0 is still 0. Founders do much worse in negative outcomes than employees do. I don't know if its two or three orders of magnitude but it is significant.
- rdl 12y ago
  The people you mention who got hired into successful businesses as non-founders and got rich (by my definition) were not hired as individual contributors. It's entirely possible (likely, even) to get rich, even by my definition, if hired as a CEO into most unsuccessful large corporations, let alone successful ones.
ahomescu1 12y ago
> My definition of "rich" is being able to do something (fund businesses) which you fundamentally can't do while earning a salary. I think most people have a much simpler definition of "rich": never ever having to work for someone else (employers or customers).

by rdl 12y ago

deleted 12y ago

[deleted]

ChuckMcM 12y ago

I understand your definition, I disagree that it's a pointless semantic argument. Employees at startups, riding an exit or two, can easily get to the point where they have no financial worries for them or their kids. My claim is that this outcome, financial independence, is a much more common definition of rich and a much more common goal, than the one you posit of "being able to fund businesses." For what its worth I've worked with, and know several dozen people who were non-founders and achieved that goal. I also know a few people who were not founders and got to the ranks of the .01% (the 1% of the 1%). Folks like Dan Warmenhoven who joined NetApp as its CEO after it was founded but before it was public, similarly Tom Mendoza (also at NetApp), Geoff Baehr who I got hired at Sun after it was public and who did quite well for himself. Being a founder has a bigger payout in a successful exit, being an employee has a better rate of return. The reason is that an employee has the freedom to say "Ok, this isn't working, eject!" and a founder doesn't. As the author points out, Founders that eject at the first sign of trouble find it hard to ever get funded again. Back in the dot com bubble they were the joke entrepreneur the wantrapreneur. They came out in the bubble to found a company and collect a big payout, but they had no idea why people got big payouts. Kind of like cargo cultists making landing signs hoping that somehow that will cause a plane to suddenly appear on final approach. I really believe its great when people are passionate about something and they invest every fiber in their being to make it happen. It doesn't always work but it is thrilling to be on the journey with them. It it much less fun to work for someone who is "just trying to get rich", they make poor choices. As an employee you can bounce bounce bounce until you find the right fit and the passionate people and ride it to the exit. As a founder you have to ride it and it you have to give it your all and you have to only step off that horse when you've exhausted every possible alternative. Anything less and your done. Yes, when it wins, it wins bigger than the rank and file, and when it loses it can destroy any advantage that extra sized piece of pie gave you because at the end of the day 10% of 0 is still 0. Founders do much worse in negative outcomes than employees do. I don't know if its two or three orders of magnitude but it is significant.

rdl 12y ago
The people you mention who got hired into successful businesses as non-founders and got rich (by my definition) were not hired as individual contributors. It's entirely possible (likely, even) to get rich, even by my definition, if hired as a CEO into most unsuccessful large corporations, let alone successful ones.

ahomescu1 12y ago

> My definition of "rich" is being able to do something (fund businesses) which you fundamentally can't do while earning a salary. I think most people have a much simpler definition of "rich": never ever having to work for someone else (employers or customers).