5 ms·

In between GlassDoor data he talks about founders being the Lords of the Startup Feudalism and I kinda agree, companies used to pay 25-40k to an employee, a pro

by nakovet 12y ago

In between GlassDoor data he talks about founders being the Lords of the Startup Feudalism and I kinda agree, companies used to pay 25-40k to an employee, a programmer/engineer can take several jobs from the industry henceforth the salary is 3x the regular salary. However the successful founder become rich and invest in other companies small, medium, big and help raise the inequality.

ChuckMcM 12y ago
That is the broken narrative. An employee can get stock in 5 different companies in 5 years, a founder is, at best, able to get one company off the ground in 5 years. An employee can move change jobs (and often get a pay raise) when the unexpected hits a company puts it on the skid. A founder will never be invested in again if they jump ship on the company when it hits a big problem. An employee can work for a cash salary every year, a founder often will spend one maybe two years without salary. Founders file for personal bankruptcy, employees generally don't. And the interesting thing is that any technical "employee" can work for 5 years in the Bay Area and get up enough cash to be a "founder" for their first startup. (I went 12 years before going into a startup but the earliest I've seen it be successful is 5, you have to know enough about running a company to make it work). The reason the narrative is so skewed though is because you here stories about the successful founders but few about the marginal ones. You rarely hear about the person whose personal bankruptcy has made every part of their life that involves running a credit check harder. For every successful billionaire founder there are THOUSANDS of millionaire employees. The problem here is the notion "big money" and perceived inequity of distribution. But if you actually put everyone who identifies as a "Founder" in a group, and everyone who identifies as an "Employee" in a group, it is much more likely the people in the latter category will have retired early.
- mooreds 12y ago
  Right. If you view your labor as an investment (and you should), employees are diversified and founders definitely are not. An interesting book on the subject is "Are you a Stock or a Bond" [0]. It really makes you think about how your time/labor has a risk profile in the same way that financial instruments in your 401k do. [0] http://www.barnesandnoble.com/w/are-you-a-stock-or-a-bond-moshe-a-milevsky/1111895174?ean=9780137127375
- ForHackernews 12y ago
  > A founder will never be invested in again if they jump ship on the company when it hits a big problem. Is that really true? What about all the "fail fast" mantras we hear so much about? It seems like I read about plenty of founders who have run three or four companies into the ground before finally having a success?
  - ChuckMcM 12y ago
    There are two kinds of failing. One is to run, and one is to fight. For a founder who fights hard, they put in the work to make it happen and try various approaches when adversity strikes until they, and their investors, agree they have done everything they can to try to make it fly. That person will get another shot, because investors do realize that this is a gamble but they know that if there had been a way to make it work, this person probably would have found it. Then there is the founder who never varies from their day one tactics, against advice from advisors, and then decides, when it is clear the company is going no where, to resign and go somewhere else. That person rarely gets a second shot at the prize. There is a third category of founder who, and this is almost literally true, curls up in the face of all the stress and shuts down. With luck, their investors replace them quickly and they get early treatment to avoid PTSD. Folks rarely talk about them. Their best outcome is to move to a stable, low to moderate responsibility position in a large company. If you're a fighter, you can get funded as many times as you can afford (remember pre-seed is all on you). If you're a runner you get at most two shots at the game. And if you're not cut out for the life, its important to find that out and deal with it early, even one person taking the short exit, is too many.

by nakovet 12y ago

ChuckMcM 12y ago

That is the broken narrative. An employee can get stock in 5 different companies in 5 years, a founder is, at best, able to get one company off the ground in 5 years. An employee can move change jobs (and often get a pay raise) when the unexpected hits a company puts it on the skid. A founder will never be invested in again if they jump ship on the company when it hits a big problem. An employee can work for a cash salary every year, a founder often will spend one maybe two years without salary. Founders file for personal bankruptcy, employees generally don't. And the interesting thing is that any technical "employee" can work for 5 years in the Bay Area and get up enough cash to be a "founder" for their first startup. (I went 12 years before going into a startup but the earliest I've seen it be successful is 5, you have to know enough about running a company to make it work). The reason the narrative is so skewed though is because you here stories about the successful founders but few about the marginal ones. You rarely hear about the person whose personal bankruptcy has made every part of their life that involves running a credit check harder. For every successful billionaire founder there are THOUSANDS of millionaire employees. The problem here is the notion "big money" and perceived inequity of distribution. But if you actually put everyone who identifies as a "Founder" in a group, and everyone who identifies as an "Employee" in a group, it is much more likely the people in the latter category will have retired early.

mooreds 12y ago
Right. If you view your labor as an investment (and you should), employees are diversified and founders definitely are not. An interesting book on the subject is "Are you a Stock or a Bond" [0]. It really makes you think about how your time/labor has a risk profile in the same way that financial instruments in your 401k do. [0] http://www.barnesandnoble.com/w/are-you-a-stock-or-a-bond-moshe-a-milevsky/1111895174?ean=9780137127375
ForHackernews 12y ago
> A founder will never be invested in again if they jump ship on the company when it hits a big problem. Is that really true? What about all the "fail fast" mantras we hear so much about? It seems like I read about plenty of founders who have run three or four companies into the ground before finally having a success?
- ChuckMcM 12y ago
  There are two kinds of failing. One is to run, and one is to fight. For a founder who fights hard, they put in the work to make it happen and try various approaches when adversity strikes until they, and their investors, agree they have done everything they can to try to make it fly. That person will get another shot, because investors do realize that this is a gamble but they know that if there had been a way to make it work, this person probably would have found it. Then there is the founder who never varies from their day one tactics, against advice from advisors, and then decides, when it is clear the company is going no where, to resign and go somewhere else. That person rarely gets a second shot at the prize. There is a third category of founder who, and this is almost literally true, curls up in the face of all the stress and shuts down. With luck, their investors replace them quickly and they get early treatment to avoid PTSD. Folks rarely talk about them. Their best outcome is to move to a stable, low to moderate responsibility position in a large company. If you're a fighter, you can get funded as many times as you can afford (remember pre-seed is all on you). If you're a runner you get at most two shots at the game. And if you're not cut out for the life, its important to find that out and deal with it early, even one person taking the short exit, is too many.