

I have a hard time believing this. - kylebragger
http://kylewritescode.com/post/718715654/i-have-a-hard-time-believing-this

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philh
Thiel says: "In practice we have found that if you only ask one question, ask
that."

Bragger hears: "that should be the only factor when evaluating a startup’s
chances of success".

How much the CEO makes might not be the best predictor of startup success, but
it might be the best one that you can accurately judge by asking a single
question. You can't ask "is your product solid?" and expect a meaningful
answer.

Of course, since noone would ever try to predict a startup's chancess of
success on the basis of a single question, it's also possible Thiel was just
using artistic license.

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TomOfTTB
I don't know Mr. Thiel and have no inside information on his views. But having
worked in a startup I think I can see where he's coming from. To understand
his point I think you have to realize there are two types of workers in the
Valley: The trail blazers and the maintainers.

Trail Blazers are the guys who are willing to work night and day and basically
kill themselves to start a company up. In order to make that ordeal worth
while you need to have a big pay out at the end.

Maintainers are the guys who come in afterwards. Smart people but people who
have outside lives they aren't willing to destroy for the company. These are
the guys who make a successful startup into a long term company

In my experience you can't successfully create a startup with maintainers.
There's just too much that needs to happen in too short a time period. I think
that is what Mr. Thiel is saying. His rules help you avoid a company trying to
startup with maintainers.

(For the record I know there are odd exceptions to this rule that can
seamlessly transition from one role to the other. But in my experience they're
very rare)

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bonaldi
Dreadful post. Why, exactly, does he have a hard time believing it? The post
doesn't say; it merely re-iterates that the author is incredulous. Closest you
get is this:

"What ever happened to looking at the team, their vision, their track record,
how well they’re executing, is the product solid, etc."

Which doesn't dismiss the point of the original. Say you look at those things
... exactly how good could they be to outweigh the fact that the CEO downwards
are extracting exorbitant amounts of value from a fledging firm? The original
article's point is: _never_ good enough.

There are similar truisms in many fields. (eg, the now well-cited example that
the only thing that truly dooms a relationship is contempt). Finding them
takes experience, and incredulity doesn't counter that.

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goodside
Thiel says immediately afterward that the average CEO he funds makes
$100K-$125K, so when he says CEO pay should be low he isn't exactly talking
about ramen. I would be extremely suspicious of any CEO who makes more than
this and still considers herself to be running a startup.

(Also, an off-topic peeve: Informative headlines are always appreciated. I
wouldn't have clicked if I didn't see your name there.)

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starkfist
I think the article is wrong and Peter Thiel is right. I've worked for 4
startups, the first 3, the CEO paid himself exorbitantly and they all died
horrible deaths. The fourth, where I now work, the CEO is paid $32K/yr and we
make more money per day than the other startups made their entire existence,
combined.

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alanh
This HN submission smacks of Reddit-style clickbait. Adding "(CEO salary #1
predictor of success)" to the end would have been sufficient.

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michaelcampbell
There's probably a bit of truth to it; I don't know what the r value of CEO
salary vs. "success" to be, and to be sure there's A LOT more that plays into
it. But it could play a small role.

There's an old rule of thumb in stock trading (although it may be only from
the person that told it to me; I've not heard it before or since) that says if
a non New York based company opens an office in New York, particularly a big
fancy one, sell immediately. The theory being that the CEO is trying to build
a monument to himself rather than keeping on with a good business strategy.

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jheriko
Yeah, its not hard to grasp... spending less money on CEO automatically
implies more profit, but more importantly it reveals some of their personality
- if you want a business to succeed you don't want a large paycheck - you want
that if you are greedy, and greed is a poor motivator. Its a shame most
businesses rely on this - its no wonder that everyone everywhere seems to
constantly complain about their managers etc. Would they have applied for the
job if it didn't come with more money? What does that say about their
suitability? Why offer more money? If you are employing your self the same
logic applies.

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abstractbill
_What about ... building a thriving business that generates — gasp — actual
profit?_

Why would I as an equity-holder care if the company is generating a profit,
unless that helps it exit? The _only_ way I'm ever going to see a return is if
the company exits. If it's profitable but cannot exit (from what I've heard,
porn sites would be examples of this), then it's worthless to me.

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kqueue
I think you are taking his words too literally. It is just an additional hint
he looks at when evaluating a company.

~~~
billswift
If you don't mean something literally, then don't write it in non-fiction,
especially not in a tech forum that has more than its share of Aspies.

~~~
jasonlotito
Hyperbole, meet billswift. Billswift, meet hyperbole.

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joshu
The bigger the CEO's house, the worse the performance of the company:
<http://www.slate.com/id/2162989>

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dododo
given the $100-125K figure, it seems like the message isn't "lower = better"
but "frugal = better". perhaps a frugal CEO makes for an efficient company.

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BigZaphod
Useless data point: Apple's CEO Steve Jobs has a salary of just $1/year. They
seem to be doing pretty well...

~~~
jmonegro
So do Larry Page and Sergey Brin. I'm sure $1/year has extraordinary tax
benefits.

