
Meet Amazon.com’s first employee: Shel Kaphan - twidlit
http://www.geekwire.com/2011/meet-shel-kaphan-amazoncom-employee-1/1
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pedalpete
Am I wrong in thinking that just because you're employee #1 (after the
founder) that that doesn't make you a co-founder. I don't think it matters if
the company had been legally formed yet or not.

I think a co-founder is about what you do, not when you join. If Mr. Kaplan
was key in strategy and envisioning the business, that would go a long way,
but if he was responsible for implementing Bezos plan, I don't think he should
be considered a co-founder.

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gojomo
In practice, the terms founder/cofounder/founding-employee are fuzzy and
granted based on mutual agreement among those present. Every early pivot or
talent-acquisition or rebranding or product launch could reasonably reset the
'founding team', if that's the spirit of the participants.

To limit the term only to the person with the idea overemphasizes ideation. To
limit the term only to the person who first writes checks would overemphasize
finance. Something great didn't exist; a group worked together; then it did
exist. We might honor the leader or original spark as 'The Founder' but all
the team are also 'founders' in a reasonable, non-hagiographic sense of the
word.

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rick888
"but all the team are also 'founders' in a reasonable, non-hagiographic sense
of the word."

I suppose, but who is taking all of the risk? A founder takes a loss if the
company loses and wins when the company is profitable. An employee doesn't
take a loss (in a sense that they are paid a regular salary no matter what).

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gojomo
That's an overgeneralization. Many big-F Founders take salaries starting at
the same time as founding employees. Both are likely taking relative cash
compensation cuts compared to their next-best options, and 'risking'
opportunity costs. Both might forgo salary in a funding pinch or chaotic fume-
out.

If the big-F Founder has a richer set of post-failure options than founding
employees – and gets more beneficial notoriety even in failure – they may in
practice be risking _less_ than early employees.

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rick888
So, the founders aren't the ones that started the company then? When I say
"founder" I mean the person that started the company from day 1: taking no
salary in the beginning because the company wasn't making any money, taking a
chance for months or even years that the company will go out of business or
possibly succeed, or even working on the company during off-hours from a
regular 9-5.

If a company has enough capital to pay employee #1, then yes, the founder is
making a salary. But, at this point, the risk is considerably less and
employee #1 shouldn't be getting anywhere near the same payout if the company
gets bought out.

The founder also most likely has their own money tied up in the company.

Employee #1 can always get unemployment if the company goes bust. The founder
will have their name and business credit history tied to the company if there
are major problems. Employee #1 can just go find another job as if nothing
ever happened.

"If the big-F Founder has a richer set of post-failure options than founding
employees – and gets more beneficial notoriety even in failure"

More risk=more reward. If you are employee #1 and you aren't getting paid
industry or above industry rates, then you shouldn't be working at that
startup. If you want all of the glory when it succeeds, then you need to start
your own company.

Have you ever actually started a company? It's not easy. Much more difficult
(and risky) than being employee #1.

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davidkobilnyk
"I didn’t get founder’s stock. It didn’t seem worth the argument at the time"

Apparently he's a nice, amiable guy. Regardless of whether you want to
technically call him co-founder or not, it's sad to think how much he possibly
missed out on by not negotiating more with Jeff at the beginning.

What I walk away with is, consider all scenarios when making a deal, and don't
be afraid to negotiate for something better.

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skaphan
Hi. Shel Kaphan here. Just to be clear, the negotiation you are referring to
was simply over whether it would be stock or employee options. No reason to be
sad. Founder's stock is more convenient and less of a taxation nightmare, but
there was a concern (an irrational one, I think) about what would happen if I
left early. There are of course ways, such as escrow, to handle that.

As for whether or not I'm a nice amiable guy, Chris (below) is probably right
-- a lot of people including him got to experience the joys of my temper while
I was trying to do what isn't possible: to contain the chaos ;^\

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davidkobilnyk
Thanks for clearing that up, Shel. I shouldn't have commented before reading
the rest of the interview.

How does it feel to see people arguing over whether you are a founder or not?
It would seem that they care more about it than you do. :)

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skaphan
It's definitely a little odd. In one way it is just a matter of semantics:
what exactly does the word "founder" really denote? But some may be asking
whether I personally was all that important in the company's history. I can't
judge that. All I know for sure is that I put my heart and soul into it
especially during the first half of my time there, and I still feel a strong
connection to the place (despite having left almost 12 years ago) even when
they really get me angry, like with this sales tax thing. I'd prefer not to
have to have a personal reaction to things like that, but there you are. As is
pointed out elsewhere, Bezos was the only one who was really making strategic
decisions, and it's probably still that way for all I know, though I
participated in some. The idea to do a bookstore was his, though we were not
the first on the web to do that. That doesn't mean I (and other early
"participants") didn't have our own visions of where things ought to go too.
When you do the engineering, hacking, and tech operations side of a startup,
going from nothing to something, it's like it grows out of you and it feels
like an extension of you. That's a different relationship from being the
person with the idea who does the fund-raising and makes the big decisions.
You need to have both.

At one point I'd say the company's "DNA" probably was influenced by me to an
extent, but I've been gone for a long time, and it was tiny compared to its
current size when I left, so it would be pretty surprising if any of that is
still there. That's fine with me -- that's just how things work.

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ramjam3
Shel's seems like an amiable enough guy. But it seems clear to me that with
out the business strategy and vision of Bezos Amazon wouldn't exist. I think
this quote summs up Shel's and Bezos's styles succinctly "I am a product of
the 60s just like Jeff is a product of the 80s".

I don't think Shel should be considered a co-founder. None of his DNA is
imprinted into Amazon. In the end, he was pretty replaceable.

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chrismealy
There's a reason nobody remembers this guy.

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jvehent
Because he escaped when the MBAs took over ?

