
“I made 3 CEOs rich – So why am I broke?” - rmcfeeley
http://www.forbes.com/sites/lizryan/2016/05/03/i-made-three-ceos-rich-so-why-am-i-broke/#6408bd8b2ec7
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dmitrygr
And this, boys and girls, is why you should never join a second start-up. Join
one early, see how it works & learn as much as you can. Do not expect $$$ -
you will not make any. Then decide if you want to start your own, or want
comfortable well-paid employment at GOOG/AAPL/FB/etc

Do not expect to make money from a start-up unless you started it. If you did
not start it, you are the disposable labour. Sorry.

~~~
x5n1
If people took your advice Silicon Valley would be toast.

~~~
dmitrygr
Silicon valley is built on naive dreamers who time and time again expect to
make money as startup employees against all rules of logic and contrary to
historical data.

~~~
cylinder
Why don't people understand, you don't get rich without risking capital.

Yes, your time is capital. But not when you've already traded it for salary.

Brokers risk their time to try to sell speculative deals. This is why they
make a chunk of the deal. No guarantee.

Lawyers get paid by the hour for their time. This is why they can earn a nice
living but won't get wildly rich unless they take speculative cases on
contingency.

~~~
dmitrygr
What did the founder risk? OtherPeoples'Money?

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thebigspacefuck
Just want to say I found this extension today:

[https://chrome.google.com/webstore/detail/forbes-splash-
scre...](https://chrome.google.com/webstore/detail/forbes-splash-screen-
bypa/gjiddhnfkgbnnhbghaacfofkopmgleij)

It disables that annoying splash screen that asks you to turn off ad blocker.

You're welcome.

------
YuriNiyazov
There's a concept called "being the master of your own destiny". It requires
that one views themselves through a lens of a business owner even while having
a W2 job. Someone that believes a CEO when the latter says "I will take care
of you" has not developed that ability. It's like believing a customer that
walks into your shop and says "I will bring the money tomorrow."

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PhilWright
Anyone that uses the phrase 'monthly expense profile' to indicate they have
large monthly expenses is clearly great at marketing. Your credentials are
proven sir.

As an employee you get paid employee wages. If you want founder wages then you
need to become a founder. Instead of joining an existing company/start-up I
recommend you reach out to your network and join up with others starting a
company.

Alternatively you could start your on your own. As a marketing expert you
should have the skills to market your new business to others that need
marketing skills. If you cannot, then your marketing skills are not that
great!

~~~
dikdik
I think you are being overly presumptuous, CEO != founder.

~~~
PhilWright
A CEO does not get hundreds of millions unless they have a large chunk of the
company. So either a founder or given lots of shares so they are like a
founder.

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rotten
In my 30+ years in the workforce I've worked at large companies, small
companies, startups, government organizations, and not-for-profits. Whether or
not I ever get rich, I'm planning on spending the rest of my career working
for startups. Why? Because it is exciting, it is fun, it is fast paced. I get
to build things, I get to innovate, I get to play with and try the very latest
technology. There is minimal bureaucracy. I know the names of everyone in my
company. I find my work is infinitely more satisfying than just going in,
doing what I have to, collecting a paycheck (regardless of its size), and
coming home. Young people think I'm cool. It is a lifestyle and career choice
and after all those other experiments - one that is working for me.

~~~
IndianAstronaut
I work in a gigantic company and I feel I get a lot of flexibility and the
scope to be creative. I worked at a startup previously and I was tightly bound
by the technology stack and had to deal with silos.

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a_small_island
Dear Abby type article. No actual data on compensation packages (salary, %
options of company) for any of the companies, nor a clear financial
perspective of any of the "exits" these companies saw.

Spidey sense is tingling.

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dimdimdim
Being an employee at a startup does mean you took a risk, but nothing in
comparison to the founders who built it.

Most employees don't understand that a lot of things change along with way
when building a company. Most product companies start with dreams of IPO or
getting sold to a large company at a massive valuation. This seldom happens
for the vast majority of startups - who either go bust, sell to slightly
larger players or becoming SMBs for life.

The owners of a company will make money in most of the above cases - employees
won't, and rightfully so.

~~~
x5n1
> Being an employee at a startup does mean you took a risk, but nothing in
> comparison to the founders who built it.

Bullshit. I hate this sort of rhetoric. Founders took no more risk than the
first employees. The founders got funding, and if they did not they convinced
some poor schlub to waste their time on the startup. That's the only
difference between early startup employees and founders. Many employees at
tech startups may be just as capable as the founders, but are not in the same
position of power. That's the only difference. Founders take no more risk and
get much more reward, if a startup succeeds, than employees, often not for any
good reason other than they did it and the employee did not. I mean obviously
chances of success are only ~<30% if you do your job well, but still.

If a startup fails the founders still got paid a salary, just like employees,
as long as they got funding. If not then they paid out money out of their
pocket, to pay a few employees a small salary which was below market. This is
the only case in which founders come out worse off than if they took a job
with a salary, so take more risk. The rest of it, their outcome is much better
just because they did it and you did not and you believed them.

~~~
landryraccoon
> founders still got paid a salary

Founders get paid a salary? That hasn't always been true in my experience.

> Founders took no more risk than the first employees.

If it's actually that easy you should go be a startup founder. After all,
there's no risk, right?

~~~
pikzen
Let's be honest: people who found startups fall in three categories:

* Those who have funds to fall back on in case the startup fails

* Those who got VC funding

* Those who are actually risking things because they invested everything in their startup

I'd wager the first two categories make up 90% of startup founders. These
people take absolutely zero risks. Whoop, startup fails. Oh well, it was
either not your money or you've still got a comfortable amount to sit on.

Thsoe last 10 percent, yes, they do take risks. Don't expect me to cry for the
others.

~~~
mpbm
This word "risk." I do not think it means what you think it means.

Just because someone has lots of money (their own or a VC's) doesn't mean they
aren't risking that money when they put it into a startup. The money is at
risk because it probably WON'T be returned, let alone increased.

I think what you're conflating with risk is actually diversification. You're
only willing to cry for the people who are "all in" on a single investment.
Arguably, being diversified is the sensible thing to do and it's the idiots
who don't make sensible choices who you shouldn't cry for.

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ImTalking
The way I see it, the first time you 'make it' you make someone else rich.
It's only the 2nd time you make it that you make yourself rich.

------
hyperliner
Company 1) "I got my first job working in the marketing department for a
wireless device company, ten years ago. I got paid the market rate which was
very good, but as you know, Northern California is an expensive place to live.
My first company got sold. I had stock options but they ended up being
worthless after the deal."

\---> That does not count. You stayed for 10 years, learned a lot, and it
seems you came in at the wrong time and were under water. It is unclear
whether your CEO made "millions," but if somebody did, it was the owners, and
you were not a significant owner. And you chose to live in the Bay Area, so
hey, it costs to be there but you got compensated by living in a great spot.
So you chose to spend the money on real estate, blah blah. Seems a little
whiney right now since there are people who are REALLY struggling to live in
SF and feed their families. It does not seem that you were in this category.

Company 2) "The CEO told us, 'We have an exit strategy. We will get bought by
a public company and your stock options will be converted into stock in the
company that buys us, or else we will go public and then your stock options
will have liquidity.' That was false. We ended up merging with another company
and then the combined firm was bought by a privately-owned tech company and
once again I had nothing to show for my hard work. When I got laid off the
second time, I had a huge monthly expense profile and I had to get a new job
quickly. "

\---> No, it was not FALSE. It simply did not work out the way the CEO thought
it would. Now, it's not like CEOs don't want their company to be the next hot
IPO or acquisition target, but hey, welcome to the real world. Things CHANGE.
It is unclear whether the CEO this time made "millions," but I assume some
people did: the "owners." Again, you were not an OWNER, or at least it is
unclear that you had skin in this second company. Did you take a huge hair cut
to work there? Did you invest your own money? But again, you kept living
beyond your means. HINT HINT.

Company 3) "I had a couple of opportunities, and I took a job with a well-
known serial entrepreneur who has been on many magazine covers. Once again,
just a few months ago, I got laid off with three months of severance. That’s
better than nothing, but my marketing programs and advice helped my ex-boss,
the CEO, to make hundreds of millions of dollars. Now I sit in northern
California with a $6,500/month mortgage and no job, and I’m disgusted. What am
I doing wrong? How could I make three CEOs filthy rich and make nothing more
than my weekly salary for myself?"

\---> well, it seems you were not given significant ownership. And why would
you spend $6500 mortgage if you could not afford it?

It seems your best decision was to move to San Francisco and buy a house. What
is your return on that? I bet not insignificant. You deserve that. I don't see
how you deserve any of the millions the owners got. Seems you got compensated
well for the job you did, so it seems your bosses were square with you on each
pay day right?

Or are investors now supposed to dilute themselves on the company they own
when they are already paying market rate for the people who work at their
companies?

~~~
raarts
> I don't see how you deserve any of the millions they got

I also don't see how they did. Did they work so much harder as to 'deserve' a
ten to hundred fold turnout of their investment?

~~~
JoeAltmaier
Capitalist success isn't something paid out by the hour. They capitalized on
an opportunity. They made out big. Its the system we live under.

~~~
fu9ar
Well, it seems like the OP was supposed to get stock options at these places
where they worked, but somehow their stakes vaporized in some kind of finance
shell game. But of course, it's all caveat employtor, right? Silicon valley
companies were illegally depressing wages for years, and it's all about the
individual workers not "negotiating good enuf". Fuck off. Capitalism is broken
because the owners are scamming the workers en masse.

~~~
JoeAltmaier
Yeah if it takes too long, initial valuation may suffer and stock options
vaporize. Its dangerous to stick around after a revaluation downward, with no
new stock options offered.

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kinkdr
Off-topic, but if Forbes don't disable their adblocker-blocker, they will soon
be broke too...

~~~
superuser2
People with adblockers don't make Forbes any money to begin with; losing them
doesn't cost anything.

~~~
kinkdr
That's one way to see it.

Another way is that the people who cannot access Forbes will access something
else. Soon everybody will be going to this something else and Forbes will be
another dinosaur.

Bullying the users never worked in favor of any online company.

~~~
superuser2
A non-subscribing, ad-blocking readership is no different from 0 readership at
all. There is no reason to retain a user whose LTV is and always will be $0.

Professional journalists aren't going to decide one day that paychecks are
overrated. Your "something else" will be one big native advertisement (in
which case, why are ad-blocking users reading it at all?) or else a hell of a
lot lower quality.

Employing people to serve users from which you don't and can't extract value
only works in tech, and only for a few years before the next crash.

~~~
kinkdr
I think I didn't make my point clear, which was that by not allowing the ad-
blocking users they risk losing the paying users too.

~~~
mpbm
That doesn't follow. If they had one reader, who paid them a million dollars
per year, then they'd still be in business. So, if they had a million users,
who paid them one dollar per year, they MIGHT be in business because it would
cost a lot more to deliver to a million people than to one person.

By throwing up the ad blocker wall they're saving the cost of serving anything
more than an ad blocker wall to the people who aren't paying them. Sure,
they're limiting their audience, but they're limiting themselves to a PAYING
audience.

The people who are willing to pay them might change their minds in the future,
but their decision won't have anything to do with the unknown number of people
bouncing off of the ad blocker wall.

~~~
kinkdr
> That doesn't follow.

What do you mean? Look the short-history of internet. It is full of stories
like this. Companies that refuse to find other ways earn money from users who
don't want to pay (be it actual dollars or ads) open the opportunity to new
businesses who are willing to to do so.

Emails. You had to pay to have access to email. Then hotmail said, screw that,
we are giving email for free, and we will find other ways to fund this.

How many companies charge for email today?

~~~
superuser2
>(be it actual dollars or ads)

There are none. All publishing can reach for right now are more subtle forms
of advertising (sell editorial influence, pass off highest-bidder content as
if it were reporting). This is a horrific societal problem and also still
advertising.

Companies give away email for free because it helps them sell ads, or ropes
you into an ecosystem that monetizes you in other ways.

