

Ask HN: Were you screwed at your startup? - tzz

In event of Snapchat settling with an ousted cofounder Reggie Brown and admitting that he originally came up with the idea, is there anyone else who got screwed at their startup? What lesson should we learn from your situation? How can we protect ourselves from being screwed?
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throw481481
When I was in college, I did a startup with my brother who was living on the
other side of the country in New York. While in school, we began to get early
traction. Being naive, he talked me in to dropping out after finishing off the
semester. And so I moved in with him. I got to work right away, but my brother
continued his full-time job, which we had planned he would do for a short
period of time. Note - this agreement was informal, nothing was formalized. We
also agreed that he would work as much as he could on the startup on the side,
and pay me a stipend to cover my living expenses + spending money as long as
he was still working full-time.

As it turns out, business is business, even with family members that you
trust. He ended up almost never helping me on the startup. He didn't quit his
full-time job, and blamed me for not creating enough value for the startup.
This blew my mind since I had done everything (design, development, sales,
marketing, social media), when all he did was chip in 10k or so for 4-5 months
of runway. He left me to do all of the work, and legally I couldn't do
anything about it. Finally, he stopped paying me.

The worst part is feeling exploited by someone you love and care about. I have
no doubt he would have committed to the startup had I gotten significant
traction. I'm actually glad it didn't work out, because I would have just
probably been screwed over even more down the road. It's sad knowing that
family will even do this - burn a close relationship just to get dirt-cheap
equity in a startup. "If it goes well, commit to it, if not, you just saved
60k by not having to hire a full time engineer. Plus you won't have to quit
your high paying job, so there's nothing to lose!" \- I feel like this is what
went through his head.

I can't speak towards getting screwed on an idea, but if I learned anything
from this it is that nobody can be trusted. Sure, I'll start another business
one day and will be vulnerable to my cofounders, but never to this degree. Get
it on paper, always. And constantly ask yourself, what is the worst thing that
could go wrong at this point in time. Always be prepared for it to happen. If
you aren't open to this, you probably shouldn't start a business, because
sometimes things go even worse than you might think is possible.

------
foolishdream
My advice is: Don't join a startup*

*until you're experienced enough. You must be able to distinguish short term and long term greedy behavior, be able to act selfishly most of the time without appearing selfish, understand and practice game theory. Until this point, you're just going to be taken advantage of until you're either sucked dry, or you've learned all the right lessons.

Every non-exec employee that joins post cofounder up until a year before IPO
or 8-9 digit acquisition gets below market compensation. There are hundreds of
startups and probably tens of thousands of people that get chewed up in
between.

Don't join a startup in this trough of sorrow, unless you're ok with getting
less money. Hopefully you're getting better status, experience, position,
power, leverage, or something tangible out of the deal. Money-wise you're much
better off being a quant or Goo-ama-twit-book. Arguably it's psychologically
healthier too.

The biggest problem in startups is the prevalence of low functioning
psychopaths. You assume you both are long term greedy, but turns out they're
just ruthless social climbers looking to take advantage of whoever is
inexperienced enough to get exploited.

Take SnapChat Evan Spiegel for instance. Regardless of Spiegel's excuse to cut
out Reggie Brown (whether it's lack of contract, lack of tech skills, lack of
ability), Spiegel flat out denied that Reggie Brown made any sort of
attribution. How ridiculous is it that he’s a potential billionaire and he's
trying to stick it to his former friend and frat brother by denying that he
had any involvement at all?

Evan is not the only low functioning psychopath by far. Once you get burned a
couple times, you'll start to recognize them and their behavior patterns.

High functioning psychopaths are a different animal. They are usually long
term greedy, and are great to work with as they have internalized game theory.
As long as you both can mutually benefit, working with them is great. They are
ruthlessly effective. They get deals done, manage people well, focus on the
right things, and treat you very well. All you need to do is stay useful.

~~~
rudimental
I appreciate this response. Besides getting out and living life, do you have
any good resources for developing the three skills you suggest- distinguishing
between short term and long term greedy behavior, how to act selfishly most of
the time without appearing selfish, and understanding and practicing game
theory?

~~~
foolishdream
I'm not sure, since this was learned through a series of hard lessons that no
one ever taught me or explicitly mentioned. Just keep in mind that many people
are not like you, and their value systems can be very different, allowing them
to do totally crazy things and backwards rationalize them (see German
population during WW2, Steve Jobs, Groupon's Lefkofsky). Eventually you're
going to run into low functioning psychopaths. Just try to minimize your
losses when it happens.

The other thing to learn with game theory is aligning self interests. When
your interests align with other people, your sails are going with the wind,
and everything just gets a lot easier. If they aren't, everything is very
tough. Try to observe this from an objective viewpoint, if your interactions
and results from this person are getting easier or tougher.

I'll need to think on this some more and maybe make a full post about this
later.

