
Downsides to working at a tech giant - razin
https://blog.garrytan.com/working-for-microsoft-cost-me-200-dollars-million
======
keithwhor
The pessimism in this thread really bothers me. I’ve read anecdotes on
entrepreneurship being on the decline, but it pains me to read so many
negative takes on startups. We’re actively training our young people to avoid
taking risks, and it’s going to fuck us — especially if some of those young
people have the ambition be early employees at, say, a startup that takes on
climate change in a big way.

Look — the fact that Garry knew Peter Thiel when he was 23 is nuts. When I was
23 I was broke and living with my parents in the suburbs outside Toronto. I
didn’t even personally know any other software engineers. I think many people
here would relate more similarly to that position.

Just because he won the social lottery early, doesn’t mean his lessons are
wrong. I got a junior engineering job in Toronto when I was 23, at a startup,
making less than Garry. $57.5k CAD. I worked on my open source portfolio and
next took a job in another startup in SF for $120k USD the next year.

That startup failed. I took a brief job at a biotech startup after being
turned down by Google and Facebook (twice). After three months I quit that
startup to run the company I’m still running today, four years later. Today,
we’re very fortunate to work with some of the largest companies in SV.

Reflecting on this: I think a better story Garry could’ve told is not that he
missed out on $200M, but that startups basically built his network so that —
years later — he’d be a prominent VC working with Alexis Ohanian, funding the
next round of exciting companies. $200M is an eye-catching clickbait headline,
but not the real substance. The real substance is — how the fuck did he meet
Peter Thiel at 23, and how can somebody recreate that?

In the story I just told about myself, I got really lucky as a function of
working at startups. I didn’t really make any money doing it. But a whole
bunch of interesting things happened:

\- The first job in SF I worked at introduced me to a product manager who went
to school with Aston Motes, employee #1 at Dropbox who would eventually be an
investor in the company I run today.

\- The founder of that first failed company introduced me to AngelPad, the
accelerator that gave me my first $50k in financing. The fact I stuck it out
as an engineering lead at a failing startup helped: I gave it my all. (Aside:
YC turned me down. Twice.)

\- The biotech company I worked at was founded by two early SpaceX employees,
one who would also become an investor later on.

Don’t work at startups to make $200M. Work at startups because you’ll work
with people who have risk profiles that are much more likely to generate
outsized returns as a group. You’ll have the opportunity to join or create a
community of high-performing folks that, in aggregate, outperform anything you
can do on your own. Maybe you’ll be the CEO one day, maybe not, but no matter
what you are very likely to come out ahead if you apply yourself.

And don’t let the comments here dissuade you. Startups are hard, but they kick
ass. I’ve cried myself to sleep some nights — as both an employee and CEO —
and still wouldn’t change the experience for anything. I’m a better person
because of what I’ve been through.

~~~
novok
The reason why is the math changed. The gap between startup and tech giant is
much larger now than it was in 2010. Also, unless you have insider access and
join a very risky angel stage company, the likelihood of getting a good
package that makes sense is low, very low. Also public companies have shown to
get +3x gains, which can make the math even worse.

Example from personal experience that is very lucky in startup land:

I'm an unwise jr, who gets a 25k (with 25k stock units) purchase price stock
plan for a series A company valued @ 5m. 4 years later that same company has
200x in valuation to $1b and I get 5k more stock units as refereshers over 4
years 'since the value of the company has gone up so much'. The value of my
stock is not 6 million, but 600k because of dilution. So even with this very
positive case situation, I broke even +/\- 100k or 200k compared to big tech
co with promotions, but whats worse, I can't sell my stock. The company later
dies and all of that stock is only sold for about $40k total in secondaries
that happened before the last $1b valuation round.

Considering that is the good case, why would I work as an early employee at a
startup? With capital being so abundant and being employee #1-5 at an angel
startup, I might as well become a founder and start my own at that point, or
join the obvious next big tech co, which was facebook back then.

We also only have so many years to go on startup expeditions, maybe 5 total
before we are 50, or more if we are able to fail fast.

~~~
sdrinf
I agree with all of the points raised, and share the same experiences. But
this one:

> I might as well become a founder and start my own at that point

Great! So, how would _you_ recruit _your_ first 10 employees?

~~~
novok
That is a big reason why I don't start my own company, because I couldn't
really live with doing that.

My current armchair strategies:

* Compete in a way that big tech are not willing to do, which means distributed remote companies. A lot of people don't want to live in $3.5k/month rent SF or other tech centers for various reasons.

* What a lot of startups do, but RDF (reality distortion field) over with 'we only hire the best'. Don't hire the best. Either because they couldn't hack the big tech co interview, have visa issues, are very jr or have personality problems that make them unhirable in big tech cos.

* Go bootstrap, so no VC style business timelines.

* Give offers that basically make them pseudo-founders and match the expected value of bigco with the risk premium of startups. A hard pill to swallow when investors give a lot of money offer similar or smaller dilution terms effectively.

I've never gone out to get investment, so I don't know how much of the above
is also blocked by investors in general.

Also crypto style 'startups' (ICO or just a completely new coin) have shown to
deliver compared to normal SV startups, but most crypto companies do not
deliver actual lasting value and are more pure speculation plays. A big
crucial difference is they give crypto coins instead of stock, and those coins
are liquid immediately. They are also not restricted to start in the USA.

~~~
pm90
Founders should be willing to give a lot more equity to the first employees. I
don’t get the logic of not doing this. You want your engineers to feel as if
they have ownership in the equity that you’re building. It’s such an easy way
to keep engineers engaged and productive that it baffles my mind that it’s not
done more widely.

I hate working for BigTech. Startups expect too much and compensate very
little. The sweet spot for me has been medium sized public companies that
offer great compensation but need solid engineering to grow their market
share.

~~~
novok
It's the math again. Go do a spreadsheet and simulate a company as it grows
and you see treating your first 10 employees in line with big tech expected
value outcomes is a really, really big hit.

~~~
pm90
I know this is totally super optimistic, but can we change the perspective
from

> is a really, really big hit.

to

> really amazing payoff for the early engineers/employees

My very limited understanding of the growth of the SV tech community is that
its a generous cycle of people creating wealth, and then using that wealth to
fund the next generation of tech. So it seems completely logical for SV
founders to want to do more of this.

~~~
whatshisface
Whether it's a big hit or an amazing payoff are actually irrelevant, there is
a going rate for engineers who are willing to accept startup risk (in a job
market where anyone can get hired right after it fails this is not a lot of
risk), and that's the price that will be paid.

~~~
tabtab
When I was young and naive, they paid employees the "risk bonus" in stock
shares, not cash. I asked for more cash, and they said, "nobody takes cash,
stock shares are the thing". They were the dud thing.

------
jarjoura
For all the startup founders and VCs in this conversation, you are cheap
motherf*ckers. When I read that engineers and employees prefer FAANG companies
because they pay better, I want to remind you that it wasn't always like this.
10-15 years ago startups paid way better than big tech. Big Tech rewarded you
by getting to specialize on problems and working at scale. The reason FB and
Google pay well is because when they were startups, they were paying WELL!

Let me ask you all this, if you could make the same (or more) money working at
a startup that you make working at a big tech company for 4 years, would you
pick the startup? The answer should be based on what kind of working style and
project you prefer, not finances.

~~~
austenallred
Google and FB were paying less when they were founded than most startups I see
today, adjusted for inflation.

The difference is that now Google and FB pay _way more_. More than startups
could ever dream of competing with. Everyone I know at FB or Google is making
$225k+, with the average/median being around $300k/yr. Absolutely no way new
startups can play ball with those salaries, and FB/GOOG certainly weren’t
paying that as they got off the ground.

~~~
nullspace
> The difference is that now Google and FB pay way more. More than startups
> could ever dream of competing with.

Logically speaking, the only way that a company can pay more and still be
profitable is if they produce value more efficiently. On a general, macro
level.

So, if startup founders cannot even _dream_ of providing either cash or equity
(adjusted to risk) comparable to the big-techs, does this mean that startups
are no longer the best way for society to become more productive?

I only see if two ways (again at the macro level)

a) Startups are better than BigTech for society economically: so make sure you
hire the best-of-the-best, and give them high equity, and later compensation
when you have more cash.

b) BigTech is better than startups for society economically: here, the proof
is in the pudding, better hires leads to more profits, so hire the best of the
best, and just give them mountains of cash.

I feel like we're seeing b) for the last 5 - 6 years.

~~~
Apocryphon
Could it be because BigTech, collectively, have created an oligopoly? Perhaps
making it easier for startups to compete is another reason for antitrust.

~~~
nojvek
BigTech is insanely big right now. Basically advertising and cloud are
humongous cash cows. It’s a good time to work for BigTech and build some
safety net.

But then again it’s only Google and FB that pay above the line. Microsoft and
Amazon salaries, last I checked were pretty subpar.

~~~
Apocryphon
Apple is not known for paying great, either. So one wonders if it really is
just Google and Facebook pumping the market up.

~~~
Gibbon1
My theory (I could be wrong) is that both Google and Facebook and startups
trying to emulate them are trying to exclusively hire from the same dozen
elite universities. That would explain the salaries.

~~~
kev009
SRE has a lot of people without degrees. I don't know if SWE is still an ivory
tower but just SRE salaries at G and FB can debunk this theory.

------
zainamro
VCs feel the need to constantly remind us that working at a startup is worth
our time as a means to fuel the startup workforce. I understand that he was
simply sharing an anecdote, but I found the conclusions and headline
misleading even verging on dishonest. I've worked at an early stage bay area
startup -- hiring progressively got harder and harder because candidates were
becoming more aware of the career risks involved and the perks they'd be
missing out on at big companies. In almost every case, you're working far more
for less with very little structure -- if that's your cup of tea and have an
obsession for the product, then go for it. If you're hoping to make $200
million, don't bother.

~~~
garry
Yeah, at the end of the post I tried to reference this: You probably shouldn't
work at a startup for the money per se. The real value is short cycles with
users and being able to make decisions and ship.

This is also cautionary for startups. You have to be an actually rewarding
place to work, otherwise there is literally no reason to work there.

~~~
rsanek
To me it comes off as a bit contradictory to say "you shouldn't work at a
startup for the money" when the title of your post and video prominently
feature the "$200 million" figure.

~~~
sertaco
Spot on! Clearly author’s intentions were to convince people that being an
employee at a startup pays monetarily. Which is now denied by him? I am
confused.

------
bartread
Garry, where do you get that figure of $1.6 million per employee per year in
profit for Google, please?

In Q2 2019 Alphabet (GOOGL), Google's parent, made $9.81 billion in profit[1].

At the end of the previous quarter, they reportedly had 103,549 employees[2].

Doing the division yields $88,654 profit per employee in Q2 2019.

Doing the naive thing of multiplying that by 4, which I know will be
_somewhat_ off, gives $354,615 profit per employee per year.

That's a tidy sum, but only a quarter of what you claimed so, again, can you
tell us where you got that figure, please?

[1] [https://www.theguardian.com/technology/2019/jul/25/google-
al...](https://www.theguardian.com/technology/2019/jul/25/google-alphabet-
earnings-shares-q2)

[2]
[https://edition.cnn.com/2019/04/29/tech/alphabet-q1-earnings...](https://edition.cnn.com/2019/04/29/tech/alphabet-q1-earnings/index.html)

~~~
Hermel
He probably confused profits and revenue.

~~~
bartread
Could be: Google's annual revenue for 2018 was $136.22 billion[1], which
yields $1,315,512 revenue per employee.

Controlling for employee growth from 2018 to 2019 (they only had 85,050
employees at the end of Q1 2018[2]) and assuming linear growth and revenue
earn through the year, that gives an average number of employees of 94,300
over the year (I realise this is an oversimplification), and revenue per
employee of $1,444,546.

That's still lower than Garry's quoted figure of $1.6M, although it's close,
and possibly close enough.

The reason I queried it is that he goes out of his way to make the point about
profit: "Google's _pure profit per employee_ is actually $1.6 million per
year, _after all costs_." (Emphasis mine.)

[1] [https://www.statista.com/statistics/266206/googles-annual-
gl...](https://www.statista.com/statistics/266206/googles-annual-global-
revenue/)

[2]
[https://edition.cnn.com/2019/04/29/tech/alphabet-q1-earnings...](https://edition.cnn.com/2019/04/29/tech/alphabet-q1-earnings/index.html)

~~~
garry
You're absolutely right — I annualized net revenue which I interpreted as
"net" but certainly is not profit. I've corrected this and will put a note
about it.

I'm sorry for the mistake. I'll do better next time.

~~~
FartyMcFarter
Even after this correction, the article still doesn't make sense to me:

> net revenue per employee is actually $1.6 million per year, after all costs.

What does "net revenue after all costs" mean? Isn't that operating income or
net income rather than revenue (which aren't that high)?

You really should get these things straight before giving people advice.

------
thecleaner
This vlog is more of a cheap advertisement for the "oh work for a startup it's
great" nonsense school. I don't really understand why I would work in an
environment where the pay is shit and the issued stocks can be re-classified
or diluted or just taken away by lay-offs. Makes no sense.

~~~
garry
I started here on Hacker News as a software engineer. I learned that I could
build software for others, ship it and release it. I did end up taking the
venture path, and now help others on that path.

The key here is that magic can be created by people, and I'm not that
different than a lot of people on this site. I also got very lucky, and I'm
thankful for that.

Startups are hard, and most fail, and most startup stock is worthless. But if
you read my post, I'm trying to point people to the fact that the _deeper_
lesson is to be able to learn to ship to real customers quickly.

Anyway, I appreciate the feedback. It's shockingly hard to get something that
is both nuanced and clickable in video format, but I will keep trying to get
better.

~~~
throwaway2048
I doubt many people have a passion for shipping to customers quickly.

~~~
csa
I am saddened by this, since the “shipping to customers quickly (and iterating
on the product based on feedback)” is the foundation of a successful growth
economy.

There are so many gross inefficiencies in my market (US) that could be
successfully addressed if more people has this type of orientation.

------
6gvONxR4sf7o
>Working for Microsoft cost me $200 million

And not playing the Mega Millions Jackpot lotto cost me $1.6 billion. I had
the opportunity to pick the winning numbers, but instead, I didn't even play!
What a chump I was.

Don't make my mistakes.

~~~
unnouinceput
Well, if is to use your analogy then you had the opportunity to turn down
somebody that gave you free money to play the lottery, because that's what
Thiel did to Garry, it gave him a check that covered one year of what
Microsoft paid him.

~~~
vchak1
The analogy does not hold because you still lose time, which is IMHO the most
valuable commodity because it represents opportunity cost.

In built into a lot of these discussions is a major assumption - that a
startup is a "typical" silicon valley startup with the goal of being a
massively valued entity. That changes the risk structure dramatically. If
instead you tried to bootstrap something into a 2M annual revenue enterprise
with minimal (say 200k) worth of investment, the equation changes quite
significantly.

I'd assert that in that situation, playing the role of "early tech adopter"
into new problem spaces dramatically reduces the risk as well.

------
lordleft
The simple truth is that working for the equity of an unproven start-up is a
gamble, and statistically unlikely to pay off. And sadly more and more start-
ups are undermining access to equity in shady ways. Not that one should never
work for a start up on the hopes it breaks big, but we should also never
forget that the successes are outliers, by a massive margin.

Just understand the trade-offs of your decision and the probabilities involved
with your decision.

~~~
stoicShell
> statistically unlikely to pay off

> probabilities involved with your decision

While this is a good general approach to life IMHO as well — if you mean "be
rational, not just emotional" and "work on your cognitive biases, seek
objectivity" — it might also prove terribly counterproductive in this context.

It would take a book or five but briefly:

\- you just can't use statistics when they say "95% fail", otherwise you just
don't do startups, ever. With that mindset, joining an established company is
more likely to "succeed" for you and maximize serenity.

\- another stat for you: most entrepreneurs fail "about twice" before making
it, i.e. you'll probably fail 1-3 times _for sure_ before entering the 5% of
those who create a profitable business. Trick #1, thus: you can roll the dice
several times (consider 2-5 years per "real try").

\- most valuable ideas were either not identified (rarely) or not well
executed (often) before someone eventually nails a product. You thus iterate
quickly on the market (MVP, feedback, lean cycles, etc) to find your best fit
curve, to hone in on the product that works. Chances are you'll find a local
minimum, not "the best", you'll pivot, you'll reconsider, you'll maybe focus
entirely on a subsystem, a 'feature' become 'product' — think how Docker, the
company, appeared after the same name product.

The reality is that a "fast scaling startup" a la California is rare and a
moonshot most often — unicorns and all that — but a diligently conducted,
ground, sustained effort to make a business growing organically to reach
sustainability for you and a few others in 2-5 years is a realistic goal (but
all things considered, e.g. probably _not_ on your first try, likely 10 years
after you began for the first time).

I don't want to claim that it's easy to create a business, it's by far harder
than working the jobs in most cases; but SMBs make up anywhere from 80 to 90%
of our economies, they're the real bread and butter of our collective wealth,
and these 'small' entrepreneurs are our true heroes. Not many of them make it
big, and that's the 'gamble' you speak of, but it's not the only way, nor is
it at all required to go down that path.

~~~
senordevnyc
_You just can 't use statistics when they say "95% fail", otherwise you just
don't do startups, ever. With that mindset, joining an established company is
more likely to "succeed" for you and maximize serenity._

Actually, you certainly _can_ do that. Most people do. And depending on what
you're optimizing for, it seems pretty rational to me.

 _Another stat for you: most entrepreneurs fail "about twice" before making
it, i.e. you'll probably fail 1-3 times for sure before entering the 5% of
those who create a profitable business. Trick #1, thus: you can roll the dice
several times (consider 2-5 years per "real try")._

Yes, but that's for _founders_ , not employees. If "success" here is defined
as "made more in risk-adjusted income as early-stage startup employee than I
would have made as big tech company employee", I doubt any early stage
employees are "successful". Every failed startup you participate in (2-5 years
of your life gone) adds to the opportunity cost "debt" you have to make up
once one succeeds.

~~~
stoicShell
As I see it, if it comes down to such criteria to decide which path you'll
take — i.e. you're in tech for the money — then it makes no sense to dabble in
startups. Statistics clearly don't lie in this regard.

What I meant however was a bit meta: those who are deeply cut for
entrepreneurship and startups are not motivated by money first or even at all;
they thus don't and shouldn't care about statistics aiming at maximizing
personal benefit... to a founder, "personal benefit" is more about getting
things done, creating the dream. They'd rather optimize for long-term success
(the kind that's much harder to take away from you, that creates real value).

Wealth, personal or collective, is but a consequence of a successful economic
endeavor. As an employee, you'd choose to work for a startup because there's
something in it that corporations money can't buy for you. There's no bet if
you already believe in the work, you will get what you want every single day
on the job. Different values, different goals, different rewards for different
people I guess.

~~~
senordevnyc
_those who are deeply cut for entrepreneurship and startups are not motivated
by money first or even at all_

From working with many, many founders, this isn’t my experience at all.

------
stiray
I really hate speeches like that. They are always told by one permile (or even
less) of people that succeeded. The voice of all those that have lost are
never heard. Same as blockchains, there are a few very loud people explaining
how easy is to get rich, while those who gave them their money are rarely
heard. I would laugh if it wouldnt be sad.

An anecdote (just a detail, I am developer for almost 30 years, I know the
industry from downside up), a month or two back, two greenhorns were
fanatically explaining me, how they were on a talk of X billionaire that told
them it was never so easy to be a billionaire as right now. You only need a 2k
laptop. I laughed on inside, but today kids really believe stories like that.
Sure, gauss will do its game and a few will get filthy rich. But lottery seems
a better game to me.

~~~
garry
Maybe more poker than a lottery. A lot of luck, but there's still a little bit
of skill in there.

I appreciate the feedback though. I know this is just one voice of many, but
it's also what I experienced. I think it's up to the viewer to decide if my
experience is applicable.

I think Paul Buchheit said it best: Advice is merely n=1 experience.

This was my n=1.

~~~
sabas123
> I appreciate the feedback though. I know this is just one voice of many, but
> it's also what I experienced. I think it's up to the viewer to decide if my
> experience is applicable.

How do you feel comfortable spreading your own experiance in a manner that
purposefully tries to persuade opinions while you know your experiance is non-
generalizable?

~~~
garry
Hm, is it truly totally non-generalizable? There are a lot of people who are
very capable for whom the real risk is not taking risk at all. I meet them
regularly.

It's not the norm, but just because it applies to a set of the very skilled
doesn't mean it is not generalizable. It just isn't applicable to all people.
I admit that.

------
tow21
... but Palantir? That rather deflated the vision of regret.

Honestly, maybe I’m way out of the normal HN demographic, but my first
reaction was, this sounds like, “how I had a lucky escape and didn’t spend
most of my early career actively making the world a much worse place.”

I’m no great fan of MS, but given the choice between a job there; or the
possibility to work on bringing about a dystopic surveillance future, I just
don’t see the hard decision.

------
evmar
His "cost me $200m" is of a $20b company, so by the math he's suggesting he
would've had 1% of the company after it went through all the dilutions on its
path to $20b.

So yeah, if you have a chance to get nearly a cofounder's amount of equity in
a company that will end up 20x a unicorn (which got that name because of how
rare they are), then definitely go for it.

~~~
ng12
Not to mention it's 1% of a $20b company that has yet to go public and seems
intent on staying private.

~~~
askafriend
They do biannual liquidity events internally. If you’re an employee you can
sell your stock back to the company for cash.

~~~
sneak
Another big iff here: iff the true owners of the company permit you to do so.
Most startups do not permit this, afaik, which further indicates what a
longshot it was that he turned down an offer from one that does.

------
Justsignedup
Building a network is an important thing... But let's not kid ourselves:

Most startups offer very little % for equity.

And that equity often amounts to next to nothing. Look at Uber or WeWork.

Most founders end up as assholes. Some are great, some care, some what to
learn. Learning as a manager/founder is someone else's job. Stress is real.
People do shut down from stress.

If you are a founder, that's great.

If you are like first or 2nd employee, and end up as CTO and such, that's
great. If you can get a few % equity.

Overall most startups you work at you will make just barely what you'd make at
Google or Microsoft (I'm taking post exit). During 2003 engineers didn't have
the leverage we do now. Right now a junior engineer can make close to 200k+ in
total compensation at a large firm. The work is different, but definitely more
money most startups will ever give you.

~~~
askafriend
> And that equity often amounts to next to nothing. Look at Uber

What are you talking about? Everyone who was early Uber is a millionaire now.

~~~
darkwizard42
Sure, but they spent 6+ years getting underpaid and could have made much more
at a Google/FB whose stock value has tripled with maximum liquidity throughout
that time.

FYI if you joined Uber after 2014 your shares are currently underwater aka you
have LOST money on your initial grant... your actual total compensation over
the years went DOWN...

------
gunshai
Flipping the coin on survivor-ship bias here, I worked at a start up for 4
years that was going to "change the world". Came out with experience in all
sorts of problems solved, projects implemented, customers reached, hell I even
have some equity(not that it's worth much). I was young and wanted to work on
problems I thought would have high impact, shit they did have large impact.

Yet when I left finally as a jack of all and a master of none. I essentially
had to start completely over.

~~~
thaumasiotes
> I was young and wanted to work on problems I thought would have high impact,
> shit they did have large impact.

I read something to the effect that post-WWII, the British government decided
the future was in three technologies: nuclear power, aviation, and computers.
So they set out to make sure the UK took its rightful place as master of the
future, slanting policy heavily towards those ideas.

And wow, they were three for three on predictions. But somehow the place of
the UK in those technologies isn't quite what they would have hoped.

~~~
pjc50
I'd be interested in seeing where you read that, because they absolutely
failed to do anything useful about it almost all of the time. And at the
expense of the rocket program too.

~~~
Tehdasi
Dunno about the government, but ARM and Rolls Royce have certainly done very
well in their given fields. Curiously they are parts suppliers, not whole
product manufacturers.

~~~
pjc50
RR are only alive because they're strategically important enough to warrant
being bailed out several times. They were nationalised in the 70s, and looks
like they're in trouble again:
[https://bdaily.co.uk/articles/2018/06/14/government-has-
to-i...](https://bdaily.co.uk/articles/2018/06/14/government-has-to-intervene-
loss-making-rolls-royce-to-slash-4600-jobs)

ARM are one of the few fully homegrown tech success stories, along with
Racal/Vodafone. Unfortunately the UK has a history of "technologically
successful but economically unviable" projects, and isn't able to take
advantage of the startup logic where investors cover the losses.

------
zadkey
It seems like he has found the problem with companies.

"Even though these companies pay a lot of money, in real terms, what software
is doing in society is creating a lot more value than what they pay you.
Google's pure profit per employee is actually $1.6 million per year, after all
costs."

"If you're in the engineering, product, design, marketing, sort of the
builder's side of that organization, you've got to know that you're creating a
lot more value than that, possibly 10 times, maybe 100 times that value, and
the only way you can really access that is by owning equity, and that means
either being a founder or working at an early stage startup that gives
significant equity. "

In other words, companies either purposefully or absentmindedly fail to pay
regular employees anywhere close to their real value. This is the real
problem. Not getting in a profitable startup early on isn't the problem. It's
the mindset that it's somehow okay to pay employees very small fractions of
what they are really worth.

~~~
garry
This is a problem, no doubt.

~~~
Apocryphon
And can VCs help address this problem?

~~~
garry
I often encourage founders to be more generous with equity for recruits and
early employee refresh grants. Care and feeding of the org also involves being
thankful to the people who build the value.

------
malisper
If you want a good reason to not join Google in particular, Google does not
train their managers. When I was interviewing with Google, I interviewed
around 8 friends of mine that worked or previously worked at Google. Lack of
management training was a something that every one of them brought up. Two of
them had even been managers at Google and basically said "yeah, we weren't
trained".

The way it's been described to me is that most managers at Google are TLMs -
Tech Lead Managers. They are responsible primarily for the tech lead part and
are only coincidentally responsible for the management part. Some teams do
have separate Tech Leads and Managers, but for most teams, it's a single
person.

~~~
jldugger
Nobody in tech trains managers. The only difference AFAICT, is that google
spreads those underprepared managers across more people. The only place I hear
stories of managers with 50 directs is from Google.

~~~
adamt
That is extremely rare at google these days. The average tech manager has more
like 6-8 directs.

------
KKKKkkkk1
Let me make sure I get this straight. On the one hand, by not working for a
startup, you're missing out on at least $1.6M of value you're creating every
year for your employer. You might even be missing out on $200M like Mr. Tan
did. On the other hand, working for a startup "is not about the money". So you
should be ok with getting less money because you're getting access to users
and customers.

That's a pretty muddled message. Is Mr. Tan offering unbiased advice or does
he have some kind of ax to grind here?

~~~
teachrdan
No ax to grind. Tan's trying to encourage more junior[0] engineers to work at
a steep discount for startup founders so that they might make a massive profit
for VCs like him.

0\. Experienced engineers know better

------
ericjang
A lot of the comments are rightly pointing out the logical fallacy of
survivorship bias in the article, but I don't think Garry intended to say that
"choosing to work for Palantir in 2003 was the expected-wealth maximizing
career decision and that's why you should join a startup".

I think the title and lede, "working for Microsoft cost me $200M" is intended
to be provocative and encourage clicks on the article, while providing an
interesting example of a "road not taken" in Garry's professional life. The
dollar magnitude is unusual, but the feeling of regret is relatable to us all,
even if you took the opposite bet that Garry did (e.g. turning down a LinkedIn
or Coinbase offer in 2016 to work at a failed startup instead).

Since this article is on the top of HN today, I'd say Garry succeeded at
sharing his personal anecdote.

On the content itself (startup vs. bigco), he is right about "you only can
make a fraction of the value you create if you don't own equity" and "If you
don't work on your dreams, someone will put you to work on theirs." But then
it follows that everyone should start their own company if they are capable,
or work for a bigco if they are not. The current SV labor market reflects this
reality as well.

It's possible to sell some top-tier talent on taking less than 1% equity to
work on your dreams, but they must really believe in the founder's vision and
the founder's ability to provide a working environment that complements what
the employee is not able to de-risk by themselves.

~~~
garry
Apologies for the clickbait— I'm trying to build a YouTube following and
having some collaborations drop this week. Just trying to make it work on that
platform. The values and what is acceptable on different social networks is so
different! I didn't really think it would appear on here, so tuning it for
different audiences is hard.

~~~
ericjang
I, for one, thought it was an excellent title. It's always fascinating to read
about the eccentric Peter Thiel, and this gave me some inspiration for how to
structure my own future writing. Thanks :)

------
Roritharr
Having spent the past 15 years chasing the dream, working as a Founder and a
couple of C-Level positions while not really amassing any sort of wealth I
can't recommend enough to do your financial due diligence when accepting
trade-offs for chances to reach your life-goals.

I'm close to 32 and have two kids now, so the financial pressure is there,
while having accepted relatively low pay in high cost-of-living locations for
roughly a decade left me without a semi-large cushion to reorient my career or
even take a sabbatical to spend with my kids. This also limits my options,
just leaving for another country for a potentially higher paying job with
lower job security is a risk that might be too large...

Use your twenties wisely, i'd recommend first amassing a cushion at a FANG or
freelancing if possible, before trying to "learn the art" at a startup. There
surely is a great many things I can teach now, having picked and fought and
won my own battles for quite some time now, but there is a high chance it
leaves you and your loved ones in an unenviable position compared to just
grinding away in your FANG Job.

~~~
mancerayder
Do startups even bother hiring people not in their 20's or early 30's, though?

32 is one thing, one if you're 35, 38, 40? You come back with your financial
cushion, ready to hit the startup circuit, but who will actually hire an older
guy (or gal) with salivating 25 year-old grads waiting around the corner?

~~~
Roritharr
35-40 wouldn't be an issue at our startup, but we can't afford corporate
salaries/benefits.

That's the hit you would have to take, accepting a lower salary again, which
most can't combine with a less comfortable environment where your
responsibilities are less narrowly defined and many of the support structures
that a large org can offer are not in place yet.

------
sbilstein
The safest risk reward ratio in terms of career development, networking, and
financial gain is to work at a startup that is in their explosive growth
stage. You will likely get shares valued at some multiple of 100k. Make sure
you understand the business and feel confident they will IPO or exit.

The scaling needs, technically or culturally, of a company at this stage are
unlikely to be available at a risky early startup that may never see massive
growth. At a BigCo, unless you are in infra or deep in the technical stack,
many of these scaling problems will have been solved for you.

In terms of networking, you will get to learn from grizzled engineers who were
around in the early days, veterans from big companies who have come in to fix
the shit that is wrong, and have a front seat to these cultures colliding. Not
only that, you'll be surrounded by soon to be angel investors.

I spent one year working at a pre-IPO unicorn and it was highest in ROI for my
career as an entrepreneur later and the IPO made me enough cash to not be
sweating my rent all the time.

~~~
patrickxrivera
Agreed. I think this type of company (high-growth and 2-3 years away from IPO)
is a much better first job out of school than working at a big tech company.
Sure, your cash comp will be 10 - 25% lower, but if you want to start a
company someday, this type of experience is on average much more valuable than
big tech co.

I've been working at a high-growth company for the past year and as OP
mentioned, have learned from early engineers, experienced engineers from big
tech co's, and started leading medium sized projects six months in. I'm on the
growth engineering team so I've also been able to learn about best practices
in growth from people who led teams at big tech co's.

From this experience, I now feel ready to be an early engineer at a startup or
build my own thing. I was able to get the benefit of working with the best
people from big tech co's but in a high-growth environment where there are
more problems to be solved than people to solve them.

For this reason, working at a high-growth unicorn is seen as just as valuable
as a big tech co. If not more, for product/growth eng roles.

------
femto113
Now I personally can't stand to work for big companies, but it's definitely
not because its a bad financial move. Might as well write a post about
"downsides of not picking the right lottery numbers". I know more people who
have retired young and comfortably from a career at Microsoft (or Google, or
Amazon) than I do who have achieved wealth from startups (and I know plenty of
both types here in Seattle). In every single case there was substantial risk
and a big element of luck for the startups that succeeded, while those who
worked for the big firms never once worried that their paycheck might bounce.

------
ping_pong
This article is garbage.

Over the last 8 years or so, FANG stock has gone through the roof. Most FANG
engineers are multi-millionaires if they have been there going back 8 years. I
have a friend whose Facebook stock doubled in the last 3 years and she will
have been paid over 3M over 4 years.

Meanwhile, I have a friend who has been bouncing around startups, making zero
in equity (because they all failed) and he gave up a job at Google. His equity
would have been worth over 2M had he stayed.

I myself worked at a YC startup that had a large exit, and only made about
$80k over 4 years (most of the money went to the founders even though I was
employee 40). I then joined one of the unicorns and also made about 250k in
equity over 5 years. Had I concentrated on my FANG interviews more, I would
have made much much much more money over the last 5 years.

------
streetcat1
The real issue with startups is that there is currently no efficient secondary
market for startup equity.

This makes the game much riskier than it should be since:

1) There is no way to diversify for founders and employees. 2) There is no
exit for employees. 3) It gives VC monopolistic power.

There were attempts to solve this (e.g. ICO) but those were misused.

Once such a market exists, it would be much easier to join/leave this
ecosystem.

~~~
codingslave
This is secondary, the real issue is employees don't get enough equity to even
sell it on a secondary market.

------
friendlybus
Why did he value Microsoft over Their? There is something in his character
that held in higher regard one decision over the other, there's no exploration
of what caused the conflict in the first instance and a likelihood it will
happen again. What should he have done with himself at that point and all
future similar points where he has opportunity again?

This post seems to be more about signalling than lessons learned. Better luck
next time!

~~~
garry
I'll try to make a longer post about this. It's hard to get it right in 5
minutes of video.

~~~
friendlybus
Seems like a good topic to talk on, soothing the burn on missed opportunity,
perceived or otherwise.

------
davidw
My uncle had a jeep he called his million dollar jeep, because he cashed out
of some Intel stock in the early 80ies to buy it.

~~~
sjg007
I refer to my student loans as my BMW M...

------
artiscode
It took me a good number of years to realize that working for startups cost me
years of being underpaid, working long hours and no real benefits in the end.
I joined a corporation a couple of months ago and now I'm getting twice as
much in compensation, plus financial incentives to actually stick around for a
longer time. Survivorship bias is real.

------
clpwn
Please, engineers, pay attention to the ethical implications of your
creations.

You can't talk about how much money you make (or could have made) and
disregard the pain you cause people in the process. Not all startups are
equally unethical, and Palantir is famously one of the most closely tied to so
much human suffering in the world.

------
timboisvert
If you have a family or you have a chronic illness, working at a big company
-- at least in the US -- generally means better health benefits. I'd wager
that health insurance alone is the most compelling reason why many people
choose big companies over startups.

~~~
sjg007
I mean if this is true we'd expect to see more startups out of Europe,
Australia, New Zealand and the UK. Maybe the stats bear that out I dunno. I do
know that the ACA has been credited by lots of folks as the reason they were
able to start a company.

------
cj
I think it's interesting part of this is that there was literally no bad
decision in Garry's situation.

1) Stay with Microsoft, get promoted over the years end up a multi-
millionaire.

2) Join Palantir and end up a multi-millionaire.

It sure does illustrate the meaning of being in the right place at the right
time (e.g. starting a career in the early 2000's working as a designer /
engineer in a tech hub).

------
wrigby
There's a LOT of survivorship bias in this article. I personally worked in
small companies (30 - 200 employees total) and startups (4 employees,
including myself) before ending up at a big tech company, and I would have
preferred to do this journey in the opposite direction - that is, work a few
years at a BigCorp, and then work for a startup.

Getting to see what works and what doesn't work in the context of a bigcorp is
really valuable, and I think this post discounts that. A lot of technical
mistakes I've made could have been remedied by simply seeing industry best
practices, and there was no way I would have learned these things in school.

~~~
MattyMc
Completely agree.

I worked for Microsoft this year. Had an amazing experience, learned a ton,
built a great network, had benefits and was well compensated. I did this all
while taking almost 0 risk. The idea that working for a tech giant is
"maintaining the status quo," but working for a startup is "making something
new," is perhaps not accurate.

Working at a startup can be great. Working at a tech giant can be great. Just
don't make your decision based on one guy who turned down a personal offer
from Peter Thiel (and was later employee #10).

~~~
seph-reed
When you work for a giant corporation of any sort, you are inherently breaking
capitalism as it is.

There's no foreseeable way around this , it's irresponsible, and all the
suffering you're seeing it the world is the cost of many many millions of
people giving themselves a pass on this.

I strongly urge you to recognize that any of the life benefits you get from
working at one of these places are reaped from the lives of others.
([https://www.youtube.com/watch?v=oQEO2P9j_vU](https://www.youtube.com/watch?v=oQEO2P9j_vU))

~~~
scarface74
As opposed to working for a small money losing company backed by VCs who hoped
to be bought out by big tech companies....

~~~
garry
Well this is why it's important to work on something that you believe in. I
think there is a fatalism to think all small companies are going to fail.
Individual employees should use their own judgment when thinking about whether
a startup will work— they are often more right than not since startups tend to
be self-fulfilling prophecy. If lots of smart people like you want to join
too, then it actually becomes a lot more likely.

That being said by the numbers most startups fail, and there is no guarantee a
startup role will get you a positive outcome vs other alternatives.

~~~
scarface74
It’s not about the company “failing”. Very few tech startups are bootstrapped.
At some point they take investor funding. At that point it doesn’t matter what
the “smart people” want or the founders. The only thing that matters is what
the investors want - they want “an exit”. Statistically:

\- the chances of a company not just closing their doors are low.

\- out of those, the chances of a company becoming a “lifestyle business”, a
profitable ongoing private business are close to zero once you take investor
money. Investors aren’t looking for profitable private companies hoping to get
a minor dividend. They are looking for their investment to get acquired or go
public.

\- speaking of which very few companies exit with going public instead of
being acquired by big tech. Look no further than YC. Only two YC companies
have ever gone public.

\- Out of those that do go public, even fewer don’t end up getting acquired by
big tech and/or are profitable. Again look at YC. Two public companies and
Dropbox has admitted that it has no idea whether it will ever be profitable.

As far as “smart people”. All startups think they have “smart people.”

------
csomar
> "Garry, "what are you doing at Microsoft? "You're wasting your time."

> "Garry, I'm so sure this is the right thing for you, "you need to quit your
> job right now."

How much does Pieter know the OP at the time? I'd probably be very wary
working with someone with such a pitch.

------
OmarIsmail
For people trying to draw false equivalencies between buying Apple stock,
buying lottery tickets, etc I think it's useful to look at the difference in
circumstances and how _close_ Garry was to joining.

If you compare this to Apple stock it would be like if you had the cash in
your bank account and your stock broker called you up and said "You should buy
1000 shares of Apple stock. In fact, I'll just give you 1000 shares of Apple
stock, there's no risk to you". And you said no.

Or if someone said "I'll give you this lottery ticket, do you want it?" And
you said no.

Now obviously, not many people find themselves in such a situation. But if
you're a developer this situation isn't _that_ uncommon. i.e. you have a
friend from school, or a someone you used to work with that is starting
something new and asks you to join. This percentage goes up the "better"
school you go to and the companies you join. i.e. I'm sure a large percentage
of MIT/Stanford CompSci grads and early Goog/FB engineers know someone within
1 to 2 degrees of separation that have started fairly large companies.

Probably the most sure way to wealth (50M+) in modern times right now is to go
to a good CompSci school, join a larger hot startup 200-500 people, spend a
few years solving hard problems, getting a good salary and building a strong
network. Then when one of your network starts a company joining that company
as employee < 10.

For 1-5M the surest way is to join a 1000+ employee tech company as an
engineer.

~~~
pathseeker
>In fact, I'll just give you 1000 shares of Apple stock, there's no risk to
you". And you said no.

That's not the same. See
[https://en.wikipedia.org/wiki/Opportunity_cost](https://en.wikipedia.org/wiki/Opportunity_cost)

~~~
OmarIsmail
In the video Garry mentioned that Thiel offered him a check for his salary.
Not quite no risk, but effectively so. He'd be able to go back to MS after 6
months/1 year no problem and would have only lost out on some vesting. He
probably would be able to go back to a better position which often happens.

~~~
geofft
> _He 'd be able to go back to MS after 6 months/1 year no problem and would
> have only lost out on some vesting._

And internal tenure and connections. Yes, for some companies, it's easier to
get promoted as a new applicant. At others it's easier to get internally
promoted and losing out on a year of that costs you quite a bit of future
value.

------
KaiserPro
The problem is that people seem to think that one must drink the coolaid to do
well.

I have worked for both small, large, internationals and startups.

A startup is a massive risk. 99.5% of them fail, of that 0.5%, >50% are
acquired which is a spectacularly brutal experience. Odds are, your startup
will fail, and take you with it. (especially as those of you in the US have to
think about health insurance.)

Most of the time you'll be making fudge after fudge, using stuff cause its
shiny and regretting every choice you made 6 months previous. then you have to
deal with the batshit social rules are de rigueur.

Either way, you can either choose to believe that your company is looking
after your interests, or treating you like cattle (Kobe beef, if you're lucky
enough)

Far too many startups require their staff to blindly worship the co-founders,
even though they are obviously deficient, only useful for tax write-down
fodder. Look the other direction as your boss has a spectacular mental
breakdown, or decides to initiate conjugal relations via blackmail and
obnoxious power plays.

Basically, you can't just slap the word startup on a thing and allow it to
fuck with peoples lives.

~~~
11thEarlOfMar
Begging your forgiveness, it's Kool-Aid.

~~~
grzm
_Acksually_ , it was Flavor Aid, but who’s counting except us pedants?

~~~
KaiserPro
I treasure this chain of pedantry.

------
yaih
Valuation and share prices of FAANGs (and Microsoft) started really taking off
2-3 years after the financial crisis of 2008. There are two theories: a lot of
money could suddenly be borrowed at near zero cost and needed a place to go,
prompting a lot of investors to invest in big tech in the hope of better than
average returns. Alternate theory: all big tech companies just simultaneously,
suddenly became _lot better_ companies and lot better investments sometime
around 2011. I tend to side with the first theory.

Recently, it also became easier to do stock buybacks, leading to another big
bounce in share prices.

[https://edition.cnn.com/2018/12/17/investing/stock-
buybacks-...](https://edition.cnn.com/2018/12/17/investing/stock-buybacks-
trillion-dollars/index.html)

So I wonder if the real problem lies elsewhere - the out of control monetary
policies practiced by various central banks.

Or maybe my statements are just completely wrong. If so, I would like to know
if someone has done any kind of analysis on this.

------
shuckles
A fellow named Paul Graham once speculated that it was not beyond reason to
offer your first employee a >6% share in your company [1]. I've received first
employee offers from startups for under 1%. This explains most of the
difference for my decision.

[1]
[http://www.paulgraham.com/equity.html](http://www.paulgraham.com/equity.html)

------
mmmBacon
I worked at 4 startups in my youth. All were formed at the tail end of the dot
com crash. Of the 4, 2 outright failed and were totally miserable places to
work. At one I even had to work for minimum wage until they realized they
violated our exempt status. Of the other 2, one was acquired for peanuts. I
got a check for $1200. The last company went public. They had had huge funding
(almost $500M) and had had several down rounds. Due to this, management was
extremely miserly with stock. My stock was briefly worth $250k until the
lockout expired and quickly sank to $120k and got as low as $45k. Looking back
on it, I totally wasted my time there.

The pay wasn’t the worst of it, I encountered many tyrants who made things
even worse.

Now as an older person I have many business ideas but I am unable to take the
risk due to having to support a family. I need to make a certain income to
cover expenses. The only way I would join a startup is as a founder and at
that I’d have to be able to pay myself enough to keep things going for my
family.

------
Grimm1
Edit: The sites I'm using make it seem like the RSU compensation is the one
time grant for 100k+ over the 4 year period so if its really a 400k+ stock
grant over the 4year period then yes there's really no way to compete with
that for early stage companies and leaving that amount of money on the table
is inadvisable if you can avoid it. That said I still hold my point about the
type of experience you'll gain at a startup and how quickly you'll gain it.

People keep talking about how "they don't know anyone at the big tech
companies making less than a 225k salary with the average being more like
300k". Those numbers are bunk, the salary is the base amount before stock
contributions and you are most certainly including RSUs to get those numbers.
Including RSU's in your annual salary is a crazy and incorrect thing to do.
The average turn over at large tech co is a little over 2 years. This means
50% of people never see more than half of their RSU compensation. An L5 (5
years or so xp and roughly the same across companies) for instance has an
average base salary of 165k and an additional 100k in RSUs. Assuming that
person works at large tech co for the average 2 years and they sell the RSUs
as soon as they can their total compensation in a given year is 165k + 25k, or
190k. Successful startups most certainly can come close to that. Anyone making
a base + 225k salary before RSU is an L7 or distinguished contributor with 10+
years of experience. So while maybe startups can't compete for compensation
for people who are very established in there careers, I've seen more than a
few who can compete for people in the 0-10yr range. I've always seen startups
as a way for people to prove themselves very quickly in ways that would take
people who took the corporate path 15 years to do. High risk, high personal
growth, and hopefully high reward.

That said I think startups do need to rework their equity compensation
structure for earlier employees to make them more fair. It is very easy to get
screwed as an IC in startups right now even as an early one.

~~~
tracer4201
Maybe I misunderstood what you’re saying here but I don’t think it’s accurate.
My salary plus stock compensation has been $300K+ each year as long as I’ve
been with my company. Of course there’s market volatility in RSUs but I have
yet to take home less than $300K in any year during the 5 years I’ve been at a
FAANG. I’m an engineer FWIW.

~~~
Grimm1
I may be inaccurate, I've been using sites like payscale to do the measuring
here for averages. If that really is the case then RSUs are quite insane and
I'd have to revise my statement.

Edit: The sites I'm using make it seem like the RSU compensation is the one
time grant for 100k+ over the 4 year period so if its really a 400k+ stock
grant over the 4year period then yes there's really no way to compete with
that for early stage companies and leaving that amount of money on the table
is inadvisable if you can avoid it.

~~~
tracer4201
I wouldn’t use Payscale or even Glassdoor. Levels.fyi is more accurate I
think, although obviously some people definitely inflate their numbers, and
there’s a self reporting bias.

FAANG total comp is crazy... obscene. I earn quite a bit more than one of my
siblings who’s a doctor, and all I have is a bachelors degree.

All this does have a cost. Not counting potential monopolistic practices, ads
being literally cancer, etc etc, the stress and anxiety level is high.

I don’t expect to keep doing this for 20 years. In 5 years I’ve learned a ton
and still meet people who are way smarter than I am and have better judgement.

~~~
Grimm1
Yeah, I've chosen to work in startups for the last 4 years largely because I
want to found my own company and I really have enjoyed working in startups.
I've learned a lot that I don't think I can get at BicCo in terms of running
an early-stage company but, I'm also in a position with student loans and
since I've done well on BigCo interviews before but chose a different path I'm
really torn on saying screw it for 3 years, get a BigCo offer and take care of
everything financially, build a small nest egg and then jump back into my own
startup at this point. Especially now when laws regarding the restrictions
around building your own thing on your own time are becoming more favorable to
us.

------
scottlegrand2
I've had a simple rule for the past 20 years. If you offer me less than 1% of
the startup I'm not interested in working with you because I am a plebe if I
accept that offer. It hasn't failed me yet.

OTOH I chose to pursue a PhD in biochemistry rather than be the third member
of the Yost group and that led to 3D Studio.

So I will boil my heuristic down to TLA or BigCo. I'd miss out on the next
Facebook or Google with such a heuristic but what are the chances I would get
an opportunity to join one of those companies at the ground floor in the first
place?

in recent years, there was one startup bought out at a modest price for which
I might have made epsilon more money being their CTO but it would have come
with sleepless nights and anxiety at no additional cost.

------
webkike
Damn, sorry you didn’t make $200m profiting off a company that makes ICE more
efficient

------
peterwwillis
_> [at a startup] you get very direct access to users and customers and their
problems, which means you can actually have empathy for what's actually going
on with them, and then you can directly solve it._

I'm calling BS on this. The empathy fairy doesn't bless you just for working
at a startup, just like it doesn't disappear when you work for big tech. You
have to actually create and nurture empathy yourself. You have to engage in
the work: learning about the products, all the people you've never met that
build things you didn't know existed, how all of it eventually becomes a thing
for a customer to use, and how to make it better. In that process, you learn
to care about things you didn't before.

Can you "directly solve" a problem for customers in a big company? Sometimes.
But more often, you have to work together with other people to solve it. You
have to use initiative, talk to people, coordinate things, lead initiatives.
It's more work. And because it's more work, it's even more rewarding when you
solve something. You may have even improved a lot more than the original
problem in the process.

------
skillvisor19
Advice to VCs on this thread trying to convince hiring folks away from tech.
giants.

Re-consider (if you can) how you attract engineering talent and capitalize the
"product-market-fit" stage of your startups - higher early stage valuations
and higher pay for the market rates for the talent. Most talent (I know of) at
FAANG is tired of being "cog-in-a-giant-wheel" and, some, would love the
opportunities that startups always offered (I am assuming I don't have to
enumerate these opportunities for this crowd)?

If you think higher valuations at earlier stages is not a fair ask - just look
at capitalization at Series-C, Series-D growth stage companies - most of this
money is being used to "buy" revenue these days. In other words, to pay
commissions for sales and marketing folks. Buying engineering talent at early
stages should be no different in 2019 in my opinion.

We don't have to rob Peter(Founders) to pay Paul(non-founding employees) and
pitch one against the other. Just make the pie bigger at early stages. From
what I hear, there is plenty of capital chasing good startups.

------
throwaway2048
This is a lot like saying not buying a winning lottery ticket "Cost you" the
jackpot.

Opportunity cost is a very real thing, the vast majority of startups fail, or
do not deliver any meaningful amount of equity to their employees (compared to
the huge pay cut they take).

This is a blog by a VC so its pretty obvious where his interests are aligned
on this.

------
c_r_e_a_m
> If you're in the engineering, product, design, marketing, sort of the
> builder's side of that organization, you've got to know that you're creating
> a lot more value than that, possibly 10 times, maybe 100 times that value

Very dubious. From personal experience I'd guess that most non-sales employees
at the big tech companies are actually creating negative value for the
business (not contributing enough to profit to pay their comp and benefits).
This mainly seems to happen for two reasons:

1\. Career incentives for decision-makers (Eng. and PM management and
directors) are almost totally disconnected from the profitability of the
business. You can definitely become a superstar by building something wildly
profitable, but that's the hard approach. The easier and more common approach
is simple empire-building: Gather a larger and larger team, and have more
projects and launches under you. The projects don't necessarily even need to
_intend_ to make or save money - you get to pick the metrics you target, and
you can probably find some that indicate you're successful! The overall impact
is mis-allocation of talent on a pretty grand scale.

2\. On a more micro-scale (within teams), engineers are _terrible_ at focusing
on things that are good for the business. If you leave an engineering team
alone, they will spend 90% of the time rewriting systems that already exist to
make them simpler, easier to modify, etc. They will normally accomplish this!
But the rewritten systems will do almost nothing to increase how much money
the company makes, and it's rare that it will save enough resources to be
worth it (engineers are expensive).

Both big tech companies I've worked at had what seemed like a relatively small
set of teams focused on the core of the business, who were laser-focused on
improving revenue or reducing the cost of core infrastructure used around the
business. There were a much larger set of teams working on projects with less
clear business value.

------
justapassenger
> The two things I really like about working for smaller places or starting a
> company is you get very direct access to users and customers and their
> problems, which means you can actually have empathy for what's actually
> going on with them, and then you can directly solve it. That cycle is so
> powerful, the sooner you learn how to make that cycle happen in your career,
> the better off you'll be.

I think that author is confusing ability to get access vs being forced to do
it.

At big company, there's so many other things and layers, that you can easily
spend your whole career without touching anything related to users. But, you
can also just work on directly customer facing parts - that gives you direct
access to customer problems. Just be careful - there's more problems that you
can imagine, the bigger the company and customer base.

------
seem_2211
I think the equity situation is bad, and only going to get worse. FAANG stocks
have been on an absolute tear and VC firms have got more money to deploy than
ever before.

If I were to bet on it, I think we'll see the tech industry move to a model
that mirrors the financial world, with fixed year end bonuses, and no equity
opportunities. That's what this thread is basically advocating for, even
though right now it means working at Google and getting options.

$1b+ Venture Funds and employees getting generous equity grants don't match. I
don't think VC is going away as an asset class anytime soon, and I don't think
fund sizes will be dramatically (3-5x) smaller.

If anything, I'd say it's probably for the best for the average person working
in tech. Most startup options aren't worth anything, and are highly illiquid.

~~~
mancerayder
I've been working in finance for years, and a couple of startups. From my own
personal experience and from the experience of many people I know, you get
stock but the stock is viewed as a 'nice little bonus' versus something that
you expect to change your life.

In New York City:

Small tech startup -> very low salaries, questionable options

Fintech -> higher salaries (than tech), "nice to have bonus" type of stock
options, plus a bonus

Banks and Hedge Funds -> For tech people, this is the "FANG equivalent". High
salaries, big bonuses, and stocks that aren't theoretical. The pay is probably
is not in the millions, but close to half a million if you're a Director or
above on the tech side. Bankers always make more than tech, and tech is always
viewed as a cost.

Now, Amazon and Google are expanding. I'm not sure how this will change the
landscape.

I read a substantial part of this thread, and honestly I don't know a single
person making 200K a year in equity as per some comments here.

Maybe I'm in the wrong part of the country.

Fintec

------
TuringNYC
Dear @garry - Thanks for your article. I'm curious if you could comment on VC-
driven "founder salaries" for startups. I've seen some fair setups and some
very unfair setups.

I can appreciate this from the VC's perspective, they want the founder to be
working to grow equity worth, not just to draw salary.

But I can also see how sub-market "founder salaries" would bias startup
ownership towards either those with extreme risk appetites _or towards those
with family safety nets and wealth._ How do you approach founder salaries?

Also, when judging founder salaries (knowing full well that will bias towards
a small set of the population) how do you determine the comparable (e.g., Is
it FAANG? Is it based on YoE as an Engineer? School? Degree?) Is this
something that just is necessarily biased in favour of <25yos?

~~~
sjg007
Trade more salary for less equity? Or ?

------
isseu
Survivorship bias

------
actuator
I joined a startup right out of school, I wouldn't do it any other way even
now but the picture he paints is far from reality for most.

I learned a lot, had a lot of ownership and was involved with the product from
a user level itself which I loved and even made my skill set very diverse.

But the 200 million line is just outright rare. The equity I was given was
pretty low and even though the startup is a leader in its space the equity
growth hasn't materialized to any noteworthy level and I can't exit right now.
I would have made much more at any FAANG level of companies in RSUs by now
like my friends over there have done.

This is why even now while discussing offers with companies I am interested
in, I don't give ESOPs much value in the package.

------
mc3
The question is what is Expectation(Total Wealth) working at tech Giant vs.
joining a typical startup (with no crystal ball bias).

Esp. given that most single peeps working at tech Giant can live in a slave
box eating supermarket food and save most of their income and invest it. They
can probably use their income for leverage build a property investment
portfolio, which if the rent covers the mortgage, they will still have savings
to invest in stocks.

Now take into account the $10M lifestyle and the $200M lifestyle, and for a
hacker who isn't into 1st class flights, balls and cristal (see what I did!) I
think 10M would be enough money to retire in a humble house somewhere in
suburbia and hack on side project, even with a family to support.

------
BooneJS
Joining a startup and missing out on entry-level wages seems like an
appropriate trade-off. It's the same reason most people go to college after
high school - the opportunity cost is quite low and you can learn a lot of
things quickly.

~~~
oliverx0
This is a very good point. On a more general note, the younger you are,
generally the more risk you can take. And in this case specifically, entry-
level wages can be only slightly lower than Big Co (not always), but what you
learn and the risk you take can make it worth it. If it doesn’t work out, you
can always join a bigger company that will value what you learned.

------
harshaw
Startups don't necessarily have good management or the core values necessary
to help weather changes. You will have problems and if you don't have either
really good management or something like the Amazon leadership principles it's
likely you will fail. Also, at least for many of the startups where I worked
there was no appreciation for the lessons of the lean startup movement (or
appreciation of the lessons of Steve Blank).

That would be my reason to consider big tech, or at least a company with solid
values. Unfortunately in my career I learned a lot at startups but don't have
anything financial to show from it.

------
L_Rahman
The choice in front of Garry is fundamentally different from the one he tells
most people to make.

I think virtually everyone here would quit their job and try a startup for a
year if a famous investor believed in them and wrote a check for a year's
worth of comp (assuming this includes healthcare).

BigCo jobs are revolving doors. The only thing you would be putting on the
line by doing the startup is the small amount of money you would have gotten
from a raise/promotion.

This is vastly different from telling a 23 year old not connected to Peter
Thiel, without a check 1yr salary to go work for a startup.

------
spectramax
Besides the main points raised (and debated here), there a few things that are
off-putting to me:

1) This whole thing smells like a PR stunt to get his name out, starting with
a click-bait highly attractive title "How I lost $200M".

2) The production value of his video to get the message out. Why? Why put so
much effort into that video? You know, you could just write a blog post.

3) I am cynically presuming Garry wants his name to get out there as much as
possible as a VC that he is today. Besides that, this whole thing smells of
humble-brag.

Really off-putting approach. Sorry, Garry, but this is how I feel.

------
inertiatic
Most startups solve boring problems in boring ways, require you to work too
much and deal with a wild west environment without proper procedures of
coexistence.

Even with compensation equal, I'd take the tech giant.

------
throwaway423342
Don't be an employee at a startup unless they pay you really well. If you want
to play the startup game, found your own company that does not rely on burning
VC money.

------
robocat
This is cherry picking.

We all have heaps of extermely valuable opportunities: the trick is to pick
the right one. He is using hindsight to pick the best. However we don’t have
that future information when an opportunity passes us by.

Any longtime HN readers had the bitcoin opportunity pass us by. Much better
since it doesn’t require hideous life-force investment (our own life time).

$200MM also includes an implicit lie that he would still own 1% _after_
dilution. Garry: what equity were you offered?

------
choiway
Is the $200M net of what he made as employee number 10? Also, Microsoft's
stock is up 5x since 2003 so he would have done well by just staying put.

------
jeromebaek
A little-discussed issue is that big tech cos tend to do better on diversity
and inclusion. Obviously it varies by startup, but when you’re in a survival
mentality it is difficult to be open to people of different sexualities, races
and experiences. You tend to get clumps of similar overachievers. Paul Graham
said this was an “advantage” but for people like me in the LGBTQ community it
certainly isn’t.

------
catalystic
I feel a lot of the folks here are focusing on the wrong parts here. The $200M
loss was a cheap way of getting user attention, but hey it worked!

The core of what he was trying to convey was the sooner you get to understand
real user / customer problems the better off you'll be in life as an
entrepreneur.

He stayed away from this in his early days as he opted for stability and that
he seems to regret.

~~~
minimaxir
> The $200M loss was a cheap way of getting user attention, but hey it worked!

Many Hacker News submissions get flagged to death for such tactics alone.

~~~
dang
True, but the ones where upvotes win the tug-of-war stay afloat, and usually
(well, sometimes at least) that's because there's countervailing substance in
the article. In such cases we eventually notice the titles and change them to
stick to the site guidelines—preferably using representative language from the
article itself. I've attempted to do that above.

In this case the countervailing substance is at least partly that Garry has
had a close relationship with HN over the years. And vice versa.

------
11thEarlOfMar
Would it be overreaching to say that no two startup experiences are the same
and therefore, generalizing startups vs. tech giants is not an adequate
analysis for deciding whether to join a startup?

I'd guess it would be enlightening to compare 'the strangest day ever at my
startup' vs. 'the strangest day ever at my tech giant'. Do you have an
anecdote?

------
abetusk
Does anyone know the source of the graphic in the article [1]?

[1] [https://phaven-
prod.s3.amazonaws.com/files/image_part/asset/...](https://phaven-
prod.s3.amazonaws.com/files/image_part/asset/2382754/KHwPQPhY6TaSSqhK_DxI7YwPOWU/xlarge_MW-
GM758_market_NS_20180718204202.jpg)

------
alecbenzer
> The real reason you should consider working at a startup or starting your
> own: It's not the money

I think this is correct, but makes the post's title seem really click-baity. I
think expected financial upside is exactly where Big Tech unequivocally wins
over startups (esp. joining and not founding), so it seems weird to frame the
post around money.

~~~
peteey
It doesn't seem correct at all. Money is very much a factor.

To prove,

How many people here would show up tomorrow if their company stopped paying
them?

How many people would join a startup for less pay without any stock offers?

I suspect the answer to both will be equal to the number polled.

~~~
alecbenzer
Not sure I understand the point you're trying to make...

Money is a factor but it's not the thing that should draw you to a startup --
expected money is better at Big Tech. A startup is the right choice only once
you start to consider non-money factors.

------
eaguyhn
I worked at four startups and gained so much experience at each. Even with the
long long hours I really liked it. Three of the four failed - the fourth one
eventually succeeded after 15 years and I received about $4,000 for my
original shares as employee #3 (I can relate to the point in one comment about
being a founder instead of an employee).

~~~
milofeynman
The founders entire job early on is to convince schmucks that they'll be rich
if the idea succeeds while simultaneously making sure to give away as little
in stock as possible. It takes people like Peter Thiel to pull that off

~~~
eaguyhn
True, that. I was a schmuck that saw his equity diluted with every angel round
in the one successful startup. But I'm still glad I went through it all.

People can take this as a cautionary tale to make sure your equity is
protected or from an optimistic view that, at least, you gained something
other than abundant riches :)

------
tlbsofware
What if these aren’t stars that are disappearing but instead the appearances
and disappearances of wormholes that are either allowing us to see to another
place in space where that star is or perhaps a wormhole blocking where that
star previously was for us and we are now looking into another section of
space where a star is not?

------
vjktyu
Many comments here about skethcy startups and for good reasons. But isn't the
solution obvious? Allow software developers to work for multiple companies at
a time: 10-20, whatever. Just like investors diversify the risks by investing
into many, often competing, startups, employees could also work for many
companies.

------
dkarras
If I guessed just 6 simple numbers correctly for the powerball I'd be a
millionaire!

------
ojbyrne
Another upside to working at a tech giant: you make enough to be an accredited
investor. Which means you can do angel investments, which is an arguably
better way (Than being an early employee) to get those “outsize” returns from
startups.

~~~
niravs
good luck with getting into anything good with insane amounts of time &
effort. capital is cheap.

~~~
ojbyrne
How is the luck different from the luck involved with being an early employee?
Labor is cheaper than capital.

------
skrebbel
This is the first time I read about someone who regrets _not_ working for
Palantir.

------
4AoZqrH2fsk5UB
Most people who have been around tech for the past 15 years have stories like
this.

Maybe they didn't have check's written, but had opportunities to join firms
that later boomed huge.

Also the title is super-clickbaity. Poor form.

------
m3kw9
Is ok bud, if we all brought MSFT early we would have all been millionaires

------
bitcurious
I think the real lesson here is that if a friend that believes in you to the
point of offering you $70k simply to remove money as a decision factor for
you, try and remove money from the decision.

------
draklor40
Work in a startup only if it is yours or you have a significant stake in it,
or if you have no other options.

The payoff for "working" at a startup with respect to the risk is IMHO simply
not worth it.

------
xondono
From a spaniard perspective, the fact that he started with no experience
making double what I make now (10y) blows my mind.

I know outside of Spain is different and all of that, but man it is depressing

------
nostromo
Not buying Apple Stock in 1999 cost me $200M too.

Not to mention what not picking those winning lottery numbers cost me...

~~~
garry
Did you get offered 1% of Apple? I mean, getting offered equity at the start
of a thing is what I was trying to talk about.

~~~
jacquesm
No, but he did have the option to buy that lottery ticket.

If Apple had gone bust there would have been nothing to write about. By the
same measure I can review my life and take every decision I took with
hindsight and re-calculate what my net worth would be if I had taken the other
fork, I'm pretty sure I could come up with a few hundred million as well but
that doesn't matter, you only get one life.

Next time you have to make a decision like that: take the other fork in the
road, and likely you'll still end up frustrated because of the road not taken.

Life is a series of 'and' ports, if you miss one it will look like that was
the one that did it but in the end random chance had as much to do with it as
that one decision did.

So the comparison with a lottery ticket is on the money. Besides all that I
think you ended up quite well so 'cost' is probably not the best term anyway.

~~~
ignoramous
> No, but he did have the option to buy that lottery ticket.

From Garry's blog [0], it looks the it was more than just _buying_ a lottery
ticket. Peter Thiel cut him a great deal, by all accounts, and he still let it
go. The equivalent to that, imo, would be to have refused ticket offered to
you _for free_ which then won the lottery.

[0] _(Peter Thiel said) "Cash this check, quit your job. This is a zero risk
opportunity for you." I said, "Thank you very much, Mr. Thiel, but I might get
promoted to Level 60 next year."_

~~~
jacquesm
Quitting your job is not a zero risk opportunity.

------
Apocryphon
The response to this post is startling. Would it received the same reception
had it been written and posted a decade ago, I wonder. Has HN gotten more
jaded- and mature?

------
justicezyx
Once a while a celebrity showcasing their true intellectual capability, and
everyone found that they owe their success mostly to luck more than anything
else...

------
pinopinopino
I feel the comments in the threads are a bit too sour. Sure, you probably will
not make 200 million dollars or even 20 million dollars. I am going to make
that a bit stronger: It is highly likely you will end up broke as fuck. But so
what? Starting something up is really fun and if you are young (20 something)
and don't have many obligations yet, just go for it. It doesn't matter if you
fail. You will learn a broad skill set, which will be useful in the rest of
your life. It will build character. Even if you fail, it is not a worthless
experience.

~~~
Apocryphon
Not everyone has the luxury of failing. Everyone’s cost-benefit analysis is
different, and one takeaway from this discussion is that founders need to stop
skewing the cost by depreciating the shares non-founder early stage employees
get.

------
johnmarcus
employee #10 at palantir, that investor would fly down from anywhere just to
interview and write checks to at the table - this is not your average
developer. If your that talented of an engineer - than yes, you would be
selling yourself short working as a cog - at a shitty startup whos management
is too cocky to know when they are wrong - or a big company whom needs a
level-ish playing field for everyone.

------
inertiatic
Do people torture themselves over mistakes that only prove to be so after the
fact?

I thought I was a master of this art but this form of it escaped me.

------
Schnitz
The author forgot the part where they mention how purposeless and boring
working in a scrum chain gang at a big tech company is. ;-)

------
ogre_codes
My big mistake?

Not being buddies with Peter Thiel in 2003. Don't make my mistake, go back in
time and be buddies with Peter Thiel in 2003.

Just the fact that he had a buddy who could cut him a check for $70,000
_before_ his startup succeeded says a whole lot about the situation he was in.
If you have a buddy who tosses around this kind of cash, your options are
different from the options available to the overwhelming majority of us.

~~~
dang
This is a shallow dismissal, which the HN guidelines ask you not to do, and
especially not out of indignation.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

It's obvious from early in the article that Garry wasn't "buddies" with Thiel.
He had just graduated, and a college friend was the connection. That means
your point reduces to: people who go to elite colleges encounter opportunities
as a result. No one disagrees with that, certainly not Garry, but it's a
tangential, generic and therefore a weak response to the point of this
article, which is about taking the opportunities that do come your way.

~~~
geofft
I disagree with this. Why was Thiel willing to cut him a check - would he have
done so for any software engineer straight out of college? Did he technically
interview Tan?

If the original comment is revised from "Be buddies with Peter Thiel" to "Be
in the set of <1000 people who has connections with Peter Thiel sufficient to
get him to write you a check," the point still stands - this article is not
generically applicable advice, and your point (which I agree with) that you
should take the opportunities that come your way generally implies you
_should_ take the Microsoft job and hold out for promo - and I think you're
shallowly dismissing this comment.

~~~
dang
Having finished the article, I was just coming back here to edit my comment,
because I described it inaccurately. The article isn't only about taking the
opportunities that come your way; it's more specific. It's about owning more
of the value that you create and having more creative autonomy in your work.

Some people are going to respond positively to that message, others not, for
various reasons, but it obviously has nothing in principle to do with Peter
Thiel or "Be in the set of <1000 people who has connections with Peter Thiel
sufficient to get him to write you a check".

~~~
Apocryphon
Then the author did a disservice to us all by the clickbait framing of his
decision.

~~~
dang
I see what you mean and yes we should probably change the title (edit: done
now). But that doesn't excuse breaking the site guidelines by adding more
provocation of one's own. The intended spirit of HN is the opposite: to
respond to provocation by getting _more_ thoughtful, not less.

When people respond to provocation or negativity with provocation and
negativity of their own, we get a Tacoma Narrows Bridge situation. Most of the
internet is doing that every day, so there are many places to enjoy that
energy. Here we're trying for something different, and each user who comments
is responsible for that. Not that that's easy!

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

------
g_langenderfer
Optimal strategy seems to be work at FAANG while iterating on side projects
until something sticks.

------
sjg007
It'd be hard to realize that $200m though because Palantir is not public...

------
muststopmyths
only takeaway worth anything from this article

>My friend, Bede Jordan of Shelf Engine here in Seattle, actually said it
best, "If you don't work on your dreams, "someone will put you to work on
theirs."

------
chrshawkes
Why is this guy trending on HackerNews? To boost his channel?

------
NoblePublius
Maybe him joining earlier would have destroyed the company.

------
leowoo91
Well, it did cost me 200M not working for a giant..

Edit: I don't understand getting downvoted here, does someone think that it
can not vary for a person?

------
beardedman
Articles like this irritate me more than anything else. Why? The ENTIRE
paradigm is based on $. Article could just as easily have been written as
"Working for Microsoft allowed me to be a better father".

And strange a VC would invest in a (very socialist) statement as "Google's
pure profit per employee is actually $1.6 million per year, after all costs.":
easy buy in, very low practical value. There are very tangible reasons for
wage differences.

------
michaelcampbell
Miss a chance at working for a horrible person at a horrible company... how
much are your ethics worth? $200MM, seems.

------
khazhoux
Like Garry, I wholeheartedly encourage every engineer to work at a startup for
.00x% equity (unless you're employee #1, and you can ask for a whopping 1%).
The founders and VCs will have hundreds or thousands times more upside than
you (and they'll have preferential shares, etc), but at least you'll be In
This Together (in that you're working "together" to try to help the
founders+VCs join the Billionaire class -- a noble effort indeed!).

~~~
msoad
A friend of mine who's helping a VC firm has told me for the right talent they
are doing better these days. Like 10% equity for founding engineer + 200k
salary. With those numbers I can totally consider a startup job.

------
asdfman123
He met Peter Thiel before he got so famous.

It's important to be in an industry that's about to blow up. Getting access to
future billionaires is much easier than access to current ones.

I agree with the sentiment that you can do a lot more in smaller companies,
which is why I work at one that doesn't happen to be a startup. However, thus
far I've received no $200 million checks.

Working in Silicon Valley might have felt like fighting the status quo a few
years back, but right now, to me, an outsider, it feels a whole lot like the
status quo.

With respect to the author, I do not believe this is legitimate life advice
but instead is mostly humblebragging.

~~~
beardedman
I think quite a few people on here think this.

Funny enough - I'm pretty sure the article would have garnered a lot of
criticism if it were authored by someone else.

------
jerkstate
This is more of a humble brag than useful advice

~~~
geofft
It's also self-serving. There simply doesn't exist $200M for every software
engineer out of college. But if this guy, a venture capitalist, can get a
thousand more people to _think_ they'll win the lottery, invests in all of
them, and 999 go bust, he'll still make money on the one startup that succeeds
by being in the right place at the right time.

~~~
garry
I started learning about startups only after I started reading Hacker News in
2006. I was an engineer for most of my career up until then. Reading Paul
Graham's essays changed my life, and it changed the life of thousands of
people I've met now known for over 10 years, as an alum, a partner at Y
Combinator and now an investor.

Guilty, it is self-serving. It's my business. But I also know from direct
experience people who can make software are capable of building billions of
dollars worth of value.

I funded more than 200 companies worth over $36B now.

And I started just like you, here, reading Hacker News.

~~~
geofft
Do you think that every reader of Hacker News can do that? Logistically, how
would it work?

I'm not disputing that "people who can make software are capable of building
billions of dollars worth of value." Of course that's true. I'm disputing that
_everyone_ who makes software can individually capture even hundreds of
millions of dollars worth of value.

------
mkettn
So he's $200M in debt now?

------
gameswithgo
On the bright side you didn't have to associate with Peter Thiel or Palantir.

~~~
anaisbetts
Seriously - not earning $200m in blood money by helping the US Government
imprison and torture refugees is imho a Bullet Dodged

~~~
friendlybus
Got a link? I'm in the dark

------
cmdshiftf4
How many countless others have invested years of their lives, in exchange for
equity and comparatively low pay, in promising-sounding startups only to see
those companies fail?

Should they be retroactively counting the money they could have had if they'd
went to a more stable firm and had the same years of pay increases, bonuses,
RSUs, etc. as a loss?

This is hollow clickbait, but the author is clearly intelligent enough to know
that hence why it's mainly focused on a youtube video which I'm presuming he's
doing in the name of trying to build an audience and "clout" for himself with.

~~~
garry
This gives me a good idea for a video: How and when to quit.

To be frank I also quit Palantir far earlier than maybe I should have. A story
for another day.

Thank you for the feedback though, I do appreciate it.

------
p0nce
> I'm a Venture Capitalist.

Sums up the article nicely.

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tanilama
This is so scammy at so many different levels.

TL;DR: He doesn't have that 200M to start with, that is the imaginary money he
never earned.

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thrownaway954
The "could of", "would of", "should of" game... Ah.... how I love to play
thee.

But wait... let's go further and play the "what if" game as well!!! What if...
you took the job and moved out to Palo Alto only to trip walking up the stairs
on your first day of work to break your spine and be confined to a wheel chair
the rest of your life???

Point being... life turns out the way it does for a reason and you never know
what events will unfold or are avoided cause of the decisions you choose. Be
happy that you are alive and have what you have. Life isn't always about
getting or having more things.

~~~
garry
This is a good reminder and I agree with this.

By the end of the video my point is: Try to make stuff for other people, and a
smaller place generally lets you do that.

That is the true reward.

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senordevnyc
This is such a weird post. Big fan of Garry, but I don't agree with most of
this.

1\. Just because it turned out that you would have made $200mm doesn't make it
a mistake. If anything, that outsized return proves just how rare this kind of
outcome is. If you look at the YC startups graduating every year, _maybe_ 1
will ever generate $20mm for an early employee, let alone $200mm. Joining a
new startup for that kind of outcome is stupid, even (especially?) if the
founder is a big personality.

2\. What is the bizarre pie chart in the middle of this post supposed to show?
I'm very skeptical that it's actually based on data of any kind.

3\. What is the line about it being hard to believe that any company other
than Google is going to make money? Apple and Microsoft both earn more than
Google, don't they?

Bottom line, if you care about comp, you should know that no early stage
startup of any kind offers an expected outcome remotely close to the big tech
companies. Yeah, you might make a few million after working your ass off for
many years. But realistically, you won't. But you _would_ make close to that
(or more) if you worked for the big tech companies for those same number of
years, at a much lower risk.

If you want to do the startup thing, do it as a founder, not an employee.
Start with 30-100% of the equity, not 1% or 2%.

Again, I'm a fan of Garry's, but I'm very skeptical of these posts by VCs
trying to convince you it's a good idea to work at an early stage startup.
Startups are great for them since they have a whole portfolio of companies to
spread their risk across, but it's a shit deal for employees if you care much
about comp. I don't envy the hassle of trying to hire at a startup when big
tech companies literally pay 2-3x as more, but that's where we are.

EDIT: apparently the graph I referenced in #2 is showing that the top 5
companies in the S&P500 (as of sometime back in 2018) are equal in market cap
to the bottom 282: [https://www.newworldadvisors.com/post/the-role-of-private-
ma...](https://www.newworldadvisors.com/post/the-role-of-private-market-
investments)

Interesting, I guess, but pretty useless stat for the topic of this post. It
also ignores about 200 companies in the middle that have huge market caps as
well. Like Visa or Walmart or Disney. More here: [https://disfold.com/top-us-
companies-sp500/](https://disfold.com/top-us-companies-sp500/)

~~~
garry
Thanks for the note! I appreciate the feedback.

These things are crazy rare. I didn't do a good job of explaining then how
weird this experience was. In the moment it felt like any other startup. Peter
was great and well known but not outrageously famous the way he is today.

I also didn't do a good job of doing an intro on this idea that tech startups
are taking over all of the economy. There are some things that I just take for
granted— I guess in abstraction now there are trillions of dollars of market
cap in just tech firms, and this fits with my overall view that software is
eating every part of GDP. We see this every day, but it's not well explained
in my video/post.

I was making a joke about Google eating all of the world's revenue, but it
didn't land. Sorry about that.

Really appreciate the feedback here. You're totally right that it's more
directly lucrative and lower risk to work at a big tech co. I just still think
people should consider making things for themselves though.

~~~
senordevnyc
Yeah, I hope none of the criticism was too harsh. I'm a big fan, we've
actually met in person, and I almost got into YC while you were a partner. Oh
well :)

Agreed on most of your points here, especially about software eating the
world. There's a good post here, just not sure this is it yet!

~~~
garry
Just trying to get better. Not too harsh at all. Thanks again.

------
marta_morena
This article seems like clickbait and bad advice. This is like selling this
ridiculous American dream to someone. Oh, come to us, work hard, wash some
dishes and you gonna get far! What pile of garbage. Yes, it works for some
lucky few, but that's about it.

The truth is that most startups fail and most people in startups that don't
fail, worked their asses off and still only get scraps. Comparing today with
2003 is nuts. The times are so different that there isn't even a remote
resemblance.

Yes founding a unicorn can make you rich. Doh! Who would have thought...

But also if you worked at Amazon in 2008, saved all the stocks, re-invested
excess money in stock, even as an entry level engineer you would be a MULTI
MILLIONAIRE ten years later... Its just crazy to give advise to people to
prefer insane risk for a chance to get 200 million, over guaranteed few
millions in a safe job.

Yes there are people who really can't work at big tech and who want to hack
some startup code together. Go for it! Sure. For everyone else, big tech is
preferable by a large margin. And there I can work on projects startups could
never even dream of doing. The reason for that is that big tech works with
economy of scale. What is profitable for Google and Amazon might very well be
suicidal for startups.

And to top it all off, the author even says that Peter Thiel wrote him a
yearly salary as check. That devalues this article even more. Anyone, yes
ANYONE should have taken this offer. This wasn't about risk whatsoever. This
was about a 23 year old guy who didn't understand how the world works. And
that applies to literally anyone young.

------
genS3
If anyone can write me a 1year salary check so I can create my startup I ll
gladly frame your picture in my office.

------
cryptica
>> He asked, "How much a year do you make at Microsoft?"

>> It was $72,000 a year, really the lowest of the low coming right out of
college. He got out his checkbook and wrote me that check.

>> "Cash this check, quit your job. This is a zero risk opportunity for you."

>> I said, "Thank you very much, Mr. Thiel, but I might get promoted to Level
60 next year."

Wow. This is probably the most impressive combination of arrogance and
stupidity that I've ever read about or witnessed in my life.

~~~
geofft
It's the safe and rational choice. I went to work at a startup after college
and the company ran out of money in three years and valued my equity at zero.
I absolutely would have been better off financially working for Microsoft.

That Palantir worked out is hindsight bias. There's no way he could or should
have expected it to succeed at the time.

