
How I Turned Down $300,000 from Microsoft to go Full-Time on GitHub (2008) - hendzen
http://tom.preston-werner.com/2008/10/18/how-i-turned-down-300k.html?
======
geophile
My story, along similar lines: Microsoft was recruiting me for two years,
starting in 1994, while at my first startup. I kept saying no. I left the
startup to work, by myself, on an early ORM for Java, (back in JDK 1.0.2
days).

Microsoft approached me again, offered to buy my technology for a close to
$1M, give me lots of equity (back when that stock was growing quickly), and
roll out my product, (this was before Microsoft dumped Java). I would then go
to work on what they wanted me for originally.

A couple of trips later, I just didn't like Microsoft, and started searching
for alternatives. I found a little Boston-based startup who needed my product,
and who I liked a lot. (Actually, the guy who put me on the trail of this
startup had just gotten his company acquired by Microsoft.)

I got drunk, called the VP putting the offer together, and said thanks but no
thanks. He said I'd be sorry.

I wasn't. I didn't make nearly as much as if I had gone to Microsoft, but I
built and shipped my product, stayed on that product, worked with Java (which
I liked) instead of the MS platform (which I didn't), learned a lot, had lots
of fun with it, and saw the equity turn tangible. Couldn't have asked for a
better outcome.

~~~
jimmaswell
The thing you were building was worth more than one million dollars to you?
It's good that you're pleased with the outcome, but the notion just seems
really bizarre to me to give up one million dollars just to keep working on
one programming project on my own. Maybe there's something about it I'm just
not "getting".

~~~
sxtxixtxcxh
have you considered money isn't everything?

~~~
jimmaswell
Yes, but one million dollars just seems like a huge sum to give up for one
project to me. I'm not saying they made the wrong choice, it's just one I
can't see myself making. $1M is a decade of $100k a year. Money might not be
/everything/ but that's a pretty comfortable life while you work on other
projects or hold another job with no fear of running into serious financial
problems as long as you don't do something ridiculous.

~~~
hnriot
It's classic cognitive dissonance - they realize they made the wrong choice,
so expend energy and time justifying it and explaining how they made the right
choice every chance they get, as though eventually they will convince
themselves. And they probably will, in time.

~~~
geophile
Sorry, but no. It was the wrong choice financially, but the right choice for
my emotional well-being. I also reasoned about regrets years down the road --
I'd probably regret not having tried my own thing.

And I don't explain this "every chance [I] get". I think about it rarely, and
discuss it even less. I've done well enough financially that giving up the
Microsoft cash just doesn't matter. I just mention it here because it seemed
relevant to the topic at hand.

~~~
WayneDB
You really don't know if you made "the right choice" for your emotional well-
being because you can only see one of any number of possible outcomes.

If you'd have gone with Big Bad Microsoft, a lot of things could have
happened. At the instant of deciding - you could have learned how to make
decisions based less on emotions and more on logic. You could have helped
change the company culture instead of being relatively ineffectual. I wonder -
what has your hate-based (I assume) decision really changed for anybody
outside of a small Boston startup?

~~~
geophile
Wow, that's a harsh comment.

Being neither Vulcan nor omniscient, just human, I had to make a decision with
imperfect information, and my instincts did play a role in that decision.
Improving Microsoft corporate culture was not my goal. Improving the world was
not my goal. My goal was to work on software that I was driven to write, using
technology that I enjoyed using, and to provide a comfortable life for my
family. I did all of those things.

I don't "hate" Microsoft, but combining what I knew of myself at the time,
with what I observed at the company, I concluded that I would be happier
elsewhere.

------
textminer
This was inspiring in a way many "how I started a company" posts aren't.

I also appreciated the transparency re: the retention package offered to him
in the Powerset acquisition. As a younger engineer, I've spent a lot of time
focusing on salary numbers (going from $70k to $90k to $100k to $122k in a few
years, and across a few companies), but I'm starting to see how that's less
informative than bonuses/stock grants, where the real long-term incentives and
house-buying/lifestyle-company-starting capital comes from.

Are there forums where folks openly discuss numbers like these? Glassdoor can
be confusing sometimes, where it's unclear if folks are putting down their
pre-tax salary number or their [salary + sign-on + annual bonus + RSU] number.

~~~
onedev
There are a few numbers on Quora submitted by anonymous people but not a very
large set of data points.

------
nchuhoai
The interesting part for me was the "I am accustomed to the six-digit
lifestyle".

For this and other reasons, I consciously try to keep an asset-
light/expenditure-light lifestyle (which is easy to do at college-age). It's
not that I like to a hip startup guy that is proud of eating Ramen every day
(I fucking hate Ramen), but not having to have to face a tough decision
because of my lifestyle.

You can have a fun and a great life-style for little money.

P.S.: Wow, I do sound like an idealistic hippie.

~~~
dyno12345
I have the six figure income and don't really spend much of it on anything.
Like what could I possibly spend that much money on? Go out and get the most
expensive thing on the menu every night of the week? Fill closets with
designer clothes I'll never actually wear? I have no idea.

So I just throw a huge cash pile into savings paycheck after paycheck, year
after year. I feel like I could develop some alternate career that I could
enjoy more, like working on cruise ships or music video shoots or something.
Makes me wish I had crappy food service or retail jobs when I was younger so I
had some alternate experience to draw from.

~~~
rodly
> So I just throw a huge cash pile into savings paycheck after paycheck, year
> after year.

I hope you're generalizing here and not actually wasting your money in a
savings account. Throw that in some IRA's, CD's, and short-term index funds.

~~~
dyno12345
Though I have too much of it in a money market account, I was being over-
general

tangent: I never saw the point in CDs if I could get a better rate on treasury
or muni bonds

~~~
n72
Find CDs with a low early withdrawal penalty (Ally bank for example) and
you've for many intents and purposes eliminated inflation risk, to which the
bonds are vulnerable. Inflation may not go up, but it certainly can't go much
farther down. See for example
[http://www.cbsnews.com/8301-505123_162-37741854/four-cds-
tha...](http://www.cbsnews.com/8301-505123_162-37741854/four-cds-that-protect-
against-a-bond-bubble/?tag=mwuser).

~~~
dyno12345
Some kind of Treasuries with 0.5% APY? Why not
[https://personal.vanguard.com/us/funds/snapshot?FundId=0083&...](https://personal.vanguard.com/us/funds/snapshot?FundId=0083&FundIntExt=INT#tab=1)

------
pdog
It's interesting that his employment offer was a salary plus a $300K bonus
_over three years_ , and just a few years later GitHub is valued at around
$1B.

Not only that, they didn't take any funding in the beginning. (It was
bootstrapped completely for many years -- its first ever funding was a $100M
round valuing GitHub at $750M.)

Previous discussion on HN: <https://news.ycombinator.com/item?id=338286>

------
seanmcdirmid
Let me share a similar story.

A long time ago, I did my undergraduate thesis at UW on a project called
Kimera [1], a bytecode verifier for Java back in the days when such things
were still pretty novel. I came across a nice fuzzing technique to test our
verifier using Sun's and Microsoft's (all other verifiers being the former) as
oracles. After we found all our bugs using this method, we began to notice
bugs in the other verifiers, and we were able to turn one of these bugs into a
full on security breach in the Netscape browser.

So we got Microsoft's attention (not that far from UW), we met a few times,
and they offered to buy our test suite/technology for an amount of money where
my share would have been a lot for the time. However, the professor in charge
decided to spin the tech off into a startup. The startup eventually failed,
but I think the decision was reasonable considering this was during the first
dotcom boom and everyone else was doing it. I also got some nice consulting
income out of it, and the whole Java thing at Microsoft came tumbling down a
few years anyways.

At the end of the day, I still wound up working for Microsoft after grad
school :)

[1] <http://www.cs.cornell.edu/people/egs/kimera/>

------
blazespin
Inspiring, but a prime example of Survivorship bias

<http://en.wikipedia.org/wiki/Survivorship_bias>

~~~
acjohnson55
Absolutely. And I say this as someone who's turned down many lucrative
opportunities to "follow my heart". If you're going to do it, don't do it for
the money. Turning down a mid-six-figure offer to start a billion dollar
company is most certainly an outlier, on both sides.

If you're going to turn down money in hand for something speculative in your
own life, do it knowing how much time, money, and opportunity you can afford
to lose, and do it because it's something you really believe in. Even if you
fail, you can land on your feet with an experience you'll never forget.

Just don't do it out of some crazy notion that destiny rewards the reckless,
which is where the survivorship bias comes into play.

------
eliben
An interesting story. One observation:

"[...] At 29 years old, I was the oldest of the three GitHubbers, and had
accumulated a proportionally larger amount of debt and monthly expenditure. I
was used to my six digit lifestyle. [...]"

Now, how does it happen that a guy earning six figures "accumulates a large
debt" over time?

~~~
enneff
By living beyond ones' means. Most people do it, regardless of their income.
The single best piece of advice I've heard is "Live within your means."

~~~
eliben
> Most people do it, regardless of their income.

Really - how does this work? If you consistently live beyond your means, do
you just die with a huge debt or do you repay it somewhere along the way?

~~~
seanmcdirmid
Eventually, it catches up with you, and either austerity ensues or you go
bankrupt. Happened to me a couple of times as a kid (via my parents, not my
spending of course).

~~~
eliben
What does it mean for an individual to go bankrupt? [genuinely curious]

~~~
markdown
It means you're fucked. Your name is dirt after that. You'll never get credit
again.

~~~
dublinben
Never being seven years.

~~~
markdown
I guess it depends on where you live.

In my community, nobody of consequence, let alone credit providers, would
forget within 7yrs.

Further, there are other consequences eg. you'd be barred from holding public
office.

~~~
tptacek
Your community sucks in this regard. Bankruptcy is not like that in the US.

------
jimmaswell
Great that it worked out for him, but I can't see myself risking bankruptcy
and all the other things that could go terribly wrong running a startup when I
have a 300k job offer at Microsoft.

~~~
chatmasta
Yes, but was he really risking bankruptcy? What was the worst case outcome of
his decision? If GitHub eventually failed, I highly doubt he would go
bankrupt. He would just have to find a new job, which for someone offered
$300k from Microsoft would presumably not be difficult. In fact, he could
probably walk right over to Microsoft and ask for a job.

A lot of these "life changing" decisions are portrayed as "risking bankruptcy"
vs. job security. But for a talented developer, job security is not a fleeting
opportunity. He could always choose to find a job later. He only had one
chance to go with GitHub. When you think about the decision like that, the
choice is obvious.

~~~
jimmaswell
Maybe I'm overestimating how bad it really is when your startup attempt fails.

Here's what I'm imagining:

Working on a startup full-time without a job, before it starts earning money
on its own, you're losing money constantly to bills and food. If your startup
doesn't start getting profit soon enough, your stored money runs out, and you
either have to live with a friend/family, or worst-case, become homeless
unless you found a new job before the startup went totally under (you might
not get any interviews in this time or get to the interviews and not get the
job). Getting a job after running out of money living with friends/family,
it'll have to either be remote or somewhere you can ride a bicycle/walk to,
unless your friend/family lends you money or drives you around (less likely).
I wouldn't feel safe having to use a bicycle as my primary transportation --
if my legs get tired I've gotta walk or find a bus. Showing up to your job
interviews sweaty and exhausted probably doesn't leave a good impression. If
you're homeless, I guess it might be possible by some stretch to remote from
public libraries? More realistically, I guess you'd have to get a job at a
supermarket or something along those lines and soon after that be able to
sustain living at a low-rent apartment somewhere (if you live somewhere with
reasonably-priced housing available, which you probably don't if you're in the
startup hub of San Francisco). In the mean time you could shower and keep your
clothes in a gym; I've heard lots of homeless people do that. Getting a job
now and going through an interview at that point would probably be harder than
before due to more stress, less good sleep, and so on. Hopefully you wouldn't
lose all your possessions in the meantime.

Maybe I'm just too inclined to think pessimistically. The average outcome of a
startup failure probably isn't that bad. If one option is a 9/10 chance
something will turn out amazingly but a 1/10 it'll be a long-term disaster,
and the other option is a 100% chance things won't be /amazing/ but they'll
still be pretty great, I'll almost definitely go with the second one. I guess
I'm just not the type for this kind of thing.

~~~
notJim
Presumably you would seek other income opportunities _before_ you're so
destitute as to be homeless. And that doesn't always mean quitting your
startup, either. Many people or startups take on consulting projects while
they're getting off the ground to make ends meet. There are many opportunities
out there for people who have a demonstrable history of making real things
happen.

Also, in big cities where startups usually are, it's not usually that hard to
get by without a car.

~~~
jimmaswell
Right, I'd just be afraid the other income opportunities might not come along,
but apparently that fear isn't too rationally founded and programmers are in a
pretty decent demand, according to what I've seen.

>There are many opportunities out there for people who have a demonstrable
history of making real things happen.

Even if it was a failure?

>Also, in big cities where startups usually are, it's not usually that hard to
get by without a car.

I used to get a bit tired just walking around my high school. I've never lived
in a city, though. I'd probably adjust well enough eventually.

------
aespinoza
This is an extremely interesting story for me. I just had to make a similar
decision.

I had always wanted to work with Stuart McClure
(<https://twitter.com/stuartmcclure>), and I was fortunate enough to do so. I
joined Cylance (his new company) in September of last year, by February I had
to make a choice.

Get in love with Cylance full time, or continue to have a love affair with
iKnode. I choose to continue with iKnode, and on February I quit my job. It
was an extremely though decision because I loved that company, and the team...
it was basically a dream come true.

I, too, quit my job to go after the Holy Grail. And things have been great. It
is true that this kind of stories (like the Github one) is extremely
inspiring. You want to go ahead and do it as well. But there are so many
implications to it. It sounds so interesting when you read about it, but doing
it is an extremely different story. You fill yourself with doubt and
uncertainty. Specially when you 2 kids to feed, and still keep your sanity.

I can't say that looking back, I feel great about my decision, because I am
not out yet. I am still living the consequences of my decision. I know the
iKnode team is very happy that I decided to stay. And I know for usre I will
definitely write a similar blog post in the following years. I know we will be
successful. I know I made the right choice.

~~~
albertoavila
Going after your own venture while you also need to support your family is
frightening and yet inspiring.

I wish the best of luck to you and your team.

~~~
aespinoza
Thanks :D Keep an eye for Structum.... we'll make it big.

------
orijing
> I was still working full time at Powerset on July 1, 2008

I'm curious how this works normally. He was employed full time at PowerSet
nine months after he started working "full time" on Github. What did Powerset
think of his devoting his time and energy to Github? What is the industry
norm? What about the IP issues that complicate the matter? Couldn't Powerset
have claimed ownership over Github since he was a salaried employee?

~~~
btilly
PowerSet is in California.

California has fairly strong protection for employee's intellectual property
in stuff they do on their own time that is not relevant to their employer's
business. This protection is, admittedly, more effective if you're employed by
a small company with a focused business than if you're employed by a major
corporation that does a bit of everything. But github doesn't sound much like
a natural language search engine, so I doubt there were any IP issues to worry
about.

See [http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=lab...](http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=lab&group=02001-03000&file=2870-2872) for the relevant
statute.

~~~
ajays
I think this single piece of legislation has done more for California's
startup scene than anything else.

------
DanielRibeiro
Tom also gave an amazing talk of the founding of GitHub when he first spoke at
Startup School a few years ago: [http://tom.preston-
werner.com/2010/10/18/optimize-for-happin...](http://tom.preston-
werner.com/2010/10/18/optimize-for-happiness.html)

------
Sealy
Tom, you have the guts that many of us aspire to having. I'm sure I speak on
behalf of the community when saying thanks for deciding to go with GitHub!
Making that decision, you have have set a new standard in the world of
development. Forever.

------
quackerhacker
>“wow, that was an adventure,” not “wow, I sure felt safe.”

Love the ending! Reminds me of a someone from my childhood. Us being the
annoying kids would tell him "smoking kills 10 years of your life"...his
optimistic response would be "the last 10 years suck anyway."

------
alcuadrado
This post is also included in The passionate programmer, a really great book:
<http://pragprog.com/book/cfcar2/the-passionate-programmer>

------
m4tthumphrey
Love this post. Always read it every few months.

------
rodrigoavie
Good to read from time to time. I bet he's got no regrets!

------
ellicottvilleny
Am I the only one who likes Bitbucket 100x more than GitHub. Still. Cool
story, bro.

~~~
lifeisstillgood
quite possibly ...

Atlassian always had that Adobe feel to it - there was a wobbly mirror between
me and the way the code underneath wanted to work.

Its hard to explain but it is best put as - github (untill v recently) does
not feel as if decisions are made by somone in charge of others where the
others get it, but the someone just does not understand it quite right

