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Successful companies also attract gold diggers. When the company is small, unless everybody is going above and beyond the call of duty, it's likely going to fail. As the company gets bigger, there is more and more latitude for failure. At some point it is successful enough that it can survive having people whose only goal is to direct a large amount of money into their pockets. This can lead to really weird decisions being made as people try to kill off "competing" projects, or to sabotage other people who are interfering with the flow of money into pockets. If you happen to be the hapless person who is innocently trying to make the company successful and who is not paying attention to where the money "should" flow, it can be quite painful for you. Of course, you will always be comforted by they near-apology, "It's nothing personal. It's just business" as they drive you ruthlessly into the ground.

> If you happen to be the hapless person who is innocently trying to make the company successful and who is not paying attention to where the money "should" flow, it can be quite painful for you.

It can be a painful, frustrating, degrading, and ultimately extremely valuable lesson.

It's especially difficult if you're naive because everyone around you is talking about metrics and OKRs, you agree on OKRs with people, and everyone seems to be working toward their OKRs. Everything seems so objective! It takes quite a bit of experience to internalize that (a) metrics have a lot of momentum and lag, (b) shit changes too fast anyway, (c) managers will move teams/groups way before the goals materialize, and (d) by the time they've moved nobody will remember what happened two quarters ago.

So while everyone is talking about the OKRs, nobody who isn't hopelessly naive actually cares about them (beyond the top line stuff executives see). Your manager doesn't care at all if you meet your objectives. They just want to look good until they can move to bigger responsibilities. Sometimes that happens to align with meeting explicit objectives, but quite often there is no alignment at all.

The people who understand the covert goals will do well very well for themselves (at least until the future eventually catches up to them). The people who naively work on their OKRs usually will not.

please write a book on this, or post a link to the book that you have written :)

I'm unlikely to write a book, but here are a few more tidbits that come to mind.

Re the above -- I don't mean to imply that any of this is malicious or even conscious on anyone's behalf. I suspect it is for a few people, but I bet most people could pass a lie detector test that they care about their OKRs and the OKRs of their reports. They really, really believe it. But they don't act it. Our brains are really good at fooling us! I used to think that corporate politics is a consequence of malevolent actors. That might be true to some degree, but mostly politics just arises. People overtly profess whatever they need to overtly profess, and then go on to covertly follow emergent incentives. Lots of misunderstandings happen that way -- if you confront them about a violation of an agreement (say, during performance reviews), they'll be genuinely surprised and will invent really good reasons for everything (other than the obvious one, of course). It's basically watching Elephant In The Brain[1] play out right in front of your eyes.

Every manager wants to grow their team so they can split it into multiple teams so they can say they ran a group.

When there is a lot of money involved, people self-select into your company who view their jobs as basically to extract as much money as possible. This is especially true at the higher rungs. VP of marketing? Nope, professional money extractor. VP of engineering? Nope, professional money extractor too. You might think -- don't hire them. You can't! It doesn't matter how good the founders are, these people have spent their entire lifetimes perfecting their veneer. At that level they're the best in the world at it. Doesn't matter how good the founders are, they'll self select some of these people who will slip past their psychology. You might think -- fire them. Not so easy! They're good at embedding themselves into the org, they're good at slipping past the founders's radars, and they're high up so half their job is recruiting. They'll have dozens of cronies running around your company within a month or two.

From the founders's perspective the org is basically an overactive genie. It will do what you say, but not what you mean. Want to increase sales in two quarters? No problem, sales increased. Oh, and we also subtly destroyed our customers's trust. Once the steaks are high, founders basically have to treat their org as an adversarial agent. You might think -- but a good founder will notice! Doesn't matter how good you are -- you've selected world class politicians that are good at getting past your exact psychological makeup. Anthropic principle!

There's lots of stuff like this that you'd never think of in a million years, but is super-obvious once you've experienced it. And amazingly, in spite of all of this (or maybe because of it?) everything still works!

[1] https://www.amazon.com/Elephant-Brain-Hidden-Motives-Everyda...

    There's lots of stuff like this that you'd 
    never think of in a million years, but is 
    super-obvious once you've experienced it. 
    And amazingly, in spite of all of this (or 
    maybe because of it?) everything still works!
I think it's because like with many other issues, we are not really in such a resource-constrained environment as the free-market advocates will make you believe ("every company below peak efficiency will quickly and ruthlessly have their lunch eaten and go out of business").

According to the first link I could find (https://eh.net/encyclopedia/the-american-economy-during-worl...) in 1945, 37% of American GDP (and almost 90% of government spending) was spent on the war. And yet basically everyone was still housed and fed with 1945 tech on only the remainder.

There's a lot of fat for these inefficiencies to feed on before (and if) they kill the organism. That's also why there are so many bullshit jobs around that the world would actually be a better place without.

Thanks for the great insight, but I also have to admit it is incredibly disheartening and bleak. I truly think silicon valley is not a good place for the human psyche as a whole. Quite honestly it breeds negativity, envy, imposter syndrome, which all turn into depression.

It's cliche, but some of the happiest people are farmers, construction workers, or people who physically work on tangible things. Also, I feel people in the bay area compared to the south where I now live are perpetually unhappy and outraged. There is more to life than work. Simple and a slower life is not such a terrible thing.

>some of the happiest people are farmers

Farmers and soldiers have notoriously high suicide rates. One explanation is that it's caused by a lack of control. From that perspective, it's certainly frustrating to watch your company succumb to inefficiencies (e.g. politics), but as a white collar worker, it's much easier to solve than for farmers. White collar worker can move laterally to a new job or upward, but farmers are looking at selling the family farm (social/career implosion) or controling the weather (impossible).

>Simple and a slower life is not such a terrible thing.


For some reason, your post reminded me of this bookmark I go back to:


"In Drive, Pink goes on to illustrate why the traditional carrots-and-sticks paradigm of extrinsic reward and punishment doesn’t work, pointing instead to his trifecta of intrinsic motivators: Autonomy, or the desire to be self-directed; Mastery, or the itch to keep improving at something that’s important to us; and Purpose, the sense that what we do produces something transcendent or serves something meaningful beyond than ourselves."

Wow, that is so depressing on so many levels but thanks for calling it out and educating us clueless ones.

It's more helpful to look at it as a social scientist. This is what can be empirically observed about the behavior of a large group of humans under these very specific conditions. It's not good or bad in the same sense that chemistry isn't good or bad. It just is, and can actually be quite fascinating if you look at it from that light!

It's also magical that given all this, everything still works! The products get shipped, the people get paid, the world benefits! Think of it this way -- human behavior is much weirded than one would naively expect, and we manage to self-organize to accomplish all this crazy stuff! Isn't that pretty cool?

I'd say that it's also a big part of the reason so much of what get shipped is incredibly mediocre, though, and why small teams of dedicated people that manage to ship generally seem to ship the highest quality products.

I've first hand experienced teams of 4 people achieve higher output (both in quality and velocity) than teams of a dozen+.

> professional money extractor

It's strange how SV geeks as a class will generally skew libertarian and wheel out lots of free market arguments, but haven't read Coase nor thought about how this applies within an organisation. Of course they're money extractors, that's what you've selected and that's what your culture prizes - you were just hoping they'd turn the money-extraction skill only against people outside the organisation. It's not even necessarily a bad thing, every successful startup needs a bit of this to get money from investors and make their first sales of a not-really-existing product.

I think this is very true, but it's worth pointing out to people. A lot of people don't think it through. You get technical people who are really passionate about their work. Additionally, they want to get rich. They think SV is the perfect marriage -- do amazing technical work and get rewarded with riches. The reality is that the money attracts a lot of people who are completely uninterested in anything but money. It's obvious if you think about it, but many people don't think about it.

>> People overtly profess whatever they need to overtly profess, and then go on to covertly follow emergent incentives.

This is a universal truth, and it is probably the main reason why a company needs a well defined mission, vision, and core values. They provide a way for individuals' emergent incentives to align toward a common goal.

nailed it

I believe this one should be relevant to your interests. Best non-fiction book I've ever read.


I was about to link to the Opportunist / Idealist / Pragmatic blog post but this is even better.

The Dictator's Handbook, by de Mesquita & Smith:


The Ropes to Skip and the Ropes to Know

Is the book worth reading in your opinion? Which edition would you recommend (earlier editions are sometimes less pc than the latter ones, and therefore contain more/better information)?

Your post reminds me of this excellent post on metagames.


The naive employee you mention who strives towards OKR completion wins the game, but loses the metagame of corporate ladder climbing.

This sounds true for startups and "established" organisation alike.

Slightly different take: I remember back in the dotcom boom, a company of which I was a part started to go downhill (in a bumpy fashion, with VC money).

In retrospect, one of the early employees observed that this happened when the company "was big enough that people could hide".

That seemed to happen around 60ish people.

>>That seemed to happen around 60ish people.

The moment your boss has a boss, its just plain easy to hide.

The most important thing to understand about big people structures is every thing is a 'cost center'. The expenses aggregate at your boss, its irrelevant who is consuming how much in a team. For example Boaty McBoatyFace could have negotiated a big bonus from his boss Scrooge McDuck. Scrooge could have 10 people reporting to him, but Boaty's bonus is largely an expense divided by 10 across Scrooge's team, and largely appears as expense per person to the Scrooge's boss.

More precisely its like

    SELECT SUM(person_expense)
    FROM expense_table
    GROUP BY manager_name;
Sure some one could fire a query and see it was not 9 people who ballooned Scrooge's expenses, but only one employee called Boaty. But almost always no one does that(Because people who deal with expenses interact through Dashboards, not SQL queries).

I learned this first hand from my ex-manager. Also most organizations are likely to fire queries along the lines.

    SELECT SUM(expense)
    FROM expense_table
    GROUP BY expense_category;
expense_category being things like lunch, project outing, education etc. Then companies decide to cut down on budgets related to that category. But that's on the common category alone.

Say an expense category was 'bonus', or 'stock grant'. Its very common in most orgs, that in a team, for 2 - 3 people to eat the whole team's budget, and yet be totally invisible. And better, make it look like the whole team finished the budget.

Same thing in the hedge fund space. When you start seeing people walking around who are basically like Creed from The Office and you start to wonder 'what does that guy actually do all day'. It's normally a good indicator that PnL is going to get rough.

But it also helps that the relationship between money in and money out is more explicit in finance. The feedback loop is more immediate.

Then office politics really pick up, and it’s no longer about being a team, but playing affiliations instead. People will totally throw each other under the bus when a promotion is up for grabs and there’s real money at stake. Power shifts between factions and people must make decisions about not only how to present themselves in the situation, but how to align themselves. People will gladly take credit for the successes while blaming others for the failures. If you think politics in real life can be a shit show, there’s times where the workplace may not be that far off, since it’s still real people afterall.

People become invested for themselves (in some ways that always true with work, but there’s levels of obviousness). It’s like that with every trending “gold rush”. Opportunity arises, FOMO strikes, and hell breaks loose. A worplace that suffers 0 damage would be incredibly rare, but having the presence of mind to accept it, plan for it, and confront it in a positive way makes a huge difference is the ultimate success or failure of a place.

>>At some point it is successful enough that it can survive having people whose only goal is to direct a large amount of money into their pockets.

This is true about any large people structure operation. In fact I would say this is true in any case where your boss has a boss.

>>If you happen to be the hapless person who is innocently trying to make the company successful

You are either going to be a Jeff Dean. Very likely you won't be.

In the other case this is the equivalent of painting a huge X and walking into an arena full of political snipers. The first thing they will do is eliminate you at all costs, to prevent competition from emerging.

I've been purposefully losing 'Hackday' and 'Innovation Challenges' at work. Those have little to do with innovation and mostly exercises to prepare purge lists.

Unless you founded a non-profit isn't your end goal to "extract money". Your employees should be in it for love though?

I think what you're really talking about is short vs long term gains.

Unless you give your employees the option to achieve long term gains that out weigh the short term gains, they'd be kinda dumb not to focus on short term gains right?

Of course, you'll still get people who focus on short term gains even if long term gains are better, because they might think it's more likely they can find better success moving on to their own version of long term gains, or they think they'll get screwed over if they put all their eggs in your basket.

At some point it is successful enough that it can survive having people whose only goal is to direct a large amount of money into their pockets.

Seen this a few times, “executives” joining late in the day (weeks before IPO) with 10-100x the stock(options) of early engineers.

Seen this too. What I can't understand is what makes people hire these clowns ?

The first thing you learn about business is that you don't know how it works.

The second thing is that no matter how experienced the competition looks, they don't know either.

Hiring cannot solve a lack of business knowledge ... and yet everyone keeps thinking, again and again and again, that it does.

So what makes people hire these idiots ?

It seems like a group thing where they buy credibility with industry insiders. IPO's are all about lending credibility (that's why investment banks take a huge chunk), and the do-nothing hires are apparently related to that.

Yes, signaling plays a big part. At some point you’re basically buying a gold-plated LinkedIn profile for the VCs and the press releases and the keynotes in industry summits, and that feeds on itself - each new prestigious VP position is another layer of gilt on the CV.

In other words, they are hired to look good - any productive outcome is a mere coincidence.

The IPO process is very tricky too; they want large holders to keep their stock as long as possible either to avoid tanking it or to keep the float small so it will bid up quickly. Naturally all these people can get out before the employee lockup ends though.

If you see such behavior, I encourage you to look for personal relationships. Many of those situations that I have observed the grifting new hires were friends of the investors or founders, etc.

My memory is hazy but the first time I saw this, they were all followers of the same guru as the founders. Not actually Scientology but a similar sort of thing. They lost it all in the dotcom crash anyway!

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