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.
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.
Very true. Making it even more unbalanced is that a startup exit may not be profitable to non-founders. I spent the first 17 years of my career at 3 different startups. Two were acquired and one is still chugging as a lifestyle business for the founder. The net value of my options (> 1% even after dilution in two of them) amounted to a $2000 capital loss due to there being no money left over after debt and liquidation preferences. I did get $350k payout for one of them since I was an executive.
I recently started at a FANG, where the new grads make cash and stock comparable with my startup exec compensation and it won't take long for them to eclipse it. I'll be making multiples of my previous compensation.
That said, I wouldn't change my path one bit. I learned so much in those startups that I wouldn't have learned anywhere else. I had a level of scope and responsibility that apply to nearly any tech job. It also lets me appreciate the benefits and stability of a large company. When I joined those companies, I was also not even thinking about making bank on an exit. I just wanted to work with nice people and build cool stuff.
I'd like to think that no matter which of these paths we chose - the more stressful and risky life or the more secure and corporate FAANG one - we'd all have a chance to live a decent life. I really enjoy working at a small company and we make a notable impact on society, but the money will never approach FAANG levels.
The work might be similar but you're paid 50-75% of your peers. That was my experience in startup land, at least. Few good challenges or career growth and half of what I felt like I was worth.
Are you thinking like bonuses for growth? Deferred bonuses?
However right now FAANG companies generally do not offer either the following:
- Reduced work weeks
- Remote work
I've talked to several staff and principle engineers who've told me that for the right company they'd take a massive paycut to work remotely 3-4 days a week. I've had the opportunity to work a 3 day week while making enough to support myself and I have to say, it's incredibly freeing. I don't think this is a sensible offering for anything below a Staff engineer, but it could be a promising path to get truly top talent.
I definitely felt "more productive" at startups since my work felt like it had a bigger impact to the company.
> and if you think the FAANG job is more difficult and stressful.
So far, it feels no more difficult and is stressful in a different way. With a startup, there's the stress of worrying about the company going under. At the FAANG, there's the stress of performing at a high enough level to justify the compensation.
A bunch of people gather together and build a thing - why is the first person to the table the person who takes home all the profit? Sure employees are technically signing away their rights by agreeing to work without being compensated with a portion of their work, but it'd be really hard to actually pursue proportional ownership in the current labour market.
Then there’s advisors and execs. You can enter into an A stage startup as an exec or an advisor and generally expect ~1% equity post dilution. This easily eclipses all but the first few early employees who have been working their asses off with much less comp for a much longer time. Maybe really good execs and advisors are game changers but I haven’t seen it play out in practice. More often than not success of the early few hides failure of the new leadership to do anything remotely resembling what they’re paid so preciously to do.
So in the current market the only valuable part of working at a small gig becomes the alignment of risk profiles and consequential networking, and the do or die environment that accompanies an 18 month runway. I think these are good experiences for anybody to have at some point in their career. But since most people are rational they look at the numbers and it just doesn’t add up.
I've yet to see someone who thinks otherwise actually go out and start a company. Perhaps it's because the calculus changes when it's your business and livelihood on the line.
I’m talking about the equity distribution sub-10 here. What sub-10 employees are getting any more benefits than their founder(s)? Maybe marginally more cash but it’s all still below market so it doesn’t really matter. But most founders I’ve encountered are actually paying themselves more than their early employees because they have to in order to maintain their lifestyle in big city. But they also have remarkably disproportional slices of equity.
If a founder is investing large sums of their own cash it’s because they have that luxury. And I don’t think that’s actually very common. More often a founder drops some sweat and cash to incorporate and then maybe isn’t getting paid much while they pitch for seed capital but they’re doing so because they can’t afford to take no salary for very long. Even if you occasionally do see founders who’ve “killed” themselves for their cause, most of the founders I’ve encountered actually come out of cushy jobs where they essentially moonlit as a founder until they met someone willing to blow a few MM their way. In my opinion this type of story does not justify such disproportional equity distribution.
At this point I honestly think telling founders that they take on so much risk and should retain such a large portion of their company because they did all the hard work is a somewhat subversive tactic used by investors who want to retain control over their investments. It’s a lot easier to reason with a single founder than 5 large equity holders.
I think founders deserve a lot. I don’t think the typical founder deserves 10 times the equity of sub-10 employees. I think you’d see more people willing to join early stage companies if the attitude around equity shifted.
And again, if you think founders should take less equity then you're free to start your own venture and show everyone how well it works. I've yet to see single example of this though. If it's so easy to start a company without risk and get rich then what's stopping anyone else?
Do you realize VC companies are less than 1% of all the small businesses out there? Most entrepreneurs are not well-connected wunderkind raising millions, they're just normal people busting their ass and risking everything they have to start and grow a business. Reality is much harsher than some wishful thinking.
In this thread we’re talking about what stops people from leaving their cushy jobs at big corp to join a small gig where apparently the talent is sorely needed. My response to that is, “if it’s so needed then speak with equity and more favorable comp strategies that are more likely to pry those smart people out of FAANG’s grip”. If the world needs a few principle engineers for some incredible new idea then surely the world can find the capital to fund the equivalent of a few 500k salaries for a few years—whether it’s with more cash or more generous equity or both.
It’s a two way street. Every time I hear someone lament about the dying startup scene my response is generally that humans are acting rationally and the industry has realized that the ~0.2-1% equity offered for positions 4-10 at a small gig is not really worth the sacrifice required unless some other stars align (mega exciting domain, super unique opportunity, write off as professional development).
So either the startup industry is dying and all the good talent is locked up in FAANG. Or maybe startups don’t need principle engineers and 0.1% talent in the first place. It’s probably some of both.
And I’m certainly not sitting in a pile of my own self entitlement at FAANG thinking, “if you want me pay me more because I’m hax0r”. I’ve made my own sacrifices to be a part of growing a small company. We’re in a specialized domain where finding the right talent is especially difficult. I’m unable to fault anyone for rationally biasing towards more comp and stability and less stress. So when the topic comes up I like to remind people that the status quo equity/comp strategies that you see at most places are a little dated and despite it being (as it seems) somewhat presumptuous of me, suggest that founders might be biased towards overvaluing their own contribution to the cause. If the cap tables were a little looser I think you’d see the scene perk up again...
And if most startups fail, why is equity worth so much to employees? Who wants to be paid in worthless options? This is the other common fallacy I see. Startups can compete by offering cash and better benefits like work flexibility. Equity rarely moves the needle and doesn't suddenly make people better workers either, regardless of all the hype leadership blog posts about ownership.
Some people respond to the increased responsibility and will always work at startups. Some people always want the big corporate gig. Neither will change much based on equity. What startups are competing over are the mostly average workers in the middle that could be swayed with the right offer, but there's not really a global shortage, just with hype FAANG workers (who are no longer 0.01% quality or anywhere close). You can get great people anywhere and plenty of startups have figured that out.
This topic was covered in Episode 3 of Gimlet Media's "Startup" podcast. He ended up do a 50/50 equity split. They seem to have done well for themselves.
(And why this reply is not properly indented is beyond me.)
That's not the same as founders giving up majority to their employees.
Why should equity be a default option? Most startups fail so that's like saying workers should get something that has a high probability of being worthless while suffering all the tax implications. If anything equity should be decreased. Startups are better off competing on cash and other benefits like work flexibility and increased responsibility.
Money comes from anywhere, tech talent is fixed in supply.
Startups offering more cash has no implication that they must generate revenue (although that's obvious to building a good business). The point is that operational costs exist - and so a business must already have cash to exist - and increasing costs for better salaries and benefits is a better trade-off than increasing equity which is mostly worthless anyway.
Also global tech talent has more supply than demand once you get past the SV/HN bubble. No serious startup has failed because they didn't get the perfect engineer.
Engineering talent is in oversupply across the US and definitely across the globe. You can easily hire PhD level talent from Brazil or India. Also FAANG companies have long ago exhausted the best talent available. Most of their hires at this scale are no better than engineers elsewhere, it's more about the interview process, benefits, location and internal politics than raw quality now.
This is true but also kind of depressing. With the means of software production cheaply available to everybody is that stable job at a tech giant really the pinnacle of the software engineering career? I understand that everybody's got the bills to pay, kids to raise etc. and maybe I'm a bit naive but it just feels... wrong. And yes, working at BigCo can provide some interesting technical challenges, opportunities to impact millions of users and shield you from unpleasant interactions with the outside world. But it still feels like you are being paid premium to sit on the sidelines.
There is a lot of them, and they can be very rewarding to work at. While they'll have less compensation, it's in real money and they're often located in smaller cities with lower cost of living. You get to work directly with clients/customers to provide value to them with your skillset. The pace is steady, and what you work on can have a lot of longevity which is nice. Software can feel somewhat ephemeral at times, written one month, thrown away the next. Working on a long term project means it feels worthwhile to go the extra mile.
A company that created a novel commercial solar estimation algorithm, and ran a B2B SaaS with it.
A small platform specific agency, 10-20 people specializing in a specific eCommerce platform.
A company that had been producing IoT software and devices for farmers.
A slightly bigger company that produced backbone software for bank management, I think they had closer to 100 employees eventually but the dev team was still relatively small. Bank software takes a lot of extra curricular activity it turns out!
Yes, because economies of scale greatly benefit big companies.
Just because software is free to scale, in the sense that a cp command doesn't cost you anything, doesn't mean that making money from software is free to scale.
I don't think software engineering in itself benefits greatly from the economies of scale. Yes, tech giants have developed some nice internal tooling, but the cost of implementing a feature for a google engineer is probably in the same ballpark as for a startup engineer. User acquisition OTOH seems substantially cheaper for the big companies. So, economies of scale in marketing and distribution?
Big companies ofc have other reasons like flexibility, needing less coordination in the company etc.
The point you’ve made — that it makes more sense to just start a company — is directionally correct, but for the most part is a logical fallacy. I hear this from competent, capable people all the time, “I might as well just start my own company rather than work at a startup as an employee.”
The reality is that 0 to 1 is an extremely, extremely difficult hump to overcome and most people intuitively know this. Which is why anybody who says, “I’m better off starting my own company than working at a startup,” especially without startup experience, is likely to never actually do that thing. I’ve never actually seen it, though I’ve seen a number of people go from working at to founding startups.
The real insight here is that it is actually more valuable to found — or be a really early employee at — a successful startup. And so the question becomes: how do you put yourself on track to get a $72k check from Peter Thiel at 23? Take risks, prove your competence and grow your network. That means work at startups.
Sure. I’m (currently) a lucky recipient of survivorship bias. There’s a long way to go and my current state is incomparable to most of the people we look up to and respect as a community. But the key word there is, “survivor.” If you look at the start of my startup career — middling ad tech company in Toronto, eng. lead at a failed Series A SF startup, short stint at a biotech company, turned down by BigCos — none of it looks like it could possibly have been leading anywhere. I just used those opportunities to meet really talented folks who believed in me and, one by one, would end up supporting me down the line. I’m lucky and very grateful for that. Some of the aspects of my journey to date are non-repeatable, and I’ll always give thanks for those moments — but a lot of the lessons I’ve learned can apply to any ambitious young technologist.
Keep at it. If startups aren’t for you, fine, but, again — survivorship bias requires you to survive in the face of insurmountable odds. And it does happen. Startups teach you how to survive. It’s OLN on steroids for careers.
Working at a startup, other than maybe a 1-2 year maximum stint to get a taste, isn't really useful because a lot is hidden from you even when you start the angel stage. And if you wanted to do the stint, I would probably do it as 1 year of PMing and 1 year of engineering max. If you really wanted the full spectrum experience just incase, then another year at a pre-ipo growth company, another year at a big tech co and another year at a VC to understand the full spectrum life cycle for 5 years.
As a founder, the demands of doing a startup induces you to learn a lot. It forces you to do that networking and making friends part and you will eventually get a mentor network via all your investment activities that will probably be way better than observing from a distance as an IC. Other founder friends you make and friends made at a co-working space doing similar things would give you a lot better experience and a better network.
I joined a smallish startup that grew big, as evidenced above. I mostly just churned on pushing out a lot of code and that's about it. I was part of helping create that 0 to 1 and all it gave me is a bit better work ethic since so much was hidden from me as a jr. The friend I made there that joined really early didn't gain much more insight than me and now works at big tech with me. I learned a bunch just through observation, but I think a founder mentor network would of taught me stuff a lot sooner, and a lot better.
The value I aim to provide anybody that works with us is all the things I felt I was missing when I was a startup employee. I wanted to understand how deals happen, what personalities are like, how things work. As we grow I can’t share entirely as much — a piece of minor bad news can hit me pretty hard emotionally and it’s not fair to subject the team to me being upset or a hothead over something that will blow over — but I do try to encourage folks to learn as much as they can.
Even if somebody were to be entirely disinterested in founder-level execution, early employees have a super easy, instant warm introduction to any investor on that company’s cap table downstream. You might not be using that aspect of your startup career yet, but it certainly can help you if you wanted to use it.
TBH the pre-ipo company I went on to next has given me a much better network than the startup I went to as a jr. One coworker direct has started a company that I think will do pretty well, along with a bunch of others who have gone on to VC firms, their own startups and so on.
Yes — being employee 50 changes the scales a little. You’re a little too far removed from the executive team to have the same level of comfort. We’re still significantly smaller than that, but at my first job I was in the same # range as an employee.
While I didn’t get to build a relationship with the executive team, my boss at the time kept in touch and ended up introducing me to my best friend / confidant in the Toronto ecosystem as a result. So I would still say the network was valuable. :)
Sure, and it's more valuable to be holding a winning lottery jackpot ticket than a year's worth of paychecks.
Problem is, most startups aren't successful, and you have to take the risk into account.
The salaries are not ridiculous at all. It's the rate the market has decided those workers are worth. If a start up wants to compete they have to change something big because as it currently is I don't see it as rational at all. All the benefits you mention only happen if it works out for you. For nearly all people who try, it's not going to.
Unfortunately, nowadays, the only job titles at a startup that offer greater expected value than working at a tech giant are "Founder" and "Co-founder". The fraction-of-a-single-digit-percentage equity packages out there for Employee #1 adjusted for the risk of failure and the risk of getting diluted are often a very low number. And if you're Employee #10? Forget about it! I'd love take another crack at a startup but it only would possibly make risk-adjusted financial sense if I'm the founder.
> I might as well become a founder and start my own at that point
Great! So, how would you recruit your first 10 employees?
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.
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.
That number is going up over time, so I can report at least a little bit of improvement, though certainly not fast enough.
For that matter heading out of a seed round with very roughly 1/3 founders 1/3 employees 1/3 angels/whatever seems pretty sane to me, although a bunch of that first 2/3 should not have vested yet. Your second tranche their would hold a largish option pool for growth, and a bunch of "founding employee" equity. You are all going to get diluted to hell, but however it eventually shakes out I think that collectively those starting key employees should see roughly the same outcome as individually a founder does....
> is a really, really big hit.
> 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.
This is easier to do when you have some money on hand. Which is why working at a well-compensated job if you are not from a wealthy background is quite important in your early career. Also its not that bad a strategy. I mean Qualtrics pulled it off quite well.
I've heard too many stories of start ups being sold where the founders cashed a big check and the employees didn't get anything.
To be clear, I'm not an expert in this, but the startup ecosystem needs to regain trust if it wants to hire more competitively.
In my case my first employee, as soon as enough comes in to pay someone, is already recruited. Equity will be around 20%, with another 25 or so for the next couple of employees. That's without outside funding, doesn't seem to be necessary so. If it will be necessary that obviously changes.
Instead of having this idea: 'We want to work for the next big thing' - Which can be super attactive.
- Instead say: Hey, Im a developer, so I like this product, can I stand behind it.. Can I stand behind my work in it.
Even if you need a job badly, and you're taken on as a developer or someone contributing, I still believe, you should always be able to stand behind your work. Even if the product is shit.
So If you want to work for a startup, you need to really know the company, product and for sure the direction, not all of them are looking for a payout. Some of them are genuinely enjoying changing and hacking things up. - Embrace these - eve if they're not startups!
The best companies I've worked for where well established, but gave the freedom to innovate, play around, make mistakes, and build.
New startups for me always seem to just throw money expecting something good.. I've come to the idea that its 'Startup business ideas people'. and not "Developer playground that turned into a startup"
I have gotten a few startup offers just to test the waters and I’m generally being offered $175k + $50k-$100k in stock options. Sounds OK if you expect the stock to grow 100X, but the problem is that even Series A funding these days pushes valuations into 8 or 9 figures. In my field, the total market is 10 figures. The valuations are going up so steeply that anyone but founders or employee 1 will be better off on the FAANG hampster wheel
1: FAANG companies have had a great decade in terms of stock prices which means employee options are enormous in terms of dollar value (even if salaries aren't huge on their own necessarily).
2: VCs are pumping much more money into the ecosystem, which destroys the equity play for employees. When companies are raising $100m Series C rounds, it changes the cap table in a brutal way. Cap tables ultimately add up to 100% which means someone has to be diluted.
That's because FAANGs have been profitable and startups haven't, in general.
There's no rule of the universe saying startups have to be unprofitable.
A profitable startup can, in fact, pay through the roof.
But most startups don't become profitable, most startups fail.
IMO, you should basically assume that any stock options a startup offers you are worth zero. Decide if you want the offer based on the base pay and how interesting/stimulating the work is.
I think the argument is less between "startups" and "tech giants" and more between "profitable companies" and "unprofitable companies". Profitable companies can also grow quickly, after all.
However, rent is through the roof, on par with San Francisco. And a city with its own set of challenges.
From what I hear and read, Seattle seems like one of the best bangs for the buck. As for myself, the lack of sunlight would make me want to live in London (at least I can fly two hours and see the Sun).
London is a global city though and you'll always feel somewhat poor in this town unless you can compete with various foreign kleptocrats using it as a land bank, and that takes 8+ digits wealth.
But for others -- dont be too jealous, because a lot of that high salary is just a rent premium and ends up with landowners. Great if you are a landowner, but otherwise, you're mostly breaking even after taxes and rent unless the markets riso to make your stock grant in the money. (and well, if all the math is on stock anyway, you can work anywhere and just buy some options on FAANG and be done with it, which is what I do.)
There are cases where you can do well (e.g., live with 2+ roommates in a tiny apt like some friends do.) -- but then, it isn't a sustainable thing.
And London has cheaper rent?
I found pay-salary ratio worked best in Toronto provided you don't expect to own a home in the city.
Some cities are not rational. The best game to play when you have irrational rules is to not play. That is why the post was directed "To others: "
London and NYC are not rational cities. To some extent, also Vancouver. Some of these cities are places where foreign cash comes to be parked in, often empty, apartments. They raise prices for everyone and ruin market dynamics. SF/Bay Area is irrational in a sense because you are competing on a time spectrum -- a rational job for someone who purchased a house in 2004 is an irrational job for someone who needs to rent at 2019 rates.
It's also why I'm so sad all the time!
1. Your success is intricately tied to your network. Have you ever met someone who was ready to cut you a $72k check as a recruiting bonus to join a startup? (Referring to Garry Tan's story.) I will bet that the vast majority of people in the world never even came close to that kind of situation. My point isn't that any given individual has no hope of getting there, but rather that if you want to manufacture that situation for yourself, you do it by networking, not really risk taking.
2. Not everyone's priority is their careers. I wholly agree with encouraging young people to take risks, but for a lot of people that's not the right choice. Most people want to build their careers, but not everyone wants to make it personal the way you have to as a founder.
I worked on startups for my entire early career. I met a lot of interesting people, learned more than the equivalent big company career could have taught me, and I regret none of it. However, it also made me realize that the vast majority of startup people are also just grinding away, not necessarily "taking risks." My experiences with startups made me much more wary about working for a startup.
If you want an interesting life that might lead to money/power (but will definitely lead to interesting people and good stories), find an idea you love and start something. If you want a reliable path to lots of money, join a growth stage company or tech giant and grind your ass off.
The VC typically has enough money to be set for life, several times over. They bet on many companies simultaneously to diversify their own risk. Most companies will fail, and the employees will go down with the ship, but the VC only needs a handful of bets to pay out. None of this is the case for the employee, who bets all in on one company.
The only reason I became a VC is that I want to be here to help people who really should be start companies actually figure out that they can! People helped me a lot, more than I deserved.
The world is full of capital, and it's not going to the right people who can solve problems. I would like that to get better, and trying to do that with my own hands.
Rents are astronomical. Startup math has worsened. FANG math has improved. In fact only the G in FANG even resembled the FANG of today. FANG has done a great job figuring out the innovator’s dilemma, making disruption in all their verticals much more challenging. The low-hanging fruit problems are gone so there aren’t really any two engineers in a garage problems that someone well capitalized can’t quickly copy. You now need generalist engineers, designers, AL/ML/DS engineers, hardware people, etc. on a founding team, meaning that you need to take on sizeable VC money before building IP equity and getting product market fit.
Startup risk is way way worse these days.
Hmmmm, isn't being a VC kind of exacerbating this problem? The business model of being a VC is entirely based around moonshots, which means that you are pigeonholed into only making bets on certain types of founders that either (a) already have extremely high risk tolerance or (b) can be pushed by VCs to take risks beyond their personal risk tolerance.
Which makes your "right people" statement come off slightly disingenuous, since the VC strategy seems to disproportionately attract more Mark Zuckerbergs than Matt Mullenwegs (for category (a)) and often exploits founder naivety for the benefit of the VC (for category (b)). I'd argue that many if not most of the "right people" who can solve problems are in general not a good fit for seeking VC investment.
Do you have suggestions for other investments strategies that may be more compatible for potential founders that don't fall within these two categories? Have you thought about branching into those investment circles?
We try to put what you say to practice, but it's an inexact art, far from a science.
I still look for two things: a/ great engineers/designers/product folks with deep empathy for problems people have, and b/ a real problem to solve.
From my experience as a YC partner it seemed clear to me most of VC-dom uses the wrong criteria: buzzwords (like Realtime or AI), and resumes (ex-Google ex-Facebook Stanford Stanford Stanford etc). Better to use first principles and try to find that which is signified, than just use of credentials that are just dumb signifiers.
But in order to do that, you kind of have to be an engineer/designer/product/marketer yourself, and that's why I think our approach can work. Ask me in another 10 years.
You're absolutely right that VC makes this problem worse. I'm sorry for the industry, but we are trying to do better.
That... sounds like just regular investing. Rather than trying to save the VC brand (which is already pretty tainted in entrepreneur circles), why not come up with another name and scale that?
But note that this game is not as much costly for you as the founder. Founder takes bigger risks in terms of their time and opportunity costs than you as a VC. You will probably find your successful pick in the other founder you fund and designate that other guy “the most capable”.
This is one of the most entitled statements I've heard.
I think things like this seem impossible when you’re thousands of miles away, but I believe the answer is to move to SF. It really works! Move here and rub shoulders with startup people and eventually you’ll be 1 degree of separation from Mark Zuckerberg.
I think I met Peter Thiel when I was around 21? And I sometimes play PUBG with the founder of del.icio.us, and Alexis Ohanian is a frequent customer of my business. I started out as a mediocre college drop out in Michigan. But to be honest while this is what a lot of people who move here chase for, they’re not really needed to make a business successful.
What's the point of that if those "group returns" are allocated almost entirely to the founders and the investors?
If you think it's not about the money, it's worth checking to see if you're being suckered by someone who realizes that it is about the money.
If you are learning, you are getting something out of the situation even if it's not well paid. Don't stay there forever, or stay until you stop learning.
Then when it's time to earn: go work at a tech giant if you must, but also consider starting one yourself. Or if you can tell a startup is a rocket ship and have a chance to join, don't ask about whether you have a window seat, just do it, because those are often the best risk-adjusted returns you can get. Post-product-market-fit is an amazing time. (The trick is it is hard to tell if it's a rocket ship, of course.)
In the learn phase, I don't think it has to be about the money (though of course people have their individual needs). But in the earn phase, it is definitely about capturing the value you create.
This is statistically not true. S&P 500 Index funds have outperformed VC's as a group for any reasonable time period.
I think that’s fair. By definition you can’t invest in bootstrapped “lifestyle companies” and they rarely have “outsized returns”.
There are a lot of “ambitious people” who have failed that you never hear about.
There are probably a thousand classmates of Larry, Sergey and Mark who are just "getting by" at $200K/year. Get out there, mingle, take risks, fail and look for the edges. That's where you'll find the famous people of 2025 or 2030.
There are thousands of start-ups in their A round right now. A bit less in their B round. Which is going to be Apple of 2040? Which will be the Google of 2030? Which will be the Stripe of 2025?
It is like one of those quotes "if you purchased gold in 2002 and sold in 2009, you'd have a 400% return" -- works well when you know in hindsight that 2002 was a long-time low and 2009 a long-time high.
1. Are about 10 years old.
2. Are close to IPO (Google was already 4 years post-IPO when it was 10 years old, but IPO timing has changed since then).
3. Have market fit with multiple products (Google had Gmail, Maps, and Chrome already when it was 10 years old).
4. Are still founder-led.
To select the Apple of 2040, you need to look at companies which:
1. Are about 20 years old.
2. Are about 10 years past IPO (again, Apple IPO'd 4 years after its founding, but the same company today would probably IPO a bit later)
3. Are still actively innovating, and launching successful new products.
These companies exist, and they have been substantially de-risked relative to the 3 year-old startups. Engineers that join them today will have similar financial outcomes to those that joined Google in 2008, or Apple in 1996.
But what you are saying seems to be cherry-picked examples, how does one do this without knowledge of the future?
We dont know who the future Andreesen will be, we dont know which one of thousands of groups/departments/companies they will work at, so where do you go work (assuming it were that easy to just choose a company+department+group at will.)
You don't have to see the future, you just have to know where those working on it are and meet enough of them. They're in places like a Supercompute booth or MIT poster session trying to tell you. They may not have The Big Idea yet, but talent tends to stand out.
Andreesen didn't randomly pick an IBM group. He picked one doing Unix distributed system management and virtualization 25 years ago. I didn't have foresight to make the same choice, it just seemed obviously interesting and there were only three major players in that space.
The maths has changed, substantially. As late as the 90’s if a startup was a success then all the early employees would make life-changing sums of money. Even the secretaries at Microsoft and Apple got equity. Nowadays all the value is captured by founders and VC’s - by spinning the myths from the 90’s and ruthlessly exploiting any workers young and naive enough to fall for it.
Some context is in order. This unit was/is the 2-star command that runs communications for CENTCOM. We were supporting a network of around 270,000 users at that time due to the surge into Iraq in 2004 and the stand up of the transitional government. That is about the size of Bank of America, the entire company with all its branch locations and total employees. I was the night tech lead of operations of communications over all of it. That was my first time in management as a young staff sergeant. This was an incredible eye-opener for me, but its not a mark of success. I didn't get paid more because of the severity of my decisions or the size of the organization.
Now I'm just some software developer at a big corporate company assigned to a team that struggles to get copy/paste right. When I want to work on software that's vaguely interesting I contribute to open source.
My reflection from all of this is that people often evaluate themselves, and their perspectives of success, using faulty metrics. If you were a fresh 2 week hire on Instagram before they were gobbled up by Facebook are you suddenly a successful software genius due to a magical windfall? In my world as a front-end developer people often consider themselves experts and pat themselves on the back for stringing a few statements together like magic glue over a monster framework that they don't really need but does all the work for them. I don't really consider that a mark of success either and am often a social pariah as a result. If you really, I mean this seriously, really wanted to be rich and financially super successful then why are you spending your time writing software?
For me, personally, I measure success in the problems I solve that other people find value in, which is a large motivation for my contributions to open source. It isn't a number that comes with bragging rights or some form of vanity. Instead, its just something to do or take pride in.
I will definitely make more content about building your network the right way. I think if you consistently try to spend time with people who make things you think are awesome, the score seems to take care of itself.
Totally agree you shouldn't work at a startup if money is the only consideration.
He kinda answers that fairly early on:
"I'd just graduated in 2003, and my friends were starting a company with Peter Thiel. They flew me down to have dinner with Peter."
So to get rich, all you need to do is come from enough privilege that you graduate well connected with rich friends...
Sounds like your story supports that too - if you didn't connect with rich people in school, meeting (and becoming friends with them) at startups is a reasonable second alternative.
I don’t recommend startups because of personal experiences. I’ve personally lost more working for startups (in terms of unpaid salaries, lower salaries and impact on health) than I did running my own startups. Startups rarely have good development practices, are often always in crunch mode and often have bad work-life balance.
Some people thrive in that environment, sure. Personally I don’t hate the environment but I can’t stick it too long either so I’ve job hopped a bit. But when you add that high-stress-low-discipline (discipline in terms of development practices) environment together with low salaries, false promises based on worthless stock, high founder ego and a high rate of startup failure, I don’t think it’s a good deal for most people, who would be better off in a stable balanced low (comparatively) stress well paying big company instead.
I hate to say it since I’ve started startups myself and it makes finding employees hard, but I think the people who really thrive in that environment are relatively few.
Sure it can be rewarding, you can make great connections and learn a lot but I’ve found big companies can be all of the same things, although the learning is usually deep in big companies and wide in startups, but a medium sized (ie established startup) company might be a good middle ground. Maybe everyone should experience it once though and then move on. I also will likely make another attempt at a startup myself too, but I do feel that there’s a difference when you own the thing.
I can't say it another way but the very american person cult is worrying. Thiel any many other tech icons are just icons because they are billionaires and maybe populists. Having a network of those is surely a way to get funding. But that again beings politics on the table and more importantly implies that you can only be successful if you have connections to the billionaires club. It lacks a great deal of imagination that only startups can survive with the direct support of the big guys.
The social toxicity is a big one for me. I have always struggled in this area and it makes things SO much harder outside of work.
As it stands now, startups are just places that offer half the salary compared to public companies. Working for half what you could be making is a large ask of almost anyone.
If we want these problem to be solved we should rather encourage people to be active politically and figure out how to tax carbon emissions worldwide and make sure the tide actually raises all boats.
One insight you may not be considering is that the profile of a CS graduate has changed significantly. A tech job is now full of prestige and social status. Even more so if that tech job is at a big brand name.
A much larger portion of young people are going into tech purely for the income and the prestige. And the preferences in this thread at the end of 2019 reflects that shift. Your average person going into tech in 2019 is very different than your average person going into tech in 2005 or even 2010.
The people who think like you still exist. Just that a much larger group has poured in and made them less obvious.
I'm not sure how many more people I will send this on to, you haven't said something for the first time, but you laid it out in a way as if i was speaking to someone.
Thanks, I appreciate it. I've been somewhat there and I get that not everyone understands, but you really speak what I believe a lot of normal developers/designers/engineers are thinking.. Much love.
I wouldn't worry about it. Every venture I've started, successful and failures, came with everyone telling me I had no chance.
One of the top comments that responds to your post tells you that the math changed. This is true. The fact that neither you nor Garry talk about the concrete specifics of this means that you're either unaware of it, or worse, intentionally sweeping over it.
You really think that what is "actively training our young people to avoid taking risks" is all the "negative takes" on startups? What about the changed exit environment where companies are staying private longer and equity shares are no longer outcompeting public company compensation? Poor or inexistant options for liquidating large holdings of early company equity? Liquidation preferences, dilutions, and founder enrichment allowing grey-hat founders to self-enrich at the expense of their employees? How about the increased ability of large companies to compete with startups and turn their products into mere features? Ballooning student loan debt, rampant social inequality, a collapsing middle class labor market and automation?
You know what I think is actually happening, based on the interviews I've given working at various startups where we lose great candidates to more established companies? I think candidates are getting smarter. If they're smart enough to make outsized impacts at startups, they're smart enough to make outsized impacts at large corporations and make sure they get commensurate compensation. They know that they have better access to a tried and true organizational structure around the software development and revenue line development lifecycle.
A lot of this completely changes if you're the founder. That's probably the one perspective where the ownership structure is so radically different and more advantageous that it's very much worth it over being a mid level manager or executive doing the same thing at a larger company, if you can pull it off. But if you're not a founder at a company any earlier than late series B or C, you're generally taking a proportional risk for a much less proportional reward if you join as an employee -- not just financially, but organizationally and directionally (in career trajectory).
And, if there's one thing I can't stand more than anything, it's when founders wear rose-colored goggles and can't admit this truth. Not implying you're doing this, but I'd advise anyone in danger of this to never drink the kool-aid you sell to the point where your reality-distortion field obscures your inability to see the very real reasons why people make (and remain happy with) these decisions, just because it threatens your life choices and identity.
But it is also possible to survive. And if you do that, you don't merely survive, you thrive— that's what product market fit looks like. I've been lucky to see it dozen of times first hand, and it's nothing short of magical.
When founders and teams pursue something without product market fit, it's a high cost to pay and a terrible outcome for most everyone. This is also absolutely true.
Startups are not for everyone! I appreciate your feedback and it resonates with me.
I think there is a big gap in how different people see this. You are right, it is possible to survive. It is also possible to fail. For some people, that is fine -- they can call up an uncle, or a friend (Thiel) and land another job quickly that pays good medical benefits.
For others, an 20/80, or even 50/50 or 80/20 survive/fail just does not cut it. Perhaps they have crushing student loans. Perhaps they have no parents to fall back upon if things go south. Perhaps they have visa issues. Perhaps they have a sick parent to take care of (my case.)
I admire your ambition (and envy it.) I hope people who have social safety nets realize it though. Because not everyone does.
It reminds me of a fellow undergraduate Senior who looked down upon me for going to work on Wall Street while he did the more pure thing of going for the Peace Corps. I asked -- so how do you land a job when you're done with the 2yrs commitment? He said his uncle was going to hook him up at a hedge fund. Nice, if you can swing that. Me? I have no uncles at hedge funds, so the on-campus recruiting super-day was my one and only shot. I dont think that makes my choice less pure, it is just one of relative necessity.
It really did, for me, as well.
But if it works poorly later on, I dont look at it negatively, because short of having a time-machine it does not help me be a better person. Constantly improving the judgement framework is a good thing, but there is no point regretting a mistake you could not have seen differently.
How do you know if you have product market fit until you pursue something though? The standard advice on this is completely contradictory:
E.g. on the one hand, you have the advice that adding more features will never result in product market fit, because most of the features will be too far down the funnel to move the needle and they won't ever solve whatever the core problem that's making the thing not successful in the first place.
On the other hand, you have the advice that you shouldn't pursue growth until you have good retention, which basically implies that you should keep working on the product almost indefinitely even without product market fit.
Garry, you entitled your blog post "Working for Microsoft cost me $200 million" but you neglected to mention that you had debt you were paying off. For many other people, that blog post could easily have been called "Why working at startups instead of Microsoft cost me $20M and left me in the debt I started in". That debt neatly encapsulates one of the societal problems with student loan debt. It creates a caste system. The less generational wealth you are born into, the more your stepwise freedom in any direction is piece by piece restricted. You can't make choices that people born just a bit wealthier than you could make because they're cost step functions.
It would indeed have been a poor decision of you to take that Palantir job out of college with your financial situation. That smart decision would have been to keep pursuing the traditional big company engineering promotional path. Any action you take that deviates from that path towards a sustained lower liquid compensation on a year over year basis is one where you're taking a hit to liquidity by paying opportunity cost to make a default-illiquid investment (or multiple of them over time). If you combine all the post-tax income you've lost with the compounding interest it could have made, it's substantial on a career-long basis.
I would advise folks to work at startups for the same reason I'd advise them to work at a fashion magazine or work at a record label intern. It still has some cachet as culturally creative labor, and you can certainly make a living in the industry, but it's not a great place to stay long-term unless you're independently wealthy, are running the show, or you found a firm cleanly in hypergrowth and manage to grow with it. The antics and financial shenanigans take a toll on you. You can't rely on it as a sane vehicle to consistently build wealth, because it's structured like a swap heavily in favor of the company's investors, and you're footing the bill with your labor in exchange for an IOU that the company will IPO.
Tens or hundreds of millions of extra income and RSUs from their big company paycheck could be going straight into their nest egg and compounding over time, making it viable for them to make a major life decision without hardship. It's reckless and irresponsible to recommend others to engage in without a significant buffer of pre-existing wealth, and with the expectation that (like many other kinds of investing) all of participation is at risk of full loss.
Be patient. I’ll respond to the other post if you wait.
Sure. Feel free to respond. I think everyone would benefit from you contributing more to the discussion, especially if your original post didn't fully clarify your position.
Especially in a forum like this one with no notifications, Be Patient is basically saying STFU.
It seems like a rather nice thing which helps to avoid many ego-battles.
Do not assume that the lack of response of somebody else implies anything aside from the fact that they didn’t respond. They could agree, disagree, or maybe they haven’t even read or thought about it yet — and maybe they never will because something else distracts them.
I think discussions tend to be the most productive if we assume everybody has the best intentions. :)
We do not agree on how folks should approach their careers. Not one bit. That's not a straw man just because you don't agree. It clearly resonated and struck a chord with others who have been on the other side of the pitch, and who have made the same conclusions I have.
I suppose the real problem is that some genuine startup-oriented personality may be dissuaded from working on one, but perhaps the cultural force against them is in the range where it should dissuade someone who isn't more wholly convinced that they know a truth that others do not believe in.
I think it may be counter-productive to attempt to convince people who prefer aiming for the safe money. I think that while attempting to draw a line hits the Sorites paradox really fast, there is quite clearly a difference between someone with your world-view and someone who runs the math on total compensation alone. I think the person with the latter view will not recreate the OP experience because all the choices are very non-independent. The same person who'll take the low-variance high-expected-value out of school will do the same the next time they're faced with a choice and again and again and again ad inf. They provide the selective pressure of optimizing for 'exploit' (in the explore/exploit sense) while the startup-type folks provide the selective pressure of predation.
0: For instance in the geeks/mops/sociopaths view https://meaningness.com/geeks-mops-sociopaths
HN doesn't just have to be a "startups are the best" echo chamber.
I would revise my position if more successful founders argue that it isn't worth it and I'd mildly revise it if more failed founders argue that it isn't worth it anymore.
I think the kind of people with the balls (or stupidity) to join/found a startup tend to be the kind of people who don't listen to what everyone else is doing anyway. This might have a sort of positive selection bias: you need a minimum amount of risk tolerance to succeed in a venture.
>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, outperforms 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.
After failing with a personal venture, I recently joined a small startup and I can offer an similar perspective: working here is amazing for a generalist because once your coworkers trust you, you have more freedom than you could ever ask for, and your personal decisions have compounding effects on the direction of the product that you're building. There is zero bureaucracy. This is a dangerous place which requires a knack for hiring the right kind of independent thinkers and doers who do not need hand holding and tend to have good understanding of large systems - but when the org is small and the team is well selected, if you're building something truly new and useful to society (read: not adtech or social networking) the feeling is magical and being enthusiastic about your job does wonders for life satisfaction.
I know this is a temporary state that will disappear if we fail or grow into a midsize company, so I'm trying to savor it while it lasts. Also helps to have no family so that you can crunch when necessary without hesitation.
lucky you. i’m in a startup where the very large majority of the eng team is here with their first job out of school. and they have the same latitude you are describing. i’ve found that to be typical these days.
It's the demographics. The HN population skews extremely old and older people are generally more pessimistic, cynical and risk averse. Also, there is a large amount of traditional media workers on HN and they, for obvious reasons, are not fans of the tech industry since the tech industry is eating their lunch.
Don't let the thread get you down. It's a skewed and biased representation that isn't based on the real world.
There's something to be said about assuming a that very large volume of mostly-anonymous messages on the Internet can be deteremined by the OP to be old. That sounds like ... something a young person might say.
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.
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.
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.
But in startups averages don’t matter as much - it has power-law style returns, so if you happen to work at an insanely valuable startup those lines of code might be 1,000x as valuable as the average line of code written at Google.
Ergo, if you can/want to play the odds with those kind of risks you go to a startup, even knowing the risk adjusted value is lower (loving your work also matters, and some prefer startups - myself included). If you want a sure thing you go to Google.
But then again it’s only Google and FB that pay above the line. Microsoft and Amazon salaries, last I checked were pretty subpar.
There will always be scope for solid good new businesses with big and small margins, but maybe the next FB / Google will be in some other field? Maybe biology or nutrition, maybe quantum physics, who knows. I wish I had some ideas though.
sed 's/produce more value/extract more wealth from dominant positions and regulation then control/'
You'd have to adjust quite a bit for inflation. The average rent has skyrocketed 300% since the time Google was a pre-IPO company. I would not mind a "low" Google 2004 salary if I could somehow also lock down a Mountain View 2004 mortgage. Also, tuition and student loans have risen. So while im at it, i'd love to lock down a 2004 student loan burden.
The world is bigger than SF. Seattle enjoys the same payscale with half the housing costs.
Are their ideas just not that promising, or are they just not raising enough money, or what?
Venture capital is supposed to be (and certainly was a few years ago, though it may have gotten more conservative) the transfer pipeline between the money printing enterprises and the high-risk, high-reward startups that provides the unlimited cash the latter don't otherwise have while unlocking the return potential the former lack.
For example, what is the option exercise window if you leave Lambda?
really? i never heard anyone said that
A lot of startups these days skimp by hiring sub-FAANG SWEs with less than 5 yoe, and it shows in their products. Lack of product maturity, bad engineering (worst horror story I’ve heard recently is Wayfair), resume driven development / over-engineering / cargo culting, huge teams to work on simple features. All so they can hire two middle-skill 22 year olds instead of a skilled 35 year old.
If you’re able to work at FAANG it is just bad financial sense to work at most startups unless you want to play the lottery. If a place offered 40-50hr/week, $250k salary, 15% target bonus AND generous RSUs/options it would be able to compete with FAANG. But not a lot of places do that, and those that do are often the very bubbly ones with uncertain futures
If a startup wants to pay you enough to compensate, the options need to be worth > 100k present value (even if this means 1% of the company). Otherwise you'd be better off working for google and buying equity in the startup rather than breaking your back working there.
Yeah, just go to Walmart and find the startup equity behind the underwear to your left.
100% this. Most people didn't work at Google or Facebook back in the day in the hopes of winning the lottery. Those companies paid really well, had the best benefits, culture, and mostly they were working on a ton of challenging problems unlike most of the "giant tech companies" of the time.
Now I contract out days for an agency. I estimate predefined tasks and then execute them. I talk nicely and calmly to clients who don't do me the same courtesy. I work only with the technology I have the most experience with and don't have opportunity to try new tech. But I have to pay my rent and I have to start putting money away to eventually get on the property ladder so working at a startup isn't really an option for me any more.
they most decidedly were not. everyone there was taking $25k if not $50k pay cuts to be part of it.
Do not ever work for a startup where the founder(s) have this sort of mentality.
The giants can pay high salaries because they're hugely profitable and don't need to worry about being hyper efficient to make the most of VC money.
Startups on the other hand, are still weak on the profitability part, but have massive room for growth when it comes to valuation. Therefore, the equity they can offer has way more potential value than stock in a large company that's averaging 5% growth or something.
I don't see how a founder of a startup would benefit much from cheaping out on salaries for employees. The vast majority of the payout for founders is company value increasing, not how much of the VC money they keep.
Once a company is large, it's hard to have that level of impact until you're a director/vp/etc.
You'd be wrong.
... And unless you’re IC number 1, you’re not going to make more than a million bucks even in the best case as well, which makes the risk/rewards ratio higher.
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.
In Q2 2019 Alphabet (GOOGL), Google's parent, made $9.81 billion in profit.
At the end of the previous quarter, they reportedly had 103,549 employees.
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?
Controlling for employee growth from 2018 to 2019 (they only had 85,050 employees at the end of Q1 2018) 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.)
I'm sorry for the mistake. I'll do better next time.
> 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.
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.
The video title is "My $200M mistake" and you spend 90% of it talking about the money. In what way is the point of this learning to ship to real customers quickly?
There are so many gross inefficiencies in my market (US) that could be successfully addressed if more people has this type of orientation.
You are also a bigger fish in a small pond - more responsibility, no bureaucracy. And usually the pay is enough to live modestly on.
Honestly this seems like Silicon Valley bait for getting people for work in an abusive mismanaged environment. And I hope most people stopped drinking the Kool Aid.
> You are also a bigger fish in a small pond - more responsibility, no bureaucracy
This I can understand, I mean if you are talented enough that you don't want to jump through corporate hoops, then it makes sense. But I would only do it for a company that has competitors. Atleast that way if you do well and get mistreated (because some founder assumes that employees are sheep), then you can always take your talent to a competitor. Better if you have the ability to take others with you.
I've seen people join abusive personal relationships with worse pay than startups, it happens with friendships and marriages everywhere. I've also seen very bad relationships between founders and teams that have caused lots of pain...
The only way this is worthwhile is if you really believe in some product + are working with non-abusive people you trust and have known for a while + actually get paid enough to live a comfortable life. You can't join a startup thinking that the world owes you and will make you rich and the startup is how it will do that. But I just hope people reading your comment don't think that any small group of friends working on something is abusive to new folks that join.
Yes he had a shot at changing the world, at Palantir.
I'm sure that it's a thrill, but it's not necessarily a benefit to the world.