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Working for a startup makes less sense (zainamro.com)
572 points by zainamro 55 days ago | hide | past | web | favorite | 378 comments

I love how the article ranked right above this one is titled "Downsides to working at a tech giant".

I wrote that other article and agree with what the original author here has written. Startups need to do a lot more to a/ solve the real problems of their customers and users, and b/ treat their employees and ecosystem better.

LOL, I noticed as well.

As I was reading "Downsides to working at a tech giant" it occurred to me that the alternative to working for a tech giant is not necessarily a start-up: I would probably work for myself — freelance.

So, in fact the two articles can both be right. ;-)

You can also work in tech, for a company, but for something that is neither a giant nor a startup. There's plenty of such jobs out there. In fact, the majority of tech jobs probably fit that category

They can be right even if your two options are either a startup or a tech giant. They have their downsides as does every job, even freelance.

I like being freelance but getting the motivation in those first couple of weeks was pretty hard. I also found it tougher to sell my services because I never really had to do it before. Probably some other stuff I can't think of off the top of my head? I don't think any type of work is perfect although I'd go for freelance any day of the week.

Written by a VC trying to get engineers to join the startups he's invested in.

> Written by a VC trying to get engineers to join the startups he's invested in.

Actually for most of the piece he was pretty straightforward about making sure you get equity if you want to get paid upon company success.

What has changed is that genuine equity in startups isn't being offered as readily as it was ~15 years ago (and it is notable that the missed opportunity he describes is that far in the past).

For a VC, scraping off net innovation minus startup-wages is a win. It's a lose for the employees, of course.

I was a software engineer who learned to start a company right off the pages of the site you're looking at right now, Hacker News. It was here where I learned to start a startup.

I later worked for Y Combinator as a partner helping founders make products and services. The best ones made something that touches millions of people now.

While there is a lot of zero sum thinking in startupland and finance/capitalism in general, you have to remember that this is probably the most GROWTH mindset industry in the world. Where else can you, with just your hands and a laptop on the Internet, create something a billion people use?

I'm not saying that is the norm. But when it works, it's still remarkable.

And it can start with you, and everyone reading this.

> I was a software engineer who learned to start a company right off the pages of the site you're looking at right now, Hacker News. It was here where I learned to start a startup.

Keep in mind that if you look back on the things that made you excited to go into startups into 2006 or whenever, probably none of them are true anymore. E.g. the main reason people were excited back then is that there was a huge arbitrage opportunity to take every business that already existed as either brick-and-mortar or web 1.0, and reimagine it using AJAX and web 2.0 design language. In retrospect there were a bunch of other favorable macro trends coalescing at the same time also, but regardless none of these arbitrage opportunities exist any longer.

> Where else can you, with just your hands and a laptop on the Internet, create something a billion people use?

Serious question: how many software companies have something that a billion people have used?

It's a pretty special industry, for sure. But the odds of it happening are basically zero. I see how selling the dream makes for a good story for young and hungry startup founders to passionately change the world and (cynically) end up as a failed bet in someone else's portfolio.

But it's a bit disingenuous to make it sound like it's commonplace.

From what little I've seen of this guy, he really doesn't come off as a genuine person at all.

> Where else can you, with just your hands and a laptop on the Internet, create something a billion people use?

At the large tech companies, with a lot less risk and higher salaries.

> Where else can you, with just your hands and a laptop on the Internet, create something a billion people use?

At companies that already have a billion users?

No disrespect but I think what the people use the product for should be mentioned ... in addition to the number of people using the product. The world has a lot of problems right now. I know there’s some VC in those areas but, well, look at what we talk about.

Touch 20 lives as a teacher and enrich those individuals, or 20 million lives by helping them order groceries over the internet.

What’s a more democratic funding model to spread net innovation? Something like an employee owned company?

The technical term is a coop, like REI.

Workers cooperatives are too risky, the liability in case of default is not limited in all legislations that i'm aware. There are successful cooperatives in most countries but those are the exception not the norm.

It's always simpler, safer and more wise to incorporate.

Why can't the shares be given to employees? Why do the shares need to be owned by investors?

Sounds like this could be a potential avenue for innovation.

> Equity agreements should not be intentionally confusing or designed to screw over employees.

Totally agree with this. Unfortunately I think there might be about 5 startups left if this idea were widely implemented.

There are a bunch of things that “good” startups can do (and ARE doing in my experience) to make early stage equity worth it. For example, instead of a 90 day limit after leaving the company to choose to exercise options, many good startups are now offering ten years.

>> Equity agreements should not be intentionally confusing or designed to screw over employees.

You should feel lucky if confusing is the problem. I think the bigger problem usually is -- you often cant see the cap table. If you cant see the cap table and the preferred overhang, there is no way to realistically understand where you stand in the scheme of things. Confusing can be overcome with some search, but "opaque" cannot be.

Your odds of making money are much better with a young-ish but publicly traded company than with a startup. Even if a startup is successful, you won't see much money unless you were one of the founders or early investors. There's a million ways the stock options that early employees get can be made worthless (or worth-little).

I have BEEN one of the founders, and still didn't make any money off the ultimate sale. There are far too many games with share classes, VC-funded bridge loans, and preferred investor incentives. The only way to win is to not play the game.

There’s a fine line between bravery and stupidity.

I can say as someone older than they were at the time that there was an element of wishful thinking about many of the founders I worked with, and even more so for some that I met in passing.

Charismatic people who are deluding themselves just bring others along for the ride. They may not even know they’re being dishonest. People who have a way with words can be sucked in by their own words just as much as others can.

There were a few recent Ask HNs on the subject:




a larger question is : why can't startups make money

For a lot of them that's just not the primary goal. Honestly, I expect the next big success stories to break from this pattern of the silicon valley sickness of trying to grow a company at all costs by conning VC firms until they've got enough users and then sell the company or get another round of funding to try and figure out the whole "revenue" thing later.

I think some old school thinking of more organic growth of a good idea with immediate revenue will see a resurgence.

It seems like start-ups could catch up, at least somewhat, by offering more stock. Right now founders are still ending up with an order of magnitude or more stock than the first few employees.

There are certainly situations where that makes sense but if the founders are adding extreme value compared to the first few employees perhaps they should only end up with twice as much stock. That would free up a lot of equity for early employees.

> if the founders are adding extreme value compared to the first few employees perhaps they should only end up with twice as much stock

Why would this be the case? If they’re adding relatively extreme value, why should they only get 2x the equity?

I think another reason that people are wary of joining start ups, is they've realised that:

a) The market is now incredibly saturated, and being an early equity owner in a start up that will be worth billions is very rare now. Gone are the days of a unicorn every month or two.

b) People have noticed the trend of FAANG companies buying up start ups, and that this is the goal of many (most?) start ups today. Reach critical mass, get a good valuation and customer reviews, get bought out by tech giant. If you want to work on the most viable new products, just join a tech giant and work on one of the projects they've acquired. (Or wait till the company is bought and join them if they are still independantly run at which point they're not really a start up anymore)

> Gone are the days of a unicorn every month or two.

My friend, I've been building software professionally for big companies and small since 2001.

There were never days where there was a unicorn every month or two.

I didn't mean that a company became a unicorn every month or two, but it seemed that companies were founded quite frequently that later went on to become unicorns.

The problem is getting paid in common stock. A pay cut is money that, instead of making, the employee is investing in the early-stage startup. That's no different than the money the investor is putting in.

Employees should get preferred stock in the amount of their pay cut.

I think the questions/issues around this topic don’t really make sense:

A. Why are we comparing an employee situation at a FAANG company with what should be a co-founder situation? If someone is an engineer that can make something happen at a startup, they should probably be a co-founder rather than an employee.

B. Why are tech center startups trying to hire coders of a certain skill level that will be incredibly expensive due to local competition? If a startup is looking for skilled coders to implement the vision of the co-founding engineers that can make things happen, then there are plenty of remote coders in non-tech-center areas that will do a bang up job for a reasonable price. Note that many of these remote coders don’t want to or cannot come to a tech center. I assume that this is an issue because many/most startups are not good at hiring, on-boarding, managing people, managing remote workers, etc.

C. Related to issue B, why play the micro-equity game with coders at all when they should either be co-founders or they (as remote workers) can be paid a satisfactory wage without equity bait?

D. Why is this conversation comparing a job with (relatively speaking) a lot of hierarchy and politics at a FAANG with a job that should have a flat structure and a great deal of autonomy? These jobs cater to two different groups of people — the ones who like the former probably won’t like the latter, and the opposite is true as well. There are subtle sides to this (e.g., do your time at a FAANG to develop a network), but many people who succeed at startups are not folks you want working at a large company — they will go nuts, and they will drive the people around them crazy.

This whole conversation is bizarre to me. I think there are three relatively simple choices:

1. Take a company job if you’re a company person — that is, someone who likes structure and hierarchy. It might not be trendy to admit it, but many/most elite school grads fall into this category.

2. If you prefer things like autonomy, being close to the customer, and being a generalist, then go to a startup. Plan on leaving once it hits a certain size.

3. If you have a plan for an alternate path that includes both, then go for it — specialist work at FAANG, FAANG then startup founder, startup employee then startup founder, etc. Just know what you’re getting into, because it can be awfully tough to walk away from $300k annual comp as a 25 yo.

Most people I’ve known clearly fall into one of these categories barring some sort of life-changing event.

I have a very straightforward suggestion for startups: Focus on the engineers who've put in a decade or more at the big companies.

They are, given the exorbitant salaries, financially set enough to afford the startup risk, and there's a good chance they'd like to see some more agility again.

But 1) you'll need to stop lowballing equity for hires, and 2) you need to get used to the idea that it's not going to be an extension of university life - these people have all better things in their spare time than playing beer pong.

Bonus points: Offer an office instead of cubicle mania. Bonus bonus points: Make sure you hire a diverse workforce from the get-go.

I've worked at 3 big tech companies and 3 startups. 2 got bought out, the other is going strong. I made more money off 1 year of bonus at Google than I did with any of the successful startups. It's not because I did anything wrong (I was Eng #1 at one, First iOS Lead at another and Lead for the 3rd) It's because I was building someone else's vision for the promise that that my stock will be worth something. When a company gets bought even if you have a high % when it gets funding, it will be diluted. If the company doesn't do refreshers often enough you will be working long hours for close to free. The charming CEOs will talk about how they plan to change the world, the sleazy ones will tell you they are a sure thing (and what will you do with your millions). That makes no difference, it's just a lottery ticket. You have to decide how much of your career to put on that ticket.

Startups are a wild ride, and a thrill to join, you'll learn a lot, and have a great chance of coming out learning more than you'd learn as a entry level at a big company. Don't for a second think you have the winning lottery ticket, because if your number doesn't come up you'll left with memories and the paper it wasn't written on.

PS I'd argue if you have a group / team, build your own vision. Go big, we have enough insta-wecha-snapple sauce out there. Build something that will have real impact. And if you don't have the Team / Vision / Risk tolerance go somewhere they'll pay you what you are worth. Maybe you'll be even meet some of those you want to build a team for whats next.

Maybe startups should try cities like Pittsburgh, Columbus, Atlanta, Knoxville, etc. Lots of talent that will work for less for the simple reason that the cost of living is not so stupidly high. Hell even SoCal, Portland, Austin, and Chicago are bargains compared to NYC or worse SF.

Problem is that all the capital is in NYC and SF, and they still prefer to invest locally. At this point VCs should just skip the middle man and cut checks directly to landlords and property speculators.

Isn’t this also a function of the limited runway VC’s give to startups. If they 10x’d the amount of funding for seed and series A, startups could afford to hire the best.

It would add a lot more risk, but given the outsized rewards, it would still be profitable for some VC’s.

Otherwise, there will be lots of ideas left un-persued because many experienced engineers will not want themselves or their employees to live (in relative terms) an ascetic lifestyle while perusing their dream.

It's VCs' and founders' fault for always diluting employees on the big exits. If they want to gain back trust we need iron-clad poison-pill provisions that prevent employees from getting screwed out of their equity.

I work at a startup and have for 2 years since graduating college. Its quite hard to gauge my true value. I know that for the area (according to Stackoverflow's salary numbers) it seems competitive, but big N companies are moving in to Culver City which may be changing that.

Since starting, I've seen engineers who can't hack it leave or get fired. I've been the one engineer who has been productive and seen our projects to completion. Our team has gotten stronger over the past 2 years however and I feel that we are in a good position. In this way, I feel that I am valuable, but I have nothing to compare myself to.

Working at a startup I've also learned an extremely broad area of knowledge, much of this completely on my own. I'm often worried that that may hurt me if I apply at a larger company and that hiring managers would question my fit.

It’s worth mentioning that this post is focused on USA and (unsurprisingly) highlights Bay Area.

I’m sure the points exposed apply there but there are many other places in the USA and the rest of the world where this doesn’t apply and you can find good talent without needing to offer an exorbitant paycheck.

How about you just start giving your first engineers a bit more equity?

My career path has been startup, public tech, startup, public tech, startup.

I got lucky that the public techs both had the largest stock growth in their history while I worked there.

All the money I ever made was at the public companies. I also learned a lot of cool, very specialized skills and got to do a lot of “ohhh so cool” type stuff.

Almost all of the knowledge I learned that allowed me to be successful at the big companies I learned at the startups, and most of the friends I made at work that I still talk to were at startups.

Both environments offer something unique.

I usually tell young people to start at a big company with a well known mentorship program and then quickly move to a startup to learn a bunch of practical skills.


Well said. Startups can't really compete with MGAFA those days. Not the people, not the resources. For domain like ML, it is hard to imagine what you can realistically achieve outside of working in those companies.

A few years ago I decided to start working for a startup because I wanted to try out the experience. It was a late-stage startup with no VC money and they had good prospects for a possible acquisition.

I did the math and I figured that it might work out for me. 2 years later it turned out that they have been talking about a possible acquisition for the last 3 years, but nothing happened. I also checked the company's public information and it turned out that they weren't that transparent about the shares. I was told that I get 0.5% worth of shares (they refused to tell me the total amount of shares) and what I saw is that it was true: I had 0.5% of the outstanding shares. But in case of an acquisition, they are free to dilute them 5-fold because the authorized shares are 5 times as much as the outstanding ones.

So I decided to join a big company which is paying almost 2 times more right off the bat and I also get additional shares each year. I made a calculation and even if the old company gets acquired I get less money (it is just a rough estimation) than I get at the new company. And that's still a big if. I think that I still started from a much better situation than most of the other folks working for startups. This company produces profit, they have a business model I believe in and there is no VC to please. Most of the startups are in a much worse situation.

I will never work for a startup again.

Captable slots for early employees range anywhere from 5 to 40% (collectively, not individually), depending on who the partners are and what the company does it might make sense to join a start-up. But it's better to be a founder and if you are risk averse then it is better to work for a big company with long term viability.

This definitely isn't one size fits all and there are a lot of people that will happily try to sell you on their version of the story because 'it worked for them'.

It's fun to watch the Bay losing its startup spirit and becoming a land of mega corporates. It might resemble Atlanta in 20-30 years. There are so many other places where joining a startup is the best option you have (excluding remote gigs). I guess most startups will become remote-first and lure people who care either about the team or the problem being solved. Building a startup employer brand will be of paramount importance.

> It might resemble Atlanta in 20-30 years.

Or it might indicate a lower probability of creating another company that produces FAANGM levels of cash flow.

Use your brain, when offered a role, do you like the product ?

Do you believe in it ?

Are they paying you a nice amount of money ?

If you can only answer 1/3 please continue to the purgatory state.

I like this piece and I agree that startups can be great. But the first half of the essay, the hook of the essay, was contingent upon the author declining a $70k check from Thiel and noting that he walked away from $200 million; and the end of the essay suggested that one shouldn't work at a startup for the money (and you really shouldn't, it's unlikely it'll make you much).

Agreed, if you're living in SF or NYC I don't see the point in working at a startup unless you're just really passionate/optimistic about the work/company or are getting some other perks you wouldn't get at a FAANG.

Personally I work for startups, but only because they let me work remotely, something I wouldn't be able to do at any FAANG. I would only go back to an office job to work at a FAANG, since compared to a startup the money, "exit ops", work life balance, and job security are probably going to be way better.

If startups want to be more competitive and have access to more talent, then they'd be wise to open to hiring remote workers. Otherwise they're going to struggle to compete with FAANG type companies. Remote is the one perk that FAANG companies don't offer, and unfortunately probably won't for the foreseeable future short of some serious cultural change.

If the cost of housing was substantially lower, perhaps these great engineers would work for startups that could really use their talent, as they might not care as much to being millionaires so they can afford what's considered a middle class home for their family in most other places besides SF/Bay Area.

It seems to me that most companies start to gain a tedious/conventional/corporate atmosphere once they get to more than, I don't know exactly, somewhere in 100-400 employees. At that point the company has acquired, in addition to those who care purely about building companies and building software and building hardware and physical processes, a middle layer of conventional auxiliary staff, and nice though everybody may be, the company just becomes a standard corporate office environment. Many people (especially those who have enjoyed academic environments) strongly don't like such atmospheres, and for those many people this is a pretty strong incentive to work at small companies.

I have worked at 3 startups for 3 years of my career. At one, I was a founder and seed-venture investor; that one lasted 8 years. It was the only company NOT run by criminals. Total out-of-pocket costs to me (in 2019 dollars) : $45,000 in 2 startups for shares and for options. Total return : $0. Total discount to market salary that I worked for : 33%. In 2 out of 3 startups, the CEOs (1) stole all the money and fled the country, or (2) conned the VCs out of $2.5m and shut down the business the next day after the final funding round (all monies went directly into CEO bank accounts.) Ask me what I think about startups .... Fuck startups.

> And, to be clear, I’m not saying that one should or should not place money or perks above everything

Why not?

The whole premise of venture capitalism is that money is an appropriate common denominator for what is valuable in the world, that the best way to change the world is through establishing a legal entity whose goal is to make money, that once you have lots of money the best thing you can do is to put that money to further use instead of directly engaging your own technical skills.

Why do we tell potential employees at startups "money isn't everything" but potential founders "you'll make more money this way" and potential funders "please, sir, some money"?

The startup ecosystem is a way for venture capitalists to get richer, and to incentivize the people who can directly help them get richer. Evidently it's not enough - so maybe they should incentivize the people who help them indirectly get richer. If money isn't everything, don't join a startup or a big company, go to grad school, where you can actually work on whatever you want. Or go work for a big company for several years and retire, or find a half-time consulting gig, or something.

I agree that the game is clearly rigged in favor of corporations at this stage.

If money is what you're after then joining a big company is by far the most rational choice. Eventually, big tech companies will realize this and start significantly lowering wages until new engineers are paid the same as blue collar workers.

The reality is that new startups do not disrupt corporations; they feed them.

The only way I can see to end corporate dominance is with blockchain tech because it can disrupt the incentive structures that feed corporarions. The new generation of developers can build a new financial system using cryptocurrency as the decentralized foundation in which to store value.

While I understand your sentiment, there is a 2015 Dan Luu article which goes into far more depth saying basically the same thing: https://danluu.com/startup-tradeoffs/

I can see you just started writing on this blog so I don't want to discourage you, but I was struck by the formatting of your notes page and this post being so similar to Dan's along with the topic and content of this post. Keep writing but I would maybe suggest something with more of an original spin.

It wasn't mentioned specifically, but I assume this post was written as a general response to "Working for Microsoft cost me $200 million" [1], which has been at the top of HN for most of the day.

[1] https://blog.garrytan.com/working-for-microsoft-cost-me-200-...

I don't think Dan Luu has some sort of eminent domain over this topic -- I've seen literally hundreds of similar posts, most long preceding and covering the same topic. It's a pretty common decision for people in this field to face, and lots of people have lots of takes.

Not to mention that his post format isn't remotely like DanLuu's. It reminds me more of old Philip Greenspun.

Not that "basic text" is some sort of copyright or something.

Thanks for the comment - this was more in response to the recent article as mentioned by seattle_spring but thanks for sharing Dan’s writing, will take a read. In terms of the similar design, I actually optimized for the least amount of HTML / CSS necessary to put readable text on a page, I guess resulting in a similar look.

I've always thought this problem to be overstated. It doesn't make financial sense to work for a startup, but the upside is that you get to work on something you care about (and even the startup salaries aren't that bad in the grand scheme).

> the upside is that you get to work on something you care about

As a counter example, I found this is far more true at big companies, where you can switch teams until you find one that fits your interest, then at a startup where you are expected to work on basic infra that the company doesn't handle. For the data/ML related jobs that I was looking for and the industry is moving towards, big companies have tons of valuable data that startups could only dream of acquiring.

I like the Elad Gil take on this issue: at big companies, you can have more /impact/, for the reasons you state.

At small companies, you have more control. That's in the high-growth handbook. :)

> The two things I really like about working for smaller places or starting a company is you get very direct access to users and customers and their problems

I don’t understand this at all. Big companies have lots of individual projects, where engineers get direct access to customers. At my big co, we all watch every App Store review come in, conduct thousands of interviews with customers and have a direct say on what gets built.

A few things developers are waking up to...

burnout, working evenings and weekends, a life outside of code, having children or families, master in a specific field vs jack of all trades (master of none), money is more important than free snacks, working your butt off to watch all the credit go to the founders (as well as the money), long term stability, benefits and retirement is much less risky than hoping for an equity payout

I feel the startup founders should enjoy reaping what they have sown.

I really agree with your opinion, especially the words in the last paragraph. I am working in a startup now for half a year, in which all the rules you mentioned is done well, so as a fresh graduate, I never regret working for a startup. There, I have learned a lot of different skills that definitely will be my great treasures in the future. So, for the fresh graduates, I think working for a startup makes great sense that helps them find their true value.

i'd say if a start-up is hiring outside of founders / stock offerings then they are no longer a startup and should offer somewhat realistic wages. before that time, people accept to get paid less with prospect of their stock options exploding and that compensating for the lack of initial wages.

that being said, if a person wants to work at a startup, i'd say they already accept that the wage will be much lower than at some big corporate or company who is making good income already. it seems a bit if not a lot silly to me that someone would join a startup in the early phases but then demand a corporate salary. startups are kind of a popular term, but think about it... people used to actually build stuff and then get funded / success, instead of wanting funding upfront without any actual effort put in (thats exaggerating i know). A lot of startups these days though really ask for ALOT of money from investors without having even an MVP or viable product yet. I can't see why someone would pay for just an idea ... it seems a lazy way to make a startup. Building something, prove it works, and investors will have no issue to invest?

YC has been saying that for a while, but great & early employee need way more equity; they're the one who change the game.

Better solution is to make do with as little staff as possible. Lower headcount makes management overhead and friction inefficiencies lower and saves you money big time. And this is something big companies can't replicate. This is how a startup was supposed to be: do one thing and do it perfectly, with as few people as possible.

Sounds like wealth inequality doesn't just affect private individuals- it's affecting corporations themselves!

The blog post echoes sentiments in TechLead's video last month about the same topic: https://www.youtube.com/watch?v=Btbvv9kfLqo "Software Engineer Salaries in 2020. How much do programmers make?"

Working for a startup makes sense if you think it has good odds of making it, and you are in for a share of it.

Also - outside of the bay (I live in Chicago) you actually make more money working for a startup (at least I do) than for a larger company (as a senior engineer with a lot of early stage experience). I think it might be the nature of the market here.

My main question is how do you attract developers to join your open source project? Wordpress and RoR and all those other projects?

Instead of startups I want to attract people to a project to change the world just like the OP is saying. But where to find the first few developers who would do it not for the money?

I work for startups because generally there's not useless word docs and red tape. You can have a fully reproducible engineering cycle without all the nasty forms.

I can't find the link but a while ago hacker news how to link to an article about useless jobs at large companies. Reminds me a lot of this.

The consensus on HN is pretty clearly towards being a founder or working at Bigtech Co vs being an employee at a startup.

So, if you're a founder, how do you tip the equation to make working at your startup attractive to talent who presumably also read HN?

What would make you interested in joining a startup as an employee?

Frequently in the UK I'm seeing options that are clawed back if you leave the company at any point. EMI options that can only be exercised under certain conditions such as an exit.

Just hire abroad. Working in a completely remote environment is entirely feasible, and it's actually in many, many ways, more comfortable and productive.

Actually, my observation over the last 20 years of being a venture investor, bigco acquirer and startup CEO (including at a unicorn) is that the risk-adjusted $ compensation is the same at a startup and at bigco. Startups just have more beta in the comp. You learn a lot more at a startup and hence it's the experience you want if you hope to do your own startup. If you just care about short-term $ then absolutely stay at bigco. If you want experiences unavailable at bigcos and are willing to take the chance of making less, but also the chance of making 10X+ more, do startups.

Show your work, because I flat out do not believe you. Just the fact that you were investing in these startups, acquiring them, and working as a CEO at a unicorn indicates that you have a vastly skewed perception of the typical startup.

>The risk-adjusted $ compensation is the same at a startup and at bigco. Startups just have more beta in the comp.

I work with startups, and while this may have been true 10-20 years ago I can't imagine how you would think it's true now. As the sibling comment says, I'd love to see your work, i.e. a remotely plausible example case with numbers illustrating how startup EV would approach bigco EV.

A solution could be to let engineers work for multiple companies at once and laws to prevent employers from penalizing such behaviour.

Awesome post! Also this is where nailing PMF is so Important too before hiring

Many new startups (with massive VC backing), aren't really startups

I feel like it is hard for people to say what they truly love before they have at least $1M in their bank account. If you have FU money, your view on working at a FAANG vs building a startup can change. You will find it easier to know what you truly LOVE.

That assumes that the person doesn't change in the meantime. You might put your dreams on hold to solve the money problem, only to discover that you no longer have the energy or focus to accomplish what you could have in the past. End state: I wish I had done what I loved back then.

>> That assumes that the person doesn't change in the meantime.

In the meantime of what? I didn't suggest any action but merely suggested that sometimes money could clarify whether you do something because you love it or/and because you have to make money.

I'm glad all the great artists, musicians, writers, theorists, scientists, teachers, and inventors throughout history didn't read this post.

A remarkably large number of the most notable of those people came from wealthy families - that’s what allowed them the single-minded focus, instead of worrying about food and healthcare.

And a lot of them suffered in poverty to pursue what they loved. Is there survivorship bias there? Sure. You don't become great without taking some chances though.

> I'm glad all the great artists, musicians, writers, theorists, scientists, teachers, and inventors throughout history didn't read this post.

Except they did. Countless people have done the calculus and decided that their creativity wasn't going to put food on the table.

If we want to equate them then we should aspire to write code that is meaningless while we are alive, while living our entire lives poorly or being completely ostracized in society?

I'm not sure the startup angle jives with the artist's.

Most of the code I've written in my life has been meaningless, but yes I get paid well. The ostracisation happened to a lot of devs during high school through the invention of the wedgee.

I am a scientist and thousands of scientists and engineers use my work.

Most great artists, musicians, writers, theorists, scientists, teachers, and inventors would not need to struggle as much if they would have some money to cover their basic needs. They would just avoid bullshit gigs and do they stuff with a greater focus. And if having $1M in their bank account would stop them doing what they love, then it is quite possible that they didn't love it in the first place.

Artistic pieces or songs are generally a representation of an event, a struggle, or a state of mind - if you lead a cushy life then no, you're not going to have the same output than if you were living on the breadline. There's a reason that history is dotted with songs and pieces of art that were written during times of struggle.

>> you're not going to have the same output than if you were living on the breadline

That is what poor people are told to justify their struggle.

$1M is not FU money for someone in a major metropolitan US city with kids.

If someone doesn't hit FU at $1M in the bank, you probably never will, which is ok.

$1M is about 20 years of coast on a modest bay area mortgage + family healthcare.

And the remaining 30 years of life you have low ability to earn income, but face higher taxes and healthcare spend.

To me, FU money is passive investments which yield a couple hundred thousand a year from businesses that can keep up with inflation.

Perhaps that gets at my intended point, which is that different people have different comfort and stability thresholds.

If someone doesn't feel comfortable leaving a job to bet on a startup project with 20 years of mortgage payments in the bank, it is unlikely they ever will.

1 million is 40.000 dollars per year indefinitely, by the 4% rule, with a small risk of ruin that you'll most likely see coming years in advance.

It should be possible to live in the Bay Area on that, given that the place still has cashiers, cleaning personnel and maintenance workers. It won't be a middle-class lifestyle, but you'd have to make _some_ sacrifices in order to indefinitely work at whatever you want in the most expensive place in the world.

Never having visited myself, this is what I don't get about the bay area. How is it still a functioning city? How far out do you have to live to be able to afford rent on a non-tech bro salary?

You posed some simple-sounding questions, but the Bay Area is a very complex real estate market to understand.

So I'll just give you some simple answers.

If you don't already own a house, it's not a functioning area for families, or those wanting to own a house, aka "priced out forever."

Commuting farther is an option in other parts of the USA, but not the Bay Area, since it's constrained by hills and the Bay.

The non-owners living here need a gaffe of some kind:

* shared accommodation

* fly into a city airport with a private plane

* know a Prop 13 owner (ultra-low property tax) who wants to rent to a friend

* find an in-law unit coming onto the rental market

* navigate the Sunset area flop houses

* connections to ethnic communities with below-market asks

* get employer to chip in

* homestead a sketchy area of Oakland

* be a multi-unit superintendent (those used to offer a free apt. on-site, but recently I heard of almost market rent being charged)

but why would anyone do this not making a stupid salary? i don't get the appeal why anyone would put up with that just to have the privilege of serving coffee to techies in a formerly cool city. (not to imply that techies aren't cool)

> It should be possible to live in the Bay Area on that, given that the place still has cashiers, cleaning personnel and maintenance workers.

There’s no reason pay for cashiers, cleaning personnel, and maintenance workers can’t rise, or to meet the demand of labor with a little bit of automation also. Making $40k per year as a cashier means $80k as a couple or roommates.

Bay area on $50k/yr? Is that some kind of joke or did you mean to type 2 years?

Why not? If you have a partner, you would be able to cover half a mortgage, and if not you can get a roommate. I know tons of people who aren't in tech that make ~50K. It makes sense because 50K is pretty close to the median per capita income in SF [1] and a starting teachers salary [2].

[1] https://smartasset.com/retirement/average-salary-in-san-fran... [2] https://www.salary.com/research/salary/benchmark/public-scho...

I mean, I don't live in SF so maybe I'm off base. But my impression is that even with a roommate you're looking at $1500-2000/mo. That's oppressive on $50k/yr.

How so? 3k a month is a lot of fun money.

Even assuming 0 tax we're talking more likw 2200-2600 and there are gonna be some taxes, especially in CA.

Assuming this is investment income of course, and not just spending down the principal, which obviously wouldn't work.

So probably under 2k, and it's not fun money, it's everything but housing starting with food and transportation.

Doable? I guess. Fun? Eye of the beholder, I'd say. And that's assuming kids don't enter the picture, say goodbye to every part of this plan if they do.

I wholeheartedly agree 50K is a miserable salary in the Bay, but the original premise was $1M in the bank:

>I feel like it is hard for people to say what they truly love before they have at least $1M in their bank account. If you have FU money, your view on working at a FAANG vs building a startup can change. You will find it easier to know what you truly LOVE

The question wasn't if you can retire, or live of the investment income, but one of perceived finical security. If someone is too afraid to try working at a startup with $1M cash in the bank, it is unlikely they ever will.

Even if someone has kids and family, $1M provides a huge buffer to find a new job if the startup doesn't work out. Maybe 20 years is a stretch, but I am utterly baffled that other posters think this would only cover 2 years of spending...

> you would be able to cover half a mortgage

Not in the Bay Area.

Looking at an excel for a million-dollar+ home is truly frightening. So many zeroes!

A million dollar home mortgage is about 5k a month. Half is 2.5k/mo, or 30k a year.

If you can live on 4% interest, you can live off of it indefinitely.

For sure. Not in SF though, or so I thought anyway

True, 1M in savings gives you ~40K per year to live off. This wouldn't be sufficient in SF, but given that you're basically retiring at that point, you might as well buy a home somewhere else and then you'd be able to live comfortable off of that.

One has to assume they considered moving out of SF and decided not to.

Or a lifetime of opulent living somewhere sane with low out of pocket health care costs.

$1M is nowhere near FU money, that's a joke to accumulate/spend here in the bay area.

I'd consider $5M closer to FU money.

Yes, that is why I say "at least $1M".

I'd say it's less about the number in the bank account and more about the perceived safety you feel. Similar to the lower two layers of Maslow's Hierarchy of Needs. If you don't think that the worst outcome of pursuing something you truly love is manageable, you're less likely to put yourself up to that risk.

In US this might correlate more strongly to the numbers of zeros in the bank account or the salary difference to similar workers at FAANG. But feeling of safety is subjective and depend a lot on the environment you're in so I don't think that's universally the case.

> I feel like it is hard for people to say what they truly love before they have at least $1M in their bank account.

[edited to protect your feelings]

Are you saying that simple introspection is hard? I completely disagree, because separating extrinsic motivation (I do this for money) from intrinsic motivation (I do this for fun) really isn't that hard.

Instead of being rude, you could try to formulate your point without attacking a straw man.

What you're saying basically amounts to "people are blinded to what they love by their need for financial security". This may be true on some level, but anyone can see through it with a modicum of introspection. Or am I giving the average person too much credit?

I'm not the original commenter, but I think you are vastly oversimplifying the situation. Most jobs are not black and white in one category or the other. There are people who will never be completely happy with any job, and there are local maxima, where one might not reasonably expect a better fit to exist.

>Or am I giving the average person too much credit?

Another consideration is that this is an irrelevant question for your average person, or even 99.9% of the population.

Dunning and Kruger explained how people drastically overestimate their value. The author won't be earning what he thinks he deserves, isn't working on projects he thinks he deserves, and doesn't get the promotions he thinks he deserves wherever he goes. His reality may never change for him and that's his cross to carry.

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