Or maybe I'm just constructing my delusional world to justify having spent $3 on a public blog post!
That's why having a cofounder can be so helpful. Hopefully, your self-serving instincts cancel out and only decisions that are mutually beneficial will make it through.
I've been aware of this for a long time as I do work in a BigCorp but I've never seen it written down so well.
Amazing. I wish my command of the english language was half as good as this guys. I'm really gushing here. I just cant get over this post.
I think a lot of really talented engineers in Silicon Valley fit into a kind of hybrid category I might call 'loser with sociopathic tendencies' (gotta love these terms--hey, I didn't invent them, I'm just following the article). Although they deliberately choose to remain at the 'loser' level in terms of the org chart, they have a
'sociopathic' level of awareness of how the business operates (maybe from being an early employee or founder of previous startups). They're never truly comfortable at the 'loser' level, but maybe not willing or capable of making a move to the 'sociopath' level, and consciously avoid the 'clueless' level (which I think they eventually enter anyway, even if they avoid becoming managers, by entering some kind of 'emeritus' engineering position).
The article suggests that Toby might be in this category, which I didn't think fit at first, but maybe it does--this type of person seemed to me to generally be laconic, cultivated a high degree of irony about the nature of the organization and their role within it, and usually carried an 'escape plan' as a prominent part of their mental outlook (based on either past actual or future fantasized stock option earnings) --all quite similar to the Toby character.
I also think there's a type of person who views anyone at the 'sociopath' level as being inherently morally corrupt, and therefore preemptively excludes him/herself from ever reaching that level, even if they'd otherwise be capable of it. I don't think this is a correct view; the 'sociopath' type may just be the type of person who is more willing to face the full reality of how the business is run and make tough decisions that involve firing and so on. For example, even in the show I don't think the David Wallace character is portrayed as being particularly corrupt. Ryan, on the other hand, is purely selfish and greedy for power--but this actually causes him to fail at the higher levels (which I think often happens in real life as well).
(By the way, in case it's not obvious, I'm trying to use these terms in the sense they're defined in the article--I don't mean them to be truly pejorative to anyone operating at any of these levels.)
The Steves, Wozniak and Jobs spring instantly to mind.
Did the Woz have fun during his career. Absolutely. Did Jobs? Well, that depends...
Org charts are meant to convey the power structure of an organization, but they are usually a lie as well. A good "sociopath" will gain rank in the real power structure, while the clueless middle manager will gain rank in the nominal org chart.
That being said, the engineer position is also fairly privileged: the pay of a Silicon Valley engineer -- even if you take into account the standard of living (provided you live in a part of Bay Area that's comparable to most suburbs e.g. San Jose, rather than a hip part of SOMA) -- is more than middle management in most other parts of the country. The starting salary for a software engineer out of college can be as high as $75,000-$95,000. They can live a very comfortable lifestyle, where additional money (outside of "fuck you money") just brings diminished returns. This isn't true for many scientists (postdocs generally make a pittance).
Note that there isn't anything -wrong- with that. As you say, there may be reasons they do that, whether it is derived pleasure, or something else, but because they aren't actively gaming the 'ladder', they aren't going to move up it, and thus will always be losers.
I think this article works better, if you don't call them losers, and instead call them exploited, because there is such a strongly negative connotation associated with the term loser that it is hard to get past. The author is really saying that bottom layer is exploited (not compensated sufficiently).
Again, I want to emphasize that I realize these terms are shockingly harsh--and of course, if we're staying with this analysis, one or another of them applies to every single person in a (medium to) large organization. I'm trying to use them in a neutral, not inherently insulting way, even if that's almost impossible to do :) I'm just trying to extend the analysis of the article a little, and so I kind of have to use its terms (and of course, it wouldn't have drawn as much attention if it were phrased in a more neutral way, etc.)
It could be that the original article's analysis is just flawed, which I would consider a valid position, etc.--but I'm just going along with its terms because they do seem to fit shockingly well (to the point that the whole thing seems like a bit of a punch in the gut when I re-analyze some past experiences).
I'm surprised this post is so popular on HN. Isn't working for a startup - pouring your time into someone else's company for below-market wages and some piddly fraction of a percent in equity - basically the definition of cluelessness, according to the author?
Here lies your answer.
A lot of people here either wants to or they already did start own company, so they are more in the position of "sociopaths" (according to the post's terminology - see "The MacLeod Life Cycle of the Firm" chart).
As I've mentioned in a previous comment, the article doesn't take into account the fact that there are people who
a) look for a meaning that isn't centered around money or power
b) derive it from their work
If you're an engineer working for a start-up (taking a below market wage, working long hours, so on) only because you are hoping for a large pay day, then you are a fool. If you're working for a start-up because you enjoy programming or because you're looking to learn what it takes to run your own start-up then you can get a lot of a start-up so the equation doesn't apply.
On the topics of start-ups and money, Paul Buchheit said best: http://paulbuchheit.blogspot.com/2007/12/is-there-more-to-li...
- If you do it because you enjoy it, then you are, by article's definition, a "loser" (in terms of potential monetary gains) .
- If you do it in order to learn about running your own startup, then you are "sociopath-in-training" (ala Ryan from The Office).
And that's it. The author doesn't claim you cannot have happy and meaningful life as "loser" (by his definition), deriving pleasure from the work itself.
He just tells that for "losers" somebody else will reap a significant part of the monetary reward for the value that their work creates.
 Similar principle works for "sexy" jobs - that's why poor game developers get abused so much.
My problem with these terms is that they just can't be disassociated with their common meanings. This is a common rhetorical trick - an author defines the word one way, and sticks to that definition, but inevitably uses the impact of the more common word (while claiming that the earlier disambiguation clears him of the need to defend the more common usage).
In short, I think we need a different word than "loser" to describe the category of workers who 1) make a good salary 2) enjoy their work, and 3) yes, could make more money or get a better deal outside the organization.
I'm also unwilling to accept the use of "sociopath" to describe all start-up founders, no matter how airtight the author has been in locking down a definition that avoids all the negative connotations of the more general use of "sociopath."
I guess that I'm really just saying that some words just can't be disambiguated.
In this case, the ambiguity is in the interest of being humorous and interesting, which is why it doesn't bug me all that much (though in other contexts, it can be infuriating).
The problem with working as an employee for a start-up is that you're required to have the commitment of a founder, without the upside. There may be some people who will knowingly invest their youth in buying someone else a yacht, but in my experience many startup employees are unrealistic about their chances. Most businesses aren't going to change the world or make average employees rich.
From a rational perspective at least, I think it's hard to justify being an employee at an early-stage startup unless you're there to build the experience and contacts necessary to start your own company. There are plenty of medium-sized companies out there that offer similar opportunities for employees without their bureaucracy of a bigcorp or the risk and time commitment of a startup.
It really comes down to the specific company/specific team/specific position. Main thing is not to have unrealistic expectations (changing the world, earning money/fame power) as well as have a clear picture of what you're looking for (technical challenge, experience for starting your own company, career advancement, etc...).
The other key thing I've learned is if joining an early stage start-up as an engineer, is to be sure that the sort of programming they do is what you want to do. Otherwise, you'd feel underutilized despite working start-up hours. For example, joining a start-up building web applications on the LAMP stack is a bad idea if you want to do systems programming; some start-ups begin with a simple technological stack but then invest a great deal in in-house systems ("build" being a better option for a start-up then "buy") as they encounter scalability/performance challenges (Facebook, Twitter, etc...) -- but the average early stage start-up would never encounter these challenges in the first place.
That makes all kinds of crazy sense.
Or to put it another way, why should someone who is (arguably) producing most of the value have to stand for getting rich slowly, when the clueless middle managers fail upwards into nicer cars & long vacations, and sociopaths -- who seem to spend most of their "workday" jockeying for position, power, & prestige rather than doing useful things -- get 6, 7, 8 figure salaries & giant stock options?
The real crime is that the productive, competent people are encouraged & incentivized to coast because of the ludicrousness of the system.
Sounds objectively like a bad bargain to me.
So much so that those productive losers should start a company & try to keep the sociopaths out. in fact, if you buy that web -> lower barriers to entry -> less need for predatory sociopathic apes. They'll always try to get in, but that's another story...
Was that the wind in the weatherstripping, or Nietzche's ghost howling?
> While some may be losers in that sense too, they are primarily losers in the economic sense: those who have, for various reasons, made (or been forced to make) a bad economic bargain: they’ve given up some potential for long-term economic liberty (as capitalists) for short-term economic stability.
Halfway with the author so far. Generally, being salaried is a bad economic bargain for people with the self-discipline and perseverance to go off on their own. There's other reasons it can be good - a friend of mine is a business consultant that's really good, really brilliant, could definitely run his own shop. But he makes decent enough coin and loves his work and coworkers, and said he doesn't want to deal with the highs and lows of self employment. He's trading off lifetime net income, most definitely, but maybe he's happier? I keep trying to convince him to do some kind of entrepreneurial project with me and failing, but maybe someday. He certainly is extremely happy.
But anyway, I'm still with the author mostly. Next point:
> Traded freedom for a paycheck in short. They actually produce, but are not compensated in proportion to the value they create...
This is sometimes true. If your work isn't set on incentives, then you aren't compensated in proportion to the value you create. This relates to the above: If you want lifetime net income, look to get compensation tied to incentives as closely as possible.
Being self employed and only getting paid for performance gets you there the fastest, but that doesn't only mean you only make more money! Some months you work very hard, and have LESS money at the end of the month for your troubles. This sucks quite badly when it happens.
> ... (since their compensation is set by sociopaths operating under conditions of serious moral hazard).
And herein lies the author's mistake - the reason people aren't compensated accordingly to their production is that it's incredibly hard to judge production. Jack Welch, one of the better HR people of all time, said he only got 2/3rds of his hiring decisions correct at the very end of his tenure and peak of his skills at GE.
The person who holds back the coin from the productive salaried employee is not his boss or the company owner. It's the unproductive salaried employee. Great companies recognize highly productive people and try to compensate and reward them accordingly, but production is notoriously fickle and variable.
Bosses and especially owners don't scheme to keep pay for productive people down - they want to pay stars, because they want to retain their stars. And if a competitor isn't paying their stars, they'll happily give them a raise and a signing bonus for jumping ship. It's just that it's so damn hard to evaluate who really is producing. The guy that produces 10x the normal amount of production for his job isn't having his pay thwarted by any "sociopaths", he's having it thwarted by colleagues who shuffle papers, schedule meetings, and make themselves appear busy while producing nothing of value.
There's reasons (primarily stability, but others too) to stay in this arrangement, but if you want to maximize your net income, you need to move to a way where you get paid based on what you produce, and be willing to accept the swings and bad things that come with that. That's easy to do in measurable fields like sales. To do it in a more intangible field you might have to open your own company.
... but perhaps Karl Marx was correct when he said that (basically) the essence of capitalism is in the systematic skimming of "surplus production" by the controllers of capital. In other words, EVERY employee is not paid according to their production.
I also think that this commenter has really swallowed the ideology (ie, is clueless): not every boss wants production from their underlings. Perhaps the owners want production, but managers don't necessarily -- changes in production might make them look bad, it might reset the expected quota level for their department, it might upset next years budget, etc. The interests of employees <> interests of owners, and managers are employees.
It all comes down to your theory of value. Marx uses a labor theory of value that might say that a chair is worth exactly the wood and the human labor that is invested in producing it. When a chair manufacturer employs people to build chairs, they pay the employees less than their labor is worth, sell the chairs, and pocket the margin.
The market theory of value says that something is worth what someone is willing to buy and sell it for. So if you decide to work at the chair factory for $5/hr, you and the chair company have agreed that your time is worth $5/hr. If the chair company sells a chair for $50, the chair company and the consumer agree the chair is worth $50. (Of course, the chair company might be willing to sell for $20 and the consumer might be willing to pay $70, so there is a "surplus" to both sides. But that simply arises from the distinction between individual value judgments and market value.)
The market perspective is the only one where productive activity makes any sense at all. From a labor theory of value, a chair, a table, a skyscraper, or a startup is only worth the amount of labor that was invested in it. But if this was true, then wouldn't we be just as well off to spare the labor and hang out on the beach instead of working? The market theory of value says that if you invest labor, you might create something more valuable than the labor you put into it, which is the only theory that justifies productive labor in the first place. It also says that if you invest your labor into building something no one wants or is willing to pay for, you simply waste it. The labor theory of value would gel with many people's naive ideas here: I put so much work into this damned thing, isn't it worth something?
While it suits the company to identify and retain the productive, management's incentive is to minimally reward producers.
Productive losers are, by definition, not those who will take a risk to ensure maximal compensation. Their wages are therefore easy pickings for a sociopath manager who is willing to take risks to ensure their own maximal compensation.
The author has simply assumed that at some point any budget will cross a sociopath's desk, thereby guaranteeing the productive loser's compensation will be depressed in the sociopath's self-interest.
Sometimes you wind up working for an oblivious or sociopathic boss - but then you need to go apply for another job elsewhere. It's like if the closest restaurant to your house is no good: You ought to take the effort to get out of there, and that is your responsibility.
But generally speaking, even halfway decent managers and owners go out of their way to compensate their best people. Now, low-middle managers are not always halfway decent, but then, they're probably not getting directly compensated on production either. Once you get to "head of division", "head of region", and any ownership role or incentive based on real production from a manager's unit, you're going to get managers that want to pay their people well. It makes a bigger pie, so to speak.
Instead, autonomy, complexity, and achievement, and recognition are related to motivation. I'd rather make $80k a year doing something I love than $95k a year doing something I hate (assuming that $80k is enough to meet my living expenses and other hygiene needs).
http://www.netmba.com/mgmt/ob/motivation/herzberg/ for a brief overview.
Job performance objectives are overwhelmingly based on overall company performance and department-level performance scores, and individual performance has almost nothing to do with it. And even then the whole salary situation is cloaked in smoke and mirrors and is essentially irrational and adversarial. Your scorecard numbers have nothing to do with it.
I work in an organization that fits your parent's description and it sucks. HR doesn't do anything except administrative work and the departmental managers don't have any authority in regards to salaries and benefits.
"Sometimes you wind up working for an oblivious or sociopathic boss - but then you need to go apply for another job elsewhere."
The author's term 'productive loser' is defined by the unwillingness to accept risk to ensure maximal compensation. If you agree that the willingness to take such risks is required, I'm not sure that you're truly at odds with the author's original statement.
Further, your 'upper management' examples all live at the 'sociopath' level of the author's corporate pyramid. Sociopaths are eager to pay other talented sociopaths fairly, because they know that they must.
Subheading "What a Job Is", 5th paragraph down or so:
In a company, the work you do is averaged together with a lot of
other people's. You may not even be aware you're doing something
people want. Your contribution may be indirect. But the company
as a whole must be giving people something they want, or
they won't make any money. And if they are paying you x dollars
a year, then on average you must be contributing at least
x dollars a year worth of work, or the company will be spending
more than it makes, and will go out of business.
I think the single biggest problem afflicting large
companies is the difficulty of assigning a value to
each person's work. For the most part they punt. In a
big company you get paid a fairly predictable salary
for working fairly hard.
the company has no way of measuring the value of your
Salesmen are an exception. It's easy to measure how
much revenue they generate, and they're usually paid a
percentage of it. If a salesman wants to work harder,
he can just start doing it, and he will automatically
get paid proportionally more.
If it does nothing for the customer, then what's the value?
It's also not usually (at megacorp) the developers responsibility to decide what will be valuable to the customer.
I don't think so. Darwinian evolution is not just a description of a natural process. It is a powerful metaphysical principle. IE, Darwinism could happily exist in theory, without any physical form. It just happens to have a physical form, biology. But this fact is the reason that it has had such an impact on our vocabulary.
People that have used Darwinian-like thought before can apply it elsewhere. This kind of analysis draws a lot from that. I think there are few philosophical principles that have this power. I cannot think of a many pieces of philosophical work with this kind of an impact.
The Method (2005) Spain/Argentina
i am really surprised this is popular amongst this particular group of entrepreneurs. i think if you have to put this level of thought into how crappy your workplace is, you should have quit years ago.