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Comment by tyre | Hacker News Reader

This is a necessary, if painful, lesson.

I remember the layoffs right before leaving LivingSocial in 2012. A raw, human catastrophe. Watching friends pack up their things, who had been sold on the culture and vision of what the company could be, was an eye opening experience.

This is why you focus on business fundamentals. Not because it is sexy, not because you can tell ProductHunt about your run rate, and not because you want impress investors.

Because if you fuck up, everyone who depends on you gets fucked.

A few words of advice:

- Before you raise money, ask yourself if that valuation is realistic or aspirational. If it is aspirational, know that you have to reach that valuation without raising another cent, just to break even. Ask yourself if you are default dead or alive.

- Before you start a company, ask if it is solving a problem for customers or your desire "to be an entrepreneur."

- Before you hire anyone, ask if their position is a need to have or a nice have. Like customers, few businesses can afford "nice to haves"

- There is always capital available for businesses with strong fundamentals who are solving real needs.

Layoffs are like throwing up from drinking. Not fun and nearly always your (the founders/managers') fault.

- Pace yourself.

- Build a company you're proud of.

- Build something that people need.

- Growth is great for slide decks, but employees can't use it to pay rent. Don't chase hypergrowth as an end in itself.

Markets can stay irrational far longer than you can stay solvent, but they can also snap back to reality before you can wake-up.

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Right now it seems like there are two reasons for creating a company. One is for making a profitable business that creates wealth for the people invested. Two is for creating a product or service that customers need or want. These two revolve around servicing those invested, or the consumers of the product/service, or both.

It's surprising to me that no one starts a company solely for creating an amazing place to work. A great workplace and work would be the product/service, and the employees the consumers of the product/service. Sure, you would have to have paying customers to fuel it, but that could always be secondary in some sense. Right now it seems like the workplace is secondary, so why not swap it? I'm sure there are a nice subset of people who would take less (even half) of their current salary just to work in a place that revolves around them and their experience working.. which is the majority of most of our days.

Viable? Probably not, but it's interesting to think about and trying to imagine what that place would look like for you personally.

Google tries (tried? it's been a couple years, and the culture was changing when I left) very hard to do that, and they actually have the money spigot to make it work (for the most part).

The problem with the idea in general is that money usually flows from the party deriving the benefit to the party providing it. So if the company's top priority really was to provide a great place to work, then logically, the employees should be paying it to work there. Indeed, places that are often considered great places to work (Google, Palantir, Fog Creek, philanthropy, non-profits, education) are often notorious for underpaying their workers relative to where they could employ their skills elsewhere. If a company took this to the logical extreme - making the employees the consumers of the product/service - then it would cease to be "work", and would instead be a "hobby/internship/volunteer/education/experience".

>If a company took this to the logical extreme - making the employees the consumers of the product/service - then it would cease to be "work", and would instead be a "hobby/internship/volunteer/education/experience".

I think there are a few places where you can fight for this experience. One at a (extremely well-funded) University lab where you are paid a Software Engineer salary to work on computational research problems. Two at a (extremely lenient) company where you are allowed the freedom. like 50% time to take classes on company-time and company-dime and/or pursue your own open source projects that tickles personal intellectual interest, not the company's production needs.

I will however add, being at a place that does offer a 20% time and tuition credit to take your own independent class of choosing, attend journal club/internal machine-learning and algorithm group classes or pursue a open-source project. It is very very hard to take the initiative because it's much easier just to cruise and do 80% of the work in the 100% allotted time. Especially after the first year of novelty of given the opportunity.

So regardless of wherever your workplace, I think whether a person really pushes their own intellectual boundaries is more the person's aptitude to apply themselves than their work environment/culture.

> So if the company's top priority really was to provide a great place to work, then logically, the employees should be paying it to work there.

Well, they are. One strong motivation for creating a really good place to work is to attract best-in-class staff without necessarily paying best-in-class wages. In that sense, your employees are paying you a chunk of their potential salary in order to work for you instead of the highest bidder.

Aren't incubators, cooperatives and co-working spaces closer to what it is being described here?

As in, the idea is to provide favorable working conditions for people / teams that are making money from their own efforts and who pay for that environment (in cash, membership dues, stock, whatever). The institution itself is in the business of giving the teams within it the best possible working conditions given available resources. However, the catch is that the income of the teams doesn't come from the institution, but rather the other way around.

Out of curiosity, since you label as Google as notorious for underpaying - something I haven't heard much elsewhere - what are some of the places that do pay appropriately?

That's actually more in reference to the situation from '07-10 (before the high-tech antitrust employee lawsuit, perhaps not coincidentally), although I think their reputation for massive perks & great working conditions also seemed to drop off around 2012ish.

For shitty working conditions + excellent pay, I'd think more in terms of algo trading or founding a startup (well, technically founding a startup gives you shitty pay too, but with the potential of a large windfall). Those are the alternatives that many Googlers with similar levels of education, intelligence, and ambition would consider, and Google didn't even try to compete with those compensation levels. In the packet included with my offer letter explaining why I should work for Google, they even said "Most Googlers do not work for Google to maximize financial gain."

> For shitty working conditions + excellent pay, I'd think more in terms of algo trading

You've either been unlucky or I've been exceptionally lucky, as my experience has been great working conditions, excellent pay, and exceptional people whom I'm happy to be spending a few evenings a week with, outside of hours, on the company dime.

Happy Friday :)

Care to give some pointers?

TL;DR: Work hard, save money, don't be an asshole.

Work hard, be good at what you do, and save every dime you can. Make sure you've got enough cash to maintain your life for 6 months. This can take time, it took me 3 years in my first tech job to reach this point, and didn't have much resembling a life during this time. It kinda sucked, but the investment paid off multiple times over.

Then interview aggressively. Interview for jobs you don't actually want, it makes good practice, and they're easy to reject. When you're researching the companies you interview for, look into why you'd want to work for them, not just into random trivia to demonstrate an interest in the firm (do this too of course). Remember that the interview is a two way street. You're interviewing them to make sure it's a good fit. Ask to look around the office, to chat to some of the people you'd be working with. Look at the nearest toilets to where you'll be working.

Do not be afraid to turn down jobs. You're not burning bridges. You can turn a job down and still join them later if you change your mind (if they're still hiring). If you've taken a job and decided it's not a good fit, do your best to impress as much as you can, as quickly as you can. Demonstrate your worth. They'll be disappointed when you leave, but you've left the door open for future opportunities with all of them. Having options is the closest you can get to free employment insurance. This builds your professional network, which leads to more and more opportunities in future.

Your salary is a function of your ability to negotiate. Interview for jobs you don't want to get offers. Salary negotiations are like prom dates. The more people that want to go to prom with you, the more people that'll want to go to prom with you. Desirability breeds desire. Having offers means you can negotiate higher, and get more of what you want. Their starting offer is their floor. They will only go up.

Go back to the beginning. Save every nickel and dime you make. You should increase your liquid cash to minimum 12 months living expenses (at the rate of expense of the life you want to lead, not at the rate of saving every nickel and dime). You should have additional savings, investments, property potentially if that's the right route for you.

Work hard, be good at what you do. If you are, and the people you're working with are too, mutual respect builds, and from that, friendship. If you're like me, 10 years in, you're no longer interviewing for jobs, you're chatting to friends about prospective opportunities where they're working. They've done similar to you, and they're only working in places with people they respect, so the effort involved on both sides of the hiring process goes down.

Invest in yourself, balance your life with your work (life-work balance, the ordering of that phrase is important), value your time. Don't work for anyone who doesn't. That doesn't mean you don't do crunches, just that they're exceptional rather than ordinary.

> If you're like me, 10 years in, you're no longer interviewing for jobs, you're chatting to friends about prospective opportunities where they're working.

You lost me at this part. Every job out there requires you to go through at least some kind of interview process. What mystical companies out there allow you to skip it, and how do you negotiate that allowance?

I don't think you're skipping the interview process (that's quite rare), but you're not worried about using it to prove your competence and look for dark secrets in the company.

If a friend has told you the company is on the level, and told the company you're on the level, the interview becomes much more sociable and low stress. You're each confirming what you already know and looking for a good fit, rather than being suspiciously analyzing one another.

Thanks, I am aware of these strategies, they work. I was actually looking for some pointers to places to work for you think are worth checking out.

Interesting, thanks. Obviously it's a huge place, especially these days, but from talking to recruiters there in the 2013-present time frame about potentially going through their process at some point, "when people turn us down it's rarely for financial reasons" has been the sort of line I've been getting. But without actually going through the process and seeing if I got an offer / what the offer would look like, obviously that could just be talk -- though I've seen recruiters at some places just walk away "yeah we wouldn't be able to give you numbers you're looking for" when presented with some of the same info.

I think Google's competition for employees is now largely other big tech companies, and they pay competitively relative to other big companies.

When I was applying, the software labor market was a bit more fluid, Google's target demographic was more startup-like, and it was right as the financial crisis was gathering steam and a number of people who had previously been in finance (including myself) were looking elsewhere. So their competition for employees was much more broadly defined. Google doesn't pay anything near what a creative algorithm-designer can make at a hedge fund, nor will they net you a few million dollars from a startup exit, but at the time those were the other opportunities that people might've considered. A number of folks I met at Google in 2009 were former startup founders; very few that I met in my last couple years there (2013/2014) were.

I know people at most of the larger algo trading firms in nyc, they all have all excellent reputation for how they treat employees. Sounds like you have algo trading confused with big banks like GS.

"If a company took this to the logical extreme - making the employees the consumers of the product/service - then it would cease to be "work", and would instead be a "hobby/internship/volunteer/education/experience"."

Tangentially related, but an early strategy of the Ford motor co was to double the standard factory wage of it's employees, so that the purchase of one of its automobiles was within reach and seen as the bonus of employment. It did wonders for their introduction of the automobile to America.

The pessimist in me wonders just how altruistic the intention behind the wages in the Ford example was. If that were a modern example, I fear the rationale from management would not be about putting the vehicles within reach as an _optional_ bonus, but rather that it would be an unwritten rule that employees are expected to purchase one. Not buying the company's product? Enjoy your status as an employee who doesn't "fit the company culture".

Realization: I have become extremely cynical in my middle years with all the crap I've seen from employers. :/

I share your suspicious. Before they raised their salaries, they were having to hire 52k workers/year despite only having a 15k workforce, due to a tremendous turnover. And the extra money wasn't free; you had to subject yourself to the "Ford Sociological Department", whose 200 investigators would make sure you complied with the company's rules: be married, keep your wife at home, abstain from alcohol and to ask for permission before making serious purchases (like buying that Ford car).

Very interesting indeed

http://jalopnik.com/when-henry-fords-benevolent-secret-polic...

Early Ford was pretty direct about the value of "fitting the company culture", what with ceremonies like this: https://www.thehenryford.org/collections-and-research/digita...

They actually doubled the wages to combat crazy rates of attrition. (Way more than 100% a year.)

That workers afford cars after that was a nice side effect that made for good PR.

Very interesting and relevant but under the model where the products of the tech titans are near free its hard to apply this same logic.

Google doesn't really cost the users much (except loss of private data?) so its hard to say they should pay their employees enough to afford a google mail account.

The last example you were looking for is "country club."

I think we could also go with coworking space!

This usually pops up when we discuss quality of life in various countries/regions. Why do we need money in the first place? Basic needs, nice-to-haves and hobbies/entertainment (rough Maslow's pyramid) and some deferred for pension. Major part of our paychecks is consumed by the basic needs: +/- housing, transportation, food, clothing and depending on country some public services like healthcare in US, children schooling.

Such a company could combine workplace with living quarters, shared transportation, etc.. Something like garage-startup evangelists dream about. Considering that 1) sharing expenses usually lowers single contribution and 2) lots of things could be [personal income] tax free such a company could actually provide services at reasonably competitive prices.

I think that would only be possible at low or large scales (<10 / >1k emploees?) and has own issues like spouse employment, personal preferences (e.g. luxurious car vs spacious house), location that are traditionally handled on per-family basis. Interesting idea, actually

What is old becomes new again. You're essentially describing the early 20th-century company towns.

The thing is; it's not nice to have to move out of the neighbourhood when you switch jobs, or to have your manager be also your landlord, or to be stuck using the few "subsidized" services available because you can't afford the others (since you've traded some salary for these compensations).

It's essentially taking the problems of employer-provided healthcare and expanding them to all the other components of your life.

> no one starts a company solely for creating an amazing place to work.

I have some friends who did exactly that. Their company is a small consulting firm that focuses on a rather uninteresting space (enterprise content management) but they have a small profitable company where hires are treated right.

The "problem" with these kinds of companies is that you are never going to read about them on HN, they aren't a lottery ticket for the employees, and the work is not that sexy. However, I have several other friends who are employed by said company and have been there for years because it is a great place to work.

> It's surprising to me that no one starts a company solely for creating an amazing place to work.

They do, they're called lifestyle businesses and tons of people do them. You simply don't hear about them because the valley (thus VC money) is generally about Unicorns, not regular businesses.

Oh yeah you're right. I definitely hear about lifestyle business all of the time, but I was always under the impression that they were trying to sell you a lifestyle instead of a product/service. I didn't know they were actually trying to create the lifestyle for themselves.

On that note I have to post one of my favorite talks.

@DHH Startup School 2008 https://www.youtube.com/watch?v=0CDXJ6bMkMY

Still inspiring, still relevant eight years later.

Thanks so much for this, as someone making just "a nice italian website in the web space", it's comforting to hear this rarely heard logical approach.

They're not trying to create a lifestyle, they're just running a small to medium sized regular business. "Lifestyle business" is just an idiotic Valley term.

In all fairness, there are small companies where people get a lot of time off and other forms of flexibility. However, I don't really disagree in general. A lot of the time "lifestyle business" seems to just be code for a smallish business that doesn't really pay up to market rates or otherwise provide competitive financial compensation.

They're also called names like, "Smuckers."

http://www.marcgunther.com/sustainable-smuckers-its-all-in-t...

I bet there are a lot of amazing or pretty darn good places to work in whatever that 37 Signals thing is that interviews companies who have been in business for a long time.

Found it: https://thedistance.com/

Don't forget these crucial categories:

- Solving interesting (to the founders) problems

- Social club (the most relevant to your proposal)

- Ego trip

- Nepotism

- Tax dodge

In all seriousness, I support your point that companies are founded for more than just to make money, even though (most) companies ultimately need to make money.

Businesses are a means to an end.

Personally, we are building a company[1] to have an impact. Profit is part of that, since how large of an impact is correlated with the number of customers we can serve which requires certain fixed costs (e.g. salaries.) Profits also allow a company to weather market fluctuations and be free of the hype-cycles of investors.

The product or service are equally means to an end. Building a CRM for local government isn't a goal in or of itself. We don't win when the code is shipped or even when the customer buys it, only when we affect change on the world.

The one thing required to do that is people. And not just anyone is passionate about empowering public servants (which is pefectly fine.) So, in fact, creating a great place to work _is_ one of the few things we build the company around.

At the end of the day, it all comes back to human happiness. Not the spurts of dopamine from Candy Crush or Snapchat, but real fulfillment. (Check out our values[2] and employee handbook[3] for how we put that into action.)

When I was younger, my dad used to always ask me, "What is your goal in life?" I'd say stupid things like a Ferrari or a big house and he would ask "Why?" Because I wanted to drive fast or have room for toys and video games. "Why?" And so on...

All of those "Why"s led to one answer: My goal in life was to be happy. Everything else is a means to that end. That's why a few of the things I listed in the original comment had little to do with product or profit. Build something you're proud of, for no other reason than that you have to live with yourself. Do the right thing. It's harder, but you'll make people, most of all yourself, happy.

And if you die in 30, 40, or 2 years having made a bunch of people happy, I think that sounds pretty great.

[1]: http://seneca.systems [2]: http://seneca.systems/values [3]: https://Github.com/senecasystems/employee_handbook

[EDIT] - added a story from my childhood

> Personally, we are building a company[1] to have an impact. Profit is part of that, since how large of an impact is correlated with the number of customers we can serve which requires certain fixed costs (e.g. salaries.) Profits also allow a company to weather market fluctuations and be free of the hype-cycles of investors.

You don't need a company - the same goals can be achieved by a non-profit. The main difference between a non-profit and a company is that the company's owners are allowed to pay themselves dividends from the profit. If you don't care about that, you'd probably be better off with a non-profit.

I looked at non-profits, but sincerely believe for-profit is better for our company.

Our goals are aligned with our customers, not whoever gives us money. As a for-profit enterprise, we are truly independent from the whims of outside investors.

It also changes the talent pool and partnership opportunities. The non-profits we have met, and there are many in the government space, move at a very different pace than a startup. They can also drift to working on the ideological over the practical.

Since software is a quantifiable good, if we cannot sell it than we aren't building something people need, in which case we shouldn't exist. For-profit aligns our survival with our impact.

There is potentially a shitload of extra paperwork, bookkeeping, and regulation involved in a 501(c) corporation that isn't present in a standard private corporation. Assuming, of course, you can convince the IRS that you fit one of the 501(c) subsections to begin with. Much easier just to run a standard, closely-held corporation or LLC.

I've "worked" on large volunteer-run art projects, and it's a lot like what you're describing. It's like a regular business with a hierarchy and people working various job titles, except that no one gets paid, and we're all just there for the delightful "work culture". We're inspired to bust ass, and we really do work incredibly hard; it's just that we get "paid" in personal fulfillment and camaraderie rather than in money.

Unfortunately we haven't figured out how to turn this stuff into a revenue-generating vehicle that would allow our "staff" to be paid in actual currency.

I seem to recall that that was one of Joel Spolsky's intentions when he created Fog Creek Software ( https://www.fogcreek.com/about/ )

Yes.

In the early days, we were all about making a great place to be a software developer in New York City.

Yep, that was all there was to it...

I...decided to start a company with my buddy Michael Pryor. Making a nice place to work was our primary objective. We had private offices, flew first class, worked 40 hour weeks...

The tagline was “building the company where the best software developers want to work.”

Source:

Figuring out what your company is all about [http://www.joelonsoftware.com/items/2009/11/01.html]

I think it's completely viable, although probably less so with VC funds. I plug this book a lot on HN, but in Managing the Professional Service Firm, David Maister talks about how a firm has 3 goals that must stay in balance: profit, job satisfaction, and client happiness. If any part is neglected, things will fall apart. In the long run, job satisfaction is not even a "nice to have," because if your employees (or you!) are unhappy, they are going to be more expensive, and they will damage your customer relationships. I know personally as I am trying to get a development partnership off the ground, enjoyment of the work and the team is a huge consideration.

You are looking at the wrong jobs.

My office used to be the rivers Inn and Oetz in the Austrian Alps, when I worked as a rafting guide and it was an amazing place to work. It just doesn't pay much.

You have to get pretty high up in salary level before at least roughly competitive salary isn't a tier one factor for most people. And, even then, salary is often taken as a proxy for overall value--see pro athletes, for example.

I think the reason it doesn't appear people are creating businesses to be a great place to work, is because if it's created for that purpose, you probably want to get as many people as possible working there to they can share in the happiness. How do you do that? Grow. From the outside, it can look just like any other company trying to grow. Are they adding perks because they need to attract talent so they can compete and grow for growth's sake, or are they adding perks because they think the employees deserve them and also just trying to grow?

> It's surprising to me that no one starts a company solely for creating an amazing place to work.

I know at least one company who did that: Mobile Jazz. I started that company in 2009, initially as a freelancer, because I wanted to focus on lifestyle, rather than business success and I wanted to surround myself with other smart people, but also such that have a similar philosophy in life.

We're now a 20 people company with our HQ in Barcelona. However, everyone is allowed to work from wherever they want and (if it is planned properly in advance) also as much as they want. Some of us travel a lot. I've been "homeless" for 2 years now and spend most of my time living out of a camper van: https://i.imgur.com/qZy6Vkd.jpg

One of our employees is currently taking 1 year around-the-world trip with his wife, not rushing, but settling down at least 1 month at each place in order to work comfortably. I've just met up with them in Bali.

On top of our personal freedom and travels we also organize about 3 company events per year, which are voluntary to attend. Some examples: * Remote office in Thailand: https://mobilejazz.com/blog/working-remotely-from-a-tropical... * Skiing in the Alps: https://mobilejazz.com/blog/why-we-decided-to-stop-the-compa... * Summer Camp in the Spanish Pyrenees: https://mobilejazz.com/blog/work-life-balance-in-the-spanish... * Remote office in Cape Town (blog post pending) * Remote office in Martinique (coming up this fall)

We pay everyone the same salary (a fair basic salary), but the interesting thing is that every quarter we share a huge chunk of our profit with everyone in the team through bonuses.

We've managed to build an amazing team, hiring mostly through our personal network. Same goes for our clients. We are doing zero sales, but all the work we get comes through word of mouth. And we're constantly overbooked.

We're fully transparent with what we do and even share it with our clients in a monthly newsletter. Now, the funny thing is, they love it. They sometimes even tell us, that they want to stop hire us and they want to start working for us ;-)

By giving my team a lot of freedom and trust, they've learned how to be responsible and act as if would be there business. I can even trust them so much that I just took of a whole month from my role as the CEO and voluntarily worked on a sailing boat crossing the South Pacific from Micronesia to New Caledonia: https://goo.gl/KPXI21

Happy to answer any questions :-)

EDIT: for completion, we're mostly a consulting/services company: http://mobilejazz.com/ - but we also run a couple of our own products, e.g. https://bugfender.com/ and https://mobilejazz.com/products/enterprise-push-technology

> because I wanted to focus on lifestyle, rather than business success

If you want to be able to focus on lifestyle, you must have the business success part pretty well sorted out. Otherwise, how would you be able to underwrite all of the activities and profit sharing you describe?

Depends what you define as "success". Probably my wording was not the best. Our business is extremely successful, but in different ways that most people define success.

We don't have a huge monetary success and no one is going to buy our company for multiple millions, but we have a lot of freedom, cool people and pretty fun adventures together without having to worry about financials either as long as don't start driving Lamborghinis ;-)

That said, the financials need to be good to support the lifestyle part. But if you live smart (not wasting money on a lot of things you probably don't need anyway) you get pretty far.

This is awesome and something to be proud of !

How many hours per day do you expect your employees to work ? (I realize it may be task based...but what does it end up spending?)

Second, can you talk about the tools you use to manage the company ? How do you track everyone's work,etc - is it self reported like Google Snippets,etc.

Have you ever fired anyone?

Thanks. I appreciate it. You know, sometimes I develop envy when I read news about the financial success of other startups, but then when I take a break from work to go kitesurfing or for a yoga class in the middle of the day I feel pretty happy and proud of what we have achieved :-)

> How many hours per day do you expect your employees to work?

We don't expect any fixed number of hours. As long as stuff gets done and no-one suffers we're pretty cool about it. It does require discipline in planning by everyone though. Taking a day or two of spontaneously usually also isn't a problem.

> Second, can you talk about the tools you use to manage the company?

- Slack (we just recently moved over from HipChat as we couldn't deal with constant connectivity issues any more)

- Asana (best investment ever)

- Google Apps (Gmail, GDocs, tons of spreadsheets, calendar, etc.)

- Trello

- Harvest (for tracking of hours, invoicing, etc.)

> Have you ever fired anyone?

Yes we have. We have a very special culture with a lot of freedom and flexibility, but that also requires high responsibility. We hire mostly on gut feeling and are pretty good at that. But honestly, you only know after you've worked with people for a couple of months. And while some might be technically excellent, there are those that are no team players, can't communicate well when it's needed or don't have a sense of accountability. Basically these people need supervision, and the way we work we don't have supervision and also don't want it.

I don't think you understand what business is at all if you think that making an "amazing place to work" can be the primary reason for starting a company.

You have to create value that customers will pay for. They don't give a rat's ass about your workplace. See iPhone.

You have misunderstood the parent post.

"It's surprising to me that no one starts a company solely for creating an amazing place to work. "

An interesting dynamic of startups. You try to build a great place to work at, [0] and in building that startup you screw it up by building a bigger company. [1]

[0] "Managing Software Engineers" ~ http://philip.greenspun.com/ancient-history/managing-softwar...

[1] "ArsDigita: From Start-Up to Bust-Up" ~ http://waxy.org/random/arsdigita/

The author of your first link has an obsession with overworking his employees.

"If you see one of your best people walking out the door at 6:00 pm, try to think why you haven't challenged that person with an interesting project."

"This means that if you want to follow the best practices of the industry in terms of design and architecture, the only way to improve speed to market is to have the same people working longer hours."

Software development is inherently creative. Employees need external stimuli to be effective.

It's generally the case that you can't work on anything truly interesting or challenging until after 6pm anyway -9-5 gets chewed up so badly by all the bullshit, meetings, email, and noisy salespeople yelling into their phones, that the real work can't get done until everybody goes home and some peace and quiet can be obtained.

3 hours of focused work with no distractions is worth at least 3 typical work days.

Just say no to meetings. As an employee for your own calendar, and as a startup founder for the whole company.

I block off three mornings a week, and all day Friday for "actual work". I like to start early, and have no desire to work till 9pm (sometimes it happens, but it will be at home and because I really want to finish something).

Most people are pretty accommodating (and I work with lots of very noisy salespeople).

I wonder if a software shop structured as a co-operative would be good for this. Let the employees themselves control the workplace and set it up as they see fit. I know I'd personally be a lot more invested in my workplace if I had a direct voice in how it functions and the direction we move in.

I've often thought about starting a think tank business that would be similar to this thought. Basically, it would employ people to think up new things, whatever they wanted, and then we would sell those ideas/patents. Sort of like Google's 20% time only at 100%. No idea if it would work, but it would be a great place to work.

Intellectual Ventures had done this.

It only provides value to the employees/owners, though. Ideas/patents are worthless without the right person/people to execute.

Have you seen public sector organisations?

this is a terrible idea.

I whole fully agree with the points you make but I want to point out that for engineers in Silicon Valley, it's less dramatic to get laid off than you make it sound (I've been a part of a couple and I've had to lay off people as well).

The reality is in that most cases, you just change a tagline here and there, recruiters call you, and you just go on and do the next great thing.

The only ones for whom this is a problem are probably the ones with a "nice to have" position and they will have a hard time finding a new job. This sucks, but this is, like you said, also the founder's fault so it's up to the founder to give them a nice severance pay, great recommendations and preferably even introductions to other companies.

> The reality is in that most cases, you just change a tagline here and there, recruiters call you, and you just go on and do the next great thing.

That depends where in the cycle we are. You're talking about the normal churn of startups, but in a downtrend the recruiters stop calling and that is the time where it is quite dramatic.

This is where I point out the obvious: save enough of your huge paychecks to last you a few months in the event of a downturn. I keep about 6 months expenses in my savings account but it's up to your individual risk tolerance.

6 months of expenses in SV is like $24k just in rent. That's going to hit people pretty hard whether they've saved for it or not.

$4k/mo is higher than average unless you're talking about supporting a family as well. If you're supporting a family your risk tolerance should be lower meaning you'll want more saved. Though it should hit people equally regardless of rent. The only difference is that people with lower rents can afford to take lower paying jobs in the event of a downturn.

$4k/mo is significantly more than my total monthly expenses. This leads to the other obvious advice: live below your means.

When layoffs start happening, they tend to be happening everywhere, so no, you're not going to just "change a tagline" and choose among the hundreds of recruiters banging down your door. Doesn't anyone remember 2000-2003? or even 2007-2009? (or earlier I'm sure, I've mercifully only had to survive two major downturns)

Bubbles repeat cause no great lessons are learnt.

The leaders who fuck up and fail are very rarely in the same positions of influence ever again.

The leaders who fuck up and survive (through luck and ruthlessness) are busy inflating the next bubble believing whatever fantasy they cook up about the reason for their survival.

I disagree that it's the employer's responsibility to look out for the employees beyond paying them the agreed-upon salary. Anyone who joins a startup should know that their job could disappear if the funding dries up. That risk is a big part of why startup jobs pay so well.

Look at the company on the basis of the stuff you list. Are they spending lavishly on "nice to haves?" Do they have any customers? Does their business model seem sane? Talk to someone disinterested to try to understand if you're being attracted to hype or to a really sound idea.

> That risk is a big part of why startup jobs pay so well.

This is a joke, right? I must have missed something between the below market salary and the lottery ticket 0.2-1% equity grant over 4 years. Please, do tell where these startup jobs are that "pay so well".

Maybe you've never taken a hard look at other, non-engineering positions. Where I'm from making $100k a year right out of college with zero experience is quite nice.

Hold on tight. We'll see if you'll still be making that in 6-12 months. Having lived through the first dot com bust, as well as the 2008 financial crisis, things usually fail slowly until they fail all of a sudden.

Have 3-6 months emergency fund saved; if not, start saving today.

That was his point. You're making more, because you also have to live with a higher degree of uncertainty.

My understanding is that's a pretty typical starting salary for the Bay Area right now, so it isn't really compensating the recipient for the risk of not having a job in six months for reasons outside of the recipient's control.

Also gives you some idea of how stupid expensive the area is, which further increases the risk.

I'm in a low cost of living area, emergency fund, everything and I just can't imagine having little experience, making 100k a year where you're paying $3-4k/month for rent, and then to lose your job with only a few weeks before you're broke.

Terrifying.

Wish I made that much at the two startups I worked at. I didn't even quite reach that when you combined the two salaries. Plus I had prior job experience.

Yeah, I know. Shhh. They were still amongst the most interesting jobs I had, and some of the projects I'm most proud of.

Good post. Random thoughts from me on reducing layoff potential:

When hiring people, hire people that can work in many different roles/projects, think about hiring a person that will improve the business, not just someone to do a particular thing. This is not saying hire marketing/programmer/designers, but rather, know that a software developer can learn anything in a few weeks and is not just a developer in language XYZ.

Hire people when you are really hungry for people and can't handle what you need to do with the number of people you have in a particular area, and you expect that need to be sustained for the long term.

Avoid the idea that you can hire contractors for short term things, when contractors is really a euphism for disposable employees. Push management to hire full time employees.

Make sure there is available revenue and burn rate to cover people. Even if you need help, hiring people when you are in dire straits may be bad for them if finding a new job is difficult. (Still, providing jobs == good).

When projects end, give these folks new jobs and give them time to learn new things, rather than getting rid of them and then hiring new people for the next project that may be booting up in just a few weeks.

Larger companies seem rather guilty of thinking a person just is hired for a department/project, and somehow thinks it's ethical to shut down or shrink whole departments. They should instead look about how to have lots of potential ideas in the pipeline for the future and move people around better.

"Avoid the idea that you can hire contractors for short term things, when contractors is really a euphism for disposable employees. Push management to hire full time employees" ..

Can you elaborate why ?

You can ask for less money? Why didn't anyone tell me you ask for less money? FUCK!@

That show has snuck in some remarkably good lessons on startup funding. Just avoiding the mistakes SV has displayed would put a lot of startups in the upper half of the market.

Wise words, I'd like to add one thing: You are doing it right only if your customers are providing most of your money - if it is VCs, you're probably in a bubble soon to burst.

This is perhaps the best comment I have ever seen on YCombinator news. Seriously. All very good points that I wish more companies followed.

There seems to be a huge moral asymmetry in your worldview between hiring and firing, which I disagree with. Yes, layoffs are very disruptive. But not having jobs (or having lower paid jobs) in the first place is also bad.

I don't think founders should go out of their way to avoid risk in order to avoid layoffs, because this would also mean employees would miss out on opportunities too. In fact, employees are already aware of the risks of smaller companies, and adjust their expectations accordingly.

> There is always capital available for businesses with strong fundamentals who are solving real needs.

just remember, sometimes that capital comes from customers, not investors.

Your opinions on employees cannot be truer. Keeping employees in the dark, even when the founders know what's coming is just terrible

Basically, you are begging those entrepreneur to think reasonable, when they are at their highest...it won't work.

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