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Comment by intellectronica | Hacker News Reader

Working for a VC-backed startup is definitely not a guaranteed get-rich-quick scheme, but working for a low wage at a no/slow-growth "startup" is a guaranteed stay-poor scheme.

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I disagree. It depends on how sticky it is with the customers. I recall a small mortgage data vendor who owned a tiny niche of the market. They had ~3-5mm in revenue and 7 employees, several of which who were admins. Most made better money than in comparable jobs. The founder did extremely well on a cash basis. He didn’t need expensive salespeople because he had saturated the market.

He couldn’t retire young, but I’m pretty sure he owned his house and could send his kids to whatever school he wanted.

This is just one too of mind data point.

The parent comment wrote one sentence. How did you miss the "working for a low wage" part?

That parent comment also is the only person who has mentioned "working for a low wage". It was not part of my original comment, and not the scenario I intended to describe.

It is a valid point, though. Working for a low wage at any company is a fundamentally different story than an above average wage at a bootstrapped success that can afford to pay good salaries.

I read that comment as adding a new dimension to the discussion: the wage dimension. I think it is an important part of the discussion. In my experience it is well known that startups pay poorly and make up for it with a lottery ticket, and many companies piggy-back on that widespread knowledge to pay similarly poorly ("competitive pay" where the competition are startups) despite not actually having that lottery ticket to include in the deal.

Don't get me wrong, I feel for these companies. They are in a bind. There is no way they can pay salaries competitive with big corporations, and they've made a (wise, IMO) decision to avoid funding and grow organically, which precludes them from compensating through a seat at the exit table. Personally I think the solution for companies like this is employee ownership and dividends. This seems to align incentives properly. I don't see this being done much (at all?) though, which makes me wonder whether there are ugly pitfalls I'm unfamiliar with.

To me it seems that the problem is the definition of "startup". Not every new/small business is a startup. A profitable, no/slow-growth small business can be a great place to work at. The article is about a particular kind of startups - ones that aren't delivering on their promise of fast growth.

I generally call small businesses like that a lifestyle business rather than a startup.

They don't return huge amounts of money, but they are not going to disappear overnight as they have the market cornered on one or two very small niches (eg: the entire worldwide demand for the product they offer is $0.5-5mil). In my experience, a lifestyle businesses has found a problem that a dozen or two midsized companies have and precisely solves it or produces a low volume customizable product.

Basically the goal of the company is to keep the owners comfortable rather than play the unicorn lottery.

> Basically the goal of the company is to keep the owners comfortable rather than play the unicorn lottery.

Why are those the only two options? What happened to "grow organically into a megacorp over 20-30 years"?

That would be a regular business. A lifestyle business the goal is to give the owner a job they like without the distractions a larger company would have because the owner/founder likes doing the work.

It is possible to start lifestyle then transition to regular or be a blend (eg: currently lifestyle, but keeping a eye out to grow). Sparkfun is a example of this where the founder hired someone to be CEO so they can actually have time to do the stuff they love.

[0]: https://www.sparkfun.com/news/2162

Even beyond that, there's a huge space between "Keep their owners comfortable" and "Unicorns".

It seems there's also an implication that if you're not maximizing your expected income you're doing something wrong. People can make a reasonable choice to work for a smaller business (or, indeed, any type of organization) that doesn't pay the highest salaries for other reasons.

Low wage means less than you can earn for doing exactly the same thing elsewhere. Of course people often compromise on wage to do something they are particularly interested in. In the case of unpaid internships or volunteer work people forego any monetary compensation. All other things being equal, though, you should seek to maximize your income.

Well, sure. If every attribute other than salary is absolutely identical, of course there's no reason to accept a lower wage. But everything else is pretty much never going to be equal when it comes to professional jobs.

Startups, or companies pretending to be startups, usually offer lower wages for doing essentially the same technical work.

Even taking this as granted, everything around the work, the people, the processes, the vision will differ.

Maybe in the short term. Low wage and slow growth isn't a good deal, but average wage and slow growth is totally fine.

>stay-poor scheme

Poor? Really? We make a great living, none of us are poor. We are very well off and you don't need a winning lotto ticket to grow your wealth outside of your salary.

You are absolutely right, "poor" only relatively. If you have a job hacking software you are probably not poor in any objective sense.

> We make a great living

Assuming "we" are all engineers. There's no reference to role in the article or comment you're replying to, so I don't think that can be assumed. There are plenty of low wage jobs at startups.

In the article, sure. I assume that because we're by a large a bunch of engineers, many of whom work at startups.

If the frame of reference is "anyone" then I still don't get the argument. What percentage of jobs out there are lottery tickets? A tiny, tiny fraction. So what's the advice from the GP; everyone should try to work in some unicorn startup in hopes of getting rich?

Poor is where you must work to maintain your lifestyle.

Rich is where your money makes you enough money to a point where you need not work to maintain your lifestyle (but can choose to).

That's not a common definition of poor. This is one that would be more in line with typical use:

> Lacking sufficient money to live at a standard considered comfortable or normal in a society.

From https://en.oxforddictionaries.com/definition/poor

>Poor is where you must work to maintain your lifestyle.

Said no one ever. That's almost insulting to people who have actual financial problems.

This is the most Silicon Valley thing I’ve ever read and it makes me sad how far we’ve come from the pure joy of hacking.

"working for a low wage at a no/slow-growth "startup" is a guaranteed stay-poor scheme"

If you are underpaid, yes. But that may not always be the case.

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