Silicon Valley’s Unbridled Optimism Gets Fresh Reality Check | Hacker News Reader

Silicon Valley’s Unbridled Optimism Gets Fresh Reality Check

wsj.com

51 pointschmaynard30 comments

When I've started reading the article I had to double check I am not on some parody site like "The Onion" that tries to ridicule SV startups community.

"The company spent millions of dollars raised from investors [...] on on-tap kombucha, arcade games and a six-figure salary for its pedigreed chief executive"

Isn't a six figure salary for the CEO pretty normal? The article later said that his salary was 125k, which is how much a 22 year old college graduate makes at Google. The on-tap kombucha and arcade games are probably a rounding error in their budget. The article is trying unfairly to paint them as a bunch of reckless hedonists.

Not sure it's useful to reason about CEO pay independently of company performance. Google's revenue and profit per-employee are quite high. If your startup is just bleeding money on hopes and promises, it's probably harder to justify a salary that high. The cut below 6 figures happened in the context of layoffs...

CEOs of very early companies that don't have an established business model and are dependent on investors to stay afloat should expect most of their compensation in equity, not salary.

Startups by definition bleed money. They measure it with this fancy term called burn rate

Equity doesn't pay the rent. $122k in Silicon Valley doesn't go far.

Single guy would still be ok with that.

Exactly, a young CEO without a lot of savings probably meets that criteria.

A founding CEO with a family might have other sources of income to rely on, and be able to get away with less.

Anyone can declare themselves to be a one-person company that they're the CEO of. Does that mean they're automatically entitled to make rent?

We're discussing companies with investors.

Investors generally balk at founders taking much salary if the company is not profitable. They need a place to live and eat but beyond that investors want their money helping the company, not funneling into a founder’s pocket. High cash comp should be coming from operating revenue/profits not an investor’s pocket.

In a very competitive environment such as SV you probably can't be too stingy on salaries either. Good employees are quite high on the list of things that will make or break your company.

The things this article mentions are pretty much required to get anyone to work for you in the valley.

When the games and snacks disappear or start getting reduced its time to polish the resume

I don't care about video games in the office. Offices are for work. Just pay me to work, and if I want video games I'll buy my own.

Same thing with snacks. Those of us working sedentary jobs really don't need them. If I want a snack I'll bring something I actually like from home.

Its all about the taxes. At 30% marginal tax rate, the company has a large margin to make sense of the benefits.

Don't knock it until you try it. The SV culture is something to be experienced.

I've tried it. The "culture" you referred to is honestly pretty lame, and only even exists in a small fraction of Silicon Valley.

Some folks don't like it others do.

To your point Offices are for work I simply call bullshit. Every office in the valley is a damn open floor plan and the antithesis of productivity

Snacks are bad for you (and lead you to bad eating habits).

No they're not (and not they don't). Snacks are inanimate objects that can't lead anyone to anything. People abusing snacks lead themselves to bad eating habits.

You're technically correct, but real humans are subject to temptation and have limited willpower. I don't think it's a great idea for employers to make it convenient for employees with sedentary jobs to eat more.

I don't think it's a great idea for me to lose a perk that I enjoy because some people are subject to temptation and have limited willpower. Those types of people would just bring in their own snacks if they weren't available oh, so I don't see the problem with the employer providing them to those who consider them a perk. I'm sure some of the more frugal employees would save a lot at the grocery store by sticking to the free snacks provided.

Cyanide is bad for you and can lead to death.

"No it's not, it's an inanimate object..."

You are correct, but it's still not a valid comparison.

You must be a libertatrian.

You must make a lot of unsubstantiated assumptions.

You have no sense of humor.

Those food-type benefits are precisely the type of benefits provided by their competitors in the space – Facebook, for example. An incompetent VC who wants to double down could easily be persuaded to consider them necessary for poaching to succeed.

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