Downsides to working at a tech giant | Hacker News Reader

Downsides to working at a tech giant

blog.garrytan.com

700 pointsrazin559 comments

The pessimism in this thread really bothers me. I’ve read anecdotes on entrepreneurship being on the decline, but it pains me to read so many negative takes on startups. We’re actively training our young people to avoid taking risks, and it’s going to fuck us — especially if some of those young people have the ambition be early employees at, say, a startup that takes on climate change in a big way.

Look — the fact that Garry knew Peter Thiel when he was 23 is nuts. When I was 23 I was broke and living with my parents in the suburbs outside Toronto. I didn’t even personally know any other software engineers. I think many people here would relate more similarly to that position.

Just because he won the social lottery early, doesn’t mean his lessons are wrong. I got a junior engineering job in Toronto when I was 23, at a startup, making less than Garry. $57.5k CAD. I worked on my open source portfolio and next took a job in another startup in SF for $120k USD the next year.

That startup failed. I took a brief job at a biotech startup after being turned down by Google and Facebook (twice). After three months I quit that startup to run the company I’m still running today, four years later. Today, we’re very fortunate to work with some of the largest companies in SV.

Reflecting on this: I think a better story Garry could’ve told is not that he missed out on $200M, but that startups basically built his network so that — years later — he’d be a prominent VC working with Alexis Ohanian, funding the next round of exciting companies. $200M is an eye-catching clickbait headline, but not the real substance. The real substance is — how the fuck did he meet Peter Thiel at 23, and how can somebody recreate that?

In the story I just told about myself, I got really lucky as a function of working at startups. I didn’t really make any money doing it. But a whole bunch of interesting things happened:

- The first job in SF I worked at introduced me to a product manager who went to school with Aston Motes, employee #1 at Dropbox who would eventually be an investor in the company I run today.

- The founder of that first failed company introduced me to AngelPad, the accelerator that gave me my first $50k in financing. The fact I stuck it out as an engineering lead at a failing startup helped: I gave it my all. (Aside: YC turned me down. Twice.)

- The biotech company I worked at was founded by two early SpaceX employees, one who would also become an investor later on.

Don’t work at startups to make $200M. Work at startups because you’ll work with people who have risk profiles that are much more likely to generate outsized returns as a group. You’ll have the opportunity to join or create a community of high-performing folks that, in aggregate, outperform anything you can do on your own. Maybe you’ll be the CEO one day, maybe not, but no matter what you are very likely to come out ahead if you apply yourself.

And don’t let the comments here dissuade you. Startups are hard, but they kick ass. I’ve cried myself to sleep some nights — as both an employee and CEO — and still wouldn’t change the experience for anything. I’m a better person because of what I’ve been through.

I think many people are just burnt out by false early stage startup promises and all of the grifting that takes place in this industry. I wouldn’t think this sort of reception would have happened in 2012.

> The real substance is — how the fuck did he meet Peter Thiel at 23, and how can somebody recreate that?

I think things like this seem impossible when you’re thousands of miles away, but I believe the answer is to move to SF. It really works! Move here and rub shoulders with startup people and eventually you’ll be 1 degree of separation from Mark Zuckerberg.

I think I met Peter Thiel when I was around 21? And I sometimes play PUBG with the founder of del.icio.us, and Alexis Ohanian is a frequent customer of my business. I started out as a mediocre college drop out in Michigan. But to be honest while this is what a lot of people who move here chase for, they’re not really needed to make a business successful.

thank you, this was the comment I was looking for

>We’re actively training our young people to avoid taking risks, and it’s going to fuck us

I think the kind of people with the balls (or stupidity) to join/found a startup tend to be the kind of people who don't listen to what everyone else is doing anyway. This might have a sort of positive selection bias: you need a minimum amount of risk tolerance to succeed in a venture.

>Work at startups because you’ll work with people who have risk profiles that are much more likely to generate outsized returns as a group. You’ll have the opportunity to join or create a community of high-performing folks that, in aggregate, outperforms anything you can do on your own. Maybe you’ll be the CEO one day, maybe not, but no matter what you are very likely to come out ahead if you apply yourself.

After failing with a personal venture, I recently joined a small startup and I can offer an similar perspective: working here is amazing for a generalist because once your coworkers trust you, you have more freedom than you could ever ask for, and your personal decisions have compounding effects on the direction of the product that you're building. There is zero bureaucracy. This is a dangerous place which requires a knack for hiring the right kind of independent thinkers and doers who do not need hand holding and tend to have good understanding of large systems - but when the org is small and the team is well selected, if you're building something truly new and useful to society (read: not adtech or social networking) the feeling is magical and being enthusiastic about your job does wonders for life satisfaction.

I know this is a temporary state that will disappear if we fail or grow into a midsize company, so I'm trying to savor it while it lasts. Also helps to have no family so that you can crunch when necessary without hesitation.

> right kind of independent thinkers and doers who do not need hand holding and tend to have good understanding of large systems

lucky you. i’m in a startup where the very large majority of the eng team is here with their first job out of school. and they have the same latitude you are describing. i’ve found that to be typical these days.

The reason why is the math changed. The gap between startup and tech giant is much larger now than it was in 2010. Also, unless you have insider access and join a very risky angel stage company, the likelihood of getting a good package that makes sense is low, very low. Also public companies have shown to get +3x gains, which can make the math even worse.

Example from personal experience that is very lucky in startup land:

I'm an unwise jr, who gets a 25k (with 25k stock units) purchase price stock plan for a series A company valued @ 5m. 4 years later that same company has 200x in valuation to $1b and I get 5k more stock units as refereshers over 4 years 'since the value of the company has gone up so much'. The value of my stock is not 6 million, but 600k because of dilution. So even with this very positive case situation, I broke even +/- 100k or 200k compared to big tech co with promotions, but whats worse, I can't sell my stock. The company later dies and all of that stock is only sold for about $40k total in secondaries that happened before the last $1b valuation round.

Considering that is the good case, why would I work as an early employee at a startup? With capital being so abundant and being employee #1-5 at an angel startup, I might as well become a founder and start my own at that point, or join the obvious next big tech co, which was facebook back then.

We also only have so many years to go on startup expeditions, maybe 5 total before we are 50, or more if we are able to fail fast.

>The reason why is the math changed.

Very true. Making it even more unbalanced is that a startup exit may not be profitable to non-founders. I spent the first 17 years of my career at 3 different startups. Two were acquired and one is still chugging as a lifestyle business for the founder. The net value of my options (> 1% even after dilution in two of them) amounted to a $2000 capital loss due to there being no money left over after debt and liquidation preferences. I did get $350k payout for one of them since I was an executive.

I recently started at a FANG, where the new grads make cash and stock comparable with my startup exec compensation and it won't take long for them to eclipse it. I'll be making multiples of my previous compensation.

That said, I wouldn't change my path one bit. I learned so much in those startups that I wouldn't have learned anywhere else. I had a level of scope and responsibility that apply to nearly any tech job. It also lets me appreciate the benefits and stability of a large company. When I joined those companies, I was also not even thinking about making bank on an exit. I just wanted to work with nice people and build cool stuff.

I'm interested in your transition, how did you go about the move from Startup Exec to working in a FANG?

The startup I was an exec at was acquired by a large (>$100B market cap) company. Going through that process and adjusting to life as a much smaller cog in a much bigger wheel was definitely educational. I was no longer "the boss" and had to work very closely with people that I had no authority over, possibly had different goals than me, and who were thousands of miles away. The startup skills of being lean, problem solving, leading people, etc. still applied, but building the skills to work in a bigger company environment was very important. Going through that experience definitely helps with my life here at a FAANG.

I think this is a really good argument as why graduated corporate taxes really need to be increased in the US. I'd be curious how productive you felt at each position and if you think the FAANG job is more difficult and stressful.

I'd like to think that no matter which of these paths we chose - the more stressful and risky life or the more secure and corporate FAANG one - we'd all have a chance to live a decent life. I really enjoy working at a small company and we make a notable impact on society, but the money will never approach FAANG levels.

I think you need to reform employee stock options - in the UK there are far less possibilities to screw employees over stock options.

Absolutely, stock options in the US are super strange, they can be performance tied and for non-qualified shares. The thing I'd actually like to see is a better default governance for companies - companies are wholly owned by founders and I think there is just something fundamentally wrong with treating all employees as contractors by default until it's decided to grant them options or actual ownership.

A bunch of people gather together and build a thing - why is the first person to the table the person who takes home all the profit? Sure employees are technically signing away their rights by agreeing to work without being compensated with a portion of their work, but it'd be really hard to actually pursue proportional ownership in the current labour market.

This. There is really no reason a founder deserves as much equity as they generally give themselves (I know the investors also have a say in what an acceptable cap table looks like so it’s not just on founders). If early stage startup founders split equity more evenly I think the numbers would start to make more sense. Maybe like 10% founder, 5% first 5, 2.5% next 5, and then 15% equity pool as you grow from 10 to 50. And that still leaves you with half your company left to raise capital with.

Then there’s advisors and execs. You can enter into an A stage startup as an exec or an advisor and generally expect ~1% equity post dilution. This easily eclipses all but the first few early employees who have been working their asses off with much less comp for a much longer time. Maybe really good execs and advisors are game changers but I haven’t seen it play out in practice. More often than not success of the early few hides failure of the new leadership to do anything remotely resembling what they’re paid so preciously to do.

So in the current market the only valuable part of working at a small gig becomes the alignment of risk profiles and consequential networking, and the do or die environment that accompanies an 18 month runway. I think these are good experiences for anybody to have at some point in their career. But since most people are rational they look at the numbers and it just doesn’t add up.

"deserve" doesn't really mean anything. As for why founders get the most equity, it comes down to the most risk. They have the most to lose and are usually are paid last compared to employees who get cash and benefits. It's easy to claim the profits and yet ignore all the risks and losses incurred by founders.

I've yet to see someone who thinks otherwise actually go out and start a company. Perhaps it's because the calculus changes when it's your business and livelihood on the line.

“Deserve“ absolutely means exactly what it means.

I’m talking about the equity distribution sub-10 here. What sub-10 employees are getting any more benefits than their founder(s)? Maybe marginally more cash but it’s all still below market so it doesn’t really matter. But most founders I’ve encountered are actually paying themselves more than their early employees because they have to in order to maintain their lifestyle in big city. But they also have remarkably disproportional slices of equity.

If a founder is investing large sums of their own cash it’s because they have that luxury. And I don’t think that’s actually very common. More often a founder drops some sweat and cash to incorporate and then maybe isn’t getting paid much while they pitch for seed capital but they’re doing so because they can’t afford to take no salary for very long. Even if you occasionally do see founders who’ve “killed” themselves for their cause, most of the founders I’ve encountered actually come out of cushy jobs where they essentially moonlit as a founder until they met someone willing to blow a few MM their way. In my opinion this type of story does not justify such disproportional equity distribution.

At this point I honestly think telling founders that they take on so much risk and should retain such a large portion of their company because they did all the hard work is a somewhat subversive tactic used by investors who want to retain control over their investments. It’s a lot easier to reason with a single founder than 5 large equity holders.

I think founders deserve a lot. I don’t think the typical founder deserves 10 times the equity of sub-10 employees. I think you’d see more people willing to join early stage companies if the attitude around equity shifted.

It doesn't mean anything because its a completely subjective moral judgement. There's no global arbiter of what people deserve.

And again, if you think founders should take less equity then you're free to start your own venture and show everyone how well it works. I've yet to see single example of this though. If it's so easy to start a company without risk and get rich then what's stopping anyone else?

Do you realize VC companies are less than 1% of all the small businesses out there? Most entrepreneurs are not well-connected wunderkind raising millions, they're just normal people busting their ass and risking everything they have to start and grow a business. Reality is much harsher than some wishful thinking.

I don’t understand the “if it’s so easy then go do it” argument. Personally I’m interested in founding something at some point in my life. And I’d much rather do it with a group of people who I’ve shared more equity with. But that’s not the point at all.

In this thread we’re talking about what stops people from leaving their cushy jobs at big corp to join a small gig where apparently the talent is sorely needed. My response to that is, “if it’s so needed then speak with equity and more favorable comp strategies that are more likely to pry those smart people out of FAANG’s grip”. If the world needs a few principle engineers for some incredible new idea then surely the world can find the capital to fund the equivalent of a few 500k salaries for a few years—whether it’s with more cash or more generous equity or both.

It’s a two way street. Every time I hear someone lament about the dying startup scene my response is generally that humans are acting rationally and the industry has realized that the ~0.2-1% equity offered for positions 4-10 at a small gig is not really worth the sacrifice required unless some other stars align (mega exciting domain, super unique opportunity, write off as professional development).

So either the startup industry is dying and all the good talent is locked up in FAANG. Or maybe startups don’t need principle engineers and 0.1% talent in the first place. It’s probably some of both.

And I’m certainly not sitting in a pile of my own self entitlement at FAANG thinking, “if you want me pay me more because I’m hax0r”. I’ve made my own sacrifices to be a part of growing a small company. We’re in a specialized domain where finding the right talent is especially difficult. I’m unable to fault anyone for rationally biasing towards more comp and stability and less stress. So when the topic comes up I like to remind people that the status quo equity/comp strategies that you see at most places are a little dated and despite it being (as it seems) somewhat presumptuous of me, suggest that founders might be biased towards overvaluing their own contribution to the cause. If the cap tables were a little looser I think you’d see the scene perk up again...

My replies are regarding your statement that founders "deserve" less, especially the rather extreme quote of 10%. That's nowhere near viable considering the effort and risk involved, and why I suggested you try it and show us.

And if most startups fail, why is equity worth so much to employees? Who wants to be paid in worthless options? This is the other common fallacy I see. Startups can compete by offering cash and better benefits like work flexibility. Equity rarely moves the needle and doesn't suddenly make people better workers either, regardless of all the hype leadership blog posts about ownership.

Some people respond to the increased responsibility and will always work at startups. Some people always want the big corporate gig. Neither will change much based on equity. What startups are competing over are the mostly average workers in the middle that could be swayed with the right offer, but there's not really a global shortage, just with hype FAANG workers (who are no longer 0.01% quality or anywhere close). You can get great people anywhere and plenty of startups have figured that out.

> And again, if you think founders should take less equity then you're free to start your own venture and show everyone how well it works. I've yet to see single example of this though.

This topic was covered in Episode 3 of Gimlet Media's "Startup" podcast[1]. He ended up do a 50/50 equity split. They seem to have done well for themselves[2].

[1]https://gimletmedia.com/shows/startup/8who49/gimlet-3-how-to...

[2]https://en.wikipedia.org/wiki/Gimlet_Media

(And why this reply is not properly indented is beyond me.)

They're both founders and equity is split evenly between them, which is extremely common with any startup.

That's not the same as founders giving up majority to their employees.

I'll have to go back and re-listen but IIRC the other guy wasn't a co-founder, he was employee #1.

You are free to found your own company and do this.

Of course I am! But I don’t want to found a company just to found a company. We’re talking about attracting talent to small companies. I’m offering my perspective on why joining a small company doesn’t make tons of sense with the status quo equity packages and sub-market salaries offered. There’s some good discussion on another post about this exact problem and it seems, at least, that VCs are starting to come around as well and there is productive discussion about alternative early stage plans/strategy for capitalizing in a way that can attract top talent from big companies. I’m not founder bashing please don’t take my comment the wrong way.

Employees get cash, that's the compensation like any other worker.

Why should equity be a default option? Most startups fail so that's like saying workers should get something that has a high probability of being worthless while suffering all the tax implications. If anything equity should be decreased. Startups are better off competing on cash and other benefits like work flexibility and increased responsibility.

That would imply that they make revenue, which is somewhat unfashionable.

You need cash to run a business, wherever it comes from. Otherwise you don't have a business in the first place.

You need engineering talent to run a tech business. Otherwise you don’t have a tech business in the first place.

Money comes from anywhere, tech talent is fixed in supply.

A business needs cash to operate. It doesn't matter what talent you have if you can't pay them. Startups die when they run out of cash, not because they couldn't hire anyone.

Startups offering more cash has no implication that they must generate revenue (although that's obvious to building a good business). The point is that operational costs exist - and so a business must already have cash to exist - and increasing costs for better salaries and benefits is a better trade-off than increasing equity which is mostly worthless anyway.

Also global tech talent has more supply than demand once you get past the SV/HN bubble. No serious startup has failed because they didn't get the perfect engineer.

That’s an interesting point of view. Do you think engineers are much more “interchangeable parts” than most HN folks seem to believe?

Customers care about solutions to their problems, not the engineering behind it. Many VC funded startups with the latest AI tech have failed because they never actually served the customers. Meanwhile there are millions of profitable small businesses running with simple boring tech that works enough to provide value to their clients.

Engineering talent is in oversupply across the US and definitely across the globe. You can easily hire PhD level talent from Brazil or India. Also FAANG companies have long ago exhausted the best talent available. Most of their hires at this scale are no better than engineers elsewhere, it's more about the interview process, benefits, location and internal politics than raw quality now.

Are you confusing "contractors" with "employees"

I really think the issue is that many startups don't offer alternative compensation and don't play to their strengths. You can be compensated in other ways, but often I've found much of the work at startups can be no more interesting than their Big N counterparts. Your career growth might also be similar. In theory, for startups, you sacrifice pay for other facets. The reality is quite different.

The work might be similar but you're paid 50-75% of your peers. That was my experience in startup land, at least. Few good challenges or career growth and half of what I felt like I was worth.

I’m intrigued by your idea of alternative compensation. Care to expand?

Are you thinking like bonuses for growth? Deferred bonuses?

Not OP but I've been thinking about this as cofounder of a "hard tech" company. If we live long enough that we're in a position to hire real talent we can't compete on total yearly comp. The business just won't be able to afford a 500k a year engineer for years.

However right now FAANG companies generally do not offer either the following:

- Reduced work weeks

- Remote work

I've talked to several staff and principle engineers who've told me that for the right company they'd take a massive paycut to work remotely 3-4 days a week. I've had the opportunity to work a 3 day week while making enough to support myself and I have to say, it's incredibly freeing. I don't think this is a sensible offering for anything below a Staff engineer, but it could be a promising path to get truly top talent.

I work at one of the FAANGMs and my group of about 700 engineers are all allowed to be 100% remote if they want to be. It’s actually promoted by our leadership.

I'm curious: which FAANGM? And where could I find the job openings for that group?

I think the benefit of working at startups is similar to the benefit of working for smaller companies in general. With a small team you'll get to touch more of the stack, and maybe even parts outside of your job domain altogether. In my first job I was the 2nd developer, the first was the CIO. In addition to writing most of the code for this project, I set up the entire production network including load balancers, database replication, firewalls, etc. I even picked out our hardware and physically installed it in the rack we rented at a local ATT data center. Now that's an extreme case obviously, but you will never get anything close to that broad of a base of experience working for a BigCo.

No it’s a good argument for eliminating corporate tax- no matter what the level it hits entrepreneurs the hardest.

This. In my experience, the burden of taxes and regulations are most felt by new entrepreneurs and smaller organizations.

> I'd be curious how productive you felt at each position

I definitely felt "more productive" at startups since my work felt like it had a bigger impact to the company.

> and if you think the FAANG job is more difficult and stressful.

So far, it feels no more difficult and is stressful in a different way. With a startup, there's the stress of worrying about the company going under. At the FAANG, there's the stress of performing at a high enough level to justify the compensation.

I agree with all of the points raised, and share the same experiences. But this one:

> I might as well become a founder and start my own at that point

Great! So, how would you recruit your first 10 employees?

I don’t understand... why is the goal to convince a bunch of naive youngsters to work for you at 1/10 their value? You shouldn’t exist unless you can pay competitively for the same people, end of story. Until then, don’t hire

The fact is that there are a bunch of younger programmers willing to work for a startup regardless of the comp. Founders naturally try to exploit this.

They could be taught ethics in college or find that their peers actually called them out for it? Heh.

That is a big reason why I don't start my own company, because I couldn't really live with doing that.

My current armchair strategies:

* Compete in a way that big tech are not willing to do, which means distributed remote companies. A lot of people don't want to live in $3.5k/month rent SF or other tech centers for various reasons.

* What a lot of startups do, but RDF (reality distortion field) over with 'we only hire the best'. Don't hire the best. Either because they couldn't hack the big tech co interview, have visa issues, are very jr or have personality problems that make them unhirable in big tech cos.

* Go bootstrap, so no VC style business timelines.

* Give offers that basically make them pseudo-founders and match the expected value of bigco with the risk premium of startups. A hard pill to swallow when investors give a lot of money offer similar or smaller dilution terms effectively.

I've never gone out to get investment, so I don't know how much of the above is also blocked by investors in general.

Also crypto style 'startups' (ICO or just a completely new coin) have shown to deliver compared to normal SV startups, but most crypto companies do not deliver actual lasting value and are more pure speculation plays. A big crucial difference is they give crypto coins instead of stock, and those coins are liquid immediately. They are also not restricted to start in the USA.

Founders should be willing to give a lot more equity to the first employees. I don’t get the logic of not doing this. You want your engineers to feel as if they have ownership in the equity that you’re building. It’s such an easy way to keep engineers engaged and productive that it baffles my mind that it’s not done more widely.

I hate working for BigTech. Startups expect too much and compensate very little. The sweet spot for me has been medium sized public companies that offer great compensation but need solid engineering to grow their market share.

It's the math again. Go do a spreadsheet and simulate a company as it grows and you see treating your first 10 employees in line with big tech expected value outcomes is a really, really big hit.

I know this is totally super optimistic, but can we change the perspective from

> is a really, really big hit.

> really amazing payoff for the early engineers/employees

My very limited understanding of the growth of the SV tech community is that its a generous cycle of people creating wealth, and then using that wealth to fund the next generation of tech. So it seems completely logical for SV founders to want to do more of this.

Whether it's a big hit or an amazing payoff are actually irrelevant, there is a going rate for engineers who are willing to accept startup risk (in a job market where anyone can get hired right after it fails this is not a lot of risk), and that's the price that will be paid.

When I was young and naive, they paid employees the "risk bonus" in stock shares, not cash. I asked for more cash, and they said, "nobody takes cash, stock shares are the thing". They were the dud thing.

Especially when you consider the diminishing returns on wealth. And presumably you should be able to attract higher quality employees who are more incentivized to work hard. Resulting in faster and more efficient growth. So you may never even take a “hit” to wealth. Unfortunately most founders and VCs have resorted to exploiting the social dynamics of the engineer class instead.

Which will be attrited away over funding rounds

We usually encourage folks to give at least 10% of the equity to the first 10 employees. That's what Stripe did and it worked well.

That number is going up over time, so I can report at least a little bit of improvement, though certainly not fast enough.

Honestly I think 10% should be a floor for this, and considered completely separately from the usual 10%+ option pool (for the ones that come after the first approx 10).

For that matter heading out of a seed round with very roughly 1/3 founders 1/3 employees 1/3 angels/whatever seems pretty sane to me, although a bunch of that first 2/3 should not have vested yet. Your second tranche their would hold a largish option pool for growth, and a bunch of "founding employee" equity. You are all going to get diluted to hell, but however it eventually shakes out I think that collectively those starting key employees should see roughly the same outcome as individually a founder does....

Equity or options? If options, what happens if they leave pre-liquidity? If it's, "they have 90 days to exercise", see this comment on the counterpoint thread: https://news.ycombinator.com/item?id=21868797. To summarize: screw that. If it's actually straight equity you recommend, how do you recommend the dilution work? Is it tied to the founders' own dilution? If not, what incentives do the founders have to not throw their early employees under the bus in future rounds? Even if all of this is done right: 10% seems likely to be too low for the risk.

> Go bootstrap, so no VC style business timelines.

This is easier to do when you have some money on hand. Which is why working at a well-compensated job if you are not from a wealthy background is quite important in your early career. Also its not that bad a strategy. I mean Qualtrics pulled it off quite well.

We'll be taking some of this approach at our new co, bootstrapped, with very generous share grants for the first employees. We're doing partially remote, but I think full remote might make it too hard to get the core team as tight knit as it needs to be. I don't think it's a good substitute for a few people sitting in a room yet, but I could certainly be wrong about that.

One of the things that keeps me away from startups is how disadvantaged employee equity is. Options become golden handcuffs when they have to be exercised to leave. Execs and investors are not in the same boat as employees due to preferred shares, liquidation preference, and other terms. None of these are disclosed to employees.

I've heard too many stories of start ups being sold where the founders cashed a big check and the employees didn't get anything.

To be clear, I'm not an expert in this, but the startup ecosystem needs to regain trust if it wants to hire more competitively.

Hope that they are not as interested in financial optimization as you? Or just take people who can’t get into top paying bigcos? Or be a good salesman? Same as everybody else who is recruiting for startups these days

Handpick them out of your network and give them not just equity but real control as well. That for the first 5 or so. The others should come from your network and be handpicked by your handpicked first 5 employees. And equity, but obviously less than the first 5.

In my case my first employee, as soon as enough comes in to pay someone, is already recruited. Equity will be around 20%, with another 25 or so for the next couple of employees. That's without outside funding, doesn't seem to be necessary so. If it will be necessary that obviously changes.

Why do you think you need employees?

> The reason why is the math changed. The gap between startup and tech giant is much larger now than it was in 2010. Also, unless you have insider access and join a very risky angel stage company, the likelihood of getting a good package that makes sense is low, very low. Also public companies have shown to get +3x gains, which can make the math even worse.

Unfortunately, nowadays, the only job titles at a startup that offer greater expected value than working at a tech giant are "Founder" and "Co-founder". The fraction-of-a-single-digit-percentage equity packages out there for Employee #1 adjusted for the risk of failure and the risk of getting diluted are often a very low number. And if you're Employee #10? Forget about it! I'd love take another crack at a startup but it only would possibly make risk-adjusted financial sense if I'm the founder.

I don’t disagree with the spirit of your post. Large tech companies are paying ridiculous salaries and generally speaking we’re in a period of early-stage capital glut.

The point you’ve made — that it makes more sense to just start a company — is directionally correct, but for the most part is a logical fallacy. I hear this from competent, capable people all the time, “I might as well just start my own company rather than work at a startup as an employee.”

The reality is that 0 to 1 is an extremely, extremely difficult hump to overcome and most people intuitively know this. Which is why anybody who says, “I’m better off starting my own company than working at a startup,” especially without startup experience, is likely to never actually do that thing. I’ve never actually seen it, though I’ve seen a number of people go from working at to founding startups.

The real insight here is that it is actually more valuable to found — or be a really early employee at — a successful startup. And so the question becomes: how do you put yourself on track to get a $72k check from Peter Thiel at 23? Take risks, prove your competence and grow your network. That means work at startups.

Sure. I’m (currently) a lucky recipient of survivorship bias. There’s a long way to go and my current state is incomparable to most of the people we look up to and respect as a community. But the key word there is, “survivor.” If you look at the start of my startup career — middling ad tech company in Toronto, eng. lead at a failed Series A SF startup, short stint at a biotech company, turned down by BigCos — none of it looks like it could possibly have been leading anywhere. I just used those opportunities to meet really talented folks who believed in me and, one by one, would end up supporting me down the line. I’m lucky and very grateful for that. Some of the aspects of my journey to date are non-repeatable, and I’ll always give thanks for those moments — but a lot of the lessons I’ve learned can apply to any ambitious young technologist.

Keep at it. If startups aren’t for you, fine, but, again — survivorship bias requires you to survive in the face of insurmountable odds. And it does happen. Startups teach you how to survive. It’s OLN on steroids for careers.

TBH the best way to get a full spectrum startup experience is to go start a startup, like many other things in life.

Working at a startup, other than maybe a 1-2 year maximum stint to get a taste, isn't really useful because a lot is hidden from you even when you start the angel stage. And if you wanted to do the stint, I would probably do it as 1 year of PMing and 1 year of engineering max. If you really wanted the full spectrum experience just incase, then another year at a pre-ipo growth company, another year at a big tech co and another year at a VC to understand the full spectrum life cycle for 5 years.

As a founder, the demands of doing a startup induces you to learn a lot. It forces you to do that networking and making friends part and you will eventually get a mentor network via all your investment activities that will probably be way better than observing from a distance as an IC. Other founder friends you make and friends made at a co-working space doing similar things would give you a lot better experience and a better network.

I joined a smallish startup that grew big, as evidenced above. I mostly just churned on pushing out a lot of code and that's about it. I was part of helping create that 0 to 1 and all it gave me is a bit better work ethic since so much was hidden from me as a jr. The friend I made there that joined really early didn't gain much more insight than me and now works at big tech with me. I learned a bunch just through observation, but I think a founder mentor network would of taught me stuff a lot sooner, and a lot better.

Yes — some execution is hidden, for sure. I, personally, try to be ultra transparent with the team: here’s our bank account, here are deals in-flight, here are the VCs and founders we’re talking to.

The value I aim to provide anybody that works with us is all the things I felt I was missing when I was a startup employee. I wanted to understand how deals happen, what personalities are like, how things work. As we grow I can’t share entirely as much — a piece of minor bad news can hit me pretty hard emotionally and it’s not fair to subject the team to me being upset or a hothead over something that will blow over — but I do try to encourage folks to learn as much as they can.

Even if somebody were to be entirely disinterested in founder-level execution, early employees have a super easy, instant warm introduction to any investor on that company’s cap table downstream. You might not be using that aspect of your startup career yet, but it certainly can help you if you wanted to use it.

You are a much better founder than my founder was, and I'm glad you are. My founder was a good business man, kind of slimy, but effective. And definitely not transparent and gave a pretty employee unfriendly options contract. Again, I was an unwise jr and that experience was years ago now. I was also employee ~50, so I don't know if that was early enough to get real warm intros for investments with people I didn't interact with that much.

TBH the pre-ipo company I went on to next has given me a much better network than the startup I went to as a jr. One coworker direct has started a company that I think will do pretty well, along with a bunch of others who have gone on to VC firms, their own startups and so on.

I appreciate the kind words, but trust me, I still have a lot to learn. The most important contributor to our early success so far has been the team, who have supported me in my growth as a founder as much, if not moreso, than I’ve supported them.

Yes — being employee 50 changes the scales a little. You’re a little too far removed from the executive team to have the same level of comfort. We’re still significantly smaller than that, but at my first job I was in the same # range as an employee.

While I didn’t get to build a relationship with the executive team, my boss at the time kept in touch and ended up introducing me to my best friend / confidant in the Toronto ecosystem as a result. So I would still say the network was valuable. :)

Most of the time, startup founders will have been successful elsewhere, or else they’d not have the ability to risk enough to do a startup. That’s why one avoids startups run by executives kids who are “creating” a track record.

> The real insight here is that it is actually more valuable to found — or be a really early employee at — a successful startup.

Sure, and it's more valuable to be holding a winning lottery jackpot ticket than a year's worth of paychecks.

Problem is, most startups aren't successful, and you have to take the risk into account.

>Large tech companies are paying ridiculous salaries and generally speaking we’re in a period of early-stage capital glut.

The salaries are not ridiculous at all. It's the rate the market has decided those workers are worth. If a start up wants to compete they have to change something big because as it currently is I don't see it as rational at all. All the benefits you mention only happen if it works out for you. For nearly all people who try, it's not going to.

Yes, I am a little longer on the tooth than some others, but I would love for developers today to dictate the path..

Instead of having this idea: 'We want to work for the next big thing' - Which can be super attactive.

- Instead say: Hey, Im a developer, so I like this product, can I stand behind it.. Can I stand behind my work in it.

Even if you need a job badly, and you're taken on as a developer or someone contributing, I still believe, you should always be able to stand behind your work. Even if the product is shit.

So If you want to work for a startup, you need to really know the company, product and for sure the direction, not all of them are looking for a payout. Some of them are genuinely enjoying changing and hacking things up. - Embrace these - eve if they're not startups!

The best companies I've worked for where well established, but gave the freedom to innovate, play around, make mistakes, and build.

New startups for me always seem to just throw money expecting something good.. I've come to the idea that its 'Startup business ideas people'. and not "Developer playground that turned into a startup"

> The reason why is the math changed. The gap between startup and tech giant is much larger now than it was in 2010.

This is true but also kind of depressing. With the means of software production cheaply available to everybody is that stable job at a tech giant really the pinnacle of the software engineering career? I understand that everybody's got the bills to pay, kids to raise etc. and maybe I'm a bit naive but it just feels... wrong. And yes, working at BigCo can provide some interesting technical challenges, opportunities to impact millions of users and shield you from unpleasant interactions with the outside world. But it still feels like you are being paid premium to sit on the sidelines.

I find a lot of joy in smaller, industry niche companies. Like 1-20 employees small. Not VC funded startups, but long running companies with proven value in an industry outside of the startup bubble.

There is a lot of them, and they can be very rewarding to work at. While they'll have less compensation, it's in real money and they're often located in smaller cities with lower cost of living. You get to work directly with clients/customers to provide value to them with your skillset. The pace is steady, and what you work on can have a lot of longevity which is nice. Software can feel somewhat ephemeral at times, written one month, thrown away the next. Working on a long term project means it feels worthwhile to go the extra mile.

Just curious can you give examples of this?

A few examples of ones I have worked at or friends have:

A company that created a novel commercial solar estimation algorithm, and ran a B2B SaaS with it.

A small platform specific agency, 10-20 people specializing in a specific eCommerce platform.

A company that had been producing IoT software and devices for farmers.

A slightly bigger company that produced backbone software for bank management, I think they had closer to 100 employees eventually but the dev team was still relatively small. Bank software takes a lot of extra curricular activity it turns out!

> This is true but also kind of depressing. With the means of software production cheaply available to everybody is that stable job at a tech giant really the pinnacle of the software engineering career?

Yes, because economies of scale greatly benefit big companies.

Just because software is free to scale, in the sense that a cp command doesn't cost you anything, doesn't mean that making money from software is free to scale.

> Yes, because economies of scale greatly benefit big companies.

I don't think software engineering in itself benefits greatly from the economies of scale. Yes, tech giants have developed some nice internal tooling, but the cost of implementing a feature for a google engineer is probably in the same ballpark as for a startup engineer. User acquisition OTOH seems substantially cheaper for the big companies. So, economies of scale in marketing and distribution?

If they don't then why does anybody use AWS?

Start-ups use AWS because with $20k-$100k in credits you can do a lot for free in the first year, and after that the cost difference usually doesn't matter. It also looks great on everyone's CV.

Big companies ofc have other reasons like flexibility, needing less coordination in the company etc.

If there were no economies of scale it certainly would seem strange that it could possibly be cheaper to rent computers from Amazon than to run your own data center.

Renting servers from Hetzner is a lot cheaper than using AWS. If you get your uplink figured out then running your own servers is also cheaper.

Sure, if you discount the administrative work to keep them up it might be.

Operating AWS and the datacenters involves massive economies of scale. Writing the software that powers AWS - not so much.

Yes, but since most of us (I think, anyways) are working on Web-hosted software that stuff all matters. It also matters that an Amazon or Facebook has whole teams dedicated to developer tools, operations management, and so on.

This assumes all entrepreneurs would want to work for or even be hired by a tech giant.

Work at startups because you’ll work with people who have risk profiles that are much more likely to generate outsized returns as a group.

This is statistically not true. S&P 500 Index funds have outperformed VC's as a group for any reasonable time period.

You’re making this (single startup) v. (single S&P company). That’s not how it works. Prove yourself at being an adept generalist and you’ll, over time, create access to the most ambitious people and companies.

I’m doing just the opposite. I’m comparing VC funds in the aggregate to stocks in the aggregate using VC funds returns as a proxy for startup returns.

I think that’s fair. By definition you can’t invest in bootstrapped “lifestyle companies” and they rarely have “outsized returns”.

There are a lot of “ambitious people” who have failed that you never hear about.

I can imagine this to be true but do you have a source for that information?

https://www.vox.com/2014/9/14/6137473/venture-capital-return...

Thanks for the links! I am aware of the Buffet's bets but I did have a feeling that some VCs can be quite profitable especially the ones which invest in future government contractors and/or future surveillance facilitators.

The VCs are always profitable - for themselves. They get 20% returns no matter what. Their investors on the hand....

Its not pessimism. People should just get to hear both sides, and know that VCs typically offer this advise because, first and foremost, it benefits the VCs.

The VC typically has enough money to be set for life, several times over. They bet on many companies simultaneously to diversify their own risk. Most companies will fail, and the employees will go down with the ship, but the VC only needs a handful of bets to pay out. None of this is the case for the employee, who bets all in on one company.

I started in 2006, here, just like you, reading Hacker News. I spent most of my day writing code. I learned on this site how to build things for other people, ship and release them, and yes, eventually build a company. I learned I wasn't meant to have a boss.

The only reason I became a VC is that I want to be here to help people who really should be start companies actually figure out that they can! People helped me a lot, more than I deserved.

The world is full of capital, and it's not going to the right people who can solve problems. I would like that to get better, and trying to do that with my own hands.

> The world is full of capital, and it's not going to the right people who can solve problems.

Hmmmm, isn't being a VC kind of exacerbating this problem? The business model of being a VC is entirely based around moonshots, which means that you are pigeonholed into only making bets on certain types of founders that either (a) already have extremely high risk tolerance or (b) can be pushed by VCs to take risks beyond their personal risk tolerance.

Which makes your "right people" statement come off slightly disingenuous, since the VC strategy seems to disproportionately attract more Mark Zuckerbergs than Matt Mullenwegs (for category (a)) and often exploits founder naivety for the benefit of the VC (for category (b)). I'd argue that many if not most of the "right people" who can solve problems are in general not a good fit for seeking VC investment.

Do you have suggestions for other investments strategies that may be more compatible for potential founders that don't fall within these two categories? Have you thought about branching into those investment circles?

If you look at our portfolio we do try to find people who are not necessarily that classic "moonshot" type. Things that turn out to be moonshots often look like niche businesses.

We try to put what you say to practice, but it's an inexact art, far from a science.

I still look for two things: a/ great engineers/designers/product folks with deep empathy for problems people have, and b/ a real problem to solve.

From my experience as a YC partner it seemed clear to me most of VC-dom uses the wrong criteria: buzzwords (like Realtime or AI), and resumes (ex-Google ex-Facebook Stanford Stanford Stanford etc). Better to use first principles and try to find that which is signified, than just use of credentials that are just dumb signifiers.

But in order to do that, you kind of have to be an engineer/designer/product/marketer yourself, and that's why I think our approach can work. Ask me in another 10 years.

You're absolutely right that VC makes this problem worse. I'm sorry for the industry, but we are trying to do better.

> I still look for two things: a/ great engineers/designers/product folks with deep empathy for problems people have, and b/ a real problem to solve.

That... sounds like just regular investing. Rather than trying to save the VC brand (which is already pretty tainted in entrepreneur circles), why not come up with another name and scale that?

I’ve been active on HN almost as long as you. It’s not 2006 anymore. I would still follow the same career path based on what the world, HN and Silicon Valley were like in 2006. I wouldn’t based on 2020 world, HN and Silicon Valley. Would you?

Rents are astronomical. Startup math has worsened. FANG math has improved. In fact only the G in FANG even resembled the FANG of today. FANG has done a great job figuring out the innovator’s dilemma, making disruption in all their verticals much more challenging. The low-hanging fruit problems are gone so there aren’t really any two engineers in a garage problems that someone well capitalized can’t quickly copy. You now need generalist engineers, designers, AL/ML/DS engineers, hardware people, etc. on a founding team, meaning that you need to take on sizeable VC money before building IP equity and getting product market fit.

Startup risk is way way worse these days.

I’m not so sure that FANG companies have solved the innovators dilemma. Do you really see new and ground breaking tech come from them these days? I do agree that innovating is more expensive than the 2006 days of “we made a website”

Parent does not dispute this. You want what you want, i.e., selecting the people who are most capable to put the capital into good use.

But note that this game is not as much costly for you as the founder. Founder takes bigger risks in terms of their time and opportunity costs than you as a VC. You will probably find your successful pick in the other founder you fund and designate that other guy “the most capable”.

> The world is full of capital

This is one of the most entitled statements I've heard.

There are two points that I think are very important but usually don't get the time of day in these discussions:

1. Your success is intricately tied to your network. Have you ever met someone who was ready to cut you a $72k check as a recruiting bonus to join a startup? (Referring to Garry Tan's story.) I will bet that the vast majority of people in the world never even came close to that kind of situation. My point isn't that any given individual has no hope of getting there, but rather that if you want to manufacture that situation for yourself, you do it by networking, not really risk taking.

2. Not everyone's priority is their careers. I wholly agree with encouraging young people to take risks, but for a lot of people that's not the right choice. Most people want to build their careers, but not everyone wants to make it personal the way you have to as a founder.

I worked on startups for my entire early career. I met a lot of interesting people, learned more than the equivalent big company career could have taught me, and I regret none of it. However, it also made me realize that the vast majority of startup people are also just grinding away, not necessarily "taking risks." My experiences with startups made me much more wary about working for a startup.

If you want an interesting life that might lead to money/power (but will definitely lead to interesting people and good stories), find an idea you love and start something. If you want a reliable path to lots of money, join a growth stage company or tech giant and grind your ass off.

If the pessimism in this thread bothers you, imagine how much your woefully out of touch survivorship bias and bothers everyone else in this thread?

One of the top comments that responds to your post tells you that the math changed. This is true. The fact that neither you nor Garry talk about the concrete specifics of this means that you're either unaware of it, or worse, intentionally sweeping over it.

You really think that what is "actively training our young people to avoid taking risks" is all the "negative takes" on startups? What about the changed exit environment where companies are staying private longer and equity shares are no longer outcompeting public company compensation? Poor or inexistant options for liquidating large holdings of early company equity? Liquidation preferences, dilutions, and founder enrichment allowing grey-hat founders to self-enrich at the expense of their employees? How about the increased ability of large companies to compete with startups and turn their products into mere features? Ballooning student loan debt, rampant social inequality, a collapsing middle class labor market and automation?

You know what I think is actually happening, based on the interviews I've given working at various startups where we lose great candidates to more established companies? I think candidates are getting smarter. If they're smart enough to make outsized impacts at startups, they're smart enough to make outsized impacts at large corporations and make sure they get commensurate compensation. They know that they have better access to a tried and true organizational structure around the software development and revenue line development lifecycle.

A lot of this completely changes if you're the founder. That's probably the one perspective where the ownership structure is so radically different and more advantageous that it's very much worth it over being a mid level manager or executive doing the same thing at a larger company, if you can pull it off. But if you're not a founder at a company any earlier than late series B or C, you're generally taking a proportional risk for a much less proportional reward if you join as an employee -- not just financially, but organizationally and directionally (in career trajectory).

And, if there's one thing I can't stand more than anything, it's when founders wear rose-colored goggles and can't admit this truth. Not implying you're doing this, but I'd advise anyone in danger of this to never drink the kool-aid you sell to the point where your reality-distortion field obscures your inability to see the very real reasons why people make (and remain happy with) these decisions, just because it threatens your life choices and identity.

The reason I haven’t responded to the math changing is because it’s Christmastime and I’m spending time with family. Some of the responses to my post require a much more thoughtful answer than I can muster while at the gym between meeting family members.

Be patient. I’ll respond to the other post if you wait.

This is a terrible comment. "Be patient" is a non-response. You made a comment, and got a very good response as to why your comment is missing nuances that might be the real reason for a change that you're attributing to something else.

Especially in a forum like this one with no notifications, Be Patient is basically saying STFU.

In a heated discussion thread we forget that web forums and bulletin boards are not the best place for realtime conversations.

On HN people often do not reply on replies to their comments and it does not mean that they do agree.

It seems like a rather nice thing which helps to avoid many ego-battles.

Not to start an argument, but that could also be because HN doesn't automatically notify you of replies. I'm subscribed to the email notifier, but that was created by a third party and I doubt if a majority of the users know about it.

It contributes as well.

The poster I replied to here created a straw man argument based on my lack of response to another comment. I didn’t think that was fair considering my bandwidth limitations, so I decided it would be best to set expectations. My response to the “math changing” comment has now been added above.

Do not assume that the lack of response of somebody else implies anything aside from the fact that they didn’t respond. They could agree, disagree, or maybe they haven’t even read or thought about it yet — and maybe they never will because something else distracts them.

I think discussions tend to be the most productive if we assume everybody has the best intentions. :)

Leaving the passive-aggressive smiley aside for a second, you'd do well to more fully understand my position before brushing it off as a straw man. While I don't agree with how GP phrased it, they are correct that "be patient" is a non-answer. I've been sold enough kool-aid to where my default presumption is that the founder suffers from a "reality-distortion field obscures your inability to see the very real reasons why people make (and remain happy with) these decisions, just because it threatens your life choices and identity." That's why I suggested it when I saw elements of that distortion field in your reply.

We do not agree on how folks should approach their careers. Not one bit. That's not a straw man just because you don't agree. It clearly resonated and struck a chord with others who have been on the other side of the pitch, and who have made the same conclusions I have.

"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."

https://news.ycombinator.com/newsguidelines.html

Please do. I honestly want to hear. I am debating whether to join a startup again for my next job or just crank Leetcode and go FAANG and stay for the rest of my life there.

Unless you’re 80, you’re not going to spend the rest of your life at Facebook or Google. Imagine someone in 2004 saying they’re going to work the rest of their life at MySpace or Yahoo.

There are 100% people who have spent their entire career at Microsoft who are financially extremely well connected and financially set for it. Folks who have been there from 1995-2015 and beyond. Don't underestimate the possibility of doing something similar, whether for MSFT or somewhere else.

Fair point.

It sounds a little bit like perhaps your original post required a more thoughtful answer than you could muster while at the gym. Perhaps it could have used a bit more patience as well?

Sure. Feel free to respond. I think everyone would benefit from you contributing more to the discussion, especially if your original post didn't fully clarify your position.

I appreciate this, and am trying to take this to heart.

But it is also possible to survive. And if you do that, you don't merely survive, you thrive— that's what product market fit looks like. I've been lucky to see it dozen of times first hand, and it's nothing short of magical.

When founders and teams pursue something without product market fit, it's a high cost to pay and a terrible outcome for most everyone. This is also absolutely true.

Startups are not for everyone! I appreciate your feedback and it resonates with me.

>> But it is also possible to survive.

I think there is a big gap in how different people see this. You are right, it is possible to survive. It is also possible to fail. For some people, that is fine -- they can call up an uncle, or a friend (Thiel) and land another job quickly that pays good medical benefits.

For others, an 20/80, or even 50/50 or 80/20 survive/fail just does not cut it. Perhaps they have crushing student loans. Perhaps they have no parents to fall back upon if things go south. Perhaps they have visa issues. Perhaps they have a sick parent to take care of (my case.)

I admire your ambition (and envy it.) I hope people who have social safety nets realize it though. Because not everyone does.

It reminds me of a fellow undergraduate Senior who looked down upon me for going to work on Wall Street while he did the more pure thing of going for the Peace Corps. I asked -- so how do you land a job when you're done with the 2yrs commitment? He said his uncle was going to hook him up at a hedge fund. Nice, if you can swing that. Me? I have no uncles at hedge funds, so the on-campus recruiting super-day was my one and only shot. I dont think that makes my choice less pure, it is just one of relative necessity.

Yeah, I know. I had this problem too. I had $40K in credit card debt and $40K in student loans, when I got that offer. I probably should have mentioned that too. Having debt is a huge crushing weight and definitely prevents you from taking the risks needed to capitalize on opportunity given you.

It really did, for me, as well.

Thanks for that detail. I believe every decision needs to be made in the context of what I know at that time -- and what I decide is the best way to go forward at that time. If I gain new information later, and I can adjust great.

But if it works poorly later on, I dont look at it negatively, because short of having a time-machine it does not help me be a better person. Constantly improving the judgement framework is a good thing, but there is no point regretting a mistake you could not have seen differently.

> When founders and teams pursue something without product market fit

How do you know if you have product market fit until you pursue something though? The standard advice on this is completely contradictory:

E.g. on the one hand, you have the advice that adding more features will never result in product market fit, because most of the features will be too far down the funnel to move the needle and they won't ever solve whatever the core problem that's making the thing not successful in the first place.

On the other hand, you have the advice that you shouldn't pursue growth until you have good retention, which basically implies that you should keep working on the product almost indefinitely even without product market fit.

On a per employee basis, the overall likelihood adjusted expected value and liquidity of most startup shares generally underperforms the market, almost to zero if biased towards liquid earnings like it should be. If you end up the former employee of one of those startups (which is pretty common), you end up in a place where even if the company is booming 5, 10 years later, no liquidity event has happened nor is in sight for employees. If you ask if you could give someone $9-19M liquid evenly split over the next two decades or several tranches of $1-100M potentially forever illiquid stock and $2M liquid, which one do you think they would pick and should pick? Even if the max payout is lower, the mean payout is orders of magnitudes higher and creates access to bootstrapping. I'm not going to say you made the wrong one for obvious reasons, but do you think it's smart to attach your lifetime net worth to such illiquid assets?

Garry, you entitled your blog post "Working for Microsoft cost me $200 million" but you neglected to mention that you had debt you were paying off. For many other people, that blog post could easily have been called "Why working at startups instead of Microsoft cost me $20M and left me in the debt I started in". That debt neatly encapsulates one of the societal problems with student loan debt. It creates a caste system. The less generational wealth you are born into, the more your stepwise freedom in any direction is piece by piece restricted. You can't make choices that people born just a bit wealthier than you could make because they're cost step functions.

It would indeed have been a poor decision of you to take that Palantir job out of college with your financial situation. That smart decision would have been to keep pursuing the traditional big company engineering promotional path. Any action you take that deviates from that path towards a sustained lower liquid compensation on a year over year basis is one where you're taking a hit to liquidity by paying opportunity cost to make a default-illiquid investment (or multiple of them over time). If you combine all the post-tax income you've lost with the compounding interest it could have made, it's substantial on a career-long basis.

I would advise folks to work at startups for the same reason I'd advise them to work at a fashion magazine or work at a record label intern. It still has some cachet as culturally creative labor, and you can certainly make a living in the industry, but it's not a great place to stay long-term unless you're independently wealthy, are running the show, or you found a firm cleanly in hypergrowth and manage to grow with it. The antics and financial shenanigans take a toll on you. You can't rely on it as a sane vehicle to consistently build wealth, because it's structured like a swap heavily in favor of the company's investors, and you're footing the bill with your labor in exchange for an IOU that the company will IPO.

Tens or hundreds of millions of extra income and RSUs from their big company paycheck could be going straight into their nest egg and compounding over time, making it viable for them to make a major life decision without hardship. It's reckless and irresponsible to recommend others to engage in without a significant buffer of pre-existing wealth, and with the expectation that (like many other kinds of investing) all of participation is at risk of full loss.

FAANG pay has gone through the roof while startup pay has not. I am not a software engineer, but I still work in a field rife with startups. I don’t even work at a FAANG, but I do work for the industry leader in my field and I’m making a safe $250k annually after 5 years.

I have gotten a few startup offers just to test the waters and I’m generally being offered $175k + $50k-$100k in stock options. Sounds OK if you expect the stock to grow 100X, but the problem is that even Series A funding these days pushes valuations into 8 or 9 figures. In my field, the total market is 10 figures. The valuations are going up so steeply that anyone but founders or employee 1 will be better off on the FAANG hampster wheel

It's a bit sad how the rest of the world don't put such reward for dev jobs.Even here, in London,I'd need to be a quant to pull such a salary.

The rest of the US does not pull such salaries. That's pretty exclusive Silicon Valley / Seattle.

You can easily make $100-$120k in Houston and that’s still much higher than London salaries. I had offers for $135k in Connecticut, offers for $90k in Kansas City.. still vastly better than London and the rent is a hell of a lot cheaper.

£90k is around benchmark senior dev pay in London (band I'd say is £80k to £95k). I make a bunch more than that.

London is a global city though and you'll always feel somewhat poor in this town unless you can compete with various foreign kleptocrats using it as a land bank, and that takes 8+ digits wealth.

Dude, $135k base in Montreal. Pay is localized but not that localized.

And NYC. Finance IT management jobs at the senior levels pay a solid 3-500, senior devs 200+, with some sort of bonus structure being common. Then there are increasingly tech companies (something that used be pretty rare even 10 years ago), and for the tired, there are university and hospital IT jobs.

However, rent is through the roof, on par with San Francisco. And a city with its own set of challenges.

From what I hear and read, Seattle seems like one of the best bangs for the buck. As for myself, the lack of sunlight would make me want to live in London (at least I can fly two hours and see the Sun).

London is an expensive town, so I'm sorry to hear that.

But for others -- dont be too jealous, because a lot of that high salary is just a rent premium and ends up with landowners. Great if you are a landowner, but otherwise, you're mostly breaking even after taxes and rent unless the markets riso to make your stock grant in the money. (and well, if all the math is on stock anyway, you can work anywhere and just buy some options on FAANG and be done with it, which is what I do.)

There are cases where you can do well (e.g., live with 2+ roommates in a tiny apt like some friends do.) -- but then, it isn't a sustainable thing.

> because a lot of that high salary is just a rent premium and ends up with landowners.

And London has cheaper rent?

Right that point broke down pretty quickly. Rent in London is more expensive than most of the United States.

I found pay-salary ratio worked best in Toronto provided you don't expect to own a home in the city.

That is why the post started off with "London is an expensive town, so I'm sorry to hear that. But for others --"

Some cities are not rational. The best game to play when you have irrational rules is to not play. That is why the post was directed "To others: "

London and NYC are not rational cities. To some extent, also Vancouver. Some of these cities are places where foreign cash comes to be parked in, often empty, apartments. They raise prices for everyone and ruin market dynamics. SF/Bay Area is irrational in a sense because you are competing on a time spectrum -- a rational job for someone who purchased a house in 2004 is an irrational job for someone who needs to rent at 2019 rates.

Yup, Vancouver can be more expensive than LA, with way lower average salaries.

$250k is new grad salary these days.

It's also why I'm so sad all the time!

I think you've hit the nail on the head as to what's causing this.

1: FAANG companies have had a great decade in terms of stock prices which means employee options are enormous in terms of dollar value (even if salaries aren't huge on their own necessarily).

2: VCs are pumping much more money into the ecosystem, which destroys the equity play for employees. When companies are raising $100m Series C rounds, it changes the cap table in a brutal way. Cap tables ultimately add up to 100% which means someone has to be diluted.

> FAANG pay has gone through the roof while startup pay has not

That's because FAANGs have been profitable and startups haven't, in general.

There's no rule of the universe saying startups have to be unprofitable.

A profitable startup can, in fact, pay through the roof.

Once again, I assert that the valuations are rising too high, too quickly, and so even if you are optimistic about profitability, you won't see a return that's worth leaving your golden beanbag chair at a FAANG. Why would I join a startup after an 8-9 figure Series A valuation for a 10-figure market? And yet, that's what my options were in my industry.

> A profitable startup can, in fact, pay through the roof.

But most startups don't become profitable, most startups fail.

IMO, you should basically assume that any stock options a startup offers you are worth zero. Decide if you want the offer based on the base pay and how interesting/stimulating the work is.

Sure. Upon re-reading my comment I wasn't very clear. What I meant was along the lines of: the past decade VCs have convinced startups that they don't need to be profitable for many years. That's a pretty recent aberration. It took Google less than 3 years to become profitable, for instance.

I think the argument is less between "startups" and "tech giants" and more between "profitable companies" and "unprofitable companies". Profitable companies can also grow quickly, after all.

It's just the reversion-to-the-mean effect described elsewhere[0]. It seems bothersome that on a startup news website run by an incubator, the view is that startups aren't a good idea. However, that's only because HN is now what /r/programming+technology+apple+google was, not what HN was. It's not really a startup news website. So I wouldn't worry too much. The people in startups are probably in real-world groups, and the networks are tighter.

I suppose the real problem is that some genuine startup-oriented personality may be dissuaded from working on one, but perhaps the cultural force against them is in the range where it should dissuade someone who isn't more wholly convinced that they know a truth that others do not believe in.

I think it may be counter-productive to attempt to convince people who prefer aiming for the safe money. I think that while attempting to draw a line hits the Sorites paradox really fast, there is quite clearly a difference between someone with your world-view and someone who runs the math on total compensation alone. I think the person with the latter view will not recreate the OP experience because all the choices are very non-independent. The same person who'll take the low-variance high-expected-value out of school will do the same the next time they're faced with a choice and again and again and again ad inf. They provide the selective pressure of optimizing for 'exploit' (in the explore/exploit sense) while the startup-type folks provide the selective pressure of predation.

0: For instance in the geeks/mops/sociopaths view https://meaningness.com/geeks-mops-sociopaths

The discussion isn't against startups. It's for giving employees more incentives to join startups, as opposed to repeating the same hoary cliches. The tech industry and cost of living have simply changed from a decade ago. Incentives must increase accordingly.

It may also be that the big pile of folks here with experience in startups have done the math and can argue that working a startup isn't the best way to maximize the outcome of your time.

HN doesn't just have to be a "startups are the best" echo chamber.

I would be surprised if your hypothetical situation more closely models reality than mine. It's possible. I just don't think it's likely.

I would revise my position if more successful founders argue that it isn't worth it and I'd mildly revise it if more failed founders argue that it isn't worth it anymore.

> Don’t work at startups to make $200M. Work at startups because you’ll work with people who have risk profiles that are much more likely to generate outsized returns as a group.

What's the point of that if those "group returns" are allocated almost entirely to the founders and the investors?

If you think it's not about the money, it's worth checking to see if you're being suckered by someone who realizes that it is about the money.

I generally recommend people think about it as two things: Learning or Earning.

If you are learning, you are getting something out of the situation even if it's not well paid. Don't stay there forever, or stay until you stop learning.

Then when it's time to earn: go work at a tech giant if you must, but also consider starting one yourself. Or if you can tell a startup is a rocket ship and have a chance to join, don't ask about whether you have a window seat, just do it, because those are often the best risk-adjusted returns you can get. Post-product-market-fit is an amazing time. (The trick is it is hard to tell if it's a rocket ship, of course.)

In the learn phase, I don't think it has to be about the money (though of course people have their individual needs). But in the earn phase, it is definitely about capturing the value you create.

Thanks! There are ways to work on ideas without sacrificing one's own life. And this can involve working in a small group that people will call a startup. There is no reason to enter into abusive relationships or sacrifice being paid, IMO. I also think though some tech salaries are really high and an ok salary from a startup that keeps you alive + lets you work on your own product vs. being told what to do is really nice. I mean if more people did that we may even have less of an income disparity between tech and all other jobs in any given geographical region.

Stories like this are really a dime a dozen. Marc Andreesen and the founders of Tivoli both worked in the same IBM dept. I met Michael Dell when he was building systems in his dorm. So did a thousand other people. Anyone who got in early at Dell got ground into the pulp years before there was a huge payoff. Even those who survived had to wait 10 years. The trick is finding new tech where people are taking risks. Anybody who went to a NeXTWorld Expo could have partied with John Parry Barlow, Tevanian, Kawasaki, Draper, etc.

There are probably a thousand classmates of Larry, Sergey and Mark who are just "getting by" at $200K/year. Get out there, mingle, take risks, fail and look for the edges. That's where you'll find the famous people of 2025 or 2030.

This is a great reminder. I was impressed by the recent documentary "General Magic" by how much smart people seem to congregate around new ideas. The old Mac team was the same one trying to create the smartphone 10 years before it was possible, and it was that core of folks who ended up doing it at Apple and Android later anyway.

I saw the documentary and enjoyed it. But finding that company in 2019 seems harder. That said, I perhaps I'm not seeing it -- how do you find that company of today?

There are thousands of start-ups in their A round right now. A bit less in their B round. Which is going to be Apple of 2040? Which will be the Google of 2030? Which will be the Stripe of 2025?

It is like one of those quotes "if you purchased gold in 2002 and sold in 2009, you'd have a 400% return" -- works well when you know in hindsight that 2002 was a long-time low and 2009 a long-time high.

This is less difficult than you're implying. It's true that selecting the Stripe of 2025 is difficult; you need to pick between companies that are only 3 years old. Similarly, if you want to select the Google of 2040, you would need to pick between a bunch of companies working out of their friends' garages, and that would not be easy. But to select the Google of 2030, you need to look at companies which:

1. Are about 10 years old.

2. Are close to IPO (Google was already 4 years post-IPO when it was 10 years old, but IPO timing has changed since then).

3. Have market fit with multiple products (Google had Gmail, Maps, and Chrome already when it was 10 years old).

4. Are still founder-led.

To select the Apple of 2040, you need to look at companies which:

1. Are about 20 years old.

2. Are about 10 years past IPO (again, Apple IPO'd 4 years after its founding, but the same company today would probably IPO a bit later)

3. Are still actively innovating, and launching successful new products.

4. Are still founder-led.

These companies exist, and they have been substantially de-risked relative to the 3 year-old startups. Engineers that join them today will have similar financial outcomes to those that joined Google in 2008, or Apple in 1996.

I really want to believe you, because that means I could also end up rubbing shoulders with Thiel, Andreesen, and their crew at will.

But what you are saying seems to be cherry-picked examples, how does one do this without knowledge of the future?

We dont know who the future Andreesen will be, we dont know which one of thousands of groups/departments/companies they will work at, so where do you go work (assuming it were that easy to just choose a company+department+group at will.)

The population of innovation is a sliver of subset of the engineering/CS/AI community. UI-Urbana (Andreesen), Stanford (Page/Brin), Harvard (Zuck), etc, etc. That gets you down to a couple of 1000 people or so. The size of an American High School.

You don't have to see the future, you just have to know where those working on it are and meet enough of them. They're in places like a Supercompute booth or MIT poster session trying to tell you. They may not have The Big Idea yet, but talent tends to stand out.

Andreesen didn't randomly pick an IBM group. He picked one doing Unix distributed system management and virtualization 25 years ago. I didn't have foresight to make the same choice, it just seemed obviously interesting and there were only three major players in that space.

It was insane that I got to meet Peter Thiel at that point in his career. One of the subtle things is that he wasn't the demigod he is today. He was a very well respected founder who had a great exit. You're right to point out it's a social lottery. Dumb luck is a big part of success.

I will definitely make more content about building your network the right way. I think if you consistently try to spend time with people who make things you think are awesome, the score seems to take care of itself.

Totally agree you shouldn't work at a startup if money is the only consideration.

I can’t stand startups. Low pay, long hours, loys of aggravation and often socially toxic environments.

The social toxicity is a big one for me. I have always struggled in this area and it makes things SO much harder outside of work.

In what sense? Also, would insisting on a 35 hours work week fly badly at startups?

A startup won't solve climate change and contributes to another global problem - inequality.

If we want these problem to be solved we should rather encourage people to be active politically and figure out how to tax carbon emissions worldwide and make sure the tide actually raises all boats.

Maybe startups would be more desirable alternatives if they gave RSUs instead of stock options, or at the very least have an exercise period of 7+ years instead of 3 months, or not be forced to pay the cash equivalent of taxes just for exercising...

As it stands now, startups are just places that offer half the salary compared to public companies. Working for half what you could be making is a large ask of almost anyone.

it pains me to read so many negative takes on startups. We’re actively training our young people to avoid taking risks

The maths has changed, substantially. As late as the 90’s if a startup was a success then all the early employees would make life-changing sums of money. Even the secretaries at Microsoft and Apple got equity. Nowadays all the value is captured by founders and VC’s - by spinning the myths from the 90’s and ruthlessly exploiting any workers young and naive enough to fall for it.

I absolutely love love love this..

I'm not sure how many more people I will send this on to, you haven't said something for the first time, but you laid it out in a way as if i was speaking to someone.

Thanks, I appreciate it. I've been somewhat there and I get that not everyone understands, but you really speak what I believe a lot of normal developers/designers/engineers are thinking.. Much love.

As tech becomes infused into everybody's daily experience, a certain amount of conservatism is not only to be expected, but probably wise. The "move fast and break things" startup approach isn't necessarily optimal in all facets of life, and a lot of the low-hanging fruit of "possible significant improvement if we succeed, low societal consequences if we screw up" is plucked.

Just based on your rebuttal, background knowledge and common sense alone, please write up an article, even if you only flesh out the points you made. I agree with as much as I can relate to, but the rest begs for more story!

Thanks for the feedback. This thread has me thinking about a blog post. I don’t write as much as I’d like to because I feel as though I’m still testing my worldview / hypotheses, and I don’t like delivering half-assed products. :)

> The pessimism in this thread really bothers me.

It's the demographics. The HN population skews extremely old and older people are generally more pessimistic, cynical and risk averse. Also, there is a large amount of traditional media workers on HN and they, for obvious reasons, are not fans of the tech industry since the tech industry is eating their lunch.

Don't let the thread get you down. It's a skewed and biased representation that isn't based on the real world.

"Extremely old" compared to the general population? Are you saying HN mostly consists of retired Cobol programmers?

I'm going to be cynical and say, maybe >32 was the cut-off point in the OP's message.

"OK, Boomer."

There's something to be said about assuming a that very large volume of mostly-anonymous messages on the Internet can be deteremined by the OP to be old. That sounds like ... something a young person might say.

Is there some kind of demographic data for HN or is this based on your impression from comments? I wouldn't expect a large amount of traditional media workers.

you say pessimism I say the experience and better insight how life really works YMMW

> The real substance is — how the fuck did he meet Peter Thiel at 23, and how can somebody recreate that?

He kinda answers that fairly early on:

"I'd just graduated in 2003, and my friends were starting a company with Peter Thiel. They flew me down to have dinner with Peter."

So to get rich, all you need to do is come from enough privilege that you graduate well connected with rich friends...

Sounds like your story supports that too - if you didn't connect with rich people in school, meeting (and becoming friends with them) at startups is a reasonable second alternative.

Where did he say that his friends were rich?

When I was 24 I was a broke college kid who couldn't get a real job and just had his first child. Then the invasion of Iraq happened and I was deployed to Kuwait. About 50 of us came over together and they basically separated the smart people from the rest of us. The smart people were given engineering or analytics positions. I was put on operations which was considered a dumb person's job.

Some context is in order. This unit was/is the 2-star command that runs communications for CENTCOM. We were supporting a network of around 270,000 users at that time due to the surge into Iraq in 2004 and the stand up of the transitional government. That is about the size of Bank of America, the entire company with all its branch locations and total employees. I was the night tech lead of operations of communications over all of it. That was my first time in management as a young staff sergeant. This was an incredible eye-opener for me, but its not a mark of success. I didn't get paid more because of the severity of my decisions or the size of the organization.

Now I'm just some software developer at a big corporate company assigned to a team that struggles to get copy/paste right. When I want to work on software that's vaguely interesting I contribute to open source.

My reflection from all of this is that people often evaluate themselves, and their perspectives of success, using faulty metrics. If you were a fresh 2 week hire on Instagram before they were gobbled up by Facebook are you suddenly a successful software genius due to a magical windfall? In my world as a front-end developer people often consider themselves experts and pat themselves on the back for stringing a few statements together like magic glue over a monster framework that they don't really need but does all the work for them. I don't really consider that a mark of success either and am often a social pariah as a result. If you really, I mean this seriously, really wanted to be rich and financially super successful then why are you spending your time writing software?

For me, personally, I measure success in the problems I solve that other people find value in, which is a large motivation for my contributions to open source. It isn't a number that comes with bragging rights or some form of vanity. Instead, its just something to do or take pride in.

> The pessimism in this thread really bothers me.

I wouldn't worry about it. Every venture I've started, successful and failures, came with everyone telling me I had no chance.

This is very insightful. Thank you.

One insight you may not be considering is that the profile of a CS graduate has changed significantly. A tech job is now full of prestige and social status. Even more so if that tech job is at a big brand name.

A much larger portion of young people are going into tech purely for the income and the prestige. And the preferences in this thread at the end of 2019 reflects that shift. Your average person going into tech in 2019 is very different than your average person going into tech in 2005 or even 2010.

The people who think like you still exist. Just that a much larger group has poured in and made them less obvious.

> The pessimism in this thread really bothers me.

I don’t recommend startups because of personal experiences. I’ve personally lost more working for startups (in terms of unpaid salaries, lower salaries and impact on health) than I did running my own startups. Startups rarely have good development practices, are often always in crunch mode and often have bad work-life balance.

Some people thrive in that environment, sure. Personally I don’t hate the environment but I can’t stick it too long either so I’ve job hopped a bit. But when you add that high-stress-low-discipline (discipline in terms of development practices) environment together with low salaries, false promises based on worthless stock, high founder ego and a high rate of startup failure, I don’t think it’s a good deal for most people, who would be better off in a stable balanced low (comparatively) stress well paying big company instead.

I hate to say it since I’ve started startups myself and it makes finding employees hard, but I think the people who really thrive in that environment are relatively few.

Sure it can be rewarding, you can make great connections and learn a lot but I’ve found big companies can be all of the same things, although the learning is usually deep in big companies and wide in startups, but a medium sized (ie established startup) company might be a good middle ground. Maybe everyone should experience it once though and then move on. I also will likely make another attempt at a startup myself too, but I do feel that there’s a difference when you own the thing.

This is all very inconsistent. OP says in big corps you need politics to get (new) shit done. But building your people network is politics, regardless where you work. It is certainly easier if you are employee number five or ten, but it still distracts you from your actual work.

I can't say it another way but the very american person cult is worrying. Thiel any many other tech icons are just icons because they are billionaires and maybe populists. Having a network of those is surely a way to get funding. But that again beings politics on the table and more importantly implies that you can only be successful if you have connections to the billionaires club. It lacks a great deal of imagination that only startups can survive with the direct support of the big guys.

I honestly find it highly unlikely that a startup is going to address climate change in any meaningful way.

For all the startup founders and VCs in this conversation, you are cheap motherf*ckers. When I read that engineers and employees prefer FAANG companies because they pay better, I want to remind you that it wasn't always like this. 10-15 years ago startups paid way better than big tech. Big Tech rewarded you by getting to specialize on problems and working at scale. The reason FB and Google pay well is because when they were startups, they were paying WELL!

Let me ask you all this, if you could make the same (or more) money working at a startup that you make working at a big tech company for 4 years, would you pick the startup? The answer should be based on what kind of working style and project you prefer, not finances.

> The reason FB and Google pay well is because when they were startups, they were paying WELL

100% this. Most people didn't work at Google or Facebook back in the day in the hopes of winning the lottery. Those companies paid really well, had the best benefits, culture, and mostly they were working on a ton of challenging problems unlike most of the "giant tech companies" of the time.

This hits home. I worked at 3 different small startups in my career. The first two failed and I left the last one for finances. I started contracting because it pays better but it's sapping my soul. I loved each one of those startups. I loved the people, the creative freedom and even just the vibe of trust and determination in the office. I loved the parts closer to the end even more because of the thrill of being on the edge. I didn't mind liquidation because I have a good recruiter and I was always ready to get back on the horse.

Now I contract out days for an agency. I estimate predefined tasks and then execute them. I talk nicely and calmly to clients who don't do me the same courtesy. I work only with the technology I have the most experience with and don't have opportunity to try new tech. But I have to pay my rent and I have to start putting money away to eventually get on the property ladder so working at a startup isn't really an option for me any more.

Absolutely this.

A lot of startups these days skimp by hiring sub-FAANG SWEs with less than 5 yoe, and it shows in their products. Lack of product maturity, bad engineering (worst horror story I’ve heard recently is Wayfair), resume driven development / over-engineering / cargo culting, huge teams to work on simple features. All so they can hire two middle-skill 22 year olds instead of a skilled 35 year old.

If you’re able to work at FAANG it is just bad financial sense to work at most startups unless you want to play the lottery. If a place offered 40-50hr/week, $250k salary, 15% target bonus AND generous RSUs/options it would be able to compete with FAANG. But not a lot of places do that, and those that do are often the very bubbly ones with uncertain futures

Who/what is a “sub-FAANG SWE”? Are you suggesting software engineers who don’t work at one of the FAANG’s are subpar? Apologies if I’m misunderstanding.

I think it's more referring to compensation. If you're only offering half the pay of some of the alternatives, you're simply not going to get a shot at most of the highest-skilled job seekers. They will, sensibly, tend to go work for the highest-paying employers. Free market for labor and all that.

I guess I can see that (to a certain extent), thanks for offering your explanation.

What about all the skilled software engineers that DON'T want to live in SF.

From what I've seen most startups DO expect you to move to SF, though. They just don't want to pay a competitive salary.

I assume they’re saying there’s a certain bar for FAANG SWEs. That doesn’t also imply all (or even the average) SWEs outside of FAANG are below it.

Sub-FANNG SWEs? 250k+ or gtfo? I sincerely hope Google and it’s Ilk don’t represent the best of the best because that would mean the best of our indistry would be found severely wanting.

The average at these companies may not be very good given the inherent noise in hiring and promo processes, but most very good engineers end up at one of these companies since it's a much better deal than going to a startup.

I thought FAANG weren't hiring 35-year-olds?

There are tons of 35 year olds at FAANG and they do hire a lot of people who are currently 35 too.

Correct. The hard threshold is 40.

Definitely not true. It seems to me that, if anything, Google has been prioritizing experienced industry hires recently, many of whom are in that age range.

That's interesting. Does "recently" mean it was not always so? My untested and rumour-based thoughts had been that they skewed towards younger (no family/ties/more energy/less negotiation skills) employees, and you were dead after 30.

Google and FB were paying less when they were founded than most startups I see today, adjusted for inflation.

The difference is that now Google and FB pay way more. More than startups could ever dream of competing with. Everyone I know at FB or Google is making $225k+, with the average/median being around $300k/yr. Absolutely no way new startups can play ball with those salaries, and FB/GOOG certainly weren’t paying that as they got off the ground.

> The difference is that now Google and FB pay way more. More than startups could ever dream of competing with.

Logically speaking, the only way that a company can pay more and still be profitable is if they produce value more efficiently. On a general, macro level.

So, if startup founders cannot even dream of providing either cash or equity (adjusted to risk) comparable to the big-techs, does this mean that startups are no longer the best way for society to become more productive?

I only see if two ways (again at the macro level)

a) Startups are better than BigTech for society economically: so make sure you hire the best-of-the-best, and give them high equity, and later compensation when you have more cash.

b) BigTech is better than startups for society economically: here, the proof is in the pudding, better hires leads to more profits, so hire the best of the best, and just give them mountains of cash.

I feel like we're seeing b) for the last 5 - 6 years.

Could it be because BigTech, collectively, have created an oligopoly? Perhaps making it easier for startups to compete is another reason for antitrust.

BigTech is insanely big right now. Basically advertising and cloud are humongous cash cows. It’s a good time to work for BigTech and build some safety net.

But then again it’s only Google and FB that pay above the line. Microsoft and Amazon salaries, last I checked were pretty subpar.

Apple is not known for paying great, either. So one wonders if it really is just Google and Facebook pumping the market up.

My theory (I could be wrong) is that both Google and Facebook and startups trying to emulate them are trying to exclusively hire from the same dozen elite universities. That would explain the salaries.

SRE has a lot of people without degrees. I don't know if SWE is still an ivory tower but just SRE salaries at G and FB can debunk this theory.

A lot of Amazon engineers have done amazingly well over the past 5 years what with the huge run-up in stock prices. This may not continue going forward, but don't underestimate how much bank they've made recently.

I think that's true but a good number of my coworkers at Apple got offers from Google as well and Apple outbid them

Or alternatively (and in my mind, more likely), the massive gains coming directly from computer technology has reached its peak. There will never be another new purely "technology" (i.e. where the business is primarily built-on computer software, internet, and/or hardware) company that's as profitable and powerful as Google or FaceBook

There will always be scope for solid good new businesses with big and small margins, but maybe the next FB / Google will be in some other field? Maybe biology or nutrition, maybe quantum physics, who knows. I wish I had some ideas though.

I don’t think it’s crazy to say that a line of code written at Google will, risk adjusted and averaged across all lines of code written at Google, create more value for society than the risk adjusted and averaged line of code at a random startup.

But in startups averages don’t matter as much - it has power-law style returns, so if you happen to work at an insanely valuable startup those lines of code might be 1,000x as valuable as the average line of code written at Google.

Ergo, if you can/want to play the odds with those kind of risks you go to a startup, even knowing the risk adjusted value is lower (loving your work also matters, and some prefer startups - myself included). If you want a sure thing you go to Google.

> Logically speaking, the only way that a company can pay more and still be profitable is if they produce value more efficiently. On a general, macro level.

sed 's/produce more value/extract more wealth from dominant positions and regulation then control/'

C) The largest tech companies are receiving windfall profits after a decade of successfully engaging in predatory anti-competitive behavior and regulatory capture.

> Absolutely no way new startups can play ball with those salaries

Are their ideas just not that promising, or are they just not raising enough money, or what?

Google has an ATM printing money in the basement. Startups do not.

> Google has an ATM printing money in the basement. Startups do not.

Venture capital is supposed to be (and certainly was a few years ago, though it may have gotten more conservative) the transfer pipeline between the money printing enterprises and the high-risk, high-reward startups that provides the unlimited cash the latter don't otherwise have while unlocking the return potential the former lack.

I mean my company raised $14 million from Google Ventures, so it’s working to some degree

>> Google and FB were paying less when they were founded than most startups I see today, adjusted for inflation.

You'd have to adjust quite a bit for inflation. The average rent has skyrocketed 300% since the time Google was a pre-IPO company. I would not mind a "low" Google 2004 salary if I could somehow also lock down a Mountain View 2004 mortgage. Also, tuition and student loans have risen. So while im at it, i'd love to lock down a 2004 student loan burden.

> average rent has skyrocketed 300%

The world is bigger than SF. Seattle enjoys the same payscale with half the housing costs.

Pretty sure house prices in Mountain View would've been way higher in 2004 if everyone knew where they'd be in 15 years.

Most startups can't match G/FB on cash, but they can do much better than they are on equity amounts, equity terms, work-life balance, etc.

For example, what is the option exercise window if you leave Lambda?

> startup can do much better on work-life balance?

really? i never heard anyone said that

They can do better on equity, but they absolutely no longer do. My last startup was acquired for $1.1B. The founder walked away with $400M, and the average engineer (there were 60 of us) received less than $100k each for 4 year grants.

They may have been paying less, but they were granting actual meaningful equity, and it paid out. Startup equity offers are absolute jokes now, and on top of that you run the risk of a recap zeroing out everything you've worked for.

Startups paying better than tech giants seems counter intuitive to me.

The giants can pay high salaries because they're hugely profitable and don't need to worry about being hyper efficient to make the most of VC money.

Startups on the other hand, are still weak on the profitability part, but have massive room for growth when it comes to valuation. Therefore, the equity they can offer has way more potential value than stock in a large company that's averaging 5% growth or something.

I don't see how a founder of a startup would benefit much from cheaping out on salaries for employees. The vast majority of the payout for founders is company value increasing, not how much of the VC money they keep.

Founders are not even giving enough equity for employees to match the income they lose not working for big tech. Its common to still make less on equity + salary after a successful exit compared to the yearly total compensation at big tech.

Fair point. However another selling point of working at a startup vs a big company is the impact you get to have on a product. Being able to say you were one of 5 people that built out a core feature of Uber in its early days is immensely valuable for career trajectory.

Once a company is large, it's hard to have that level of impact until you're a director/vp/etc.

Google makes so much money that it makes sense to overpay? I mean that keeps people from leaving and starting their own thing that might be competition to Google. Plus give them the resources inside Google and they might build something there.

> The reason FB and Google pay well is because when they were startups, they were paying WELL!

they most decidedly were not. everyone there was taking $25k if not $50k pay cuts to be part of it.

The average turnover is a little over 2 years at BigTechCo so half of the people never see that 4year total compensation.

That _position_ pays that much over the 4 years, irrespective of how many different people filled those positions in those years.

I doubt this very much.

https://www.inc.com/business-insider/tech-companies-employee...

You'd be wrong.

Exactly. There get so many startup positions advertised, even here on HN, where the job description summarizes as “build our product from the ground up” and the offere salary is below par and the offered equity is an insultingly low number like 0.2%.

It's because the founders think too highly of themselves, and have the thought that since it's their "idea", they deserve the lion's share of equity.

Do not ever work for a startup where the founder(s) have this sort of mentality.

I think the problem is that startups don't offer enough equity. Google offers a couple hundred thousand PLUS options worth > 100k present value.

If a startup wants to pay you enough to compensate, the options need to be worth > 100k present value (even if this means 1% of the company). Otherwise you'd be better off working for google and buying equity in the startup rather than breaking your back working there.

> and buying equity in the startup

Yeah, just go to Walmart and find the startup equity behind the underwear to your left.

VCs feel the need to constantly remind us that working at a startup is worth our time as a means to fuel the startup workforce. I understand that he was simply sharing an anecdote, but I found the conclusions and headline misleading even verging on dishonest. I've worked at an early stage bay area startup -- hiring progressively got harder and harder because candidates were becoming more aware of the career risks involved and the perks they'd be missing out on at big companies. In almost every case, you're working far more for less with very little structure -- if that's your cup of tea and have an obsession for the product, then go for it. If you're hoping to make $200 million, don't bother.

Yeah, at the end of the post I tried to reference this: You probably shouldn't work at a startup for the money per se. The real value is short cycles with users and being able to make decisions and ship.

This is also cautionary for startups. You have to be an actually rewarding place to work, otherwise there is literally no reason to work there.

I agree -- ideally, it shouldn't be about the money. But, everything comes at a cost, and the cost to short cycles with users and more control over your product is quite literally thousands of dollars, endless perks, and a cushion not affordable by most startups. That's the classic early-stage startup dilemma I've experienced -- when left to the decision of good potential hires, I've noticed a disproportionate number not willing to forgo all of that. Big companies are only getting larger and the requirement for startups to outcompete them on everything besides money and perks is higher than ever. At the very least, I think startups should be fully transparent about this instead of waving equity in front of you as though it will be worth anything.

To me it comes off as a bit contradictory to say "you shouldn't work at a startup for the money" when the title of your post and video prominently feature the "$200 million" figure.

Spot on! Clearly author’s intentions were to convince people that being an employee at a startup pays monetarily. Which is now denied by him? I am confused.

> If you're hoping to make $200 million, don't bother

... And unless you’re IC number 1, you’re not going to make more than a million bucks even in the best case as well, which makes the risk/rewards ratio higher.

Garry, where do you get that figure of $1.6 million per employee per year in profit for Google, please?

In Q2 2019 Alphabet (GOOGL), Google's parent, made $9.81 billion in profit[1].

At the end of the previous quarter, they reportedly had 103,549 employees[2].

Doing the division yields $88,654 profit per employee in Q2 2019.

Doing the naive thing of multiplying that by 4, which I know will be somewhat off, gives $354,615 profit per employee per year.

That's a tidy sum, but only a quarter of what you claimed so, again, can you tell us where you got that figure, please?

[1] https://www.theguardian.com/technology/2019/jul/25/google-al...

[2] https://edition.cnn.com/2019/04/29/tech/alphabet-q1-earnings...

He probably confused profits and revenue.

Could be: Google's annual revenue for 2018 was $136.22 billion[1], which yields $1,315,512 revenue per employee.

Controlling for employee growth from 2018 to 2019 (they only had 85,050 employees at the end of Q1 2018[2]) and assuming linear growth and revenue earn through the year, that gives an average number of employees of 94,300 over the year (I realise this is an oversimplification), and revenue per employee of $1,444,546.

That's still lower than Garry's quoted figure of $1.6M, although it's close, and possibly close enough.

The reason I queried it is that he goes out of his way to make the point about profit: "Google's pure profit per employee is actually $1.6 million per year, after all costs." (Emphasis mine.)

[1] https://www.statista.com/statistics/266206/googles-annual-gl...

[2] https://edition.cnn.com/2019/04/29/tech/alphabet-q1-earnings...

You're absolutely right — I annualized net revenue which I interpreted as "net" but certainly is not profit. I've corrected this and will put a note about it.

I'm sorry for the mistake. I'll do better next time.

No stress: thanks for posting the correction.

Even after this correction, the article still doesn't make sense to me:

> net revenue per employee is actually $1.6 million per year, after all costs.

What does "net revenue after all costs" mean? Isn't that operating income or net income rather than revenue (which aren't that high)?

You really should get these things straight before giving people advice.

This vlog is more of a cheap advertisement for the "oh work for a startup it's great" nonsense school. I don't really understand why I would work in an environment where the pay is shit and the issued stocks can be re-classified or diluted or just taken away by lay-offs. Makes no sense.

There is a medium-high probability of what you mentioned. But for many, it's about having a (tiny) shot at changing the world. It can be a thrill.

You are also a bigger fish in a small pond - more responsibility, no bureaucracy. And usually the pay is enough to live modestly on.

> But for many, it's about having a (tiny) shot at changing the world. It can be a thrill.

Honestly this seems like Silicon Valley bait for getting people for work in an abusive mismanaged environment. And I hope most people stopped drinking the Kool Aid.

> You are also a bigger fish in a small pond - more responsibility, no bureaucracy

This I can understand, I mean if you are talented enough that you don't want to jump through corporate hoops, then it makes sense. But I would only do it for a company that has competitors. Atleast that way if you do well and get mistreated (because some founder assumes that employees are sheep), then you can always take your talent to a competitor. Better if you have the ability to take others with you.

There are a lot of envs that are not abusive. Having your workplace generalized and called abusive on the internet when it's not in real life, definitely feels abusive, however.

I've seen people join abusive personal relationships with worse pay than startups, it happens with friendships and marriages everywhere. I've also seen very bad relationships between founders and teams that have caused lots of pain...

The only way this is worthwhile is if you really believe in some product + are working with non-abusive people you trust and have known for a while + actually get paid enough to live a comfortable life. You can't join a startup thinking that the world owes you and will make you rich and the startup is how it will do that. But I just hope people reading your comment don't think that any small group of friends working on something is abusive to new folks that join.

The main question is to ask what can you make out of it as an employee assuming the worst. I know full well that there are several great people working in tech as founders. I also believe that ambitious people who really think they are fantastic at delivering products can and should try the testy waters of startups knowing full well what the true market value is of the skillset that they are building. I would never ever join a startup where your market value keeps degrading. Yet many people join startups as employees with mostly worthless stock and continue to do meaningless work that doesn't help increase their market value because they are sold the Kool Aid of "belief in product" and "changing the world" or whatever so hard. As an employee, it is important to stay mindful of your market value and where it is headed.

Yeah this definitely makes sense. I think the startup work you do should build your personal portfolio. Open source (like with an actual open source license like MIT and no weird edge cases) work helps a ton too. I think also being paid in actual cash is actually pretty good and you don't have to make weird money bets.

> But for many, it's about having a (tiny) shot at changing the world. It can be a thrill.

Yes he had a shot at changing the world, at Palantir.

I'm sure that it's a thrill, but it's not necessarily a benefit to the world.

I started here on Hacker News as a software engineer. I learned that I could build software for others, ship it and release it. I did end up taking the venture path, and now help others on that path.

The key here is that magic can be created by people, and I'm not that different than a lot of people on this site. I also got very lucky, and I'm thankful for that.

Startups are hard, and most fail, and most startup stock is worthless. But if you read my post, I'm trying to point people to the fact that the deeper lesson is to be able to learn to ship to real customers quickly.

Anyway, I appreciate the feedback. It's shockingly hard to get something that is both nuanced and clickable in video format, but I will keep trying to get better.

The first time we met, you had just announced Initialized and had hired two people to work for you. I asked one question about it hoping to see if you guys were hiring more and send a resume, and you said something along the lines of: “Yes, one of the perks of raising money is you get to hire your friends”.

I doubt many people have a passion for shipping to customers quickly.

You're right, they don't. It's my hope that more people do, though.

I am saddened by this, since the “shipping to customers quickly (and iterating on the product based on feedback)” is the foundation of a successful growth economy.

There are so many gross inefficiencies in my market (US) that could be successfully addressed if more people has this type of orientation.

> But if you read my post, I'm trying to point people to the fact that the deeper lesson is to be able to learn to ship to real customers quickly.

The video title is "My $200M mistake" and you spend 90% of it talking about the money. In what way is the point of this learning to ship to real customers quickly?

I threw it in at the end but honestly your point is valid. I should have expanded that part and will do so in the future.

Just want to say that I appreciate the post. I am considering whether to go to a smaller startup for my next job, or just go to a big company.

>Working for Microsoft cost me $200 million

And not playing the Mega Millions Jackpot lotto cost me $1.6 billion. I had the opportunity to pick the winning numbers, but instead, I didn't even play! What a chump I was.

Don't make my mistakes.

Well, if is to use your analogy then you had the opportunity to turn down somebody that gave you free money to play the lottery, because that's what Thiel did to Garry, it gave him a check that covered one year of what Microsoft paid him.

The analogy does not hold because you still lose time, which is IMHO the most valuable commodity because it represents opportunity cost.

In built into a lot of these discussions is a major assumption - that a startup is a "typical" silicon valley startup with the goal of being a massively valued entity. That changes the risk structure dramatically. If instead you tried to bootstrap something into a 2M annual revenue enterprise with minimal (say 200k) worth of investment, the equation changes quite significantly.

I'd assert that in that situation, playing the role of "early tech adopter" into new problem spaces dramatically reduces the risk as well.

The simple truth is that working for the equity of an unproven start-up is a gamble, and statistically unlikely to pay off. And sadly more and more start-ups are undermining access to equity in shady ways. Not that one should never work for a start up on the hopes it breaks big, but we should also never forget that the successes are outliers, by a massive margin.

Just understand the trade-offs of your decision and the probabilities involved with your decision.

I mean this is really not talked about more frequently. At this point, with all the shady tactics that most startups now pull, it would appear that only an idiot would really want to be swindled this way. Furthermore, this is not something that will go away since with less IPOs actually being successful and a mature tech market, hoarding the most value you can from your company seems to be in vogue these days.

It's the leading response on HN to the topic, so I'd say it's talked about frequently.

> Furthermore, this is not something that will go away since with less IPOs actually being successful and a mature tech market

You’re implying that less successful IPOs mean less liquidity options for private company employees. That increasingly isn’t the case as private markets opens up to sales of startup equity. Success is no longer the same as an IPO and the number of companies that are becoming successful and the cumulative value in those companies are both increasing

> statistically unlikely to pay off

> probabilities involved with your decision

While this is a good general approach to life IMHO as well — if you mean "be rational, not just emotional" and "work on your cognitive biases, seek objectivity" — it might also prove terribly counterproductive in this context.

It would take a book or five but briefly:

- you just can't use statistics when they say "95% fail", otherwise you just don't do startups, ever. With that mindset, joining an established company is more likely to "succeed" for you and maximize serenity.

- another stat for you: most entrepreneurs fail "about twice" before making it, i.e. you'll probably fail 1-3 times for sure before entering the 5% of those who create a profitable business. Trick #1, thus: you can roll the dice several times (consider 2-5 years per "real try").

- most valuable ideas were either not identified (rarely) or not well executed (often) before someone eventually nails a product. You thus iterate quickly on the market (MVP, feedback, lean cycles, etc) to find your best fit curve, to hone in on the product that works. Chances are you'll find a local minimum, not "the best", you'll pivot, you'll reconsider, you'll maybe focus entirely on a subsystem, a 'feature' become 'product' — think how Docker, the company, appeared after the same name product.

The reality is that a "fast scaling startup" a la California is rare and a moonshot most often — unicorns and all that — but a diligently conducted, ground, sustained effort to make a business growing organically to reach sustainability for you and a few others in 2-5 years is a realistic goal (but all things considered, e.g. probably not on your first try, likely 10 years after you began for the first time).

I don't want to claim that it's easy to create a business, it's by far harder than working the jobs in most cases; but SMBs make up anywhere from 80 to 90% of our economies, they're the real bread and butter of our collective wealth, and these 'small' entrepreneurs are our true heroes. Not many of them make it big, and that's the 'gamble' you speak of, but it's not the only way, nor is it at all required to go down that path.

You just can't use statistics when they say "95% fail", otherwise you just don't do startups, ever. With that mindset, joining an established company is more likely to "succeed" for you and maximize serenity.

Actually, you certainly can do that. Most people do. And depending on what you're optimizing for, it seems pretty rational to me.

Another stat for you: most entrepreneurs fail "about twice" before making it, i.e. you'll probably fail 1-3 times for sure before entering the 5% of those who create a profitable business. Trick #1, thus: you can roll the dice several times (consider 2-5 years per "real try").

Yes, but that's for founders, not employees. If "success" here is defined as "made more in risk-adjusted income as early-stage startup employee than I would have made as big tech company employee", I doubt any early stage employees are "successful". Every failed startup you participate in (2-5 years of your life gone) adds to the opportunity cost "debt" you have to make up once one succeeds.

As I see it, if it comes down to such criteria to decide which path you'll take — i.e. you're in tech for the money — then it makes no sense to dabble in startups. Statistics clearly don't lie in this regard.

What I meant however was a bit meta: those who are deeply cut for entrepreneurship and startups are not motivated by money first or even at all; they thus don't and shouldn't care about statistics aiming at maximizing personal benefit... to a founder, "personal benefit" is more about getting things done, creating the dream. They'd rather optimize for long-term success (the kind that's much harder to take away from you, that creates real value).

Wealth, personal or collective, is but a consequence of a successful economic endeavor. As an employee, you'd choose to work for a startup because there's something in it that corporations money can't buy for you. There's no bet if you already believe in the work, you will get what you want every single day on the job. Different values, different goals, different rewards for different people I guess.

those who are deeply cut for entrepreneurship and startups are not motivated by money first or even at all

From working with many, many founders, this isn’t my experience at all.

- another stat for you: most entrepreneurs fail "about twice" before making it, i.e. you'll probably fail 1-3 times for sure before entering the 5% of those who create a profitable business. Trick #1, thus: you can roll the dice several times (consider 2-5 years per "real try").

I've never heard of this stat. Seems like a case of survivorship bias more than anything else.

For every entrepreneur that "made it" on their third try, there are millions who had to declare bankruptcy and set their career back years because their ventures didn't work out.

So the exact statistic is indeed about "entrepreneurs who make it", those who eventually create a successful business, how many time did they have to try?

Average is ~3 times, and your typical successful business (across sectors) takes ~2 years in "survival mode" (most don't make it past that mark), then 3 more (~5Y total) before things may feel "sustainable", cruising.

So indeed, we are not all considering those who don't make it in this picture. Creating a business is hard, very hard.

Small business does not equate to a startup. It's not nearly as huge of a gamble starting a small business as most aren't pursing new ideas in unproven markets, and trying to find product market fit/scale rapidly.

You're right that "startups" are harder statistically I'd suppose, more moonshots.

Still these numbers are general, not tech specific.

The mindset in entrepreneur circles:

- failing is ok. Happens to most. Those who eventually succeed try again, and again.

- you have about 2 years of surviving hell to overcome first

- going alone (by design) lowers your chances of success; hiring gets you in the right growth mindset, strategy (eg most people don't charge enough in the beginning)

Honestly, it's almost masochistic when you've failed twice yet keep trying. Obsessive. You could but just won't fold, get a regular job. This is what it takes.

That's why I said the money is far from the first goal of those who succeed. At best that kind of money is 10 years later when you first try. You'll suffer so much and statistically would probably do better at a regular job. You'll be broke often. Stressed and uncertain. Unable to make promises in your personal life to a certain extent. So why?.. Doesn't make sense from a utility standpoint. You do it because that's what you do, like artists or athletes. This is the general profile of entrepreneurs who make it, and age of success is 45-55 on average.

I really hate speeches like that. They are always told by one permile (or even less) of people that succeeded. The voice of all those that have lost are never heard. Same as blockchains, there are a few very loud people explaining how easy is to get rich, while those who gave them their money are rarely heard. I would laugh if it wouldnt be sad.

An anecdote (just a detail, I am developer for almost 30 years, I know the industry from downside up), a month or two back, two greenhorns were fanatically explaining me, how they were on a talk of X billionaire that told them it was never so easy to be a billionaire as right now. You only need a 2k laptop. I laughed on inside, but today kids really believe stories like that. Sure, gauss will do its game and a few will get filthy rich. But lottery seems a better game to me.

Maybe more poker than a lottery. A lot of luck, but there's still a little bit of skill in there.

I appreciate the feedback though. I know this is just one voice of many, but it's also what I experienced. I think it's up to the viewer to decide if my experience is applicable.

I think Paul Buchheit said it best: Advice is merely n=1 experience.

This was my n=1.

> I appreciate the feedback though. I know this is just one voice of many, but it's also what I experienced. I think it's up to the viewer to decide if my experience is applicable.

How do you feel comfortable spreading your own experiance in a manner that purposefully tries to persuade opinions while you know your experiance is non-generalizable?

Hm, is it truly totally non-generalizable? There are a lot of people who are very capable for whom the real risk is not taking risk at all. I meet them regularly.

It's not the norm, but just because it applies to a set of the very skilled doesn't mean it is not generalizable. It just isn't applicable to all people. I admit that.

The survival bias is real.

... but Palantir? That rather deflated the vision of regret.

Honestly, maybe I’m way out of the normal HN demographic, but my first reaction was, this sounds like, “how I had a lucky escape and didn’t spend most of my early career actively making the world a much worse place.”

I’m no great fan of MS, but given the choice between a job there; or the possibility to work on bringing about a dystopic surveillance future, I just don’t see the hard decision.

His "cost me $200m" is of a $20b company, so by the math he's suggesting he would've had 1% of the company after it went through all the dilutions on its path to $20b.

So yeah, if you have a chance to get nearly a cofounder's amount of equity in a company that will end up 20x a unicorn (which got that name because of how rare they are), then definitely go for it.

Not to mention it's 1% of a $20b company that has yet to go public and seems intent on staying private.

They do biannual liquidity events internally. If you’re an employee you can sell your stock back to the company for cash.

Another big iff here: iff the true owners of the company permit you to do so. Most startups do not permit this, afaik, which further indicates what a longshot it was that he turned down an offer from one that does.

I think they only started doing that recently, after they stayed private so long that many employees started approaching the 10 year mark at which point their options would expire.

Since Plantir is not going private for while, would his $200M be at all liquid in any way?

If you spend enough time in tech, you meet a lot of people who have this kind of story. It's ridiculous, but not that rare.

Building a network is an important thing... But let's not kid ourselves:

Most startups offer very little % for equity.

And that equity often amounts to next to nothing. Look at Uber or WeWork.

Most founders end up as assholes. Some are great, some care, some what to learn. Learning as a manager/founder is someone else's job. Stress is real. People do shut down from stress.

If you are a founder, that's great.

If you are like first or 2nd employee, and end up as CTO and such, that's great. If you can get a few % equity.

Overall most startups you work at you will make just barely what you'd make at Google or Microsoft (I'm taking post exit). During 2003 engineers didn't have the leverage we do now. Right now a junior engineer can make close to 200k+ in total compensation at a large firm. The work is different, but definitely more money most startups will ever give you.

> And that equity often amounts to next to nothing. Look at Uber

What are you talking about? Everyone who was early Uber is a millionaire now.

Sure, but they spent 6+ years getting underpaid and could have made much more at a Google/FB whose stock value has tripled with maximum liquidity throughout that time.

FYI if you joined Uber after 2014 your shares are currently underwater aka you have LOST money on your initial grant... your actual total compensation over the years went DOWN...

Flipping the coin on survivor-ship bias here, I worked at a start up for 4 years that was going to "change the world". Came out with experience in all sorts of problems solved, projects implemented, customers reached, hell I even have some equity(not that it's worth much). I was young and wanted to work on problems I thought would have high impact, shit they did have large impact.

Yet when I left finally as a jack of all and a master of none. I essentially had to start completely over.

> I was young and wanted to work on problems I thought would have high impact, shit they did have large impact.

I read something to the effect that post-WWII, the British government decided the future was in three technologies: nuclear power, aviation, and computers. So they set out to make sure the UK took its rightful place as master of the future, slanting policy heavily towards those ideas.

And wow, they were three for three on predictions. But somehow the place of the UK in those technologies isn't quite what they would have hoped.

I'd be interested in seeing where you read that, because they absolutely failed to do anything useful about it almost all of the time. And at the expense of the rocket program too.

Dunno about the government, but ARM and Rolls Royce have certainly done very well in their given fields. Curiously they are parts suppliers, not whole product manufacturers.

RR are only alive because they're strategically important enough to warrant being bailed out several times. They were nationalised in the 70s, and looks like they're in trouble again: https://bdaily.co.uk/articles/2018/06/14/government-has-to-i...

ARM are one of the few fully homegrown tech success stories, along with Racal/Vodafone. Unfortunately the UK has a history of "technologically successful but economically unviable" projects, and isn't able to take advantage of the startup logic where investors cover the losses.

It seems like he has found the problem with companies.

"Even though these companies pay a lot of money, in real terms, what software is doing in society is creating a lot more value than what they pay you. Google's pure profit per employee is actually $1.6 million per year, after all costs."

"If you're in the engineering, product, design, marketing, sort of the builder's side of that organization, you've got to know that you're creating a lot more value than that, possibly 10 times, maybe 100 times that value, and the only way you can really access that is by owning equity, and that means either being a founder or working at an early stage startup that gives significant equity. "

In other words, companies either purposefully or absentmindedly fail to pay regular employees anywhere close to their real value. This is the real problem. Not getting in a profitable startup early on isn't the problem. It's the mindset that it's somehow okay to pay employees very small fractions of what they are really worth.

Well said. You’re also describing a fundamental tension between capitalism and socialism.

Yes, but not in the way I imagine you intended. In capitalism, perhaps 80% of the value you create as an employee is captured by others (see sibling comment.) You can also opt out -- by becoming self employed, by joining a commune or collective, or by becoming a vagrant.

In socialism, the percentage of value you create captured by others is nearly 100%, and opting out is illegal -- in many socialist countries, even talking about opting out gets you sent to a "re-education camp."

No, this argument you’ve made is question-begging.

What I was referring to has more to do with the labor theory of value https://en.m.wikipedia.org/wiki/Labor_theory_of_value

I understand why I got downvoted, it seemed like a political drive-by comment. I should’ve explained what I was referring to in the first place. But this implication that socialism somehow naturally leads to slavery/internment in ways capitalism doesn’t is a canard.

That is a weird definition of socialism...

This is a problem, no doubt.

And can VCs help address this problem?

I often encourage founders to be more generous with equity for recruits and early employee refresh grants. Care and feeding of the org also involves being thankful to the people who build the value.

You would love this essay by James Altucher: https://jamesaltucher.com/blog/work-prison/

Key point: Other entities may capture up to 80% of the value you create.

1. Your boss, their boss, and their boss.

2. Shareholders.

3. Vendors.

4. Other employees in the company.

5. Taxes.

Better off working for your own self.

Eh. The same person can dig for oil in north dakota, or they can go dig for oil in nebraska. You'll get a lot more oil in dakota (big tech) than you would be getting at nebraska.

Go do the best thing you can do right now. Expenses don't matter, the total gross profit is what does.

Except tech is nothing like oil. It's a knowledge based industry and the pace of innovation rapidly keeps breaking barriers to entry. It effectively enables a lot of other industries to move swiftly and get a lot done with fewer resources [0]. A rising tide lifts all boats.

Instagram scaled to 30M users with 13 engs [1], and WhatsApp to half a billion with 32 [2]. Oculus was started by a then 17yr old Palmer Luckey [3] for who, later, the great Jon Carmack would go on to work for.

[0] https://a16z.com/2011/08/20/why-software-is-eating-the-world...

[1] https://time.com/4299297/instagram-facebook-revenue/

[2] https://www.sequoiacap.com/article/four-numbers-that-explain

[3] https://en.wikipedia.org/wiki/Palmer_Luckey#Oculus_Rift

Yay you're citing lottery winners, the most engineer efficient unicorns in the world, in a lottery that you can only buy 5-8 tickets in for your lifetime.

What I mean by 'go do the best thing you can do now', doesn't exclude working for yourself or starting that company that becomes your biggest thing also.

But if $500k/yr as a staff eng at bigco (north dakota) is your best thing, there is no shame in it. It's doubtful you can reproduce that although working for yourself in 'nebraska'.

> Yay you're citing lottery winners

You do realise that I can only cite lottery winners to make my point?

> What I mean by 'go do the best thing you can do now', doesn't exclude working for yourself or starting that company that becomes your biggest thing also.

I guess, then, we are on the same boat and agree with each other?

The salaries in the US are significant [0]... but the barrier to entry is lower than before, that it doesn't hurt to try. If one is a staff eng at BigTech, they probably are worth more money than what they get paid.

[0] https://danluu.com/startup-tradeoffs/

> It's the mindset that it's somehow okay to pay employees very small fractions of what they are really worth.

The employee decides what they are “really worth” when they accept, reject, or negotiate an offer. His rejection of the check offered him was his doing precisely that.

That’s not an issue with companies, that is an attribute of human free association and free, consensual dealing in general.

If you offer services at $100/hour but I know I can sell those services for $1000/hour (with my involvement) and you voluntarily accept $100/hour and agree to work for me, I have turned opportunity into profit, and have exploited no one. Sales and marketing and connections to people in specialty markets have a value, too!

(Correspondingly, the hypothetical “you” in this example may have not been able to get or generate more than $100/hour alone. Sometimes the sum is greater than the parts, and the assembly is itself a value-generating activity.)

But ultimately this story illustrates very well that the final arbiter of what price a person places on their time and effort is themself. No one can force you to accept a certain wage, and, as was demonstrated, you can always tell a billionaire to go stuff it.

Seems to have worked out pretty well for OP in the end, even without the CIA-vendor equity.

> In other words, companies either purposefully or absentmindedly fail to pay regular employees anywhere close to their real value.

Purposefully. your comment is spot on, so i’m surprised you don’t get this aspect. It’s not the burden of companies (in capitalistic society) to pay employees their value. Companies are practically obligated to extract maximum value at the most competitive (ie, market) rate. And after all, you might do the exact same job at Google as you do at tinyCO but because it’s google (network effect and all that) you just arbitrarily happen to have more impact. You aren’t actually bringing that value.

If employees want to be paid for their value, they can take all their otherwise excess income and join the capitalists by buying the stock.

If you want a good reason to not join Google in particular, Google does not train their managers. When I was interviewing with Google, I interviewed around 8 friends of mine that worked or previously worked at Google. Lack of management training was a something that every one of them brought up. Two of them had even been managers at Google and basically said "yeah, we weren't trained".

The way it's been described to me is that most managers at Google are TLMs - Tech Lead Managers. They are responsible primarily for the tech lead part and are only coincidentally responsible for the management part. Some teams do have separate Tech Leads and Managers, but for most teams, it's a single person.

Nobody in tech trains managers. The only difference AFAICT, is that google spreads those underprepared managers across more people. The only place I hear stories of managers with 50 directs is from Google.

That is extremely rare at google these days. The average tech manager has more like 6-8 directs.

Googler here. I'm not sure when you interviewed or your friends worked at Google, but nowadays managers undergo some training (I can't tell you how thorough that is, because I didn't do it yet).

Also, right now, I believe the norm is to have managers and TLs as separate positions, even in small teams (like mine, 5 people in total).

Over half of them worked for Google within the past two years. This is across New York, San Francisco, and Mountain View. One of them said they had a friend that wanted to become a manager and they were made a manager just like that.

This can't be true.

I just went through a 2 day required training as a new manager. This is required training that has to be done within the first 6 months of you becoming a manager.

This has been a requirement for many years.

Source: I'm a googler

Edit: just to add, the same training is required for TLMs. The moment you get a direct report the training becomes mandatory. I suspect there must be some miscommunication from the folks you spoke with.

I think we may have a different definition of "training". A two day training session isn't anywhere near what a manager should be getting. Compare that to software engineering where you will get months of continuous mentorship.

All managers in Google (engineering and non-engineering) are encouraged to take a 2-day immersive course. There's a course for "experienced manager, but new to Google" and a course for "new manager" with content tailored to the two different populations. There are also many many many mandatory trainings that span the gamut from allyship and inclusiveness, to local laws, to how we do performance reviews and comp. In the first year alone, I would guess something O(~weeks) of these trainings.

There are also countless hours of opt-in training for pretty much any subject where you want to improve your skills.

In Google SRE, combo TLMs are considered to be an acceptable short term solution for team turnover, but not a long term best practice. TLMs are highly encouraged to find a different TL for the team.

In addition, all SRE managers (SRMs) are paired with an experienced manager as their mentor.

Ultimately though, apart from the mandatory trainings, no one can really force you to be a better manager. The big feedback mechanism is that internal mobility is very high, to the point where managers have essentially no power to prevent anyone from leaving their team. So if you suck, you will get bad scores in your own performance review and everyone on your team will just transfer away.

I called out the SRE-specific bits, and a few common practices, but it could be that there are different practices in other engineering orgs.

Source: I'm an SRM, and speak only for myself.

Let me make sure I get this straight. On the one hand, by not working for a startup, you're missing out on at least $1.6M of value you're creating every year for your employer. You might even be missing out on $200M like Mr. Tan did. On the other hand, working for a startup "is not about the money". So you should be ok with getting less money because you're getting access to users and customers.

That's a pretty muddled message. Is Mr. Tan offering unbiased advice or does he have some kind of ax to grind here?

No ax to grind. Tan's trying to encourage more junior[0] engineers to work at a steep discount for startup founders so that they might make a massive profit for VCs like him.

0. Experienced engineers know better

A lot of the comments are rightly pointing out the logical fallacy of survivorship bias in the article, but I don't think Garry intended to say that "choosing to work for Palantir in 2003 was the expected-wealth maximizing career decision and that's why you should join a startup".

I think the title and lede, "working for Microsoft cost me $200M" is intended to be provocative and encourage clicks on the article, while providing an interesting example of a "road not taken" in Garry's professional life. The dollar magnitude is unusual, but the feeling of regret is relatable to us all, even if you took the opposite bet that Garry did (e.g. turning down a LinkedIn or Coinbase offer in 2016 to work at a failed startup instead).

Since this article is on the top of HN today, I'd say Garry succeeded at sharing his personal anecdote.

On the content itself (startup vs. bigco), he is right about "you only can make a fraction of the value you create if you don't own equity" and "If you don't work on your dreams, someone will put you to work on theirs." But then it follows that everyone should start their own company if they are capable, or work for a bigco if they are not. The current SV labor market reflects this reality as well.

It's possible to sell some top-tier talent on taking less than 1% equity to work on your dreams, but they must really believe in the founder's vision and the founder's ability to provide a working environment that complements what the employee is not able to de-risk by themselves.

Apologies for the clickbait— I'm trying to build a YouTube following and having some collaborations drop this week. Just trying to make it work on that platform. The values and what is acceptable on different social networks is so different! I didn't really think it would appear on here, so tuning it for different audiences is hard.

I, for one, thought it was an excellent title. It's always fascinating to read about the eccentric Peter Thiel, and this gave me some inspiration for how to structure my own future writing. Thanks :)

We've tuned the title above for this audience. If there's a better one that represents the point of the article, happy to change again.

Everyone's opinions on tradeoffs vary. Were it me, I wouldn't be proud if I'd made the call to join the company that is directly supporting The US's broken ICE system (https://www.google.com/amp/s/slate.com/technology/2019/05/do...), even if I were $200M richer. It seems Garry dodged a bullet on this one.

He says he ended up working for Palantir anyway, so he dodged the bullet then chased it down to dive back in front of it again.

In the case of this metaphor, he ran back to Palantir for his opportunity to shoot the gun, for a tiny share of the profits.

This article is garbage.

Over the last 8 years or so, FANG stock has gone through the roof. Most FANG engineers are multi-millionaires if they have been there going back 8 years. I have a friend whose Facebook stock doubled in the last 3 years and she will have been paid over 3M over 4 years.

Meanwhile, I have a friend who has been bouncing around startups, making zero in equity (because they all failed) and he gave up a job at Google. His equity would have been worth over 2M had he stayed.

I myself worked at a YC startup that had a large exit, and only made about $80k over 4 years (most of the money went to the founders even though I was employee 40). I then joined one of the unicorns and also made about 250k in equity over 5 years. Had I concentrated on my FANG interviews more, I would have made much much much more money over the last 5 years.

Having spent the past 15 years chasing the dream, working as a Founder and a couple of C-Level positions while not really amassing any sort of wealth I can't recommend enough to do your financial due diligence when accepting trade-offs for chances to reach your life-goals.

I'm close to 32 and have two kids now, so the financial pressure is there, while having accepted relatively low pay in high cost-of-living locations for roughly a decade left me without a semi-large cushion to reorient my career or even take a sabbatical to spend with my kids. This also limits my options, just leaving for another country for a potentially higher paying job with lower job security is a risk that might be too large...

Use your twenties wisely, i'd recommend first amassing a cushion at a FANG or freelancing if possible, before trying to "learn the art" at a startup. There surely is a great many things I can teach now, having picked and fought and won my own battles for quite some time now, but there is a high chance it leaves you and your loved ones in an unenviable position compared to just grinding away in your FANG Job.

Do startups even bother hiring people not in their 20's or early 30's, though?

32 is one thing, one if you're 35, 38, 40? You come back with your financial cushion, ready to hit the startup circuit, but who will actually hire an older guy (or gal) with salivating 25 year-old grads waiting around the corner?

35-40 wouldn't be an issue at our startup, but we can't afford corporate salaries/benefits.

That's the hit you would have to take, accepting a lower salary again, which most can't combine with a less comfortable environment where your responsibilities are less narrowly defined and many of the support structures that a large org can offer are not in place yet.

The safest risk reward ratio in terms of career development, networking, and financial gain is to work at a startup that is in their explosive growth stage. You will likely get shares valued at some multiple of 100k. Make sure you understand the business and feel confident they will IPO or exit.

The scaling needs, technically or culturally, of a company at this stage are unlikely to be available at a risky early startup that may never see massive growth. At a BigCo, unless you are in infra or deep in the technical stack, many of these scaling problems will have been solved for you.

In terms of networking, you will get to learn from grizzled engineers who were around in the early days, veterans from big companies who have come in to fix the shit that is wrong, and have a front seat to these cultures colliding. Not only that, you'll be surrounded by soon to be angel investors.

I spent one year working at a pre-IPO unicorn and it was highest in ROI for my career as an entrepreneur later and the IPO made me enough cash to not be sweating my rent all the time.

Agreed. I think this type of company (high-growth and 2-3 years away from IPO) is a much better first job out of school than working at a big tech company. Sure, your cash comp will be 10 - 25% lower, but if you want to start a company someday, this type of experience is on average much more valuable than big tech co.

I've been working at a high-growth company for the past year and as OP mentioned, have learned from early engineers, experienced engineers from big tech co's, and started leading medium sized projects six months in. I'm on the growth engineering team so I've also been able to learn about best practices in growth from people who led teams at big tech co's.

From this experience, I now feel ready to be an early engineer at a startup or build my own thing. I was able to get the benefit of working with the best people from big tech co's but in a high-growth environment where there are more problems to be solved than people to solve them.

For this reason, working at a high-growth unicorn is seen as just as valuable as a big tech co. If not more, for product/growth eng roles.

What are the right metrics to look at for growth?

Now I personally can't stand to work for big companies, but it's definitely not because its a bad financial move. Might as well write a post about "downsides of not picking the right lottery numbers". I know more people who have retired young and comfortably from a career at Microsoft (or Google, or Amazon) than I do who have achieved wealth from startups (and I know plenty of both types here in Seattle). In every single case there was substantial risk and a big element of luck for the startups that succeeded, while those who worked for the big firms never once worried that their paycheck might bounce.

The real issue with startups is that there is currently no efficient secondary market for startup equity.

This makes the game much riskier than it should be since:

1) There is no way to diversify for founders and employees. 2) There is no exit for employees. 3) It gives VC monopolistic power.

There were attempts to solve this (e.g. ICO) but those were misused.

Once such a market exists, it would be much easier to join/leave this ecosystem.

This is secondary, the real issue is employees don't get enough equity to even sell it on a secondary market.

It took me a good number of years to realize that working for startups cost me years of being underpaid, working long hours and no real benefits in the end. I joined a corporation a couple of months ago and now I'm getting twice as much in compensation, plus financial incentives to actually stick around for a longer time. Survivorship bias is real.

Why did he value Microsoft over Their? There is something in his character that held in higher regard one decision over the other, there's no exploration of what caused the conflict in the first instance and a likelihood it will happen again. What should he have done with himself at that point and all future similar points where he has opportunity again?

This post seems to be more about signalling than lessons learned. Better luck next time!

I'll try to make a longer post about this. It's hard to get it right in 5 minutes of video.

Seems like a good topic to talk on, soothing the burn on missed opportunity, perceived or otherwise.

My uncle had a jeep he called his million dollar jeep, because he cashed out of some Intel stock in the early 80ies to buy it.

I refer to my student loans as my BMW M...

Please, engineers, pay attention to the ethical implications of your creations.

You can't talk about how much money you make (or could have made) and disregard the pain you cause people in the process. Not all startups are equally unethical, and Palantir is famously one of the most closely tied to so much human suffering in the world.

If you have a family or you have a chronic illness, working at a big company -- at least in the US -- generally means better health benefits. I'd wager that health insurance alone is the most compelling reason why many people choose big companies over startups.

I mean if this is true we'd expect to see more startups out of Europe, Australia, New Zealand and the UK. Maybe the stats bear that out I dunno. I do know that the ACA has been credited by lots of folks as the reason they were able to start a company.

I think it's interesting part of this is that there was literally no bad decision in Garry's situation.

1) Stay with Microsoft, get promoted over the years end up a multi-millionaire.

2) Join Palantir and end up a multi-millionaire.

It sure does illustrate the meaning of being in the right place at the right time (e.g. starting a career in the early 2000's working as a designer / engineer in a tech hub).

There's a LOT of survivorship bias in this article. I personally worked in small companies (30 - 200 employees total) and startups (4 employees, including myself) before ending up at a big tech company, and I would have preferred to do this journey in the opposite direction - that is, work a few years at a BigCorp, and then work for a startup.

Getting to see what works and what doesn't work in the context of a bigcorp is really valuable, and I think this post discounts that. A lot of technical mistakes I've made could have been remedied by simply seeing industry best practices, and there was no way I would have learned these things in school.

I just cringed at the thought of some BigCo software company project management tracking obsessive approach being pigeonholed onto a startup. Or the various other ‘processes’ that built up continually over the years at BigCo to minimize any sort of risk at the expense of speed and flexibility.

The bigger benefit is working with really smart people. I think you’re over valuing the utility of a lot of the stuff that goes on at bigger firms, mostly out of necessity but also many times due to managers trying to justify their own existence in the company so they create ‘processes’. But also just merely the scale of the operation where highly automated fancy systems would be a complete waste of time for a startup with a small team and a short run way.

GP comment never said "processes," so I'm not sure why you're focusing on that. They said "best practices", which is totally different.

Sorry I just think I wanted to go on a rant at all the big software co "project managers" that got hired into startups I worked at and ruined everything.

That wasn't a proper response to OP's comment.

Yeah, I could have been more clear - the BigCo I'm at is still pretty light on process, and teams are free to use whatever project management approach they want. As seattle_spring conjectured, I was thinking more about technical best practices. I've learned many patterns from the software I work with now, and I've been able to grow from working with really smart engineers that have enough experience to be pragmatic without compromising on quality.

An (admittedly controversial) example is repos-per-service vs a monorepo: now that I've worked at a bigco with a monorepo, I would have used a monorepo at my previous company.

Personally having also worked at monorepoCo, I would only recommend it to another company with a good enough system to support it. I’ve heard of places trying to implement it with git sub folders and hellacious branching, to great lack of success

Completely agree.

I worked for Microsoft this year. Had an amazing experience, learned a ton, built a great network, had benefits and was well compensated. I did this all while taking almost 0 risk. The idea that working for a tech giant is "maintaining the status quo," but working for a startup is "making something new," is perhaps not accurate.

Working at a startup can be great. Working at a tech giant can be great. Just don't make your decision based on one guy who turned down a personal offer from Peter Thiel (and was later employee #10).

When you work for a giant corporation of any sort, you are inherently breaking capitalism as it is.

There's no foreseeable way around this , it's irresponsible, and all the suffering you're seeing it the world is the cost of many many millions of people giving themselves a pass on this.

I strongly urge you to recognize that any of the life benefits you get from working at one of these places are reaped from the lives of others. (https://www.youtube.com/watch?v=oQEO2P9j_vU)

So all the suffering in the world is the fault of giant corporations? How giant do they have to be to go from being the building blocks of capitalism to breaking it?

Obviously not all. You know how english is with these words.

There's a gradient. The point at which there's no point in going up against them is definitely too far. Competition is important to a healthy capitalist economy.

And yet I'm unclear on where any of the big tech companies have a lock on their market such that there's no point in competing with them. Google has huge market share in search, but Bing and DDG and others are still competing.

As opposed to working for a small money losing company backed by VCs who hoped to be bought out by big tech companies....

Well this is why it's important to work on something that you believe in. I think there is a fatalism to think all small companies are going to fail. Individual employees should use their own judgment when thinking about whether a startup will work— they are often more right than not since startups tend to be self-fulfilling prophecy. If lots of smart people like you want to join too, then it actually becomes a lot more likely.

That being said by the numbers most startups fail, and there is no guarantee a startup role will get you a positive outcome vs other alternatives.

It’s not about the company “failing”. Very few tech startups are bootstrapped. At some point they take investor funding. At that point it doesn’t matter what the “smart people” want or the founders. The only thing that matters is what the investors want - they want “an exit”. Statistically:

- the chances of a company not just closing their doors are low.

- out of those, the chances of a company becoming a “lifestyle business”, a profitable ongoing private business are close to zero once you take investor money. Investors aren’t looking for profitable private companies hoping to get a minor dividend. They are looking for their investment to get acquired or go public.

- speaking of which very few companies exit with going public instead of being acquired by big tech. Look no further than YC. Only two YC companies have ever gone public.

- Out of those that do go public, even fewer don’t end up getting acquired by big tech and/or are profitable. Again look at YC. Two public companies and Dropbox has admitted that it has no idea whether it will ever be profitable.

As far as “smart people”. All startups think they have “smart people.”

Please don't take HN on generic ideological tangents. They're repetitive, tedious, and off topic here.

https://news.ycombinator.com/newsguidelines.html

I don't disagree with you in theory, but when an article is suggesting that you should instead make $200M in equity by working for a venture capitalist - and not just any venture capitalist, Peter Thiel, the man who is sad about women's suffrage because it means unchecked libertarianism is less likely to be chosen by free elections - for spy firm Palantir?

Go work for a big tech company, it's far more ethical if you think capitalism is bad.

Also keep in mind that there simply isn't $200M to go around for every software engineer, let alone every human. These concentrated payoffs only come at the expense of others. It's not universal advice and it can't be.

> These concentrated payoffs only come at the expense of others

Capital creation is not zero sum. It's positive sum and makes us all better off. This idea that if one person succeeds, it's because he's stolen from someone else has led to immense misery in history.

Working for a consulting firm with a lot of startup clients can also be a great experience if you plan to go that way yourself down the road, at least in what YC would call "hard tech."

You get to see the inner workings of a bunch of startups in your field, and you get to see which ones work out and which ones don't. Of course, the pay isn't great, but you do get to work on a lot of cool stuff in a "startup-ish" environment.

> "Garry, "what are you doing at Microsoft? "You're wasting your time."

> "Garry, I'm so sure this is the right thing for you, "you need to quit your job right now."

How much does Pieter know the OP at the time? I'd probably be very wary working with someone with such a pitch.

For people trying to draw false equivalencies between buying Apple stock, buying lottery tickets, etc I think it's useful to look at the difference in circumstances and how _close_ Garry was to joining.

If you compare this to Apple stock it would be like if you had the cash in your bank account and your stock broker called you up and said "You should buy 1000 shares of Apple stock. In fact, I'll just give you 1000 shares of Apple stock, there's no risk to you". And you said no.

Or if someone said "I'll give you this lottery ticket, do you want it?" And you said no.

Now obviously, not many people find themselves in such a situation. But if you're a developer this situation isn't _that_ uncommon. i.e. you have a friend from school, or a someone you used to work with that is starting something new and asks you to join. This percentage goes up the "better" school you go to and the companies you join. i.e. I'm sure a large percentage of MIT/Stanford CompSci grads and early Goog/FB engineers know someone within 1 to 2 degrees of separation that have started fairly large companies.

Probably the most sure way to wealth (50M+) in modern times right now is to go to a good CompSci school, join a larger hot startup 200-500 people, spend a few years solving hard problems, getting a good salary and building a strong network. Then when one of your network starts a company joining that company as employee < 10.

For 1-5M the surest way is to join a 1000+ employee tech company as an engineer.

>In fact, I'll just give you 1000 shares of Apple stock, there's no risk to you". And you said no.

That's not the same. See https://en.wikipedia.org/wiki/Opportunity_cost

In the video Garry mentioned that Thiel offered him a check for his salary. Not quite no risk, but effectively so. He'd be able to go back to MS after 6 months/1 year no problem and would have only lost out on some vesting. He probably would be able to go back to a better position which often happens.

> He'd be able to go back to MS after 6 months/1 year no problem and would have only lost out on some vesting.

And internal tenure and connections. Yes, for some companies, it's easier to get promoted as a new applicant. At others it's easier to get internally promoted and losing out on a year of that costs you quite a bit of future value.

The director of my product unit took me out for coffee and basically said as much. Congrats on the move, and if you ever want to come back, email me directly.

It was one of the classiest things that ever happened to me in my business career.

The problem is that people seem to think that one must drink the coolaid to do well.

I have worked for both small, large, internationals and startups.

A startup is a massive risk. 99.5% of them fail, of that 0.5%, >50% are acquired which is a spectacularly brutal experience. Odds are, your startup will fail, and take you with it. (especially as those of you in the US have to think about health insurance.)

Most of the time you'll be making fudge after fudge, using stuff cause its shiny and regretting every choice you made 6 months previous. then you have to deal with the batshit social rules are de rigueur.

Either way, you can either choose to believe that your company is looking after your interests, or treating you like cattle (Kobe beef, if you're lucky enough)

Far too many startups require their staff to blindly worship the co-founders, even though they are obviously deficient, only useful for tax write-down fodder. Look the other direction as your boss has a spectacular mental breakdown, or decides to initiate conjugal relations via blackmail and obnoxious power plays.

Basically, you can't just slap the word startup on a thing and allow it to fuck with peoples lives.

Begging your forgiveness, it's Kool-Aid.

Acksually, it was Flavor Aid, but who’s counting except us pedants?

I treasure this chain of pedantry.

Valuation and share prices of FAANGs (and Microsoft) started really taking off 2-3 years after the financial crisis of 2008. There are two theories: a lot of money could suddenly be borrowed at near zero cost and needed a place to go, prompting a lot of investors to invest in big tech in the hope of better than average returns. Alternate theory: all big tech companies just simultaneously, suddenly became lot better companies and lot better investments sometime around 2011. I tend to side with the first theory.

Recently, it also became easier to do stock buybacks, leading to another big bounce in share prices.

https://edition.cnn.com/2018/12/17/investing/stock-buybacks-...

So I wonder if the real problem lies elsewhere - the out of control monetary policies practiced by various central banks.

Or maybe my statements are just completely wrong. If so, I would like to know if someone has done any kind of analysis on this.

A fellow named Paul Graham once speculated that it was not beyond reason to offer your first employee a >6% share in your company [1]. I've received first employee offers from startups for under 1%. This explains most of the difference for my decision.

[1] http://www.paulgraham.com/equity.html

I worked at 4 startups in my youth. All were formed at the tail end of the dot com crash. Of the 4, 2 outright failed and were totally miserable places to work. At one I even had to work for minimum wage until they realized they violated our exempt status. Of the other 2, one was acquired for peanuts. I got a check for $1200. The last company went public. They had had huge funding (almost $500M) and had had several down rounds. Due to this, management was extremely miserly with stock. My stock was briefly worth $250k until the lockout expired and quickly sank to $120k and got as low as $45k. Looking back on it, I totally wasted my time there.

The pay wasn’t the worst of it, I encountered many tyrants who made things even worse.

Now as an older person I have many business ideas but I am unable to take the risk due to having to support a family. I need to make a certain income to cover expenses. The only way I would join a startup is as a founder and at that I’d have to be able to pay myself enough to keep things going for my family.

Edit: The sites I'm using make it seem like the RSU compensation is the one time grant for 100k+ over the 4 year period so if its really a 400k+ stock grant over the 4year period then yes there's really no way to compete with that for early stage companies and leaving that amount of money on the table is inadvisable if you can avoid it. That said I still hold my point about the type of experience you'll gain at a startup and how quickly you'll gain it.

People keep talking about how "they don't know anyone at the big tech companies making less than a 225k salary with the average being more like 300k". Those numbers are bunk, the salary is the base amount before stock contributions and you are most certainly including RSUs to get those numbers. Including RSU's in your annual salary is a crazy and incorrect thing to do. The average turn over at large tech co is a little over 2 years. This means 50% of people never see more than half of their RSU compensation. An L5 (5 years or so xp and roughly the same across companies) for instance has an average base salary of 165k and an additional 100k in RSUs. Assuming that person works at large tech co for the average 2 years and they sell the RSUs as soon as they can their total compensation in a given year is 165k + 25k, or 190k. Successful startups most certainly can come close to that. Anyone making a base + 225k salary before RSU is an L7 or distinguished contributor with 10+ years of experience. So while maybe startups can't compete for compensation for people who are very established in there careers, I've seen more than a few who can compete for people in the 0-10yr range. I've always seen startups as a way for people to prove themselves very quickly in ways that would take people who took the corporate path 15 years to do. High risk, high personal growth, and hopefully high reward.

That said I think startups do need to rework their equity compensation structure for earlier employees to make them more fair. It is very easy to get screwed as an IC in startups right now even as an early one.

Maybe I misunderstood what you’re saying here but I don’t think it’s accurate. My salary plus stock compensation has been $300K+ each year as long as I’ve been with my company. Of course there’s market volatility in RSUs but I have yet to take home less than $300K in any year during the 5 years I’ve been at a FAANG. I’m an engineer FWIW.

I may be inaccurate, I've been using sites like payscale to do the measuring here for averages. If that really is the case then RSUs are quite insane and I'd have to revise my statement.

Try something like levels.fyi that lists the RSUs on a yearly scale.

I wouldn’t use Payscale or even Glassdoor. Levels.fyi is more accurate I think, although obviously some people definitely inflate their numbers, and there’s a self reporting bias.

FAANG total comp is crazy... obscene. I earn quite a bit more than one of my siblings who’s a doctor, and all I have is a bachelors degree.

All this does have a cost. Not counting potential monopolistic practices, ads being literally cancer, etc etc, the stress and anxiety level is high.

I don’t expect to keep doing this for 20 years. In 5 years I’ve learned a ton and still meet people who are way smarter than I am and have better judgement.

Yeah, I've chosen to work in startups for the last 4 years largely because I want to found my own company and I really have enjoyed working in startups. I've learned a lot that I don't think I can get at BicCo in terms of running an early-stage company but, I'm also in a position with student loans and since I've done well on BigCo interviews before but chose a different path I'm really torn on saying screw it for 3 years, get a BigCo offer and take care of everything financially, build a small nest egg and then jump back into my own startup at this point. Especially now when laws regarding the restrictions around building your own thing on your own time are becoming more favorable to us.

It's 100k per year not over 4 years... I can assure you that these numbers are not bunk and are very real. A lot of my friends have been offered 1.2M in RSUs for L6 positions.

I myself am an L5 and I got a 600k RSU grant - so I get 150k in vested RSUs per year (which started vesting after about 3 months, and which vests continuously throughout the year).

I also get 120k of RSU refreshers (which vest over 4 years) each year as well.

So yes, when I say my TC is 400k+/year, I mean I actually earn that much per year. This isn't accounting for stock appreciation either, my RSUs have increased in value by over 50% since I joined early this year.

I've had a simple rule for the past 20 years. If you offer me less than 1% of the startup I'm not interested in working with you because I am a plebe if I accept that offer. It hasn't failed me yet.

OTOH I chose to pursue a PhD in biochemistry rather than be the third member of the Yost group and that led to 3D Studio.

So I will boil my heuristic down to TLA or BigCo. I'd miss out on the next Facebook or Google with such a heuristic but what are the chances I would get an opportunity to join one of those companies at the ground floor in the first place?

in recent years, there was one startup bought out at a modest price for which I might have made epsilon more money being their CTO but it would have come with sleepless nights and anxiety at no additional cost.

Damn, sorry you didn’t make $200m profiting off a company that makes ICE more efficient

> [at a startup] you get very direct access to users and customers and their problems, which means you can actually have empathy for what's actually going on with them, and then you can directly solve it.

I'm calling BS on this. The empathy fairy doesn't bless you just for working at a startup, just like it doesn't disappear when you work for big tech. You have to actually create and nurture empathy yourself. You have to engage in the work: learning about the products, all the people you've never met that build things you didn't know existed, how all of it eventually becomes a thing for a customer to use, and how to make it better. In that process, you learn to care about things you didn't before.

Can you "directly solve" a problem for customers in a big company? Sometimes. But more often, you have to work together with other people to solve it. You have to use initiative, talk to people, coordinate things, lead initiatives. It's more work. And because it's more work, it's even more rewarding when you solve something. You may have even improved a lot more than the original problem in the process.

Advice to VCs on this thread trying to convince hiring folks away from tech. giants.

Re-consider (if you can) how you attract engineering talent and capitalize the "product-market-fit" stage of your startups - higher early stage valuations and higher pay for the market rates for the talent. Most talent (I know of) at FAANG is tired of being "cog-in-a-giant-wheel" and, some, would love the opportunities that startups always offered (I am assuming I don't have to enumerate these opportunities for this crowd)?

If you think higher valuations at earlier stages is not a fair ask - just look at capitalization at Series-C, Series-D growth stage companies - most of this money is being used to "buy" revenue these days. In other words, to pay commissions for sales and marketing folks. Buying engineering talent at early stages should be no different in 2019 in my opinion.

We don't have to rob Peter(Founders) to pay Paul(non-founding employees) and pitch one against the other. Just make the pie bigger at early stages. From what I hear, there is plenty of capital chasing good startups.

This is a lot like saying not buying a winning lottery ticket "Cost you" the jackpot.

Opportunity cost is a very real thing, the vast majority of startups fail, or do not deliver any meaningful amount of equity to their employees (compared to the huge pay cut they take).

This is a blog by a VC so its pretty obvious where his interests are aligned on this.

> If you're in the engineering, product, design, marketing, sort of the builder's side of that organization, you've got to know that you're creating a lot more value than that, possibly 10 times, maybe 100 times that value

Very dubious. From personal experience I'd guess that most non-sales employees at the big tech companies are actually creating negative value for the business (not contributing enough to profit to pay their comp and benefits). This mainly seems to happen for two reasons:

1. Career incentives for decision-makers (Eng. and PM management and directors) are almost totally disconnected from the profitability of the business. You can definitely become a superstar by building something wildly profitable, but that's the hard approach. The easier and more common approach is simple empire-building: Gather a larger and larger team, and have more projects and launches under you. The projects don't necessarily even need to intend to make or save money - you get to pick the metrics you target, and you can probably find some that indicate you're successful! The overall impact is mis-allocation of talent on a pretty grand scale.

2. On a more micro-scale (within teams), engineers are terrible at focusing on things that are good for the business. If you leave an engineering team alone, they will spend 90% of the time rewriting systems that already exist to make them simpler, easier to modify, etc. They will normally accomplish this! But the rewritten systems will do almost nothing to increase how much money the company makes, and it's rare that it will save enough resources to be worth it (engineers are expensive).

Both big tech companies I've worked at had what seemed like a relatively small set of teams focused on the core of the business, who were laser-focused on improving revenue or reducing the cost of core infrastructure used around the business. There were a much larger set of teams working on projects with less clear business value.

> 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, which means you can actually have empathy for what's actually going on with them, and then you can directly solve it. That cycle is so powerful, the sooner you learn how to make that cycle happen in your career, the better off you'll be.

I think that author is confusing ability to get access vs being forced to do it.

At big company, there's so many other things and layers, that you can easily spend your whole career without touching anything related to users. But, you can also just work on directly customer facing parts - that gives you direct access to customer problems. Just be careful - there's more problems that you can imagine, the bigger the company and customer base.

I think the equity situation is bad, and only going to get worse. FAANG stocks have been on an absolute tear and VC firms have got more money to deploy than ever before.

If I were to bet on it, I think we'll see the tech industry move to a model that mirrors the financial world, with fixed year end bonuses, and no equity opportunities. That's what this thread is basically advocating for, even though right now it means working at Google and getting options.

$1b+ Venture Funds and employees getting generous equity grants don't match. I don't think VC is going away as an asset class anytime soon, and I don't think fund sizes will be dramatically (3-5x) smaller.

If anything, I'd say it's probably for the best for the average person working in tech. Most startup options aren't worth anything, and are highly illiquid.

I've been working in finance for years, and a couple of startups. From my own personal experience and from the experience of many people I know, you get stock but the stock is viewed as a 'nice little bonus' versus something that you expect to change your life.

In New York City:

Small tech startup -> very low salaries, questionable options

Fintech -> higher salaries (than tech), "nice to have bonus" type of stock options, plus a bonus

Banks and Hedge Funds -> For tech people, this is the "FANG equivalent". High salaries, big bonuses, and stocks that aren't theoretical. The pay is probably is not in the millions, but close to half a million if you're a Director or above on the tech side. Bankers always make more than tech, and tech is always viewed as a cost.

Now, Amazon and Google are expanding. I'm not sure how this will change the landscape.

I read a substantial part of this thread, and honestly I don't know a single person making 200K a year in equity as per some comments here.

Maybe I'm in the wrong part of the country.

Fintec

Dear @garry - Thanks for your article. I'm curious if you could comment on VC-driven "founder salaries" for startups. I've seen some fair setups and some very unfair setups.

I can appreciate this from the VC's perspective, they want the founder to be working to grow equity worth, not just to draw salary.

But I can also see how sub-market "founder salaries" would bias startup ownership towards either those with extreme risk appetites or towards those with family safety nets and wealth. How do you approach founder salaries?

Also, when judging founder salaries (knowing full well that will bias towards a small set of the population) how do you determine the comparable (e.g., Is it FAANG? Is it based on YoE as an Engineer? School? Degree?) Is this something that just is necessarily biased in favour of <25yos?

Trade more salary for less equity? Or ?

Survivorship bias

I joined a startup right out of school, I wouldn't do it any other way even now but the picture he paints is far from reality for most.

I learned a lot, had a lot of ownership and was involved with the product from a user level itself which I loved and even made my skill set very diverse.

But the 200 million line is just outright rare. The equity I was given was pretty low and even though the startup is a leader in its space the equity growth hasn't materialized to any noteworthy level and I can't exit right now. I would have made much more at any FAANG level of companies in RSUs by now like my friends over there have done.

This is why even now while discussing offers with companies I am interested in, I don't give ESOPs much value in the package.

The question is what is Expectation(Total Wealth) working at tech Giant vs. joining a typical startup (with no crystal ball bias).

Esp. given that most single peeps working at tech Giant can live in a slave box eating supermarket food and save most of their income and invest it. They can probably use their income for leverage build a property investment portfolio, which if the rent covers the mortgage, they will still have savings to invest in stocks.

Now take into account the $10M lifestyle and the $200M lifestyle, and for a hacker who isn't into 1st class flights, balls and cristal (see what I did!) I think 10M would be enough money to retire in a humble house somewhere in suburbia and hack on side project, even with a family to support.

Joining a startup and missing out on entry-level wages seems like an appropriate trade-off. It's the same reason most people go to college after high school - the opportunity cost is quite low and you can learn a lot of things quickly.

This is a very good point. On a more general note, the younger you are, generally the more risk you can take. And in this case specifically, entry-level wages can be only slightly lower than Big Co (not always), but what you learn and the risk you take can make it worth it. If it doesn’t work out, you can always join a bigger company that will value what you learned.

Startups don't necessarily have good management or the core values necessary to help weather changes. You will have problems and if you don't have either really good management or something like the Amazon leadership principles it's likely you will fail. Also, at least for many of the startups where I worked there was no appreciation for the lessons of the lean startup movement (or appreciation of the lessons of Steve Blank).

That would be my reason to consider big tech, or at least a company with solid values. Unfortunately in my career I learned a lot at startups but don't have anything financial to show from it.

The choice in front of Garry is fundamentally different from the one he tells most people to make.

I think virtually everyone here would quit their job and try a startup for a year if a famous investor believed in them and wrote a check for a year's worth of comp (assuming this includes healthcare).

BigCo jobs are revolving doors. The only thing you would be putting on the line by doing the startup is the small amount of money you would have gotten from a raise/promotion.

This is vastly different from telling a 23 year old not connected to Peter Thiel, without a check 1yr salary to go work for a startup.

Besides the main points raised (and debated here), there a few things that are off-putting to me:

1) This whole thing smells like a PR stunt to get his name out, starting with a click-bait highly attractive title "How I lost $200M".

2) The production value of his video to get the message out. Why? Why put so much effort into that video? You know, you could just write a blog post.

3) I am cynically presuming Garry wants his name to get out there as much as possible as a VC that he is today. Besides that, this whole thing smells of humble-brag.

Really off-putting approach. Sorry, Garry, but this is how I feel.

Most startups solve boring problems in boring ways, require you to work too much and deal with a wild west environment without proper procedures of coexistence.

Even with compensation equal, I'd take the tech giant.

Don't be an employee at a startup unless they pay you really well. If you want to play the startup game, found your own company that does not rely on burning VC money.

This is cherry picking.

We all have heaps of extermely valuable opportunities: the trick is to pick the right one. He is using hindsight to pick the best. However we don’t have that future information when an opportunity passes us by.

Any longtime HN readers had the bitcoin opportunity pass us by. Much better since it doesn’t require hideous life-force investment (our own life time).

$200MM also includes an implicit lie that he would still own 1% after dilution. Garry: what equity were you offered?

Is the $200M net of what he made as employee number 10? Also, Microsoft's stock is up 5x since 2003 so he would have done well by just staying put.

A little-discussed issue is that big tech cos tend to do better on diversity and inclusion. Obviously it varies by startup, but when you’re in a survival mentality it is difficult to be open to people of different sexualities, races and experiences. You tend to get clumps of similar overachievers. Paul Graham said this was an “advantage” but for people like me in the LGBTQ community it certainly isn’t.

I feel a lot of the folks here are focusing on the wrong parts here. The $200M loss was a cheap way of getting user attention, but hey it worked!

The core of what he was trying to convey was the sooner you get to understand real user / customer problems the better off you'll be in life as an entrepreneur.

He stayed away from this in his early days as he opted for stability and that he seems to regret.

> The core of what he was trying to convey was the sooner you get to understand real user / customer problems the better off you'll be in life as an entrepreneur.

And sometimes you're better off learning this at an actual company that ships products to millions of people than grinding away at a startup that won't exist in a year or two, with options that are worth nothing and a salary much lower than you'd get at a more established company. And there's a good chance the startup never ends up shipping anything of value. Startup vs Big Co isn't always a no brainer, lots of factors to consider.

> The $200M loss was a cheap way of getting user attention, but hey it worked!

Many Hacker News submissions get flagged to death for such tactics alone.

I feel they should be as well. If left unmonitored, this can lead to spammy / crappy experience. In this case the individual speaking is a well known and experienced figure who has a lot of insights to offer, hence I feel this made the cut.

True, but the ones where upvotes defeat flags in the tug-of-war stay afloat, and usually (well, sometimes at least) that's because there's some other substantive aspect to the article. In such cases we eventually notice the titles and change them to stick to the site guidelines—preferably using representative language from the article itself. I've attempted to do that above.

In this case the substantive aspect is at least partly that Garry has had a close relationship with HN over the years. And vice versa.

> I feel a lot of the folks here are focusing on the wrong parts here. The $200M loss was a cheap way of getting user attention, but hey it worked!

It "worked" in that that it got people's attention but distracted from the post's main message.

Agreed .. bait and switch technique i guess. But since we've invested time looking into the content, might as well talk about the core / useful content rather than focusing on the bait :)

Would it be overreaching to say that no two startup experiences are the same and therefore, generalizing startups vs. tech giants is not an adequate analysis for deciding whether to join a startup?

I'd guess it would be enlightening to compare 'the strangest day ever at my startup' vs. 'the strangest day ever at my tech giant'. Do you have an anecdote?

Does anyone know the source of the graphic in the article [1]?

[1] https://phaven-prod.s3.amazonaws.com/files/image_part/asset/...

> The real reason you should consider working at a startup or starting your own: It's not the money

I think this is correct, but makes the post's title seem really click-baity. I think expected financial upside is exactly where Big Tech unequivocally wins over startups (esp. joining and not founding), so it seems weird to frame the post around money.

Sorry, I made this post for YouTube originally, and didn't expect it to show up on HN. :-)

It doesn't seem correct at all. Money is very much a factor.

To prove,

How many people here would show up tomorrow if their company stopped paying them?

How many people would join a startup for less pay without any stock offers?

I suspect the answer to both will be equal to the number polled.

Not sure I understand the point you're trying to make...

Money is a factor but it's not the thing that should draw you to a startup -- expected money is better at Big Tech. A startup is the right choice only once you start to consider non-money factors.

I worked at four startups and gained so much experience at each. Even with the long long hours I really liked it. Three of the four failed - the fourth one eventually succeeded after 15 years and I received about $4,000 for my original shares as employee #3 (I can relate to the point in one comment about being a founder instead of an employee).

The founders entire job early on is to convince schmucks that they'll be rich if the idea succeeds while simultaneously making sure to give away as little in stock as possible. It takes people like Peter Thiel to pull that off

True, that. I was a schmuck that saw his equity diluted with every angel round in the one successful startup. But I'm still glad I went through it all.

People can take this as a cautionary tale to make sure your equity is protected or from an optimistic view that, at least, you gained something other than abundant riches :)

What if these aren’t stars that are disappearing but instead the appearances and disappearances of wormholes that are either allowing us to see to another place in space where that star is or perhaps a wormhole blocking where that star previously was for us and we are now looking into another section of space where a star is not?

Many comments here about skethcy startups and for good reasons. But isn't the solution obvious? Allow software developers to work for multiple companies at a time: 10-20, whatever. Just like investors diversify the risks by investing into many, often competing, startups, employees could also work for many companies.

If I guessed just 6 simple numbers correctly for the powerball I'd be a millionaire!

Another upside to working at a tech giant: you make enough to be an accredited investor. Which means you can do angel investments, which is an arguably better way (Than being an early employee) to get those “outsize” returns from startups.

good luck with getting into anything good with insane amounts of time & effort. capital is cheap.

How is the luck different from the luck involved with being an early employee? Labor is cheaper than capital.

This is the first time I read about someone who regrets not working for Palantir.

Most people who have been around tech for the past 15 years have stories like this.

Maybe they didn't have check's written, but had opportunities to join firms that later boomed huge.

Also the title is super-clickbaity. Poor form.

Is ok bud, if we all brought MSFT early we would have all been millionaires

I think the real lesson here is that if a friend that believes in you to the point of offering you $70k simply to remove money as a decision factor for you, try and remove money from the decision.

Work in a startup only if it is yours or you have a significant stake in it, or if you have no other options.

The payoff for "working" at a startup with respect to the risk is IMHO simply not worth it.

From a spaniard perspective, the fact that he started with no experience making double what I make now (10y) blows my mind.

I know outside of Spain is different and all of that, but man it is depressing

Not buying Apple Stock in 1999 cost me $200M too.

Not to mention what not picking those winning lottery numbers cost me...

Captain hindsight strikes again!

It might not be too late for the lottery numbers!

I can't find it now, but I remember reading about a guy who was arrested in China for buying winning lottery numbers after they'd already been announced. The semi-surprising thing, to me, was that he did this more than once.

Seems like a clear example of when you should take the win, and then leave in dignified haste.

Most criminals get caught because they can’t stop getting bigger. Same with most diseases

After all, it worked once, why would it not work again...?

"Insanity is doing the same thing over and over again and expecting different results." - perhaps they are too sane for their own good :)

You mean the criminals that we catch are the ones who cant help getting too big

This is usually money laundering. A Brazilian politic had won the lottery 7 times.

This isn't a case of an unknown mechanism. The guy noticed that the lottery didn't close for a few minutes after the winning numbers were announced, making it possible to just watch the announcement and then buy the numbers.

As such, there is no reason to believe it's anything more than it appears.

Did you get offered 1% of Apple? I mean, getting offered equity at the start of a thing is what I was trying to talk about.

No, but he did have the option to buy that lottery ticket.

If Apple had gone bust there would have been nothing to write about. By the same measure I can review my life and take every decision I took with hindsight and re-calculate what my net worth would be if I had taken the other fork, I'm pretty sure I could come up with a few hundred million as well but that doesn't matter, you only get one life.

Next time you have to make a decision like that: take the other fork in the road, and likely you'll still end up frustrated because of the road not taken.

Life is a series of 'and' ports, if you miss one it will look like that was the one that did it but in the end random chance had as much to do with it as that one decision did.

So the comparison with a lottery ticket is on the money. Besides all that I think you ended up quite well so 'cost' is probably not the best term anyway.

> No, but he did have the option to buy that lottery ticket.

From Garry's blog [0], it looks the it was more than just buying a lottery ticket. Peter Thiel cut him a great deal, by all accounts, and he still let it go. The equivalent to that, imo, would be to have refused ticket offered to you for free which then won the lottery.

[0] (Peter Thiel said) "Cash this check, quit your job. This is a zero risk opportunity for you." I said, "Thank you very much, Mr. Thiel, but I might get promoted to Level 60 next year."

Quitting your job is not a zero risk opportunity.

Oh for sure. I think the point is, any of these moves is an inherent risk. For every Apple or PayPal there are a thousand startups which fail.

Knowing which will succeed and which will fail is sort of the whole caveat. You can't know the future when you make these decisions.

If Peter's company hadn't worked out then your decision would have been correct in hindsight. It is very hard to tell with foresight which startups will succeed or fail. Given the statistics, at the time your decision would have been the most probable one to produce more personal wealth. Even if you had chosen differently, you may not have made the $200 million anyway. If you were given stock options, decided to quit before a liquidation event, then the rational choice would be to not exercise the options because you can get hammered on taxes.

I think your choice was perfectly reasonable and was not a mistake at all.

but everybody at a startup gets offered equity and almost all of it ends up being garbage, so maybe you made a poor assessment of the startup & founder but it seems a silly thing to thinking about and a dangerous one from which to draw lessons or advice.

I think it's great to learn from your previous decisions but this one seems (1) emotionally dangerous, (2) logically faulty and (3) largely selected for the headline.

That's amusing, because shortly after that I was converting MSFT ESPP into AAPL shares (started as diversifying, then turned into an appealing strategy).

Still a lottery pick, though; I'm no financial genius. I just really enjoyed the iPods we had recently purchased.

> Not buying Apple Stock in 1999 cost me $200M too.

When I was the TA for my high school physics teacher back in 1994, he couldn't ever stop talking about how terrible Apple stock was and how he wished he never bought it. He kept trying to sell it to me; I didn't have a brokerage account or I probably would have just to get him to shut up about it.

Back then it was less than $1 per share.

The response to this post is startling. Would it received the same reception had it been written and posted a decade ago, I wonder. Has HN gotten more jaded- and mature?

Once a while a celebrity showcasing their true intellectual capability, and everyone found that they owe their success mostly to luck more than anything else...

I feel the comments in the threads are a bit too sour. Sure, you probably will not make 200 million dollars or even 20 million dollars. I am going to make that a bit stronger: It is highly likely you will end up broke as fuck. But so what? Starting something up is really fun and if you are young (20 something) and don't have many obligations yet, just go for it. It doesn't matter if you fail. You will learn a broad skill set, which will be useful in the rest of your life. It will build character. Even if you fail, it is not a worthless experience.

Not everyone has the luxury of failing. Everyone’s cost-benefit analysis is different, and one takeaway from this discussion is that founders need to stop skewing the cost by depreciating the shares non-founder early stage employees get.

employee #10 at palantir, that investor would fly down from anywhere just to interview and write checks to at the table - this is not your average developer. If your that talented of an engineer - than yes, you would be selling yourself short working as a cog - at a shitty startup whos management is too cocky to know when they are wrong - or a big company whom needs a level-ish playing field for everyone.

Do people torture themselves over mistakes that only prove to be so after the fact?

I thought I was a master of this art but this form of it escaped me.

The author forgot the part where they mention how purposeless and boring working in a scrum chain gang at a big tech company is. ;-)

My big mistake?

Not being buddies with Peter Thiel in 2003. Don't make my mistake, go back in time and be buddies with Peter Thiel in 2003.

Just the fact that he had a buddy who could cut him a check for $70,000 before his startup succeeded says a whole lot about the situation he was in. If you have a buddy who tosses around this kind of cash, your options are different from the options available to the overwhelming majority of us.

Life is a lottery.

I had the opportunity to take a job as lead programmer at a dot com that ended up becoming one of the biggest entertainment companies of the early 2000's and I passed for a job at a company that went bust in 6 months.

The only lesson I got from this post is one I already know - don't regret your decisions because you can't see the damn future.

The butterfly effect is also worth considering. There’s no telling that the current outcome is inevitable if you had chosen to participate.

>> There’s no telling that the current outcome is inevitable if you had chosen to participate.

True. Judging from the author's terrible decision-making abilities, the company would probably have gone belly up before it got to series A if the author had joined sooner as a director.

Going into the unknown can be guided by things other than luck and randomness. Did you figure out why you chose what you did?

This is a shallow dismissal, which the HN guidelines ask you not to do, and especially not out of indignation.

https://news.ycombinator.com/newsguidelines.html

It's obvious from early in the article that Garry wasn't "buddies" with Thiel. He had just graduated, and a college friend was the connection. That means your point reduces to: people who go to elite colleges encounter opportunities as a result. No one disagrees with that, certainly not Garry, but it's a tangential, generic and therefore a weak response to the point of this article, which is about taking the opportunities that do come your way.

I disagree with this. Why was Thiel willing to cut him a check - would he have done so for any software engineer straight out of college? Did he technically interview Tan?

If the original comment is revised from "Be buddies with Peter Thiel" to "Be in the set of <1000 people who has connections with Peter Thiel sufficient to get him to write you a check," the point still stands - this article is not generically applicable advice, and your point (which I agree with) that you should take the opportunities that come your way generally implies you should take the Microsoft job and hold out for promo - and I think you're shallowly dismissing this comment.

Having finished the article, I was just coming back here to edit my comment, because I described it inaccurately. The article isn't only about taking the opportunities that come your way; it's more specific. It's about owning more of the value that you create and having more creative autonomy in your work.

Some people are going to respond positively to that message, others not, for various reasons, but it obviously has nothing in principle to do with Peter Thiel or "Be in the set of <1000 people who has connections with Peter Thiel sufficient to get him to write you a check".

Then the author did a disservice to us all by the clickbait framing of his decision.

I see what you mean and yes we should probably change the title (edit: done now). But that doesn't excuse breaking the site guidelines by adding more provocation of one's own. The intended spirit of HN is the opposite: to respond to provocation by getting more thoughtful, not less.

When people respond to provocation or negativity with provocation and negativity of their own, we get a Tacoma Narrows Bridge situation. Most of the internet is doing that every day, so there are many places to enjoy that energy. Here we're trying for something different, and each user who comments is responsible for that. Not that that's easy!

https://news.ycombinator.com/newsguidelines.html

I don't think pointing out that the article only applies to a very tiny minority of readers is a shallow dismissal.

I seriously doubt the overwhelming majority of people reading this article lost $200m from any single decision in their lives. Hell, most of us haven't lost $1 million from any single decision in our lives.

If anything, what this article most effectively points out is the fact the value of being born with or building connections is greater than ever in history. Maybe if the author had spoken about that it would have been an interesting piece. As it stands, it's more or less meaningless.

Keep in mind, the author has a huge vested interest in developers like us working at startups for equity stakes.

The article plainly doesn't apply to only a very tiny minority of readers. It's an argument to talented people not to undervalue themselves.

The sensational detail of "a check from Peter Thiel" is blowing the stack here, and flushing everything else the article says out of memory. I think it's worth keeping to the point.

As feedback, you are overreacting and not being empathetic to the opposing view. The post you are calling out does not strike me as a rule violation at all; it is just normal discussion.

In a real sense, this article is very biased. The author had a rare and unique combination of luck, timing, and privilege where the normally highly-irrational calculus of throwing away such a highly prestigious job actually made sense.

Nowadays, FANG dishes out 200k TC offers to new grads even — work hard and do well, and you will make 400k as an L5 in five years at Google or Facebook.

Meanwhile, startups are staying private and only enriching their founders at the expense of their employees (see Adam Neumann), and the standard 120k plus “equity” new grad offer for the first engineer employee at some YC company that just graduated Demo Day no longer makes any sense.

People are just making decisions in their best interest, and you cannot fault them for that. I think it’s a bit disingenuous to encourage talented young people to waste their time otherwise by working for a startup. Let’s revisit the terms of the deal for talented young people first before lamenting that most of them are not willing to be volunteers.

I have a friend exactly like that and it’s been basically worthless for me. I don’t really engage with him any more.

His car is worth more than my house. He seems to think that gives him the right to allocate my labor to his pet projects. Had I quit my job when he urged, years ago, I would have had a boss with untreated ADHD and unlimited money waste a half-decade of my life.

Optimal strategy seems to be work at FAANG while iterating on side projects until something sticks.

It'd be hard to realize that $200m though because Palantir is not public...

only takeaway worth anything from this article

>My friend, Bede Jordan of Shelf Engine here in Seattle, actually said it best, "If you don't work on your dreams, "someone will put you to work on theirs."

Why is this guy trending on HackerNews? To boost his channel?

Maybe him joining earlier would have destroyed the company.

Well, it did cost me 200M not working for a giant..

Edit: I don't understand getting downvoted here, does someone think that it can not vary for a person?

Articles like this irritate me more than anything else. Why? The ENTIRE paradigm is based on $. Article could just as easily have been written as "Working for Microsoft allowed me to be a better father".

And strange a VC would invest in a (very socialist) statement as "Google's pure profit per employee is actually $1.6 million per year, after all costs.": easy buy in, very low practical value. There are very tangible reasons for wage differences.

Miss a chance at working for a horrible person at a horrible company... how much are your ethics worth? $200MM, seems.

Like Garry, I wholeheartedly encourage every engineer to work at a startup for .00x% equity (unless you're employee #1, and you can ask for a whopping 1%). The founders and VCs will have hundreds or thousands times more upside than you (and they'll have preferential shares, etc), but at least you'll be In This Together (in that you're working "together" to try to help the founders+VCs join the Billionaire class -- a noble effort indeed!).

A friend of mine who's helping a VC firm has told me for the right talent they are doing better these days. Like 10% equity for founding engineer + 200k salary. With those numbers I can totally consider a startup job.

He met Peter Thiel before he got so famous.

It's important to be in an industry that's about to blow up. Getting access to future billionaires is much easier than access to current ones.

I agree with the sentiment that you can do a lot more in smaller companies, which is why I work at one that doesn't happen to be a startup. However, thus far I've received no $200 million checks.

Working in Silicon Valley might have felt like fighting the status quo a few years back, but right now, to me, an outsider, it feels a whole lot like the status quo.

With respect to the author, I do not believe this is legitimate life advice but instead is mostly humblebragging.

I think quite a few people on here think this.

Funny enough - I'm pretty sure the article would have garnered a lot of criticism if it were authored by someone else.

This is more of a humble brag than useful advice

It's also self-serving. There simply doesn't exist $200M for every software engineer out of college. But if this guy, a venture capitalist, can get a thousand more people to think they'll win the lottery, invests in all of them, and 999 go bust, he'll still make money on the one startup that succeeds by being in the right place at the right time.

I started learning about startups only after I started reading Hacker News in 2006. I was an engineer for most of my career up until then. Reading Paul Graham's essays changed my life, and it changed the life of thousands of people I've met now known for over 10 years, as an alum, a partner at Y Combinator and now an investor.

Guilty, it is self-serving. It's my business. But I also know from direct experience people who can make software are capable of building billions of dollars worth of value.

I funded more than 200 companies worth over $36B now.

And I started just like you, here, reading Hacker News.

Do you think that every reader of Hacker News can do that? Logistically, how would it work?

I'm not disputing that "people who can make software are capable of building billions of dollars worth of value." Of course that's true. I'm disputing that everyone who makes software can individually capture even hundreds of millions of dollars worth of value.

So he's $200M in debt now?

On the bright side you didn't have to associate with Peter Thiel or Palantir.

Seriously - not earning $200m in blood money by helping the US Government imprison and torture refugees is imho a Bullet Dodged

Got a link? I'm in the dark

You realize they use React as well too right? Java and other tech helps them do the same thing.

How many countless others have invested years of their lives, in exchange for equity and comparatively low pay, in promising-sounding startups only to see those companies fail?

Should they be retroactively counting the money they could have had if they'd went to a more stable firm and had the same years of pay increases, bonuses, RSUs, etc. as a loss?

This is hollow clickbait, but the author is clearly intelligent enough to know that hence why it's mainly focused on a youtube video which I'm presuming he's doing in the name of trying to build an audience and "clout" for himself with.

This gives me a good idea for a video: How and when to quit.

To be frank I also quit Palantir far earlier than maybe I should have. A story for another day.

Thank you for the feedback though, I do appreciate it.

> How many countless others have invested years of their lives, in exchange for equity and comparatively low pay, in promising-sounding startups only to see those companies fail?

My intuition leads me to believe its more than the cumulation of these "I could have made $N" stories :)

> I'm a Venture Capitalist.

Sums up the article nicely.

This is so scammy at so many different levels.

TL;DR: He doesn't have that 200M to start with, that is the imaginary money he never earned.

The "could of", "would of", "should of" game... Ah.... how I love to play thee.

But wait... let's go further and play the "what if" game as well!!! What if... you took the job and moved out to Palo Alto only to trip walking up the stairs on your first day of work to break your spine and be confined to a wheel chair the rest of your life???

Point being... life turns out the way it does for a reason and you never know what events will unfold or are avoided cause of the decisions you choose. Be happy that you are alive and have what you have. Life isn't always about getting or having more things.

This is a good reminder and I agree with this.

By the end of the video my point is: Try to make stuff for other people, and a smaller place generally lets you do that.

That is the true reward.

This is such a weird post. Big fan of Garry, but I don't agree with most of this.

1. Just because it turned out that you would have made $200mm doesn't make it a mistake. If anything, that outsized return proves just how rare this kind of outcome is. If you look at the YC startups graduating every year, maybe 1 will ever generate $20mm for an early employee, let alone $200mm. Joining a new startup for that kind of outcome is stupid, even (especially?) if the founder is a big personality.

2. What is the bizarre pie chart in the middle of this post supposed to show? I'm very skeptical that it's actually based on data of any kind.

3. What is the line about it being hard to believe that any company other than Google is going to make money? Apple and Microsoft both earn more than Google, don't they?

Bottom line, if you care about comp, you should know that no early stage startup of any kind offers an expected outcome remotely close to the big tech companies. Yeah, you might make a few million after working your ass off for many years. But realistically, you won't. But you would make close to that (or more) if you worked for the big tech companies for those same number of years, at a much lower risk.

If you want to do the startup thing, do it as a founder, not an employee. Start with 30-100% of the equity, not 1% or 2%.

Again, I'm a fan of Garry's, but I'm very skeptical of these posts by VCs trying to convince you it's a good idea to work at an early stage startup. Startups are great for them since they have a whole portfolio of companies to spread their risk across, but it's a shit deal for employees if you care much about comp. I don't envy the hassle of trying to hire at a startup when big tech companies literally pay 2-3x as more, but that's where we are.

EDIT: apparently the graph I referenced in #2 is showing that the top 5 companies in the S&P500 (as of sometime back in 2018) are equal in market cap to the bottom 282: https://www.newworldadvisors.com/post/the-role-of-private-ma...

Interesting, I guess, but pretty useless stat for the topic of this post. It also ignores about 200 companies in the middle that have huge market caps as well. Like Visa or Walmart or Disney. More here: https://disfold.com/top-us-companies-sp500/

Could you recommend good reading from this guy? That article doesn’t reflect well on his judgment- the story, the decision to post this story- the idea that Peter Thiel literally told him to quit his job (after he answered the question of his current salary?!?)- none of it makes any sense to me.

It's pretty bewildering to me too. The point is I said no, and it was the wrong decision. I ended up starting a company and later becoming a VC.

Agreed. On the surface Im like, oh ok yeah that is good advice. But as I pondered the situation and remembered what I was doing at that age. If someone waved my annual salary in my face to join a startup there is no doubt I would take it. But how many of us hob knob with hundred millionaires or billionaires and get approached to leave their job? maybe .01% of the folks who frequent HN. It feels a bit humble braggy.

I guess what I wanted to say was that if you are capable of building great software, you should join the .01%, because that was my experience.

I started as a reader of Hacker News just out of college, and it taught me a lot. Many of the founders we back came through Y Combinator and learned about startups here.

I have a hard time not reading this as a "pull yourself up by your bootstraps".

I grew up poor as the child of refugee immigrants. I was food insecure. My dad was an alcoholic. Being obsessed with computers was literally the thing that changed my life.

That's just my experience, YMMV.

> That's just my experience, YMMV.

The vast majority of people like that aren't (and don't) getting into Stanford, period, because impressive-to-admissions-committee folks are usually children of other impressive people (not always, usually). I don't think it's possible to interpret this as anything but "pulling yourself up by your bootstraps".

I guess I was one of those middle class scholarship kids. There were lots of them around and they were my friends. The private school kids honestly tended to keep to themselves. It's a part of my Stanford experience I found most jarring.

I know several "middle class" kids who went to Stanford. All of their parents were professors (or at least PhDs). The rest had parents who were doctors.

So, maybe things are different now.

I hope that eventually as more and more people realize how much more they could make at big tech (IME a lot of people just straight up don't know, esp. when a lot of the comp comes as equity grants), startups will have to start paying more/offering bigger slices of equity. But seems we're not there yet.

I also wonder how much of this is driven by software engineers who couldn't (or, probably more realistically, don't think they could) get a job at Big Tech?

Oh I agree— big tech is fantastically lucrative! I wouldn't dissuade people from spending some time there.

Separately I also agree that there's a big problem of credentialism in software engineering. We meet lots of amazing software engineers who didn't go to the right schools— that's a big reason why I funded Triplebyte.

The other big thing messing up startup comp right now are super-high valuations for mid stage companies. When you’re getting options based off an inflated evaluation your upside is low, and the probability your options become worth $0 even if the startup does moderately well (eg if it raises a round at $4b right before you start and goes public for $3b). Doesn’t matter how many options you got, they were pegged to an inflated evaluation

Agreed. People are madly in love with working at companies like Stripe and Airbnb right now, but I'm not convinced the risk is worth it. They're giving out equity as if it's liquid, but it's not. So if I can get $200k per year in equity from Stripe or $200k per year in equity from Google, why exactly would I choose Stripe or Airbnb? Just in the hopes that the $200k will end up worth $400k or $800k? I mean, maybe it will, but that feels pretty speculative. Put another way, if you already worked at Google and had the opportunity to invest cash into those companies, would you put all your equity comp in Stripe or Airbnb?

In the example where you have equivalent equity packages available at Google and Stripe/Airbnb, I think you're right -- it's hard to see how equity that has an uncertain liquidity horizon is equal in value to Google's, which you will definitely be able to sell in a year. However, I've found that offers from these companies compensate for that -- Stripe/Airbnb will offer more in equity than Google precisely because of the liquidity premium. Then it comes down to, how much of a liquidity premium do you demand as an investor?

Google at least is insanely profitable. Are Stripe and Airbnb?

Seems to me that there's less risk in the Google stock than the others, because the others need a lot of potential future upside to justify their high valuations absent major profits, and if that upside fails to materialize the valuations will tank (as we're seeing with, e.g., Lyft).

RSUs are the solution to this problem. With a double trigger a pre-public company can offer them without employees suffering a tax liability on illiquid equity.

RSU will make you pay tax at the marginal rate though instead of long term cap gains on options.

NQSOs have the same issue and ISOs are increasingly difficult to issue as startups get to mid and late stages.

Valid points

Thanks for the note! I appreciate the feedback.

These things are crazy rare. I didn't do a good job of explaining then how weird this experience was. In the moment it felt like any other startup. Peter was great and well known but not outrageously famous the way he is today.

I also didn't do a good job of doing an intro on this idea that tech startups are taking over all of the economy. There are some things that I just take for granted— I guess in abstraction now there are trillions of dollars of market cap in just tech firms, and this fits with my overall view that software is eating every part of GDP. We see this every day, but it's not well explained in my video/post.

I was making a joke about Google eating all of the world's revenue, but it didn't land. Sorry about that.

Really appreciate the feedback here. You're totally right that it's more directly lucrative and lower risk to work at a big tech co. I just still think people should consider making things for themselves though.

Yeah, I hope none of the criticism was too harsh. I'm a big fan, we've actually met in person, and I almost got into YC while you were a partner. Oh well :)

Agreed on most of your points here, especially about software eating the world. There's a good post here, just not sure this is it yet!

Just trying to get better. Not too harsh at all. Thanks again.

> I just still think people should consider making things for themselves though.

I've worked for startups and big companies. In both cases you're making something for someone else. Even then, at least at a "Big Company" you can sometimes choose to work on a product that you personally use.

> I was making a joke about Google eating all of the world's revenue, but it didn't land. Sorry about that.

Honestly, I found it slightly offensive.

Sorry about that. Lots of other companies are going to make money, and that's a good thing.

It's certainly a bad thing for large tech firms to take out increasingly large portions of global profits. It also might be a secular trend without end.

What I got out of the post is that the value you bring to a company, doesn't at all align with what you're actually paid, which is typical of our society.

I think the truth is more complicated than that. The synergistic existence of the company itself is what allows each person to be able to create millions of dollars in value. And there was a risky bet made with capital to create that company in the first place, and those investors / owners / etc. making a solid risk-adjusted return on their investment hardly seems like a travesty to me.

I wish we did have more employee-owned cooperatives though. I think that's a better way to fix the inherent tension of owners vs employees.

Yup. It's almost axiomatic that you are being paid less than you are worth to your company. This is a foundational piece of the capitalist mode of production.

I wish there were more software cooperatives, or worker owned businesses out there.

A cynical reading is this: he missed out by not buying a $200M lottery ticket, so the next generation of engineers and designers should buy lottery tickets.

Conveniently, the author is now in the business of selling lottery tickets.

(Then again, if he’d stayed at Microsoft he probably wouldn’t be in a position to sell lottery tickets).

Yeah, the moral of the story, as far as I can tell, is: 1) make sure to know the kind of person who can write you a $72,000 check as if he was leaving a tip at Starbucks, 2) impress him enough that he’s willing to offer you $200 million when you’re 23.

I see now where I went wrong in my youth.

Surprisingly, these sorts of people are both not that rare and relatively straightforward to connect with.

A year of low level engineer’s salary is, relatively speaking, not a lot of money in our industry/society, regardless of what that figure ultimately works out to as an integer.

There are 607 billionaires in the US out of 320 million people. You need to meet over half a million people to average one person with Peter Thiel's level of wealth.

My personal controversial opinion is that life doesn't work like that half million people math. In reality, one either can meet a billionaire with very little effort, or won't meet one regardless of effort. Another controversial opinion: that ability to get the desired results with little effort is something that needs to be earned, it's not a casino.

You don’t need to be a billionaire to be able to write a check for $100k like it ain’t no thing.

> 2) impress him enough that he’s willing to offer you $200 million when you’re 23

I think the answer to that is "Go to Stanford". For literally 99.999% of people that is never possible.

I think you're not giving the meritocracy at MIT enough credit. I went to a state university.

I'm not sure if this is sarcasm? I went to an unranked state university myself - I'd love to experience even a fraction of the respect these folks get.

It is not sarcasm. Stanford does indeed have the most alumni who founded unicorns. But Harvard, UC, and MIT round things out nicely, for American schools at least.

https://www.theatlas.com/charts/HJSgAUdPx

That's...effectively the same idea.

I'd argue that all meritocracy has completely failed people like me so I can't take that seriously at all.

I'd also argue for a replacement, but I guess I'm not credentialed enough to propose one.

I understand the general skepticism, but if Peter Thiel writes you a check for your current annual salary as a signing bonus and asks you to join his new company - you’d be stupid to turn that down now.

Worst case you can just go back to Microsoft on failure without too much lost.

Today the salaries are higher, but they’re often pretty high at VC funded startups too.

> If you look at the YC startups graduating every year, maybe 1 will ever generate $20mm for an early employee

YCombinator -- like all other VCs -- has the data trivially available to show actual compensation of early employees across entire classes of startups and not just cherry-picked best cases. After all, they have the cap tables and the exit dollar figures and how long it took to reach those exits and how many never exited. They probably show that stuff under NDAs to their LPs.

Just not to engineers.

Since YC, like every other VC, has never bothered to publish that kind of data I have to assume it doesn't support their boosterism case for working for a startup.

Very interesting point.

> They probably show that stuff under NDAs to their LPs.

Probably not. I can’t imagine why LPs would care. it’s not their problem.

This article seems like clickbait and bad advice. This is like selling this ridiculous American dream to someone. Oh, come to us, work hard, wash some dishes and you gonna get far! What pile of garbage. Yes, it works for some lucky few, but that's about it.

The truth is that most startups fail and most people in startups that don't fail, worked their asses off and still only get scraps. Comparing today with 2003 is nuts. The times are so different that there isn't even a remote resemblance.

Yes founding a unicorn can make you rich. Doh! Who would have thought...

But also if you worked at Amazon in 2008, saved all the stocks, re-invested excess money in stock, even as an entry level engineer you would be a MULTI MILLIONAIRE ten years later... Its just crazy to give advise to people to prefer insane risk for a chance to get 200 million, over guaranteed few millions in a safe job.

Yes there are people who really can't work at big tech and who want to hack some startup code together. Go for it! Sure. For everyone else, big tech is preferable by a large margin. And there I can work on projects startups could never even dream of doing. The reason for that is that big tech works with economy of scale. What is profitable for Google and Amazon might very well be suicidal for startups.

And to top it all off, the author even says that Peter Thiel wrote him a yearly salary as check. That devalues this article even more. Anyone, yes ANYONE should have taken this offer. This wasn't about risk whatsoever. This was about a 23 year old guy who didn't understand how the world works. And that applies to literally anyone young.

If anyone can write me a 1year salary check so I can create my startup I ll gladly frame your picture in my office.

>> He asked, "How much a year do you make at Microsoft?"

>> It was $72,000 a year, really the lowest of the low coming right out of college. He got out his checkbook and wrote me that check.

>> "Cash this check, quit your job. This is a zero risk opportunity for you."

>> I said, "Thank you very much, Mr. Thiel, but I might get promoted to Level 60 next year."

Wow. This is probably the most impressive combination of arrogance and stupidity that I've ever read about or witnessed in my life.

It's the safe and rational choice. I went to work at a startup after college and the company ran out of money in three years and valued my equity at zero. I absolutely would have been better off financially working for Microsoft.

That Palantir worked out is hindsight bias. There's no way he could or should have expected it to succeed at the time.

I don't think this is fair. In part, because valuations are so high today, but 2004 was totally different. This was shortly after the bubble burst. An enormous number of people went to interesting startups and lost their jobs/equity when the companies went under. Nowadays, startups have been de-risked quite a bit and there's obviously a lot of money if you operate well, but at the time, a career in Microsoft probably seemed extremely rational.

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