Finding Time to Invest in Yourself
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It seems to me that early employees are underpriced these days, the way that founders used to be, so a correction is probably inevitable. At the same time, there's no way seed-stage startups can match FB levels of compensation—the math just doesn't work. So what would a correction look like?
Could be something like:
- companies keep lower number of employees, higher grants, but demand founder-like effort for early years
- early employees get substantial equity grants 5-10%, that must be sold to VCs on secondary offering at next rounds. In that case, employees could directly benefit from startup grows, while reducing risk compared to FAANg, and founder can keep their equity size. Yes, upside is limited, tax/legal work, but could be covered by new refreshment grants from employee pool
- YC creates/funds employee union-like organization, that funds/organize activities/benefits for early stage startups
- help legally with paying/hiring employees remote with equity package
also joining startup and buying out $$$$$ worth of stock options that could turn to 0 is a downside compared to stock grants from FAANg.
But I think big vc orgs and especially YC could pioneer / help with new approaches
At least, that's what it would take for me to join a startup as first engineer versus starting my own business.
Just to be clear, I'm not disputing the point and don't have a strong opinion. I'm curious where HN users—who include many prospective early engineers—think the market needs to go. The comments about startup compensation are routinely so negative that it seems clear it needs to move; the question is what range would start to be fairer.
I think the first engineer employee should get 2-3%, next three should get ~1% each. Sam Altman has said he thinks the first 10 should get 10% total [1], so you could front load the early employees even more.
We're a long way from that. The offers I got were in the .02-.03 percent range with most of the standard terms. Not even a 10 year exercise window. This was as one of the first 5 engineers.
Why is it like that? Guess people can hire a sufficient number of engineers without offering more. Maybe with FAANG squeezing everyone out we'll see the numbers go up, I wonder if they've been going up already.
I was certainly disappointed with my equity offers, for that YC has said about rewarding early employees, I was expecting more. Oh well.
I would be OK with contracts that say employee's 1 through 5 get 0.8 to 1% share of the company but is non-diluatable. So their equity stays the same regardless of the success of the company. (of course there is room for discussion with an idea like this but hopefully you get the point Im trying to make)
This bit, however:
better liquidation preferences that favor employees at the same level as investors because employees _are_ investors if they are taking a pay cut
seems serious and fair to me, and perhaps something that startups could actually do to stand out. I don't know how doable that is vs. what barriers there might be to it, but I'll ask.
This is all intensely vague and general but it's an interesting line you started down with the balance of investment vs. employee contributions, risk and compensation.
The thing about fiddling with liquidation preferences is that it's very hard to change and will have minimal impact on the bottom line for employees. Liquidation preferences only matter in the case of companies that fail, where they might make the difference between making $0 and making a tiny bit of money. Employees will make virtually all of their money on the companies that are successful.
Not that it's a minor point if Airbnb was that far ahead in employee compensation.
Any offer I've seen from a startup (admittedly a small sample size, and always later stage) has been options rather than stock, and I've never heard of a company providing enough information to actually value the options.
I think the amount I got was pretty standard for an engineer, but I also know some engineers received 4 or 5 times as much, and others got half that. I think the recruiters had a lot of discretion to decide how much to hand out in order to hire great people.
Either some info is incorrect somewhere, or there was some split or valuation indeed didn't change much in 4 years.
https://www.vox.com/2019/3/19/18272274/airbnb-valuation-comm...
There are going to be challenges, no doubt. Depending on where the team is, there will be legal stuff to figure out, time zone difference will be an issue and it will require some work to maintain the same "all-in-this-together" team atmosphere.
On the other hand, you are not competing with FAANG on compensation. For example, in Eastern Europe, even low-level Bay Area salaries are higher than most offers people will get locally. And equity grants are basically unheard of. English levels are very high, culture is pretty compatible with the US. And the level of accessible engineering talent is also very high, since you can outbid the local market easily.
There is a pretty well-developed remote contracting ecosystem where I live, but hiring people to be a part of the core team (by US startups) is comparatively rare.
To me, it's not a question of monetary reward so much as agency. If you want me to care about something deeply, then I need to have say in how it works. I'm not going to be blindly devoted to a plan that could change at any moment for any reason.
Of course, compensation/equity matters as well, but as a programmer I tend to get heavily attached to work that matters. Nothing is more demotivating then feeling like I'm giving up free time and working long hours to build something that doesn't matter or that is poorly managed. And at a certain point, if I'm devoting that kind of energy into something, I'm going to start having opinions about it.
With many VC funded startups, workers often get sold on a vision, and then in 4-5 years they get sold to Google and everything they build dies. Workers know that their work isn't going to matter in the long run, and that the vision they're being sold could change at any moment (and in fact is highly likely to change once VCs start putting on more pressure for rapid growth). It's hard to invest emotional energy into something that fragile.
Founders have a vested interest in making sure that their baby stays under their control. But if you want me to work like a founder, treat me like a founder. And while equity is a part of that, the biggest thing is that I want a say in how that vision evolves.
The way I work on personal projects and the way I work as an employee are different. It's not the money that makes them different, it's the sense of ownership and agency. As an employee I work from a contractual "what are my obligations" perspective, because I recognize that it's not my vision, it's never going to be my vision, and that it would be problematic and against the company's interests for me to try and make it into my vision.
This is part of why I am very cautiously optimistic about the rise in popularity of worker collectives. I dislike founders who want the employee enthusiasm that comes with ownership and purpose, but none of the employee opinions and agency that are part of that.
But in principle it makes enough sense that when I see an article in Slate or similar[0] that's championing them, I don't dismiss it out of hand. I want to see more evidence that any working examples that do exist aren't just very rare, temporary exceptions to the rule that hierarchy is necessary. But the idea seems worth looking at.
This principle is the same reason I'm also very cautiously optimistic about ideas like UBI. I'm cautious of anything that sounds great in theory but that has comparatively little practical data behind it. My understanding is collectives are more common in Europe, but it's not clear to me how that experience will map to the US.
[0]: https://www.vice.com/en_us/article/pa75a8/worker-owned-apps-...
I also suggest stay to keep a good eye on operation, rules and definitions when considering mapping that or any experience to the US. It's become very apparent to me that discussion on concepts (for example unions or healthcare stuff) in the US often reference apparent success or failure in other countries without ever looking deeper into the workings and such. Thus implementations often end up flawed or just not equivalent.
Someone who's attacking or defending unions for example should not consider my country an example for the style and workings of unions I often see described across the pond and if they do talk about the style of unions here they should to the environment and law constraints in which they exist all of which has a big impact.
By the time that Buffett worked for Graham, he had already studied at Columbia with Graham and worked for a few years at his dad's brokerage business. He worked for Graham for a couple of years, he took a salary (over $100k/year in today's terms), and literally the year after Buffett was running money for other people. He was not a rube who needed Graham's wisdom, he was already Buffett. It is a very odd and specific story to make up.
Interestingly, there is a more well know story in the Berkshire lore on this subject about Mozart (google Munger Mozart story).
But yes, you are right. The idea that you need to sit at the feet of some guru, and that is the only way you will ever learn is utter horseshit (and likely self-serving).
There isn't some secret book with the answers, you have to work it yourself, and build up expertise yourself...you can't borrow expertise (btw, this is something that is kind of common in Asian culture...if you go to a Berkshire Hathaway meeting, you overindex to these cultures that have respect for elders/"guru" culture...if you want to be an entrepreneur, I can't think of a worse attribute).
As for learning, obviously it depends on the specific companies and what you're interested in. But what Naval is talking about here is becoming a founder. At startups you're wearing more hats, can have a bigger impact and are closer to how things work. You'll probably learn a lot more about being a founder than at a big company where your role is more defined and sandwiched between layers of abstractions, many levels away from the CEO and decisions being made.
But then I had to get into the "big" companies for visa reasons, and honestly I don't miss start-up world anymore. The learning has been pretty steep, yes in a start-up you wear more hats.
But in my experience, the attention to detail and investment on engineering is higher in bigger companies, simply because they can afford to. Whereas an early stage start-up works more or less on a thin deadline, and if the founders are not engineers themselves, usually engineering gets compromised over velocity. Also, scale. The bigger the company the more challenges they will have (whether in vertical or horizontal scaling). And IMO working at scale, teaches you a lot more than people think.
As a software developer, the differences in goals have a significant impact on how I design and implement code.
I prefer big companies because I am usually a stickler for good conventions and proper coding structure.
Simple.
One central habit in the book is around “saw sharpening” and essentially making time to invest in yourself, so ultimately you can invest in interpersonal relationships. It’s kind of a “hierarchy of needs”. You need time, and money — and sometimes neither seem to be available.
I can’t do the whole thing justice here, but for the sake of advancing my point — it begins with sorting out what’s urgent and important from what’s trivial and unimportant, and learning to be proactive. Personal finance is something to consider as well, because saving and reducing expenses can buy you some additional flexibility in your life.
With some spare time and money, you get to the question of — what do I do next? How do I learn, where do I start? Personally, I think the best way to learn is to build something! Build something that you’re passionate about, and try to solve a problem. Then, see if you can demonstrate value to others — speak to real people who use your product, empathize, and try to make it better.
In terms of big company vs startup, both — like anything — have their ups-and-downs. In my experience, if there’s something worth optimizing for it’s this: try to work with great people. Kind, brilliant, considerate people.
Whilst innovation is important, and earning your stripes too, I get sick of this unspoken attitude that anyone who doesn't work for a "cool" startup must be unambitious and lack talent.
Big tech are dominating most of the interesting problems. Startups likely can not compete with google - if they choose to let you exist it is because they have decided the problem isn't profitable enough.
I feel like early stage startups are getting closed to be toast, at least in bay area, from different angels conglomerates are better at non-compensation factors as well. And in current environment, when startups stay private longer, any engineer has a better chances to go to mid or late stage startup, wait till IPO and repeat. It is better from money, career, networking.
If put aside equity, as a decision factor, I think, early engineers can go to a startup because it's a faster growing environment with more freedom. Faster for career, business skills, networking, engineering skills... But founders are focused on growing a startup (or stock price) at all cost, short term, from round to round. And people personal goals are usually longer term and founders don't have time/will for that.
More thoughts on non-compensation factors that startups could get right if they want:
1. Advance in career faster.
Some go to startups because they feel they can progress faster in career ladder. In reality early engineers do not have enough experience for management/lead positions, and there is not enough experience to gain in early days (not enough people, tasks). Founders usually end up bringing ex-big corp/cool startup management, because "they worked at scale".
For management career development working at big corps are usually better, since there is a clear path you can take to grow, and you can estimate how much it will take you to do it.
Founders could be upfront about they goals and as part of offer could promise people a chance at management, some management coaching. Organizations like YC could offer early engineers management/leads coaching programs to their portfolio companies.
2. Grow as engineers
Startups usually don't have enough scale and tech is not perfect. More like a different peaces "glued" together in a hurry, and always constant change.
Anyone working at startups as early engineer and trying to go to big-corp for money will hear "yeah cool, but we are looking for tech experience at our scale of usage"
Startups can compete in this area (if they don't have scale) by allowing people to develop as public figures, encouraging blogging, talking at conferences.
3. Unlimited vacations. Flexible time.
Early engineers are always on, and harder to take long vacation, or completely disconnect. Compare to big corps, there are some where you can take several months sabbatical.
4. Full business transparency
Founders can be fully transparent in terms of business, funding in front of employees. This can go long way in developing loyalty and trust. Compare it to big corps, where there are layers of management.
5. Remote-first
More startups allow people to travel and work from whatever hours, location they want - more employees/engineers they will attract. Founders could be upfront about it: we pay 80% of market comp, but we don't care where you work from, as long as you available from some reasonable time online.
6. Networking
I feel like startups suck at this. It's expensive to send people to conferences, startup team is small. Working at FAANg you have better networking opportunities.
YC/VCs could have a networking events not only for founders, but for engineers as well. From YC perspective it's better if engineer leaves for another YC company and stay in ecosystem, than to leave to FAANg.
7. Family friendly
I feel like big corps are more family friendly: insurance, time off, activities. Startups figuring out how to make it or compensate for luck of it — could help.
Then why didn’t google found/outcompete the laundry list of unicorns that have emerged over the last decade plus? Google could outspend them all by 10x. Google is very, very good at what it does, but like all big organizations Google has blind spots you could hide a tour bus in.
I'm so lucky that I've almost forgotten how lucky I am to have an employer who lets me work on myself in job related aspects at work. They give me time to get better at my job at treat me well enough for me to stay. It sure as hell pays dividends to them as I get better at making stuff for them.
Meanwhile, that means that outside of work, finding time to invest in myself doesn't have anything to do with career. I've got that covered at work. Now it's about finding time to make myself feel fulfilled. This is what I'm happiest to be able to invest time into, and it's not even mentioned in a post about finding time to invest in yourself? It feels like another symptom of the broken work-life balance culture I see in the early stage startup community. More like work=life balance.
Basically what I understand is that I should care as much as the founder even though I don't get paid enough. It's about other skills I gain by doing this. I highly disagree. No matter what I'll do it's all about the short-term compensation when working for others because I can get other skills both if my pay is low or high. And I prefer having a high pay and also getting soft skills. This guy sounds like he's a founder and tries to convince readers to be a good employees and care about others' businesses.
- If you can afford to apprentice / intern under someone success or on a trajectory to success, do it. - If you can't, then work your paying job, whatever that is, but feel around for opportunities that no one else is looking to own yourself.
Not bad advice, but IMO, not exactly "finding the time to invest in yourself". I actually think finding the time to invest in yourself is getting better at time management:
1. Instead of reading tweets, opening instagram, swiping on tinder, etc - go start an essay, article, etc.
2. That time you'd normally zone out and listen to music on the bus/train - read or watch something that you learn from in a big way.
3. Instead of staying in and watching netflix, hulu, etc get out to a meetup of people that are interested in the same thing you are.
But these - I think - are all obvious things to people that are reading this. ️
I stopped reading here, because... no, no they won't, and even if they do - they won't/can't reward you appropriately for it.
It is to compete with yourself every day given the constraints you have as an individual.
As an example, I would rather find the best happy me than copying a so-called successful person.
To me, owning a business is the ultimate experience for people skills which you can never learn in a classroom. But I would rather do it on my own individual terms than copying a mental model.
Always popular, always divisive enough, no clear compromise in sight.
I think it speaks of how actually a lot of HN readers really want to work at startups (including me) but these days they cannot find any justification to do it, financial wise.
I personally find Naval and his platitudes to be overly simplistic, and his "get rich quick" advice is mostly impractical (and often bad) for normal people.
> Coming out of college, Warren Buffett wanted to work for Benjamin Graham to learn to be a value investor. Buffett offered to work for free, and Graham responded, “You’re overpriced.” What that means is you have to make sacrifices to take on an apprenticeship.
No, what that means is that, as a fresh college graduate, Buffet added negative value to Graham. (Hence, even at $0 he was too expensive.)
Blog posts are often a bit like code: They take more effort to read than they do to write. In this case, the author spends so little time trying to produce something worth reading that I couldn't finish the article.
Even for free, this post was overpriced.
> you have to make sacrifices to take on an apprenticeship
I understand that to mean that in order to even apply for / commit to an apprenticeship, you have to make sacrifices. In the context of the rest of his narrative, that means sacrificing a safer, better paying, more conventional career for being a gopher for a would-be titan of Silicon Valley.
Obviously, if you have the chance to be the gopher for an actual titan of industry, it's probably worth any reasonable sacrifice. But that's not what the author is promoting. He's promoting the "hustle 24/7" mentality even as a barista in the hopes that your manager will reward your entrepreneurial sprit--or, more likely, a newbie founder who will at best will exit their startup somewhere in the high six to low seven figures and leave you with little more than a few hundred thousand dollars of opportunity cost.
I still think Naval understood the point about negative value perfectly well.
I find his writing reeking of arrogance and axe body spray. Have some damn humility.
These sort of ideas telegraph that the author knows they got rich but don’t actually understand how they got there.
He tweets these vague pseudo-philosophical koans, things that look fine as 280 character retweets. It's fine for self-branding and he's certainly played the genre well.
But that middle ground between advice directly relevant to a practical question and a nuanced, deeply investigated ethical framework isn't as self-helpful as marketed.
It's those things people read and _feel_ like they've done some life-work today (and perhaps that's what people really want.)
As you point out, much content by well-known, materially successful people is a post-hoc constructed narrative to explain why they are where they are.
Would it be edifying for you and others if I explained why I think suggesting that a smart startup employee should not be doing the CEO’s laundry?
You seized on "CEO's laundry" because it sounds absurd; no doubt the fact that it sounds absurd is exactly why he included it. If you reduce his argument to that, you're breaking another site guideline too: "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
What would be more edifying is if you delivered on the claim your comment makes for yourself, that you know how someone got rich better than they themselves do. How?
You claim that HN is "better than this" but Naval's post is totally devoid of insight. It is hackneyed and the commentary responding to it is a reflection of that. If you want better commentary on the front page, then do a better job of making the front page articles worth talking about.
As to me claiming to know how Naval got rich - that's easy - he's a person who cashed in on a golden era of startups when it was easy to sell off bad properties for big money. Instead of realizing that he was extremely lucky to be at the right place and right time, with the privilege of having enough personal wealth to take those risks, he instead spends the rest of his career trying to justify his wealth and position. That's why all his advice and "insight" are the sort of trite self-help aphorisms that anyone can say and make it sound true.
You always ask others to be better on HN, but maybe take a step back and ask yourself if maybe the state of HN is a reflection not of the community but of the guidelines and leadership that drives it today.
as for me? I gotta get back to my day job ;)
I have no opinion about Naval one way or the other, but your argument there is flawed. There were tons of people trying to do the same thing at the time. Plenty had privilege and money. Why didn't they all succeed too? To just say "luck" is a non-answer; that's assuming your conclusion. A real argument would need to show how it wasn't anything else.
Given that plenty had privilege and money (i.e. those are the covariates), and many didn't succeed, we'd expect those weren't significant variables.
Many likely had drive, connections, know-how as well. Many of them probably failed too. Again, insignificant covariates.
So what does that leave? The error term: luck.
In other words, during a tech boom like at the turn of the century, there are so many winners (often outsized, which distort many basic statistical assumptions, such as a normal distribution) that is almost futile to try and identify significant covariates.
To speculate here, often with the pretense of certainty, is more often reflective of post-hoc reasoning than actual science.
That, in my opinion, is why "luck" is an adequate answer. We can be fairly sure that certain covariates contribute to success over the long-term in life (i.e. we have a large sample size of being alive, and we can extrapolate from many other people who have lived). It is far harder to do this with nonce hype cycles (infrequent, low-sample size).
Chalking up more success to the error term, "luck", seems perfectly appropriate during such unusual times.
There's a cruder version of this argument, according to which all success is luck. I hear that, or things that sound like it, a lot, but it's too simplistic and usually too self-serving to be plausible. Though many successful people will be the first to tell you they were lucky. (I always remember https://news.ycombinator.com/item?id=1621845)
The only tweak I'd make is really around sample sizes and statistical significance.
All success _may_ be due to luck (the error term), but we can be fairly confident (say p < .001) it isn't. Said otherwise, we can be reasonably sure that some covariates (e.g. hard work, wealth, education) are significant, given a large enough sample size and we define what qualifies as success. One of course could quibble about these - do we really have enough statistical significance for each trait? - but the fact is that every person everyday operates with some intuitive understanding that these things matter. In other words, not all outcomes are due to luck.
This is much harder to do with small sample sizes or unusual occurrences. Statistics is based on frequencies, and if we have low frequencies (such as a tech boom), we should be much less confident in the significance of each variable.
This is, presumably, why people intuitively chalk up much success during these times as survivorship bias. It's not that it certainly, absolutely is; rather, it's that we're far less confident on which variables are significant and which aren't. The error term remains.
Again, attributing it to the error term, implies mostly that we shouldn't have too much confidence in our speculations on which traits are significant during such one-off events.
Welcome to America 2020
"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
https://news.ycombinator.com/newsguidelines.html
I don't care about the author's argument one way or the other, but I care a lot about degraded discussion on HN.
"What can be asserted without evidence can also be dismissed without evidence."
In other words, the "low quality" of comments may actually reflect a patent and blithe dismissal of a perceived "low quality" post. I think you must acknowledge, given the community's reaction, that this is potentially a low quality post.
In that case, such a reaction seems appropriate.
The original article is very thinly argued, and I do believe it's perpetuating negative dynamics that don't reflect well on the general VC/startup community and the author in particular.
The author of the article is essentially arguing that the only thing that matters is proximity to power, status, and wealth, and one should pursue it at the cost of one's own dignity for almost no renumeration.
Given that the author themselves is in fact powerful, wealthy, and holds high status, his statement should properly be parsed as self-serving propaganda. He's basically saying "find people like me and be their handservant" in as many words. My response contains no more dismissive scorn than his original post.
In my humble opinion, of course.
Sorry, but that's not true at all.
The thing is, it doesn't matter whether the article is thinly argued or what have you—comments here still need to be much better than that one. Maybe the article doesn't deserve better, but the community here deserves better. It's about ourselves.
Suppose someone writes a shitty, arrogant article. What good does it do to react by degrading HN? It only makes it harder for this place to survive.
Naval quotes Scott Adams, dilbert creator who has on the record said things like this:
"But in general, society is organized as a virtual prison for men's natural desires. I don't have a solution in mind. It's a zero sum game. If men get everything they want, women lose, and vice versa. And there's no real middle ground because that would look like tweeting a picture of your junk with your underpants still on. Some things just don't have a compromise solution."
"Naval: Tony Soprano was a businessman who had to enforce his own contracts. That’s a very complicated business."
Just for others' edification, I'd like to point out that Tony Soprano is not a real person.
source: https://jezebel.com/dilbert-creator-scott-adams-weighs-in-on...