Meet Amazon.com’s first employee: Shel Kaphan | Hacker News Reader

Meet Amazon.com’s first employee: Shel Kaphan

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72 pointstwidlit22 comments

Am I wrong in thinking that just because you're employee #1 (after the founder) that that doesn't make you a co-founder. I don't think it matters if the company had been legally formed yet or not.

I think a co-founder is about what you do, not when you join. If Mr. Kaplan was key in strategy and envisioning the business, that would go a long way, but if he was responsible for implementing Bezos plan, I don't think he should be considered a co-founder.

In practice, the terms founder/cofounder/founding-employee are fuzzy and granted based on mutual agreement among those present. Every early pivot or talent-acquisition or rebranding or product launch could reasonably reset the 'founding team', if that's the spirit of the participants.

To limit the term only to the person with the idea overemphasizes ideation. To limit the term only to the person who first writes checks would overemphasize finance. Something great didn't exist; a group worked together; then it did exist. We might honor the leader or original spark as 'The Founder' but all the team are also 'founders' in a reasonable, non-hagiographic sense of the word.

"but all the team are also 'founders' in a reasonable, non-hagiographic sense of the word."

I suppose, but who is taking all of the risk? A founder takes a loss if the company loses and wins when the company is profitable. An employee doesn't take a loss (in a sense that they are paid a regular salary no matter what).

That's an overgeneralization. Many big-F Founders take salaries starting at the same time as founding employees. Both are likely taking relative cash compensation cuts compared to their next-best options, and 'risking' opportunity costs. Both might forgo salary in a funding pinch or chaotic fume-out.

If the big-F Founder has a richer set of post-failure options than founding employees – and gets more beneficial notoriety even in failure – they may in practice be risking less than early employees.

So, the founders aren't the ones that started the company then? When I say "founder" I mean the person that started the company from day 1: taking no salary in the beginning because the company wasn't making any money, taking a chance for months or even years that the company will go out of business or possibly succeed, or even working on the company during off-hours from a regular 9-5.

If a company has enough capital to pay employee #1, then yes, the founder is making a salary. But, at this point, the risk is considerably less and employee #1 shouldn't be getting anywhere near the same payout if the company gets bought out.

The founder also most likely has their own money tied up in the company.

Employee #1 can always get unemployment if the company goes bust. The founder will have their name and business credit history tied to the company if there are major problems. Employee #1 can just go find another job as if nothing ever happened.

"If the big-F Founder has a richer set of post-failure options than founding employees – and gets more beneficial notoriety even in failure"

More risk=more reward. If you are employee #1 and you aren't getting paid industry or above industry rates, then you shouldn't be working at that startup. If you want all of the glory when it succeeds, then you need to start your own company.

Have you ever actually started a company? It's not easy. Much more difficult (and risky) than being employee #1.

Most early employees in startups are investing through opportunity cost - they lose out on what they could be making elsewhere, in a less risky job by taking a salary cut.

The person being interviewed addresses that in his first response: “Well, you could either consider me the first employee or a co-founder depending upon how you want to think about it."

So he's not claiming to be one; and if you look at the headline of the article it says "first employee".

I guess its more about official role and what you officially register yourself as when you join the company, its really the only thing that goes down in history so no one would actually know what you do other then your official role, not the general public anyway (press, media, shareholders etc etc).

After reading that whole article i find Kaphlan to be a very interesting guy. I feel i share alot of personality traits with him and from the outcome i can see where those traits has helped and worked against him in the startup world....

Might look into a few things further cause of this article :) Thanks ...

The first time I'd heard of him was when Paul Graham called him a de facto cofounder:

http://news.ycombinator.com/item?id=1045781

Noun founder (plural founders) One who founds, establishes, and erects; one who lays a foundation; an author; one from whom something originates; one who endows. http://en.wiktionary.org/wiki/founder

Whatever his title officially was, before him, there was no code. He built the foundation of amazon.com. Doesn't that make him a "founder".

I would say it is simpler in startup terms. Most founders are pre-money. If you get a full salary on your start date, you are not a founder, you are an employee (perhaps the first).

So as a thought experiment, what if Bezos gave him a spec with one sentence "Sell books online?" That's a plan.

It's not like in startups founders sit in a closed room and "envision" strategy and plan, then come out and hand it over to their minions to implement.

Startupping is a creative process in which all levels of company should participate, good ideas might very well have come from below ranks.

He mentions he didn't get founder's stock though, so that kinda answers your question.

"I didn’t get founder’s stock. It didn’t seem worth the argument at the time"

Apparently he's a nice, amiable guy. Regardless of whether you want to technically call him co-founder or not, it's sad to think how much he possibly missed out on by not negotiating more with Jeff at the beginning.

What I walk away with is, consider all scenarios when making a deal, and don't be afraid to negotiate for something better.

Hi. Shel Kaphan here. Just to be clear, the negotiation you are referring to was simply over whether it would be stock or employee options. No reason to be sad. Founder's stock is more convenient and less of a taxation nightmare, but there was a concern (an irrational one, I think) about what would happen if I left early. There are of course ways, such as escrow, to handle that.

As for whether or not I'm a nice amiable guy, Chris (below) is probably right -- a lot of people including him got to experience the joys of my temper while I was trying to do what isn't possible: to contain the chaos ;^\

Thanks for clearing that up, Shel. I shouldn't have commented before reading the rest of the interview.

How does it feel to see people arguing over whether you are a founder or not? It would seem that they care more about it than you do. :)

It's definitely a little odd. In one way it is just a matter of semantics: what exactly does the word "founder" really denote? But some may be asking whether I personally was all that important in the company's history. I can't judge that. All I know for sure is that I put my heart and soul into it especially during the first half of my time there, and I still feel a strong connection to the place (despite having left almost 12 years ago) even when they really get me angry, like with this sales tax thing. I'd prefer not to have to have a personal reaction to things like that, but there you are. As is pointed out elsewhere, Bezos was the only one who was really making strategic decisions, and it's probably still that way for all I know, though I participated in some. The idea to do a bookstore was his, though we were not the first on the web to do that. That doesn't mean I (and other early "participants") didn't have our own visions of where things ought to go too. When you do the engineering, hacking, and tech operations side of a startup, going from nothing to something, it's like it grows out of you and it feels like an extension of you. That's a different relationship from being the person with the idea who does the fund-raising and makes the big decisions. You need to have both.

At one point I'd say the company's "DNA" probably was influenced by me to an extent, but I've been gone for a long time, and it was tiny compared to its current size when I left, so it would be pretty surprising if any of that is still there. That's fine with me -- that's just how things work.

Shel's seems like an amiable enough guy. But it seems clear to me that with out the business strategy and vision of Bezos Amazon wouldn't exist. I think this quote summs up Shel's and Bezos's styles succinctly "I am a product of the 60s just like Jeff is a product of the 80s".

I don't think Shel should be considered a co-founder. None of his DNA is imprinted into Amazon. In the end, he was pretty replaceable.

There's a reason nobody remembers this guy.

Because he escaped when the MBAs took over ?

there's definitely a reason YOU don't...

im pretty sure everyone knows who he is

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