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Comment by maybetoofast | Hacker News Reader

I joined Fast towards the end of last year.

I didn't get as much exposure to the rest of the company as parent comment, but I'll say I saw a weird air of complacency and assumed success.

I first ignored my instincts that something was wrong, but as I saw more of how the company operated, I became convinced that the single largest problem the company had was the culture. On the surface, I agree with the parent comment, things were definitely positive, but rather than toxic, I think it was more of a naive one, like most of these people had never worked at a startup before, and didn't understand that it's always easy to snatch defeat from the jaws of victory, and that if they didn't understand what they were doing and how it affected the company then probably nobody else did either. It felt like everyone was very smart, but somewhat foolish (myself included).

That being said, I enjoyed my time there, and definitely learned a lot, especially organizationally. The people are solid and I think Affirm is going to get a pretty sweet deal.

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This whole thing is strange to me. It's targeted at software engineers, and the dominant theme is that you should be wary of toxic positivity and a number of specific indicators that you should be able to see from your desk as an engineer. The discussion in here is also focused on that.

But if you are an early employee with equity, you are not just an engineer. You are, figuratively, a shareholder. One of the reasons they give you stock options as opposed to actual shares is that shareholders have a ton of rights against companies, and can e.g. sue for investor fraud, vote the board out, get quarterly reports with financial & performance statements therein backed by federal law and the threat of investor fraud lawsuits. You, on the other hand, are given the financial exposure to the company's performance without any of the attached rights. And they will happily lie to you in order to keep you happy & get you to project enough positivity to hide flaws & keep outside investment flowing until it all collapses.

So as an employee, you should be trying to claw back some of what being a shareholder would get you, given you are so heavily exposed. I've worked at companies where there is a monthly meeting, nearly everyone present, where the entire company's business position, prospects and challenges are discussed openly. The employees (largely) didn't even have equity. Any cracks (like an imminent complete collapse in the next three days) would show very early on, but there were none, because the employees were empowered to do something about any challenges.

So, yes, there are warning signs, and your response isn't a binary choice between staying and leaving. I would like people to come away with a better model of this than "if they are hiring exclusively from big tech, that's a red flag, get out of there". You can demand more transparency if you know what transparency looks like. If you are content to sit at your desk and happily churn out React components, satisfied with management sending enough emojis at you via slack, then you can't protect yourself at all.

The reason they give options is that giving out stock basically forces an early IPO due to the 500 employee rule.

I think options will trigger this as well, this is where the “double trigger” rsu came from.

As in, if a company as 500 (now 2000 I think) options-holders, the SEC will start regulating them as if they're public? I don't think that's true?

Double-trigger RSUs are AFAIK just a way to avoid paying taxes on illiquid assets. The reason to shift from options to RSUs at all is (I think) that once the company's FMV gets high enough, the strike price and taxes due for the options will be so high that employees won't be able to afford paying them if they leave the company.

No but companies don’t want to risk that 2k of the options holders might exercise and force the issue so it’s functionally the same.

I thought it was common knowledge that fb started the double trigger thing to avoid this limit, and I heard something similar when a startup I was in converted options to RSUs.

Also, the taxes for RSUs doesn't work. Say the pre-IPO stock is worth $3 right now, and a good exit is $10. I'll need cash to pay taxes on those RSUs as they vest. Their current market value should greatly exceed my salary as IPO approaches, but even at $3, the taxes on the RSUs are likely to be 25-50% of my post tax cash income. With 33% effective tax on the income, paying another 50% tax for the RSU vest means my effective tax rate would he 66%. Compensating for by increasing salary would increase the company run rate, and would bump many employees into the 51% tax bracket, so their marginal rate would be something like 75%.

TIL it's actually 2000 shareholders as of 2012. https://www.investopedia.com/terms/5/500-shareholder-thresho...

This is an excellent post. I've worked at 4-5 different startups over the past 22 years with a range of exits including shutting down and getting laid off, 3 acquisitions while I was still at the company, and one acquisition after I left but had kept my equity. They all existed on a spectrum between what Fast sounds like and what you're talking about with "extreme" transparency.

You want to be at the company where the CFO gets up at the monthly all hands and goes over the numbers in gory detail and doesn't hold anything back. You do not want to be at the cargo cult company where they get up and cheerlead and never talk about numbers. It took me a shockingly long time to figure this out.

In the end the stock gains have all been in the periods where I didn't work at startups but instead worked at public companies. Go figure.

Also --

"Toxic positivity" and ISOs/rights:

ISOs nominally give you "ownership" in the company, an extra incentive to make sure it succeeds. But you lose them within some time period after you leave (say, are fired), and there's no way to sell them during that time unless the company has gone public. So this thing that's supposed to make you an "owner" just makes you a hostage. It does not motivate you to take risks on behalf of the company, and it does not motivate you to speak the truth.

If they couldn't take it from you, then you'd speak the truth.

This echos my experience at a $100M startup that I worked for and that ultimately failed.

HR would tell us we were extraordinary, we would have world-class catering for lunch every day, and yet we had no customers, no contracts, and no money except the investors'.

It was a sobering realisation on the damage that can happen when you are submerged in toxic positivity. You forget that companies still need to earn actual money, that it's not a party every day.

How on Earth did the company raise so much money with so few milestones of any kind being achieved?

A well known name was attached and it was at the peak of the AI craze.

Ah, celebrity investing. Of course, of course.

> How on Earth did the company raise so much money with so few milestones of any kind being achieved?

Fast pitched itself as taking the prudent path compared with e.g. Bolt. The latter went for big clients first. Fast started with small businesses.

There were clearly other issues. But the closing era of cheap capital favoured the bold, and Bolt’s seizure of the fertile low grounds cut off Fast from its growth. Despite Fast taking the orthodox path.

this doesn't answer the question at all, it's just a bunch of bullshit words strung together. we never raised any money, and we had more to show than Fast although we were in a completely different industry. this goes to show that all that matters is knowing people, it doesn't actually matter whether you have a real business and have achieved anything at all.

VCs sometimes follow "hot" companies. Companies become hot when several VCs think they are hot for whatever reason. When the company is hot and gets offers, other VCs will rush to give them more offers and at that point you might not even need a deck or any metrics anymore. The startup can then bid those offers against each and can end up raising even more they initially were trying to.

Fast did great job hyping the company on Twitter, likely the founder also was a good storyteller. The old adage is that you raise with a story, team or traction. Sometimes the story actually pans out, like with YC Airbnb is often an example of company that struggled for a long time in the beginning and no-one could really predict how big they could become.

traction doesn’t matter. or we would have raised. story and team maybe. i think that VCs buy into a certain type of person. maybe a younger version of themselves. somebody they want or wanted to be. that rules out anyone who is nerdy or weird. and they like to go to parties to hear what others are investing in and then do the same.

I'm all in if a founder can "sell" a company to raise money. It becomes a problem once people believe their own hype, so.

> we never raised any money

Who? (Also, given an open market, as was the case when the Amazon patent expired in 2017, the company fundraises to scale will beat its more timid competitor. This is basic strategy.)

If you were in a different industry…great execution in the wrong industry is as good as a Ferrari in a swamp.

> all that matters is knowing people

Sounds like you’ve been through some shit. I’m sorry for that.

The point I was making, summarily, is that Bolt ate Fast’s lunch. It went straight for the big customers. Fast wanted to grow towards them incrementally. In this story, if anyone had a fundraising connections advantage, it was Fast—they were Stripe backed. Bolt outmanoeuvred them (and was lucky).

This is unorthodox strategy. Fast played it conservatively. Bolt swung for the fences. Curiously, Bolt landed the home run.

FAST wasted $100M on nothing. That's not conservative.

I don't know why on earth this is downvoted. You're 100% correct and I'm bewildered that this 'conservative' trope is prevailing in the thread. Both companies spent functionally the same amount of money, and both maximised different terms of the [customer count]*[customer revenue] equation.

Fast made what was manifestly the wrong decision, both in hindsight and in foresight (I'm happy to post my WhatsApp screencaps from a year and a half ago when I was exploring starting a co in that space). It's not possible to build a hands-off 'platform' like Stripe in that space - integrations are complex, and so integrating a large number of small clients predictably bogged them down till they ran out of money.

(That's not the only reason, I'm sure. It was also a shitty implementation of one-click checkout: most saliently, it wasn't one click. Anyone who actually tried Fast at the time - and I & my prospective cofounder shared the few tiny client websites either of us found like they were rare gems - could see that it was a terrible implementation, in a space where UX is literally the entire game. Many actually did, e.g. this guy from back then: https://chrisfrantz.com/checking-in-on-fast/)

you can build a great business in any industry. VCs think this is limited to a handful of industries which they happen to think are hot. because of that thinking many good deals are lost.

maybe Bolt knew a couple of things Fast did not.

Going for bigger clients is the prudent path. Small clients require far more initial investments and the payoff will be much later.

We failed to raise money exactly because we had a bunch of small clients and not enough revenue. It was a prudent decision for the potential investors - but the main failure on our side was not to network enough with our current investors in order to get another friendly round of investment.

We had a competitor that was doing exactly the same thing (with worse metrics) that raised several millions a few months later, so it wasn't too far fetched.

VCs invest in a lot of baseless crap - sometimes the crap turns into gold and sometimes in order to be the chosen crap you need to know the right people.

Way too much VC money is not driven by business analysis, and influenced by FOMO, especially in big names circles. It's totally irresponsible.

I think a lot of egos are running the VC business than actual investment analyst.

Look at Theranos. That con lasted over 10 years and was valued at billions yet they never managed to actually DO anything.

Well, they don't. The toxic positivity is the product and the investors are the customers.

> we would have world-class catering for lunch every day

I'd like to point out that this is not the case for every Silicon Valley start-up: the three start-ups I worked at (CollabNet, Aeluros, Ardatech) were incredibly frugal with money (exception: salaries were competitive).

At one of the companies, the CEO and I took a trip to Safeway to buy soft drinks for customers. When we got back, I walked around the office telling everyone the soft drinks were _not_ for them, only for customers.

At another company, I had to make a compelling presentation to the CTO to buy a $1.5k printer. "The Linux workstations need a PostScript printer!" We bought the printer, but he didn't like parting with the money.

Being frugal doesn't guarantee success: my CollabNet stock was washed out in later rounds, Aeluros had a fair-to-middling exit to Broadcom, and Ardatech had a good exit to Google. But it's good to keep an eye on the money.

That sounds like way too far in the other direction at both places. Stuff like drinks and printers are basically noise compared to engineering payroll when you're paying people $250k a year.

The lesson should be buy whatever the hell people want, just stop buying people until you need them. They're the expensive bit.

3 great devs can do about the same work as like 30 average ones. People massively underestimate communication overhead. As soon as you lose the 'startup feel', you lose the speed, and it's gone for good. The transition is probably inevitable, but there's a threshold of revenue you have to reach before you make it. If you don't reach it, you're cactus.

150 devs and 50 sales people to generate $600k yearly revenue is laughable.

"just stop buying people until you need them. They're the expensive bit."

If only they could be bought that easy right when you'd need them. At least in a corporation, the HR will tell you "50 engineers? That's going to take X monts, judging from the hiring rate we had so far."

> The lesson should be buy whatever the hell people want, just stop buying people until you need them. They're the expensive bit.

Absolutely. We were frugal, but not to the point of self-sabotage. Our biggest expense was payroll, followed by the Cadence/Synopsys EDA software licenses.

So, for example, no catered lunches or breakfasts, but if there was a customer or investor dinner, it would be expensed.

We had good health insurance, but we didn't have gym memberships or (gasp!) an onsite gym.

The workstations were powerful, but we shaved costs by buying "gamer rigs" instead of the more expensive "engineer workstations". We bought prosumer equipment (Netgear) instead of enterprise equipment (Cisco).

If someone needed, say, a Wacom tablet to accommodate a wrist injury, we made that happen.

We had a well-stocked lab, but some of the electrostatic benches we got at a good price secondhand.

Our office was near the train station to accommodate the engineers who commuted from the city, but it wasn't expensive space (all glass & chrome); it was a "B" office. We shared a bathroom with the other tenants. It was a little run-down, but it was clean.

We didn't have offices or cubes, just desks, and the CEO & President sat next to each other in the big room we all shared.

Netgear and Cisco are kind of a security shit-show, but kudos in principle.

Good point, I am always surprise when well funded startups hire former big-tech engineers, rather than experienced startup engineers.

Hear hear.

There is a pretty good reason. If the experienced engineer worked at a startup that went anywhere, they have a lot of money and aren't coming to work for you. So the choice in many cases is big tech engineer or failed startup engineer. It's not clear which is better, it is clear (ish) which seems better.

This is not true at all. A lot of people In BigTech companies boast of passing a tough interview as their biggest accomplishment and beyond that haven’t really done much.

Meanwhile, good startup engineers are used to learning new technologies quick, can work across the full stack, can own all aspects of their app/feature, work without much direction, never mind a formal spec, and generally are used to solve problems over shipping code.

Often, the key drawback with startup engineers who are available after working at one or two startups, is that they pick bad companies and do not really understand the business end of the equation. However they are still excellent problem solvers.

You've compared the worst big tech engineers with the best startup engineers. Those are rarely the choices faced.

Your comparison was similarly unfair at the other end while presenting it as a common scenario, which is why I presented a different one.

This is from my experience as a hiring manager who has worked at multiple startups and now works for a large public tech company.

But I was implying the choice isn't clear.

There aren't many good startup engineers with experience at successful startups who are floating around, especially from when the company in question was actually a startup.

edit: i re-read, my comment "failed startup engineer" may have read differently to what i intended. I meant they worked at a failed startup, not that they were a failure. It's largely unfair, but people do seem to think people who worked at a successful company are better than those who worked at a failed company.

From my experience, the choice isn't clear favoring BigTech engineers either.

For example, a pattern I noticed among the pool of BigTech engineers recruiters would pitch to me was the following. The engineer would join a startup with an immediate promotion in title, and then 18 months after the fact, they would jump back to BigTech to a higher level than the one they had when they left. When you asked what they delivered at the startup, it was clear that they didn't do much or often couldn't correlate the impact of their features to the ROI of the business. Nevertheless, the title upgrade in their resume helped them game the recruiter search and the BigTech ladder.

https://www.teamblind.com/ is full of recommendation for similar strategies that BigTech engineers use to climb the ladder.

Also, the good startup engineers aren't floating around, but you can still poach them. You'll have to give them a big signing bonus to cover the purchase of their options, but it isn't a risk to me when they are sure bets; a recommendation from my network for example.

Yep, the choice really isn't clear.

There are plenty of engineers from successful startups —- maybe the majority of them — who were lucky to get a new Honda Fit out of a very lucrative (for some) exit.

I think judging an engineer's engineering skills by the (effectively random) chance of them being at a startup that "makes them rich" just reveals a significant lack of understanding of how the current startup world works. The vast majority fail. The ones that succeed tend to not make anyone any significant amount of money except the founders.

There seems to be a significant number of tech industry employees still floating around that are convinced that instant financial independence is available for all.

At least in my experience, even people who understand how it works seem to have this bias. On average it might even be a fair bias.

> If the experienced engineer worked at a startup that went anywhere, they have a lot of money and aren't coming to work for you.

This is a stupid view of motivation and competence.

First, it implies people are only motivated by money. At the first startup I worked at, one of the senior engineers had been through 4 successful exits and was in the business to build things.

Second, competence of the engineering org and individual engineers is orthogonal to successful exits. An engineer can successfully ship many iterations of a product that are just a bad market fit and the company will fail. I’d still take that engineer any day over the typical FAANG cog who’s big project was a 2 year tax billing database migration.

A lot of what you are saying is true - but if you re-read my comment, it wasn't saying what you seem to be thinking it was saying. Just read it literally.

I interviewed at Fast last year as an experienced startup engineer. I was given the "describe a production incident you were involved in" question.

I detailed a case where a recent deploy I had done had resulted in elevated error rates for some of our clients and how I had solved it with a quick follow up push to prod. The interviewer asked why it wasn't caught in staging and I mentioned that it could have been but as a small company we have to make velocity vs bug tradeoffs and in general it feels like we are currently at a sweet spot. The interviewer was unwilling to explore that space at all, or the concept that different companies might want to land in different places.

Later I was given feedback that I did exceptionally well in the technical interviews but the company didn't want any cowboys on their team. All of that is probably just a long way of confirming the other anecdotes in this thread that from the outside fast seemed somewhere between delivery hostile and overly cautious.

What exactly is meant by "cowboy" here?

Someone who plays it "fast and loose" in terms of engineering (for example, deploying straight to prod). As parent mentions- this isn't necessarily a bad thing depending on the context (but "cowboy" here has a negative connotation).

oof, i described myself as a cowboy at a interview i did last year to a higher up, no wonder i didn't get the job even though i did well on their technical exams. I always took cowboy coder to mean someone who had independence and resilience to get things done even if the environment isn't conducive towards that.

Not OP but in tech cowboy often means "taking unacceptable risks to increase velocity". In this case, shipping code without integration tests in Staging. whether that risk was 'unacceptable' is the difference of opinion at issue.

Fun fact: The 2011 article Cowboys and Pit Crews (https://www.newyorker.com/news/news-desk/cowboys-and-pit-cre...) points out that modern cowboys actually spend a lot of time on communication and checklists.

This is hilarious - velocity vs. bug tradeoffs is a key balancing act that every startup does, and you were totally right in what you were doing, also with your point that other companies may choose differently and that's also totally fine.

But to be deemed as a cowboy - utterly hilarious, given where they ended up. Pretty cowboy with the investor money instead I reckon?

Or inexperienced startup engineers, given the nature of the name

It’s a kind of cargo cult, cf the post “you aren’t google”. The kinds of people who succeed at FAANG (MANGA?) are used to a lot of infrastructure and are (at google in particular) mostly incented to ship rev 0, not build a sustainable system.

That’s a gross generalization, but gives you the flavor. I couldn’t do what they do (huge budget, low incrementalism) and would hate the environment. But they can’t do what I do, and when hired to do so, typically fail. Not because they are dumb, or lazy, or foolish, or anything negative — typically they are none of those things. Just haven’t experienced the startup environment.

My experience of Google is very much incrementalism and long term sustainability. Very few things at Google are built "new", it's tons of cobbling together systems that already existed and making small adjustments and optimizations to them.

There's a big difference between the product strategy side (v0 of N different chat products) and the tech side which is that all those products are made of many of the same components arranged differently.

> I am always surprise when well funded startups hire former big-tech engineers, rather than experienced startup engineers

i'd say that if you plan on scaling, you need a bit of both. a lot of tricky scale/process/architecture questions have effectively been "solved" in big orgs, it's useful to have people who can bring this experience

to take a completely random examples: setting up a performance improvement plan, performing incident post-mortems, organising oncall rotas, branching strategies when you have a mix of small customers on standard product and big accounts with customisations etc

The risk, and I see that currently in non-software functions, is hiring people from big corps that know how to manage the people that solved those scale/... problems instead of the problems themselves. With the result that those senior people default back to building an organization that looks like the one they are used to. Which doesn't solve a single one of those solved problems.

Quite likely to happen of the founders / existing hiring managers have no idea themselves how big corp solved these problems.

That’s the problem. They had 0 need of scaling. It’s premature optimization 101.

nail it, then scale it

Exactly, scaling doesn't help you solve product-market fit. It adds operational complexity/overhead with, in this specific case, no benefits, and solidifies the product that doesn't have market fit. Watch this for a laugh: https://youtu.be/y8OnoxKotPQ

Yeah...it's often a different type of person who goes from 0->1 than from 1->100. Neither type is better than the other, just different.

They pay them better salaries and comp too. Startups boast about poaching talent from big tech by matching compensation and putting those new big tech employees at forefront.

It's a fund raising and public marketing trick.

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