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Comment by danilocampos | Hacker News Reader

So heartbreaking. The front-line folks at Zynga were worked to the bone, by so many insider accounts. Now all the stock they were counting on has had most of its value evaporate.

But that's life, right? Counting on equity is, simply, a gamble.

Except when you've rigged the table, as Pincus and his cronies have.

http://www.forbes.com/sites/nathanvardi/2012/10/05/zynga-kee...

They got to play by different rules than the folks whose hard work got them to IPO. Instead of being subject to lockup, like the rest of Zynga, they got to cash out early, before the true state of their company was fully appreciated by the market.

So what's the lesson?

Don't trust people willing to fuck people over to make a buck. You're not special. If there's a buck in it, you'll get fucked too.

http://techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus...

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Is it really heartbreaking that some Silicon Valley developers, one of the highest paid professions in one of the highest paid areas of the world, only made a decent salary instead of a fantastic total compensation package?

It's unfortunate, sure. And quite a few parts of the Zynga story are downright distasteful, especially the options clawback last year.

But let's not get hyperbolic - they played the startup lottery hoping to get rich, and lost.

I think that's easy for you to say. But I bet it really, really hurts for the many folks who genuinely worked their asses off to see Zynga succeed. You put in that kind of effort only to watch your boss get rich while you get screwed?

You take Pincus and company, tie their fates to that of the employees, and everyone loses together? Fine, whatever. Like you said, they played the lottery. But the mismatch of fates is, to me, what makes this story pretty damn sad.

A few years ago, I saw a documentary that broke my heart.

A woman in China had an unnecessary, experimental operation done at a hospital, without her consent. It caused kidney failure, and she needed a transplant.

There was a match with a family member, but the hospital refused to pay for it, even though it could have been sued into bankruptcy in the US. For the want of $7,000 USD, she was dying.

Watching her sit with her young children on her lap, deathly sick with her husband by her side, the expression of finality and despair on their faces - I'm not ashamed to admit that it made me tear up.

Now that, to me, is god damn heartbreaking. I don't disagree with the direction of your sentiment, just the magnitude of the word you are using. It's close to the strongest feelings you can have on a subject. Did you really feel a pang in your heart when you read the article?

Because to me, those two stories aren't even on the same planet.

Your comment is one of those which I so very much hate about HN, because you already know it's wrong, you're just writing it because you like to argue and insult others.

By this stupid logic, you can never be happy, because there's always someone with more reasons to be happy, while the victims of a serial killer probably had it better off than a child who dies of starvation in Africa.

(Of course, you're a smart person, so I'm sure you're aware of how stupid this line of arguing is.)

You seem to be pretty strongly in support of someone who by all means cheated his employees. If that's the case, I certainly hope future employees have the foresight to do some research on who you are before agreeing to work for you.

You're misrepresenting reitzensteinm's position, which he put clearly: "I don't disagree with the direction of your sentiment, just the magnitude of the word you are using." His comment certainly seems to have been made in good faith even if you disagree with it.

Your tone on other hand is combative and patronizing. The HN guidelines say "When disagreeing, please reply to the argument instead of calling names," and "Be civil."

I tend to agree with reitzensteinm that we in Silicon Valley should remember how good we have it compared to the rest of the world. Our fortune comes not only from hard work and talent, but from being born in the right decade in a prosperous country.

I was going to comment on reitz' original statement because something was off in the way it was put.

I didn't because every time I went over it and sliced it, there was too much scope to misunderstand what was said.

But there were 2 aspects that I knew were triggers -

1) His underlying assumption that the employees were there for playing the "startup lottery". Firstly this ascribes knowledge of the mind set of the emps. Secondly this ignores the fact that Zynga also was a "safer" firm given its history and at the time, certain prospects.

The employees for that firm which are hurting today aren't necessarily the same as your first batch or second batch hires in an untested startup.

(this is why I didn't comment - there are many ways to slice and dice this further, and suffer from badly drawn edges and subsets)

2) His description of it as startup lottery. The underlying philosophy here on HN, and in most places which discuss startups is strongly merit oriented. His statement carried the implication that all the discussions so far were eye wash - it was a lottery and people lost, bad luck.

His later clarifications were pretty crucial to explain his context, but I can completely see where he ticked people off.

That's reductio ad absurdum. Yes, taken to an extreme, it stops making sense, but all I'm arguing for is a little perspective on how lucky we are as gifted developers. I might be wrong, but I'm certainly not arguing just for the sake of it.

Your assertion that I support cheating employees just because I didn't explicitly say otherwise is quite insulting, and it's what makes me feel the need to reply to you. I think the deal they got it shitty, and I certainly wouldn't start taking money off the table before my employees could.

I think you're reading an attitude into my comments that just isn't there. I suggest we continue this conversation by email, to avoid polluting HN with what will no doubt be a long thread - mine is in my profile if you'd like to.

I think you're ignoring the role of psychology. I think you do this very explicitly in your first comment:

>some Silicon Valley developers, one of the highest paid professions in one of the highest paid areas of the world, only made a decent salary instead of a fantastic total compensation package?

The relevance of the integrity of the managers to the ways people make decisions that determine the course of their lives is not something to be taken lightly. This applies even if the consequences themselves do not appear to be so dire. There is a distinctly painful feeling that comes along with devoting your life to someone who abuses that. For those familiar with this perception, the idea that you could ignore it is preposterous. From your perspective, whatever it may be, it could beyond your imagination and experience.

You might say this:

>Is it really 'heartbreaking' when someone's 17-year-old cat dies? It's a normal and expected outcome; plus, not only were they lucky enough to afford a pet and keep it in good health, the animal itself hasn't lost much, considering it's limited cognitive capacity.

And yet anyone who has been through or even near this situation would find the argument to be incredibly callous, because the formation of human emotion has so much more to it than simply evaluating one's present situation.

I understand the sentiment that perhaps nobody is entitled to a fantastically large amount of money and that people living what we call the good life are a small minority in the world. However, that just isn't the story here.

Connections between humans are what make society possible. It's reasonable to care when they are abused.

The comment you quote was trying to point out that they will recover from this, and have a fantastic career ahead of them.

It was not meant to be a comment on how it feels today, or to suggest that we shouldn't feel empathy for them because of their future position.

I just meant that in a few years they'll look back on this and laugh, which makes it story much less sad. Do you disagree with that?

Look, I'm coming from the perspective of an outsider. OP seemed to suggest it is heartbreaking to read about Zynga, which is what I was responding to. If one of my close friends was working there, I would absolutely feel a different way.

Similarly, if I read about a kid's cat dying on the internet, it might just make me feel a bit down. When my dog died, heartbroken was exactly how I felt.

Yes, I'm sure everyone will eventually recover from being worked to the bone and having faith in someone who essentially cheated them.

Well, okay, maybe some of them might have been under a lot of stress and that might affect their personal life and even health or life expectancy.

Maybe some of the talented people who might have a fantastic career ahead of them won't recover and become jaded or leave the industry altogether.

Maybe none of that is heartbreaking, strictly said. It's "highly unfortunate" or "really sad", perhaps.

What really grates is your decision to nitpick about the choice of words because you saw something that was even sadder on TV.

I don't know, I kind of read your comment to say that unless you're dying some horrible death you shouldn't be using the word "heartbreaking" to describe the plight of someone. I think it would be heartbreaking for someone to toil away their time with family and friends in the hopes of a payout only to have it blow up in their face. Relationships do die and health does suffer from the strain of some peoples endeavors. While you can say that these programmers and artists brought it upon themselves and took on that challenge, at the same time there is enormous pressure by employers and the culture itself which reinforces the notion of grinding away and sometimes poor work/life balances.

I think it's very hard to define exactly where your slippery slope of perspective begins and ends. Bottom line is that greater injustice is never an excuse for injustice. Neither are acceptable.

Reductio ad absurdum is a valid form of argument and not a logical fallacy. While the argument doesn't prove or disprove anything, it can show inconsistency. For example one person might say "I think taking the middle ground is always a good thing" and one might reply "So the middle ground between Hitler and Stalin is good then?", if the first person were to say "no" he would have exposed an inconsistency in his logic, rendering his first statement all but useless.

While there was a "reductio ad absurdam" in there, it appears that term was used in error. From the rest of the post, the complaint appears to have been about an alleged "straw man argument".

I have no comment on the issue, I just wanted to point out a terminology confusion.

You are both right. My use of the term was in error. I meant to say it was reduced to absurdity while being presented as an inevitable logical conclusion, which is a straw man argument.

Without the straw man, reductio ad absurdum alone is just a tool, not a fallacy, as you say.

By way of being pedantic -- reductio ad absurdum is not a fallacy. Showing extreme consequences by taking assumptions to their conclusions is perfectly valid. That's the whole point of reductio.

http://tvtropes.org/pmwiki/pmwiki.php/Main/AppealToWorseProb...

Couldn't find some more official name for the "The "Children Are Starving In Africa!" argument.

Anyone willing to help out?

Is it the Four Yorkshireman defence? As in the python/at last the 1948 show sketch.

"Of course, when I were a lad, we had it tough..."

Love that idea, that would be a great addition to the true Scotsman.

I don't think there is anything wrong with that comment nor do I think it is insulting in any way.

EDIT: Maybe I should add I am currently in Asia. Many people here probably work harder then the people at Zygna and receive less compensation.

I think his point was about the wording, the vocabulary used in the previous comment. I see a lot of hyperbole in HN, and I find the abuse of inappropriate wording revolting (haha, just kidding here). This is probably HN is populated by a lot of very young people whose toughest thing that happened to them so far is to get a bad grade in school or worse to quit college, and who therefore consider that losing a lot of money over something that is nothing but a bet can be heartbreaking.

Using overly emphatic words for not so cruel-bad situations is a bad thing, since you will be at loss for words when something worse happen. That's just a sign of lack of culture. I am not talking about the person who said "heartbreaking" in the first place, just a general observation as to what language is changing into these days.

Commenter is right. It's almost foolish to find this heartbreaking. It could be anger, disgust (though it's not necessary they are always mutually exclusive) but it can certainly not be heartbreaking. Not in this case.

It wasn't like Zyanga kept them working while they were starving and kept them lured all along that they will be fed once Zynga stock booms up.

They always had the chance to jump ship. Esp. with many small/big ships steadily floating around ready to lift them aboard. It was a gamble for the extra cash (read bonanza) and they lost (just the bonanza).

While I genuinely believe that documentary saddened you, you're basically saying that skilled workers in the first world don't deserve words connoting sympathy or outrage when they're fucked over by their employer.

You don't think Elvis was taking his economic privilege into account when he wrote "Heartbreak Hotel"? Maybe he should have called it "Momentary Romantic Setback Hotel". Or maybe the word "heartbreaking" should be reserved for citizens of the Democratic Republic of the Congo, where, all things considered, things are considerably more dire.

"The National Adjective Council must regrettably inform you that your first world documentary viewing experience was merely 'disheartening'."

How have they been "fucked over"? They've bet on equity and it did not turn out the way they hoped.

That the CEO cashed out before has nothing to do with that fact.

And with

"Pincus has a track record now of big IPO train wrecks. He founded Support.com and took it public for $14 a share during the first Internet bubble in 2000. The stock zoomed up by 133% in its first day of trading. It changed hands for more than $30 per share before tanking below $5 in 2001."

they might have should known what was comming.

>>How have they been...

Yes they make a mistake. That mistake is to bet on an unethical business man. The point is not that, the point is the CEO set different conditions for him and different for others.

While the senior execs were allowed to cash out, guys down the ladder weren't.

Which does not mean they have been "fucked over", or in which way have they?

How does the fact that senior execs cashed out relate to the fact that they don't get rich b/c their company has no sustainable business model and the stock crashed?

Well, I think the definition applies when the thought was that the reason the CEO was able to cash out was because he set different rules for himself from his employees, as was explained, and that he knew the true outlook of the company which was bad, as was explained. What more do you require to understand the situation?

I mean, if the CEO told everyone up front about the tactics he was going to use to allow him to cash out early that also prevented everyone else from doing the same at the same time and also that the future of the company was all downhill; then maybe you have a point.

Maybe saying they were cheated is a better phrase for you?

If you don't agree that that's fine. Which, by the way, I have a bridge for sale you might be interested in...

You consider employees that don't have the same rules as the CEO "fucked over?"

Depends on the rules we're talking about.

If we're talking about pay structure and access to the executive washroom, then no.

If we're talking about employees and the CEO having equity in the same company but the CEO can cash his equity any time he feels like it while the employees cannot then there's a problem. Especially when said CEO seems to be doing questionable things to pump up the value of his stock that later collapses so that when employees finally can get money there's no money to be had.

I find it disturbing that you seem to think there's nothing wrong in this situation. There's no way you can say that the actions and behaviors of this CEO and company are the norm. If you don't understand that at this point then I'm unable to explain it to you. In this case we'll just leave it with you have your opinion and I have mine.

I never said I find it ok what the CEO did, but that's not the reason the stocks crashed, the reason being that Zygna just does not work as a business model.

And the reason they've lost their "money" is not because of the CEO having different rules.

Because, regardless of whether the company performed well or not the senior execs and the CEO considered their right to cash out.

But didn't hold the employees to have the same right.

Which actually speaks a lot about the intentions of those senior execs, which is clearly to play a hit and run game.

You consider employees that don't have the same rights as the CEO "fucked over?"

Don't be obtuse. The primary insiders of Zynga sold like there was no tomorrow immediately after the IPO. They should have had the same lock-up period as the employees. The entire company just reeks of sleaze. You don't have to be a crackpot to notice these things.

Feelings are not negotiable. Poor people feel poor-people problem pains, rich people feel rich-people problem pains. The problems may be different, but the intensity of the pain felt by them can be of the same magnitude.

If you're in America, have $0, can't pay rent, can't buy food for your kids; the fact that kids in Africa are dying from some non-1st world disease is completely irrelevant to the pains you're having.

It's a completely different thing for an impartial third party to say person X's pain is more than person Y's pans (that's relative to the observer).

I'm going to be cold-hearted here for a moment.

We put far too much emphasis on prolonging life and not enough on quality of life. I have no clue who this lady was or what her background was, but $7k goes a long ways in China. Imagine if she could have instead guaranteed a solid education for every one of her children.

We spend a ton of money on end of life care that could do much more good spent elsewhere. Which would you rather have- $50k in end of life care or a free college education?

Kidney failure and a transplant, chances that the transplant doesn't work, complications following it, issues remaining for the rest of her life, etc. It's not all roses and medicine isn't as magic as it is in the movies.

I totally agree with you, logically; but I also don't really have any problem with the earlier poster saying it was "heartbreaking", either. Certainly to the people involved at Zynga, the situation is heartbreaking — and our sympathy/empathy responses are based on our ability to "feel" (in some way) a similar experience to that which we imagine others are feeling.

Whenever I read about these documentaries, I ask myself what the guys doing the documentary did about the case.

I hope they did get the woman the U$ 7.000.

Sadly, there are stories much like that, or worse, every single day. My SO works for the state child care agency here in Uruguay, now that's a thankless job if there is one. She gets to see the worst of human beings (child rape, uncaring mothers, a mother putting her 12 year old girl into prostitution), fortunately balanced by a little of the best too (kindhearted adoptive mothers for example, and lots of supportive people).

I've always wondered if they give them the money after shutting off the cameras, since it's such a small amount.

More likely, they shut off the cameras, thank the people, and then fly away, shaking their heads that such a tragedy could occur.

If you debate semantics on Hacker News, you're gonna have a bad time.

Personally, I would use heart-wrenching for your documentary, rather than heartbreaking.

When you think of it, those two stories are the consequence of one huge problem. Globalization, and financial empires don't give a fuck about human beings. This poor mother in China is dying because a whole chain of power/money holders don't give a dman about what could be an insect for all they care. Same for Zinga : no respect for the human beings whose income depends on what decisions the leaders make. Only, yes, i agree with you, nobody died at Zinga yet. That chinese mother did die.

Now that is hyperbole..

You aren't contributing here.

This is why i support private gun ownership. In such a situation, I think a little lead coercion is necessary.

Or... instead of people shooting each other (or threatening to), maybe China could just have more robust rights to sue.

This is radical. We will end up all blind this way. Because it will be impossible to determine the threshold scenario when to pull the trigger.

As much as I am a Zynga hater, this happens ALL The time.

Decide.com in 1999 - they farked over the employees and diluted the stock of everyone hoping to cash out in an acquisition - this caused a major meltdown and the company fell apart and nobody received anything.

Savi Technology was acquired by Lockheed - they stated an option price internally which was wildly wrong, granted many many many options to execs and came out and said that anyone who joined in the last 12 months had options worth zero. People who did have common shares got farked over, newer employees even worse. and all employees got ZERO equity in lockheed.

Then Lockheed stock tripled after the acquisition due to the War on Humanity and everyone was still stuck holding the bag.

This is just two direct examples.

Most companies will fuck over their employees. I don't trust ANYONE in the valley.

In addition, and this should be obvious, don't trust ANY company executive or manager that makes oral promises or allusions to future windfall without it being in writing, signed and verified by a lawyer.

I second this. Get everything in writing. But you know, even THAT isn't good enough sometimes.

But don't fret, if (when) Zynga does collapse, it's execs (including the founder, who I hear is a piece of work) will be up to their eyeballs in lawsuits. Ahh the fun, writing checks to your lawyers.

People like that have lawyers on retainer. And if those same lawyers did their job when the options contracts were written, the lawsuits won't amount to anything.

This is a pretty common story. Probably more common than when the options pay anything. I once worked for a company that acquired another company. We were bigger, our CEO set up the deal, their CEO got paid, etc. But officially it was a "merger of equals". Why? Because if we'd bought them their options would have vested immediately and we would have had to buy up all the stock the employees held.

The way it was worked my company traded their options for options in the new company. Two years later everyone who had worked for the company we acquired was out of a job, and they had to decide whether or not to exercise their options in a company that wasn't publicly traded (which is madness, BTW - never, ever do that). I would have bought one of those mirrors on a stick and checked under my car every day if I'd been the CEO. But eventually he cashed out for a cool $15m.

I remember this one part of the documentary Born Rich where one of the recently-turned-18 kids said that when you're born stupidly rich in the US, getting sued over something -- anything -- is basically a right a passage. He basically said it's not a matter of if you'll get sued, just when you'll get sued.

Given how litigious the US is, if I were super rich I could not imagine keeping a significant portion of my assets in the country. If you have a lot of money it makes a lot of sense to not only diversify your investments but your jurisdictional exposure as well.

If you know the lawsuits are going to take forever (time) and cost a bunch (money), not having many assets in the US makes it easy to accept a default judgement, declare bankruptcy and write off the loss entirely without ever paying any lawyers a cent.

In this case, the people being sued seem like they totally deserve a lawsuit, but that doesn't change the fact that it is naive to not diversify jurisdictionally.

> Given how litigious the US is, if I were super rich I could not imagine keeping a significant portion of my assets in the country.

You don't even need to be wealthy. The US no longer has the rule of law, so you can now be stripped of your possessions even if you are _accused_ of a crime:

http://en.wikipedia.org/wiki/Asset_forfeiture#The_trend_towa...

True. Getting it in writing is not really enough if your employer is a snake.

I know an employee #3 at a successful startup who was fired two weeks before he would have vested. He got his due but only after legal action.

This reminds me the story of forgotten Twitter founder Noah Glass and the way affairs were handled that time http://www.businessinsider.com/twitter-cofounder-noah-glass-.... It's not exactly the same situation but it's also about not giving someone the due he deserved.

A good friend worked for a Valley start-up in the late-90s boom. Wasn't too sure about the organization, and yes, there were some sketchy people there.

Turns out, though, that the founder was funding payroll out of his own pocket for the last couple of months. Subsequent datapoints suggest he's a good (if occasionally odd) egg.

Trust in the Valley is a very scarce commodity, but it can be found.

Zynga? I have to say I saw it coming from miles away.

That doesn't sound like it happens ALL The time. There are hundreds (thousands?) more companies that don't pull these things.

Those were two of many examples. I have more, others have more.

It is really a problem. People have simply been conditioned to think it is normal. it may be "normal" but it is farked and wrong.

I don't think it is appropriate behavior, but I don't think it is the common case.

Right, but again, heartbreaking is hyperbolic. Heartbreaking is when you are a coal miner and you have the mine collapse on you and you die like a trapped rat. This is just a raw deal.

The miner is not heartbroken in that scenario. He is dead.

The story is heartbreaking.

Are we supposed to agree that only the worst can be heartbreaking?

Well to plays devil's advocate, the coal miner is working in a coal mine because he did not get a superior education.

You can argue about why, but I am willing to bet (I don't know anyone working at Zynga) that many of these employees still have tens of thousands of dollars in college loans and seeing the sacrifices they made to get into a position in order to pay them off, erased in a matter of weeks, makes them feel like trapped rats.

I never really like these comparison though because why is a ditch digger better or worse than a computer programmer? Both hold basically the same desires. Why should one's misfortune be less important than another? They both work just as hard?

I think, regardless of socio-economic status, "severely injured/dead" is worse than "only made 120k and I'm in debt".

>Well to plays devil's advocate, the coal miner is working in a coal mine because he did not get a superior education.

Which is heartbreaking in itself, on top of the bloody mine crushing on him.

You say it like this argument somehow makes the Zynga case more heartbreaking, instead of less...

>I never really like these comparison though because why is a ditch digger better or worse than a computer programmer? Both hold basically the same desires. Why should one's misfortune be less important than another? They both work just as hard?

No, they don't. And they don't get the same compensation either. Or job satisfaction -- the ditch digger pretty much works that job because he has to support himself / his family and he doesn't have the means to get something different. The computer programmer could have been 10 other things if he wanted, from tech support to floor manager at a Costco.

Really, try ditch digging for a year, and then we'll talk.

And, unlike ditch diggers and coalminers, programmers (and other educated folk) can work until they die if need be. This make it or break it silicon valley thing is kind of distorting people their brains. Most people in this world have a job to provide for their family; as a developer you are much better off doing that. You get paid more, it's easier to switch jobs, you can move mostly anywhere and you can work until you're old/dead and enjoy it. A lot of educated people (at least 2 devs) over 70 I know still work and are happy to do so.

And gambling on equity when you get paid well over average with all the options you have for your future is not that bad all considered.

>>Really, try ditch digging for a year, and then we'll talk.

What's that? Is it like "First perform at the Opera House and then we'll talk Mozart"?

Most of the times they do not have same desires. For whatever reasons. Be it the immediate need to support family or the ambition the fire of desire having been lost over the years or fight and struggle to look for a stable mean to live. Or maybe the kind of education/upbringing he received. Or the company he grew up with (well, this is very important). This is also has a lot to do with the genes you were born with.

This is the nature of a capitalist society and other ones are even worse. In a capitalist people are supposed to be of uneven means so they are. In a society like communist societies people are not supposed to be of uneven means (in the usual sense) and still they are and the gap is a lot wider than that in the former society.

The genes? Like, if the kid of a miner is adopted by a couple of lawyers, his miner genes would still push him to a life of digging?

Don't feed the troll, galactus.

>the coal miner is working in a coal mine because he did not get a superior education

Now, this is heartbreaking. Given the fact that most probably not having superior education (or education at all) didn't have anything to do with neglecting studies but simply being born to poor parents.

>why is a ditch digger better or worse than a computer programmer?

It's the society we live in. There are various places on this planet where you are an untouchable by caste the caste you were born in leave alone money and job.

>I think that's easy for you to say. But I bet it really, really hurts for the many folks who genuinely worked their asses off to see Zynga succeed. You put in that kind of effort only to watch your boss get rich while you get screwed?

How is that different from 99% of jobs out there? People flipping burgers work crazy shifts with shitty compensation only to watch the franchise owners getting filthy rich.

The difference is in the expectations. In in a minimum wage job, there's no equity. You're not expecting to cash out in stock if an acquisition goes well, and there's no opportunity for the people at the top to manipulate things so that they can cash out and leave you with junk stock.

If you get a minimum wage job, you know what the deal is. If you get equity, it's reasonable to expect that you won't get screwed over completely.

Is it fair? That's a very different question.

It's 2012. Anyone who sincerely expects options to vest without dilution and other shenanigans is naive at best. Been there, done that in 2000 and 2004.

been there done that. Had stock options not from one, not two, but three startups in dot coms. Worked 60 hrs week - to the bone. Came through with nothing, actually lost money because in one of the startup I had to buy out my options and it came with a large tax bill for some reason

> I had to buy out my options and it came with a large tax bill for some reason

This usually happens if your option has a strike price lower than the market price at the time they're issued, in which case depending on jurisdiction they difference will usually be taxed as income on exercise. If you're really unlucky about where you are and how the options are arranged, you might even get taxed based on the market price on exercise. E.g. Norway at least used to be that way a while back unless you took specific precautions to get the options issued under an approved scheme.

It's something to be aware of, as it means a lot of people might not be able to afford to exercise the options before they're ready to sell the shares, which means your total gains gets taxed as income most places (as opposed to if you see the company on a nice upwards trajectory and exercise and wait, in which case you may end up paying only capital gains and in some cases depending on where you are might end up paying reduced capital gains rates on the growth from your exercised onwards). The difference between a good and bad options plan can easily be 50%+ tax (e.g. UK, if you're careless you might pay 53.8% - top rate income tax + national insurance + employers national insurance contributions, vs. 10% if your company qualifies for certain incentive schemes for startups and the options plan is structured right..)

It might seem great to have a really low strike price, but if you expect to be in it for the long haul and might contemplate exercising options before you're ready to sell your shares, talk to a tax lawyer before agreeing to options terms.

For those in the UK you need to read and understand the implications of Mansworth vs Jelley as it could save you a chunk of Capital Gains Tax (or allow you to carry forward a capital loss to offset future CGT).

That's why it's an intelligent move by Starbucks to let baristas own stock, it creates raised expectations and makes them literally invested in the company's success.

That's not really a good thing either...

"Silicon Valley developers, one of the highest paid professions"

Based upon the number of hours the people who I knew at Zynga were putting in - IMHO they were far from receiving a good rate when looked at hourly.

100k at 60-70+ hrs per week in a place with some of the highest living costs is not all that admirable of pay if you ask me. Yes they are not on the street but its not exactly the bees' knees either.

They knew the risks and they aren't slaves. If they really thought it was a bad deal, they can find a job at another company.

Everyone I know that worked at a startup has ended up out of a job with little to no payout (beyond their salary). It's a risk.

If you don't want to take that risk, work at a non-startup company.

This is _precisely_ why I live in Berlin and not in SF.

If you don't mind me asking, what is the average developer salary compared to the cost of living in Berlin?

Well, developers work on the internet. Good freelance developers command $70+/hour on the internet.

The cost of living in the hip part of Berlin (Kreuzberg/Friedrichshain) has nearly DOUBLED in the last 5 years. You're now looking at nearly $1500 per month for a 900 square foot 2-bedroom. :D

My place a bit farther out is €1000/mo and is 1800 square feet. My office is on one floor (the one with the small balcony) and living quarters upstairs (the big balcony).

Sorry, I'll stop now.

That is extremely inexpensive compared to new york or San Francisco.

I'm aware - I moved here from Manhattan.

But in line with South Bay. As long as the work is near Caltrain/BART lines, one doesn't really have to live in San Francisco unless they really want to pay premium for the privilege.

How long is the conmute time in that setup?

Depends on where you're going to or from. If you live near the Redwood City Caltrain and work in SoMa, it's 30-40 mins.

Melbourne as well, I would say.

Melbourne's about $2400 a month for a decent 2-bedroom in CBD.

Fuck, I paid $1850 for a 650 sqft one-bedroom in Mountain View. That was before they tried to raise the rent after the Google expansion, I hear they posted it at $2400 after I left.

That said, London is more expensive.

> That said, London is more expensive.

That depends a _lot_ on where in London.

My 3 bedroom 1000sqft house with a garden in London has a current rental value of about $1600. That's the difference between living in a leafy, relatively unfashionable suburb in the South of London vs. living in one of the enclaves of rich people or hipsters in the centre of town. I have a 45 minute commute to the centre, door to door.

The analogue is living in Oakland or San Jose. Of course public transportation is much worse in the bay area, if you happen to live and work near the right Caltrain or Bart stops then it can be comparable.

London's a big place. Where do you mean?

Battersea and Hackney personally.

The Bay Area is a bigger place BTW.

I don't recognise the prices you quote:

http://www.rightmove.co.uk/property-to-rent/find.html?locati...

Sigh.

The place I lived in Mountain View was prime real estate. I was on Castro street, one of the only walkable places outside of San Francisco proper. There is plenty of cheaper real estate in MV.

Similarly in Battersea I live near Clapham Junction. I can get to Heathrow in 40, Gatwick in 30, Soho in 25 and Bright on 50! I can also cycle to Trafalgar Sq in 20 mins if the lights are favorable. Again, there are cheaper places around, but not without worse location or other problems with the property.

Also, the first property on the link you listed is £390 a week. You do realize that that is $2700 / month right? And you do realize that in Mountain View when you rent there is no council tax, and you don't pay estate agents any fees at all. In fact there are no estate agents, and property holders often give you some kind of deal like reduced rent for the first month to get you to sign a lease.

The first property on the link when I click is £650 pcm.

You lazy bastard! get back to work and stop posting on HN!

(JK)

Context> @ 0230 hrs, berlin time

Packing to fly to go visit my customers in the USA in a couple hours.

You don't think I actually work for Berlin salary, do you?! This is the Internet!

Compiling!

XKCD should really be a protocol.

"I'm getting an XKCD 303 back from the developer."

Depending if you like what you are doing? I don't know a lot of people working to get rich and cannot imagine everyone in the valley is.

And this is why I love HN.

I found myself nodding along in full agreement with the GP, then doing the same, after reading the top rebuttal.

/enqueues 10 minutes of self-loathing, for being so fickle minded. ;)

> Is it really heartbreaking that some Silicon Valley developers, one of the highest paid professions in one of the highest paid areas of the world, only made a decent salary instead of a fantastic total compensation package?

They effectively worked two full-time jobs for a year and a half, and got paid for one. Average salary for a programmer at Zynga seems to be around $100k, which is less than I make working 37.5 hour weeks, not 100-hour ones.

So, yes. It's pretty heartbreaking to see them get fucked over after giving their entire life to Zynga for the better part of 2 years. I'm not sure why you think otherwise, frankly.

But they had the option to leave anytime they wanted, no?

I don't consider it heartbreaking when someone makes a conscious decision to stick around in a crappy situation in the hopes of striking it rich and it doesn't work out.

What about all the people that work at Zynga who are not developers? The artist, the people in Q/A, and the rest? In many cases they are working just as hard without the compensation packages or virtual guarantee of another job if Zynga goes under. To me, it really is heartbreaking.

> they played the startup lottery hoping to get rich, and lost.

What?!? Folks: ZNGA still has a market cap of almost $2 billion. Your average startup engineer is lucky to see any decent and timely exit event. So even at these "low" prices, from where I sit they are still looking better than many of their peers.

So rich people never deserve sympathy? It's got to hurt when people close to you, whom you see as peers, make off like bandits whilst you're left relatively a lot worse off.

"Life's not fair", bellum omnium. But the reason to talk about fairness is that it's something to strive for and insofar as we can make things fairer (like through SEC regulation) we should.

Nobody's saying the losers here are catastrophically equivalent to a war zone. But worthy of sympathy? Sure. Just because you're rich doesn't mean things can't suck for you, subjectively.

I think with Zynga it's the fact that it's hard to feel bad for people who work for Pincus, who laughs as he proudly relates how he got his start by peddling malware. When you work for a known-to-be shady guy in the hopes of getting rich, it makes your plight less sympathetic to most people.

Not only heartbreaking, it's literally the worst thing that has ever happened in the history of humankind.

If I cried constantly, for the age of the universe, times infinity, it would not be enough to express the sadness I feel.

An infinite number of oceans the size of the Sun would not be enough to capture all our tears.

Apparently HN readers do not value ironic hyperbole and reductio ad absurdum.

You should see him when someone breaks a nail.

Like the old poker adage: if you can't recognize the sucker, then it's you.

Any developer with a moderate amount of common sense who chose to work for Zynga should've seen this coming. Zynga has been criticized for its business model and the way it treats its employees for a long time now.

Lots of Zynga employees ended up there due to acquisitions. It's not their fault if their employer got bought and their equity (if any) at the old company became Zynga equity...

That's not entirely true. Employees still have a choice. Specifically, I remember reading this article: http://www.gamasutra.com/view/news/167244/Turning_down_Zynga... and thinking to myself, "at least someone isn't just in it for a quick buck."

While I have never worked there, I think the assumption pre-IPO was that yes you might get abused but it will all be worth it in the end because of the equity - remember Zynga according to tech blogs was the hottest thing coming out of the oven a couple years ago.

This also isn't all that unusual of an attitude in a hyped startup - management will abuse you (ahem, I mean expose you to a dynamic exciting work environment) and you will take it because your going to be rich in a few years... or not.

Life is short. Putting up with abuse in the pursuit of a potential windfall is part of what's wrong with our lottery culture these days.

As a gamer friend always reminds me, "The cake is a lie."

I find that quote interesting. Your gamer friend might not have given you the context of the game, but it's interesting:

You pretty much know there is no cake. GLaDOS, the malevolent and controlling AI telling you there is cake, lies to you consistently. You catch on quickly that she's lying.

The warning "The cake is a lie" is scrawled in blood inside a hidden antechamber, inside one of the levels.

Somehow I feel like there are parallels here that you stumbled on more or less accidentally. Or maybe I'm being far too literary.

I'd say: "expose you to a dynamically exciting work environment". The direction of the dynamics is another story, right.

Winningest quote ever from DotCom 1.0: "It has a ballistic trajectory".

Technically I think orbit can be achieved ballistically, or even planetary/solar escape but the overwhelming majority of projectiles do land. And some of them very hard, others barely get off the ground. All of which makes it quite a good metaphor really although not the originally intended one.

Ballisticality has a lot less to do with sustaining the trajectory than attaining a minimal orbital velocity, or escape velocity.

NB: Ballisticality isn't a word. Pity.

That's really special. And appropriate here.

While I agree with this statement somewhat, I can't imagine the talented devs at Zynga didn't have common sense. Seems harsh to write those people off with essentially 'you only have yourselves to blame'. That attitude also removes some of the responsibility from the folks at the top.

> I can't imagine the talented devs at Zynga didn't have common sense.

There are a lot of very smart people who are easily blinded to the truth when confronted with the possibility of vast riches. Making the right decision here was less about talent/intelligence and more about wisdom.

Or it is about risk tolerance. I can see joining an overhyped overvalued yet detested company with eyes wide open, realizing that the risk is huuuge.

Yes, that's certainly possible. However, I don't think the math worked out in Zynga's favor in this case. And the reason why people joined anyway was because it's emotionally difficult to do that math correctly when your eyes are blinded by dollar signs.

Going to the mat to double your options and attempting to deal with them with your eyes open, only to have shenanigans on the back end is nothing that can be protected against. Hey, they're a public company, the shenanigans are out of the bosses hands...or are they?

This reminds me of the riddle Varys poses Tyrion in "Game of Thrones": Three great men sit in a room, a king, a priest and the rich man. Between them stands a common sellsword. Each great man bids the sellsword kill the other two. Who lives? Who dies?

Replace sellsword with employee. All these employees got screwed, yet like the sellsword they should have had the power to get a better deal.

Totally, and there was a familiar line, around tech circles, it goes like this "Friends don't let friends work at Zynga".

And let's not forget.

“I did every horrible thing in the book just to get revenues,” -Mark Pincus

It's unfortunate the empolyees were not paying attention to what their CEO and Company was saying and doing.

It's unfortunate the employees were not paying attention to what their CEO and Company was saying and doing.

This. Stop coding for a moment and pay attention to the surroundings.

What makes you think a person that's unethical to their customers is going to be ethical to their employees?

100% spot on. Yah, super sux that (as usual) the top execs ride on the backs of everyone else, cash out, and buy fat crib in Pac Heights. But then again, what do you expect when the ceo is so blatant about the culture there? That sentence says it all, anyone can see it.

So, sorry folks u got screwed, but it's, literally a house of cards. Everyone early and vc that put their money in, I'd a happy camper..

Let's not get caught up in the morals of what Pincus said.

It's even against your self interest - you work for a boss who acts like that, and they'll throw you under the bus pretty quickly just as well.

And that boss will hire folks who think like (s)he does also.

When your project manager shows you a Top 25 game from the AppStore and tells you to Zynga-ify (blatantly copy it), you should know you're dealing with scum of the earth.

Let's not get caught up in the morals of what Pincus said.

It's the moral hazard - you work for a boss who acts like that, and they'll throw you under the bus pretty quickly just as well.

And that boss will hire folks who think like (s)he does also.

It's heartening that their business model is failing. I hope it means that it keeps ever more developers from falling into that short-term trap of extracting value through psychological manipulation instead of creating things that are useful or enriching.

Heartbreaking? I feel about as bad for people working at Zynga, where they spend day and night copying other web properties, as I do for those working on the Death Star when it exploded.

"You know, any contractor willing to work on that Death Star knew the risks. If they were killed, it was their own fault. A roofer listens to this... [taps his heart] not his wallet."

http://www.whysanity.net/monos/clerks5.html

This is deplorable, of course, but that's the way the scam works. It's only remarked upon when the short position of the executive team is so obvious.

This is like feeling sorry for people who work overtime for telemarketers. Oh poor them. Zynga was a cheesy business to begin with, and absolutely every employee there knew it.

I don't find it heartbreaking at all, actually. While it may be a bummer for those who lost the gamble; it was probably a valuable life lesson. Surely they'll think twice about buying into unfounded hype, and depending on the promise of a paycheck later, someday.

Do you find it heartbreaking when a fool throws down $50k on red at the roulette table, and loses?

I've heard from a lot of people that your reputation means everything. It's a shame that Pincus's didn't catch up with him sooner, since he hardly deserves anything he's getting.

I have no pity for them. They'd have to be terminally ignorant not to realize they were building scumware.

"... before the true state of their company was fully appreciated by the market."

I think this article makes it clear that the market has _no clue_ what the "true state" of the company is...

I'd say I'm living from paycheck to paycheck.... "Except I'm not getting a paycheck!"

http://uptownalmanac.com/2012/10/nerds-gone-wild-day-san-fra...

Anyone worth their salt could've Googled their leaderships history of creating big IPOs that end up crushing and burning. Most were complicit in it, or just rationalized it to themselves that it was different.

Second, the people who make the company - the early people - are on better terms. The guy who got hired the month before IPO shouldn't be expecting much.

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