> Has anyone stopped to think what a massive failing of the startup part of the industry this is?
The failing is not that the employee equity math rarely works out, it's that the "industry" is so focused on equity. It often falls short as a recruiting tool (a significant number of prospective employees are clued in to the fact that it's likely to be worthless) and it's usually a poor retention tool as well (just look at startup turnover and the number of employees who don't stay with one company long enough to fully vest).
The startup value proposition today is actually quite compelling in some cases. Employees, many of them young and without significant real-world experience, can earn six-figure salaries working at companies that, without outside investment, could not sustain themselves.
Too much capital chasing too few opportunities has given many startup founders the ability to raise capital on terms that are insane. I mean, you have entrepreneurs raising million-plus convertible note seed rounds with caps that make absolutely no sense. Where does all that cheap money go? For many if not most startups, one word: salaries.
If you're being paid $120,000/year plus benefits to work on a CRUD Rails app at a startup that probably won't be around in five years, you should forget about equity. You have already won the lottery.
How is $120k/year to live in a top 5 most expensive city in the world to work harder than 95% of the people on the planet on a boring CRUD app winning the lottery in any stretch of the imagination? That sounds terrible.
Try earning $25,000/year working two jobs in a top 5 most expensive city in the world.
Working in tech may be unjustifiably glamorized, but you have to be incredibly out of touch with reality not to realize that earning six-figures plus benefits working 8-10 hours a day in air-conditioned buildings for employers, many of whom will feed and transport you, is something that millions of Americans would give everything for the opportunity to do.
Precisely. Work in a boiler room, or hike sacks of grain 20 miles on your back, or work in low end food service, or go scrub toilets 60 hours per week, then come back and say software developers are working harder then 95% of other workers.
80+ hours per week? Are you joking? Most startups aren't 9 to 5, but please name a single startup where you believe employees regularly put in 80 hour-plus weeks.
Even in professions like law and investment banking, where employees do have to work grueling hours on a regular basis, the "80 hour work week" is largely a myth. I think medical residents are one of the few groups that really puts in these types of hours consistently.
Yes. And from what I've seen, the companies where developers regularly do put in stupid hours aren't doing it because it's effective. It's a sign of dysfunction. E.g., a competition to be seen as the toughest, or a manager who can't really evaluate productivity other than by counting butts in seats.
hah, don't get me wrong, I highly doubt anyone really "works" a 80 hour week. I personally work 35 given that I take an hour and half for the gym + lunch everyday. And out of that 35, I probably spend 10 reading HN, learning new tech, doing personal emails, and other not exactly job-related activities, so 25 I'd say total of real 'work'.
so I was probably exaggerating a bit, but I stand by my original comment that many of these overworked, underpaid startup employees lead absolutely miserable lives and work harder than 95% of people on the planet.
For reference, the US in general works more hours per week than any other industrial nation. Hunter gatherers worked only 15 hours/week. Most impoverished nations work very few hours per week. The only people who beat them out are sweat shops in Southeast asia
"Employees, many of them young and without significant real-world experience...."
Getting that first job on your resume can be quite a trick.
Just before he emphasizes, with italics, that this is only "compelling in some cases".
Because of the circumstances in which I got dumped into the job market, I started out with a sysadmin job with some programming, which I turned into more programming, but it was not a great start, and it was only through unique coincidence (about the only person in the community with serious Lisp Machine and UNIX(TM) experience) and connections that I got my first really good job.
Working for Lisp Machines Inc. (LMI), the other MIT Lisp Machine spinoff, in the early '80s.
They were working with Western Digital, which like everyone else at the time was designing a 68000 based workstation, and conveniently enough, it was based on MIT's Nubus NuMachine: https://en.wikipedia.org/wiki/NuMachine
So they were doing all the normal infrastructure for a high end workstation, and LMI was designing a 4 board Lisp Machine CPU with a Nubus interface that would work in one of their machines, with or without the 68000 processor board running UNIX(TM).
People with a serious UNIX(TM) background were actually harder to find in the community at that time....
In the early '80s... Oh, I didn't realize it was so long ago. I was hoping that your experience with Lisp Machines would enable you to enter in some lucrative but secretive niche sector, that would still be using something similar to Lisp machines now. I know a company has built one internally, but I don't have its name in mind.
Oh well, lucky you for having been exposed to Lisp machines.
The failing is not that the employee equity math rarely works out, it's that the "industry" is so focused on equity. It often falls short as a recruiting tool (a significant number of prospective employees are clued in to the fact that it's likely to be worthless) and it's usually a poor retention tool as well (just look at startup turnover and the number of employees who don't stay with one company long enough to fully vest).
The startup value proposition today is actually quite compelling in some cases. Employees, many of them young and without significant real-world experience, can earn six-figure salaries working at companies that, without outside investment, could not sustain themselves.
Too much capital chasing too few opportunities has given many startup founders the ability to raise capital on terms that are insane. I mean, you have entrepreneurs raising million-plus convertible note seed rounds with caps that make absolutely no sense. Where does all that cheap money go? For many if not most startups, one word: salaries.
If you're being paid $120,000/year plus benefits to work on a CRUD Rails app at a startup that probably won't be around in five years, you should forget about equity. You have already won the lottery.