"The simple reason is that if you over-perform at the loser level, it is clear that you are an idiot. You’ve already made a bad bargain, and now you’re delivering more value than you need to, making your bargain even worse."
I'm surprised this post is so popular on HN. Isn't working for a startup - pouring your time into someone else's company for below-market wages and some piddly fraction of a percent in equity - basically the definition of cluelessness, according to the author?
A lot of people here either wants to or they already did start own company, so they are more in the position of "sociopaths" (according to the post's terminology - see "The MacLeod Life Cycle of the Firm" chart).
The article handles the case of people who derive a meaning from outside of their work and the people who are looking for financial success and power/status within a corporation.
As I've mentioned in a previous comment, the article doesn't take into account the fact that there are people who
a) look for a meaning that isn't centered around money or power
b) derive it from their work
If you're an engineer working for a start-up (taking a below market wage, working long hours, so on) only because you are hoping for a large pay day, then you are a fool. If you're working for a start-up because you enjoy programming or because you're looking to learn what it takes to run your own start-up then you can get a lot of a start-up so the equation doesn't apply.
- If you do it because you enjoy it, then you are, by article's definition, a "loser" (in terms of potential monetary gains) [1].
- If you do it in order to learn about running your own startup, then you are "sociopath-in-training" (ala Ryan from The Office).
And that's it. The author doesn't claim you cannot have happy and meaningful life as "loser" (by his definition), deriving pleasure from the work itself.
He just tells that for "losers" somebody else will reap a significant part of the monetary reward for the value that their work creates.
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[1] Similar principle works for "sexy" jobs - that's why poor game developers get abused so much.
Very good points. The author does try to disambiguate "loser" (though I don't think he does disambiguate "sociopath").
My problem with these terms is that they just can't be disassociated with their common meanings. This is a common rhetorical trick - an author defines the word one way, and sticks to that definition, but inevitably uses the impact of the more common word (while claiming that the earlier disambiguation clears him of the need to defend the more common usage).
In short, I think we need a different word than "loser" to describe the category of workers who 1) make a good salary 2) enjoy their work, and 3) yes, could make more money or get a better deal outside the organization.
I'm also unwilling to accept the use of "sociopath" to describe all start-up founders, no matter how airtight the author has been in locking down a definition that avoids all the negative connotations of the more general use of "sociopath."
I guess that I'm really just saying that some words just can't be disambiguated.
In this case, the ambiguity is in the interest of being humorous and interesting, which is why it doesn't bug me all that much (though in other contexts, it can be infuriating).
I agree wholeheartedly with Paul, but you do have to balance it against the amount of work involved. Something that's fulfilling at 40 hours a week can be grinding when you're at it 60+ hours a week.
The problem with working as an employee for a start-up is that you're required to have the commitment of a founder, without the upside. There may be some people who will knowingly invest their youth in buying someone else a yacht, but in my experience many startup employees are unrealistic about their chances. Most businesses aren't going to change the world or make average employees rich.
From a rational perspective at least, I think it's hard to justify being an employee at an early-stage startup unless you're there to build the experience and contacts necessary to start your own company. There are plenty of medium-sized companies out there that offer similar opportunities for employees without their bureaucracy of a bigcorp or the risk and time commitment of a startup.
I agree with working for a medium company can be a very good trade off (I am presently at one and enjoy my job a great deal). However, there are always trade offs: in a small company you get a much bigger say in the product features and its architecture; medium companies might also have the same broken processes/tools/standards as an early an early stage standards but they would be much harder to dislodge.
It really comes down to the specific company/specific team/specific position. Main thing is not to have unrealistic expectations (changing the world, earning money/fame power) as well as have a clear picture of what you're looking for (technical challenge, experience for starting your own company, career advancement, etc...).
The other key thing I've learned is if joining an early stage start-up as an engineer, is to be sure that the sort of programming they do is what you want to do. Otherwise, you'd feel underutilized despite working start-up hours. For example, joining a start-up building web applications on the LAMP stack is a bad idea if you want to do systems programming; some start-ups begin with a simple technological stack but then invest a great deal in in-house systems ("build" being a better option for a start-up then "buy") as they encounter scalability/performance challenges (Facebook, Twitter, etc...) -- but the average early stage start-up would never encounter these challenges in the first place.
Yes unfortunately this is the chasm that all of us have to jump. I've had a hard time reconciling this BUT I think there are a lot of ways that you can create a work environment which measures individual performance well enough to compensate appropriately.
Of course this will require each employee to be able to do more than just one role and will need them to be involved in sales as well.
Another way to get past this "mental block" is to let your employees do something they really love and build your business around it. Ie like Patagnoia which lets people take off a whole season to go surf.
I get where you are going, but my personal experience has taught me otherwise. A 10X gain on nominal value after 3 years of work isn't atypical. Doesn't make you a millionaire, but it does help pay the mortgage.
In cash terms, that isn't remotely close to true. The chances of making a fortune as the founder of a startup are vanishingly small, and as an employee, a tenth that. Work in an industry such as banking where compensation has a bonus element and you will do better than a hypothetical startup employee who participates in an IPO every year on that alone, and that's before you consider you'll get a good salary and work half as much.
Comments
"The simple reason is that if you over-perform at the loser level, it is clear that you are an idiot. You’ve already made a bad bargain, and now you’re delivering more value than you need to, making your bargain even worse."
I'm surprised this post is so popular on HN. Isn't working for a startup - pouring your time into someone else's company for below-market wages and some piddly fraction of a percent in equity - basically the definition of cluelessness, according to the author?
"someone else's company"
Here lies your answer.
A lot of people here either wants to or they already did start own company, so they are more in the position of "sociopaths" (according to the post's terminology - see "The MacLeod Life Cycle of the Firm" chart).
The article handles the case of people who derive a meaning from outside of their work and the people who are looking for financial success and power/status within a corporation.
As I've mentioned in a previous comment, the article doesn't take into account the fact that there are people who
a) look for a meaning that isn't centered around money or power
b) derive it from their work
If you're an engineer working for a start-up (taking a below market wage, working long hours, so on) only because you are hoping for a large pay day, then you are a fool. If you're working for a start-up because you enjoy programming or because you're looking to learn what it takes to run your own start-up then you can get a lot of a start-up so the equation doesn't apply.
On the topics of start-ups and money, Paul Buchheit said best: http://paulbuchheit.blogspot.com/2007/12/is-there-more-to-li...
I think the author has these options covered:
- If you do it because you enjoy it, then you are, by article's definition, a "loser" (in terms of potential monetary gains) [1].
- If you do it in order to learn about running your own startup, then you are "sociopath-in-training" (ala Ryan from The Office).
And that's it. The author doesn't claim you cannot have happy and meaningful life as "loser" (by his definition), deriving pleasure from the work itself.
He just tells that for "losers" somebody else will reap a significant part of the monetary reward for the value that their work creates.
-----
[1] Similar principle works for "sexy" jobs - that's why poor game developers get abused so much.
Very good points. The author does try to disambiguate "loser" (though I don't think he does disambiguate "sociopath").
My problem with these terms is that they just can't be disassociated with their common meanings. This is a common rhetorical trick - an author defines the word one way, and sticks to that definition, but inevitably uses the impact of the more common word (while claiming that the earlier disambiguation clears him of the need to defend the more common usage).
In short, I think we need a different word than "loser" to describe the category of workers who 1) make a good salary 2) enjoy their work, and 3) yes, could make more money or get a better deal outside the organization.
I'm also unwilling to accept the use of "sociopath" to describe all start-up founders, no matter how airtight the author has been in locking down a definition that avoids all the negative connotations of the more general use of "sociopath."
I guess that I'm really just saying that some words just can't be disambiguated.
In this case, the ambiguity is in the interest of being humorous and interesting, which is why it doesn't bug me all that much (though in other contexts, it can be infuriating).
I agree wholeheartedly with Paul, but you do have to balance it against the amount of work involved. Something that's fulfilling at 40 hours a week can be grinding when you're at it 60+ hours a week.
The problem with working as an employee for a start-up is that you're required to have the commitment of a founder, without the upside. There may be some people who will knowingly invest their youth in buying someone else a yacht, but in my experience many startup employees are unrealistic about their chances. Most businesses aren't going to change the world or make average employees rich.
From a rational perspective at least, I think it's hard to justify being an employee at an early-stage startup unless you're there to build the experience and contacts necessary to start your own company. There are plenty of medium-sized companies out there that offer similar opportunities for employees without their bureaucracy of a bigcorp or the risk and time commitment of a startup.
I agree with working for a medium company can be a very good trade off (I am presently at one and enjoy my job a great deal). However, there are always trade offs: in a small company you get a much bigger say in the product features and its architecture; medium companies might also have the same broken processes/tools/standards as an early an early stage standards but they would be much harder to dislodge.
It really comes down to the specific company/specific team/specific position. Main thing is not to have unrealistic expectations (changing the world, earning money/fame power) as well as have a clear picture of what you're looking for (technical challenge, experience for starting your own company, career advancement, etc...).
The other key thing I've learned is if joining an early stage start-up as an engineer, is to be sure that the sort of programming they do is what you want to do. Otherwise, you'd feel underutilized despite working start-up hours. For example, joining a start-up building web applications on the LAMP stack is a bad idea if you want to do systems programming; some start-ups begin with a simple technological stack but then invest a great deal in in-house systems ("build" being a better option for a start-up then "buy") as they encounter scalability/performance challenges (Facebook, Twitter, etc...) -- but the average early stage start-up would never encounter these challenges in the first place.
Yes unfortunately this is the chasm that all of us have to jump. I've had a hard time reconciling this BUT I think there are a lot of ways that you can create a work environment which measures individual performance well enough to compensate appropriately. Of course this will require each employee to be able to do more than just one role and will need them to be involved in sales as well. Another way to get past this "mental block" is to let your employees do something they really love and build your business around it. Ie like Patagnoia which lets people take off a whole season to go surf.
If you have stock options, even a small slice of the company, it's not wasted effort.
The typical employee's <1% share won't even make up for the overtime they put in unless their company turns out to be the next Google.
I get where you are going, but my personal experience has taught me otherwise. A 10X gain on nominal value after 3 years of work isn't atypical. Doesn't make you a millionaire, but it does help pay the mortgage.
In cash terms, that isn't remotely close to true. The chances of making a fortune as the founder of a startup are vanishingly small, and as an employee, a tenth that. Work in an industry such as banking where compensation has a bonus element and you will do better than a hypothetical startup employee who participates in an IPO every year on that alone, and that's before you consider you'll get a good salary and work half as much.