I get your point though that if everybody shares equally in the company, everybody has their incentives aligned, and it doesn't matter much how you balance money versus equity value, because everybody is in the same boat.
On whether this counts as startup or not: it's not a restaurant. It's something that could scale globally and to billions of users. I think it adds the most value to users in western Europe, and particularly cities like Amsterdam, but it adds some value to everybody everywhere. It could get really big, but we're happy with just being big in a couple of western European countries.
What it isn't is the kind of startup that has no business model beyond investors and getting bought by Facebook or Google. This could work as an independent company. And if we can get the right subsidies, this could even work without early investors dilluting our equity. He's also looking at crowdfunding, because you can also build a community around this. I have my doubts about whether that's a good idea (at least at an early stage), and he seems to be coming around to my line of reasoning.
> One of the features of a startup in the technical sense is a focus on the growth in the value of equity creates a better alignment of interests among investors and employee shareholders [in a startup in the technical sense, founders are employees].
So how does that work? Do all employees get a similar amount of salary+equity? It's possible he's doing exactly the thing you say, and I just don't understand. He did propose starting at a valuation of € 1000, at something like 100,000 shares of €0.10, which I didn't understand (my gut reaction would be that I'd like to buy this company for that amount, because he's already invested more into it than that), but maybe the point is that it grows as everybody, including him, gets the same salary+equity. (Though I still wonder if that's fair to him, considering how much time and money he's already put into this.)
I think this is easily the point I understand the least about.
I don't see this as building someone else's idea for free. The worst that could happen is that I might slightly less money working on someone that's interesting and exciting, than I would working on something that's boring but safe. And that's assuming the project fails.
I honestly have no idea what the salary would be. I personally feel like a €100.000+ salary would be too much for a startup looking for its initial funding, but on the other hand, my salary can't be that much lower than that either; it's going to be in that order of magnitude anyway, so maybe I should stop worrying that my salary might be a problem for a starting company.
The reasons I would want to do this with him are: * It's a good idea and I think it will work * He put a lot of effort into it already and has contact with relevant stakeholders * I think he's honest * It's an interesting thing to work on, and it will be an educational experience even if it does ultimately fail
In case it isn't obvious to the OP, the suggestion here is based (in part) on the fact that Jacques Mattheij is also Dutch.
+ The idea person is trying to convince people to work on the cheap. The difference between a freelancer/contractor/consultant and an entrepreneur is that freelancer/contractor/consultants make money by doing the work. Entrepreneurs make money by getting other people to do the work. The more work an entrepreneur gets for less money the more money the entrepreneur makes. The freelancer makes money in exactly the opposite way.
+ I'm using "startup" in the narrow technical sense that someone in Silicon Valley's startup ecosystem might. Out in the rest of the world, the success of companies founded on that model has led to "startup" entering the common lexicon as a synonym for "a new business" and people will apply "startup" to restaurants and dry goods stores and an office of consultants billing time and materials.
There is some shared structure between startups and normal businesses. One of the things that isn't shared is the risk reward profile. A restaurant will never have exponential growth in users or revenues. It will never have nominal unit costs approaching zero.
+ One of the features of a startup in the technical sense is a focus on the growth in the value of equity creates a better alignment of interests among investors and employee shareholders [in a startup in the technical sense, founders are employees].
In the end and at the start, "paying normal salaries with part of it replaced by equity" is not paying normal salaries. In a business structured to provide regular cashflows to owners and investors, the controlling interests can [and often do] reduce profits via paying themselves excellent salaries, leasing or renting intellectual, real or personal property to the business, employing family members, etc. All are legitimate business expenses and all are normal business practices for businesses optimized around dividends and profits.
Please don't misunderstand me. There is nothing wrong with a cash-dividend oriented model, or with going to work for someone else.
But I want to be clear that this does not look something clearly intended or structured as the sort of startup one reads about on Hacker News. That means that the sort of outcomes one reads about are less likely. It also means that the class of investors the business will have access to will not have the sort of objectives and operational values which are more common among VC's and the terms upon which cash can be raised are likely to be far more heavy handed.
My advice:
Have expectations aligned with what the company and its organization and control structure are likely to be rather than with what tends to be described on the Hacker News front page.
Focus on understanding what the "ideas guy" expects for the organization and control of the company.
Don't go into business with people you don't understand and trust 100%.
Programmers have unlimited access to projects someone wants built for free or at a discount.
Programmers have a nearly unlimited access to people who have ideas that they will let you build.
I like this essay: https://sivers.org/multiply