Particularly since this seems to be precipitated by a Calacanis tweet, the guy who fires people for any or no reason. Not exactly an example of loyalty.

I'm guessing the reason for the entire post is actually that while Calacanis is okay firing someone, he gets angry if anyone leaves his company for a better position. There was a kerfluffle over that yesterday in various parts of the net (someone from his company sent a 2-weeks notice, and he blew up, firing them and telling them they had their last day and never set foot in the office or email his staff again). I'm guessing his tweet of 23 hours ago is due to him still being pissed at someone jumping ship from Mahalo.

Edit: It came to mind that there's a perfectly capitalist way of solving the problem, for companies that really do hate the idea of someone leaving: sign an employment contract with time terms, rather than hiring at-will employees. :)

I doubt there's many employers willing to spend the money it would take to lock someone in.

(Because you certainly didn't expect me to agree to that clause for free, did you? No, you're going to pay. And the sooner you lock me in, the more you'd better pay if I can't even evaluate the job before the lockin starts.)

There might be some people who'd take it, since it also means guaranteed employment for the same period: an employer couldn't fire you without documented good cause that'd stand up in court. But I agree that it'd probably make hiring in a startup/tech sort of culture harder, since this isn't a culture where there's that much value put on the can't-be-fired aspect (the job market is good, so you'll just get another job).

I think you just described Germany.

Well, what they do in (at least parts of) Europe is have a written contract with a 2 month notice period. That goes for you and the employer. If they fire you they still have to keep you employed until the end of the notice period. And it doesn't make changing jobs worse because everyone has this and works it into their hiring process.

anecdotally, ironically, I interviewed with mahalo.com (Calacanis' company), while I was working for a startup in an office about 2 blocks away in Santa Monica. They offered me a job, but I declined, as it was a 15% pay cut or so from my current position.

Exactly. Nobody wants to work for a) peanuts or b) evil spammers. Life's too short. I suspect it's probably happened to Calcanis before, which is why he's going nutso on Twitter.

Solution: If you want people to stay at your company, then pay them reasonable amounts and don't be a dickhead.

Yeah, anecdotally, I've found that if your company is doing things that the general public (or at least, the peers of your employees) considers vaguely sketchy, it's best to counter it by getting a reputation as a great place to work. Zynga is a decent example: there is plenty of negative press about it, but none of the negative press is about working there, since by all accounts they treat their employees very well.

I had a think about this on the train on the way home, and here's the formula that I've come up with.

Assuming that your employees aren't clueless (ie. know their market rate) and are free to leave (eg. not family members or H1-Bs), then you'll see significant employee churn if:

                  asshattery
  $ < $market x  -------------
                  cool factor

It seems to hold for most of the cases that I can think of.

Apple, for example, has a high asshattery factor (Steve Jobs) and market rate (they want awesome people) but also has a huge cool factor to balance it out somewhat (I heard they pay ~1.5x market).

Banks, Traders, Insurance companies, etc. have low cool factor, so they have to make it up with large salaries and perks and not be too toxic to work at.

In the case of Mahalo, it seems like they have a large asshattery factor (Calcanis is an overbearing idiot who will post nasty things about you on Twitter), and cool factor < 1 (spammers) and (it seems) they pay below market rates, so it's not suprising that they're seeing lots of "job hoppers".

> "In the case of Mahalo, it seems like they have a large asshattery factor (Calcanis is an overbearing idiot who will post nasty things about you on Twitter)"

Why anyone would willingly work for someone like that is beyond me. You're setting yourself up for abuse, ensuring other employees are abused in the process.

In my view, once you post something ugly about any of your employees, you lose your ability to hire any non-desperate (let alone loyal) employees forever.

Well, that doesn't include the people who don't do due diligence. I'm sure there are still some who don't bother with even cursory Google searches.

I'd word it as "would willingly work for very long"....

A prior employer looked good on paper, and on Google; in fact, I went into the interviewing process very skeptical of their industry in general, and came away with a surprisingly positive vibe about the organization and what they were trying to do. The employees I spoke with were top-caliber folks; asked smart questions, and had good answers for me as well. The interview with the owners was fairly typical and high-level, nothing out of the ordinary.

So, I came aboard. The principals had just left for an extended sabbatical (they departed shortly after I interviewed with them). Morale seemed excellent when I started, and there was a great deal of interesting work to be done. When they returned, the mood changed very quickly, and it didn't take long to understand why.

I spent enough time there to do some interesting things, and help them over a knowledge slump during an infrastructure forklift, but it quickly became apparent that the owners and I had different ideas about how people should be treated, and how businesses should conduct themselves. My personal google-fu failed me on this one.

I showed myself the door to take a position that I would have never otherwise considered taking, knowing full well how that would look on a resume, but also knowing I didn't want to continue contributing to their bottom line.

(I have a few items on my resume I do not enjoy discussing in an interview, and I've had to add this one to the list: being vague or evasive suggests you're hiding something, but any real explanation just invites the idea that you're the kind of guy who doesn't work well with others. But, such is life.)

If everyone would behave like this there wouldn't be so many crap bosses around.

I don't think the author is interested in making a fair transaction. It sounds a lot more like he's trying to frame the situation so that he holds all the cards, leaving the employee with the short end of the stick.

"That awesome gal you hired in engineering has job options and she knows it."

I can totally imagine him lobbying for more H1-B visas so he can get "captive" employees who are stuck without options to leave.

And if I feel like I'm getting bored here, I'll leave and we both win. I'm no longer bored, you don't have an unproductive worker. I don't see what's taboo about this. While leaving at the first sign of boring work or bad situations / pay / etc is a little iffy, if this is becoming the trend I'm going to leave. Loyalty doesn't come from nothing. It can't be expected by default, it's won. Besides, 2 years is a lot of time when you're a twenty-something.

Loyalty shouldn't be in the conversation at all. How much loyalty does the company have for you when they need to make cuts? That's how much you owe them.

Loyalty is a one way street for most companies. If the company has problems they expect me to suck it up and help keep them alive however the reverse never happens.

There are absolutely loyal companies. It's just not the norm.

They're definitely not startups.

If I need to launch a complex product in 6 months or die, I don't care whether my senior developer had his entire family die from serial dysentery. You're either working as hard as you can getting us to the milestone, or you're not a developer here.

The truth is that being "loyal" will kill a startup.

I realize you probably didn't mean this, but the thought that went through my mind reading it is "What kind of psychopath would take such a position?"

Actually, I know what kind of psychopath: the kind who ran the only startup I ever joined. He once told me, "I am at war, and if one of my men can't keep up, I will shoot him." A remarkably similar sentiment to yours! He also used to phone people up and yell at them if they didn't stay till midnight or come in on weekends.

Needless to say (or so I would have hoped), this is an algorithm to produce not a "complex product" but a fiasco, and that is exactly what happened. I was long gone before then, though. What kind of leader shoots his own men? What kind of people want to work for a leader who shoots his own men, or doesn't care if their families die? I know what kind: scared, servile placators. And since such a team hardly makes for startup success, there really isn't an argument here, only a form of hypnosis.

If you read my other comments in this discussion, you will surely see that I am in fact very pro-employee.

I also am, however, very pro truth.

Anyone who tells you he can have employees with low or zero productivity, for whatever reason, as select members of a small, highly leveraged startup - is either lying to you, or will fail unless he's extremely lucky not to have such employees.

If your team consists of 3 senior developers, and one of them stops producing, your project will likely be pushed back a third or more over schedule. This can easily kill a startup, since if your idea has any merit at all (which is your only chance of success anyway), then you have ten other teams competing against you to launch first.

I totally agree that employees should be respected and cared for, and that a key employee leaving a startup is generally the startup's fault. However, if someone doesn't work out, he will be let go. Not just by the employer - his co-workers will call for his head, since his problems (whether he's to blame for them, or not) endanger the entire team.

Who said anything about low productivity? The issue at stake is whether you should hire "job hoppers".

If I need to launch a complex product in 6 months or die, I don't care whether my senior developer had his entire family die from serial dysentery.

Yeah, yeah - really respectful and caring.

Sure, if my senior developer had something horrible happen to him, I should allow him to work 0-2 hour weeks, keep him in the same position and payroll, and let my startup go down and hurt the lives of the other 9 employees who worked hard on it.

"Respect and care" means among other things, that you keep your business running so it can respect and care for the majority of employees. If you're going to take things to extreme, why then I need to "respect" every candidate by hiring, and "care" for any employee who just feels like taking a 20-month meditation trip to Tibet, since the woes of this modern world are depressing him.

The fact remains the same: a lean, highly leveraged startup can't allow developers to go off on vacations for 3-6+ months, no matter how badly they need it. Hell, if you're that kind of startup, those 3-6 months may very well be your entire product (or life!) cycle.

If your senior developer has something horrible happen to him* , and you then immediately cut him loose because he's of no use to you any more, what happens to your product? You're a startup, so you're unlikely to have huge amounts of redundancy to cover for them when they refuse to train their replacement or answer support questions about your complicated 6 month time-critical project from their dying, dysentery-stricken family members' bedside.

Also, taking that sort of hard-nosed attitude will make the other developers on your team more wary, which will result in higher salaries, more turnover and (if you're a real idiot) no new staff, since word gets around. Ultimately you depend on your staff, so if you play hardball you're likely to reap the 'benefits' further down the track when you need them.

* - this was your original point, not some "meditation trip to Tibet"

If you're a startup and someone needs a 6-month vacation for mental health reasons, you need to cut him loose. If he's done good work and is willing to leave in a way that minimizes damage to the company, try to leave the door open and give him a good reference. You're right, of course, that startups cannot afford to have important people become nonproductive.

Well if you want to be a startup loyal to your employees you wouldn't back yourself into this kind of corner in the first place, if I was applying for a job at a startup like you mentioned I wouldn't expect much job security and expect to be compensated accordingly.

What "corner"? Having to launch a very successful product, very fast, or die - is what startups are all about. Certainly all the VC backed ones.

And yes, anyone expecting any kind of job security at a startup, especially a VC backed one, is simply fooling himself.

Well an unrealistic timeline, if your idea is solid enough you shouldn't have to promise the world in a couple of months to get VC backing. There is the slowly building up a startup or leveraging big VC money in an all or nothing approach, one which you don't take if your goal is employee loyalty.

I won't really argue with that - although reality is that the vast majority of startups need to launch fast, or have the entire market move away from them, guaranteeing failure.

If you're developing an innovative product for the iPhone market, you can be sure that it won't be "innovative" in a year, especially if it was a good idea to begin with. Not to mention that in a year, such a fast market will move so far, that your original business model will be outdated in significant ways, because your price point, features, and target audience analysis are now all obsolete.

Even without that, though - you realize that VC-backed startups are a huge chunk of the startup sphere? In fact, the author of this article is a VC, and probably most of this article was written with VC-backed startups in mind.

Yes because a lot of start-ups have no margin for error. Not only will that developer loose his job should he not perform, but in the case of bootstrapped start-ups it could take everyone else out too. All the same, if the company does not get the next round of financing, they should duly expect defections and not piss and moan.

What would be a reason to work for you?

Sounds like you are a contractor, not an early startup employee.

That's a remarkably wrong statement, given that I am an early startup employee.

If you are an early startup employee, you normally get compensated primarily with equity. Hence, you are the company; hurting the company will just hurt you. There's a big difference between an economic transaction between you and a big company, and an economic transaction which is largely between you and yourself.