That rests on the perverse assumption that founders are the most talented and deserving individuals in the universe, and everyone one else should be happy to uncomplainingly serve the interests of these fabulous ubermensch.

To say that’s a naive and inaccurate view of the world would be an understatement.

No, it doesn’t. It simply means if nobody founds it there is no company in the first place.

Whoever wants to do the first 3-6 months (or 3-6 years) without a paycheck while figuring out the problem, solution and funding gets to be the founder.

If employees were lowballed underpaid, screwed out of vested shares etc that’s different but of course the person that decides to make the company owns most of it and gets the biggest payout when it sells.

No, it rests on the realistic assumption that there are a million engineers you can hire to be "early employees", and only a handful of Josh Porters with the talent to build something great and the risk tolerance to execute on it.

The market doesn't care about your fragile ego or low self-esteem.

No, it says that those that take the biggest risks get the biggest outcomes. Being an early employee of a startup doesn't give you the "right" to a big payout any more than being an founder of a startup gives you a right to inexpensive labor.

Or, you know, negotiate higher equity and stop bitching and moralizing when your payout isn’t high enough.

> Or, you know, negotiate higher equity and stop bitching and moralizing when your payout isn’t high enough.

Seriously, what is your point here, besides acting like a jerk? I mean, I totally agree with you, but that's why I think this thread is important. It should be a lesson to potential startup employees about how extremely lopsided the risk/return considerations are, that most equity deals are complete shit at startups, and that you should usually demand more equity if you have any negotiating power.

Indeed, the purpose of threads like this should be to convince startup employees as a whole that they're getting screwed on equity so they should demand more.

I didn't think it was a jerk comment at all.

Your point is 100% right though. Early startup employees rarely understand the risk/reward. Surely none of the 10 employees at a 7 year old software company doing 1.6M a year thought they were on a rocketship.

This thread has nothing to do with a level headed discussion on the "fairness" of equity (which doesn't even make sense). I was responding to a comment calling Josh a dick for finally getting paid for a company he built that adds value to thousands of customer's lives, instead of giving it to highly replaceable early engineers.

Average software engineer gets compensated with 6 figure income for 7 years leading to a $70k cash payout. What a jerk that Josh is.

Rise, proletariat, rise.

So one is supposed to negotiate for higher equity but at the same time those who have gone through it aren't supposed to discuss their experience and payout?

I suspect you're also one of those people who says employees should just have negotiated better salaries but also fires them for discussing salaries.

I respectfully very much disagree. Even Sam Altman has been arguing that founders should give more equity to startups, mainly because employees who are usually sold on "equity dreams" are all coming to realize those equity dreams are peanuts.

Isn’t getting credit and cash for other people’s work exactly what you’re advocating.

Not at all, it only seems that way to you because you have zero sense of what risk/reward actually means. Employees were paid for their value determined by the market. Josh is just now being compensated for the immense amount of risk and deferred cash he gave up to build this company in the early days.

There's a reason the market doesn't compensate every early employee at a meh SaaS company with millions.

> There's a reason the market doesn't compensate every early employee at a meh SaaS company with millions.

And I think the primary reason is that many early engineers don't realize what a shitty deal they're getting. The purpose of this thread is to let them know that, so eventually startups won't be able to hire employees with such shitty terms.

Yeah, except that’s not how negotiations (or the market) works.

Go have fun negotiating 3% equity deals and six figure salaries to write Go all day, I’ll hire a smarter engineer for half the price from Kiev or São Paulo.

Curious to know why you think this of Sam Altman...

>I don’t know when this dramatic shift happened to Americans to believe building a successful company is mostly luck, but it’s depressing.

Because it's true? Studies (Gompers, et. al. (2009)) indicate that a second time entrepreneur has a 30% chance of success versus a 20% for a first time one. So there's some skill in it but it mostly comes down to luck.

edit: And if you're arguing skill then clearly the skill of the early employees matter tremendously and not just the skill of the founder. So why do you think it's wrong for those employees to get more stake?

Per your data they do 50% better the second time.

That clearly shows a vast improvement in skill. A luck doesn't improve over time. If it was "mostly" luck they would get roughly the same outcomes the second time.

The fact that that’s your conclusion based on that “study” is exactly why success is easy for some of us

Anyone who believes startup outcomes are mostly luck doesn’t have what it takes to be a successful founder—you need to have the belief that you can shape the outcome. The idea that we reduce outcomes to two buckets, success and failure and then flip a coin is reductive and belies the decisions and effort that lead every human endeavor to its own unique outcome. Keep in mind corporate projects fail all the time too, we just don’t talk in these terms because people’s salaries and jobs aren’t on the line. Of course luck matters tremendously in terms of riding a series of waves to make a billion dollar company, but it was paved with hard and deliberate work every step of the way. The founders could have reacted and changed direction completely at any stage along the way, therefore these fixed percentage figures are meaningless. How hard did each of those founders work? How many pivots? What type of businesses? What skill sets did they bring?

And to your last point, who is saying it’s wrong for employees to get more stake? Of course it’s not wrong, but as an employee you have to negotiate that. People can’t just magically get what they feel they deserve because it would add up to way over 100%. Remember, the company exists because of the founder, doesn’t matter how much you think you contribute, because at the end of the day the company does not exist without them. If you can convince them to give you more then you should, and if you can’t you are free to start your own company. I do not see what is so unfair about this situation and I say that as instrumental #1 employee who got less than 1% for a 9-year effort building a moderately successful company. You don’t get what you deserve in life, you get what you negotiate.

>Anyone who believes startup outcomes are mostly luck doesn’t have what it takes to be a successful founder—you need to have the belief that you can shape the outcome.

The two aren't mutually exclusive.

Startup outcomes are mostly luck, led by people who (have to?) believe that they aren't.

Sorry, what exactly about Baremetrics is luck?

You people seem to fixate on the Facebooks of the world instead of the other 99% of businesses built on blood, sweat and tears.

Probably because most of this website sits behind a desk writing software thinking it gets sold because of magical fairies and luck, not 10000 agonizing cold calls.

> You don’t get what you deserve in life, you get what you negotiate.

And negotiation require knowledge. This thread is about being told to not discuss that knowledge publicly and to not acknowledge the real life implications of certain equity splits.

As I said in another comment, this is like saying employees should have negotiated better salaries and then firing them for discussing salaries.