> For one thing, founders and employees don't share equally in the high growth rate of the company even though at most a founder is working let's say 2x longer hours than a salaried employee. You can do nothing wrong but you're still taking more of your fair share by the basic structure of how the business is setup.

What is fair? Obviously hours worked is one metric to determine what is fair. But another way to arrive at what is fair is through negotiation. Neither the founders nor potential hires are obligated to work with one another. The only way it happens is if an early employee believes the compensation they are offered by the founders is fair. If it was unfair, they would presumably reject the offer outright.

What if you think all of the available offers are unfair but you don’t have the means to start your own business?

Then the offers are fair and your assessment of your labor value is disproven by the market rate.

That’s one definition of fairness (market rate.)

There are many other definitions of fairness as well.

This comes back to the thread we’re discussing. What a fair wage means is a philosophical and moral question. Not just a math problem.

If someone inherits a business and earns higher wages than their workers is that fair? What did they do to earn that?

If the market rate is so fair why does the minimum wage and child labor laws exist?

Hey, that 8 year old was willing to work in the asbestos factory, that’s just fair market value!

Most people need money to eat. I don't know if you can ever really have a fair negotiation with an employer when "the rent is due" is involved. You know those companies that buy settlements from people in exchange for a fraction of their value immediately? You could say that this is a fair trade in an econ 101 sense that body parties rationally entered into a mutual agreement. But you could also notice that one person just got laid off and doesn't have enough money to pay rent and is therefore pressured by circumstance to accept extremely unfavorable terms because the alternative is homelessness.

> Most people need money to eat. I don't know if you can ever really have a fair negotiation with an employer when "the rent is due" is involved.

Your definition of "fair" is questionable.

If you're negotiating from a position where you've taken on debts and rent that you can't afford to pay, and time has run out to the point where you're desperate for a paycheck as soon as possible, that's unfortunate. But that's not the fault of the person you're negotiating for a job with. Exceptional cases aside, 95% of the time that's likely due to your own risk-taking, neglect, poor decision-making, or financial mismanagement. And you had a "fair" chance to not get into that situation to begin with.

But regardless of blame, it's certainly not the fault of the counterparty in your employment negotiations in that you're in that spot. Nor is it their responsibility. Nor should we want it to be! What kind of system would that be, exactly? A brutal one where many more people fall through the gaps than would otherwise. A much better system is the one we have, where people pay taxes, and do so at higher rates the more fortunate they are, and that tax money goes into programs like unemployment, which helps people in exceptional situations.

What's so unfair about this, exactly?

Actually it's probably more 99.99% likely due to the family you're born in.

> What's so unfair about this, exactly?

We don't roll the same dices at birth.

No one's saying we roll the same dice at birth. That doesn't mean that people who are so desperate that they can't risk negotiating a job offer are 99.99% in that situation because of birth rather than decisions made subsequent to birth.

Especially because in America at least, over 200 million people are born middle class or above. An even lower class in America is doing much better than many other countries in the world.

At what point in your mind does personal accountability come into play? How prosperous does a nation have to be for people to have some responsibility for the consequences of their own actions? Or are people never responsible?

Regarding personal responsibility, at an individual's level it's your responsibility to improve your life, because that's the only lever you have and you don't have the time to wait for societal changes that take decades or centuries to arrive.

When we're discussing policy for our society however it's too easy to blame people for the choices they made so we don't have to think harder. The world's complexity is beyond what the humans brain can hold at any single time. Some people are dealt bad hands, born in a difficult family, born in a body that slow them down or drag them down. Some people make one bad choice (even something mild like a financially unprofitable carrer choice) at 18 because millions of parameters that played since their birth compulsed their brain to make that choice at that moment in their life. Not even mentioning meeting the wrong people. You can do everything well and cross the path of someone who breaks you.

Truly and without getting too philosophical,looking back and learning about people's stories I've come to realize that we have little agency and by the time we understand how the world works and what we should have done instead it's often too late to change the outcome drastically.

To tie it all back to the topic of this thread, the 19 year old who's been pushed by his parents all his life to get good grades, study well, get involved in the right extracurriculars, ends up at Stanford, starts a startup because that's what people do around him, is told to apply to YC, is accepted, is taken care of by YC, tell me how much is he responsible for his success?

I don't disagree with you. I think there's an even argument along these lines that we don't really have free will, since our initial biology and environmental circumstances aren't within our control, and yet every subsequent decision and choice follows inexorably from those initial conditions.

To me, this inspires empathy and care, and it's why I believe that society should have a very high floor. But discussions like these, and the current "eat the rich" zeitgeist seem to focus so much more on lowering the ceiling. Which to me is the wrong focus.

Not really? If the same value and wealth is being created - the redistribution of it raises the floor as well.

Capping the ceiling would be a tremendous mistake. It would eliminate the "if" in your scenario. The same value in wealth would not be created. You would be massively disincentivizing people to stay here and innovate, and that innovation would flow elsewhere or simply diminish.

Luckily, we've never actually capped the ceiling, and it's unlikely we ever will.

If there's no cap on a ceiling, is it fair or humanly okay when someone's wealth is Epstein-enough to own other people's lives? Wealth is a proxy for power, when someone has more power than legal systems or enough to swindle all of it, is that a better world?

There should be a ceiling or we reach the current state where accountability is nothing a million dollars can't buy.

Do you seriously believe the by limiting people's wealth, we'll solve problems like this? Humans used to have thousands of times less wealth than we do now, yet people still had power and influence, harems and slaves, cults and gangs.

Solve? Likely not. Improve? Of course. Policies that improve the state of problems even if they remain unsolved are good.

More than one million people die of TB annually. We have a cure for it. Elon Musk could pay for testing and treatment distribution for the entire world without noticing a change in his wealth.

A million people a year.

I feel like you should read about systems thinking. You're ignoring so many potential side effects, so much history, so many statistics, incentives, human psychology. The idea of capping wealth in order to try to prevent certain power imbalances like sex trafficking, is similar to firebombing your house to fix a leaky pipe. Not only would it mess up a ton of stuff, but it wouldn't even fix the problem.

Of course there are side effects. The question is whether those side effects are worth the benefits we'd get.

Millions dead every year from TB. A curable disease.

The idea of capping wealth is to cap power imbalance, without power imbalance many things would not be able to happen within a system, alas there are as you say many potential side effects, implementations of how a cap could work would have to be discussed by society, right now I do feel people are very mad about inequality as is, what solutions are there for it?

I have never met a founder who was motivated, even in part, by the possibility of being a mega billionaire.

You can believe that’s fair. I don’t. I don’t believe that one party needs to be at fault for an economic transaction to be unfair.

I live in a country where “oopsy doopsy your insurance denied this so now you owe us 20,000” isn’t terribly uncommon and your employer can fire you without any warning or severance. “I need money for the rent this month” is not consistently some moral failing.

If you’re an early employee at a startup, you almost certainly had other options for employment

I don’t think you can assume this to be the case, especially outside of the Bay Area.

My first startup was one where I was hired because I was young and cheap. I could be paid in free lunches rather than 401k matching and decent healthcare plans.

Big companies often pay better salaries.

There are plenty of people who would consider themselves extremely lucky to work at a startup, even for cheap. I know many older people working much worse jobs. I think it's fair to assume that most startup workers have other options, and that generally those options are worse.

Could you imagine this perception you describe playing into being underpaid?

Your last sentence you’re saying it’s fair to make this assumption that most other jobs are worse.

So that means if a non-startup offered you a better pay package your assumption and bias might steer you away and take worse compensation to do the same job.

I ask you this question because I made a similar mistake in my youth. I took a pay and benefits cut for a startup because it sounded a lot more fun. 6 months later and the company was going under and I was out of a job.

There are also plenty of employees who just didn’t get a job offer elsewhere. When I took my first startup job I didn’t have a competing offer.

I too have worked for startups that failed. And when I took those jobs, I had many thousands of alternative opportunities I could've taken instead that I considered to be worse, or at least not worth pursuing compared to the startup jobs. What's your point?

Here's an example that could help make my point: Glimpse is hiring a Security and Compliance Lead in New York City and is only paying $150K - $225K.

Meta is paying a Security Engineer (not a lead) $271,000/year to $347,000/year + bonus + equity + benefits across the following locations: Bellevue, WA, Menlo Park, CA, Washington, DC, New York, NY

I find it hard to reconcile that salary difference, and I think the only way to explain it is that startups offer dreams of upside like a smoky Vegas casino.

Working for Meta [1] is "boring" and corporate, but it's also objectively a better financial decision unless Glimpse becomes the next Uber. My point is that I am hypothesizing that tech culture encourages people (especially young people) to prefer objectively worse financial outcomes to do the exact same work at a more "exciting" startup company.

At the time you joined those startups, you considered those other opportunities to be worse, but I wonder if that was true or if that was perception? Of course, I don't intend to tell you that you were wrong, in fact I think it's highly likely you were right. I only mean to say that it's worth introspecting on the concept.

[1] Or insert any other large and slightly more ethical company, if we want to disqualify working for Meta due to its "evil empire problem."

Yeah, I mean, when you put it that way, I don't disagree with you. I think it's a matter of perception. What's better or worse will always be subjective. And there will always be gaps in the market where people make genuine mistakes, because of a lack of knowledge, or an error in judgment due to inexperience, etc.

But there are also genuine advantages that others simply might not see. For example, many would rather apply to work at a startup because it's an easier job to get than one at Meta, Alphabet, Amazon, etc., and not having to study as hard for interviews is a genuine advantage to some that's worth the money left on the table. Or for others, maybe they want a more casual work environment. Or others might just want startup experience because they hope to start a startup someday. Etc.

If the argument is going to be “I exerted negotiation leverage over you” I think this feeds into my argument about the immorality of the whole setup.

We might as well just say “I exploited my structural power over my employees and got a better deal for myself.”

Of course the employees agreed to the deal presented to them, what other option did they have? They aren’t like all these founders that have the luxury of being unemployed because their dad will pay the rent.

That’s another point I forgot to bring up entirely: PG also hand-waved over the quantity of billionaires from his accelerator that came from families of very decent means where they have the luxury of risking failure. The quantity of true rags to riches billionaires is extremely slim.

> Of course the employees agreed to the deal presented to them, what other option did they have?

What? The employees had infinity other options! They could have negotiated harder. They could have declined the job. They could have taken a job somewhere else. They could have taken the risk to start their own startup, and been in the founder position, instead of choosing to be in the employee position and getting the security and reduced stress that comes along with it.

> That’s another point I forgot to bring up entirely: PG also hand-waved over the quantity of billionaires from his accelerator that came from families of very decent means where they have the luxury of risking failure. The quantity of true rags to riches billionaires is extremely slim.

Over 200M Americans come from middle class backgrounds are above. YC also provides founders with the funds to pay themselves while they start their company. I did YC when I had almost $0 to my name and no well-off family to rely on.

youre not going to negotiate your way to 40% ownership of the company with a strike price of $0.00001

Then go start your own company?

you have completely drank the kool aid

Why do you expect outsized rewards without taking outsized risks? Companies don't start themselves.

Remember, you said "YC also provides founders with the funds to pay themselves while they start their company."

That doesn't sound very risky. Why are these founders getting outsized rewards again?

The risk that founders undertake when starting a business, that risk is primarily associated with small businesses, which are a very different concept from VC-funded startup companies. If I take a small business loan and start my cupcake truck, that's me taking a huge personal risk.

My read is, the way the system works is as follows:

- VC firms have lots of money but no ideas to grow that money further than the overall market growth rate

- Startup incubators find ideas and nurture them

- VC firms don't incur any level of unpredictable risk, as they have spread their risk across dozens of funded firms and the risk/reward is rather predictable - 9/10 of the companies are expected to fail and leave the majority of their employees with nothing more than a resume bullet point

- Successful founders of VC-funded companies are rewarded disproportionately from early employees and all employees in the company in general.

This seems totally fine on the surface and certainly it's worked well, but I still detect an undertone of exploitation here. The only thing the structure of these businesses value and significantly reward with equity are the founders with ideas, and of course the VC funds themselves who provide the capital for the funding rounds.

At the bottom are the employees who actually built the product. Without their work none of these ideas would have any value at all. But they don't have to be paid like they are highly valued since they're just interchangeable market rate implementers. In fact, they'll take below-market rates to work for a startup because of the excitement and the lottery effect. If I see the YC brand on a company and I think if I work there I could be the next Airbnb millionaire (and of course the founders of Airbnb are billionaires while the early employees are taking home 1/1000th of that wealth despite doing a much larger share of the labor than 1/1000).

Here's an example: Glimpse is hiring a Security and Compliance Lead in New York City and is only paying $150K - $225K.

Meta is paying a Security Engineer (not a lead) $271,000/year to $347,000/year + bonus + equity + benefits across the following locations: Bellevue, WA, Menlo Park, CA, Washington, DC, New York, NY

You said earlier that YC pays founders for living expenses. What risk are they taking?

VC-backed Startups are much different than small businesses where founders take personal financial risks. The VC itself is also not taking any kind of outsized risk as it has mitigated that risk by betting on dozens of companies. They expect most of their companies to fail and leave their employees high and dry, but that’s not their problem.

Essentially VCs have plenty of capital and no ideas, so they pay outsized equity compensation to founders for ideas. But the early employees are just interchangeable implementers and get basically nothing by comparison.

If I started a cupcake truck with my friends, they wouldn’t be my friends anymore if I decided I get 50x their equity stake just because it was my idea.

Every day, there are trillions of prices that are set by sellers, and either accepted or rejected or counter-offered by buyers. Of course, sellers want higher prices, and buyers want lower prices. There is no one person who can determine what a fair price is. A fair price is one that both buyers and sellers agree on, that creates a successful transaction.

Importantly, people are free to walk away from a bad deal. If you don't like a store's wares, you can go to another store. If you don't like a job offer, you can apply to a different job. Freedom of choice creates competition, which puts pressure on buyers and sellers alike to actually come to terms.

Your post comes across as someone who is consistently in the seller position (selling your labor for compensation), and who's simply advocating for his own personal interests in wanting higher wages. But for some reason, you think your own personal opinion about exactly how much you should be paid is what the bar is for "fair", rather than the prices set by the market, that is, the repeated agreements by tens of thousands of people day after day for years.

And that perplexes me. Why are you so special? Why is your opinion or anybody else's opinion supposed to be the basis of what's fair? I've never met someone who's not just going to argue for their own interests here, exactly as you're doing.

If you don't think it's a good deal to work at a startup and get the equity that you're offered, then you can negotiate or you can just walk away from the deal and work somewhere else. There are many tens of thousands of jobs that I personally don't think are a good deal, or I wouldn't work there. But for other people, they are a good deal. I don't really understand where this belief comes from that, because you personally don't find it to be a good deal, that it's objectively unfair for everyone else, even as they're accepting it willingly.

> But you said earlier that YC pays founders for living expenses. What risk are YC founders taking?

I could have easily gone and gotten a job at Google and made a lot more money very easily. Instead, I spent a ton of time and effort trying to create something new in the world and take it from zero to one. That was a lot of personal sacrifice, giving up my nights and weekends and living off Ramen noodles and almost no money. Just that I could get something successful and useful enough to be in a position to realistically even apply to YC and hopefully get accepted. And I was still rejected twice before finally getting in.

If you think being a founder is so risk-free, so easy, and such a good deal because of how much equity you get to keep, then presumably what should happen is many more people should find the prospect attractive and become founders, relative to becoming early-stage employees, and that should drive up the prices that early-stage employees are able to charge.

I think the way we can summarize exactly what you said as:

Selling labor on the labor market, well, you can just go find whatever offer is on the labor market (e.g., your first five paragraphs)

You had to beat out a bunch of other people and get rejected twice in order to go the startup route. However, I think you are mistaking hard work and low pay for risk in this transaction.

There's no risk because, like you said, "I could have easily gone and gotten a job at Google and made a lot more money very easily." You can always go back to selling your labor on the market.

You aren't risking any personal property or savings. A college student is also living on ramen and giving up nights and weekends, but they are actually taking a bigger risk than a VC founder by paying tuition to the school.

What is happening here is that VCs/incubators are using scarcity as a quality filter since they're trying to buy good ideas/stake in early stage companies and dangle the founders' lottery ticket/casino jackpot to buy those ideas.

I think that startup founders are in weird sandwich between being exploited by VCs in the worst case and being unfairly over-compensated by them in the best case. I'm sure many of your early employees also worked nights and weekends just like you did, but they have less of an ownership stake than founders do.

Maybe the founder's scenario is similar to an NFL player, where average players have short careers and are left with broken bodies and dreams, while the star quarterbacks leave as billionaires. This is why the NFL has a players union.

> There's no risk because, like you said, "I could have easily gone and gotten a job at Google and made a lot more money very easily." You can always go back to selling your labor on the market.

The risk is the opportunity cost. Going and getting a job at Google pays a lot of money. Repeatedly starting and failing at startups, or getting rejected by YC, doesn't pay you anything. I was a student and then a recent grad with lots of debt, so I had all the normal risk of a college student living on ramen and giving up nights and weekends.

> I think that startup founders are in weird sandwich between being exploited by VCs

What makes an agreement between two parties exploitation, exactly?

> the star quarterbacks leave as billionaires.

I think it sucks that the NFL destroys people's brains and bodies. But why is it so bad that the star quarterbacks command such high pay?

> If it was unfair, they would presumably reject the offer outright.

My word do people actually believe this. What theoretical econ 101 textbook are you living in?

I agree with most of what you're saying -- but just wanted to add some notes here: 1) founders should start companies where equity is distributed to the early employees much more evenly: this actually gives additional super-powers to the company since employee incentives are much more closely aligned with the vision of the founders (building something great that people love to use). 2) stop rewarding growth: there is nothing wrong with NOT growing 90% a month. The goal of most companies shouldn't be to grow or return maximum value to investors (or shareholders): it should be to provide a greater human good the markets will be willing to pay for 3) revenue growth also is not something to aim for: sustainable income growth is. 4) unless the billionaires start re-distributing their wealth -- history is not on their side. A revolution will happen: usually this is associated with the younger male population being unemployed (~15% is the magic number) and causing an uprising. The goal of most founders at this point should not be 'how do I get to 1 billion.' The massive unemployment caused by the AI revolution will cause a massive uprising. There is great danger I think if they do not figure out a way to re-distribute their wealth. Currently, the poor and middle class are taxed way more than the rich (as a percentage of their income): and from what I see are increasingly becoming more disgruntled with the situation they are in. Why in the world would anyone want to even be a billionaire in this situation is the question I want to ask?

>So yeah, Jeff Bezos made $260 billion dollars, but an alternative that could have happened was "Jeff Bezos makes $50 million and every Amazon employee gets a much more fair share of the happy customers' money."

Jeff Bezos famously took an $80,000/yr salary. Bezos didn't make $260 billion, or anything within 1/1000th of that. He built a company, that through some inane estimations his share of which might be $260 billion.

For him to not have that imaginary $260 billion would be for the company to not be built at all. So, if that's what you want, you're at least consistent... but no one else would think that a particularly good idea. Quite a few people like being able to order things online and receive them quickly. They don't want to have to go back to stomping through Walmart, hoping that the store has what they need.

I think part of the problem is that if you can slap a label on someone of "Eleventy billion dollars", everyone's brain malfunctions and treats it as a literal fact, regardless of the truth of the label. When you don't want billionaires to have billions, what you're saying is that you don't want them in control of those billion dollar companies. But do you not want the companies to exist, or do you just want someone else in control of those companies? And who?

Dollars are the way we denominate wealth - no one who understands this thinks that these numbers represent cash that they hold. But that's a far cry from it being imaginary.

This seems to come up on every thread like this. Owning 9% of a company that generates ~$80B in profits and employees 1.5m+ people is literally a massive amount of wealth and putting a dollar figure on that is both straightforward and accurate.

Anyone who owns a house can understand that liquidity and net worth are two different things. But shares of Amazon are far more liquid than a typical home.

In case you need a real example, Bezos personally funds Blue Origin by selling around $1B worth of Amazon stock each year. That's 11000 people earning their salaries + a huge amount of capital investment that are all funded from this so-call "imaginary" money. I can assure you that each time those people get a paycheck, it's just as real as yours.

>Dollars are the way we denominate wealth

Sure, but we also attach imaginary dollars to things that wouldn't and can't sell for those imaginary dollars, or even large fractions. And I expect older children to at least catch on to that fact, but a great many adults never seem to.

> and employees 1.5m+ people is l

So is that what the leftists hate? That he employs 1.5 million people? You want that to stop. That's the the part of the him being a billionaire that hurts the most?

>and putting a dollar figure on that is both straightforward and accurate.

If that were true, he could sell it for that valuation tomorrow. But as soon as he tried, the amount would drop, and the company might even be in peril. So it's neither accurate nor straightforward. It's convoluted and overestimated.

>In case you need a real example, Bezos personally funds Blue Origin

So that's the part of his wealth that you despise... that he employs people making spaceships? Those 11,000 people are the problem?

You're not even staying consistent in your own replies in this one comment. Let me boil it down: are the 11,000 people who earn their salary at Blue Origin getting real money or not?

My point is has nothing to do with despising blue origin - it's just a direct contradiction to your absurd belief that this wealth is imaginary. You can't fund that big a company on imagination!

>are the 11,000 people who earn their salary at Blue Origin getting real money or not?

Are they earning (collectively) $260 billion? Are they earning anything like a significant fraction of $260 billion? Is the amount they collectively earn, whatever the total, coming out of Jeff Bezos' wealth, subtracted from it, or are they paid out of several different funding streams such as the government contracts and commercial revenue?

And you think this is somehow some sort of gotcha question. "Look, I've proved that Jeff Bezos has $260 billion!" (or whatever the amount was supposed to be). You're unable to think clearly or correctly on the matter. It's scary how confused you are.

I'm actually making a very simple point. You said most of Jeff Bezos wealth is imaginary / not real. But he's proven that he can turn it into cash at a rate of at least $1B per year.

And again, he only owns 9% of Amazon. Of course if he dumped all of that stock at once the price would go down, but Bill Gates sold almost all of his Microsoft stock for cash and Microsoft stock has continued to go up. Jeff Bezos could certainly do the same and come out the other end with around $260B in cash - but he has zero reason to go do that..

Here's another way to look at this: do you have a retirement account? Is the money in there imaginary? If not, why not?

Grombobulous says "Paul Graham is out here giving speeches to rich kids at Oxford Union, but he could be spending his morning in the local soup kitchen or building homes with Habitat for Humanity. He could be mentoring people who are struggling to escape housing insecurity, or he could be working with advocacy groups to expand healthcare access and end childhood hunger."

Which of those would provide the most benefit to the world?

Grombobulous says "But he is one of the people who has dedicated his life to capitalism, even after successfully taking care of his family for many lifetimes, and that says a lot about him."

You're simply anti-capitalist. Please post about that instead of mounting personal attacks on people who make more money than you. And please cease telling other people what to do and not do! Try to put yourself into their shoes and think harder about their situation.

I’m not anti-capitalist at all, but all good things have limits. It’s a wonderful thing to eat a scoop of ice cream, or three scoops of ice cream, but I would never suggest that anyone eat 1000 scoops of ice cream.

Grombobulous says "I’m not anti-capitalist at all".

Nonsense. You are a simple study and you are envious. There are good reasons why envy is listed as one of the "Seven Deadly Sins". See Wikipedia:

https://en.wikipedia.org/wiki/Envy

Reading "St. Augustine on Envy" might help:

https://fountainofelias.blogspot.com/2019/08/st-augustine-on...

Thomas Aquinas on Envy:

https://www.newadvent.org/summa/3036.htm

Stanford Encyclopedia of Philosophy on Envy:

https://plato.stanford.edu/entries/envy/

> And please cease telling other people what to do and not do!

This is the most ironic comment I've seen in a while.

Not ironic but perhaps somewhat self-contradictory. In any case it is very reasonable as an assumption for civil debate.

> cease telling other people what to do and not do!

People like you are so sociopathic and unaware that it's simply comedy.

> people who make more money than you.

One of the things I realized, as I made more money... was how much _easier_ every aspect of earning gets, as you are already earning more, and as you need it less.

We live in a system that almost _automatically_ overallocates wealth to people who do little for society. It's pathetic.

Unworthy.

Pure envy.