The advice is "broken record" and it will be ignored by majority of young engineers. Working for a cool startup is very very cool. Working for big corporation is not cool (and considered evil if that corporation is Microsoft or Oracle).

And that is actually good for economy, for startups, for VCs, and for engineers (not in monetary sense but they will become wiser).

No, working for something like Google or Facebook in its start up days is cool. And that is like once in a 15 year opportunity.

In reality you can do a lot of things on the side in a 9-5 job. Than working crazy hours at a crappy start up .

Yes working at big companies is not very much profitable, but neither is working at a bad start up. Bad starts up are worse than big companies.

That is a far cry from the policy I experienced at MSFT. Doing free reviews on my own time of books being published by Microsoft Press on products I was an engineer on required approval from my VP.

Interesting. My first programming job was in a finance company who had a "we own everything you make, here or at home" policy. My manager said most finance companies would rather pay people more than have them working on things outside of work, which I took at face value. Knowing that was how I enjoy learning most, it was a big factor in my leaving.

- when you join a company as an engineer, the best case scenario is probably something like 1%.

- a pretty good case scenario would be for a company to be bought in the $100M range. Say, $250M? You'll have cases in the billion-range, but that's exceptional.

So that's $2.5M! Nice! But a couple of things:

- you've been diluted in the meantime. - investors have liquidation preferences, so your percentage is coming out of a smaller amount.

That $2.5M got reduced a bunch. And you'll have to pay taxes on this. So, you're likely under a million in the bank at that point. That's honestly fantastic. But it won't last forever (meaning you're not set for life) and to compare it fairly, you'd want to divide that amount by the number of years you've worked for the company. (compared to a more stable job that pays more, with a regular bonus plan, less hours on the job, probably better benefits, etc.)

But the thing is that in most cases, people don't get 1% and in most cases, companies don't get bought for $250M or more. So, no you most likely won't get rich. Some do (the people at Instagram and Tumblr recently), but they are lucky exceptions. And even then, reports say that most people at Tumblr would get somewhere around $350k. Certainly very nice, but not life-changing and the reason it's been discussed at all, it's because it's an exception.

In the ideal case, how much would you make on that $1mm exit if you were the sole, bootstrapping founder?

How much are you going to make in the ideal case as an employee at the $100mm exit after Series A and B rounds of funding when your initial stake was 1%?

I know there are certainly folks out there being taken for a ride. But take me for example- I know I personally could find more extravagant wages if I wanted, but I am not optimizing for salary. I am optimizing for happiness, which is what keeps me where I am.

As for taking a paycut to work on something particularly cool, sure, why not? I've certainly done it in the past. But accepting a salary lower that doesn't even cover your cost of living (as implied in the article), when joining a company that's reportedly taken $20M in venture capital... That seems pretty unreasonable. Even exploitative.

    I am not optimizing for salary. I am optimizing
    for happiness

And most of the times it is.

Not optimizing for money is setting yourself up for long term sadness. Though it might make you feel comfortable for the meanwhile.

I'm not saying work for minimum wage. Money is obviously a component to happiness, because while you can't buy happiness, it's hard to be happy when you can't afford to eat. But you probably don't have to hit 100% of your maximum earning potential to avoid starvation-induced unhappiness, which is why optimizing for money is not my approach.

To make a lot of money joining a startup, you probably have to be better at evaluating startups than VCs are, which is pretty difficult. Luckily, picking a startup where you can develop your skills, work with smart people, and have a lot of fun is easier than that. But it's still not automatic--you need to evaluate the founders and other employees to find out if you'll fit.

    I don't know why you're post the same advice
    that, apparently, you know gets circulated
    here continually

    If he had followed your advice who knows where he'd be.

Also, it seems somewhat disingenuous, given this topic, that you don't mention you work for Greylock.

Well, that's a rather passive-aggressive way of saying nothing at all, but insinuating anything.

It's irrelevant is why, I do work for Greylock but I'm not advocating that people should work below market rates, or even saying your advice is universally wrong. I'm saying that you are posting this advice on a story which literally contradicts what you are saying. The "I left the money" story would have been a much more sensible place to leave your comment.

Speaking of arithmetic though:

He received 80% of a $300k payout over two years: $120/year. On top of that he received a salary of, maybe, $60-80k. I think he did fine, and has landed well

Your advice doesn't make sense for this story. It's like posting "and this is why I don't fly" on a story about an utterly mundane flight.

Also, as an engineer I'd like to see this cycle stop. It creates an exploitative environment akin to some of the bad stories you hear in the gaming industry, where young engineers are often taken advantage and burnt out the industry.

If the bonus had come in the form of a more lucrative cash buyout, it likely would have ended up being short term capital gains as options were cashed out, so there isn't even a tax difference.

What I'm really interested in, is where you came up with that "Salary of $60-$80K" - what is that number supposed to represent? It certainly doesn't correlate with any engineering salary in the bay area I've seen in 15+ years. I.E. That isn't "below market salary" - it's what most companies pay their interns/summer students doing Desktop Support for IT the first couple years. ($65K is actually my very first salary in the Bay Area - doing Windows 95 Desktop suport back in 1996.)

Although I'd be interesting in knowing. Granted, most people probably consider a acqui-hire to Google or Facebook a great medium term career move.

They do it for the experience of working on something really new, and working in that kind of environment, not the money. The big tech companies try to be startup-like, but they can never truly emulate the startup experience.

But on the inside of these places you tend to have a lot of people at the founder level who speak about how well off everyone is going to be when the business really hits it big, and this type of talk can be pervasive to the point of almost being cultish. It becomes the go-to pep talk when the going is tough -- "Sure we're working 90 hours a week, but just think how great it is going to be when we all have Lambos in the parking lot!" And I do think a lot of younger folks who are less experienced with the game do tend to believe the bullshit even if all available data (save for ridiculous outliers like Google) states otherwise. When you're inside an echo chamber, it is really hard not to start believing what everyone is echoing, even if it seems obviously wrong to objective bystanders.

As far as the founders go, I think in some cases they are just being purely manipulative, and in other cases they aren't but are just naive themselves and not really thinking about the enormous drop in EV you can expect when you are a common share pleb.

What are you disagreeing with? I said that people know that startups don't on average pay more than big companies.

Most people I know who have considered the start-up option want the start-up experience for its own sake, not because they expect big financial gains.

Anecdotal evidence on both sides, but most people I know who have actually gone into very early stage contemporary startups as non-founders were convinced (primarily by being sweet-talked by the founders and money people) that the company they were working for was going to be "the next big thing", and that is already a bad assumption for any startup. But the worse misconception is that even if the startup defies the odds and is quite successful, most younger non-experienced folk remain under the impression that because they were given "1%" of the company to sign-up (at the time when they actually signed up), if the company exits at say $100,000,000 ("real" money but kind of chump change in the days of Instatumblrgram) they will see $1,000,000... which is... not going to happen, not even close. By the time they are fully vested and the company exits, their 1% is probably more like 0.01% or worse. The realities of things like dilution of common stock are obvious to people who live on the money side of the startup world, but not so obvious (in my anecdotal experience) to the heads-down techie types who haven't yet been burned by it.

Now that I've said that, hopefully someone more knowledgeable will jump in to correct these numbers.

Assuming a YC 3 founder model After 1 or 2 seed rounds, likely 10-20% Decrease by 20-40% per round after