> That's true, but the market prices that kind of risk, and the market cares a lot about substitutes, and the typical developer taking basis points for their participation is eminently replaceable by other developers.

If all you're hiring with your first employees are replaceable people, you're doing it wrong and will probably fail. Those people not only have to work long hours, they have to work them well. It's like the APM curve at the beginning of a RTS. You never make up those time and behind-ness just piles up.

This is one of those things that sounds true but I think probably isn't. Business isn't an RTS, and most startups aren't really in an APM race.

With equity in the long run an engineering career looks a lot more like prison or slavery, you are taking all the risk and most often if there's a hiccup you have to live with not getting paid

> Probably not, or that already would have happened. It hasn't.

There was a time when convertible notes hadn't happened, or become main-stream, until they happened.

Agreed. That's the worst possible argument against this happening.

I think HN is getting old. Certainly more conservative in how it views future change.

I'd say "cynical" rather than "conservative." Most people here aren't against change, it's that we've all been burned by these things, time and time again.

If you model the entrepreneurial/tech ecosystem as a market, you'll find inefficiencies and mispricing of risk everywhere, not just in hiring at early-stage startups.

How else would you model companies and their staffing?

For new startups? A cult (of personality or of the religious persuasion)? A warparty? A pirate crew? All are good options.

> A pirate crew?

I. Every man has a vote in affairs of moment; has equal title to the fresh provisions, or strong liquors, at any time seized, and may use them at pleasure, ...

IX. No man to talk of breaking up their way of living, till each had shared one thousand pounds. If in order to this, any man should lose a limb, or become a cripple in their service, he was to have eight hundred dollars, out of the public stock, and for lesser hurts, proportionately.

X. The Captain and Quartermaster to receive two shares of a prize: the master, boatswain, and gunner, one share and a half, and other officers one and quarter.

Far more equitable than most startups.

Nice! For others, this is from an actual pirate code: http://en.m.wikipedia.org/wiki/Pirate_code

Peter Leeson wrote a paper on the economics of pirates, possibly of interest:

[PDF warning] http://www.peterleeson.com/an-arrgh-chy.pdf

I'm a firm believer that every filmmaking project is a cult, and that directors with cult leader traits are much more effective at getting the project made the way they want it.

There can be obvious downsides to that, of course, but the same thing likely applies to startups.

I don't know if you can force it if you don't have it, but it's probably learn-able.

This is absolutely true.

I don't know if a war party or a pirate crew are good options. Startups are attempting to create wealth. War parties and pirate crews aren't engaged in wealth creation, they are involved in wealth destruction. This is an important distinction that often gets lost in comparisons of business and warfare.

I used those terms as flavor more than anything. That said, the core argument of each (we're going to kill X, we're going to make a ton of cash because we're just better and faster) is a typical conceit.

Do you actually have a model for cults, warparties, or pirate crews? The reason the phrase "model a startup as a market" even makes sense is that reasonably well-accepted and well-defined models do exist for markets.

Certainly. Most of these are arguments for why people would make irrational decisions that break market models.

Cult: A singular leader or small group of leaders convince people who are looking for something to believe in/want to change the world of their worldview. The followers are willing to make non-optimal decisions in order to be a part of something greater/be close to the leader(s).

Warparties: A leader/small group of leaders convinces a group of people who are looking for something to believe in that they're on a holy mission: kill X. The followers are willing to make non-optimal decisions in order to be a part of something greater/be close to the leader(s).

Pirate Crew: A leader/small group of leaders convince a small group of people that they're special - and that they're going to work together to make a ton of cash. This is not necessarily true. The followers are willing to make non-optimal decisions in order to be a part of something greater/be close to the leader(s).

> the typical developer taking basis points for their participation is eminently replaceable by other developers

Is this true for the startup that needs to compete with Google and Facebook on attracting top-level talent?

> * developers ... should start their own companies

> * developers ... should instead work for larger companies that can pay them better wages.

So startups are missing out on these developers, can they afford to continue doing so if other startups start scooping them up?