I specialize in work for the financial sector and do the occasional interim management / project rescue job, high pay, very intense and fun to do with both a defined beginning and end.
As for the failures, they're too numerous to recount :) Having one 'win' and a string of failures still adds up to a win (for me), but it was a pretty slow road upwards with one stroke of good luck in between somewhere. For the most part it was simply hard work.
The first contracting job I landed sustained me for quite a while, you're definitely right in that (and it became a very large success over the longer term but I did not see any revenues from that).
CEOs without specific skill-sets are usually not the best CEOs to begin with, that might be where the failure correlation comes in. I don't think I'm the best CEO either (or CTO for that matter), but I know how to spot talent and when to get the hell out the way and I think those are the major skills you should have as a manager at any level (as well as knowing how to keep people motivated).
As for the parent comment: I think it's spot on. The worst possible position to be in is early hire in a start-up. You're going to see all of the downsides but only 1% of the upside of being a founder. If you're going to be taking that much risk you might as well be a founder.
Let's expand on this, because that's me and I'm quite happy (but also willing to be convinced otherwise :D).
Financially, you're balancing lower salary with a potential for a large upside later. That upside can be great if you believe in the company and/or the value of the stock options offsets the lower salary, which it probably has the last two times I've done it, and definitely didn't the first 3. That being said, the first three gave me access to the last 2, and allowed me to see why the last 2 would work in a way that the first 3 didn't. Edit: also, comparing to the risk an entrepreneur takes, the salary cut tends to be much higher for an entrepreneur than an early hire (often the entrepreneur takes little to no salary for a long time).
In some ways you miss out on working with specific talent. You work with fewer people, so by definition you have access to fewer viewpoints. That's a very real opportunity loss, for sure. On the other hand, you get to work on a wider variety of things, and working at an early company tends to give you a better work-life balance which can allow you to learn more aggressively outside of work (and allow me to be a happier person in general). You also get far more control over the company's direction, if you care about stuff like that.
In terms of "might as well be a founder" - my CEO puts in way more work, way more hours than I do, is able to attract better talent than I can, is able to attract money in a way I couldn't, is able to administer the business better than I can etc. If I didn't think that was true, I wouldn't be where I am (this is part of the skillset that I can pick up at an early stage company that I couldn't at a later stage company). If I had those skills, yes it would obviously be better for me to found, but I don't so I don't think the way you've laid out the risk is entirely fair.
There are many more trade offs, but it's difficult for me to see why being an early stage employee is worse than a late stage. In either cases a lot is left to the negotiator and in both cases you can get a great deal, depending on what you are looking for.
So it makes no sense at all to me. Just about the same risk and none of the upsides.
In contrast, a later hire comes on-board at a time that most of the risk has been absorbed or mitigated.
And in most cases there won't be any later hires because the company has folded.
> It's simple math: the equity a founder gets is paid for with less cash than your salary downside as an early hire.
I'm not sure why that matters. To me the only thing that matters is my salary downside vs. interest I could be making on a larger salary else where. I might be misunderstanding what you mean though.
Founders don't typically provide a whole lot of capital.
Three guys meet in a room somewhere, hash out an idea, assign themselves CEO, CFO and COO, plunk $1000 on the table each, call each other 'founder', then get some funding and then hire you to implement their vision.
Their risk is just about the same as yours, only you get to share - if you're lucky - maybe in 1% or so of the success (assuming you don't get screwed somewhere along the line) and in 100% of the failure.
And if you're in for a profit share the odds are even worse.
If you're good enough to be engineer #1 you're good enough to be a co-founder.
Better to fold than to not pay payroll tax, or, alternatively, talk to the tax man and see if you can work out some kind of a deal. Simply not paying is illegal and will get you in seriously hot water.
As an employee you are insulated from that but that's simply bad business and bad management and nobody forces anybody to do such things.
I'm curious about your experiences because, correct me if I'm wrong, I think you were pretty successful early on in your career. I'm sure you've had failures, but having a win behind you tends to temper failures quite a bit.
Regardless, the entrepreneur will have to either change careers (go back to being a programmer - which is not difficult in this market), or negotiate successfully for much rarer positions than the programmer. I'm not saying it's impossible, I'm just saying the concept that there is a risk for entrepreneurs, and more so than their employees (at least the engineers).
Edit: And I'm curious what your thoughts on the comment I was replying to are as well.