The pessimism in this thread really bothers me. I’ve read anecdotes on entrepreneurship being on the decline, but it pains me to read so many negative takes on startups. We’re actively training our young people to avoid taking risks, and it’s going to fuck us — especially if some of those young people have the ambition be early employees at, say, a startup that takes on climate change in a big way.<p>Look — the fact that Garry knew Peter Thiel when he was 23 is nuts. When I was 23 I was broke and living with my parents in the suburbs outside Toronto. I didn’t even personally know any other software engineers. I think many people here would relate more similarly to that position.<p>Just because he won the social lottery early, doesn’t mean his lessons are wrong. I got a junior engineering job in Toronto when I was 23, at a startup, making less than Garry. $57.5k CAD. I worked on my open source portfolio and next took a job in another startup in SF for $120k USD the next year.<p>That startup failed. I took a brief job at a biotech startup after being turned down by Google and Facebook (twice). After three months I quit that startup to run the company I’m still running today, four years later. Today, we’re very fortunate to work with some of the largest companies in SV.<p>Reflecting on this: I think a better story Garry could’ve told is not that he missed out on $200M, but that startups basically built his network so that — years later — he’d be a prominent VC working with Alexis Ohanian, funding the next round of exciting companies. $200M is an eye-catching clickbait headline, but not the real substance. The real substance is — how the fuck did he meet Peter Thiel at 23, and how can somebody recreate that?<p>In the story I just told about myself, I got really lucky as a function of working at startups. I didn’t really make any money doing it. But a whole bunch of interesting things happened:<p>- The first job in SF I worked at introduced me to a product manager who went to school with Aston Motes, employee #1 at Dropbox who would eventually be an investor in the company I run today.<p>- The founder of that first failed company introduced me to AngelPad, the accelerator that gave me my first $50k in financing. The fact I stuck it out as an engineering lead at a failing startup helped: I gave it my all. (Aside: YC turned me down. Twice.)<p>- The biotech company I worked at was founded by two early SpaceX employees, one who would also become an investor later on.<p>Don’t work at startups to make $200M. Work at startups because you’ll work with people who have risk profiles that are much more likely to generate outsized returns as a group. You’ll have the opportunity to join or create a community of high-performing folks that, in aggregate, outperform anything you can do on your own. Maybe you’ll be the CEO one day, maybe not, but no matter what you are very likely to come out ahead if you apply yourself.<p>And don’t let the comments here dissuade you. Startups are hard, but they kick ass. I’ve cried myself to sleep some nights — as both an employee and CEO — and still wouldn’t change the experience for anything. I’m a better person because of what I’ve been through.
For all the startup founders and VCs in this conversation, you are cheap motherf*ckers. When I read that engineers and employees prefer FAANG companies because they pay better, I want to remind you that it wasn't always like this. 10-15 years ago startups paid way better than big tech. Big Tech rewarded you by getting to specialize on problems and working at scale. The reason FB and Google pay well is because when they were startups, they were paying WELL!<p>Let me ask you all this, if you could make the same (or more) money working at a startup that you make working at a big tech company for 4 years, would you pick the startup? The answer should be based on what kind of working style and project you prefer, not finances.
VCs feel the need to constantly remind us that working at a startup is worth our time as a means to fuel the startup workforce. I understand that he was simply sharing an anecdote, but I found the conclusions and headline misleading even verging on dishonest. I've worked at an early stage bay area startup -- hiring progressively got harder and harder because candidates were becoming more aware of the career risks involved and the perks they'd be missing out on at big companies. In almost every case, you're working far more for less with very little structure -- if that's your cup of tea and have an obsession for the product, then go for it. If you're hoping to make $200 million, don't bother.
Garry, where do you get that figure of $1.6 million per employee per year in profit for Google, please?<p>In Q2 2019 Alphabet (GOOGL), Google's parent, made $9.81 billion in profit[1].<p>At the end of the previous quarter, they reportedly had 103,549 employees[2].<p>Doing the division yields $88,654 profit per employee in Q2 2019.<p>Doing the naive thing of multiplying that by 4, which I know will be <i>somewhat</i> off, gives $354,615 profit per employee per year.<p>That's a tidy sum, but only a quarter of what you claimed so, again, can you tell us where you got that figure, please?<p>[1] <a href="https://www.theguardian.com/technology/2019/jul/25/google-alphabet-earnings-shares-q2" rel="nofollow">https://www.theguardian.com/technology/2019/jul/25/google-al...</a><p>[2] <a href="https://edition.cnn.com/2019/04/29/tech/alphabet-q1-earnings/index.html" rel="nofollow">https://edition.cnn.com/2019/04/29/tech/alphabet-q1-earnings...</a>
This vlog is more of a cheap advertisement for the "oh work for a startup it's great" nonsense school. I don't really understand why I would work in an environment where the pay is shit and the issued stocks can be re-classified or diluted or just taken away by lay-offs. Makes no sense.
>Working for Microsoft cost me $200 million<p>And not playing the Mega Millions Jackpot lotto cost me $1.6 billion. I had the opportunity to pick the winning numbers, but instead, I didn't even play! What a chump I was.<p>Don't make my mistakes.
The simple truth is that working for the equity of an unproven start-up is a gamble, and statistically unlikely to pay off. And sadly more and more start-ups are undermining access to equity in shady ways. Not that one should never work for a start up on the hopes it breaks big, but we should also never forget that the successes are outliers, by a massive margin.<p>Just understand the trade-offs of your decision and the probabilities involved with your decision.
I really hate speeches like that. They are always told by one permile (or even less) of people that succeeded. The voice of all those that have lost are never heard. Same as blockchains, there are a few very loud people explaining how easy is to get rich, while those who gave them their money are rarely heard. I would laugh if it wouldnt be sad.<p>An anecdote (just a detail, I am developer for almost 30 years, I know the industry from downside up), a month or two back, two greenhorns were fanatically explaining me, how they were on a talk of X billionaire that told them it was never so easy to be a billionaire as right now. You only need a 2k laptop. I laughed on inside, but today kids really believe stories like that. Sure, gauss will do its game and a few will get filthy rich. But lottery seems a better game to me.
... but Palantir? That rather deflated the vision of regret.<p>Honestly, maybe I’m way out of the normal HN demographic, but my first reaction was, this sounds like, “how I had a lucky escape and didn’t spend most of my early career actively making the world a much worse place.”<p>I’m no great fan of MS, but given the choice between a job there; or the possibility to work on bringing about a dystopic surveillance future, I just don’t see the hard decision.
His "cost me $200m" is of a $20b company, so by the math he's suggesting he would've had 1% of the company after it went through all the dilutions on its path to $20b.<p>So yeah, if you have a chance to get nearly a cofounder's amount of equity in a company that will end up 20x a unicorn (which got that name because of how rare they are), then definitely go for it.
Building a network is an important thing... But let's not kid ourselves:<p>Most startups offer very little % for equity.<p>And that equity often amounts to next to nothing. Look at Uber or WeWork.<p>Most founders end up as assholes. Some are great, some care, some what to learn. Learning as a manager/founder is someone else's job. Stress is real. People do shut down from stress.<p>If you are a founder, that's great.<p>If you are like first or 2nd employee, and end up as CTO and such, that's great. If you can get a few % equity.<p>Overall most startups you work at you will make just barely what you'd make at Google or Microsoft (I'm taking post exit). During 2003 engineers didn't have the leverage we do now. Right now a junior engineer can make close to 200k+ in total compensation at a large firm. The work is different, but definitely more money most startups will ever give you.
Flipping the coin on survivor-ship bias here, I worked at a start up for 4 years that was going to "change the world". Came out with experience in all sorts of problems solved, projects implemented, customers reached, hell I even have some equity(not that it's worth much). I was young and wanted to work on problems I thought would have high impact, shit they did have large impact.<p>Yet when I left finally as a jack of all and a master of none. I essentially had to start completely over.
It seems like he has found the problem with companies.<p>"Even though these companies pay a lot of money, in real terms, what software is doing in society is creating a lot more value than what they pay you. Google's pure profit per employee is actually $1.6 million per year, after all costs."<p>"If you're in the engineering, product, design, marketing, sort of the builder's side of that organization, you've got to know that you're creating a lot more value than that, possibly 10 times, maybe 100 times that value, and the only way you can really access that is by owning equity, and that means either being a founder or working at an early stage startup that gives significant equity. "<p>In other words, companies either purposefully or absentmindedly fail to pay regular employees anywhere close to their real value. This is the real problem. Not getting in a profitable startup early on isn't the problem. It's the mindset that it's somehow okay to pay employees very small fractions of what they are really worth.
If you want a good reason to not join Google in particular, Google does not train their managers. When I was interviewing with Google, I interviewed around 8 friends of mine that worked or previously worked at Google. Lack of management training was a something that every one of them brought up. Two of them had even been managers at Google and basically said "yeah, we weren't trained".<p>The way it's been described to me is that most managers at Google are TLMs - Tech Lead Managers. They are responsible primarily for the tech lead part and are only coincidentally responsible for the management part. Some teams do have separate Tech Leads and Managers, but for most teams, it's a single person.
Let me make sure I get this straight. On the one hand, by not working for a startup, you're missing out on at least $1.6M of value you're creating every year for your employer. You might even be missing out on $200M like Mr. Tan did. On the other hand, working for a startup "is not about the money". So you should be ok with getting less money because you're getting access to users and customers.<p>That's a pretty muddled message. Is Mr. Tan offering unbiased advice or does he have some kind of ax to grind here?
A lot of the comments are rightly pointing out the logical fallacy of survivorship bias in the article, but I don't think Garry intended to say that "choosing to work for Palantir in 2003 was the expected-wealth maximizing career decision and that's why you should join a startup".<p>I think the title and lede, "working for Microsoft cost me $200M" is intended to be provocative and encourage clicks on the article, while providing an interesting example of a "road not taken" in Garry's professional life. The dollar magnitude is unusual, but the feeling of regret is relatable to us all, even if you took the opposite bet that Garry did (e.g. turning down a LinkedIn or Coinbase offer in 2016 to work at a failed startup instead).<p>Since this article is on the top of HN today, I'd say Garry succeeded at sharing his personal anecdote.<p>On the content itself (startup vs. bigco), he is right about "you only can make a fraction of the value you create if you don't own equity" and "If you don't work on your dreams, someone will put you to work on theirs." But then it follows that everyone should start their own company if they are capable, or work for a bigco if they are not. The current SV labor market reflects this reality as well.<p>It's possible to sell some top-tier talent on taking less than 1% equity to work on your dreams, but they must really believe in the founder's vision and the founder's ability to provide a working environment that complements what the employee is not able to de-risk by themselves.
This article is garbage.<p>Over the last 8 years or so, FANG stock has gone through the roof. Most FANG engineers are multi-millionaires if they have been there going back 8 years. I have a friend whose Facebook stock doubled in the last 3 years and she will have been paid over 3M over 4 years.<p>Meanwhile, I have a friend who has been bouncing around startups, making zero in equity (because they all failed) and he gave up a job at Google. His equity would have been worth over 2M had he stayed.<p>I myself worked at a YC startup that had a large exit, and only made about $80k over 4 years (most of the money went to the founders even though I was employee 40). I then joined one of the unicorns and also made about 250k in equity over 5 years. Had I concentrated on my FANG interviews more, I would have made much much much more money over the last 5 years.
Having spent the past 15 years chasing the dream, working as a Founder and a couple of C-Level positions while not really amassing any sort of wealth I can't recommend enough to do your financial due diligence when accepting trade-offs for chances to reach your life-goals.<p>I'm close to 32 and have two kids now, so the financial pressure is there, while having accepted relatively low pay in high cost-of-living locations for roughly a decade left me without a semi-large cushion to reorient my career or even take a sabbatical to spend with my kids. This also limits my options, just leaving for another country for a potentially higher paying job with lower job security is a risk that might be too large...<p>Use your twenties wisely, i'd recommend first amassing a cushion at a FANG or freelancing if possible, before trying to "learn the art" at a startup. There surely is a great many things I can teach now, having picked and fought and won my own battles for quite some time now, but there is a high chance it leaves you and your loved ones in an unenviable position compared to just grinding away in your FANG Job.
The safest risk reward ratio in terms of career development, networking, and financial gain is to work at a startup that is in their explosive growth stage. You will likely get shares valued at some multiple of 100k. Make sure you understand the business and feel confident they will IPO or exit.<p>The scaling needs, technically or culturally, of a company at this stage are unlikely to be available at a risky early startup that may never see massive growth. At a BigCo, unless you are in infra or deep in the technical stack, many of these scaling problems will have been solved for you.<p>In terms of networking, you will get to learn from grizzled engineers who were around in the early days, veterans from big companies who have come in to fix the shit that is wrong, and have a front seat to these cultures colliding. Not only that, you'll be surrounded by soon to be angel investors.<p>I spent one year working at a pre-IPO unicorn and it was highest in ROI for my career as an entrepreneur later and the IPO made me enough cash to not be sweating my rent all the time.
Now I personally can't stand to work for big companies, but it's definitely not because its a bad financial move. Might as well write a post about "downsides of not picking the right lottery numbers". I know more people who have retired young and comfortably from a career at Microsoft (or Google, or Amazon) than I do who have achieved wealth from startups (and I know plenty of both types here in Seattle). In every single case there was substantial risk and a big element of luck for the startups that succeeded, while those who worked for the big firms never once worried that their paycheck might bounce.
The real issue with startups is that there is currently no efficient secondary market for startup equity.<p>This makes the game much riskier than it should be since:<p>1) There is no way to diversify for founders and employees.
2) There is no exit for employees.
3) It gives VC monopolistic power.<p>There were attempts to solve this (e.g. ICO) but those were misused.<p>Once such a market exists, it would be much easier to join/leave this ecosystem.
It took me a good number of years to realize that working for startups cost me years of being underpaid, working long hours and no real benefits in the end. I joined a corporation a couple of months ago and now I'm getting twice as much in compensation, plus financial incentives to actually stick around for a longer time. Survivorship bias is real.
Why did he value Microsoft over Their? There is something in his character that held in higher regard one decision over the other, there's no exploration of what caused the conflict in the first instance and a likelihood it will happen again. What should he have done with himself at that point and all future similar points where he has opportunity again?<p>This post seems to be more about signalling than lessons learned. Better luck next time!
Please, engineers, pay attention to the ethical implications of your creations.<p>You can't talk about how much money you make (or could have made) and disregard the pain you cause people in the process. Not all startups are equally unethical, and Palantir is famously one of the most closely tied to so much human suffering in the world.
If you have a family or you have a chronic illness, working at a big company -- at least in the US -- generally means better health benefits. I'd wager that health insurance alone is the most compelling reason why many people choose big companies over startups.
I think it's interesting part of this is that there was literally no bad decision in Garry's situation.<p>1) Stay with Microsoft, get promoted over the years end up a multi-millionaire.<p>2) Join Palantir and end up a multi-millionaire.<p>It sure does illustrate the meaning of being in the right place at the right time (e.g. starting a career in the early 2000's working as a designer / engineer in a tech hub).
There's a LOT of survivorship bias in this article. I personally worked in small companies (30 - 200 employees total) and startups (4 employees, including myself) before ending up at a big tech company, and I would have preferred to do this journey in the opposite direction - that is, work a few years at a BigCorp, and then work for a startup.<p>Getting to see what works and what doesn't work in the context of a bigcorp is really valuable, and I think this post discounts that. A lot of technical mistakes I've made could have been remedied by simply seeing industry best practices, and there was no way I would have learned these things in school.
> "Garry, "what are you doing at Microsoft? "You're wasting your time."<p>> "Garry, I'm so sure this is the right thing for you, "you need to quit your job right now."<p>How much does Pieter know the OP at the time? I'd probably be very wary working with someone with such a pitch.
For people trying to draw false equivalencies between buying Apple stock, buying lottery tickets, etc I think it's useful to look at the difference in circumstances and how _close_ Garry was to joining.<p>If you compare this to Apple stock it would be like if you had the cash in your bank account and your stock broker called you up and said "You should buy 1000 shares of Apple stock. In fact, I'll just give you 1000 shares of Apple stock, there's no risk to you". And you said no.<p>Or if someone said "I'll give you this lottery ticket, do you want it?" And you said no.<p>Now obviously, not many people find themselves in such a situation. But if you're a developer this situation isn't _that_ uncommon. i.e. you have a friend from school, or a someone you used to work with that is starting something new and asks you to join. This percentage goes up the "better" school you go to and the companies you join. i.e. I'm sure a large percentage of MIT/Stanford CompSci grads and early Goog/FB engineers know someone within 1 to 2 degrees of separation that have started fairly large companies.<p>Probably the most sure way to wealth (50M+) in modern times right now is to go to a good CompSci school, join a larger hot startup 200-500 people, spend a few years solving hard problems, getting a good salary and building a strong network. Then when one of your network starts a company joining that company as employee < 10.<p>For 1-5M the surest way is to join a 1000+ employee tech company as an engineer.
The problem is that people seem to think that one must drink the coolaid to do well.<p>I have worked for both small, large, internationals and startups.<p>A startup is a massive risk. 99.5% of them fail, of that 0.5%, >50% are acquired which is a spectacularly brutal experience. Odds are, your startup will fail, and take you with it. (especially as those of you in the US have to think about health insurance.)<p>Most of the time you'll be making fudge after fudge, using stuff cause its shiny and regretting every choice you made 6 months previous. then you have to deal with the batshit social rules are de rigueur.<p>Either way, you can either choose to believe that your company is looking after your interests, or treating you like cattle (Kobe beef, if you're lucky enough)<p>Far too many startups require their staff to blindly worship the co-founders, even though they are obviously deficient, only useful for tax write-down fodder. Look the other direction as your boss has a spectacular mental breakdown, or decides to initiate conjugal relations via blackmail and obnoxious power plays.<p>Basically, you can't just slap the word startup on a thing and allow it to fuck with peoples lives.
Valuation and share prices of FAANGs (and Microsoft) started really taking off 2-3 years after the financial crisis of 2008. There are two theories: a lot of money could suddenly be borrowed at near zero cost and needed a place to go, prompting a lot of investors to invest in big tech in the hope of better than average returns. Alternate theory: all big tech companies just simultaneously, suddenly became <i>lot better</i> companies and lot better investments sometime around 2011. I tend to side with the first theory.<p>Recently, it also became easier to do stock buybacks, leading to another big bounce in share prices.<p><a href="https://edition.cnn.com/2018/12/17/investing/stock-buybacks-trillion-dollars/index.html" rel="nofollow">https://edition.cnn.com/2018/12/17/investing/stock-buybacks-...</a><p>So I wonder if the real problem lies elsewhere - the out of control monetary policies practiced by various central banks.<p>Or maybe my statements are just completely wrong. If so, I would like to know if someone has done any kind of analysis on this.
A fellow named Paul Graham once speculated that it was not beyond reason to offer your first employee a >6% share in your company [1]. I've received first employee offers from startups for under 1%. This explains most of the difference for my decision.<p>[1] <a href="http://www.paulgraham.com/equity.html" rel="nofollow">http://www.paulgraham.com/equity.html</a>
I worked at 4 startups in my youth. All were formed at the tail end of the dot com crash. Of the 4, 2 outright failed and were totally miserable places to work. At one I even had to work for minimum wage until they realized they violated our exempt status. Of the other 2, one was acquired for peanuts. I got a check for $1200. The last company went public. They had had huge funding (almost $500M) and had had several down rounds. Due to this, management was extremely miserly with stock. My stock was briefly worth $250k until the lockout expired and quickly sank to $120k and got as low as $45k. Looking back on it, I totally wasted my time there.<p>The pay wasn’t the worst of it, I encountered many tyrants who made things even worse.<p>Now as an older person I have many business ideas but I am unable to take the risk due to having to support a family. I need to make a certain income to cover expenses. The only way I would join a startup is as a founder and at that I’d have to be able to pay myself enough to keep things going for my family.
Edit: The sites I'm using make it seem like the RSU compensation is the one time grant for 100k+ over the 4 year period so if its really a 400k+ stock grant over the 4year period then yes there's really no way to compete with that for early stage companies and leaving that amount of money on the table is inadvisable if you can avoid it.
That said I still hold my point about the type of experience you'll gain at a startup and how quickly you'll gain it.<p>People keep talking about how "they don't know anyone at the big tech companies making less than a 225k salary with the average being more like 300k". Those numbers are bunk, the salary is the base amount before stock contributions and you are most certainly including RSUs to get those numbers. Including RSU's in your annual salary is a crazy and incorrect thing to do. The average turn over at large tech co is a little over 2 years. This means 50% of people never see more than half of their RSU compensation. An L5 (5 years or so xp and roughly the same across companies) for instance has an average base salary of 165k and an additional 100k in RSUs. Assuming that person works at large tech co for the average 2 years and they sell the RSUs as soon as they can their total compensation in a given year is 165k + 25k, or 190k. Successful startups most certainly can come close to that. Anyone making a base + 225k salary before RSU is an L7 or distinguished contributor with 10+ years of experience. So while maybe startups can't compete for compensation for people who are very established in there careers, I've seen more than a few who can compete for people in the 0-10yr range. I've always seen startups as a way for people to prove themselves very quickly in ways that would take people who took the corporate path 15 years to do. High risk, high personal growth, and hopefully high reward.<p>That said I think startups do need to rework their equity compensation structure for earlier employees to make them more fair. It is very easy to get screwed as an IC in startups right now even as an early one.
I've had a simple rule for the past 20 years. If you offer me less than 1% of the startup I'm not interested in working with you because I am a plebe if I accept that offer. It hasn't failed me yet.<p>OTOH I chose to pursue a PhD in biochemistry rather than be the third member of the Yost group and that led to 3D Studio.<p>So I will boil my heuristic down to TLA or BigCo. I'd miss out on the next Facebook or Google with such a heuristic but what are the chances I would get an opportunity to join one of those companies at the ground floor in the first place?<p>in recent years, there was one startup bought out at a modest price for which I might have made epsilon more money being their CTO but it would have come with sleepless nights and anxiety at no additional cost.
<i>> [at a startup] you get very direct access to users and customers and their problems, which means you can actually have empathy for what's actually going on with them, and then you can directly solve it.</i><p>I'm calling BS on this. The empathy fairy doesn't bless you just for working at a startup, just like it doesn't disappear when you work for big tech. You have to actually create and nurture empathy yourself. You have to engage in the work: learning about the products, all the people you've never met that build things you didn't know existed, how all of it eventually becomes a thing for a customer to use, and how to make it better. In that process, you learn to care about things you didn't before.<p>Can you "directly solve" a problem for customers in a big company? Sometimes. But more often, you have to work together with other people to solve it. You have to use initiative, talk to people, coordinate things, lead initiatives. It's more work. And because it's more work, it's even more rewarding when you solve something. You may have even improved a lot more than the original problem in the process.
Advice to VCs on this thread trying to convince hiring folks away from tech. giants.<p>Re-consider (if you can) how you attract engineering talent and capitalize the "product-market-fit" stage of your startups - higher early stage valuations and higher pay for the market rates for the talent. Most talent (I know of) at FAANG is tired of being "cog-in-a-giant-wheel" and, some, would love the opportunities that startups always offered (I am assuming I don't have to enumerate these opportunities for this crowd)?<p>If you think higher valuations at earlier stages is not a fair ask - just look at capitalization at Series-C, Series-D growth stage companies - most of this money is being used to "buy" revenue these days. In other words, to pay commissions for sales and marketing folks. Buying engineering talent at early stages should be no different in 2019 in my opinion.<p>We don't have to rob Peter(Founders) to pay Paul(non-founding employees) and pitch one against the other. Just make the pie bigger at early stages. From what I hear, there is plenty of capital chasing good startups.
This is a lot like saying not buying a winning lottery ticket "Cost you" the jackpot.<p>Opportunity cost is a very real thing, the vast majority of startups fail, or do not deliver any meaningful amount of equity to their employees (compared to the huge pay cut they take).<p>This is a blog by a VC so its pretty obvious where his interests are aligned on this.
> If you're in the engineering, product, design, marketing, sort of the builder's side of that organization, you've got to know that you're creating a lot more value than that, possibly 10 times, maybe 100 times that value<p>Very dubious. From personal experience I'd guess that most non-sales employees at the big tech companies are actually creating negative value for the business (not contributing enough to profit to pay their comp and benefits). This mainly seems to happen for two reasons:<p>1. Career incentives for decision-makers (Eng. and PM management and directors) are almost totally disconnected from the profitability of the business. You can definitely become a superstar by building something wildly profitable, but that's the hard approach. The easier and more common approach is simple empire-building: Gather a larger and larger team, and have more projects and launches under you. The projects don't necessarily even need to <i>intend</i> to make or save money - you get to pick the metrics you target, and you can probably find some that indicate you're successful! The overall impact is mis-allocation of talent on a pretty grand scale.<p>2. On a more micro-scale (within teams), engineers are <i>terrible</i> at focusing on things that are good for the business. If you leave an engineering team alone, they will spend 90% of the time rewriting systems that already exist to make them simpler, easier to modify, etc. They will normally accomplish this! But the rewritten systems will do almost nothing to increase how much money the company makes, and it's rare that it will save enough resources to be worth it (engineers are expensive).<p>Both big tech companies I've worked at had what seemed like a relatively small set of teams focused on the core of the business, who were laser-focused on improving revenue or reducing the cost of core infrastructure used around the business. There were a much larger set of teams working on projects with less clear business value.
> The two things I really like about working for smaller places or starting a company is you get very direct access to users and customers and their problems, which means you can actually have empathy for what's actually going on with them, and then you can directly solve it. That cycle is so powerful, the sooner you learn how to make that cycle happen in your career, the better off you'll be.<p>I think that author is confusing ability to get access vs being forced to do it.<p>At big company, there's so many other things and layers, that you can easily spend your whole career without touching anything related to users. But, you can also just work on directly customer facing parts - that gives you direct access to customer problems. Just be careful - there's more problems that you can imagine, the bigger the company and customer base.
I think the equity situation is bad, and only going to get worse. FAANG stocks have been on an absolute tear and VC firms have got more money to deploy than ever before.<p>If I were to bet on it, I think we'll see the tech industry move to a model that mirrors the financial world, with fixed year end bonuses, and no equity opportunities. That's what this thread is basically advocating for, even though right now it means working at Google and getting options.<p>$1b+ Venture Funds and employees getting generous equity grants don't match. I don't think VC is going away as an asset class anytime soon, and I don't think fund sizes will be dramatically (3-5x) smaller.<p>If anything, I'd say it's probably for the best for the average person working in tech. Most startup options aren't worth anything, and are highly illiquid.
Dear @garry - Thanks for your article. I'm curious if you could comment on VC-driven "founder salaries" for startups. I've seen some fair setups and some very unfair setups.<p>I can appreciate this from the VC's perspective, they want the founder to be working to grow equity worth, not just to draw salary.<p>But I can also see how sub-market "founder salaries" would bias startup ownership towards either those with extreme risk appetites <i>or towards those with family safety nets and wealth.</i> How do you approach founder salaries?<p>Also, when judging founder salaries (knowing full well that will bias towards a small set of the population) how do you determine the comparable (e.g., Is it FAANG? Is it based on YoE as an Engineer? School? Degree?) Is this something that just is necessarily biased in favour of <25yos?
I joined a startup right out of school, I wouldn't do it any other way even now but the picture he paints is far from reality for most.<p>I learned a lot, had a lot of ownership and was involved with the product from a user level itself which I loved and even made my skill set very diverse.<p>But the 200 million line is just outright rare. The equity I was given was pretty low and even though the startup is a leader in its space the equity growth hasn't materialized to any noteworthy level and I can't exit right now. I would have made much more at any FAANG level of companies in RSUs by now like my friends over there have done.<p>This is why even now while discussing offers with companies I am interested in, I don't give ESOPs much value in the package.
The question is what is Expectation(Total Wealth) working at tech Giant vs. joining a typical startup (with no crystal ball bias).<p>Esp. given that most single peeps working at tech Giant can live in a slave box eating supermarket food and save most of their income and invest it. They can probably use their income for leverage build a property investment portfolio, which if the rent covers the mortgage, they will still have savings to invest in stocks.<p>Now take into account the $10M lifestyle and the $200M lifestyle, and for a hacker who isn't into 1st class flights, balls and cristal (see what I did!) I think 10M would be enough money to retire in a humble house somewhere in suburbia and hack on side project, even with a family to support.
Joining a startup and missing out on entry-level wages seems like an appropriate trade-off. It's the same reason most people go to college after high school - the opportunity cost is quite low and you can learn a lot of things quickly.
Startups don't necessarily have good management or the core values necessary to help weather changes. You will have problems and if you don't have either really good management or something like the Amazon leadership principles it's likely you will fail. Also, at least for many of the startups where I worked there was no appreciation for the lessons of the lean startup movement (or appreciation of the lessons of Steve Blank).<p>That would be my reason to consider big tech, or at least a company with solid values. Unfortunately in my career I learned a lot at startups but don't have anything financial to show from it.
The choice in front of Garry is fundamentally different from the one he tells most people to make.<p>I think virtually everyone here would quit their job and try a startup for a year if a famous investor believed in them and wrote a check for a year's worth of comp (assuming this includes healthcare).<p>BigCo jobs are revolving doors. The only thing you would be putting on the line by doing the startup is the small amount of money you would have gotten from a raise/promotion.<p>This is vastly different from telling a 23 year old not connected to Peter Thiel, without a check 1yr salary to go work for a startup.
Besides the main points raised (and debated here), there a few things that are off-putting to me:<p>1) This whole thing smells like a PR stunt to get his name out, starting with a click-bait highly attractive title "How I lost $200M".<p>2) The production value of his video to get the message out. Why? Why put so much effort into that video? You know, you could just write a blog post.<p>3) I am cynically presuming Garry wants his name to get out there as much as possible as a VC that he is today. Besides that, this whole thing smells of humble-brag.<p>Really off-putting approach. Sorry, Garry, but this is how I feel.
Most startups solve boring problems in boring ways, require you to work too much and deal with a wild west environment without proper procedures of coexistence.<p>Even with compensation equal, I'd take the tech giant.
Don't be an employee at a startup unless they pay you really well. If you want to play the startup game, found your own company that does not rely on burning VC money.
This is cherry picking.<p>We all have heaps of extermely valuable opportunities: the trick is to pick the right one. He is using hindsight to pick the best. However we don’t have that future information when an opportunity passes us by.<p>Any longtime HN readers had the bitcoin opportunity pass us by. Much better since it doesn’t require hideous life-force investment (our own life time).<p>$200MM also includes an implicit lie that he would still own 1% <i>after</i> dilution. Garry: what equity were you offered?
Is the $200M net of what he made as employee number 10? Also, Microsoft's stock is up 5x since 2003 so he would have done well by just staying put.
A little-discussed issue is that big tech cos tend to do better on diversity and inclusion. Obviously it varies by startup, but when you’re in a survival mentality it is difficult to be open to people of different sexualities, races and experiences. You tend to get clumps of similar overachievers. Paul Graham said this was an “advantage” but for people like me in the LGBTQ community it certainly isn’t.
I feel a lot of the folks here are focusing on the wrong parts here. The $200M loss was a cheap way of getting user attention, but hey it worked!<p>The core of what he was trying to convey was the sooner you get to understand real user / customer problems the better off you'll be in life as an entrepreneur.<p>He stayed away from this in his early days as he opted for stability and that he seems to regret.
Would it be overreaching to say that no two startup experiences are the same and therefore, generalizing startups vs. tech giants is not an adequate analysis for deciding whether to join a startup?<p>I'd guess it would be enlightening to compare 'the strangest day ever at my startup' vs. 'the strangest day ever at my tech giant'. Do you have an anecdote?
Does anyone know the source of the graphic in the article [1]?<p>[1] <a href="https://phaven-prod.s3.amazonaws.com/files/image_part/asset/2382754/KHwPQPhY6TaSSqhK_DxI7YwPOWU/xlarge_MW-GM758_market_NS_20180718204202.jpg" rel="nofollow">https://phaven-prod.s3.amazonaws.com/files/image_part/asset/...</a>
> The real reason you should consider working at a startup or starting your own: It's not the money<p>I think this is correct, but makes the post's title seem really click-baity. I think expected financial upside is exactly where Big Tech unequivocally wins over startups (esp. joining and not founding), so it seems weird to frame the post around money.
I worked at four startups and gained so much experience at each. Even with the long long hours I really liked it. Three of the four failed - the fourth one eventually succeeded after 15 years and I received about $4,000 for my original shares as employee #3 (I can relate to the point in one comment about being a founder instead of an employee).
What if these aren’t stars that are disappearing but instead the appearances and disappearances of wormholes that are either allowing us to see to another place in space where that star is or perhaps a wormhole blocking where that star previously was for us and we are now looking into another section of space where a star is not?
Many comments here about skethcy startups and for good reasons. But isn't the solution obvious? Allow software developers to work for multiple companies at a time: 10-20, whatever. Just like investors diversify the risks by investing into many, often competing, startups, employees could also work for many companies.
Another upside to working at a tech giant: you make enough to be an accredited investor. Which means you can do angel investments, which is an arguably better way (Than being an early employee) to get those “outsize” returns from startups.
Most people who have been around tech for the past 15 years have stories like this.<p>Maybe they didn't have check's written, but had opportunities to join firms that later boomed huge.<p>Also the title is super-clickbaity. Poor form.
I think the real lesson here is that if a friend that believes in you to the point of offering you $70k simply to remove money as a decision factor for you, try and remove money from the decision.
Work in a startup only if it is yours or you have a significant stake in it, or if you have no other options.<p>The payoff for "working" at a startup with respect to the risk is IMHO simply not worth it.
From a spaniard perspective, the fact that he started with no experience making double what I make now (10y) blows my mind.<p>I know outside of Spain is different and all of that, but man it is depressing
The response to this post is startling. Would it received the same reception had it been written and posted a decade ago, I wonder. Has HN gotten more jaded- and mature?
Once a while a celebrity showcasing their true intellectual capability, and everyone found that they owe their success mostly to luck more than anything else...
I feel the comments in the threads are a bit too sour. Sure, you probably will not make 200 million dollars or even 20 million dollars. I am going to make that a bit stronger: It is highly likely you will end up broke as fuck. But so what?
Starting something up is really fun and if you are young (20 something) and don't have many obligations yet, just go for it. It doesn't matter if you fail. You will learn a broad skill set, which will be useful in the rest of your life. It will build character. Even if you fail, it is not a worthless experience.
employee #10 at palantir, that investor would fly down from anywhere just to interview and write checks to at the table - this is not your average developer. If your that talented of an engineer - than yes, you would be selling yourself short working as a cog - at a shitty startup whos management is too cocky to know when they are wrong - or a big company whom needs a level-ish playing field for everyone.
Do people torture themselves over mistakes that only prove to be so after the fact?<p>I thought I was a master of this art but this form of it escaped me.
My big mistake?<p>Not being buddies with Peter Thiel in 2003. Don't make my mistake, go back in time and be buddies with Peter Thiel in 2003.<p>Just the fact that he had a buddy who could cut him a check for $70,000 <i>before</i> his startup succeeded says a whole lot about the situation he was in. If you have a buddy who tosses around this kind of cash, your options are different from the options available to the overwhelming majority of us.
only takeaway worth anything from this article<p>>My friend, Bede Jordan of Shelf Engine here in Seattle, actually said it best, "If you don't work on your dreams, "someone will put you to work on theirs."
Well, it did cost me 200M not working for a giant..<p>Edit: I don't understand getting downvoted here, does someone think that it can not vary for a person?
Articles like this irritate me more than anything else. Why? The ENTIRE paradigm is based on $. Article could just as easily have been written as "Working for Microsoft allowed me to be a better father".<p>And strange a VC would invest in a (very socialist) statement as "Google's pure profit per employee is actually $1.6 million per year, after all costs.": easy buy in, very low practical value. There are very tangible reasons for wage differences.
Like Garry, I wholeheartedly encourage every engineer to work at a startup for .00x% equity (unless you're employee #1, and you can ask for a whopping 1%). The founders and VCs will have hundreds or thousands times more upside than you (and they'll have preferential shares, etc), but at least you'll be In This Together (in that you're working "together" to try to help the founders+VCs join the Billionaire class -- a noble effort indeed!).
He met Peter Thiel before he got so famous.<p>It's important to be in an industry that's about to blow up. Getting access to future billionaires is much easier than access to current ones.<p>I agree with the sentiment that you can do a lot more in smaller companies, which is why I work at one that doesn't happen to be a startup. However, thus far I've received no $200 million checks.<p>Working in Silicon Valley might have felt like fighting the status quo a few years back, but right now, to me, an outsider, it feels a whole lot like the status quo.<p>With respect to the author, I do not believe this is legitimate life advice but instead is mostly humblebragging.
How many countless others have invested years of their lives, in exchange for equity and comparatively low pay, in promising-sounding startups only to see those companies fail?<p>Should they be retroactively counting the money they could have had if they'd went to a more stable firm and had the same years of pay increases, bonuses, RSUs, etc. as a loss?<p>This is hollow clickbait, but the author is clearly intelligent enough to know that hence why it's mainly focused on a youtube video which I'm presuming he's doing in the name of trying to build an audience and "clout" for himself with.
The "could of", "would of", "should of" game... Ah.... how I love to play thee.<p>But wait... let's go further and play the "what if" game as well!!! What if... you took the job and moved out to Palo Alto only to trip walking up the stairs on your first day of work to break your spine and be confined to a wheel chair the rest of your life???<p>Point being... life turns out the way it does for a reason and you never know what events will unfold or are avoided cause of the decisions you choose. Be happy that you are alive and have what you have. Life isn't always about getting or having more things.
This is such a weird post. Big fan of Garry, but I don't agree with most of this.<p>1. Just because it turned out that you would have made $200mm doesn't make it a mistake. If anything, that outsized return proves just how rare this kind of outcome is. If you look at the YC startups graduating every year, <i>maybe</i> 1 will ever generate $20mm for an early employee, let alone $200mm. Joining a new startup for that kind of outcome is stupid, even (especially?) if the founder is a big personality.<p>2. What is the bizarre pie chart in the middle of this post supposed to show? I'm very skeptical that it's actually based on data of any kind.<p>3. What is the line about it being hard to believe that any company other than Google is going to make money? Apple and Microsoft both earn more than Google, don't they?<p>Bottom line, if you care about comp, you should know that no early stage startup of any kind offers an expected outcome remotely close to the big tech companies. Yeah, you might make a few million after working your ass off for many years. But realistically, you won't. But you <i>would</i> make close to that (or more) if you worked for the big tech companies for those same number of years, at a much lower risk.<p>If you want to do the startup thing, do it as a founder, not an employee. Start with 30-100% of the equity, not 1% or 2%.<p>Again, I'm a fan of Garry's, but I'm very skeptical of these posts by VCs trying to convince you it's a good idea to work at an early stage startup. Startups are great for them since they have a whole portfolio of companies to spread their risk across, but it's a shit deal for employees if you care much about comp. I don't envy the hassle of trying to hire at a startup when big tech companies literally pay 2-3x as more, but that's where we are.<p>EDIT: apparently the graph I referenced in #2 is showing that the top 5 companies in the S&P500 (as of sometime back in 2018) are equal in market cap to the bottom 282: <a href="https://www.newworldadvisors.com/post/the-role-of-private-market-investments" rel="nofollow">https://www.newworldadvisors.com/post/the-role-of-private-ma...</a><p>Interesting, I guess, but pretty useless stat for the topic of this post. It also ignores about 200 companies in the middle that have huge market caps as well. Like Visa or Walmart or Disney. More here: <a href="https://disfold.com/top-us-companies-sp500/" rel="nofollow">https://disfold.com/top-us-companies-sp500/</a>
This article seems like clickbait and bad advice.
This is like selling this ridiculous American dream to someone. Oh, come to us, work hard, wash some dishes and you gonna get far! What pile of garbage. Yes, it works for some lucky few, but that's about it.<p>The truth is that most startups fail and most people in startups that don't fail, worked their asses off and still only get scraps. Comparing today with 2003 is nuts. The times are so different that there isn't even a remote resemblance.<p>Yes founding a unicorn can make you rich. Doh! Who would have thought...<p>But also if you worked at Amazon in 2008, saved all the stocks, re-invested excess money in stock, even as an entry level engineer you would be a MULTI MILLIONAIRE ten years later... Its just crazy to give advise to people to prefer insane risk for a chance to get 200 million, over guaranteed few millions in a safe job.<p>Yes there are people who really can't work at big tech and who want to hack some startup code together. Go for it! Sure. For everyone else, big tech is preferable by a large margin. And there I can work on projects startups could never even dream of doing. The reason for that is that big tech works with economy of scale. What is profitable for Google and Amazon might very well be suicidal for startups.<p>And to top it all off, the author even says that Peter Thiel wrote him a yearly salary as check. That devalues this article even more. Anyone, yes ANYONE should have taken this offer. This wasn't about risk whatsoever. This was about a 23 year old guy who didn't understand how the world works. And that applies to literally anyone young.
>> He asked, "How much a year do you make at Microsoft?"<p>>> It was $72,000 a year, really the lowest of the low coming right out of college. He got out his checkbook and wrote me that check.<p>>> "Cash this check, quit your job. This is a zero risk opportunity for you."<p>>> I said, "Thank you very much, Mr. Thiel, but I might get promoted to Level 60 next year."<p>Wow. This is probably the most impressive combination of arrogance and stupidity that I've ever read about or witnessed in my life.