[l33t2328]

> God forbid you live in the Bay Area, and you and I perhaps cross paths at a party, Burning Man, or any other event

What, you’ll be so personally slighted that this person made a business decision that you’ll ensure to disrupt everyone else’s time at burning man/a party/ any other event?

[hn_neverguess]

I like how you minimize the ethical implications by calling it a business decision. I do agree that screwing over a family member is different than screwing over a colleague, but let's also agree that both are bad.

And what appears to be a "business decision" could be a serious setback for the person on the other side of this transaction. Granted, as a startup founder, I am more exposed than someone at FAANG, but don't fool yourself - either way, someone wasted a lot of time and money on giving you a shot, and more importantly, they declined all other candidates. It really is such a selfish thing to do, and while sometimes you have no choice (health, etc), I didn't get the feeling from the OP that he felt particularly bad about it.

So to get back to your original question - no, I wouldn't give you a pass because you showed your dirty side in a business context. And if I thought you were dishonest, I would assume that your dishonesty extends across all facets of your life, and I would think I'd be doing my friends a favor by letting them know.

[Daishiman]

> And what appears to be a "business decision" could be a serious setback for the person on the other side of this transaction. Granted, as a startup founder, I am more exposed than someone at FAANG, but don't fool yourself - either way, someone wasted a lot of time and money on giving you a shot, and more importantly, they declined all other candidates.

Yeah, sucks, that's life, if that triggers you emotionally you have no business running a startup.

[scarface74]

I hate to be blunt. But as a startup founder, you probably don’t matter to many of the posters on HN. Most startup founders pay below what we could get at a public company and all you could offer is “equity” that would be statistically worthless.

[hn_neverguess]

No need to apologize - what you're sharing is the accepted truism. And yes, it makes it hard to compete for the same talent that's also considering FAANG. I will be even more blunt - yes, you're likely to retire sooner if you took a FAANG job.

But there are three caveats:

1. That last statement is only true because most of the people who start or join a startup don't see a material increase in the value of their equity. But a little known secret in the startup world is that you only have to be right once. It doesn't matter one tiny bit if your previous 5 startups failed, if the 6th one ends up finding the product market fit. My batting average is pretty poor, and even so I am way ahead of anyone I grew up with. You only have to be right once.

2. People think of startup success as this all or nothing thing, where you're either super poor or super rich. In reality, if you give it your best and do a decent job, even if you end up failing you'll be getting calls from people who you would have never met in any other way. For example, I failed with a startup about 10 years ago and ended up at Square only because of that exact same failure. There's no way in hell it would have happened any other way.

3. Most startups are run by first-time founders, and most first-time founders are still early in their learning process. A direct consequence of that is that they are cheap. But every once in a while you come across someone who's had one or two big exits, and I guarantee you that they are thinking differently about comp. In PG's words, Apple could have given Steve Jobs 95% of their equity to lure him back, and it still would have been a great deal for them. Experienced startup founders know that, and they have levers that FAANG doesn't. There are two senior people in my current startup that I poached directly out of FAANG.

[Apocryphon]

1. "You only have to be right once"... out of how many times? 1/6? 1/10? Much worse? This caveat is nothing but an ad for lottery tickets.

2. Sure, startups are a fine place to hone your talents, show your worth, and network. Same as any other type of workplace. Who's to say you wouldn't have met someone else at a big company who could've gotten you into Square?

3. For every serial entrepreneur who truly has a knack for it and truly learned along the way, there are those who are persisting in error. You're combining your first and second caveats here, describing the possibility of networking one's way into working for a quality experienced founder who will be your lottery ticket.

Nothing wrong with startups, but this is just another set of hoary old truisms more optimistic than the previous one.

[hn_neverguess]

> out of how many times?

Let's do the math. YC has had 378 exits out of 4314 investments [0], so roughly 9% so far. Most investments have been made recently enough that those companies are still baking, so let's double that number to 18%.

The only other number of you need is how likely you are to get into YC. Their overall acceptance rate is 1.75% per application[1], so if you apply three times with the same startup, you get to 5.25%. That figure includes literally everyone and their grandmother, so let's assume you're deciding between a startup and FAANG. Well, FAANG's acceptance in late stages of interviews is around 15% [2], so your YC acceptance chances are around 33%.

Combine 33% and 18%, and you get 6% per lifecycle of a startup. If you try that with four startups, you're at 24%.

Is 24% a good deal? Well, it depends on the upside and the opportunity cost. Let's assume it took you 16 years to build 4 failed startups. In that time period, you could have earned around $5m at FAANG ($300k/year). Of course, things could have also gone wrong (bad manager, your screwed up, layoffs), so let's peg that chance at 80%, which gives the opportunity cost of $4m.

The average YC exit is $24m (not taking into account the whales, which ballooned the overall YC portfolio to over $300B) - the $24m seems like a pretty conservative take [3]. That yields almost $6m upside, not including dilution. Hard to guess what the average dilution is, but I bet you it's higher than 33%, which would have been the breakeven point. Darn it, startups suck! :)

[0] https://www.cbinsights.com/investor/y-combinator

[1] https://www.ycombinator.com/investors

[2] https://www.teamblind.com/post/Whats-fangs-interview-selecti...

[3] https://www.shawnngtq.com/projects/y-combinator-startups-ana....

[Apocryphon]

We might be posting on YC's site, but there are a whole lotta startups beyond YC funded ones. For all of this work, this math relies upon an incomplete data set.

[scarface74]

But you have to include dilution. You’re speaking as a founder - not an employee.

If I join any of the BigTech companies (FAANG - Netflix + Microsoft), as a mid level developer, I’m guaranteed to get a $1 million+ four year offer and I don’t have to wait on an exit and pray for a successful exit. I can sell my RSUs at every vesting event. The average startup takes 7 years to exit. I would have also been hypothetically missing out on one of the greatest bull markers and seen my earlier grants more than double over the last five years.

I left out Netflix because even before the stock tanked, it should have never been grouped with the 1 trillion+ BigTech companies.

[grog454]

From [2], is this post really your source?

> Capital One / Eng NewHere1

> 23 Comments

> How many people interview vs get the job ?

>

> My guess /estimates (avg company wide)

> ...

Or some other post behind the login wall?

A bad reference is probably worse than no reference.

[scarface74]

For context, I am speaking from the viewpoint of a 48 year old guy who first fell into BigTech two years ago by doing a slight pivot from software development at unremarkable companies into cloud consulting.

So for me personally, I don’t have time to risk on startups when I can be certain that my RSUs will be worth something when they vest and I can sell them and diversify. Even if they are down 25% year to date.

On the other hand, I mentored an intern last year, who got a return offer of $150K and can live anywhere in the US - right now he is staying at home rent free. This already puts him in the top 10% of income earners in the US.

In three years, he can be making $250k- $275K. Three years after that, he can be making close to $400K-$500K. But he will need to switch from an IC if he doesn’t want to switch from consulting.

Because of the time value of money, it makes much more sense to make as much money as possible while he is younger and avoid startups like the plague unless they can offer as much in cash as he is getting in cash+RSUs.

You are looking at things from the founders side. I am looking at things from the employee’s end. It’s your company. You should be passionate it about. From our end it’s a job.

As far as finding “product market fit”, how often has a company found product market fit, and a larger more profitable company came in, put a department on duplicating the effort and crushed the upstart?

We saw it in the 90s with Microsoft and we see it today with Facebook. Even Netflix isn’t immune. It’s being outcompeted by Warner Bros and Disney.

Everyone likes to point to Apple and Amazon. But they are the exception not the rule.

[dudul]

Always funny when employers realize that "at will" works both ways.

You can easily let someone go any day of the week? Well, I can also leave any day of the week. If you don't want this sort of liability you can hire me with a contract.

You call me dishonest, I call you hypocrite.