[its_so_on]

this will be mod'd down but it's the truth. Below I reveal entrepreneurship's REAL dirty little secret.

it's that if you're talking to an early founder about helping in any way, shape, or form, you are going to get screwed - the question is for how long, and for how much.

is it just going to be your opportunity cost at accepting the wage that you were offered and any other compensation? or are you even going to get paid what you agreed to?

the true dirty little secret to entrepreneurship is downright marxist(3): it's how much value you can steal from your contributors. but wait, why does that work in a capitalist system? everyone sets their own price. Ah, but the thing is, people expect you to at least stick to agreeements. that's how zynga became zynga. (1)

it's like hollywood accounting - how about fifty thousand and five percent of net profits? My last three films each grossed over 500 million. (Author thinks: YES. If this thing makes anything like that, 5% of net profits is going to make me rich. The film grosses a quarter billion, net profit...0..)(2)

zynga is entrepreneurship's dirty little secret.

you can mod me down now.

summary of my whole commment: the dirty secret to entrepreneurship is that it's a sucker's game for a talented developer to come on board as an early non-founder.

[wpietri]

Modded down indeed, but for incoherence.

[its_so_on]

I've added clarifications, let me know if there is anything left unclear. (I didn't want to explain every comment, thought it would be condescending or unnecessary, but I've explained anything I thought was unclear in an edit, and can add more if anything is still unclear.

[wpietri]

I guess you've worked your way up from incoherence to confused but apparently baseless allegations.

You appear to suggest that Zynga is typical. It isn't. Indeed, it's gotten so much press because it is very different than the Silicon Valley norms.

From the exits I've seen, early employees generally do well when founders do well. The only financial games I've heard of are ones that VC investors play with founders. E.g., the joy of "participating preferred". But even those aren't games like Hollywood plays: nobody bends the rules or hides profits.

As a counterexample to Zynga, consider Google. The NY Times estimated in 2007 that there were more than 1,000 employees worth $5m or more thanks to stock and options: http://www.nytimes.com/2007/11/12/technology/12google.html

[its_so_on]

I have to say that 90% of what I said applies to the vast majority of startups today, rather than the occassional one that succeeds big. Google is characteristic of a different era and philosophy; I doubt very much that it would be possible for Google to have become Google in today's ethos, and if it did, it would not have created more than a handful of truly rich people.

[wpietri]

And what's your basis for saying you have insight into the vast majority of startups today? Because an assertion from an anonymous, semi-coherent commenter isn't doing it for me.

As another counterexample, I just checked the YouTube purchase. They started much later than Google. When they sold for $1.6 billion, about 140 million ended up in the hands of the 20 non-founder employees with enough equity to list in the SEC filing:

http://www.secinfo.com/d14D5a.uM1t.htm#10gr

That includes these titles: Senior User Interface Designer, Director for Networking at YouTube, Senior Engineer, Engineering Manager; Vice President of Content at YouTube, Director of Product Development, Director of Customer Support, Systems Architect and Office Manager.

[its_so_on]

hi, youtube is the same era and was heavily influenced in gearing up, by input from google management. I'm talking about now.

[pestaa]

I'd mod you down not because you did not have something to add to the conversation, not even because you provoked me to do so, but because your comment is so unreadable.

[its_so_on]

've added clarifications, let me know if there is anything left unclear. (I didn't want to explain every comment, thought it would be condescending or unnecessary, but I've explained anything I thought was unclear in an edit, and can add more if anything is still unclear. I think my point is quite clear.

[its_so_on]

---------------------------------

EDIT:

It's inside my edit window and several people have asked for clarification, so I'll try to clarify. If something is unclear, ask, and if it's outside the edit window anymore I will reply.

(1) (footnote from above) The Zynga case is here: http://online.wsj.com/article/SB1000142405297020462190457701... (there's a search engine friendly url if ever I saw one)

this is the rare case where you get to zynga size before the "clawback", which is very formal and unusual for that reason...it's not just a couple of heated skype conversations when you're tiny. usually there is no such thing, and the collaboration breaks down around your first few sales or after the product can actually be finished by someone on a small wage. Conveniently, the founders are left holding the "bag".

(2) Hollywood accounting: http://en.wikipedia.org/wiki/Hollywood_accounting

e.g. http://en.wikipedia.org/wiki/Forrest_Gump#Author_controversy

clarification on "search engine friendly URL" - I meant I think the wall street journal should put the title in the URL so that it's matched in pages such as this one, and so Google gives the article more weight!).

(3) Under marxist theory, anyone who actually owns the means of production (e.g. the web server hosting the content let's say) makes money off of "surprus profit" that workers contribute. If the workers owned the means of production, they would be better off. So, this part of my comment was that it sounds like marxist to talk about ripping off workers, who are voluntarily contributing their labor under capitalist laws. But it only sounds that way -- critics of hollywood accounting do not criticize capitalism, nor that a film distributor can make 500,000,000 worldwide after spending 100,000,000 all told, with the rest being the retained profit. The analogy with marxist discontent is only superfluous, not deep.