There's a famous quote by a prominent businessman (maybe Jack Welch?) to the effect of "At the end of a workweek, you get your paycheck, and then you and your company are even." Of course, equity and stock options cloud the picture (likely in favor of the employer, since they have the informational and experiential advantage). But a good thing to keep in mind nonetheless.
"But since starting my professional life 17 years ago, I’ve seen many friends who “gave it all” as employees, only to be spit out when they were no longer needed."
What should one expect from a working relationship? Companies are there to make a profit, plain and simple. You are one of the many resources that allows them to do that.
"use your social network to promote the company, recruit friends to the team, go to events in the evening, and use your personal equipment."
Companies may expect this, but I will never give this much to a company..unless it's my own or I have a significant share. You just need to learn to say no. If enough people do this, companies won't expect it.
My advice is to only do this when you need to prove yourself/get your foot in the door/you are trying to build some experience because you are first starting out.
"All of this would be fine if employees benefited from their sacrifice in the same way their bosses do"
Employees don't benefit a much, because they often times either aren't making key decisions, don't have as much money or reputation on the line. You get rewarded more for a larger risk or a unique ability.
Would you open up a credit line in your name in exchange for a percentage of the company? If the company tanks, you owe that money to the bank.
This is what pretty much all business owners go thought and most employees aren't willing to risk.
"Bullshit! A business isn’t a bloodline. A business is a business, and anyone who treats it otherwise will be disappointed."
Totally agree. This is a way to make it difficult to quit and guilt you into staying when things get rough.
"If your company gets acquired for $30 million (good luck!), your 0.1% is worth $30,000 (at best). Acquired for $1 million? You get $1,000. Crash and burn? 0.1% of zero is zero."
The problem with numbers like this is that every situation is different. A company that takes in tons of VC and is overvalued and then sold a few years later, will pay out to the VC first.
You also need to learn to read contracts (or get a lawyer to do it for you) and never sign something you don't understand or want. I take the emotion out of business and it makes things much easier.
"At least a startup gives you a “lottery’s chance” of being rewarded as an employee."
If you want a chance to make millions, don't work for a startup, create your own. The risk is much higher, but so is the reward.
"I don’t think you should give your best ideas to your employer."
I agree here too. I always saved my best ideas for myself and now run a profitable company with those ideas. My old boss is bankrupt.
"Create a side-project. Do something independently. Carve out a piece of your life, and mold it your way."
Be careful though. Many companies (especially in silicon valley) lay claim to all of your work.
I personally won't sign contracts like this and will specifically list all of my current businesses/side projects as my own and get it in writing. It's never really been a problem for me.
"Increasingly, companies are demanding cult-like devotion. Do whatever it takes; sacrifice whatever you’ve got."
Companies can only demand that as long as there's a supply of employees who are willing to give it to them.
Maybe it's those same companies who are complaining about how hard it is to find good people these days?
I think that in a healthy relationship, the employee is no more devoted to the company than the company is devoted the employee. Just how devoted are companies to their employees? Under the U.S. system of "at will" employment, your employer can fire you without cause and without warning. And it happens all the time.
4 comments
[ 2.9 ms ] story [ 16.5 ms ] threadThere's a famous quote by a prominent businessman (maybe Jack Welch?) to the effect of "At the end of a workweek, you get your paycheck, and then you and your company are even." Of course, equity and stock options cloud the picture (likely in favor of the employer, since they have the informational and experiential advantage). But a good thing to keep in mind nonetheless.
Disclaimer: I've never worked for a startup.
What should one expect from a working relationship? Companies are there to make a profit, plain and simple. You are one of the many resources that allows them to do that.
"use your social network to promote the company, recruit friends to the team, go to events in the evening, and use your personal equipment."
Companies may expect this, but I will never give this much to a company..unless it's my own or I have a significant share. You just need to learn to say no. If enough people do this, companies won't expect it.
My advice is to only do this when you need to prove yourself/get your foot in the door/you are trying to build some experience because you are first starting out.
"All of this would be fine if employees benefited from their sacrifice in the same way their bosses do"
Employees don't benefit a much, because they often times either aren't making key decisions, don't have as much money or reputation on the line. You get rewarded more for a larger risk or a unique ability.
Would you open up a credit line in your name in exchange for a percentage of the company? If the company tanks, you owe that money to the bank.
This is what pretty much all business owners go thought and most employees aren't willing to risk.
"Bullshit! A business isn’t a bloodline. A business is a business, and anyone who treats it otherwise will be disappointed."
Totally agree. This is a way to make it difficult to quit and guilt you into staying when things get rough.
"If your company gets acquired for $30 million (good luck!), your 0.1% is worth $30,000 (at best). Acquired for $1 million? You get $1,000. Crash and burn? 0.1% of zero is zero."
The problem with numbers like this is that every situation is different. A company that takes in tons of VC and is overvalued and then sold a few years later, will pay out to the VC first.
You also need to learn to read contracts (or get a lawyer to do it for you) and never sign something you don't understand or want. I take the emotion out of business and it makes things much easier.
"At least a startup gives you a “lottery’s chance” of being rewarded as an employee."
If you want a chance to make millions, don't work for a startup, create your own. The risk is much higher, but so is the reward.
"I don’t think you should give your best ideas to your employer."
I agree here too. I always saved my best ideas for myself and now run a profitable company with those ideas. My old boss is bankrupt.
"Create a side-project. Do something independently. Carve out a piece of your life, and mold it your way."
Be careful though. Many companies (especially in silicon valley) lay claim to all of your work.
I personally won't sign contracts like this and will specifically list all of my current businesses/side projects as my own and get it in writing. It's never really been a problem for me.
we’ll spit you out.
This is the part people forget about most.
Companies can only demand that as long as there's a supply of employees who are willing to give it to them.
Maybe it's those same companies who are complaining about how hard it is to find good people these days?
I think that in a healthy relationship, the employee is no more devoted to the company than the company is devoted the employee. Just how devoted are companies to their employees? Under the U.S. system of "at will" employment, your employer can fire you without cause and without warning. And it happens all the time.