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I'm not an entrepreneur, and know I'd make a bad one (I'm just not interested in working that hard, haha). But, I have worked for two startup software companies. In 2000, I joined a small pre-IPO company (~40 employees), which failed 9 months later as the dotcom boom collapsed and the VC (we had one major moneybags guy) decided to pull out. I then worked for a post-IPO startup (~450 employees when I started) for three years; at the end, it got purchased by a much larger company (not really "success" for anyone except the execs and initial funders, since the final price paid per share was far less than its peak and most employee's stock options were out of the money). Most of my friends live and work here in the SF bay area, for various software companies, and I've talked to them at length about the various failures and successes they've been through as well. Through these experiences, I have developed Opinions About Startup Failure that might be of interest. In particular, software startups. I don't want to be too specific about my previous employers, but I can talk in a more general sense about what the major successes and failures were. For the most part, these are failures that happen well after the initial rounds of bootstrapping, though, so I'm not sure how applicable it is for the folks in this thread. Any interest?
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Nov 2, 2011 19:49
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| # ¿ May 2, 2024 04:29 |
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I love it. I'm a native, though, so take that into consideration. Networking is big here, and a large percentage of my friends are people I originally met through various tech jobs. It's key for getting those tech jobs, as well (although not necessarily a requirement). As you might imagine, having a recommendation from another employee is a huge boost to landing a job at a given company. Lots of people think of the whole area as one homgeneous place, but actually the bay area is composed of neighborhoods and cities that have a lot of individual character. You're definitely going to have a different experience working in Cupertino or Sunnyvale, vs. working in San Francisco, vs. Palo Alto, and so on. The cost of living is high. Really high. But tech job salaries are also high. Some people who move here kind of get shocked at apartment prices or whatever and decide it's too expensive, before realizing that their entry-level programming job will pay $100k and it's (relatively speaking) not that bad. Of course, most people who live here are pretty much accustomed to paying more than 50% of our income for housing, too, when I guess 1/3 is more usual in other parts of the country. But. But! The weather is great, California is gorgeous (are you an outdoorsman? We have mountains, deserts, forests, beaches, rivers, etc. all over the drat place, much of it fairly unspoiled and most of it reasonably accessible). Our politics are a bit crazy (very liberal in the Bay Area in general, extra-liberal in Berkeley and SF, but somewhat conservative in outlying and wealthy counties, and very conservative in rural and southern counties) and our state is perennially "bugetarily challenged" mostly due to layer upon layer of direct-voter-enacted measures mandating spending combined with restrictions on taxes strangling the budget. The collapse in housing prices has put an extra-huge hurt on the state and also many counties, so services are being cut in some areas and our public schools are rapidly getting to be almost as expensive as they are in the east coast. But like I said before, it varies a lot by city/neighborhood. Palo Alto is one of the wealthiest cities in the country, but right across the freeway, East Palo Alto has at various times been the murder capital of the bay area. Richmond is also a hellhole of urban blight, and Oakland is very spotty (really awful neighborhoods intermingled with decent ones and even some enclaves of really very wealthy and upscale hoods). The job market is what it is. If you have tech skills that are in demand and you understand how to network, you can probably get a good position. Some companies are still growing and hiring. The really big names (google, apple, etc.) are highly competitive and even really amazing people fail to get hired by them all the time. The days of giant stock option packages, hiring bonuses, and pinball machines are long gone though: there's still some very fun places to work, but the dotcom-era silly-buggers poo poo did not survive the dotcom bust of 2000-2001. Also outsourcing is big. If you are just a basic entry-level QA guy, it's gonna be tough, because India is chock full of people who will work for a fifth your wage. Having specialized skills gets you a big leg up over just a basic CS degree. "Website design" is also not a money maker any more, nobody cares if you can make a website. Certifications are useful as "also nice" things on your resume, but they're the seasoning for the real meat, which is your degree plus your experience. If you're a programmer, you'd better have code samples, references for what you've helped develop, useful languages, and be ready to have your knowledge tested during your interviews. Also hiring sometimes takes a long time. Some places are better than others, but expect at least a month-long process, which means you probably can't just hope to fly out here, have an interview, and "start monday". Unless that actually happens, which it might, if a company needs you right goddamn now. At my own company, we routinely take two months from interview to first day at the job, and sometimes even longer; multiple rounds of interviews are common and we have a lengthy and onerous approvals process before the offer letter finally goes out. Um. Culturally? Awesome. People here love music, art, food, science, geeky stuff, nature, conservation, individualism, film, books, etc. Our bars close at 2am (its the law) and some places that's it for the night, but there are some neighborhoods where you can find something to do later than that if you're a night-owl. Our restaurants are world-class; San Francisco is possibly the best eating-town in the country (New Yorkers will disagree but gently caress them). The area is overflowing with activities and groups and subcultures and kink and so on and so on. Even stuff you wouldn't think is likely in California; one of my co-workers is an avid shooter, for example, and there's several gun clubs and shooting ranges to go to. Auto racing? Yes (though not much NASCAR). Hunting? Highly regulated, but yes, we're overrun with deer actually so please come shoot a few if you are so inclined. Sports, yes indeed, we got your hockey, basketball, baseball, football, whatever. Roller derby. Yachting. Spelunking. Mountain biking. Some people don't like it here. I had a friend from the east coast decide eventually that he had to move back... but in a big part that's because he's a hardcore libertarian and he just got fed up with all the liberal politics. Some people don't like that smoking is getting harder and harder to do here (and it's really expensive). Our gun control laws are pretty ridiculous. If you want snow you have to go to the mountains. We have earthquakes and wildfires and sometimes even floods and mudslides. Mostly the earthquakes thing. Commutes can be really long and traffic can suck (not as bad as LA though, by a looong shot.) We have reasonable public transportation if you work or live near the BART system, or CalTrain, or in San Francisco, but in some places it can be bad or (Pacifica, Marin) almost nonexistent. And it's expensive, enough that taking BART might not actually save you any money over driving, depending on your route and availability of cheap parking, but even then a lot of people use it because it's less frustrating. Oh and there's tons of goons here if you want to goonmeet or whatever. That's probably way more detail than you were asking for.
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Nov 4, 2011 06:07
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Yeah, there's some red flags in there for sure. Amazon's cloud is actually pretty good in that it's open and you can get your poo poo back out again if you decide to change vendors or switch to self-hosting, but... uh. All the buzzwords, the stuff about how you're this super-dynamic superstar, the fact they seem to want a programmer who is actually a manager or vice-versa... they want someone who can write device drivers in C? A CTO should be too busy to be spending their time doing serious hacking. If you're pre-IPO, members of the executive staff need to be spending a lot of their time working with customers, planning, and directing staff. In a really tiny startup I can see it, but they claim to have "dozens" of designers already signed on, and as CTO you're at the top of that org. You should be delegating coding, not doing it all yourself. Also, MongoDB is Web Scale https://www.youtube.com/watch?v=b2F-DItXtZs Here's what rents are like in san francisco (the city proper): craigslist. For example, here's a $1200 in-law with utils included. In Mission/Excelsior, which is not a great neighborhood, but not the worst SF has to offer either (avoid bayview, hunters point, tenderloin - these are the worst three). Given the pricing and the photos look decent, I would expect to be competing with probably 20-30 other people for that place. As an in-law, you're downstairs from some other family; there's no parking included; and, it's possibly an illegal unit (most in-laws are). That's one of the better deals I'm seeing today. Since it's posted on a weekend and they're asking for someone "immediately" it will be rented out today, unless the landlord decides to take longer to review applications for some reason. Oh, and be prepared to provide a sealed copy of your credit report when applying for apartments here. You can save a lot by getting a job on the peninsula instead, and even more if you can commute from the East Bay. So there's a balance. Keep in mind that rents are actually extra-high right now due to foreclosures... all those people that lost their houses had to move into rental units, and we already had a shortage of rental units in the area anyway. If you're interested in buying (DO NEVER BUY) you can get a decent deal now though (which is to say, still far higher than most other places in the country, but a lot less than it was in 2008). edit: "your college degree and grades do not matter to us." ... "Any ideal candidate would possess most of the following: A college degree in CS, Math, EE or equivalent." As the first thing on the list. Yeah, that line about how they don't care about your degree? It's bullshit. Leperflesh fucked around with this message at 20:43 on Nov 6, 2011 |
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Nov 6, 2011 20:35
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Amazon and Steam, together, will be impossible for you to compete with. Honestly I don't really understand how Gamestop is even still in business.
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Nov 7, 2011 03:38
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Well honestly I was trying to be the devil's advocate there. I do think that boardgames and (especially) tabletop gaming still has a place for a brick-and-mortars store... mostly because people want a sort of gaming-community center where they can get together and play the games, as well as buying them. For videogames, and in particular the new game market, I don't think there's a lot of profit potential any more. My local gamestore owner has an online blog where he writes a lot about the difficulties of running his business. Might be of interest: http://blackdiamondgames.blogspot.com/ He goes into details about issues like local taxes and regulations, competition, his relationship with suppliers, customer preferences, staffing, etc.
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Nov 7, 2011 18:59
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What kind of hosed up software company doesn't make its contractors sign an NDA? It boggles the mind.slapsack posted:or any contracts at these jobs even. Do you mean to say you are working without any contract whatsoever? Because that's pretty bad for you. They could refuse to pay you and you'd have no particular recourse. Are they going to send you a 1099 even? For your own protection as much as theirs, you should have a standard contract to present if your customers aren't offering you their own. Leperflesh fucked around with this message at 10:00 on Dec 5, 2011 |
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Dec 5, 2011 09:56
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Well, fair enough: but they could (for example) pay him less than what they'd previously agreed to pay him, and then insist that that was the contracted fee. Or, that he worked fewer hours then he's claiming. Etc. Basically working on a contract basis without a contract is "faith based" contracting, and not a good idea.
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Dec 5, 2011 19:48
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2nd Rate Poster posted:Just went through the most god awful startup experience, and need to vent. I don't understand how you can be "forced" to trade your shares for severance. Also, if the people laying you off knew that they were about to sell the company, and used that insider knowledge to trick you into selling or giving shares to them for a tiny value, that sure seems like illegal insider trading to me. The SEC takes insider trading accusations seriously. If you feel like you've been burned out of a significant amount of money, I'd consider sending a mail to the Feds.
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Dec 13, 2011 21:49
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2nd Rate Poster posted:SEC enforcement I had several friends involved with a startup back in 2000 who eventually had to contact the SEC because the co-founder had apparently shown forged stock certificates to some investors as "proof" that he had sufficient capital to fund the company. He went to jail and was subsequently deported (canadian) and can never re-enter the country. That is of course anecdotal, but unless you are Too Big to Fail, the SEC does indeed give a poo poo about enforcing the law. ..that said, if your shares were unvested, then all they did was lie to you and there's nothing actually illegal there. Although I don't know why they'd need you to relinquish unvested shares at all, that makes no sense.
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Dec 13, 2011 22:02
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I can only speak to my experience (two different startups) but there's a lot of coolaid passed out. It does make sense to try to boost morale among your workers by being positive about the company... I mean, you don't want everyone jumping ship just because there's been some setbacks, as long as there's any chance the company will succeed (or even just be bought). On the other hand, it's easy especially in a small company where everyone knows the CEO and the execs and talks with them regularly, to start thinking that they actually, you know, give a gently caress about the welfare of their employees. Which unfortunately tends not to be the case as soon as there's significant money on the table. At my second job, I joined the company on the day they had their first major post-IPO layoff. From that day the company gradually shrank over the next two years from a high of nearly 500 employees to, on the day we were purchased, about 110. A lot of the people still there, and many of those laid off, had vested stock options that were out-of-the-money due to the share price. I was lucky in that, because I had joined so late, half my stock had an exercise price (which is based on the public price the day you are hired) that was in-the-money when it vested (and I exercised and sold immediately); the rest wound up in-the-money based on the per-share price offered by the buyout (but only by a small amount, I made a couple hundred dollars). Many of my co-workers had, on top of their options, bought shares directly using the ESPP (Employee Stock Purchase Plan) shortly after IPO (before I was hired), when the shares were above $10. So some lost thousands and thousands of dollars. This was all based on the relentless optimism of the executives, and the fact that through my entire tenure there, we always had sufficient operating cash to go for at least a couple more years at the current burn rate. But... the buyout, even though many of us were expecting it, showed the execs to be scum. Why? Because a month before the sale (at which point they were certainly shopping the company to various potential buyers), they issued a new batch of Preferred Stock, and handed it out exclusively to the executives and members of the board. So when the company sold, the vast bulk of the money paid went to the execs, who had effectively diluted the public shares to enrich themselves. The public shares still earned a significant premium over the market price, so there were no complaints there... so really it was just the employees, current and former, who got screwed by the deal. I don't blame them for selling the company (it was time), and I don't blame them for not saying they were doing it (they're not allowed), but the push earlier to get employees to buy stocks, and the blatant moneygrab with the preferred shares was pretty scummy.
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Dec 15, 2011 00:24
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| # ¿ May 2, 2024 04:29 |
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Nah I pretty much agree with Keevon. Everyone around here knows a horror story, but the truth is most folks do fine and a lot of those horror stories are centered around events of 2000 and 2001, when thousands of ill-advised companies imploded. I've always advised people to take the bulk of their compensation in salary, not stock, and I think a lot of people in the industry now do this as a matter of course. Stock options should be seen as an incentive, a bonus, a way of getting people invested (literally and figuratively) in the welfare of the company as a whole... but never as a substitute for a competitive salary and benefits package. I have been with my current (very large) employer for over 7 years now, and I've never owned stock in the company. But I'm reasonably well paid (I'm "non-exempt" so I get an hourly rate and earn overtime when I work over 8 hours in a day and/or 40 in a week), have excellent benefits, and could participate in the ESPP if I really wanted to.
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Dec 26, 2011 20:01
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