Michael T. Halligan, the story of a wayward Infrastructure Architect

His approach, reasoned and measured against real value, is how adults do things.

I am probably half your age, but here is some advice:

In any competitive industry (the world of tech start-ups is definitely one of them), those who are in it for the money are frauds. These are people who camouflage themselves under a shroud of buzzwords and "cool looking glasses."

Over the long run enough people will figure out what you are, and you will not succeed. We don't need any more frauds in tech.

This blog post should have said focus on finding the right work first, and consider pay second. Obviously fight for the pay/benefits that you deserve, but also be humble enough to know when you are getting a reasonable deal.

It's unfortunate that this blog post suggests the opposite.

As another bay area long-time software geek, I gotta say the egocentrism & narcissism of these whelps is just amazing.

More than your "FUPM" mantra, I think the better answer to folks asking you to take such large risks without any significant risk premium is simply "NO".

It's just complete nonsense. EVERYONE is in it for the money. Because it's a job. And it pays bills which lets you live.

The secondary "value" that a given job might give you (warm fuzzy feelings, egomaniacal world-changer thoughts, fun, etc.) are great, and you should be willing to trade "money" for that secondary value whenever it fits.

But calling rational, careful, intelligent and reasoned people "frauds" because they demand to be paid what they are worth is so ridiculous I'm having a hard time coming up with a word appropriately hyperbolic.

You wrote, "I am probably half your age, but here is some advice:"

I suspect that you're in your early 20s, so I have fifteen years on you. Let me give you some advice. What seems really great in your early 20s, gets really painful in your mid 30s. And what is really painful in your mid 30s is downright insane in your mid 40s.

It is like starting a company. Putting two years of 100 hour weeks with a very small probability of success is a great investment when you are in your early 20s. Worst case scenario, you get two years of amazing experience that will make recruiters salivate. But, by the time you get into your 30s or 40s, those two years of experience don't have as much value and the time doing a startup is significantly more expensive.

I'm not trying to be a dick. In fact, when I was in my early 20s, I would have said the exact same thing that you did. But trust me, my friend, time passes faster than you will ever believe. And, as time passes, your priorities change and things like benefits and savings become incredibly important.

The solution?

Unless you can invent something that stops aging (if so, hit me up, I'll work for equity), you've got to live everyday to the fullest. Our time is very limited and the older you get, the faster it seems to go. Enjoy your youth, work great jobs, take some crazy risks, and cherish every moment.

That felt like a commencement address. Sorry about that, I've finally become the old programmer who goes on rants like this. I think I'm going to go get something pierced now....:)

So, they drink the YC koolaide and think that "oldsters" are just being "old".

They have no concept of risk, and don't realize they're demanding you put in more hours than they are (lets be honest, most startups these days are run by people with connections, not technical skills) while thinking that they're "killing it".

So, they want more out of you than they will put in, but they also demand you take a chance at a relatively small payoff (that would make them rich) while giving up the salary they really owe you for the work they are demanding.

The answer is very simple: IF you have enough experience to know this is a bad deal, don't be an employee. Go be a founder.

You can't change them, and PG has no morals and just wants to get rich, so go kick their asses in the marketplace.

If you're 24 and you agree with this article, then the difference isn't between age, but between experience or wisdom.

Rationally, if you think about it, it should be obvious the author is right, just do the math on the net present value of those options when risk is priced in.

But until you've failed enough people often don't think they can fail. So they do their risk calculations assuming there is little or no risk.

You're probably wiser than people your age, but I was starting to think like the author around your age too.

We're just going to be drowned out by the clueless.

Would love to hear your thoughts.

With all due respect,
Brian

1. Skim Twitter account.
2. Skim work history on résumé.
3. Read blog post.
4. Enlightenment about this person as a human being.

I hadn't considered that about less experience directly correlating to concept of risk. I'll have to remember to factor that in for the future.

I have worked since as far back as I can remember and I've made plenty of mistakes that I'm glad to say I made sure to learn from. I normally try not to hold everyone to the standards I hold myself to though, as I understand not everyone has had to live the life I had to live.

It probably helps that I'm a father as well but I digress, I prefer not to spend to much comment space on someone else's blog with my life story (not that I could even scratch that surface with comment space alone.) In any case I think it's fair to say everyone who is disagreeing doesn't really understand the logic behind the decision.

The biggest part of his post that I disagree with also contradicts your recommendation: "work great jobs, take some crazy risks, and cherish every moment."

Instead this is what the blog post says:

"...Their product means nothing to me, it's not going to change the world, but that's OK, neither company is going to change the world. All start-ups today are about supporting advertising in one way or another. If I truly believed in a company, I
would work for $100k/year with no benefits and as much stock as I could get. I haven't believed in any company I've worked for since Napster."

This type of thinking and way of life is destructive. Being focused on cash rather than doing the things you suggested is a mistake. I never want this type of person on my team; I don't care how little I would have to pay them.

I appreciate the whole age brings wisdom concept, but I also believe that you don't have to be old to be right.

This post comes across as incredibly arrogant and entitled, to me.

Now back to outsourcing. I can get and have gotten talented programmers, some more talented than any I've hired in the past. They work for less because they supplement their pay by taking on additional project (as I'm sure you do on the side as well). I use them as needed so I'm not wasting their time or my own. They are just as responsive and fight to keep your business. They don't need health insurance and I can write them off just the same without paying employee taxes. Frankly, I don't understand where your value is unless you are a founder. Anything you can do, can be done by somebody else for less....way less.

start-ups done this way are appropriate for young singles (or one half of a young dual income couple.) They are highly risky,.

(mba, startup experience, also 25 years experience in software)

There is, however, one thing you've left out. Even if a startup were to offer me a decent salary, great benefits, proper working hours, etc. It still has one problem. That problem is that the startup could disappear any minute due to failure or being sold.

When you work at an established company there is no guarantee, but there is a low risk of the place closing its doors. It puts you in a secure position where you know for almost certain the rent will be paid. I never want to be in a situation where my job disappears, and I have to scramble to find a new one. Unless the equity payout is millions, that's what you'll be doing when the place sells. I would suddenly be in a much weaker bargaining position when all those recruiters start calling again.

Fact is, many of these startups won't make it. You are simply draining VC money for a short period before you jump to the next "big" thing in hopes it might take off. They aren't loyal by any means. Some may be, but the majority aren't. How many are working to make contacts in hopes their own startup will be properly networked when the time is right. Do you really think they don't sit in their office and think "man, I could be top guy". They are and their loyalties are only as strong as their contracts. Which is exactly why many companies are bought for their talent, not their product.

Refuse to work for equity.

I don't trust it. I'll take cash, TYVM.

I'm with the author on this. Fantastic writeup!

For the younger 28-35 crowd that is willing to take a gamble, I say go for it. The environment is made for you. It's fun, it will network you in very well and your time spent won't be wasted with the experience you gain. You'll settle in just fine in a more established company in the future if the startup doesn't survive.

The point wasn't to say you're replaceable, it's to say that the deals aren't that bad and aren't for everybody. For those that demand more, go look for it elsewhere and leave the startup scene alone ya old farts! Nobody really wants to be around your grumpy asses anyways.

The ones that made it were: 1. Generating real revenue at or near day 1 and profitable within the first year; 2. Very selective in who they hired, and understood that the best employees were less disposable than a four-carat diamond; 3. The founders had no exit strategy until at least the fifth year.

Startup or established company, the last thing you want to hear is that they want to attract the best and brightest with market-rate salaries and benefits. That's really saying you want 80th percentile workers for 50th percentile money.

I'm not entirely sure how wanting a normal pay rate instead of equity equates to not-loyal.

In any case, you are literally telling the "old farts" that they should leave the startup scene alone as opposed to voice their thought out opinion and the reasoning behind it on a blog that belongs to them. Meanwhile you are plastering it with rhetoric on why he's being an old fart that you would hate to hire because he wants what he knows he's worth. Here's a tip, why not just leave and go run your company the way you want to, not paying people what they deserve and outsourcing anyone who's job you can get away with outsourcing because it's cheaper.

I'll tell you what, I couldn't picture myself wanting to work for anything you are doing anyway, the way you have presented yourself makes me think you would fire me if you found anyone who could do my job for cheaper, and that's fine. Eventually everyone is going to catch onto people like you, and then you'll only be able to outsource your work, until one day you dig yourself into a hole so deep you can't even find people to outsource to because they have all caught on to your wily ways.

Have a great day sir.

"Now back to outsourcing. I can get and have gotten talented programmers, some more talented than any I've hired in the past. They work for less because they supplement their pay by taking on additional project (as I'm sure you do on the side as well). I use them as needed so I'm not wasting their time or my own. They are just as responsive and fight to keep your business. They don't need health insurance and I can write them off just the same without paying employee taxes. Frankly, I don't understand where your value is unless you are a founder. Anything you can do, can be done by somebody else for less....way less."

People like you honestly make me sick. Underpaying "employees" with no health insurance that you 1099? All signs point to scumbag.

That doesn't mean that there's people out there, with less ties (i.e. family) who aren't willing in sacrifice potential perks for the gamble of an acquisition.

And if you don't realize that talented engineers can get plenty of work for companies that DO offer good benefits, and that you still have to compete with those companies for labor, then YOU should not be running a company.

Like it or not, you are the one that has to entice us to work for you, not the other way around.

The fact that you offer so little in terms of equity, and feel that it can substitute for salary shows that you want to put the burden of risk on us, which most of us are not willing to do.

Andrew R.: Note that he is comparing two job offers, from two different companies, and explaining why one is attreactive to him, and the other one leaves him cold. Neither of them is from a (potentially) world-changing company. If he got an offer of nearyly any sort from one of those, he'd be on it like slick on snot. Grow up, and learn to read.

Your selfishness and sense of entitlement is awe-inspiring. You turn down a job before you even give the employer a fair chance to present their equity and benefits package? Have you never negotiated a job offer?

You infer all kinds of nefarious or negligent motives for each of the companies mentioned above when you have no reason to do so other than your paranoid delusions. Your sour, insincere attitude is way off base. Don't you realize how your attitude is guaranteed to make you *less* successful in your career, and is going to undermine your ability to provide for your family? I don't know you, and I can't say I like you, but I would still be sad to see you and others around you suffer the consequences of your attitude.

Yours is a parasitic attitude that sucks the life out of otherwise great companies.

A proven, profitable and fully-funded company (meaning little likelihood of future serious dilution) offers you 1/2 of the 1% and you scoff at that?

I appreciate your desire to earn a living wage - and if you're worth your salt you'll have no problem doing so - but a living wage in the Bay Area is not a God-given right when there are thousands of engineers out there in India, China, Europe, the Bay Area and elsewhere who are smarter and hungrier than you, and willing to work harder than you for less.

You can't change your competition but you can change your attitude. You'll be more successful if you focus first on what you'll contribute.

Your comments about founders is insulting to founders. These are the men and women who live off of ramen to build great businesses against impossible odds. These are the risk takers who will completely and utterly fail nine times out of ten, yet they pay their employees before they get paid. You don't hear founders whining about working for nothing for years on end, passing up myriad safer opportunities elsewhere.

If you're not satisfied with the rewards of being a contributor, be a founder. If you've got the balls, pull out calculator, compute the estimated risk/reward and expected value, and go for it. Prove yourself. If you don't have the balls, go be a greeter at Walmart.

If you're smart, you'll delete this post and hope that in future years it's fallen out of Google's search index so employers don't run across it. I'll certainly do my best to remember your name should my company ever run across your resume.

In the meantime, if you're lucky, some big "safe" company will hire you, pay you all your desired benefits, your work will have minimal impact on their success or failure (in other words, your ability to contribute anything meaningful will be limited and you'll be a powerless pawn - how pathetic is that?) and you and others like you will contribute to their excessive cost structure which will one day lead to your layoff when they feel the heat from a scrappier, more efficient upstart led by founders and powered by a dedicated appreciative team who put everything on the line every day to change the world.

I'm sorry if I've come across as harsh. I don't want to see you or your family suffer.

No thanks.

I keep equity and the full time jobs for those who deserve it. I didn't take VC money and I'm a fairly successful bootsrapper with significant growth. With that comes the fact that I don't have millions of other peoples dollars to waste. I couldn't do it and I won't do it. I don't need it. I'd rather work harder and longer to succeed than take a handout from a VC and fail or succeed under their terms.

You guys are all jaded, seriously fucking JADED! you think you are entitled and you aren't! Go create something, then start giving shit away. See how it feels. See how the stress eats at you, see what really goes into it. You want things given to you as if these startups are fortune 500 companies, but they aren't. You are taking a gamble every time you join up with one. That is the fucking point. I personally don't care to deal with a majority of you, as a developer myself, I can't wrap my head around how seriously entitled you think you are. If you're a senior programmer, go find a company with real longevity looking for a senior programmer with everything you need. If you've been doing this for 20 years and don't own a home because you can't afford it then you need to rethink your life, you're doing it wrong.

The rest of you are wasting your breath. Seriously, go think up a genuinely good idea, develop it, build a team, generate some funds from investors or just revenue in general then get back at me.

It's easy for some companies to throw around big benefits when they get big money, for those taking "small" sums, its more difficult. Be more understanding of the economy and the general situation of being a startup and where the money could be better spent to get you to the point where you get all of these things you want.

You do know that you can negotiate everything right?

One commenter said, live life to your fullest. I couldn't agree more. The axiom that goes along with that is: All that glitters is not gold.

If you love what you do, are passionate about it, and are really good at it, the money will come. You don't have to chase pipe-dreams about getting rich at a startup. If all that motivates you is greed, then perhaps you should find something more fulfilling than your current work, because when you're dead and gone, money doesn't go with you.

That's all he's saying. In comparison, yeah the deals ARE that bad.

The frog counting technology was interesting enough, but the pay was lousy.

Ultimately, when the money runs out, there's only a brick left, and it does not love you. The brick that does not love you will not pay for the roof over your head.

Loyalty isn't an issue then. I've seen people who've been the last at a dying startup. It's not a great place to be. I've been in this industry since 1975, so I've seen a few boom-and-bust cycles.

Not to mention a million-to-one (really) reverse split on my shares in a pre-IPO startup I used to work for before the dot bomb crisis hit.

I'll just add - for a great blog, you seem to have chosen an unfortunate color scheme that really doesn't bode well for people to read long articles on.

Maybe refrain from giving advice until you are his age.

In any competitive industry (the world of tech start-ups is definitely one of them), those who are in it for the money are frauds.

So you want a professional in a capitalist free market society to be in it NOT for the money?

This is your advice?

Do you conflate companies (and in a competitive industry at that!) with the Boy Scouts or the Peace Corps?

Can someone please elaborate on this point? Would like to know how to avoid AMT.

Expecting 6 weeks is kind of insane.

The point of the article is, if the employee is expected to take such a risk, why aren't they compensated accordingly?

You're saying shit like this, and you're wondering why people aren't being loyal to you? Loyalty is a two way street. You don't get it just because you give someone a paycheck.

Given how many startup companies fail you're essentially offering your employees jack squat in return. Don't believe me when I say they fail? Union Square Ventures, a VC firm who is generally considered to be highly successful, finds in their experience that a 1/3rd rule applies:

1/3rd fail.
1/3rd underperform.
1/3rd succeed.

If you offer me equity, there is just a 33% chance it'll actually be of any value, 33% chance I'll get a few $$s out of it (but mostly less than I'd have made not working for equity stake) and 33% chance I'll have given you an absurd amount of labor for cheap. Equity doesn't pay my rent, living expenses, health care, 401k etc.
If I'm working at 60 I want to be working because I choose to, not because I can't afford to retire.

Why would I work for less salary on such slim odds? If I want to gamble I'll go to Vegas.

If you want cheap labour, feel free to outsource. Having fair experience dealign with outsources I can say that in general you'll find you get what you pay for. Outsourcing is not the be-all and end-all, with cheap labour will come a lot more micro-management work for you and other hassles. If you want to do that work, no problem, that's your choice.

If you ran the company, what would you do differently?

I dont think we (my company) would optimize our comp plans around the edge case of having a transgendered employee. It probably wouldn't even occur to us to look at our insurance policies and ensure we have plans that cover transgendered people.

From what you've said, no job you've worked at has given you benefits that work for you; so does that mean you've only worked for startups?

I've brought this up at every company I've worked at since transitioning and the general response is "well that would require us to change things" or "that would cost more money". No company has taken ownership of my problem and truly made me feel like they care. I'm a individual contributor and thus easily replaced by somebody more normal.

Oh yeah, anyone else thinking startups in the city need to start offering a solid $40k/yr more than startups in the valley to compensate for the cost of living delta?

if you are sitting at a poker table and you dont know who the sucker is................

On the subject of outsourcing: I doubt that at the level of seniority of the OP, outsourcing will be that successful. You can maybe outsource some code monkey work but if you want creativity and someone who can plan a strategy and work towards a common goal, you don't want a transient code monkey. You want a big picture thinker who can make his bit work and facilitate the development of other peoples bits.

Also, outsourcing at a high level will raise all sorts of intellectual property and trust issues. If your startup is based on a really good innovation you would be a real dumbass to outsource it at a big picture level. Try litigation by tracing your IP leakage to your rival startup in India who spoke to the guy in Indonesia who knew the expat in Hong Kong who is the brother of your outworkers ex-wife.

Loyalty and trust is everything.

A fairly standard exit seems to be about 100M. There are some other things to be aware of:

1) You need to know outstanding shares. If you don't, your equity stake is nearly worthless.
2) How much more likely dilution before an exit? If early on, figuring 200% dilution (aka tripling of stocks outstanding) between now and an exit is reasonable. Investors will frequently also have special clauses that mean their stocks are worth more than your stocks.
3) What are the likely exit scenarios? In the good scenario (IPOs aren't really relevant anymore for most startups) a 100M exit with 50% of the cash being earn outs aka potentially 0 is reasonable.

A lot of people value their stocks incorrectly, are sold on pipe dreams of "owning a part of the company", and then the company does get sold and only the investors and founders make any money. A variety of high value employees for a company I know in a "more than 100M sale!" will make less off of their stocks than their previous employer paid in yearly bonuses. And for this they worked crazy hours and a salary significantly lower than market rate.

Startups are generally about making the founders and investors money. That is fine and they can still be a great experience, especially if you want to start your own thing someday. Just be aware of how it works and don't bet it all on someone taking care of you - they won't and they shouldn't. It is their startup and you are an employee.